What changed in this filing

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Item 1A. Risk Factors

2026-02-24 compared with 2025-02-25 · 44 added, 63 removed, 540 unchanged (17% of the section changed)

28 unchanged sentences

• the price and quantity of foreign imports and exports of oil and natural gas;

• political and economic conditions in oil producing regions, including the Middle East, Africa, South America, and Russia;

• political and economic conditions in oil producing regions, including the Middle East, Africa, South America, including Venezuela, and Russia;

• the ability of members of the Organization of Petroleum Exporting Countries to agree to and maintain oil price and production controls;

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military operations in the Middle East;

• global geopolitical conflict, including the ongoing war in Ukraine, conflict in the Middle East and the relationships between the United States and other countries, such as China and Russia;

• global geopolitical conflicts and developments, including the ongoing conflict in Ukraine, hostilities in the Middle East, the evolving situation in Venezuela and the relationships between the United States and other countries, such as China and Russia;

• the proximity, cost, availability, and capacity of oil and natural gas pipelines and other transportation facilities;

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3 Low prices for WTI and Henry Hub were in 2021 and 2024, respectively.

Excludes the period in April 2020 when WTI briefly traded in negative territory.

Any prolonged substantial decline in the price of oil and natural gas will likely have a material adverse effect on our financial condition, results of operations, and cash distributions to unitholders.

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oil production from unconventional (shale) reserves, periods of investment restraint from U.S.

oil and natural gas producers, actions taken by members of the Organization of the Petroleum Exporting Countries and its broader partners ("OPEC+"), and fluctuations in demand as a result of the COVID-19 pandemic.

oil and natural gas producers, actions taken by members of the Organization of the Petroleum Exporting Countries and its broader partners ("OPEC+"), and geopolitical conflicts and developments.

If prices for oil are depressed for an extended period of time or there are future declines, we may be required to write down the value of our oil and natural gas properties and some of our undeveloped locations may no longer be economically viable.

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natural gas production from unconventional (shale) reserves, periods of investment restraint from U.S.

oil and natural gas producers, seasonal changes in demand for heating by residential and commercial customers, and rising levels of U.S.

oil and natural gas producers, seasonal changes in demand for heating by residential and commercial customers, and levels of U.S.

natural gas exports.

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In addition, sustained low prices for natural gas may negatively impact the value of our estimated proved reserves and the amount that we are allowed to borrow under our Credit Facility and reduce the amounts of cash we would otherwise have available to pay expenses, make distributions to our unitholders, and service our indebtedness.

New trade policies, such as tariffs, could adversely affect our operations, costs, and business

There is currently significant uncertainty regarding the future relationship between the United States and various other countries arising from changes that may be implemented by the new presidential administration, including with respect to trade policies, treaties, tariffs, taxes, and other limitations on cross-border operations.

Trade policies, such as tariffs, could adversely affect our operations, costs, and business

Any actions taken by the United States’ federal government that restrict or otherwise impact the economics of trade—including tariffs, trade barriers, or other similar measures—could have the potential to disrupt existing supply chains and trigger retaliatory efforts by other countries, including the imposition of tariffs, raising taxation, setting foreign exchange or capital controls, or establishing embargos, sanctions, or other import/export restrictions, thereby negatively impacting our business, both directly and indirectly.

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In addition, the third parties on whom we or our operators rely for transportation services are subject to complex federal, state, tribal, and local laws that could adversely affect the cost, manner, or feasibility of conducting our business.

In January 2024, the Biden administration announced that approvals for pending and future applications for certain new LNG facilities were being paused pending a review by the Department of Energy ("DOE") that aims to assess whether climate effects should be more heavily considered in the authorization process for such LNG export projects.

In July 2024, a federal judge halted the pause, although this decision was later appealed up to the Fifth Circuit in November 2024.

The DOE’s LNG study was completed in December 2024.

However, on his first day in office, President Trump signed an Executive Order which

resumes the processing of permit applications for new LNG export projects.

At this time, it is unclear what actions the Trump Administration may take, if any at all, with respect to the DOE study.

Our estimated reserves are based on many assumptions that may turn out to be inaccurate.

Any material inaccuracies in these reserve estimates or underlying assumptions will materially affect the quantities and present value of our reserves.

Oil and natural gas reserve engineering is not an exact science and requires subjective estimates of underground accumulations of oil and natural gas and assumptions concerning future oil and natural gas prices, production levels, ultimate recoveries, and operating and development costs.

recoveries, and operating and development costs.

As a result, estimated quantities of proved reserves, projections of future production rates, and the timing of development expenditures may be incorrect.

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In the absence of a specific contractual obligation, any development and production activities will be subject to their reasonable discretion.

Our operators could determine to drill and complete fewer wells on our acreage than is currently

Our operators could determine to drill and complete fewer wells on our acreage than is currently expected.

The success and timing of drilling and development activities on our properties, and whether the operators elect to drill any additional wells on our acreage, depends on a number of factors largely outside of our control, including:

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• delay or cancellation of construction or operation of LNG export facilities in the Gulf of Mexico;

In December 2023, we received notice that Aethon was exercising the “time-out” provisions under its joint exploration agreements with us in Angelina and San Augustine counties in East Texas.

In September 2024, we entered into letter agreements with Aethon to amend the joint exploration agreements to, among other things, withdraw the invocation of the time-out provisions.

See "Note 4 - Oil and Natural Gas Properties" to the consolidated financial statements included elsewhere in this Annual Report for additional information.

• delay, cancellation, or reduced demand from planned data centers.

If any of these risks are realized, production may decrease, reducing cash generated from operations and cash available for distribution.

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Decreases in the available borrowing amount could result from declines in oil and natural gas prices, operating difficulties or increased costs, decreases in reserves, lending requirements, or regulations or certain other circumstances.

As of December 31, 2024, we had $25.0 million outstanding borrowings a nd the aggregate maximum credit amounts of the lenders wer e $1.0 billion.

The lenders under our Credit Facility reaffirmed our borrowing bas e in November 2024 a t $580.0 million and we elected to maintain cash commitments at $375.0 million.

As of December 31, 2025, we had $154.0 million outstanding borrowings and the aggregate maximum credit amounts of the lenders were $1.0 billion.

In October 2025, we amended the Credit Facility to extend the maturity date from October 31, 2027 to October 31, 2030 and remove the adjustment applied to secured overnight financing rate ("SOFR") loans.

Concurrent with the Credit Facility amendment, the borrowing base under the Credit Facility was reaffirmed at $580.0 million and we elected to maintain cash commitments under the Credit Facility at $375.0 million.

The next semi -annual redetermination is scheduled for April 2026.

A future decrease in our borrowing base could be substantial and could be to a level below our then-outstanding borrowings.

A future decrease in

our borrowing base could be substantial and could be to a level below our then-outstanding borrowings.

Outstanding borrowings in excess of the borrowing base are required to be repaid in five equal monthly payments, or we are required to pledge other oil and natural gas properties as additional collateral, within 30 days following notice from the administrative agent of the new or adjusted borrowing base.

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In the past, we have made substantial capital expenditures in connection with the acquisition of mineral and royalty interests and, to a lesser extent, participation in our non-operated working interests.

To date, we have financed capital expenditures primarily with funding from cash generated by operations, limited borrowings under our Credit Facility, executed farmout agreements, and the issuance of equity securities.

To date, we have financed capital expenditures primarily with funding from cash generated by operations, limited borrowings under our Credit Facility, farmout agreements, and the issuance of equity securities.

While we are currently focused on organic growth of our existing assets and have farmed out most of our non-operated working interests, we expect to make opportunistic acquisitions to complement our existing acreage positions and may need access to capital for those activities in the future.

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• an inability to hire, train, or retain qualified personnel to manage and operate our growing business and assets;

• investments in seismic and other subsurface data may not identify commercially viable prospects or support successful development or acquisitions;

• the occurrence of other significant changes, such as impairment of oil and natural gas properties, goodwill or other intangible assets, asset devaluation, or restructuring charges.

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Fuel conservation measures, alternative fuel requirements, increasing consumer demand for alternatives to oil and natural gas, technological advances in fuel economy, and energy-generation devices could reduce demand for oil and natural gas.

The impact of the changing demand for oil and natural gas services and products may have a material adverse effect on our business, financial condition, results of operations, and cash distributions to unitholders.

The impact of the changing demand for oil and natural gas services and products may have a material adverse effect on our

business, financial condition, results of operations, and cash distributions to unitholders.

It is also possible that the concerns about the production and use of fossil fuels will reduce the number of investors willing to own our common units, adversely affecting the market price of our common units.

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To the extent the operators of our properties are shippers on interstate pipelines, they must comply with the tariffs of those pipelines and with federal policies related to the use of interstate capacity.

Our operators may be required to make significant expenditures to comply with the governmental laws and regulations described above and may be subject to potential fines and penalties if they are found to have violated these laws and

We believe the trend of more expansive and stricter environmental legislation and regulations will continue.

We believe the general trend of more expansive and stricter environmental legislation and regulations will continue.

Please read Part I, Items 1 and 2.

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A good-faith operation for the discovery and production of minerals, even one resulting in a dry hole, conducted within the ten-year period will interrupt the prescription of nonuse and restart the running of the ten-year prescriptive period.

If the operation results in production, prescription is interrupted as long as the production continues or operations are conducted in good faith to secure or restore production.

If the operation results in

production, prescription is interrupted as long as the production continues or operations are conducted in good faith to secure or restore production.

If any of our mineral servitudes are prescribed by operation of Louisiana law, our operating results may be adversely affected.

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Increased attention to environmental, social and governance (ESG) matters may impact our business.

Increased attention to, and sometimes conflicting social expectations on, companies to address climate change and other environmental and social impacts, investor and societal expectations regarding voluntary ESG disclosures, and increased consumer demand for alternative forms of energy may result in increased costs, reduced demand for our products, reduced profits, increased investigations and litigation, and negative impacts on our unit price and access to capital markets.

Increased attention to climate change and environmental conservation, for example, may result in demand shifts for oil and natural gas products and additional governmental investigations and private litigation against us.

Increased attention to, and sometimes conflicting social expectations on, companies to address climate change, investor and societal expectations regarding ESG disclosures, and increased consumer demand for alternative forms of energy may result in increased costs, reduced demand for our products, reduced profits, increased investigations and litigation, and negative impacts on our unit price and access to capital markets.

To the extent that societal pressures or political or other factors are involved, it is possible that such liability could be imposed without regard to our causation or contribution to the asserted damage, or other mitigating factors.

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Any new laws or regulations imposing requirements on our business related to the disclosure of climate-related risks may result in reputational harms among certain stakeholders if they disagree with our approach to mitigating climate-related risks, increased compliance costs, and increased costs of and restrictions on access to capital to the extent we do not meet any climate-related expectations of requirements of financial institutions.

In March 2024, the U.S.

Securities and Exchange Commission (“SEC”) finalized rules establishing a framework for the reporting of climate risks, targets, and metrics.

However, the implementation of the rule has been stayed pending the outcome of legal challenges.

Moreover, on February 11, 2025, SEC Acting Chairman Mark T.

Uyeda requested that the U.S.

Court of Appeals for the Eighth Circuit not schedule arguments in the case while the SEC reconsiders the finalized rules.

While the SEC, under the new presidential administration, may seek to repeal or otherwise modify the rules, we cannot predict whether such action will occur or its timings.

Relatedly, California has enacted laws requiring additional disclosure with respect to certain climate-related risks and GHG emissions reduction claims.

For example, California has enacted laws requiring additional disclosure with respect to certain climate-related risks and GHG emissions reduction claims.

Other states are expected to follow.

Non-compliance with these laws may result in the imposition of substantial fines or penalties.

Relatedly, certain organizations that provide information to investors on corporate governance and related matters have developed ratings processes for evaluating companies on their approach to ESG matters.

Such ratings are used by some investors to inform their investment and voting decisions.

While such ratings do not impact all investors’ investment or voting decisions, unfavorable ESG ratings may lead to negative investor sentiment toward us and to the diversion of investment which could have a negative impact on our unit price and/or our access to and costs of capital.

Additionally, institutional lenders may decide not to provide funding for fossil fuel energy companies based on climate change related concerns, which could affect our access to capital.

Non-compliance with these laws, to the extent applicable, may result in the imposition of substantial fines or penalties.

In addition, certain organizations that provide information, ratings or proxy advisory services to investors on corporate governance and related matters have developed processes for evaluating companies on their approach to ESG matters.

Such ratings or recommendations are used by some investors to inform their investment and voting decisions.

While such ratings or recommendations do not impact all investors’ investment or voting decisions, unfavorable ESG ratings or recommendations may lead to negative investor sentiment toward us and to the diversion of investment which could have a negative impact on our unit price and/or our access to and costs of capital.

Additionally, certain financial institutions may decide not to provide funding or insurance for fossil fuel energy companies based on climate change related concerns, which could affect our access to capital or the ability to complete projects.

Additionally, certain public statements with respect to ESG matters, such as emissions reduction goals, other environmental targets, or other commitments addressing certain social issues, have been subject to heightened scrutiny from public and governmental authorities related to the risk of potential “greenwashing,” i.e., misleading information or false claims overstating potential ESG benefits.

Any alleged claims of greenwashing against us or others in our industry may lead to increased litigation risks and foster negative sentiment and diversion of investments.

Finally, certain employment practices and social initiatives are the subject of scrutiny by both those calling for the continued advancement of such policies, as well as those who believe they should be curbed, including government actors, and the complex regulatory and legal frameworks applicable to such initiatives continue to evolve.

Finally, certain employment or business practices and social initiatives are the subject of scrutiny by both those calling for the continued advancement of such policies, as well as those who believe they should be curbed, including government actors, and the complex regulatory and legal frameworks applicable to such initiatives continue to evolve.

We cannot be certain of the impact of such regulatory, legal and other developments on our business.

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Our partnership agreement generally provides that any distributions are paid each quarter as follows:

(i) first, to the holders of Series B cumulative convertible preferred units equal to 7.0% of the face amount of the preferred units per annum through November 27, 2023, adjusted to 9.8% effective November 28, 2023 and subject to readjustment every two years thereafter, and (ii) second, to the holders of common units.

(i) first, to the holders of Series B cumulative convertible preferred units in an amount equal to 7.0% of the face amount of the preferred units per annum, through November 27, 2023, then adjusting on November 28, 2023 and readjusting every two years thereafter, to a rate equal to the greater of (a) the rate in effect immediately prior to the relevant readjustment and (b) the 10-year Treasury Rate as of such readjustment date plus 5.5% per annum (which rate adjusted to 9.8% effective November 28, 2023 and remained the same at 9.8% for November 28, 2025), and (ii) second, to the holders of common units.

However, the Board could elect not to pay distributions for one or more quarters or at all.

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• the market price of the common units may decline.

rights to share in distributions, redemption obligations, or redemption rights without Series B cumulative convertible preferred unitholder approval.

However, subject to certain exceptions, our partnership agreement does not authorize us to issue securities having preferences or rights with priority over or on a parity with the Series B cumulative convertible preferred units with respect to rights to share in distributions, redemption obligations, or redemption rights without Series B cumulative convertible preferred unitholder approval.

Distributions to Unitholders;

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Because we are a publicly traded partnership, the NYSE does not require us to have a majority of independent directors on our general partner’s board of directors or to establish a compensation committee or a nominating and corporate governance committee.

In addition, because we are a publicly traded partnership, the NYSE does not require us to obtain unitholder

approval prior to certain unit issuances.

In addition, because we are a publicly traded partnership, the NYSE does not require us to obtain unitholder approval prior to certain unit issuances.

Accordingly, unitholders will not have the same protections afforded to stockholders of certain corporations that are subject to all of the NYSE’s corporate governance requirements.

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federal income tax purposes, we would pay U.S.

federal income tax on our taxable income at the corporate tax rate.

Distributions to our common unitholders would generally be taxed again as corporate distributions, and no income, gains, losses, or deductions would flow through to our common unitholders.

federal income tax on our taxable income at the corporate tax rate, which is currently a maximum of 21%, and would likely pay state income tax at

varying rates.

Distributions to our common unitholders would generally be taxed again as corporate distributions, and no income, gains, losses, deductions, or credits would flow through to our common unitholders.

Because an entity-level tax would be imposed upon us as a corporation, cash distributions to our common unitholders would be substantially reduced.

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Imposition of any of those taxes may substantially reduce the cash distributions to our common unitholders.

Therefore, treatment of us as a corporation or the assessment of a material amount of entity-level taxation would result in a material reduction in the anticipated cash generated from our operations and after-tax return to our common unitholders, likely causing a substantial reduction in the value of our common units.

Therefore, treatment of us as a corporation or the assessment of a material amount of entity-level taxation would result in a material reduction in the anticipated cash generated from our operations and after-tax returns to our common unitholders, likely causing a substantial reduction in the value of our common units.

The tax treatment of publicly traded partnerships or an investment in our common units could be subject to potential legislative, judicial, or administrative changes and differing interpretations, possibly applied on a retroactive basis.

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Recent proposals have provided for the expansion of the qualifying income exception for publicly traded partnerships in certain circumstances and other proposals have provided for the total elimination of the qualifying income exception upon which we rely for our partnership tax treatment.

Further, while unitholders of publicly traded partnerships are,

subject to certain limitations, generally entitled to a deduction equal to 20% of their allocable share of a publicly traded

partnership’s “qualified business income” (as further discussed below), this deduction is scheduled to expire with respect to

taxable years beginning after December 31, 2025.

In addition, the Treasury Department has issued, and in the future may issue, regulations interpreting those laws that affect publicly traded partnerships.

There can be no assurance that there will not be further changes to U.S.

federal income tax laws or

the Treasury Department's interpretation of the qualifying income rules in a manner that could impact our ability to qualify as a partnership in the future.

federal income tax laws or the Treasury Department's interpretation of the qualifying income rules in a manner that could impact our ability to qualify as a partnership in the future.

Any modification to the U.S.

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federal income tax provisions currently available to oil and gas companies.

Such legislative changes have included, but not been limited to, (i) the repeal of the percentage depletion allowance for oil and natural gas properties;

Such legislative changes have included, but not been limited to, (i) the repeal of the percentage depletion allowance for oil and natural gas

(ii) the elimination of current deductions for intangible drilling and development costs;

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common unitholder will also be subject to a 10% withholding tax on the amount of any distribution in excess of our cumulative net income.

As we do not compute our cumulative net income for such purposes due to the complexity of the calculation and lack of clarity in how it would apply to us, we intend to treat all of our distributions as being in excess of our cumulative net income for such purposes

and subject to such 10% withholding tax.

Accordingly, distributions to a non-U.S.

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For a transfer of an interest in a publicly traded partnership that is effected through a broker, the obligation to withhold is imposed on the transferor’s broker.

Current and future prospective non-U.S.

Current and prospective non-U.S.

common unitholders should consult their tax advisors regarding the impact of these rules on an investment in our common units.

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federal income taxes, you likely will be subject to other taxes, including state and local taxes, unincorporated business taxes and estate, inheritance, or intangible taxes that are imposed by the various jurisdictions in which we conduct business or own property now or in the future, even if you do not live in any of those jurisdictions.

We own assets and conduct business in several states, many of which impose a personal income tax and also impose income taxes on

corporations and other entities.

We own assets and conduct business in several states, many of which impose a personal income tax and also impose income taxes on corporations and other entities.

You may be required to file state and local income tax returns and pay state and local income taxes in these jurisdictions.

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Although we believe our common unitholders are entitled to a 20% deduction related to qualified business income, application of the deduction to royalty income is not free from doubt.

For taxable years beginning after December 31, 2017 and ending on or before December 31, 2025, an individual common unitholder is entitled to a deduction equal to 20% of his or her allocable share of our "qualified publicly traded partnership income." For purposes of the deduction, the term qualified publicly traded partnership income includes the net amount of such unitholder’s allocable share of our income that is effectively connected to our U.S.

An individual common unitholder is entitled to a deduction equal to 20% of his or her allocable share of our "qualified publicly traded partnership income." For purposes of the deduction, the term qualified publicly traded partnership income includes the net amount of such unitholder’s allocable share of our income that is effectively connected to our U.S.

trade or business activities.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors