What changed in this filing

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Item 1A. Risk Factors

2025-02-20 compared with 2024-02-22 · 40 added, 30 removed, 495 unchanged (12% of the section changed)

1 unchanged sentence

Our cash distributions are highly dependent on oil and natural gas prices, which have historically been very volatile.

Our quarterly cash distributions depend significantly on the prices realized from the sale of oil and, in particular, natural gas.

Our quarterly cash distributions depend significantly on the prices realized from the sale of natural gas and, in particular, oil.

Historically, the markets for oil and natural gas have been volatile and may continue to be volatile in the future.

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the availability of pipeline capacity;

technological advances affecting energy consumption;

weather conditions;

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The Operating Partnership or any transferee may abandon any well or property if it reasonably believes that the well or property can no longer produce in commercially economic quantities.

This could result in termination of the NPIs relating to the abandoned well.

This could result in termination of the NPIs relating to the abandoned well or property.

Cash distributions are affected by production and other costs, most of which are outside of our control.

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Thereafter, in 2021, oil and natural gas prices significantly rebounded.

Although we continue to see sustained improvements in pricing, on account of a number of factors, the oil and natural gas markets remain subject to price volatility, which may have a material adverse effect on our cash distributions in periods of lower prices.

However, global military conflicts, fluctuating interest rates, changes in tariff rates, global supply chain disruptions, concerns about a potential economic downturn or recession, recent measures to combat persistent inflation, and actions taken by OPEC and its non-OPEC allies, collectively OPEC+, continued to contribute to economic and pricing volatility during 2024.

Oil and natural gas markets remain subject to price volatility, which may have a material adverse effect on our cash distributions in periods of lower prices.

During periods of substantial declines in prices, such as in 2020, oil and natural gas operators on our properties may suspend drilling programs, which would impact our revenues and operating income.

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Continuing or worsening inflationary issues and associated changes in federal monetary policy may result in increases to the costs of the goods, services and labor used by our operators, which could cause their capital expenditures and operating costs to rise and may delay or restrict their exploration and development activities.

The rate of inflation in the U.S.

has been steadily increasing since 2021 and through 2022.

Recently, the U.S.

has had periods of high inflation.

These inflationary pressures may result in increases to the costs of the goods, services and labor used by our operators, which could cause their capital expenditures and operating costs to rise.

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On May 12, 2016, the EPA amended its regulations to impose new standards for methane and volatile organic compounds emissions for certain new, modified, and reconstructed equipment, processes, and activities across the oil and natural gas sector.

However, on August 13, 2020, in response to an executive order by former President Trump, the EPA amended the New Source Performance standards to ease regulatory burdens, including rescinding standards applicable to transmission or storage segments and eliminating methane requirements altogether.

However, on August 13, 2020, in response to an executive order by President Trump, the EPA amended the New Source Performance standards to ease regulatory burdens, including rescinding standards applicable to transmission or storage segments and eliminating methane requirements altogether.

On June 30, 2021, President Biden signed into law a joint resolution of Congress disapproving the 2020 amendments, with the exception of some technical changes, thereby reinstating the prior standards.

The EPA expects owners and operators of regulated sources to take “immediate steps” to comply with these standards.

Additionally, on December 2, 2023, the EPA announced a final rule that would expand and strengthen emission reduction requirements for both new and existing sources in the oil and natural gas industry by requiring increased monitoring of fugitive emissions, imposing new requirements for pneumatic controllers and tank batteries, and prohibiting venting of natural gas in certain situations.

Additionally, on April 17, 2023, the EPA agreed in a consent decree to issue a proposed rule by December 10, 2024 that either revises its emission standards for hazardous air pollutants from oil and natural gas production activities or determines that no revision is necessary.

Additionally, on March 8, 2024, the EPA published a final rule that would expand and strengthen emission reduction requirements for both new and existing sources in the oil and natural gas industry by requiring increased monitoring of fugitive emissions, imposing new requirements for pneumatic controllers and tank batteries, and prohibiting venting of natural gas in certain situations.

Federal changes will affect state air permitting programs in states that administer the federal CAA under a delegation of authority, including states in which we have operations.

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The discharge of pollutants into regulated waters is prohibited, except in accordance with the terms of a permit issued by the EPA, an analogous state agency, or, in the case of fill material, the United States Army Corps of Engineers (“USACOE”).

The scope of waters regulated under the CWA has fluctuated in recent years.

On June 29, 2015, the EPA and the USACOE jointly promulgated a final rule expanding the scope of “Waters of the United States” (“WOTUS”), which would have made additional waters subject to the jurisdiction of the Clean Water Act.

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Also, on November 18, 2016, the BLM finalized a rule to reduce the flaring, venting and leaking of methane from oil and natural gas operations on federal and Indian lands.

On March 28, 2017, former President Trump signed an executive order directing the BLM to review the above rules and, if appropriate, to initiate a rulemaking to rescind or revise them.

On March 28, 2017, President Trump signed an executive order directing the BLM to review the above rules and, if appropriate, to initiate a rulemaking to rescind or revise them.

Accordingly, on December 29, 2017, the BLM published a final rule to rescind the 2015 hydraulic fracturing rule.

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however, a federal court struck down the scaled-back rule on July 15, 2020, and shortly thereafter, on October 8, 2020, another federal court struck down the 2016 methane rule.

On November 28, 2022, the BLM announced a proposed replacement rule to reduce the waste of natural gas from venting, flaring and leaks during oil and gas production activities on federal and Indian lands, which would require the use of upgraded equipment in some cases and would place time and volume limits on royalty-free flaring.

Also, on July 24, 2023, the BLM published a proposed rule to update its oil and gas leasing regulations, which would increase bonding requirements and raise royalty rates.

At this time, it is uncertain when, or if, the above rules will be implemented or if new requirements will be adopted.

Each of these regulations, to the extent that they are reinstated or modified, may result in additional levels of regulation or complexity that could lead to operational delays, increased operating costs and additional regulatory burdens that could make it more difficult to perform hydraulic fracturing and increase costs of compliance.

On April 10, 2024, the BLM published a final replacement rule to reduce the waste of natural gas from venting, flaring and leaks during oil and natural gas production activities on federal and Indian lands, which would require the use of upgraded equipment in some cases and would place time and volume limits on royalty-free flaring.

On April 24, 2024, several states challenged the 2024 waste prevention rule in federal court, which has resulted in a preliminary injunction against the BLM enforcing the rule in North Dakota, Texas, Montana, Wyoming, and Utah.

Also, on April 23, 2024, the BLM published a final rule to update its oil and gas leasing regulations, which increases bonding requirements and raises royalty rates.

Each of these regulations, to the extent that they are implemented, reinstated or modified, may result in additional levels of regulation or complexity that could lead to operational delays, increased operating costs and additional regulatory burdens that could make it more difficult to perform hydraulic fracturing and increase costs of compliance.

Additionally, certain states in which our properties are located, including Oklahoma, Texas and Wyoming, have adopted, and other states are considering adopting, regulations that could impose more stringent permitting, public disclosure and well construction requirements on hydraulic-fracturing operations or otherwise seek to ban fracturing activities altogether.

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These ongoing or proposed studies could spur initiatives to further regulate hydraulic fracturing, and could ultimately make it more difficult or costly for our operators to perform fracturing and increase their costs of compliance and doing business.

The adoption of climate change legislation or regulations could result in increased operating costs and reduced demand for the oil and natural gas production from our properties.

In recent years, federal, state, and local governments have taken steps to reduce emissions of greenhouse gases (“GHGs”).

Climate change legislation or regulations could result in increased operating costs and reduced demand for the oil and natural gas production from our properties.

In recent years, federal, state, and local governments have taken steps to reduce emissions of greenhouse gases (“GHGs”), though policy changes at the federal level have caused uncertainty.

For example, the Infrastructure Investment and Jobs Act of 2021 and the Inflation Reduction Act of 2022 (“IRA”) include billions of dollars in incentives for the development of renewable energy, clean hydrogen, clean fuels, electric vehicles, investments in advanced biofuels and supporting infrastructure and carbon capture and sequestration.

The EPA has proposed ambitious rules to reduce harmful air pollutant emissions, including GHGs, from light-, medium-, and heavy-duty vehicles beginning in model year 2027.

These incentives and regulations could accelerate the transition of the economy away from the use of fossil fuels towards lower or zero-carbon emissions alternatives, which could decrease demand for, and in turn the prices of, oil and natural gas and adversely impact our business.

Also, in March 2024, the EPA finalized ambitious rules to reduce harmful air pollutant emissions, including GHGs, from light-, medium-, and heavy-duty vehicles beginning in model year 2027, which could decrease demand for, and in turn the prices of, oil and natural gas and adversely impact our business.

In addition, the IRA imposes the first ever federal fee on the emission of GHGs through a methane emissions charge.

Specifically, the IRA amends the Clean Air Act to impose a fee on the emission of methane that exceeds an applicable waste emissions threshold from sources required to report their GHG emissions to the EPA, including sources in the offshore and onshore petroleum and natural gas production and gathering and boosting source categories.

The methane emissions charge would start in calendar year 2024 at $900 per ton of methane, increase to $1,200 in 2025 and be set at $1,500 for 2026 and each year after.

Calculation of the fee is based on certain thresholds established in the IRA.

On January 12, 2024, the EPA announced a proposed rule to implement the methane emissions charge.

The methane emissions charge could increase our operators’ costs, which could adversely impact our business, financial condition and cash flows.

In implemented, methane emissions charge could increase our operators’ costs, which could adversely impact our business, financial condition and cash flows.

However, on January 20, 2025, President Trump signed multiple executive orders seeking to reverse these climate incentives, including pausing the disbursement of funds under the IRA.

The same day, President Trump also issued executive orders to encourage fossil fuel production and exploration on federal lands and waters, while moving away from renewable energy and electric vehicles.

Such actions have the potential to impact prior efforts to transition the economy away from the use of fossil fuels and towards lower or zero-carbon emissions alternatives.

The EPA has also finalized a series of GHG monitoring, reporting and emission control rules for the oil and natural gas industry, and almost half of the states have taken measures to reduce GHG emissions primarily through the development of GHG emission inventories and/or regional GHG cap and trade programs.

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In addition, states have imposed increasingly stringent requirements related to the venting or flaring of natural gas during oil and natural gas operations.

In addition, the United States has been involved in international negotiations regarding GHG reductions under the United Nations Framework Convention on Climate Change (“UNFCCC”).

At the international level, the United States has been involved in negotiations regarding GHG reductions under the United Nations Framework Convention on Climate Change (“UNFCCC”).

was among approximately 195 nations that signed an international accord in December 2015, the so called Paris Agreement, which became effective on November 4, 2016, with the objective of limiting GHG emissions.

On April 21, 2021, the United States announced that it was setting an economy-wide target of reducing its GHG emissions by 50-52 percent below 2005 levels by 2030.

In November 2021, in connection with Glasgow Climate Pact, the United States and other world leaders made further commitments to reduce GHG emissions, including reducing global methane emissions by at least 30% by 2030 from 2020 levels.

More than 150 countries have now signed on to this pledge.

Most recently, at the 28th Conference of the Parties in the United Arab Emirates, world leaders agreed to transition away from fossil fuels in a just, orderly and equitable manner and to triple renewables and double energy efficiency globally by 2030.

Additionally, the Biden Administration announced a new climate target for the United States on December 19, 2024, which included a 61-66 percent reduction in economy-wide net greenhouse gas emissions by 2035, as compared to 2005 levels.

Many state and local leaders have stated their intent to intensify efforts to support the international climate commitments.

Although these international commitments are not directly binding on companies, additional GHG reduction regulatory requirements may be issued in an effort to help meet the U.S.

commitments under the Paris Agreement.

Though President Trump issued an executive order on January 20, 2025, directing the United States Ambassador to the United Nations to immediately withdraw from the Paris Agreement, it is possible that the Paris Agreement and other domestic and international regulatory requirements will have an adverse effect on the demand for oil and natural gas products.

Although it is not possible at this time to predict whether or when Congress may adopt additional climate change legislation, or whether EPA may promulgate additional regulation of GHGs from the oil and natural gas industry, any laws or regulations that may be adopted to restrict or reduce emissions of GHGs could require oil and natural gas operators that develop our properties to incur increased operating costs and could have an adverse effect on demand for the oil and natural gas produced from our properties.

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While reporting on ESG metrics remains voluntary, access to capital and investors is likely to favor companies with robust ESG programs in place.

In March 2022, the SEC proposed new rules relating to the disclosure of a range of climate-related risks and other information.

To the extent this rule is finalized as proposed, the Partnership, our operators and/or our customers could incur increased costs related to the assessment and disclosure of climate-related information.

The SEC published final rules on March 28, 2024, relating to the disclosure of a range of climate-related risks and other information.

Several lawsuits have been filed challenging the rules.

In April 2024, the SEC agreed to pause the rules to facilitate an orderly judicial resolution.

To the extent the rules are implemented, the Partnership, our operators and/or our customers could incur increased costs related to the assessment and disclosure of climate-related information.

Enhanced climate disclosure requirements could also accelerate any trend by certain stakeholders and capital providers to restrict or seek more stringent conditions with respect to their financing of certain carbon intensive sectors.

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The Court noted, however, that future challenges were possible depending on the outcome of the ongoing environmental study, which the USACOE issued in draft form on September 8, 2023.

On October 14, 2024, the Standing Rock Sioux Tribe filed a new lawsuit in the U.S.

District Court for the District of Columbia, alleging that the USACOE is allowing the pipeline to operate without the necessary easement and without an appropriate environmental impact statement.

The USACOE and Dakota Access Pipeline filed motions to dismiss the case on January 17, 2025, though the matter remains pending.

Accordingly, the continued operation of Dakota Access Pipeline in the future is uncertain.

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The new owner of the General Partner would then be in a position to replace the management of our Partnership with its own choices.

A group of unitholders own a large percentage of our units and have the right to appoint a Manager to our Board of Managers and may be able to exert significant influence over certain matters.

West Texas Minerals LLC and Carrollton Mineral Partners, LP, and certain affiliates, beneficially hold, in the aggregate, approximately 6.9% of our outstanding Units.

These unitholders, acting together, would be able to influence all matters requiring unitholder approval and have the right to appoint a Manager to our Board of Managers, for so long as they collectively hold an aggregate of at least 1,000,000 Units.

For example, these unitholders would be able to influence amendments of our organizational documents, or approval of any merger, sale of assets, or other major corporate transaction.

Our General Partner and its affiliates have conflicts of interests, which may permit our General Partner and its affiliates to favor their own interests to the detriment of unitholders.

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federal income tax laws that affect publicly traded partnerships, including elimination of partnership tax treatment for publicly traded partnerships.

Under current law, we believe that our royalty income is qualifying income for purposes of Section 7704(d)(1)(E) of the Internal Revenue Code (the “Code”).

Under current law, we believe that our royalty income is qualifying income for purposes of Section 7704(d)(1)(E) of the Internal Revenue Code of 1986, as amended (the “Code”).

If the current law remains effective in its current form, we believe we will continue to be able to meet the qualifying income requirement.

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The Partnership may be adversely affected by the international economic instability caused by ongoing global conflicts.

During 2022 and 2023, multiple global military conflicts arose, causing instability in the international economy which may continue into 2024.

From 2022 through 2024, multiple global military conflicts arose causing instability in the international economy which may continue into 2025.

Although the length, impact and outcome of these military conflicts are highly unpredictable, an escalation or expansion of any of these conflicts 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.

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If, notwithstanding our efforts to comply with new or changing laws, regulations, and standards, we fail to comply, regulatory authorities may initiate legal proceedings against us, and our business may be harmed.

Further, failure to comply with these laws, regulations and standards may make it more difficult and more expensive for us to obtain directors’ and officers’ liability insurance, which could make it more difficult for us to attract and retain qualified members to serve on our board of directors or committees or as members of senior management.

Further, failure to comply with these laws, regulations and standards may make it more difficult and more expensive for us to obtain directors’ and officers’ liability insurance, which could make it more difficult for us to attract and retain qualified members to serve on our board of managers or committees or as members of senior management.

These rules and regulations are often subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies.

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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