TXO Partners, L.P. Files 10-Q for Period Ending March 31, 2024

TL;DR

TXO Partners, L.P. filed its Q1 2024 10-Q, detailing financial performance, reserves, related party transactions, and debt facilities.

AI Summary

TXO Partners, L.P. (TXO) filed a Quarterly Report (10-Q) with the SEC on May 7, 2024. TXO Partners, L.P. reported financial results for the quarter ended March 31, 2024. The filing details reserves for Oil & Condensate, Natural Gas Liquids, and Natural Gas as of March 31, 2024. Management fees paid to CrossTimbers Energy, a related party, were reported for Q1 2024 and Q1 2023. The company's debt structure includes the November 2021 Credit Facility and the September 2016 Loan as of March 31, 2024. The filing references the Secured Overnight Financing Rate (SOFR) in relation to the November 2021 Credit Facility.

Why It Matters

For investors and stakeholders tracking TXO Partners, L.P., this filing contains several important signals. Investors can assess the company's operational performance and reserve base, crucial for a natural gas and oil producer. Understanding related party transactions and debt covenants provides insight into the company's financial health and governance.

Risk Assessment

Risk Level: medium — TXO Partners, L.P. shows moderate risk based on this filing. The filing contains detailed financial data and operational metrics for the oil and gas sector, which is subject to market volatility and regulatory changes.

Analyst Insight

Monitor the company's reserve reports and debt facility terms for potential impacts on future production and financial flexibility.

Key Numbers

• 2024-03-31 — Reporting Period End Date (Quarter ended March 31, 2024)
• 2024-05-07 — Filing Date (Date the 10-Q was filed)
• 2023-01-31 — Date of Name Change (From TXO Energy Partners, L.P.)
• 2012-10-02 — Date of Name Change (From MorningStar Partners, L.P.)

Key Players & Entities

• TXO Partners, L.P. (company) — Filer of the 10-Q report
• TXO (company) — Ticker symbol for TXO Partners, L.P.
• CrossTimbers Energy (company) — Recipient of management fees from TXO Partners
• 400 WEST 7TH STREET (company) — Business and mailing address of TXO Partners
• FORT WORTH (company) — City of TXO Partners' business and mailing address
• TXO Energy Partners, L.P. (company) — Former name of TXO Partners, L.P.
• MorningStar Partners, L.P. (company) — Earlier former name of TXO Partners, L.P.
• Secured Overnight Financing Rate (SOFR) (regulator) — Reference rate for the November 2021 Credit Facility

FAQ

Key Dates

• 2024-03-31: Quarterly Period End — Financial and reserve data reported as of this date
• 2024-05-07: Filing Date — Official submission date of the 10-Q

Glossary

10-Q

A quarterly report required by the U.S. Securities and Exchange Commission (SEC). (Provides an update on the company's financial performance and condition between annual reports.)

Oil & Condensate

Crude oil and natural gas liquids. (Key commodity for TXO Partners, impacting revenue and reserves.)

Natural Gas Liquids (NGLs)

Hydrocarbons that are separated from natural gas. (Important component of TXO Partners' production and revenue streams.)

Filing Documents

• txo-20240331.htm (10-Q) — 703KB
• ex311txo-q1202410xqsection.htm (EX-31.1) — 8KB
• ex312txo-q1202410xqsection.htm (EX-31.2) — 8KB
• ex321txo-q1202410xqsection.htm (EX-32.1) — 4KB
• ex322txo-q1202410xqsection.htm (EX-32.2) — 4KB
• 0001559432-24-000020.txt ( ) — 4350KB
• txo-20240331.xsd (EX-101.SCH) — 37KB
• txo-20240331_cal.xml (EX-101.CAL) — 48KB
• txo-20240331_def.xml (EX-101.DEF) — 157KB
• txo-20240331_lab.xml (EX-101.LAB) — 454KB
• txo-20240331_pre.xml (EX-101.PRE) — 317KB
• txo-20240331_htm.xml (XML) — 463KB

- Financial Information

Part I - Financial Information

Financial Statements

Item 1. Financial Statements 1 Consolidated Balance Sheets 1 Consolidated Statements of Operations 2 Consolidated Statements of Cash Flows 3 Consolidated Statements of Members' Equity 4

Notes to Financial Statements

Notes to Financial Statements 5

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 15

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 25

Controls and Procedures

Item 4. Controls and Procedures 26

- Other Information

Part II - Other Information

Legal Proceedings

Item 1. Legal Proceedings 28

Risk Factors

Item 1A. Risk Factors 28

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 28

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities 28

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 28

Other Information

Item 5. Other Information 28

Exhibits

Item 6. Exhibits 29

Signatures

Signatures 30 i Table of Contents

- Financial Information

Part I - Financial Information

Financial Statements

Item 1. Financial Statements TXO PARTNERS, L.P. Consolidated Balance Sheets (in thousands) March 31, 2024 December 31, 2023 (Unaudited) ASSETS Current Assets: Cash and cash equivalents $ 4,570 $ 4,505 Accounts receivable, net 30,721 32,226 Derivative fair value 5,167 6,052 Other 13,469 12,406 Total Current Assets 53,927 55,189 Property and Equipment, at cost – successful efforts method: Proved properties 1,544,870 1,540,105 Unproved properties 18,516 18,479 Other 83,997 83,854 Total Property and Equipment 1,647,383 1,642,438 Accumulated depreciation, depletion and amortization ( 1,023,632 ) ( 1,013,115 ) Net Property and Equipment 623,751 629,323 Other Assets: Note receivable from related party 7,131 7,131 Other 3,394 3,970 Total Other Assets 10,525 11,101 TOTAL ASSETS $ 688,203 $ 695,613 LIABILITIES AND PARTNERS' CAPITAL Current Liabilities: Accounts payable $ 7,659 $ 8,598 Accrued liabilities 25,143 23,362 Derivative fair value 3,818 4,045 Asset retirement obligation, current portion 1,750 1,750 Other current liabilities 1,354 1,361 Total Current Liabilities 39,724 39,116 Long-term Debt 26,100 28,100 Other Liabilities: Asset retirement obligation 154,803 152,222 Other liabilities 1,845 2,377 Total Other Liabilities 156,648 154,599 Commitments and Contingencies Partners' Capital: Partners' capital 465,731 473,798 TOTAL LIABILITIES AND PARTNERS' CAPITAL $ 688,203 $ 695,613 See accompanying notes to the Consolidated Financial Statements 1 Table of Contents TXO PARTNERS, L.P. Consolidated Statements of Operations (Unaudited) (in thousands) Three months ended March 31, 2024 2023 REVENUES Oil and condensate $ 38,034 $ 49,621 Natural gas liquids 6,502 9,123 Natural gas 22,903 99,655 Total Revenues 67,439 158,399 EXPENSES Production 33,083 35,324 Exploration 123 67 Taxes, transportation and other 15,573 28,903 Depreciation, depletion and amortization 10,517 10,938 Accretion of discount in asset retirement o

Notes to Consolidated Financial Statements (Unaudited)

Notes to Consolidated Financial Statements (Unaudited) 1. Organization and Summary of Significant Accounting Policies TXO Partners, L.P. (TXO Partners or the Partnership) is an independent oil and gas company that was formed as a Delaware limited partnership in January 2012 (with an effective inception of operations at January 18, 2012). The operations of TXO Partners are governed by the provisions of the partnership agreement, as amended, executed by the general partner, TXO Partners GP, LLC (the General Partner) and the limited partners. The General Partner is the manager and operator of TXO Partners. The General Partner is managed by the board of directors and executive officers of our General Partner. The members of the board of directors of our General Partner are appointed by MorningStar Oil & Gas, LLC ("MSOG"), as the sole member of our General Partner. TXO Partners will remain in existence unless and until dissolved in accordance with the terms of the partnership agreement. TXO Partners' assets include its investment in an unincorporated joint venture, Cross Timbers Energy, LLC ("Cross Timbers Energy"). TXO Partners owns 50 % of Cross Timbers Energy, and TXO Partners is the manager of Cross Timbers Energy. Cross Timbers Energy is governed by a Member Management Committee (MMC) and is comprised of six representatives, three from each group, with each group having one voting member. All matters that come before the MMC require the unanimous consent of the voting members. On the last day of each calendar quarter, Cross Timbers Energy distributes all excess cash to the members based on their ownership percentage of 50 % each, except for earnings from the note receivable which is owned 5 % by TXO Partners. Cross Timbers Energy's properties are located primarily in the San Juan Basin of New Mexico and Colorado and the Permian Basin of West Texas and New Mexico. TXO Partners also has a wholly-owned subsidiary, MorningStar Operating LLC which owns oil and gas a