What changed in this filing

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Item 1. Financial Statements

2025-08-07 compared with 2025-05-08 · 77 added, 60 removed, 244 unchanged (36% of the section changed)

35 unchanged sentences

( 3,497 ) ( 1,997 )

Unitholders ( 47,340 common units issued and outstanding as of March 31, 2025 and December 31, 2024, respectively)

Unitholders ( 47,340 common units issued and outstanding as of June 30, 2025 and December 31, 2024, respectively)

323,336 363,785

9 unchanged sentences

Three Months Ended

Six Months Ended

Operating revenues

1 unchanged sentence

Net profits interest

Lease bonus and other

3,794 5,244 8,587 10,842

3,696 97 3,807 142

473 383 903 842

Total operating revenues

2 unchanged sentences

Operating, including production taxes

2,517 3,515 6,964 6,138

Depreciation, depletion and amortization

14,709 7,666 31,468 14,586

General and administrative

2,822 2,551 7,138 5,820

Total costs and expenses

4 unchanged sentences

$ 442 $ 826 $ 1,074 $ 1,431

$ 11,905 $ 22,802 $ 28,915 $ 40,364

Net income per common unit (basic and diluted)

9 unchanged sentences

Unitholder Units

Three Months Ended March 31, 2024

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

Three Months Ended June 30, 2025

Balance at April 1, 2025

$ ( 2,656 ) $ 345,791 $ 343,135 47,340

442 11,905 12,347

Distributions ($ 0.725835 per common unit)

( 1,283 ) ( 34,360 ) ( 35,643 )

Balance at June 30, 2025

$ ( 3,497 ) $ 323,336 $ 319,839 47,340

General Partner

Unitholder Units

Six Months Ended June 30, 2024

Balance at January 1, 2024

5 unchanged sentences

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

Balance at March 31, 2024

Balance at June 30, 2024

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

Three Months Ended March 31, 2025

Six Months Ended June 30, 2025

Balance at January 1, 2025

3 unchanged sentences

( 2,574 ) ( 69,364 ) ( 71,938 )

Balance at March 31, 2025

Balance at June 30, 2025

$ ( 3,497 ) $ 323,336 $ 319,839 47,340

4 unchanged sentences

(In Thousands)

Three Months Ended

Six Months Ended

Net cash provided by operating activities

$ 33,394 $ 27,967

Cash flows provided by investing activities:

2 unchanged sentences

Distributions paid to General Partner and unitholders

( 36,295 ) ( 41,412 )

Decrease in cash and cash equivalents

( 963 ) ( 9,288 )

Cash and cash equivalents at beginning of period

42,508 47,025

Cash and cash equivalents at end of period

$ 41,545 $ 37,737

Non-cash investing and financing activities:

29 unchanged sentences

Recent Accounting Pronouncements

Recently Adopted Pronouncements

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023 - 07, “Segment Reporting (Topic 280 ):

Improvements to Reportable Segment Disclosures” (“ASU 2023 - 07” ), which expands a public entity’s annual and interim disclosure requirements about their reportable segments, primarily through more detailed disclosures about significant segment expenses.

Public entities with a single reportable segment are required to apply the disclosure requirements in ASU 2023 - 07, as well as all existing segment disclosures in ASC 280 on an interim and annual basis.

ASU 2023 - 07 is effective for annual periods beginning after December 15, 2023, and for interim periods beginning after December 15, 2024.

We adopted this standard for our fiscal year 2024 annual consolidated financial statements and interim condensed consolidated financial statements thereafter and have applied this standard retrospectively for all prior periods presented in the consolidated financial statements.

See Note 6 — Segment Reporting for further information.

Accounting Pronouncements Not Yet Adopted

11 unchanged sentences

The condensed consolidated balance sheet as of December 31, 2024 includes $ 193.7 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 $ 1.9 million is included in net cash contributed in acquisitions on the condensed consolidated statement of cash flows for the three months ended March 31, 2025.

Final settlement net cash received, net of capitalized transaction costs paid, of $ 2.0 million is included in net cash contributed in acquisitions on the condensed consolidated statement of cash flows for the six months ended June 30, 2025.

On September 30, 2024, pursuant to a non-taxable contribution and exchange agreement with an unrelated third party, the Partnership acquired royalty interests totaling approximately 1,204 net royalty acres located in Weld County, Colorado in exchange for 530,000 common units representing limited partnership interests in the Partnership valued at $ 16.0 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.

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.

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 December 31, 2024 includes $ 12.3 million of net proved oil and natural gas properties acquired in the transaction.

2 unchanged sentences

Distributions to Holders of Common Units

On April 24, 2025, the Partnership announced its cash distribution for the first quarter of 2025 of $ 0.725835 per common unit, representing activity for the three -month period ended March 31, 2025, payable to common unitholders of record as of May 5, 2025.

This distribution will be paid on May 15, 2025.

The partnership agreement requires the next cash distribution to be paid by August 14, 2025.

On July 24, 2025, the Partnership announced its cash distribution for the second quarter of 2025 of $ 0.620216 per common unit, representing activity for the three -month period ended June 30, 2025, payable to common unitholders of record as of August 4, 2025.

This distribution will be paid on August 14, 2025.

The partnership agreement requires the next cash distribution to be paid by November 14, 2025.

Segment Reporting

The Partnership manages its business activities on a consolidated basis and operates in a single operating and reportable segment.

Operating segments are defined as components of a public entity that engages in business activities and for which discrete financial information and operating results are available and regularly reviewed by the chief operating decision maker in deciding how to allocate resources and assess performance.

As disclosed in Note 1 – Business and Basis of Presentation, our business may be described as the acquisition, ownership and administration of Royalty Properties and the NPI.

See Note 2 – Summary of Significant Accounting Policies in the Partnership’s Annual Report for a summarization of the Partnerships revenue recognition policy.

The Partnership operates in a single operating and reportable segment.

The Partnership’s Chief Executive Officer (“CEO”) has been determined to be the chief operating decision maker of the Partnership.

The CEO uses Net income, as reported on our Condensed Consolidated Income Statements, to assess financial performance and allocate resources on a consolidated basis.

The CEO uses Net income to assess financial performance and allocate resources on a consolidated basis.

The CEO manages and evaluates the results of the Partnership on a consolidated basis, and Net income is used to evaluate key operating decisions, such as making strategic acquisitions, determining transaction structures to capitalize on the development of the properties underlying our mineral interests, and allocating resources for general and administrative expenditures.

The CEO does not review condensed consolidated balance sheet assets when assessing segment performance and deciding how to allocate resources.

Disaggregated operating revenues of the Partnership’s single segment and all significant segment expenses are presented separately on the Partnership’s Condensed Consolidated Income Statements.

2 unchanged sentences

The following discussion contains forward-looking statements.

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, 2025 and 2024, should be read in conjunction with our unaudited condensed consolidated financial statements and the accompanying notes.

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

This discussion, which presents our results of operations for the three and six months ended June 30, 2025 and 2024, 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, 2025, 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, 2025, 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, 2025, the NPI was in a surplus position and had outstanding capital commitments, primarily in the Bakken region, equaling cash on hand of $3.0 million.

From a cash perspective, as of June 30, 2025, the NPI was in a surplus position and had outstanding capital commitments, primarily in the Bakken region, equaling cash on hand of $7.3 million.

Commodity Price Risks

20 unchanged sentences

On September 30, 2024, pursuant to a non-taxable contribution and exchange agreement with West Texas Minerals LLC, a Delaware limited liability company, Carrollton Mineral Partners, LP, a Texas limited partnership, Carrollton Mineral Partners Fund II, LP, a Texas limited partnership, Carrollton Mineral Partners III, LP, a Texas limited partnership, Carrollton Mineral Partners III-B, LP, a Texas limited partnership, Carrollton Mineral Partners IV, LP, a Texas limited partnership, CMP Permian, LP, a Texas limited partnership, CMP Glasscock, LP, a Texas limited partnership, and Carrollton Royalty, LP, a Texas limited partnership (collectively, the “Contributors”), the Partnership acquired mineral, royalty, and overriding royalty interests in producing and non-producing oil and natural gas properties representing approximately 14,225 net mineral acres located in 14 counties across New Mexico and Texas in exchange for 6,721,144 common units representing limited partnership interests in the Partnership valued at $202.6 million and issued pursuant to the Partnership’s registration statements on Form S-4.

Final settlement net cash received, net of capitalized transaction costs paid, of $1.9 million is included in the net cash contributed in acquisitions on the condensed consolidated statement of cash flows for the three months ended March 31, 2025.

Final settlement net cash received, net of capitalized transaction costs paid, of $2.0 million is included in net cash contributed in acquisitions on the condensed consolidated statement of cash flows for the six months ended June 30, 2025.

On September 30, 2024, pursuant to a non-taxable contribution and exchange agreement with an unrelated third party, the Partnership acquired royalty interests totaling approximately 1,204 net royalty acres located in Weld County, Colorado in exchange for 530,000 common units representing limited partnership interests in the Partnership valued at $16.0 million and issued pursuant to the Partnership’s registration statement on Form S-4.

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.

Three Months Ended March 31, 2025 as compared to 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.

Three and Six Months Ended June 30, 2025 as compared to Three and Six Months Ended June 30, 2024

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:

9 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 2024 to the same period of 2025 is primarily a result of higher suspense releases on new wells on legacy acreage, suspense releases on first time payments from properties acquired in the third quarter of 2024, and increased baseline production from legacy wells and wells acquired in the third quarter of 2024 in the Permian Basin and increased baseline production from wells acquired in the first and third quarters of 2024 in the Rockies, partially offset by lower suspense releases on new wells and decreased baseline production in the Bakken region.

The increase in natural gas sales volumes attributable to our Royalty Properties from the first quarter of 2024 to the same period of 2025 is primarily a result of higher suspense releases on new wells on legacy acreage, suspense releases on first time payments from properties acquired in the third quarter of 2024, and increased baseline production from legacy wells and wells acquired in the third quarter of 2024 in the Permian Basin and increased baseline production from wells acquired in the first and third quarters of 2024 in the Rockies, partially offset by lower suspense releases on new wells in the Mid-Continent and East Texas.

The decrease in oil sales volumes attributable to our NPI properties from the first quarter of 2024 to the same period of 2025 is primarily a result of decreased baseline production in the Permian Basin and Bakken region and lower suspense releases on new wells in the Bakken region, partially offset by higher suspense releases on new wells in the Permian Basin.

The decrease in natural gas sales volumes attributable to our NPI properties from the first quarter of 2024 to the same period of 2025 is primarily a result of decreased baseline production in the Bakken region and decreased Fayetteville Shale production due to higher prior period adjustments, partially offset by increased baseline production in the Permian Basin.

Operating costs, including production taxes, increased 70% from the first quarter of 2024 to the same period of 2025.

The decrease in oil sales volumes attributable to our Royalty Properties from the second quarter of 2024 to the same period of 2025 is primarily a result of lower suspense releases on new wells on legacy acreage and decreased baseline production from legacy wells, partially offset by suspense releases on first time payments and increased baseline production from Permian Basin properties acquired in the third quarter of 2024.

The increase in oil sales volumes attributable to our Royalty Properties from the first six months of 2024 to the same period of 2025 is primarily a result of suspense releases on first time payments and increased baseline production from Permian Basin properties acquired in the third quarter of 2024, increased baseline production from Rockies wells acquired in the first and third quarters of 2024, and increased second quarter of 2025 baseline production from Permian Basin legacy wells, partially offset by lower suspense releases on new wells on legacy acreage in the Permian Basin in the second quarter of 2025.

The increases in natural gas sales volumes attributable to our Royalty Properties from the second quarter and first six months of 2024 to the same periods of 2025 are primarily a result of suspense releases on first time payments and increased baseline production from Permian Basin properties acquired in the third quarter of 2024 and increased baseline production from wells acquired in the first and third quarters of 2024 in the Rockies, partially offset by lower suspense releases on new wells on legacy acreage in the Permian Basin in the second quarter of 2025 and lower suspense releases on new wells on legacy acreage and decreased baseline production on legacy wells in the Mid-Continent and East Texas.

The increase in oil sales volumes attributable to our NPI properties from the second quarter of 2024 to the same period of 2025 is primarily a result of higher suspense releases on new wells in the Permian Basin, partially offset by lower suspense releases on new wells in the Bakken region.

The decrease in oil sales volumes attributable to our NPI properties from the first six months of 2024 to the same period of 2025 is primarily a result of decreased baseline production in the Permian Basin and Bakken region and lower suspense releases on new wells in the Bakken region, partially offset by higher suspense releases on new wells in the Permian Basin in the second quarter of 2025.

Natural gas sales volumes attributable to our NPI properties remained flat from the second quarter of 2024 to the same period of 2025.

The lack of change is primarily a result of higher suspense release on new wells in the Permian Basin, offset by decreased baseline production and lower suspense releases on new wells in the Mid-Continent and Bakken region and decreased Fayetteville Shale production in 2025 and higher prior period adjustments in 2024.

The decrease in natural gas sales volumes attributable to our NPI properties from the first six months of 2024 to the same period of 2025 is primarily a result of decreased baseline production and lower suspense releases on new wells in the Mid-Continent and Bakken region and decreased Fayetteville Shale production in 2025 and to higher prior period adjustments in 2024, partially offset by increased suspense releases on new wells in the Permian Basin.

Lease bonus revenue for the second quarter and first six months of 2025 is primarily attributable to the receipt of $3.6 million from the extension of a lease that was originally executed on November 6, 2023, in Reagan County, Texas for $15,000 per acre and retained a 25% royalty.

Operating costs, including production taxes, decreased 28% from the second quarter of 2024 to the same period of 2025.

The decrease is primarily the result of lower proportionate production taxes and post-production costs, such as transportation, due to lower oil sales volumes and revenue.

Operating costs, including production taxes, increased 13% from the first six months of 2024 to the same period of 2025.

The increase is primarily a result of higher proportionate production taxes due to higher oil and natural gas sales revenue, higher proportionate post-production costs, such as compression, transportation, processing, and marketing, due to higher oil and natural gas sales volumes, and higher ad valorem taxes attributable to our Royalty Properties.

Depreciation, depletion and amortization increased 142% from the first quarter of 2024 to the same period of 2025.

Depreciation, depletion and amortization increased 92% from the second quarter of 2024 to the same period of 2025 and 116% from the first six months of 2024 to the same period of 2025.

Depletion is the amount of cost basis of oil and natural gas properties at the beginning of a period attributable to the volume of reserves extracted during such period, calculated on a units-of-production basis.

1 unchanged sentence

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

General and administrative expenses increased 32% from the first quarter of 2024 to the same period of 2025.

The increase is primarily a result of increased legal and professional service fees, higher regulatory filing fees due to the Partnership’s S-4 registration statement filing in the first quarter of 2025, and higher compensation expenses, including an expanded Operating Partnership equity program designed for employee retention.

Net cash provided by operating activities increased 19% from the first quarter of 2024 to the same period of 2025 primarily due to higher revenue receipts attributable to our Royalty Properties, net of production taxes and operating expenses, partially offset by lower NPI payment receipts and higher general and administrative expenses.

General and administrative expenses increased 11% from the second quarter of 2024 to the same period of 2025.

The increase is primarily a result of increased data services costs and higher compensation expenses, including an expanded Operating Partnership equity program designed for employee retention, partially offset by decreased legal fees.

General and administrative expenses increased 23% from the first six months of 2024 to the same period of 2025.

The increase is primarily a result of increased legal fees in the first quarter of 2025, higher regulatory filing fees due to the Partnership’s S-4 registration statement filing in the first quarter of 2025, increased data service costs, and higher compensation expenses, including an expanded Operating Partnership equity program designed for employee retention.

Net cash provided by operating activities increased 11% from the first six months of 2024 to the same period of 2025 primarily due to higher revenue receipts attributable to our Royalty Properties, net of production taxes and operating expenses and higher lease bonus receipts, partially offset by lower NPI payment receipts and higher general and administrative 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 2025 totaled $34.2 million.

Approximately 68% of these receipts reflect oil sales during December 2024 through February 2025 and natural gas sales during November 2024 through January 2025, and approximately 32% from prior sales periods.

The average realized prices for oil and natural gas sales cash receipts attributable to the Royalty Properties during the first quarter of 2025 were $63.00/bbl and $2.19/mcf, respectively.

Cash receipts attributable to the Partnership's NPI during the first quarter of 2025 totaled $4.8 million.

Approximately 74% of these receipts reflect oil and natural gas sales during November 2024 through January 2025, and approximately 26% from prior sales periods.

The average realized prices for oil and natural gas sales cash receipts attributable to the NPI properties during the first quarter of 2025 were $58.83/bbl and $1.97/mcf, respectively.

Cash receipts attributable to our Royalty Properties during the second quarter of 2025 totaled $26.6 million.

Approximately 73% of these receipts reflect oil sales during March 2025 through May 2025 and natural gas sales during February 2025 through April 2025, and approximately 27% from prior sales periods.

The average realized prices for oil and natural gas sales cash receipts attributable to the Royalty Properties during the second quarter of 2025 were $59.60/bbl and $2.46/mcf, respectively.

Cash receipts attributable to the Partnership's NPI during the second quarter of 2025 totaled $3.1 million.

Approximately 66% of these receipts reflect oil and natural gas sales during February 2025 through April 2025, and approximately 34% from prior sales periods.

The average realized prices for oil and natural gas sales cash receipts attributable to the NPI properties during the second quarter of 2025 were $60.73/bbl and $3.09/mcf, respectively.

Liquidity and Capital Resources

5 unchanged sentences

Because many of these expenses vary directly with oil and natural gas sales prices and volumes, we anticipate that sufficient funds will be available at all times for payment of these expenses.

See Note 5 to the unaudited condensed consolidated financial statements included in “Item 1 – Financial Statements” of this Quarterly Report on Form 10-Q for additional information regarding cash distributions to unitholders.

See Note 5 to the unaudited condensed consolidated financial statements included in “Item 1 – Financial Statements” of this Quarterly Report for additional information regarding cash distributions to unitholders.

Contractual Obligations

2 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, 2025 are summarized as follows:

Future maturities of Office Lease liabilities representing monthly cash rental payment obligations as of June 30, 2025 are summarized as follows:

(In Thousands)

12 unchanged sentences

Liquidity and Working Capital

Cash and cash equivalents totaled $41.5 million at March 31, 2025 and $42.5 million at December 31, 2024.

Cash and cash equivalents totaled $36.5 million at June 30, 2025 and $42.5 million at December 31, 2024.

Critical Accounting Policies and Estimates

As of March 31, 2025, 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, 2024.

As of June 30, 2025, there have been no significant changes to our critical accounting policies and related estimates previously disclosed in our Annual Report.

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, 2025.

For a discussion of our exposure to market risk, refer to Item 7A of Part II of the Partnership’s Annual Report for the year ended December 31, 2024.

There have been no significant changes in our exposure to market risk during the three months ended June 30, 2025.

For a discussion of our exposure to market risk, refer to Item 7A of Part II of the Partnership’s Annual Report.

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