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Quarterly report [Sections 13 or 15(d)]

Business Segment Reporting

v3.25.2
Business Segment Reporting
 6 Months Ended
Jun. 30, 2025
Segment Reporting [Abstract]
Business Segment Reporting Business Segment Reporting
During the periods presented, we reported our financial performance based on the following reportable segments: Land and Resource Management and Water Services and Operations. We eliminate inter-segment revenues and expenses, if any, upon consolidation. There were no inter-segment revenues for the three and six months ended June30, 2025 and 2024.

The Land and Resource Management segment encompasses the business of managing our approximately 874,000 surface acres of land and our approximately 207,000 NRA of oil and gas royalty interests, principally concentrated in the Permian Basin. The revenue streams of this segment consist primarily of royalties from oil and gas, revenues from easements and commercial leases, and land and material sales.

The Water Services and Operations segment encompasses the business of providing a full-service water offering to operators in the Permian Basin. The revenue streams of this segment primarily consist of revenue generated from sales of sourced and treated water as well as revenue from produced water royalties.
The following tables present segment financial results for Land and Resource Management (“LRM”) and Water Service and Operations (“WSO”) and the reconciliation to consolidated financial results for the three and six months ended June30, 2025 and 2024 (in thousands):
Three Months Ended June 30,
2025 2024
LRM WSO Consolidated LRM WSO Consolidated
Revenues:
Oil and gas royalties $ 95,006 $ — $ 95,006 $ 89,813 $ — $ 89,813
Water sales — 25,577 25,577 — 40,650 40,650
Produced water royalties — 30,737 30,737 — 25,301 25,301
Easements and other surface-related income 33,491 2,732 36,223 14,219 2,351 16,570
Total revenues 128,497 59,046 187,543 104,032 68,302 172,334
Expenses:
Salaries and related employee expenses 7,025 7,047 14,072 6,480 6,291 12,771
Water service-related expenses — 8,451 8,451 — 14,824 14,824
General and administrative expenses 3,648 2,045 5,693 3,989 1,991 5,980
Depreciation, depletion and amortization 9,137 4,562 13,699 813 3,280 4,093
Ad valorem and other taxes 1,864 13 1,877 1,443 1 1,444
Total operating expenses 21,674 22,118 43,792 12,725 26,387 39,112
Operating income 106,823 36,928 143,751 91,307 41,915 133,222
Other income, net 4,156 1,084 5,240 11,014 2,206 13,220
Income before income taxes 110,979 38,012 148,991 102,321 44,121 146,442
Income tax expense 24,410 8,441 32,851 22,192 9,661 31,853
Net income $ 86,569 $ 29,571 $ 116,140 $ 80,129 $ 34,460 $ 114,589
Six Months Ended June 30,
2025 2024
LRM WSO Consolidated LRM WSO Consolidated
Revenues:
Oil and gas royalties $ 206,251 $ — $ 206,251 $ 181,933 $ — $ 181,933
Water sales — 64,390 64,390 — 77,776 77,776
Produced water royalties — 58,437 58,437 — 48,307 48,307
Easements and other surface-related income 48,827 5,621 54,448 32,340 4,876 37,216
Land sales — — — 1,244 — 1,244
Total revenues 255,078 128,448 383,526 215,517 130,959 346,476
Expenses:
Salaries and related employee expenses 14,429 14,215 28,644 12,945 12,287 25,232
Water service-related expenses — 19,577 19,577 — 25,036 25,036
General and administrative expenses 6,961 4,804 11,765 10,663 4,548 15,211
Depreciation, depletion and amortization 16,826 8,814 25,640 1,506 6,427 7,933
Ad valorem and other taxes 4,053 23 4,076 3,799 2 3,801
Total operating expenses 42,269 47,433 89,702 28,913 48,300 77,213
Operating income 212,809 81,015 293,824 186,604 82,659 269,263
Other income, net 7,572 1,989 9,561 18,944 4,219 23,163
Income before income taxes 220,381 83,004 303,385 205,548 86,878 292,426
Income tax expense 48,268 18,325 66,593 44,448 18,972 63,420
Net income $ 172,113 $ 64,679 $ 236,792 $ 161,100 $ 67,906 $ 229,006

Interest income by segment is included in other income, net in the table above.

The following tables present capital expenditures, total assets and property, plant and equipment, net by segment for the periods presented (in thousands):
Three Months Ended
June 30,		 Six Months Ended
June 30,
2025 2024 2025 2024
Capital Expenditures:
Land and resource management $ 161 $ 93 $ 164 $ 144
Water services and operations 3,647 6,406 13,552 12,017
Total capital expenditures $ 3,808 $ 6,499 $ 13,716 $ 12,161

June 30,
2025		 December 31,
2024
Assets:
Land and resource management $ 1,186,884 $ 1,024,188
Water services and operations 217,780 223,832
Total consolidated assets $ 1,404,664 $ 1,248,020
Property, plant and equipment, net:
Land and resource management $ 4,570 $ 4,805
Water services and operations 123,379 117,773
Total consolidated property, plant and equipment, net $ 127,949 $ 122,578