Dorchester Minerals(DMLP) - 2020 Q3 - Quarterly Report

Financial Performance - Operating revenues decreased 36% from $19.6 million during Q3 2019 to $12.5 million during Q3 2020, and decreased 41% from $59.2 million during the first nine months of 2019 to $34.8 million during the same period of 2020[55]. - Net cash provided by operating activities decreased 42% from $54.8 million during the first nine months of 2019 to $32.0 million during the same period of 2020[59]. - General and administrative expenses increased 29% from $1.7 million in Q3 2019 to $2.2 million in Q3 2020, primarily due to higher IT project costs and non-recurring divestiture transaction costs[58]. - The company experienced a 27% decrease in NPI natural gas sales volumes from 719 mmcf in Q3 2019 to 528 mmcf in Q3 2020[50]. - The COVID-19 pandemic and oil market volatility have significantly disrupted the oil and natural gas market, leading to decreased revenues due to lower commodity prices[46]. Sales and Pricing - Royalty properties natural gas sales averaged $1.33/mcf in Q3 2020, a 4% increase from $1.28/mcf in Q3 2019, while oil sales averaged $36.34/bbl, a 26% decrease from $48.85/bbl in Q3 2019[49]. - The weighted average indicated prices for oil and natural gas sales during Q3 2020 were $33.59/bbl and $1.16/mcf, respectively[61]. - Oil sales volumes attributable to Royalty properties remained consistent at 260 mbbls in both Q3 2019 and Q3 2020[50]. Cash and Liquidity - As of September 30, 2020, cash and cash equivalents totaled $14.9 million, a slight decrease from $15.3 million at December 31, 2019[68]. - The company expects to maintain sufficient liquidity to fund distributions to unitholders despite uncertainties from the COVID-19 pandemic and oil market volatility[67]. - Future distributions to unitholders may be impacted by economic conditions in the oil and natural gas market, which are beyond the company's control[67]. Strategic Actions - The company closed the divestiture of Hugoton net profits interests for gross proceeds of $5.7 million on September 30, 2020[49]. - The company is evaluating potential reductions in all discretionary spending due to the rapidly evolving economic environment[67]. Accounting Policies - There have been no significant changes to critical accounting policies as of September 30, 2020, compared to the previous year[69]. Capital Commitments - As of September 30, 2020, the Minerals NPI had outstanding capital commitments in the Bakken region equaling cash on hand of $2.5 million[43].