Price Volatility and Revenue Impact - The company reported a significant volatility in oil and natural gas prices, with the Henry Hub spot market price for natural gas ranging from $1.21 per MMBtu to $23.86 per MMBtu over the past five years, and WTI prices fluctuating between negative $36.98 per barrel and $123.64 per barrel[516]. - As of December 31, 2024, the Henry Hub spot market price of natural gas was $3.40 per MMBtu and the posted price for oil was $72.44 per barrel, indicating potential revenue impacts due to price fluctuations[516]. - The company does not currently intend to hedge its indirect exposure to commodity price risk, which may lead to unmitigated impacts from price volatility[517]. Customer Dependency and Revenue Concentration - For the year ended December 31, 2024, three customers accounted for 24%, 14%, and 10% of total revenues, highlighting a concentration risk in customer dependency[521]. Interest Rate Risk - The company is exposed to interest rate risk, with a weighted average interest rate of 8.39% for revolving credit borrowings and 8.47% for term loan borrowings as of December 31, 2024[61]. - The weighted average interest rate for revolving credit borrowings was 8.39%, while for term loan borrowings it was 8.47% for the twelve months ended December 31, 2024[523]. - A 1.0% increase or decrease in the weighted average interest rate would impact interest expense by $3.9 million per year, assuming no change in the amount outstanding[523]. - The company does not currently have or intend to enter into any derivative hedge contracts to protect against interest rate fluctuations[523]. Liquidity and Market Conditions - The company’s liquidity and ability to access capital markets are influenced by general market conditions, including inflation, tariffs, and potential economic recession[53]. Operational Stability and Future Growth - Future revenue growth is expected to be significantly derived from WaterBridge and Desert Environmental, making their operational stability critical[57]. - The company acknowledges that its operating history is limited, making investments in its Class A shares highly speculative[57]. Competitive Environment and Regulatory Risks - The company operates in a highly competitive environment, with risks associated with geographic concentration in the Permian Basin[57]. - The company faces risks related to environmental regulations and potential legal changes that could restrict drilling and production activities[58]. Debt and Borrowings - As of December 31, 2024, the company had $385.0 million of outstanding borrowings, including $30.0 million in revolving credit and $355.0 million in term loans[523].
LandBridge Company LLC(LB) - 2024 Q4 - Annual Report