TXO Partners (TXO) Q2 2024 earnings summary

Executive summary

• Q2 2024 net income was $2.8 million, reversing a $2.5 million loss in Q2 2023; six-month net income was $13.1 million, down from $81.3 million year-over-year.

• Q2 2024 revenue was $57.3 million, a 5% decrease year-over-year, mainly due to lower production and natural gas prices, partially offset by hedging gains and higher oil and NGL prices.

• Completed a public offering raising $122.5 million in June 2024 and an additional $18.5 million in July 2024 to fund Williston Basin acquisitions and repay debt.

• Entered agreements to acquire oil and gas assets in the Williston Basin for $243.2 million in cash and 2.5 million common units, with one acquisition closed in August and another expected in Q3 2024.

• Six-month revenues were $124.7 million, down 43% year-over-year.

Financial highlights

• Q2 2024 revenues: $57.3 million (down 5% year-over-year); six-month revenues: $124.7 million (down 43%).

• Q2 2024 net income: $2.8 million; six-month net income: $13.1 million.

• Adjusted EBITDAX for Q2 2024: $21.1 million; cash available for distribution: $15.0 million.

• Q2 2024 oil and condensate sales: $42.8 million; NGLs: $6.7 million; gas: $7.8 million.

• Net cash provided by operating activities for the first half of 2024 was $48.1 million, up from $35.6 million in the prior year period.

Outlook and guidance

• Expect to close the EMEP Acquisition in Q3 2024, funded by cash and $120 million in new borrowings, increasing net-debt-to-EBITDAX to approximately 1x.

• Anticipate Williston assets to add 4,955 BOE/day production with a $30–$35 million capital program and a three-year average annual decline rate of 14%.

• Plan to hedge a portion of new production to protect distributions and balance sheet.

• 2024 capital expenditures for drilling, completion, and facilities budgeted at $20–$28 million.