Quarterly report [Sections 13 or 15(d)]

Business Segment Reporting

v3.25.1
Business Segment Reporting
 3 Months Ended
Mar. 31, 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 months ended March 31, 2025 and 2024.

The Land and Resource Management segment encompasses the business of managing our approximately 873,000 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 table presents 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 months ended March 31, 2025 and 2024 (in thousands):
  Three Months Ended March 31,
  2025 2024
LRM WSO Consolidated LRM WSO Consolidated
Revenues:
Oil and gas royalties $ 111,245  $ —  $ 111,245  $ 92,120  $ —  $ 92,120 
Water sales —  38,813  38,813  —  37,126  37,126 
Produced water royalties —  27,700  27,700  —  23,006  23,006 
Easements and other surface-related income 15,336  2,889  18,225  18,121  2,525  20,646 
Land sales —  —  —  1,244  —  1,244 
Total revenues 126,581  69,402  195,983  111,485  62,657  174,142 
Expenses:
Salaries and related employee expenses 7,404  7,168  14,572  6,465  5,996  12,461 
Water service-related expenses —  11,126  11,126  —  10,212  10,212 
General and administrative expenses 3,313  2,759  6,072  6,674  2,557  9,231 
Depreciation, depletion and amortization 7,689  4,252  11,941  693  3,147  3,840 
Ad valorem and other taxes 2,189  10  2,199  2,356  1  2,357 
Total operating expenses 20,595  25,315  45,910  16,188  21,913  38,101 
Operating income 105,986  44,087  150,073  95,297  40,744  136,041 
Other income, net 3,416  905  4,321  7,930  2,013  9,943 
Income before income taxes 109,402  44,992  154,394  103,227  42,757  145,984 
Income tax expense 23,858  9,884  33,742  22,256  9,311  31,567 
Net income $ 85,544  $ 35,108  $ 120,652  $ 80,971  $ 33,446  $ 114,417 

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
March 31,
2025 2024
Capital Expenditures:
Land and resource management $ 3  $ 51 
Water services and operations 9,905  5,611 
Total capital expenditures $ 9,908  $ 5,662 

  March 31,
2025		 December 31,
2024
Assets:    
Land and resource management $ 1,127,711  $ 1,024,188 
Water services and operations 225,581  223,832 
Total consolidated assets $ 1,353,292  $ 1,248,020 
Property, plant and equipment, net:    
Land and resource management $ 4,608  $ 4,805 
Water services and operations 123,860  117,773 
Total consolidated property, plant and equipment, net $ 128,468  $ 122,578