Financial Data and Key Metrics Changes - The company reported a strong start to 2025, with revenues increasing to approximately $44 million, representing a 20% sequential increase and a 131% year-over-year growth [10] - Adjusted EBITDA for Q1 was $38.8 million, reflecting a sequential increase of 221% year-over-year, with an adjusted EBITDA margin of 88% [11] - Free cash flow was approximately $15.8 million, with a free cash flow margin of 36%, although there was a quarter-over-quarter compression due to higher accounts receivable [12] Business Line Data and Key Metrics Changes - Resource sales and royalties increased by 118%, driven by increased brackish water sales and royalty volumes from newly acquired acreage [10] - Surface use royalties and revenues increased by 3% sequentially, with a 72% sequential increase in surface use royalty volumes [11] - Oil and gas royalties declined by 24% sequentially due to a decrease in net royalty production [11] Market Data and Key Metrics Changes - Non-oil and gas royalty revenue streams accounted for approximately 92% of overall revenue during Q1, up from 88% in the previous quarter [6] - The company is well-positioned in the Delaware Basin, where demand for water handling infrastructure continues to grow [7] Company Strategy and Development Direction - The company emphasizes a diversified revenue model that insulates it from oil and gas price volatility, with a focus on non-mineral royalties [5] - The active land management strategy is expected to drive growth, particularly following the acquisition of the Wolfbone Ranch, which contributed to a significant increase in produced water royalty volumes [9] - The Speedway pipeline project is anticipated to enhance cash flow significantly once operational, with an expected capacity of up to 500,000 barrels a day [19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating macroeconomic volatility, citing strong demand for services and no changes in production expectations from major customers [17][18] - The company remains optimistic about growth prospects, particularly in the core areas of operation, despite broader industry concerns [23] Other Important Information - The Board declared a dividend of $0.10 per Class A share, payable on June 19 to shareholders of record as of June 5 [12] - The company is actively pursuing value-enhancing land acquisitions while maintaining a strong balance sheet for financial flexibility [12] Q&A Session Summary Question: Impact of Permian activity levels on produced water handling growth - Management noted that the majority of their business is insulated from commodity price exposure, with 92% of revenue from non-mineral royalties, indicating a strong position despite potential production slowdowns [16] Question: Demand for the Speedway pipeline and its growth impact - Management indicated that the pipeline could generate approximately $30 million a year in cash flow once operational, with initial payments expected in the fourth quarter [19] Question: Update on data centers in West Texas - Management stated that updates on data centers would be available in 12 to 18 months, with ongoing strong traction in discussions [25] Question: Growth in produced water volumes across the basin - Management confirmed expectations for water growth to eclipse oil growth in core development areas due to deeper intervals and flatter production decline rates [34] Question: Desalination opportunities and power generation discussions - Management highlighted ongoing pilot projects with partners and the increasing demand for power generation in West Texas, indicating a positive outlook for future developments [38]

Financial Data and Key Metrics Changes - The company reported a strong start to 2025, with revenues increasing to approximately $44 million, representing a 20% sequential increase and a 131% year-over-year growth [9] - Adjusted EBITDA for Q1 was $38.8 million, reflecting a sequential increase of 221% year-over-year, with an adjusted EBITDA margin of 88% [10] - Free cash flow was approximately $15.8 million, with a free cash flow margin of 36%, although there was a quarter-over-quarter compression due to higher accounts receivable [11] Business Line Data and Key Metrics Changes - Resource sales and royalties increased by 118%, driven by increased brackish water sales and royalty volumes from newly acquired acreage [9] - Surface use royalties and revenues increased by 3% sequentially, supported by a 72% sequential increase in surface use royalty volumes [10] - Oil and gas royalties declined by 24% sequentially due to a decrease in net royalty production, with volumes falling from 11.99 BOE per day in Q4 2024 to 9.23 BOE per day in Q1 2025 [10] Market Data and Key Metrics Changes - Non-oil and gas royalty revenue streams accounted for approximately 92% of overall revenue during Q1, up from approximately 88% in the previous quarter [5] - The company continues to see strong demand for water handling infrastructure in the Delaware Basin, which is a key driver of business through its affiliate company Waterbridge [6] Company Strategy and Development Direction - The company is focused on advancing its active land management strategy in 2025, with strong growth driven by the acquisition of the Wolfbone Ranch [7] - The Wolfbone Ranch contributed to a greater than 70% quarter-over-quarter increase in produced water royalty volumes, underpinned by a minimal annual revenue commitment of $25 million for each of the next five years [8] - The company aims to maintain a strong balance sheet and pursue value-enhancing land acquisitions as part of its capital allocation priorities for 2025 [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the business model, emphasizing that the majority of revenue streams are insulated from oil and gas price volatility [4] - Despite macroeconomic volatility, management has not observed any changes in production expectations from major customers, indicating a stable demand for services [16] - The company anticipates continued growth in produced water handling, particularly in core areas where demand remains strong [22] Other Important Information - The Board declared a dividend of $0.10 per Class A share, payable on June 19 to shareholders of record as of June 5 [11] - The Speedway pipeline project is expected to provide significant cash flow once operational, with an anticipated capacity of up to 500,000 barrels a day [18] Q&A Session Summary Question: Impact of Permian activity levels on produced water handling growth - Management stated that the majority of the business is insulated from commodity price exposure, with 92% of revenue from non-mineral royalties, indicating a strong position despite potential production slowdowns [15] Question: Demand for the Speedway pipeline and its growth impact - Management indicated that the pipeline could generate approximately $30 million a year in cash flow once operational, with initial payments expected in the fourth quarter [18] Question: Update on data centers in West Texas - Management noted that traction remains strong, with ongoing discussions about power generation needs in West Texas, which could benefit the company [25][27] Question: Growth in produced water volumes across the basin - Management confirmed that water growth is expected to eclipse oil growth in core development areas due to deeper intervals and flatter PDP declines [32] Question: Desalination opportunities and Waterbridge's perspective - Management highlighted ongoing pilot projects with Five Point and the potential for desalination efforts to be economically beneficial, although feasibility at scale is still being evaluated [35][36]

Financial Data and Key Metrics Changes - In Q4 2024, the company reported a revenue increase of 109% year-over-year, reaching $36.5 million, and an adjusted EBITDA increase of 108% year-over-year with an adjusted EBITDA margin of 87% [3][12] - For the full year 2024, revenues grew by 51% year-over-year to $110 million, and adjusted EBITDA increased by 55% year-over-year to $97.1 million, achieving an adjusted EBITDA margin of 88% [3][12][15] - Free cash flow for Q4 2024 was approximately $26.7 million, with a free cash flow margin of 73%, while the full year generated $66.7 million of free cash flow [16][21] Business Line Data and Key Metrics Changes - Surface use royalties and revenues increased by 54% sequentially in Q4, contributing significantly to revenue growth [13] - Non-oil and gas royalty revenue accounted for nearly 90% of overall revenue in Q4, remaining flat from the prior quarter but up about 20% year-over-year [14] - Resource sales and royalties declined by 28% sequentially due to decreased brackish water sales and royalty volumes [13] Market Data and Key Metrics Changes - The company expanded its land holdings from approximately 72,000 surface acres to approximately 273,000 surface acres, with significant acquisitions in Q4 [4][5] - The acquisition of the Wolf Bone Ranch added 46,000 acres in a strategic location for oil and natural gas production, securing a minimum annual revenue commitment of $25 million for the next five years [5] Company Strategy and Development Direction - The company is focused on expanding its active land management strategy, which has proven effective in creating shareholder value [4] - Future growth opportunities are identified in digital infrastructure, renewable energy, and commercial real estate, with recent agreements for solar energy project development [6][7] - The company aims to maintain a strong balance sheet while pursuing value-enhancing land acquisitions, focusing on underutilized and under-commercialized surface [18][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth potential from digital infrastructure and the demand for data centers, particularly in West Texas [8][9] - The company reaffirmed its guidance for 2025, expecting adjusted EBITDA of $170 million to $190 million, driven by contributions from recent acquisitions and increased surface use royalties [22] Other Important Information - The company ended 2024 with $385 million of debt, up from $281.3 million at the end of Q3 2024, and total liquidity of $107 million [19][21] - A cash dividend of $0.10 per share was declared, with plans to revisit the amount quarterly [21] Q&A Session Summary Question: Surface use economic efficiency growth expectations - Management indicated that there is still significant room for improvement in surface use economic efficiency, with potential to achieve over $3,000 per acre [25][27] Question: Details on the WES agreement and third-party agreements - The WES agreement is expected to generate low to mid-teens of royalties once operational, with ongoing discussions for additional third-party agreements [29][32] Question: Data center roadmap and revenue opportunities - The data center project has a 2-year site selection period followed by a 4-year construction period, with expected revenues ramping up as construction phases come online [36][39] Question: M&A outlook and market fragmentation - The market remains fragmented with many opportunities for M&A, which continues to be a priority for capital allocation [80][82] Question: Impact of oil prices on 2025 guidance - The 2025 guidance does not incorporate significant ramps based on oil prices, as the company is insulated from commodity price fluctuations [74][75]