Operations and Production - The company focuses on the acquisition, development, optimization, and exploitation of conventional oil, natural gas, and NGL reserves in North America, primarily in the Permian Basin, San Juan Basin, and Williston Basin[35]. - The company aims to maintain a flat to low growth production profile while offsetting natural declines through acquisitions and drilling[37]. - The base decline rate of the company's reserves is currently estimated to be approximately 9%[39]. - The company seeks to enhance production and reserves through effective integration of acquisitions and operational improvements[39]. - The company produced an average of 23,387 Boe per day in 2024, with 66% of production from operated assets[44]. - Total production for the year ended December 31, 2024, was 8,559 MBoe, with a daily average of 23.5 MBoe[74]. - The company drilled or participated in the drilling of 26 gross wells in 2024 and plans to drill approximately 14 gross wells in the San Juan Basin in 2025[49]. - The company drilled or participated in 6 gross wells in the Permian Basin in 2024, with expectations to drill approximately 1 gross well in 2025[72]. - The company expects to focus nearly 50% of its drilling and recompletion work in 2025 on Williston Basin assets[52]. - The company completed 26 development wells in 2024, comprising 18 oil wells and 8 gas wells, compared to 38 total wells completed in 2023[83]. Financial Performance - The development budget for 2025 is projected to be between $30 million and $50 million[37]. - The company intends to distribute all available cash at the end of each quarter, which is dependent on prevailing commodity prices[36]. - The company plans to utilize cash flow from operations primarily to fund capital expenditures, with potential borrowings under its Credit Facility for acquisitions[37]. - The company aims to maintain a conservative capital structure with a net debt-to-EBITDAX ratio not exceeding one times[39]. - The company incurred development costs of $28.0 million in 2024 and $29.8 million in 2023, with no PUDs converted to proved developed reserves in both years[70]. - The company expects to incur approximately $30 - $50 million for development in 2025, following $28.0 million in development capital spent in 2024[55]. - For the year ended December 31, 2024, consolidated revenues were derived 66% from oil, 24% from natural gas, and 10% from NGL revenues, with total average production comprising approximately 32% oil, 54% natural gas, and 14% NGLs[53]. - The company earned management fees from Cross Timbers of $5.1 million in 2024, down from $6.2 million in 2023[94]. Reserves and Assets - As of December 31, 2024, the company had total estimated proved reserves of approximately 94 MMBoe, with 65% being liquids and 89% proved developed[44]. - The company’s net proved reserves as of December 31, 2024, included 47,191.9 MBbls of oil, 13,794.4 MBbls of NGLs, and 197,035.7 MMcf of natural gas[59]. - As of December 31, 2024, proved undeveloped reserves (PUDs) totaled 10,067.1 MBoe, consisting of 9,297.3 MBbls of oil, 599.5 MBbls of NGLs, and 1,022.0 MMcf of natural gas[68]. - The total balance of proved undeveloped reserves as of December 31, 2023, was 23,827.4 MBoe, reflecting a significant revision from previous estimates[69]. - The average net revenue interest on the company's properties is approximately 86.4% on a 100% working interest basis[104]. - The total developed acreage amounted to 1,116,804 gross acres, with 548,526 net acres as of December 31, 2024[81]. Regulatory and Compliance - The company is subject to various federal, state, and local laws and regulations that can increase operational costs and affect profitability[111]. - The company must comply with reporting requirements for natural gas transactions exceeding 2.2 million MMBtus annually[120]. - The company is required to hedge at least 50% of reasonably anticipated projected production if the Leverage Ratio is greater than 0.75 to 1.00[98]. - The company is subject to civil penalties of up to approximately $1,426,319 per violation per day for market manipulation under FTC regulations[127]. - The company is subject to various environmental regulations, including NEPA, which may delay or increase costs for exploration and production activities[164]. - The company is required to observe stringent environmental regulations, which may necessitate costly compliance actions[128]. - The company is subject to ongoing legal challenges regarding emissions regulations, which may create uncertainty in future compliance and operational costs[156]. Market and Competition - The company faces intense competition from larger companies with greater resources in the oil and natural gas industry[102]. - The competitive landscape in the oil and natural gas industry is intense, with larger companies having greater resources to absorb regulatory changes[102]. - The company has no long-term contracts with customers, with most sales made under arm's length contracts of 12 months or less[96]. Environmental Impact - The company is exposed to credit risk and market risk due to its use of derivative instruments for hedging[101]. - The demand for natural gas typically decreases during summer months and increases during winter months, affecting seasonal operations[109]. - The company may incur substantial costs for cleanup and compliance with hazardous waste regulations under RCRA and CERCLA[135]. - The company engages in hydraulic fracturing, which is regulated by state commissions and may face increased scrutiny and regulations related to seismic activity[157][159]. - The Inflation Reduction Act imposes a fee on GHG emissions starting at $900 per ton in 2024, increasing to $1,500 per ton in 2026, which could affect the company's financials[153]. - The company is monitoring the potential impact of stricter National Ambient Air Quality Standards (NAAQS) for ground-level ozone, which could lead to increased regulatory burdens[150]. Human Resources - As of December 31, 2024, the company had a total of 209 employees, with 201 being full-time[175]. - The company is focused on attracting and retaining top talent, emphasizing employee well-being and career development opportunities[176].

Company Overview - TXO Partners LP (TXO) is a notable stock within the Oils-Energy sector, which consists of 247 companies and is currently ranked 5 in the Zacks Sector Rank [2] - TXO is categorized under the Energy and Pipeline - Master Limited Partnerships industry, which includes 3 companies and is ranked 16 in the Zacks Industry Rank [6] Performance Analysis - TXO has achieved a year-to-date return of approximately 16.7%, significantly outperforming the average gain of 2.9% for the Oils-Energy sector [4] - Over the past 90 days, the Zacks Consensus Estimate for TXO's full-year earnings has increased by 35%, indicating improved analyst sentiment and a stronger earnings outlook [4] Comparison with Peers - Capricorn Energy PLC Unsponsored ADR (CRNCY) is another stock in the Oils-Energy sector that has outperformed, with a return of 7.9% since the beginning of the year [5] - The consensus EPS estimate for Capricorn Energy has surged by 411.8% over the past three months, and it currently holds a Zacks Rank of 2 (Buy) [5] - In contrast, the Oil and Gas - Exploration and Production - International industry, which includes Capricorn Energy, has seen a decline of 10% this year, ranking 146 [7]

Core Viewpoint - TXO Partners LP (TXO) is experiencing solid improvement in earnings estimates, indicating potential investment opportunities as the stock has gained short-term price momentum [1][2]. Estimate Revisions - The upward trend in earnings estimate revisions reflects growing analyst optimism regarding TXO's earnings prospects, which is expected to positively influence the stock price [2]. - For the current quarter, TXO is projected to earn $0.39 per share, showing a year-over-year decline of 60.2%. However, the Zacks Consensus Estimate has increased by 40.3% over the last 30 days, with one estimate rising and no negative revisions [4]. - For the full year, TXO is expected to earn $1.02 per share, representing a 23.88% decrease from the previous year. The consensus estimate has improved by 34.98% in the past month, with one estimate moving higher and no negative revisions [5]. Zacks Rank - TXO Partners LP has achieved a Zacks Rank 1 (Strong Buy) due to favorable estimate revisions, which historically correlate with significant outperformance compared to the S&P 500 [6]. - Stocks with Zacks Rank 1 and 2 are shown to significantly outperform the S&P 500, indicating a strong investment potential for TXO [6]. Investment Outlook - The strong estimate revisions have led to a 12.5% increase in TXO's stock price over the past four weeks, suggesting further upside potential, making it a candidate for portfolio addition [7].

Company Performance - TXO Partners LP's stock closed at $19.15, reflecting a -1.08% change from the previous trading day's closing, underperforming compared to the S&P 500's daily loss of 0.29% [1] - The stock has increased by 16.14% over the past month, contrasting with the Oils-Energy sector's decline of 1.71% and the S&P 500's gain of 2.52% [1] Earnings Forecast - The upcoming earnings report for TXO Partners LP is anticipated to show earnings per share (EPS) of $0.30, indicating a significant decrease of 69.39% from the same quarter last year [2] - Revenue is projected to be $85.93 million, reflecting a 6.57% decline compared to the equivalent quarter last year [2] Analyst Revisions - Recent revisions to analyst forecasts for TXO Partners LP should be monitored, as they often reflect short-term business trends and can indicate analysts' confidence in the company's performance [3] Zacks Rank and Performance - The Zacks Rank system, which ranges from 1 (Strong Buy) to 5 (Strong Sell), has shown that 1 ranked stocks have yielded an average annual return of +25% since 1988 [5] - TXO Partners LP currently holds a Zacks Rank of 1 (Strong Buy), with the Zacks Consensus EPS estimate having increased by 15.19% in the past month [5] Valuation Metrics - TXO Partners LP has a Forward P/E ratio of 11.88, which aligns with the industry's average Forward P/E of 11.88 [6] - The Energy and Pipeline - Master Limited Partnerships industry is part of the Oils-Energy sector and currently holds a Zacks Industry Rank of 31, placing it in the top 13% of over 250 industries [6] Industry Insights - The Zacks Industry Rank measures the strength of individual industry groups based on the average Zacks Rank of stocks within those groups, with the top 50% rated industries outperforming the bottom half by a factor of 2 to 1 [7]

Core Insights - Low-beta stocks are identified as resilient during market volatility, making them a strategic choice for investors in turbulent times [1][2][3] - A curated portfolio of low-beta stocks can provide a safeguard against market fluctuations, enhancing resilience for investors [3] Stock Analysis - **Mission Produce**: A leader in the avocado industry, positioned to benefit from rising consumer demand for healthy eating, particularly avocados which are rich in vitamins and minerals [9] - **TXO Partners**: Operates in the oil-rich Permian Basin, with significant potential from its Mancos Shale project, which could increase reserves fivefold, targeting a 3,520-acre block estimated to hold 200-300 Bcf of natural gas [10] - **Penumbra**: Focuses on innovative solutions for complex medical conditions, including ischemic stroke and venous thromboembolism, enhancing patient outcomes with advanced thrombectomy technologies [11] - **Strategic Education**: Exhibits strong growth across various segments, driven by increasing enrollment and operational efficiency, with a solid financial position and rising revenues [12] Screening Criteria - Stocks with a beta between 0 and 0.6 are prioritized for being less volatile than the market [6] - Additional criteria include positive price movement over the last month, average trading volume greater than 50,000, a minimum price of $5, and a Zacks Rank of 1 indicating strong buy potential [7]

Group 1 - TXO Partners LP closed at $17.80, reflecting a +0.68% change from the previous day, outperforming the S&P 500's gain of 0.12% [1] - The stock has increased by 10.09% over the past month, significantly better than the Oils-Energy sector's decline of 8.42% and the S&P 500's loss of 3.45% [1] Group 2 - TXO Partners LP is expected to report earnings of $0.31 per share, which would be a year-over-year decline of 68.37%, with projected revenue of $85.93 million, indicating a 6.57% decrease compared to the same quarter last year [2] - Recent changes to analyst estimates for TXO Partners LP are crucial as they reflect the evolving business trends, with upward revisions indicating analysts' positive outlook on the company's operations [3] Group 3 - The Zacks Rank system, which ranges from 1 (Strong Buy) to 5 (Strong Sell), shows that TXO Partners LP currently holds a Zacks Rank of 1 (Strong Buy), with a consensus EPS projection that has increased by 19.43% in the past 30 days [5] - TXO Partners LP has a Forward P/E ratio of 10.46, which is lower than its industry's Forward P/E of 10.76, indicating a valuation discount [6] Group 4 - The Energy and Pipeline - Master Limited Partnerships industry, part of the Oils-Energy sector, has a Zacks Industry Rank of 193, placing it in the bottom 24% of over 250 industries [6][7] - The Zacks Industry Rank measures the strength of industry groups based on the average Zacks Rank of individual stocks, with the top 50% rated industries outperforming the bottom half by a factor of 2 to 1 [7]

Core Viewpoint - TXO Partners LP has received an upgrade to a Zacks Rank 1 (Strong Buy) due to an upward trend in earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system is based on changes in earnings estimates, which have a strong correlation with near-term stock price movements [4][6]. - An increase in earnings estimates typically leads to higher fair value calculations by institutional investors, resulting in buying or selling pressure that affects stock prices [4]. Company Performance Indicators - For the fiscal year ending December 2024, TXO Partners LP is expected to earn $0.76 per share, reflecting a decrease of 43.3% from the previous year [8]. - Over the past three months, the Zacks Consensus Estimate for TXO Partners LP has increased by 20.7%, indicating positive sentiment among analysts [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [7]. - The upgrade of TXO Partners LP to Zacks Rank 1 places it in the top 5% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [10].

Core Viewpoint - TXO Partners L.P. has recently reported its Q3 financial results, prompting an analysis of the company's performance and future outlook in both macroeconomic and microeconomic contexts [1]. Financial Performance - The article focuses on the Q3 numbers reported by TXO Partners L.P., indicating a need for a detailed examination of these results to understand the company's financial health and operational efficiency [1]. Investment Strategy - The investment approach discussed emphasizes a long-term horizon, typically ranging from 5 to 10 years, with a preference for a diversified portfolio that includes growth, value, and dividend-paying stocks, although there is a stronger inclination towards value investments [1].

Acquisition and Production - The company completed the acquisition of producing properties in the Williston Basin for a total cash consideration of $241.8 million and 2.5 million common units valued at $50.0 million[92]. - Average daily production from the acquired Williston assets is expected to consist of approximately 78% oil, 12% NGLs, and 10% gas[98]. - Total leasehold and mineral acreage increased from approximately 846,000 gross (372,000 net) to approximately 1,120,000 gross (550,000 net) due to the acquisitions[99]. - Total production for the three months ended September 30, 2024, was 2,105 MBoe, slightly up from 2,104 MBoe in the same period in 2023[109]. Financial Performance - Net income for the three months ended September 30, 2024, was $203,000, a decrease of 97.6% from $8.48 million in the same period in 2023[108]. - Total revenues decreased by $1.1 million, or 2%, from $69.9 million in Q3 2023 to $68.7 million in Q3 2024, primarily due to a 40% decrease in average selling price of natural gas and an 11% decrease in oil prices[110]. - Total revenues decreased by $95.3 million, or 33%, from $288.7 million for the nine months ended September 30, 2023, to $193.5 million for the same period in 2024[124]. - Average selling price of natural gas decreased by 67%, leading to a revenue decrease of $86.0 million, while oil and NGLs saw minor decreases of less than 1% and 1%, respectively[124]. Expenses and Costs - Production expenses rose by $3.8 million, or 11%, from $35.7 million in Q3 2023 to $39.4 million in Q3 2024, mainly due to costs associated with Williston Basin acquisitions[111]. - General and administrative expenses increased by $1.5 million, or 87%, from $1.8 million in Q3 2023 to $3.3 million in Q3 2024, driven by higher personnel costs[117]. - General and administrative expenses increased by $5.5 million, or 108%, from $5.1 million in 2023 to $10.5 million in 2024, mainly due to higher personnel costs[132]. - Depreciation, depletion, and amortization expenses increased by $3.0 million, or 28%, from $10.6 million in Q3 2023 to $13.6 million in Q3 2024, primarily due to Williston Basin production[115]. Cash Flow and Financing - Cash available for distribution increased to $16.57 million in Q3 2024 from $14.65 million in Q3 2023, representing a 12.3% increase[106]. - Net cash provided by operating activities increased by $9.1 million, from $59.7 million in 2023 to $68.8 million in 2024, due to decreased cash paid on derivatives[149]. - Outstanding borrowings under the Credit Facility were $148.0 million as of September 30, 2024, compared to $21.0 million at December 31, 2023[136]. - The company expects to fund distributions, meet debt obligations, and finance its 2024 capital development program from cash flow from operations and borrowings[145]. Market Conditions - NYMEX crude oil prices reached a high of $93.68 per Bbl and a low of $65.75 per Bbl from January 1, 2023, to September 30, 2024[94]. - Natural gas prices peaked at $4.17 per MMBtu in January 2023 and fell to $2.26 per MMBtu as of October 18, 2024[94]. - The company anticipates continued volatility in crude oil and natural gas markets, impacting revenue and profitability[95]. - Inflationary pressures on operating costs are expected to persist, particularly for steel, chemicals, and transportation[97]. Debt and Credit Facilities - The company entered into Amendment No. 4 on its senior secured credit facility, increasing the borrowing base from $165 million to $275 million and extending the maturity date to August 30, 2028[151]. - The weighted average interest rate on Credit Facility borrowings was 8.80% for the nine months ended September 30, 2024[153]. - The company is required to maintain a current ratio greater than 1.0 to 1.0 and a total net debt-to-EBITDAX ratio not greater than 3.0 to 1.0[154]. Other Income - Other income increased by $1.1 million, or 22%, from $5.2 million in Q3 2023 to $6.3 million in Q3 2024, mainly from higher CO and plant income[119]. - Other income increased by $10.4 million, or 57%, from $18.2 million in 2023 to $28.6 million in 2024, driven by bonus payments and higher CO and plant income[134].

Group 1 - TXO Partners LP closed at $19.17, down 0.67% from the previous trading session, underperforming the S&P 500's gain of 0.16% [1] - Over the past month, TXO shares have decreased by 2.43%, while the Oils-Energy sector lost 9.36% and the S&P 500 gained 1.67% [1] Group 2 - TXO is expected to report an EPS of $0.07, reflecting a 74.07% decline year-over-year, with revenue estimated at $64.6 million, a decrease of 7.54% compared to the same quarter last year [2] - Full-year estimates predict earnings of $0.91 per share and revenue of $277.18 million, indicating year-over-year declines of 32.09% and 27.2%, respectively [3] Group 3 - Recent modifications to analyst estimates for TXO are crucial as they indicate changing near-term business trends, with positive revisions seen as a favorable sign for the company's outlook [4] - The Zacks Rank system, which incorporates estimate changes, currently rates TXO as 5 (Strong Sell), with the consensus EPS estimate declining by 7.65% over the last 30 days [6] Group 4 - TXO Partners LP has a Forward P/E ratio of 21.33, which is higher than the industry average of 14.88, indicating a premium valuation [7] - The Energy and Pipeline - Master Limited Partnerships industry, part of the Oils-Energy sector, holds a Zacks Industry Rank of 248, placing it in the bottom 2% of over 250 industries [7]