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INCOME TAXES | 12 Months Ended
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Dec. 31, 2025
INCOME TAXES |
INCOME TAXES | NOTE 13—INCOME TAXES The Partnership’s income tax (benefit) expense is based on the estimated annual effective tax rate. The Partnership incurred a benefit of $1.3 million and $0.8 million for the years ended December 31, 2025 and 2024, respectively, and expense of $3.8 million for the year ended December 31, 2023. The Partnership has filed all tax returns to date that are currently due. The components of income tax (benefit) expense are summarized as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year Ended December 31,
​ | ​ | 2025 | ​ | 2024 | ​ | 2023
​ | ​ | (In thousands)
Current | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Federal | ​ | $ | (1,395) | ​ | $ | (433) | ​ | $ | 2,469
State | ​ | ​ | 91 | ​ | ​ | (338) | ​ | ​ | 1,297
Total Current | ​ | ​ | (1,304) | ​ | ​ | (771) | ​ | ​ | 3,766
Deferred | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Federal | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
State | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Total Deferred | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Income tax (benefit) expense | ​ | $ | (1,304) | ​ | $ | (771) | ​ | $ | 3,766
​ The Partnership’s income tax (benefit) expense differs from the amount derived by applying the statutory federal rate to pre-tax income principally due the effect of the following items: ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year Ended December 31,
​ | ​ | 2025
​ | ​ | (In thousands, except percentage values)
​ | ​ | ​ | Amount | ​ | Percent
U.S. federal statutory rate | ​ | $ | 20,653 | ​ | 21.00 | %
​ | ​ | ​ | ​ | ​ | ​ | ​
State and local income taxes, net of federal income tax effect (1) | ​ | ​ | 91 | ​ | 0.09 | %
Changes in valuation allowances | ​ | ​ | (1,917) | ​ | (1.95) | %
Nontaxable or nondeductible items | ​ | ​ | ​ | ​ | ​ | ​
Non-controlling interest | ​ | ​ | (1,848) | ​ | (1.88) | %
Income at OpCo | ​ | ​ | (18,805) | ​ | (19.12) | %
Other, net | ​ | ​ | 522 | ​ | 0.53 | %
Effective tax rate | ​ | $ | (1,304) | ​ | (1.33) | %
(1) | State taxes in Louisiana made up the majority of the tax effect in this category.
The Partnership’s effective income tax benefit was 1.33% for the year ended December 31, 2025. The Partnership earned income before taxes, as calculated under GAAP, for the current year and is recording a current income tax benefit of $1.3 million. ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year Ended December 31,
​ | ​ | 2024 | ​ | 2023
​ | ​ | (In thousands, except percentage values)
Net income before taxes | ​ | $ | 10,299 | ​ | ​ | $ | 86,772 | ​
Statutory rate | ​ | ​ | 21 | % | ​ | ​ | 21 | %
Income tax provision computed at statutory rate | ​ | ​ | 2,163 | ​ | ​ | ​ | 18,222 | ​
Reconciling items: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
State income taxes | ​ | ​ | (1,377) | ​ | ​ | ​ | 1,393 | ​
Non-controlling interest | ​ | ​ | 435 | ​ | ​ | ​ | (3,519) | ​
Income at OpCo | ​ | ​ | (2,597) | ​ | ​ | ​ | (14,703) | ​
Percentage depletion in excess of basis | ​ | ​ | (464) | ​ | ​ | ​ | — | ​
Change in valuation allowance, federal | ​ | ​ | (2) | ​ | ​ | ​ | 2,860 | ​
Change in valuation allowance, state | ​ | ​ | 1,038 | ​ | ​ | ​ | (96) | ​
Other, net | ​ | ​ | 33 | ​ | ​ | ​ | (391) | ​
Income tax (benefit) expense | ​ | $ | (771) | ​ | ​ | $ | 3,766 | ​
​ A significant reconciling item in the Partnership’s effective tax rate reconciliation relates to income allocated to non-controlling interest, which is held by the OpCo common unitholders and not subject to federal income taxes. While 100% of the Partnership’s income is included in its consolidated pre-tax book income, for U.S. federal income tax purposes, the Partnership is only subject to tax on the portion of Partnership income allocated to them as the C corporation. The income allocated to OpCo common unitholders is not taxable to the Partnership, resulting in a reduction to its effective tax rate compared to the statutory rate. This reconciling item reflects the exclusion from the Partnership’s taxable income of earnings allocated to OpCo common unitholders, consistent with the partnership tax rules under which income is taxed at the partner level and not at the partnership entity level. The Partnership recorded a decrease in the valuation allowance related to federal deferred tax assets and an increase in the valuation allowance related to state deferred tax assets. These changes were primarily attributable to a true-up of prior-year amounts following the finalization of tax returns, resulting from changes in estimates the year ended December 31, 2025. The Partnership’s effective tax rate is increased by state and local income taxes, which are imposed in addition to federal income taxes. The impact varies based on the mix of income earned in states with different tax rates and the availability of state tax credits and incentives. On July 4, 2025, Public Law No. 119-21, commonly referred to as the One Big Beautiful Bill Act (the “Act”), was enacted by the U.S. government. Key provisions of the Act affecting the Partnership include: (i) the permanent reduction of the corporate tax rate, (ii) the permanent extension of 100% bonus depreciation for qualified property, and (iii) modifications to the calculation for excess business interest expense limitation under § 163(j) to adjusted taxable income calculation on the business interest expense limitation. In accordance with ASC Topic 740, Income Taxes, the Partnership has recognized the effects of the new tax law in the period of enactment. The impact of the Act for the quarter ended September 30, 2025, the reporting period that included the enactment date, resulted in a reduction to current income tax expense, primarily due to the changes to the 163(j) interest limitation. Deferred income taxes primarily represent the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The components of the Partnership’s deferred taxes are detailed in the table below. ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year Ended December 31,
​ | ​ | 2025 | ​ | 2024 | ​ | 2023
​ | ​ | (In thousands)
Deferred tax asset | ​ | ​ | ​ | ​ | ​ | ​
Outside basis in OpCo | ​ | $ | 19,372 | ​ | $ | 17,826 | ​ | $ | 22,625
Net operating loss carryforward | ​ | ​ | 2,710 | ​ | ​ | — | ​ | ​ | —
State tax benefit | ​ | ​ | 2,450 | ​ | ​ | 1,424 | ​ | ​ | 386
Business interest deduction limitation | ​ | ​ | — | ​ | ​ | 6,172 | ​ | ​ | 1,376
Deferred tax asset | ​ | ​ | 24,532 | ​ | ​ | 25,422 | ​ | ​ | 24,387
Valuation allowance, federal | ​ | ​ | (22,082) | ​ | ​ | (23,998) | ​ | ​ | (24,001)
Valuation allowance, state | ​ | ​ | (2,450) | ​ | ​ | (1,424) | ​ | ​ | (386)
Net deferred tax asset | ​ | $ | — | ​ | $ | — | ​ | $ | —
​ The tax years ended December 31, 2022 through 2025 remain open to examination under the applicable statute of limitations in the United States and other jurisdictions in which the Partnership and its subsidiaries file income tax returns. In some instances, state statutes of limitations are longer than those under United States federal tax law. The Partnership believes that it is more likely than not that the benefit from the outside basis differences in the Partnership’s investment in the Operating Company and its federal and state loss carryforward will not be realized. In recognition of this risk, the Partnership has provided a valuation allowance of $24.5 million on the deferred tax assets. Income taxes paid (net of refunds) were paid in the following jurisdictions: ​
​ | ​ | ​ | ​
​ | ​ | Year Ended December 31,
​ | ​ | 2025
​ | ​ | (In thousands)
Supplemental cash flow information: | ​ | ​ | ​
Cash paid for taxes - federal, net of refunds | ​ | $ | (2,112)
Cash paid for taxes - state, net of refunds | ​ | ​ | (1,816)
Total cash paid for taxes, net of refunds | ​ | $ | (3,928)
​ Other than cash payments or refunds for U.S. federal income tax shown in the table above, Oklahoma ($1.5 million refund), New Mexico ($0.7 million refund) and Texas ($0.3 million paid) are the only jurisdictions in which the Partnership received or paid more than 5% of total cash taxes in the year presented. As of December 31, 2025, the Partnership has not recorded a reserve for any uncertain tax positions.

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