Quarterly report [Sections 13 or 15(d)]

Business Segment Reporting

v3.26.1
Business Segment Reporting
 3 Months Ended
Mar. 31, 2026
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, 2026 and 2025.

The Land and Resource Management segment encompasses the business of managing our approximately 881,000 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 financial results for the three months ended March 31, 2026 and 2025 (in thousands):
  Three Months Ended March 31,
  2026 2025
LRM WSO Consolidated LRM WSO Consolidated
Revenues:
Oil and gas royalties $ 118,167  $ —  $ 118,167  $ 111,245  $ —  $ 111,245 
Water sales —  46,863  46,863  —  38,813  38,813 
Produced water royalties —  33,529  33,529  —  27,700  27,700 
Easements and other surface-related income 14,449  2,866  17,315  15,336  2,889  18,225 
Land sale 20,944  —  20,944  —  —  — 
Total revenues 153,560  83,258  236,818  126,581  69,402  195,983 
Expenses:
Salaries and related employee expenses 7,558  7,429  14,987  7,404  7,168  14,572 
Water service-related expenses —  14,287  14,287  —  11,126  11,126 
General and administrative expenses 5,495  3,136  8,631  3,313  2,759  6,072 
Depreciation, depletion and amortization 9,194  4,849  14,043  7,689  4,252  11,941 
Ad valorem and other taxes 2,530  12  2,542  2,189  10  2,199 
Total operating expenses 24,777  29,713  54,490  20,595  25,315  45,910 
Operating income 128,783  53,545  182,328  105,986  44,087  150,073 
Interest expense (793) (199) (992) —  —  — 
Other income, net 1,581  647  2,228  3,416  905  4,321 
Income before income taxes 129,571  53,993  183,564  109,402  44,992  154,394 
Income tax expense 28,648  12,014  40,662  23,858  9,884  33,742 
Net income $ 100,923  $ 41,979  $ 142,902  $ 85,544  $ 35,108  $ 120,652 

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 for the periods presented (in thousands):
Three Months Ended
March 31,
2026 2025
Purchases of Fixed Assets:
Land and resource management $ 217  $ 3 
Water services and operations 6,701  9,905 
Total purchases of fixed assets $ 6,918  $ 9,908 

  March 31,
2026		 December 31,
2025
Assets:    
Land and resource management $ 1,456,377  $ 1,332,180 
Water services and operations 295,076  291,098 
Total consolidated assets $ 1,751,453  $ 1,623,278 
Property, plant and equipment, net:    
Land and resource management $ 7,263  $ 7,336 
Water services and operations 159,488  157,202 
Total consolidated property, plant and equipment, net $ 166,751  $ 164,538