What changed in this filing

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Item 1. Financial Statements

2024-08-01 compared with 2024-05-02 · 82 added, 81 removed, 236 unchanged (41% of the section changed)

34 unchanged sentences

General Partner

Unitholders ( 40,088 and 38,372 common units issued and outstanding as of March 31, 2024 and December 31, 2023, respectively)

( 1,065 ) 113

Unitholders ( 40,088 and 39,583 common units issued and outstanding as of June 30, 2024 and December 31, 2023, respectively)

171,611 185,444

Total partnership capital

8 unchanged sentences

Three Months Ended

Six Months Ended

Operating revenues

1 unchanged sentence

Net profits interest

5,244 5,830 10,842 20,777

Lease bonus and other

480 1,176 984 1,712

Total operating revenues

2 unchanged sentences

Operating, including production taxes

3,515 2,754 6,138 5,472

Depreciation, depletion and amortization

7,666 5,337 14,586 11,978

General and administrative

2,551 2,724 5,820 5,462

Total costs and expenses

4 unchanged sentences

$ 826 $ 656 $ 1,431 $ 1,416

$ 22,802 $ 19,148 $ 40,364 $ 46,458

Net income per common unit (basic and diluted)

9 unchanged sentences

Unitholder Units

Three Months Ended March 31, 2023

Three Months Ended June 30, 2023

Balance at April 1, 2023

$ 319 $ 164,219 $ 164,538 38,372

656 19,148 19,804

Distributions ($ 0.989656 per common unit)

( 1,035 ) ( 37,975 ) ( 39,010 )

Balance at June 30, 2023

$ ( 60 ) $ 145,392 $ 145,332 38,372

Three Months Ended June 30, 2024

Balance at April 1, 2024

$ ( 799 ) $ 180,152 $ 179,353 40,088

826 22,802 23,628

Distributions ($ 0.781837 per common unit)

( 1,092 ) ( 31,343 ) ( 32,435 )

Balance at June 30, 2024

$ ( 1,065 ) $ 171,611 $ 170,546 40,088

General Partner

Unitholder Units

Six Months Ended June 30, 2023

Balance at January 1, 2023

3 unchanged sentences

( 2,152 ) ( 71,908 ) ( 74,060 )

Balance at March 31, 2023

Balance at June 30, 2023

$ ( 60 ) $ 145,392 $ 145,332 38,372

Three Months Ended March 31, 2024

Six Months Ended June 30, 2024

Balance at January 1, 2024

1 unchanged sentence

1,431 40,364 41,795

Acquisition of assets for units

Acquisition of assets for common units

- 17,041 17,041 505

1 unchanged sentence

( 2,609 ) ( 71,238 ) ( 73,847 )

Balance at March 31, 2024

Balance at June 30, 2024

$ ( 1,065 ) $ 171,611 $ 170,546 40,088

4 unchanged sentences

(In Thousands)

Three Months Ended

Six Months Ended

Net cash provided by operating activities

5 unchanged sentences

( 73,847 ) ( 74,060 )

(Decrease) increase in cash and cash equivalents

Decrease in cash and cash equivalents

( 11,864 ) ( 5,430 )

31 unchanged sentences

The Partnership’s Chief Executive Officer (“CEO”) has been determined to be the chief operating decision maker and allocates resources and assesses performance based upon financial information at the consolidated level.

Recent Events

Recent Events – In January 2020, the World Health Organization (“WHO”) announced a global health emergency because of a new strain of coronavirus (“COVID- 19” ) and the significant risks to the international community and economies as the virus spread globally beyond its point of origin.

In March 2020, the WHO classified COVID- 19 as a pandemic, based on the rapid increase in exposure globally, and thereafter, COVID- 19 continued to spread throughout the U.S.

and worldwide.

Multiple variants emerged in 2021 and became highly transmissible, which contributed to pricing volatility during 2021 to date.

While in May 2023, the WHO determined that COVID- 19 is now an established and ongoing health issue which no longer constitutes a public health emergency of international concern, the financial results of companies in the oil and natural gas industry have been impacted materially as a result of changing market conditions.

Such circumstances generally increase uncertainty in the Partnership’s accounting estimates.

Furthermore, during 2022 and 2023, multiple global military conflicts arose, causing instability in the international economy which may lead to significant market and other disruptions, including disruptions to the oil and gas industry, significant volatility in commodity prices and supply of energy resources, instability in financial markets, supply chain interruptions, political and social instability and other material and adverse effects on macroeconomic conditions.

It is not possible at this time to predict or determine the ultimate consequences of these ongoing conflicts.

We are continuing to closely monitor the overall impact and the evolution of the COVID- 19 pandemic, including the ongoing spread of any variants, along with future OPEC actions and the ongoing global military conflicts which arose during 2022 and 2023, on all aspects of our business, including how these events may impact our future operations, financial results, liquidity, employees, and operators.

While conditions have significantly improved with the increase in domestic vaccination programs, the reduction in global constraints and the reduced spread of COVID- 19 overall, the long-term impact of COVID- 19 remains uncertain as responses to COVID- 19 and newly emerging variants continue to evolve.

Although the WHO, in May 2023, determined that COVID- 19 is now an established and ongoing health issue which no longer constitutes a public health emergency of international concern, additional actions may be required in response to the COVID- 19 pandemic on a national, state, and local level by governmental authorities, and such actions may further adversely affect general and local economic conditions if there is a resurgence in the spread of COVID- 19.

Furthermore, the ongoing global military conflicts could continue during 2024 and could lead to significant market and other disruptions, including disruptions to the oil and gas industry, significant volatility in commodity prices and supply of energy resources, instability in financial markets, supply chain interruptions, political and social instability and other material and adverse effects on macroeconomic conditions.

We cannot predict the long-term impact of these events on our liquidity, financial position, results of operations or cash flows due to uncertainties including the severity of COVID- 19 or any of the ongoing variants, and the duration and international impact of the ongoing global military conflicts.

These situations remain fluid and unpredictable, and we are actively managing our response.

Summary of Significant Accounting Policies

18 unchanged sentences

Accordingly, the cost of the acquisition was allocated on a relative fair value basis and transaction costs were capitalized as a component of the cost of the assets acquired.

At closing, in addition to conveying mineral interests to the Partnership, the contributors delivered funds to the Partnership in an amount equal to their cash receipts during the period from January 1, 2024 through March 25, 2024 of $ 4.0 million.

The contributed cash of $ 4.0 million is included in net cash contributed in acquisitions on the condensed consolidated statement of cash flows for the three months ended March 31, 2024.

The condensed consolidated balance sheet as of March 31, 2024 includes $ 12.0 million of net proved oil and natural gas properties acquired in the transaction.

Contributed cash delivered at closing and final settlement net cash received, net of capitalized transaction costs paid, of $ 4.4 million is included in net cash contributed in acquisitions on the condensed consolidated statement of cash flows for the six months ended June 30, 2024.

The condensed consolidated balance sheet as of June 30, 2024 includes $ 12.1 million of net proved oil and natural gas properties acquired in the transaction.

On September 29, 2023, pursuant to a non-taxable contribution and exchange agreement with an unrelated third party, the Partnership acquired mineral and royalty interests totaling approximately 716 net royalty acres located in three counties in Texas in exchange for 494,000 common units representing limited partnership interests in the Partnership valued at $ 14.4 million and issued pursuant to the Partnership’s registration statement on Form S- 4.

8 unchanged sentences

The condensed consolidated balance sheet as of December 31, 2023 includes $ 10.1 million of net proved oil and natural gas properties acquired in the transaction.

Final settlement net cash received, net of capitalized transaction costs paid, of $ 0.2 million is included in net cash contributed in acquisitions on the condensed consolidated statement of cash flows for the three months ended March 31, 2024.

On July 12, 2023, pursuant to a non-taxable contribution and exchange agreement with multiple unrelated third parties, the Partnership acquired mineral and royalty interests totaling approximately 900 net royalty acres located in 13 counties and parishes across Louisiana, New Mexico, and Texas in exchange for 343,750 common units representing limited partnership interests in the Partnership valued at $ 11.0 million and issued pursuant to the Partnership’s registration statement on Form S- 4.

7 unchanged sentences

Accordingly, the cost of the acquisition was allocated on a relative fair value basis and transaction costs were capitalized as a component of the cost of the assets acquired.

Final settlement net cash received, net of capitalized transaction costs paid, of $ 0.5 million is included in net cash contributed in acquisitions on the condensed consolidated statement of cash flows for the three months ended March 31, 2023.

Commitments and Contingencies

1 unchanged sentence

Distributions to Holders of Common Units

On April 18, 2024, the Partnership announced its cash distribution for the first quarter of 2024 of $ 0.781837 per common unit, representing activity for the three -month period ended March 31, 2024, payable to common unitholders of record as of April 29, 2024.

This distribution will be paid on May 9, 2024.

The partnership agreement requires the next cash distribution to be paid by August 14, 2024.

On July 18, 2024, the Partnership announced its cash distribution for the second quarter of 2024 of $ 0.702058 per common unit, representing activity for the three -month period ended June 30, 2024, payable to common unitholders of record as of July 29, 2024.

This distribution will be paid on August 8, 2024.

The partnership agreement requires the next cash distribution to be paid by November 14, 2024.

MANAGEMENT ’ S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

1 unchanged sentence

For a description of limitations inherent in forward-looking statements, see page 1 of this Quarterly Report on Form 10-Q.

This discussion, which presents our results of operations for the three months ended March 31, 2024 and 2023, should be read in conjunction with our unaudited condensed consolidated financial statements and the accompanying notes.

This discussion, which presents our results of operations for the three and six months ended June 30, 2024 and 2023, should be read in conjunction with our unaudited condensed consolidated financial statements and the accompanying notes.

We intend for this discussion to provide the reader with information that will assist in understanding our financial statements, the changes in certain key items in those financial statements from period to period, and the primary factors that accounted for those changes.

2 unchanged sentences

We currently own Royalty Properties in 594 counties and parishes in 28 states.

As of March 31, 2024, we own a net profits overriding royalty interest (referred to as the Net Profits Interest, or “NPI”) in various properties owned by Dorchester Minerals Operating LP (the “Operating Partnership”), a Delaware limited partnership owned directly and indirectly by our General Partner.

As of June 30, 2024, we own a net profits overriding royalty interest (referred to as the Net Profits Interest, or “NPI”) in various properties owned by Dorchester Minerals Operating LP (the “Operating Partnership”), a Delaware limited partnership owned directly and indirectly by our General Partner.

We receive a monthly payment from the NPI equaling 96.97% of the net profits actually realized by the Operating Partnership from these properties in the preceding month.

1 unchanged sentence

In the event the NPI has a deficit of cumulative revenue versus cumulative costs, the deficit will be borne solely by the Operating Partnership.

From a cash perspective, as of March 31, 2024, the NPI was in a surplus position and had outstanding capital commitments, primarily in the Bakken region, equaling cash on hand of $4.0 million.

From a cash perspective, as of June 30, 2024, the NPI was in a surplus position and had outstanding capital commitments, primarily in the Bakken region, equaling cash on hand of $3.8 million.

Commodity Price Risks

2 unchanged sentences

Our profitability is affected by oil and natural gas market prices.

Oil and natural gas market prices have fluctuated significantly in recent years in response to changes in the supply and demand for oil and natural gas in the market, along with domestic and international political and economic conditions.

In January 2020, the World Health Organization (“WHO”) announced a global health emergency because of a new strain of coronavirus (“COVID-19”) and the significant risks to the international community and economies as the virus spread globally beyond its point of origin.

In March 2020, the WHO classified COVID-19 as a pandemic, based on the rapid increase in exposure globally, and thereafter, COVID-19 continued to spread throughout the U.S.

and worldwide.

In addition, in early March 2020, oil prices dropped sharply and continued to decline, briefly reaching negative levels, as a result of multiple factors affecting the supply and demand in global oil and natural gas markets, including (i) actions taken by OPEC members and other exporting nations impacting commodity price and production levels and (ii) a significant decrease in demand due to the COVID-19 pandemic.

Additionally, multiple variants emerged in 2021 and became highly transmissible, which contributed to additional pricing and demand volatility during 2021 to date.

However, conditions have significantly improved since 2022 with the increase in domestic vaccination programs, a reduction in global constraints and a reduced spread of COVID-19 overall and in May 2023, the WHO determined that COVID-19 is now an established and ongoing health issue which no longer constitutes a public health emergency of international concern.

Nevertheless, the long term impact of COVID-19 remains uncertain.

It is not possible at this time to predict or determine the ultimate consequences of these ongoing conflicts.

As a result of the lifting of certain restrictions put in place in response to COVID-19 and the global supply shortage of oil and natural gas caused by the Russian invasion of Ukraine, in addition to other changing market conditions, oil and natural gas market prices sharply increased during the first half of 2022 followed by a slight softening in oil prices during the second half of 2022 due to higher inflation and rising interest rates.

During the first quarter of 2023, with the exception of a decline of oil prices in March in reaction to the U.S.

regional bank instability, oil prices remained generally in line with those seen in the later portion of 2022.

Despite the decline in oil prices we have seen during 2023, demand and market prices for oil and natural gas remain resilient, due in part to global travel trending towards pre-COVID-19 levels and the recently announced OPEC+ production cuts.

However, commodity prices have historically been volatile, and we cannot predict events which may lead to future fluctuations in these prices.

Although the WHO in May 2023 determined that COVID-19 is now an established and ongoing health issue which no longer constitutes a public health emergency of international concern, additional actions may be required in response to the COVID-19 pandemic on a national, state, and local level by governmental authorities, and such actions may further adversely affect general and local economic conditions if there is a resurgence in the spread of COVID-19.

The long term effects of COVID-19 remain uncertain.

Similarly, the length, impact and outcome of the ongoing military conflicts are highly unpredictable and could lead to significant market disruptions and increased volatility in oil and natural gas prices and supply of energy resources along with instability in the global commodity and financial markets.

Oil and natural gas market prices have fluctuated significantly in recent years in response to factors outside of our control, including the war in Ukraine, conflicts in the Middle East, fluctuations in interest rates, global supply chain disruptions and actions taken by OPEC+.

It is not possible for us to predict or determine how these factors might affect oil and natural gas market prices in the future.

Results of Operations

1 unchanged sentence

On March 28, 2024, pursuant to a non-taxable contribution and exchange agreement with multiple unrelated third parties, the Partnership acquired mineral interests totaling approximately 1,485 net royalty acres located in two counties in Colorado in exchange for 505,369 common units representing limited partnership interests in the Partnership valued at $17.0 million and issued pursuant to the Partnership’s registration statement on Form S-4.

The contributed cash of $4.0 million is included in net cash contributed in acquisitions on the condensed consolidated statement of cash flows for the three months ended March 31, 2024.

Contributed cash delivered at closing and final settlement net cash received, net of capitalized transaction costs paid, of $4.4 million is included in net cash contributed in acquisitions on the condensed consolidated statement of cash flows for the six months ended June 30, 2024

On September 30, 2022, pursuant to a non-taxable contribution and exchange agreement with Excess Energy, LLC, a Texas limited liability company, the Partnership acquired mineral, royalty and overriding royalty interests totaling approximately 2,100 net royalty acres located in 12 counties across Texas and New Mexico in exchange for 816,719 common units representing limited partnership interests in the Partnership valued at $20.4 million and issued pursuant to the Partnership's registration statement on Form S-4.

Final settlement net cash received, net of capitalized transaction costs paid, of $0.5 million is included in net cash contributed in acquisitions on the condensed consolidated statement of cash flows for the three months ended March 31, 2023.

Three Months Ended March 31, 2024 as compared to Three Months Ended March 31, 2023

Final settlement net cash received, net of capitalized transaction costs paid, of $0.5 million is included in net cash contributed in acquisitions on the condensed consolidated statement of cash flows for the six months ended June 30, 2023.

Three and Six Months Ended June 30, 2024 as compared to Three and Six Months Ended June 30, 2023

Our period-to-period changes in net income and cash flows from operating activities are principally determined by changes in oil and natural gas sales volumes and prices, and to a lesser extent, by capital expenditures deducted under the NPI calculation.

2 unchanged sentences

Three Months Ended

Six Months Ended

Accrual basis sales volumes:

3 unchanged sentences

NPI oil sales (mbbls)

Accrual basis average sales prices:

Accrual basis average sales price:

Royalty Properties natural gas sales ($/mcf)

3 unchanged sentences

Both oil and natural gas sales price changes reflected in the table above resulted from changing market conditions.

The increase in oil sales volumes attributable to our Royalty Properties from the first quarter of 2023 to the same period of 2024 is primarily a result of increased production in the Permian Basin, Bakken region, and from acquired wells in South Texas, partially offset by lower suspense releases on new wells in the Permian Basin.

The decrease in natural gas sales volumes attributable to our Royalty Properties from the first quarter of 2023 to the same period of 2024 is primarily a result of lower suspense releases on new wells in the Permian Basin and East Texas and lower suspense releases from acquired wells in South Texas, partially offset by increased production in the Permian Basin and East Texas and higher suspense releases in the Mid-Continent.

The decrease in oil and natural gas sales volumes attributable to our NPI properties from the first quarter of 2023 to the same period of 2024 is primarily a result of lower suspense releases on new wells in the Permian Basin, partially offset by increased production and higher suspense releases on new wells in the Bakken region.

Operating costs, including production taxes, decreased 3% from the first quarter of 2023 to the same period of 2024.

The decrease is primarily a result of lower ad valorem taxes attributable to our Royalty Properties.

The increase in oil sales volumes attributable to our Royalty Properties from the second quarter and first six months of 2023 to the same periods of 2024 is primarily a result of higher suspense releases on new wells and increased baseline production in the Permian Basin and higher suspense releases on first time payments and increased baseline production in South Texas from wells acquired in the third quarter of 2023 and 2022.

The increase in natural gas sales volumes attributable to our Royalty Properties from the second quarter of 2023 to the same period of 2024 is primarily a result of higher suspense releases on new wells and increased baseline production in the Permian Basin and Mid-Continent, increased baseline production in South Texas from wells acquired in the third quarter of 2023, and higher suspense releases on new wells in East Texas from wells acquired in the third quarter of 2022, partially offset by decreased production from legacy wells in the Fayetteville Shale and Barnett Shale.

The increase in natural gas sales volumes attributable to our Royalty Properties from the first six months of 2023 to the same period of 2024 is primarily attributable to higher suspense releases on new wells and increased baseline production in the Permian Basin and Mid-Continent, increased baseline production in South Texas from wells acquired in the third quarter of 2023, and higher suspense releases on first time payments and increased baseline production in East Texas from wells acquired in the third quarter of 2022, partially offset by lower suspense releases on first time payments from acquired wells in South Texas during the first quarter of 2024 compared to the same period of 2023, primarily attributable to wells acquired in the third quarter of 2022, and decreased production from legacy wells in the Fayetteville Shale and Barnett Shale.

The decrease in oil sales volumes attributable to our NPI properties from the second quarter of 2023 to the same period of 2024 is primarily the result of decreased baseline production in the Permian Basin and lower suspense releases on new wells in the Permian Basin and Bakken region, partially offset by increased baseline production in the Bakken region.

The decrease in oil sales volumes attributable to our NPI properties from the first six months of 2023 to the same period of 2024 is primarily the result of decreased baseline production and lower suspense releases on new wells in the Permian Basin, partially offset by increased baseline production and higher suspense releases on new wells in the Bakken region during the second quarter of 2024 compared to the same period of 2023.

The increase in natural gas sales volumes attributable to our NPI properties from the second quarter of 2023 to the same period of 2024 is primarily the result of increased baseline production and higher suspense releases in the Mid-Continent.

The decrease in natural gas sales volumes attributable to our NPI properties from the first six months of 2023 to the same period of 2024 is primarily the result of lower suspense releases on new wells in the Permian Basin, partially offset by higher suspense releases on new wells in the Mid-Continent and increased baseline production and higher suspense releases on new wells in the Bakken region during the second quarter of 2024 compared to the same period of 2023.

Operating costs, including production taxes, increased 28% from the second quarter of 2023 to the same period of 2024 and 12% from the first six months of 2023 to the same period of 2024.

The increases are primarily a result of higher proportionate taxes due to higher oil and natural gas sales volumes and higher oil sales prices attributable to our Royalty Properties.

Depreciation, depletion and amortization increased 44% from the

first quarter of

second quarter of

2023 to the same period of

2024 and 22% from the first six months of 2023 to the same period of 2024.

We adjust our depletion rate each quarter for significant changes in our estimates of oil and natural gas reserves, including recent acquisitions.

General and administrative expenses increased 19% from the first quarter of 2023 to the same period of 2024.

Net cash provided by operating activities decreased 28% from the first three months of 2023 to the same period of 2024.

The decrease is primarily due to lower NPI payment receipts.

General and administrative expenses decreased 6% from the second quarter of 2023 to the same period of 2024.

The decrease is primarily a result of one-time, non-recurring professional services expenses of $1.2 million related to an unsuccessful acquisition in the second quarter of 2023, partially offset by higher compensation expenses, including an expanded Operating Partnership equity program designed for employee retention, and increased professional service fees in the second quarter of 2024.

General and administrative expenses increased 7% from the first six months of 2023 to the same period of 2024.

The increase is primarily a result of higher compensation expenses, including an expanded Operating Partnership equity program designed for employee retention, and increased legal and professional service fees, partially offset by a decrease resulting from one-time, non-recurring professional services expenses of $1.2 million related to an unsuccessful acquisition in the second quarter of 2023.

Net cash provided by operating activities decreased 16% from the first six months of 2023 to the same period of 2024.

The decrease is primarily due to lower NPI payment receipts and higher general and administrative expense payments, partially offset by higher Royalty revenue receipts, net of production taxes and operating expenses.

In an effort to provide the reader with information concerning prices of oil and natural gas sales that correspond to our quarterly distributions, management calculates the average price by dividing gross revenues received by the net volumes of the corresponding product without regard to the timing of the production to which such sales may be attributable.

1 unchanged sentence

While the relationship between our cash receipts and the timing of the production of oil and natural gas may be described generally, actual cash receipts may be materially impacted by purchasers’ release of suspended funds and by purchasers’ prior period adjustments.

Cash receipts attributable to our Royalty Properties during the first quarter of 2024 totaled $24.5 million.

Approximately 71% of these receipts reflect oil sales during December 2023 through February 2024 and natural gas sales during November 2023 through January 2024, and approximately 29% from prior sales periods.

The average indicated prices for oil and natural gas sales cash receipts attributable to the Royalty Properties during the first quarter of 2024 were $63.89/bbl and $2.37/mcf, respectively.

Cash receipts attributable to our Net Profits Interest during the first quarter of 2024 totaled $6.8 million.

Approximately 65% of these receipts reflect oil and natural gas sales during November 2023 through January 2024, and approximately 35% from prior sales periods.

The average indicated prices for oil and natural gas sales cash receipts attributable to the NPI properties during the first quarter of 2024 were $65.12/bbl and $2.27/mcf, respectively.

Cash receipts attributable to our Royalty Properties during the second quarter of 2024 totaled $26.1 million.

Approximately 74% of these receipts reflect oil sales during March 2024 through May 2024 and natural gas sales during February 2024 through April 2024, and approximately 26% from prior sales periods.

The average indicated prices for oil and natural gas sales cash receipts attributable to the Royalty Properties during the second quarter of 2024 were $70.48/bbl and $1.53/mcf, respectively.

Cash receipts attributable to our Net Profits Interest during the second quarter of 2024 totaled $6.4 million.

Approximately 69% of these receipts reflect oil and natural gas sales during February 2024 through April 2024, and approximately 31% from prior sales periods.

The average indicated prices for oil and natural gas sales cash receipts attributable to the NPI properties during the second quarter of 2024 were $67.51/bbl and $2.24/mcf, respectively.

Liquidity and Capital Resources

10 unchanged sentences

Under the third amendment to the Office Lease, monthly rental payments range from $25,000 to $30,000.

Future maturities of Office Lease liabilities representing monthly cash rental payment obligations as of March 31, 2024 are summarized as follows:

Future maturities of Office Lease liabilities representing monthly cash rental payment obligations as of June 30, 2024 are summarized as follows:

(In Thousands)

6 unchanged sentences

To the extent necessary to avoid unrelated business taxable income, our partnership agreement prohibits us from incurring indebtedness, excluding trade payables, in excess of $50,000 in the aggregate at any given time or which would constitute “acquisition indebtedness” (as defined in Section 514 of the Internal Revenue Code of 1986, as amended).

We currently expect to have sufficient liquidity to fund our distributions to unitholders and operations despite potential material uncertainties that may impact us as a result of the ongoing world military conflicts, including in Israel and in Ukraine and the rise during 2022 and 2023 in inflation and interest rates.

Although demand and market prices for oil and natural gas remain resilient due in part to global travel trending towards pre-COVID-19 levels and the recently announced OPEC+ production cuts, we cannot predict events that may lead to future price volatility.

Our ability to fund future distributions to unitholders may be affected by the prevailing economic conditions in the oil and natural gas market and other financial and business factors, including the possible resurgence of COVID-19 and any ongoing variants, along with the military conflict between Russia and Ukraine which are beyond our control.

We currently expect to have sufficient liquidity to fund our distributions to unitholders and operations despite potential material uncertainties that may impact us as a result of the ongoing global military conflicts, including in Ukraine and the Middle East and current inflation and interest rates.

We cannot predict events that may lead to future oil and natural gas price volatility.

Our ability to fund future distributions to unitholders may be affected by the prevailing economic conditions in the oil and natural gas market and other financial and business factors, including the possible resurgence of COVID-19 and any ongoing variants, along with global military conflicts, including in Ukraine and the Middle East, which are beyond our control.

If market conditions were to change due to declines in oil prices or uncertainty created by a resurgence of COVID-19 or any ongoing variants and our revenues were reduced significantly or our operating costs were to increase significantly, our cash flows and liquidity could be reduced.

Despite the significant improvement in conditions since the beginning of the COVID-19 pandemic, the current economic environment is volatile, and therefore, we cannot predict the ultimate long-term impact that COVID-19 or the ongoing military conflict between Russia and Ukraine will have on our liquidity or cash flows.

The current economic environment is volatile, and we cannot predict the ultimate long-term impact on our liquidity or cash flows from factors outside of our control, including those related to COVID-19 or ongoing global military conflicts in Ukraine and the Middle East.

Liquidity and Working Capital

Cash and cash equivalents totaled $37.7 million at March 31, 2024 and $47.0 million at December 31, 2023.

Cash and cash equivalents totaled $35.2 million at June 30, 2024 and $47.0 million at December 31, 2023.

Critical Accounting Policies and Estimates

As of March 31, 2024, there have been no significant changes to our critical accounting policies and related estimates previously disclosed in our Annual Report for the year ended December 31, 2023.

As of June 30, 2024, there have been no significant changes to our critical accounting policies and related estimates previously disclosed in our Annual Report for the year ended December 31, 2023.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no significant changes in our exposure to market risk during the three months ended March 31, 2024.

There have been no significant changes in our exposure to market risk during the three months ended June 30, 2024.

For a discussion of our exposure to market risk, refer to Item 7A of Part I of the Partnership’s Annual Report for the year ended December 31, 2023.

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-Q

Item 1. Financial Statements