TXO Partners(TXO)2025-03-04 21:19Operations 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 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 29.8 million in 2023, with no PUDs converted to proved developed reserves in both years[70]. - The company expects to incur approximately 50 million for development in 2025, following 5.1 million in 2024, down from 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 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].