TXO Partners, L.P. (NYSE: TXO)

TXO Partners, L. P. is an independent oil and natural gas company focused on the acquisition, development, optimization and exploitation of conventional and unconventional oil, natural gas and natural gas liquid reserves in North America. Its properties are concentrated in the Permian Basin of New Mexico and Texas, the San Juan Basin of New Mexico and Colorado and the Williston Basin of Montana and North Dakota. The company seeks to increase production and cash flow through strategic acquisitions drilling activities and operational improvements. The partnership is managed by TXO Partners GP, LLC, its general partner. It regularly evaluates acquisition opportunities to expand its reserve base and production capacity. Its portfolio includes both developed and undeveloped oil and natural gas properties.

The company generates revenue primarily from the sale of oil, natural gas liquids and natural gas produced from its owned properties. For the nine months ended September 30, 2025 total revenues reached $275.1 million, consisting of $190.4 million from oil and condensate, $23.9 million from natural gas liquids and $60.7 million from natural gas. For the three months ended September 30, 2025 total revenues were $100.9 million with oil and condensate contributing $66.3 million, natural gas liquids $7.5 million and natural gas $27.0 million. In addition, the company earns ancillary income from carbon dioxide and gas processing plant operations located in the Permian Basin and Colorado. To mitigate exposure to commodity price swings, TXO Partners uses derivative contracts that lock in prices for a portion of its expected production. During the nine months ended September 30, 2025 the company recognized net gains on its hedging activity of $16.9 million comprising $10.6 million unrealized and $6.3 million realized gains. During the three months ended September 30, 2025 the company recognized net gains on its hedging activity of $10.9 million comprising $7.8 million unrealized and $3.1 million realized gains. Ancillary income from carbon dioxide and gas processing plant operations contributed to other income which decreased year over year due to pipeline disruptions.

TXO Partners L. P. competes in the upstream oil and natural gas sector alongside numerous independent producers and major integrated companies. The company’s competitive stance is supported by its focus on three prolific basins, the Permian, San Juan and Williston, which provide geographic diversification and operational synergies. Its hedging program helps stabilize cash flows during periods of volatile commodity prices, a capability that many smaller peers lack. Access to capital is reinforced by a revolving credit facility with a borrowing base of $410 million as of September 30, 2025 and recent equity offerings that have provided substantial liquidity for acquisitions. As of September 30, 2025 the revolving credit facility had an outstanding balance of $264.0 million and remaining availability of $146.0 million. The facility requires maintenance of a current ratio greater than 1.0 to 1.0 and a total net debt to EBITDAX ratio not exceeding 3.0 to 1.0. Recent equity offerings in May 2025 generated net proceeds of approximately $189.5 million supporting the WRE Acquisition and general corporate purposes. The company’s strategy emphasizes a production and distribution model aiming to generate cash flow for distributions and debt service.

The company sells its production to a range of purchasers that include oil and gas traders, utility companies, refining enterprises and midstream service providers. Specific customer names are not disclosed in the filing, but the typical counterparties are marketing affiliates of major oil companies, independent gas utilities and regional refineries. Long term contracts with these counterparties help secure predictable outlet for the company’s hydrocarbon output. The company’s hydrocarbon output is typically sold under short term contracts tied to prevailing market prices. It also engages in occasional term agreements with regional refineries for a portion of its natural gas liquids production. The customer base is primarily domestic reflecting the company’s concentration of assets in United States basins.