Annual report [Section 13 and 15(d), not S-K Item 405]

Business Segment Reporting

v3.25.4
Business Segment Reporting
 12 Months Ended
Dec. 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 years ended December 31, 2025, 2024, and 2023.

The Land and Resource Management segment encompasses the business of managing our approximately 882,000 surface acres of land and our approximately 224,000 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 (“Cons”) financial results for the years ended December 31, 2025, 2024, and 2023 (in thousands):
  Years Ended December 31,
  2025 2024 2023
LRM WSO Cons LRM WSO Cons LRM WSO Cons
Revenues:
Oil and gas royalties $ 411,677  $ —  $ 411,677  $ 373,331  $ —  $ 373,331  $ 357,394  $ —  $ 357,394 
Water sales —  169,701  169,701  —  150,724  150,724  —  112,203  112,203 
Produced water royalties —  124,218  124,218  —  104,123  104,123  —  84,260  84,260 
Easements and other surface-related income 78,230  13,545  91,775  63,074  10,183  73,257  67,905  3,027  70,932 
Land sales 819  —  819  4,388  —  4,388  6,806  —  6,806 
Total revenues 490,726  307,464  798,190  440,793  265,030  705,823  432,105  199,490  631,595 
Expenses:
Salaries and related employee expenses 29,184  28,741  57,925  27,493  26,128  53,621  21,945  21,439  43,384 
Water service-related expenses —  53,528  53,528  —  46,124  46,124  —  33,566  33,566 
General and administrative expenses 14,358  9,422  23,780  25,531  8,952  34,483  39,078  7,372  46,450 
Depreciation, depletion and amortization 44,555  17,978  62,533  10,968  14,194  25,162  3,073  11,684  14,757 
Ad valorem and other taxes 8,218  45  8,263  7,257  38  7,295  7,382  3  7,385 
Total operating expenses 96,315  109,714  206,029  71,249  95,436  166,685  71,478  74,064  145,542 
Operating income 394,411  197,750  592,161  369,544  169,594  539,138  360,627  125,426  486,053 
Interest expense (552) (138) (690) —  —  —  —  —  — 
Other income, net 14,926  3,932  18,858  31,707  7,976  39,683  30,384  1,124  31,508 
Income before income taxes 408,785  201,544  610,329  401,251  177,570  578,821  391,011  126,550  517,561 
Income tax expense 86,370  42,583  128,953  86,350  38,511  124,861  84,305  27,611  111,916 
Net income $ 322,415  $ 158,961  $ 481,376  $ 314,901  $ 139,059  $ 453,960  $ 306,706  $ 98,939  $ 405,645 

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

The following tables present purchases of fixed assets, total assets, and property, plant and equipment, net by segment (in thousands):
Years Ended December 31,
2025 2024 2023
Purchases of Fixed Assets:
Land and resource management $ 10,282  $ 279  $ 241 
Water services and operations 55,666  29,144  15,190 
Total purchases of fixed assets $ 65,948  $ 29,423  $ 15,431 
  December 31, 2025 December 31, 2024
Assets:    
Land and resource management $ 1,332,180  $ 1,024,188 
Water services and operations 291,098  223,832 
Total consolidated assets $ 1,623,278  $ 1,248,020 
Property, plant and equipment, net:    
Land and resource management $ 7,336  $ 4,805 
Water services and operations 157,202  117,773 
Total consolidated property, plant and equipment, net $ 164,538  $ 122,578