TXO Partners (TXO) Q4 2024 earnings summary

Executive summary

• TXO Partners, L.P. focuses on acquiring, developing, and optimizing conventional oil, natural gas, and NGL reserves in North America, with core operations in the Permian, San Juan, and Williston Basins.

• The company completed significant acquisitions in the Williston Basin in 2024, funded by a $122.5M equity offering and increased borrowings, expanding its asset base and production.

• Management emphasizes a strategy of stable production, disciplined capital allocation, and maximizing cash distributions to unitholders, supported by a conservative leverage profile.

• The partnership agreement requires distribution of all available cash each quarter, with distributions varying based on business performance and commodity prices.

Financial highlights

• Revenues decreased 26% year-over-year to $282.8M for 2024, primarily due to a 60% drop in average natural gas prices and lower oil prices, partially offset by higher production from Williston Basin acquisitions.

• Net income for 2024 was $23.5M, compared to a net loss of $104M in 2023, which included a $223.4M impairment charge.

• Production expenses rose 4% to $150.3M, while depreciation, depletion, and amortization increased 18% to $52.4M, reflecting higher production from new assets.

• Cash provided by operating activities increased to $109.3M, while net cash used in investing activities rose to $288.3M due to acquisitions.

• Distributions to unitholders totaled $85.4M in 2024, with a fourth quarter distribution of $0.61 per unit declared in March 2025.

Outlook and guidance

• Capital expenditures for 2025 are budgeted at $30–$50M, to be funded primarily from operating cash flow.

• Management expects to maintain a net debt-to-EBITDAX ratio near 1x and sufficient liquidity to fund operations and distributions.

• The company anticipates continued volatility in oil and gas prices and inflationary pressures on costs, with mitigation efforts in place.

• Development plans include drilling and recompleting wells across all core basins, with a focus on measured growth and reserve replacement.