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Business Segment Reporting | 6 Months Ended
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Jun. 30, 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 and six months ended June 30, 2026 and 2025. The Land and Resource Management segment encompasses the business of managing our approximately 894,000 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 tables present segment financial results for Land and Resource Management (“LRM”) and Water Services and Operations (“WSO”) and the reconciliation to consolidated financial results for the three and six months ended June 30, 2026 and 2025 (in thousands):
|  | Three Months Ended June 30,
|  | 2026 |  | 2025 |  |
|  | LRM |  | WSO |  | Consolidated |  | LRM |  | WSO |  | Consolidated |  |  |  |  |  |
Revenues: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Oil and gas royalties |  | $ | 145,589 |  |  | $ | — |  |  | $ | 145,589 |  |  | $ | 95,006 |  |  | $ | — |  |  | $ | 95,006 |  |  |  |  |  |  |
Water sales |  | — |  |  | 39,733 |  |  | 39,733 |  |  | — |  |  | 25,577 |  |  | 25,577 |  |  |  |  |  |  |
Produced water royalties |  | — |  |  | 37,075 |  |  | 37,075 |  |  | — |  |  | 30,737 |  |  | 30,737 |  |  |  |  |  |  |
Easements and other surface-related income |  | 18,278 |  |  | 5,384 |  |  | 23,662 |  |  | 33,491 |  |  | 2,732 |  |  | 36,223 |  |  |  |  |  |  |
Land sales |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  |  |  |  |  |
Total revenues |  | 163,867 |  |  | 82,192 |  |  | 246,059 |  |  | 128,497 |  |  | 59,046 |  |  | 187,543 |  |  |  |  |  |  |
Expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Salaries and related employee expenses |  | 8,347 |  |  | 7,215 |  |  | 15,562 |  |  | 7,025 |  |  | 7,047 |  |  | 14,072 |  |  |  |  |  |  |
Water service-related expenses |  | — |  |  | 11,570 |  |  | 11,570 |  |  | — |  |  | 8,451 |  |  | 8,451 |  |  |  |  |  |  |
General and administrative expenses |  | 5,245 |  |  | 2,759 |  |  | 8,004 |  |  | 3,648 |  |  | 2,045 |  |  | 5,693 |  |  |  |  |  |  |
Depreciation, depletion and amortization |  | 11,695 |  |  | 4,944 |  |  | 16,639 |  |  | 9,137 |  |  | 4,562 |  |  | 13,699 |  |  |  |  |  |  |
Ad valorem and other taxes |  | 2,279 |  |  | 188 |  |  | 2,467 |  |  | 1,864 |  |  | 13 |  |  | 1,877 |  |  |  |  |  |  |
Total operating expenses |  | 27,566 |  |  | 26,676 |  |  | 54,242 |  |  | 21,674 |  |  | 22,118 |  |  | 43,792 |  |  |  |  |  |  |
Operating income |  | 136,301 |  |  | 55,516 |  |  | 191,817 |  |  | 106,823 |  |  | 36,928 |  |  | 143,751 |  |  |  |  |  |  |
Interest expense |  | (779) |  |  | (194) |  |  | (973) |  |  | — |  |  | — |  |  | — |  |  |  |  |  |  |
Other income, net |  | 2,140 |  |  | 714 |  |  | 2,854 |  |  | 4,156 |  |  | 1,084 |  |  | 5,240 |  |  |  |  |  |  |
Income before income taxes |  | 137,662 |  |  | 56,036 |  |  | 193,698 |  |  | 110,979 |  |  | 38,012 |  |  | 148,991 |  |  |  |  |  |  |
Income tax expense |  | 28,230 |  |  | 11,538 |  |  | 39,768 |  |  | 24,410 |  |  | 8,441 |  |  | 32,851 |  |  |  |  |  |  |
Net income |  | $ | 109,432 |  |  | $ | 44,498 |  |  | $ | 153,930 |  |  | $ | 86,569 |  |  | $ | 29,571 |  |  | $ | 116,140 |  |  |  |  |  |  |
|  | Six Months Ended June 30,
|  | 2026 |  | 2025
|  | LRM |  | WSO |  | Consolidated |  | LRM |  | WSO |  | Consolidated
Revenues: |  |  |  |  |  |  |  |  |  |  |  |
Oil and gas royalties |  | $ | 263,756 |  |  | $ | — |  |  | $ | 263,756 |  |  | $ | 206,251 |  |  | $ | — |  |  | $ | 206,251 |
Water sales |  | — |  |  | 86,596 |  |  | 86,596 |  |  | — |  |  | 64,390 |  |  | 64,390 |
Produced water royalties |  | — |  |  | 70,604 |  |  | 70,604 |  |  | — |  |  | 58,437 |  |  | 58,437 |
Easements and other surface-related income |  | 32,727 |  |  | 8,250 |  |  | 40,977 |  |  | 48,827 |  |  | 5,621 |  |  | 54,448 |
Land sales |  | 20,944 |  |  | — |  |  | 20,944 |  |  | — |  |  | — |  |  | — |
Total revenues |  | 317,427 |  |  | 165,450 |  |  | 482,877 |  |  | 255,078 |  |  | 128,448 |  |  | 383,526 |
Expenses: |  |  |  |  |  |  |  |  |  |  |  |
Salaries and related employee expenses |  | 15,905 |  |  | 14,644 |  |  | 30,549 |  |  | 14,429 |  |  | 14,215 |  |  | 28,644 |
Water service-related expenses |  | — |  |  | 25,857 |  |  | 25,857 |  |  | — |  |  | 19,577 |  |  | 19,577 |
General and administrative expenses |  | 10,740 |  |  | 5,895 |  |  | 16,635 |  |  | 6,961 |  |  | 4,804 |  |  | 11,765 |
Depreciation, depletion and amortization |  | 20,889 |  |  | 9,793 |  |  | 30,682 |  |  | 16,826 |  |  | 8,814 |  |  | 25,640 |
Ad valorem and other taxes |  | 4,809 |  |  | 200 |  |  | 5,009 |  |  | 4,053 |  |  | 23 |  |  | 4,076 |
Total operating expenses |  | 52,343 |  |  | 56,389 |  |  | 108,732 |  |  | 42,269 |  |  | 47,433 |  |  | 89,702 |
Operating income |  | 265,084 |  |  | 109,061 |  |  | 374,145 |  |  | 212,809 |  |  | 81,015 |  |  | 293,824 |
Interest expense |  | (1,572) |  |  | (393) |  |  | (1,965) |  |  | — |  |  | — |  |  | — |
Other income, net |  | 3,721 |  |  | 1,361 |  |  | 5,082 |  |  | 7,572 |  |  | 1,989 |  |  | 9,561 |
Income before income taxes |  | 267,233 |  |  | 110,029 |  |  | 377,262 |  |  | 220,381 |  |  | 83,004 |  |  | 303,385 |
Income tax expense |  | 56,878 |  |  | 23,552 |  |  | 80,430 |  |  | 48,268 |  |  | 18,325 |  |  | 66,593 |
Net income |  | $ | 210,355 |  |  | $ | 86,477 |  |  | $ | 296,832 |  |  | $ | 172,113 |  |  | $ | 64,679 |  |  | $ | 236,792 |
Interest income by segment is included in other income, net in the tables 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 June 30, |  | Six Months Ended June 30,
|  | 2026 |  | 2025 |  | 2026 |  | 2025
Purchases of Fixed Assets: |  |  |  |  |  |  |  |
Land and resource management |  | $ | 76 |  |  | $ | 161 |  |  | $ | 293 |  |  | $ | 164 |
Water services and operations |  | 20,847 |  |  | 3,647 |  |  | 27,548 |  |  | 13,552 |
Total purchases of fixed assets |  | $ | 20,923 |  |  | $ | 3,808 |  |  | $ | 27,841 |  |  | $ | 13,716 |
|  | June 30, 2026 |  | December 31, 2025
Assets: |  |  |  |
Land and resource management |  | $ | 1,569,215 |  |  | $ | 1,332,180 |
Water services and operations |  | 290,259 |  |  | 291,098 |
Total consolidated assets |  | $ | 1,859,474 |  |  | $ | 1,623,278 |
Property, plant and equipment, net: |  |  |  |
Land and resource management |  | $ | 7,050 |  |  | $ | 7,336 |
Water services and operations |  | 175,827 |  |  | 157,202 |
Total consolidated property, plant and equipment, net |  | $ | 182,877 |  |  | $ | 164,538 |

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