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Item 1. Financial Statements

2026-08-06 compared with 2026-05-06 · 137 added, 67 removed, 253 unchanged (45% of the section changed)

3 unchanged sentences

(A Delaware Limited Partnership)

CONSOLIDATED BALANCE SHEETS

CONDENSED CONSOLIDATED BALANCE SHEETS

(In Thousands)

30 unchanged sentences

( 5,092 ) ( 4,825 )

Unitholders ( 48,256 common units issued and outstanding as of March 31, 2026 and December 31, 2025, respectively)

Unitholders ( 48,256 common units issued and outstanding as of June 30, 2026 and December 31, 2025, respectively)

308,768 310,064

3 unchanged sentences

$ 314,015 $ 309,554

The accompanying notes are an integral part of these consolidated financial statements.

The accompanying notes are an integral part of these condensed consolidated financial statements.

DORCHESTER MINERALS, L.P.

(A Delaware Limited Partnership)

CONSOLIDATED INCOME STATEMENTS

CONDENSED CONSOLIDATED INCOME STATEMENTS

(In Thousands, except per unit amounts)

Three Months Ended

Six Months Ended

Operating revenues

$ 43,900 $ 24,432 $ 84,865 $ 62,262

Net profits interest - related party

9,585 3,794 26,114 8,587

1,233 3,696 2,082 3,807

1,357 473 1,889 903

Total operating revenues

56,075 32,395 114,950 75,559

Costs and expenses

Operating, including production taxes

5,620 2,517 10,187 6,964

Depreciation, depletion and amortization

General and administrative

15,820 14,709 36,727 31,468

General and administrative expenses

868 315 2,129 1,694

General and administrative expenses - related party

2,896 2,507 5,899 5,444

Total costs and expenses

25,204 20,048 54,942 45,570

$ 30,871 $ 12,347 $ 60,008 $ 29,989

Allocation of net income

General Partner

$ 1,037 $ 442 $ 1,914 $ 1,074

$ 29,834 $ 11,905 $ 58,094 $ 28,915

Net income per common unit (basic and diluted)

$ 0.62 $ 0.25 $ 1.20 $ 0.61

Weighted average basic and diluted common units outstanding

The accompanying notes are an integral part of these consolidated financial statements.

48,256 47,340 48,256 47,340

The accompanying notes are an integral part of these condensed consolidated financial statements.

DORCHESTER MINERALS, L.P.

(A Delaware Limited Partnership)

CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERSHIP CAPITAL

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERSHIP CAPITAL

(In Thousands)

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Unitholder Units

Three Months Ended March 31, 2025

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

Three Months Ended June 30, 2026

Balance at April 1, 2026

$ ( 5,174 ) $ 301,857 $ 296,683 48,256

1,037 29,834 30,871

Distributions ($ 0.475036 per common unit)

( 955 ) ( 22,923 ) ( 23,878 )

Balance at June 30, 2026

$ ( 5,092 ) $ 308,768 $ 303,676 48,256

General Partner

Unitholder Units

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

Three Months Ended March 31, 2026

Six Months Ended June 30, 2026

Balance at January 1, 2026

3 unchanged sentences

( 2,181 ) ( 59,390 ) ( 61,571 )

Balance at March 31, 2026

Balance at June 30, 2026

$ ( 5,092 ) $ 308,768 $ 303,676 48,256

The accompanying notes are an integral part of these consolidated financial statements.

The accompanying notes are an integral part of these condensed consolidated financial statements.

DORCHESTER MINERALS, L.P.

(A Delaware Limited Partnership)

CONSOLIDATED STATEMENTS OF CASH FLOWS

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands)

Three Months Ended

Six Months Ended

Cash flows from operating activities:

$ 60,008 $ 29,989

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation, depletion and amortization

36,727 31,468

Amortization of operating lease right-of-use asset

1 unchanged sentence

Accounts receivable

( 2,667 ) 2,330

Net profits interest receivable - related party

( 9,474 ) ( 664 )

Prepaid expenses and other current assets

1 unchanged sentence

Operating lease liability

( 138 ) ( 133 )

Net cash provided by operating activities

88,126 63,916

Cash flows provided by investing activities:

2 unchanged sentences

Distributions paid to General Partner and unitholders

Decrease in cash and cash equivalents

( 61,571 ) ( 71,938 )

Increase (decrease) in cash and cash equivalents

30,563 ( 5,994 )

Cash and cash equivalents at beginning of period

41,937 42,508

Cash and cash equivalents at end of period

The accompanying notes are an integral part of these consolidated financial statements.

$ 72,500 $ 36,514

The accompanying notes are an integral part of these condensed consolidated financial statements.

DORCHESTER MINERALS, L.P.

(A Delaware Limited Partnership)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Business and Basis of Presentation

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Securities and Exchange Commission (“SEC”).

The unaudited consolidated financial statements do not include all of the disclosures required for complete annual financial statements prepared in conformity with U.S.

Therefore, the accompanying unaudited consolidated financial statements and related notes should be read in conjunction with the consolidated financial statements and notes thereto included in the Partnership’s Annual Report.

The accompanying unaudited consolidated financial statements reflect all adjustments (consisting only of normal and recurring adjustments unless indicated otherwise) that are, in the opinion of management, necessary for the fair presentation of our financial position and operating results for the interim period.

The unaudited condensed consolidated financial statements do not include all of the disclosures required for complete annual financial statements prepared in conformity with U.S.

Therefore, the accompanying unaudited condensed consolidated financial statements and related notes should be read in conjunction with the consolidated financial statements and notes thereto included in the Partnership’s Annual Report.

The accompanying unaudited condensed consolidated financial statements reflect all adjustments (consisting only of normal and recurring adjustments unless indicated otherwise) that are, in the opinion of management, necessary for the fair presentation of our financial position and operating results for the interim period.

Interim period results are not necessarily indicative of the results for the calendar year.

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The Partnership has no potentially dilutive securities and, consequently, basic and diluted income per unit do not differ.

The unaudited consolidated financial statements include the accounts of the Partnership and its wholly-owned subsidiaries Dorchester Minerals Oklahoma LP, Dorchester Minerals Oklahoma GP, Inc., Maecenas Minerals LLP, Dorchester-Maecenas GP LLC, The Buffalo Co., A Limited Partnership, DMLPTBC GP LLC, and DMLP Terra Firma LLC.

The unaudited condensed consolidated financial statements include the accounts of the Partnership and its wholly-owned subsidiaries Dorchester Minerals Oklahoma LP, Dorchester Minerals Oklahoma GP, Inc., Maecenas Minerals LLP, Dorchester-Maecenas GP LLC, The Buffalo Co., A Limited Partnership, DMLPTBC GP LLC, and DMLP Terra Firma LLC.

All significant intercompany balances and transactions have been eliminated in consolidation.

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The Partnership’s significant accounting policies are described in Note 2 of the consolidated financial statements included in the Partnership’s Annual Report on Form 10‑K for the year ended December 31, 2025.

There have been no changes in such polices or the application of such polices during the three months ended March 31, 2026.

There have been no changes in such policies or the application of such policies during the six months ended June 30, 2026.

Use of Estimates — The preparation of financial statements in conformity with U.S.

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Receivables — The following table presents the Partnership’s receivables as of the dates indicated:

March 31, 2026

June 30, 2026

December 31, 2025

8 unchanged sentences

$ 27,012 $ 16,481 $ 24,785

Revenues — The following table disaggregates the Partnership’s oil and natural gas revenues from production on the Royalty Properties for the three months ended March 31, 2026 and 2025:

Revenues — The following table disaggregates the Partnership’s oil and natural gas revenues from production on the Royalty Properties for the three and six months ended June 30, 2026 and 2025:

Three Months Ended

Six Months Ended

Oil sales (1)

1 unchanged sentence

Natural gas sales

278 1,864 4,605 7,072

Total Royalties operating revenue

21 unchanged sentences

Acquisitions for Common Units

On July 31, 2026, pursuant to a non-taxable contribution and exchange agreement with multiple unrelated third parties, the Partnership acquired mineral and royalty interests totaling approximately 3,100 net royalty acres located in five counties across the Williston Basin in North Dakota in exchange for 835,958 common units representing limited partnership interests in the Partnership valued at $ 23.1 million and issued pursuant to the Partnership’s registration statement on Form S- 4.

At closing, in addition to conveying mineral and royalty interests to the Partnership, the contributors delivered funds to the Partnership in an amount equal to their cash receipts during the period from April 1, 2026 through June 30, 2026 of $ 3.6 million, which will be included in the calculation of the Partnership’s third quarter 2026 cash distribution to unitholders.

On August 29, 2025, pursuant to a non-taxable contribution and exchange agreement with multiple unrelated third parties, the Partnership acquired mineral interests totaling approximately 3,050 net royalty acres located in Adams County, Colorado in exchange for 915,694 common units representing limited partnership interests in the Partnership valued at $ 23.0 million and issued pursuant to the Partnership’s registration statement on Form S- 4.

3 unchanged sentences

Oil and natural gas properties, at cost, on the consolidated balance sheet as of December 31, 2025 includes $ 19.7 million of net capitalized costs attributable to proved oil and natural gas properties acquired in the transaction.

Final settlement net cash received of $ 4.0 million is included in net cash contributed in acquisitions on the condensed consolidated statement of cash flows for the six months ended June 30, 2026.

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, 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.

2 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 $ 1.9 million is included in net cash contributed in acquisitions on the 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.

Commitments and Contingencies

1 unchanged sentence

During the first quarter of 2026, our Partnership and the Operating Partnership entered into a settlement and mutual release agreement with unrelated third parties resolving ordinary course litigation affecting certain leasehold in Midland County, Texas, which is owned by the Operating Partnership and subject to the NPI.

The Operating Partnership received proceeds of $ 15.5 million, which will be included in the calculation of the April 2026 NPI payment.

The Operating Partnership received proceeds of $ 15.5 million, which were included in the calculation of the April 2026 NPI payment.

Distributions to Holders of Common Units

On April 23, 2026, the Partnership announced its cash distribution for the first quarter of 2026 of $ 0.475036 per common unit, representing activity for the three -month period ended March 31, 2026, payable to common unitholders of record as of May 4, 2026.

This distribution will be paid on May 14, 2026.

The partnership agreement requires the next cash distribution to be paid by August 14, 2026.

On July 23, 2026, the Partnership announced its cash distribution for the second quarter of 2026 of $ 1.272943 per common unit, representing activity for the three -month period ended June 30, 2026, payable to common unitholders of record as of August 3, 2026.

This distribution will be paid on August 13, 2026.

The partnership agreement requires the next cash distribution to be paid by November 14, 2026.

Segment Reporting

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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.

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

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.

There are no other significant segment expenses or other segment items that would require disclosure.

The Partnership leases its office space at 3838 Oak Lawn Avenue, Suite 300, Dallas, Texas (the “Office Lease”).

The third amendment to the Office Lease was executed in April 2017 for a term of 129 months, beginning June 1, 2018 and expiring February 28, 2029.

At lease commencement, the Partnership concluded the Office Lease was an operating lease.

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

In May 2026, the Partnership executed the fourth amendment to the Office Lease, extending the lease term for an additional 86 months, beginning March 1, 2029 and expiring April 30, 2036.

Monthly rental payments under the fourth amendment range from approximately $ 45,000 to $ 52,000 .

Upon commencement of the fourth amendment, the Partnership concluded that the amendment constituted a lease modification and did not represent a separate contract under ASC 842 as the amendment did not grant the Partnership additional right of use not included in the existing Office Lease.

As the fourth amendment did not represent a separate contract and extended the contractual term of the existing Office Lease, the Partnership reassessed the classification of the Office Lease and concluded that it continues to be an operating lease.

Therefore, upon the effective date of the modification, the Partnership remeasured the operating lease liability using a discount rate of 7 % and recognized a corresponding adjustment to the operating lease right-of-use asset.

As the Office Lease does not provide an implicit rate of return and as the Partnership is precluded from incurring any borrowings above a nominal amount under its partnership agreement, the Partnership used a discount rate commensurate with the incremental borrowing rate of a group of peers based on information available at the application date in determining the present value of lease payments.

The modification was accounted for as a non-cash exchange in which the Partnership obtained additional operating lease right-of-use asset in exchange for the remeasured operating lease liability.

The non-cash exchange resulted in an increase of $ 2.8 million to both the operating lease right-of-use asset and operating lease liability on the condensed consolidated balance sheet.

Maturities of lease liabilities under the fourth amendment to the Office Lease are as follows:

Total lease payments

Less amount representing interest

Total lease obligation

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.

This discussion, which presents our results of operations for the three months ended March 31, 2026 and 2025, should be read in conjunction with our unaudited consolidated financial statements and the accompanying notes.

This discussion, which presents our results of operations for the three and six months ended June 30, 2026 and 2025, 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 593 counties and parishes in 28 states.

As of March 31, 2026, 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, 2026, 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, 2026, the NPI was in a surplus position and had outstanding capital commitments, primarily in the Bakken region, of $11.7 million.

From a cash perspective, as of June 30, 2026, the NPI was in a surplus position and had outstanding capital commitments, primarily in the Bakken region, of $10.4 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 factors outside of our control, including the war in Ukraine, conflicts in the Middle East, fluctuations in interest rates, global supply chain disruptions, political uncertainty in Venezuela, and actions taken by OPEC+.

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, including the ongoing military conflict in Iran, fluctuations in interest rates, global supply chain disruptions, political uncertainty in Venezuela, 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.

1 unchanged sentence

Tariffs and Trading Relationships

In April 2025, the U.S.

government announced a baseline tariff of 10% on products imported from all countries and an additional individualized reciprocal tariff on the countries with which the United States has the largest trade deficits, including China.

Increased tariffs by the United States have led and may continue to lead to the imposition of retaliatory tariffs by foreign jurisdictions.

Additionally, the U.S.

government has announced, adjusted and rescinded multiple tariffs on several foreign jurisdictions, which has increased uncertainty regarding the ultimate effect of the tariffs on economic conditions.

government has announced, adjusted and rescinded multiple tariffs on many foreign jurisdictions, which has increased uncertainty regarding the ultimate effect of the tariffs on economic conditions.

Continued uncertainties about tariffs and their effects on trading relationships may affect costs for and availability of raw materials or contribute to inflation in the markets in which we own properties.

6 unchanged sentences

Acquisitions for Common Units

On July 31, 2026, pursuant to a non-taxable contribution and exchange agreement with multiple unrelated third parties, the Partnership acquired mineral and royalty interests totaling approximately 3,100 net royalty acres located in five counties across the Williston Basin in North Dakota in exchange for 835,958 common units representing limited partnership interests in the Partnership valued at $23.1 million and issued pursuant to the Partnership’s registration statement on Form S-4.

At closing, in addition to conveying mineral and royalty interests to the Partnership, the contributors delivered funds to the Partnership in an amount equal to their cash receipts during the period from April 1, 2026 through June 30, 2026 of $3.6 million, which will be included in the calculation of the Partnership’s third quarter 2026 cash distribution to unitholders.

On August 29, 2025, pursuant to a non-taxable contribution and exchange agreement with multiple unrelated third parties, the Partnership acquired mineral interests totaling approximately 3,050 net royalty acres located in Adams County, Colorado in exchange for 915,694 common units representing limited partnership interests in the Partnership valued at $23.0 million and issued pursuant to the Partnership’s registration statement on Form S-4.

2 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 of $4.0 million is included in net cash contributed in acquisitions on the condensed consolidated statement of cash flows for the six months ended June 30, 2026.

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 consolidated statement of cash flows for the three months ended March 31, 2025.

Three Months Ended March 31, 2026 as compared to Three Months Ended March 31, 2025

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

Three and Six Months Ended June 30, 2026 as compared to Three and Six Months Ended June 30, 2025

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:

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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 2025 to the same period of 2026 is primarily a result of suspense releases on first time payments and increased baseline production from Rockies wells acquired in the third quarter of 2025 and higher suspense releases on new wells on legacy acreage in the Permian Basin, partially offset by decreased baseline production in the Permian Basin.

The increase in natural gas sales volumes attributable to our Royalty Properties from the first quarter of 2025 to the same period of 2026 is primarily a result of suspense releases on first time payments and increased baseline production from Rockies wells acquired in the third quarter of 2025.

The increase in oil sales volumes attributable to our NPI properties from the first quarter of 2025 to the same period of 2026 is primarily due to higher suspense releases on new wells in the Bakken region and the recognition of sales volumes from July 2021 through May 2025 associated with the $15.5 million of legal settlement proceeds received by the Operating Partnership in the first quarter of 2026 from resolution of ordinary course litigation affecting certain leasehold in Midland County, Texas, which is owned by the Operating Partnership and subject to the NPI .

The increase in natural gas sales volumes attributable to our NPI properties for the first quarter of 2025 to the same period of 2026 is primarily due to the recognition of sales volumes from July 2021 through May 2025 associated with legal settlement proceeds noted above, partially offset by decreased baseline production on legacy wells in the Permian Basin.

Operating costs, including production taxes, attributable to our Royalty Properties remained consistent from the first quarter of 2025 to the same period of 2026.

This is primarily a result of higher proportionate oil production taxes due to higher oil sales revenue, offset by lower proportionate natural gas production taxes due to lower natural gas sales revenue and lower ad valorem taxes.

Depreciation, depletion and amortization increased 21% from the first quarter of 2025 to the same period of 2026.

The increase in oil sales volumes attributable to our Royalty Properties from the second quarter of 2025 to the same period of 2026 is primarily a result of higher suspense releases on new wells on legacy acreage in the Permian Basin, increased baseline production from legacy wells in the Permian Basin, and Rockies wells acquired in the third quarter of 2025.

The increase in oil sales volumes attributable to our Royalty Properties from the first six months of 2025 to the same period of 2026 is primarily a result of higher suspense releases on new wells on legacy acreage in the Permian Basin, and suspense releases on first time payments and increased baseline production from Rockies wells acquired in the third quarter of 2025, partially offset by decreased baseline production in the Permian Basin, particularly in the first quarter of 2026 compared to the same period of 2025, and lower suspense releases on new wells on legacy acreage in the Rockies in the first quarter of 2026 compared to the same period of 2025.

The increase in natural gas sales volumes attributable to our Royalty Properties from the second quarter and first six months of 2025 to the same periods of 2026 is primarily a result of higher suspense releases on new wells on legacy acreage in the Permian Basin, and suspense releases on first time payments and increased baseline production from Rockies wells acquired in the third quarter of 2025, partially offset by decreased baseline production in the Permian Basin and lower suspense releases on new wells on legacy acreage in the Rockies in the first quarter of 2026 compared to the same period of 2025.

The increase in oil sales volumes attributable to our NPI properties from the second quarter of 2025 to the same period of 2026 is primarily a result of higher suspense releases on new wells in the Permian Basin and increased baseline production in the Bakken region and Rockies, partially offset by decreased baseline production on legacy wells in the Permian Basin.

The increase in oil sales volumes attributable to our NPI properties from the first six months of 2025 to the same period of 2026 is primarily a result of higher suspense releases on new wells in the Permian Basin and Bakken region, increased baseline production in the Bakken region and Rockies, and the recognition of sales volumes from July 2021 through May 2025 associated with the $15.5 million of legal settlement proceeds received by the Operating Partnership in the first quarter of 2026 from resolution of ordinary course litigation affecting certain leasehold in Midland County, Texas, which is owned by the Operating Partnership and subject to the NPI.

This increase was partially offset by decreased baseline production on legacy wells in the Permian Basin.

The increase in natural gas sales volumes attributable to our NPI properties from the second quarter of 2025 to the same period of 2026 is primarily a result of increased baseline production in the Permian Basin, Bakken region, and Mid-Continent.

The increase in natural gas sales volumes attributable to our NPI properties from the first six months of 2025 to the same period of 2026 is primarily due to the recognition of sales volumes from July 2021 through May 2025 associated with legal settlement proceeds noted above and increased baseline production in the Bakken region and Mid-Continent in the second quarter of 2026 compared to the same period of 2025, partially offset by decreased baseline production on legacy wells in the Permian Basin, particularly in the first quarter of 2026 compared to the same period of 2025.

Operating costs, including production taxes, attributable to our Royalty Properties increased 123% from the second quarter of 2025 to the same period of 2026 and 46% from the first six months of 2025 to the same period of 2026.

This is primarily a result of higher proportionate oil production taxes due to higher oil sales revenue, higher post-production costs, such as compression, transportation, processing, and marketing, due to higher oil and natural gas sales volumes, and higher ad valorem taxes, partially offset by lower proportionate natural gas production taxes due to lower natural gas sales revenue.

Depreciation, depletion and amortization increased 8% from the second quarter of 2025 to the same period of 2026 and 17% from the first six months of 2025 to the same period of 2026.

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 decreased 1% from the first quarter of 2025 to the same period of 2026.

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

Net cash provided by operating activities decreased 28% from the first quarter of 2025 to the same period of 2026 primarily due to lower revenue receipts attributable to our Royalty Properties and lower NPI payment receipts, partially offset by higher lease bonus receipts and lower general and administrative expenses.

General and administrative expenses increased 33% from the second quarter of 2025 to the same period of 2026.

General and administrative expenses increased 12% from the first six months of 2025 to the same period of 2026.

The increase is primarily attributable to higher professional services fees and increased compensation expenses, including an expanded Operating Partnership equity program designed for employee retention, partially offset by lower regulatory fees due to the Partnership’s S-4 filing in the first quarter of 2025.

Net cash provided by operating activities increased 38% from the first six months of 2025 to the same period of 2026 primarily due to higher revenue receipts attributable to our Royalty Properties and higher NPI payment receipts, partially offset by lower lease bonus receipts and higher general and administrative expense payments.

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 third quarter of 2026 totaled $26.6 million.

Approximately 76% of these receipts reflect oil sales during December 2025 through February 2026 and natural gas sales during November 2025 through January 2026, and approximately 24% 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 2026 were $51.79/bbl and $2.27/mcf, respectively.

There were no cash receipts attributable to the NPI during the first quarter of 2026 as the NPI was in a deficit position for the months of December 2025 through February 2026 due to capital expenditures reserved by the Operating Partnership for Bakken drilling commitments.

Cash receipts attributable to our Royalty Properties during the second quarter of 2026 totaled $50.4 million.

Approximately 66% of these receipts reflect oil sales during March 2026 through May 2026 and natural gas sales during February 2026 through April 2026, and approximately 34% 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 2026 were $70.37/bbl and $1.68/mcf, respectively.

Cash receipts attributable to the Partnership's NPI during the second quarter of 2026 totaled $16.6 million.

Approximately 21% of these receipts reflect oil and natural gas sales during February 2026 through April 2026, and approximately 79% from prior sales periods including $15.5 million of proceeds from the previously announced settlement and mutual release agreement affecting certain leasehold in Midland County, Texas.

The average realized prices for oil and natural gas sales cash receipts attributable to the NPI properties during the second quarter of 2026 were $67.87/bbl and $3.56/mcf, respectively.

Liquidity and Capital Resources

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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 consolidated financial statements included in “Item 1 – Financial Statements” of this Quarterly Report 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

The Partnership leases its office space at 3838 Oak Lawn Avenue, Suite 300, Dallas, Texas, through an operating lease (the “Office Lease”).

The third amendment to our Office Lease was executed in April 2017 for a term of 129 months, beginning June 1, 2018 and expiring in 2029.

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, 2026 are summarized as follows:

(In Thousands)

Total lease payments

Less amount representing interest

Total lease obligation

The third amendment to our Office Lease was executed in April 2017 for a term of 129 months, beginning June 1, 2018 and expiring February 28, 2029.

The fourth amendment to our Office Lease was executed in May 2026 for a term of 86 months, beginning March 1, 2029 and expiring April 30, 2036.

Under the third and fourth amendments to the Office Lease, monthly rental payments range from $25,000 to $52,000.

Future maturities of Office Lease liabilities representing monthly cash rental payment obligations are summarized in Note 7 to the unaudited condensed consolidated financial statements included in “Item 1 – Financial Statements” of this Quarterly Report.

We are not directly liable for the payment of any exploration, development or production costs.

4 unchanged sentences

However, our liquidity and ability to fund future distributions may be affected by material uncertainties arising from factors beyond our control, including:

ongoing global military conflicts such as those in Ukraine and the Middle East;

ongoing global military conflicts such as those in Ukraine and the Middle East, including the conflict in Iran;

current inflation and interest rates;

6 unchanged sentences

Liquidity and Working Capital

Cash and cash equivalents totaled $28.2 million at March 31, 2026 and $41.9 million at December 31, 2025.

Cash and cash equivalents totaled $72.5 million at June 30, 2026 and $41.9 million at December 31, 2025.

Critical Accounting Policies and Estimates

As of March 31, 2026, there have been no significant changes to our critical accounting policies and related estimates previously disclosed in our Annual Report.

As of June 30, 2026, 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, 2026.

There have been no significant changes in our exposure to market risk during the three months ended June 30, 2026.

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