Item 1A. Risk Factors
ITEM 1A.
RISK FACTORS
There have been no material changes to the Partnership’s risk factors as disclosed under “Item 1A – Risk Factors” in the Partnership’s Annual Report other than as disclosed below.
The Partnership may be adversely affected by price volatility in the oil and natural gas markets.
Historically, there has been price volatility in the oil and natural gas markets, which have been impacted by a number of factors, including actions by oil producing nations. Global military conflicts and political uncertainty, 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 2025. More recently, military actions among the United States, Israel and Iran have occurred throughout 2026 with related disruptions to transit through the Strait of Hormuz. Additionally, Yemen has indicated a continued readiness to resume or escalate attacks on shipping and key waterways in the Red Sea corridor, particularly in response to further escalation of the conflict involving Iran. These hostilities have disrupted and may further disrupt the flow of oil, and have contributed to, and may continue to contribute to, price volatility. Although the length and impact of these ongoing and evolving conflicts are fluid and unpredictable, they have led and may continue to lead to market disruptions, including volatility in oil prices and disruptions to global trade flows. Furthermore, the withdrawal of the United Arab Emirates from OPEC and OPEC+ may further impact oil price volatility. Oil and natural gas market price volatility may have a material adverse effect on our cash distributions in periods of lower prices. During periods of substantial declines in prices, oil and natural gas operators on our properties may suspend drilling programs, which would impact our revenues and operating income. In the event that any wells on our properties are shut-in, restarting wells may require significant costs from our operators, and we cannot guarantee that they would be able to restart at the same level. Moreover, due to the extremely volatile market conditions, we are unable to predict the degree or duration of any adverse impact on our operations and financial condition and other risks in our industry may be enhanced by such conditions.
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