TXO Partners Q2 2024: Operating Assets & Liabilities Update

TL;DR

**TXO Partners Q2 2024:** AR up $21.8K, Current Liab down $10K. Oil & gas data included.

AI Summary

TXO Partners, L.P. filed its 10-Q for the period ending June 30, 2024. The company reported changes in operating assets and liabilities, with accounts receivable increasing by $21,834 and current liabilities decreasing by $10,059. The filing also includes data related to oil and condensate production and natural gas liquids reserves for various periods in 2023 and 2024.

Why It Matters

This filing provides insight into TXO Partners' short-term financial health and operational metrics, which can influence investor decisions.

Risk Assessment

Risk Level: medium — The filing contains financial and operational data for an energy company, which inherently carries market and commodity price risks.

Key Numbers

• $21.8K — Accounts Receivable Change (Increase in operating assets for Q2 2024)
• $10.1K — Current Liabilities Change (Decrease in operating liabilities for Q2 2024)

Key Players & Entities

• TXO Partners, L.P. (company) — Filer of the 10-Q
• 20240630 (date) — End of reporting period
• $21,834 (dollar_amount) — Increase in accounts receivable
• $10,059 (dollar_amount) — Decrease in current liabilities

FAQ

Filing Documents

• txo-20240630.htm (10-Q) — 903KB
• ex311txo-q2202410xqsection.htm (EX-31.1) — 8KB
• ex312txo-q2202410xqsection.htm (EX-31.2) — 8KB
• ex321txo-q2202410xqsection.htm (EX-32.1) — 4KB
• ex322txo-q2202410xqsection.htm (EX-32.2) — 4KB
• 0001559432-24-000045.txt ( ) — 5121KB
• txo-20240630.xsd (EX-101.SCH) — 39KB
• txo-20240630_cal.xml (EX-101.CAL) — 49KB
• txo-20240630_def.xml (EX-101.DEF) — 172KB
• txo-20240630_lab.xml (EX-101.LAB) — 510KB
• txo-20240630_pre.xml (EX-101.PRE) — 349KB
• txo-20240630_htm.xml (XML) — 600KB

- 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 16

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 30

Controls and Procedures

Item 4. Controls and Procedures 32

- Other Information

Part II - Other Information

Legal Proceedings

Item 1. Legal Proceedings 33

Risk Factors

Item 1A. Risk Factors 33

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 35

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities 35

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 35

Other Information

Item 5. Other Information 35

Exhibits

Item 6. Exhibits 36

Signatures

Signatures 37 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) June 30, 2024 December 31, 2023 (Unaudited) ASSETS Current Assets: Cash and cash equivalents $ 75,999 $ 4,505 Accounts receivable, net 28,509 32,226 Derivative fair value — 6,052 Other 12,515 12,406 Total Current Assets 117,023 55,189 Property and Equipment, at cost – successful efforts method: Proved properties 1,578,274 1,540,105 Unproved properties 18,648 18,479 Other 84,574 83,854 Total Property and Equipment 1,681,496 1,642,438 Accumulated depreciation, depletion and amortization ( 1,033,940 ) ( 1,013,115 ) Net Property and Equipment 647,556 629,323 Other Assets: Note receivable from related party 7,131 7,131 Other 2,809 3,970 Total Other Assets 9,940 11,101 TOTAL ASSETS $ 774,519 $ 695,613 LIABILITIES AND PARTNERS' CAPITAL Current Liabilities: Accounts payable $ 8,829 $ 8,598 Accrued liabilities 22,926 23,362 Derivative fair value 991 4,045 Asset retirement obligation, current portion 1,750 1,750 Other current liabilities 1,346 1,361 Total Current Liabilities 35,842 39,116 Long-term Debt 7,100 28,100 Other Liabilities: Asset retirement obligation 157,294 152,222 Other liabilities 1,495 2,377 Total Other Liabilities 158,789 154,599 Commitments and Contingencies Partners' Capital: Partners' capital 572,788 473,798 TOTAL LIABILITIES AND PARTNERS' CAPITAL $ 774,519 $ 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 June 30, Six Months Ended June 30, 2024 2023 2024 2023 REVENUES Oil and condensate $ 42,799 $ 47,691 $ 80,833 $ 97,312 Natural gas liquids 6,670 7,033 13,172 16,156 Gas 7,839 5,748 30,742 105,403 Total Revenues 57,308 60,472 124,747 218,871 EXPENSES Production 36,439 39,357 69,522 74,681 Exploration 71 16 194 83 Taxes, transportation and other 13,201 15,088 2

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