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]