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Item 2 — Management's Discussion and Analysis
Landbridge Company LLC · 10-Q · Q2 FY2026 · Period ended Jun 30, 2026
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The following discussion and analysis of our financial condition and results of operations is based on, and should be read in conjunction with, the audited consolidated financial statements and related notes in our Annual Report on Form 10‑K for the fiscal year ended December 31, 2025 (the “2025 Form 10‑K”) and the accompanying unaudited condensed consolidated financial statements (“Financial Statements”) and notes thereto in “Part I — Item 1. Financial Statements” of this Quarterly Report.
The following discussion contains “forward-looking statements” reflecting our current expectations, future plans, estimates, beliefs and assumptions concerning events and financial trends that may be outside our control and may affect our future results of operations, cash flows and financial position. Actual results and the timing of events may differ materially from those contained in these forward-looking statements due to a number of factors, which include those factors discussed below and elsewhere in this Quarterly Report, particularly in the sections titled “Part I — Item 1A. Risk Factors” in the 2025 Form 10-K and “Cautionary Note Regarding Forward-Looking Statements,” all of which are difficult to predict. In light of these risks, uncertainties and assumptions, actual results may differ materially from such forward-looking statements. We do not undertake any obligation to publicly update any forward-looking statements except as otherwise required by applicable law.
Overview
Land is a fundamental requirement for the development and production of energy and the construction and operation of critical infrastructure. As of June 30, 2026, we owned or managed more than 325,000 surface acres in the Delaware Basin and adjacent Central Basin Platform sub-regions in the prolific Permian Basin, which is the most active area for oil and gas exploration and development in the United States. Access to expansive surface acreage is necessary for oil and natural gas development, solar power generation, power storage, digital infrastructure and non-hazardous oilfield reclamation and solid waste facilities. Further, the significant industrial economy that exists to service and support energy and infrastructure development requires access to surface acreage to support those activities. Our strategy is to actively manage our land and resources to support and encourage energy and infrastructure development and other land uses that will generate long-term revenue and Free Cash Flow for us and returns to our shareholders.
We share a legacy financial sponsor, Five Point, and our management team with WaterBridge. WaterBridge is one of the largest water midstream companies in the United States and operates a large-scale network of pipelines and other infrastructure in the Delaware Basin. These relationships provide our shared management team visibility into key areas of oil and natural gas production and long-term trends, which we leverage to encourage and support the development of critical infrastructure on our land and generate additional revenue for us. We receive royalties for each barrel of produced water that WaterBridge handles on our land as well as surface use payments for infrastructure constructed on our land.
Recent Developments
On August 4, 2026, OpCo entered into an amendment (the “Amendment”) to the 2025 Revolving Credit Facility to increase its aggregate revolving commitments from $275.0 million to $375.0 million through the exercise in full of the incremental commitment capacity available under the 2025 Revolving Credit Facility. Concurrently, the Amendment re-established an incremental commitment capacity of up to an additional $100.0 million, which may be exercised by OpCo from time to time, subject to the receipt of additional lender commitments and the satisfaction of the other conditions set forth in the 2025 Revolving Credit Facility.
The Amendment also reduced the applicable margins and letter of credit fees by 0.25%. As amended, Term SOFR Loans bear interest at Term SOFR for the applicable tenor plus a leverage-based applicable margin between 1.75% and 2.75% per annum, and Base Rate Loans bear interest at the applicable base rate plus a leverage-based applicable margin between 0.75% and 1.75% per annum.
Except as described above, the other material terms of the 2025 Revolving Credit Facility, including the Maturity Date, the commitment fee and the financial and other covenants, remained unchanged.
Additionally, on August 4, 2026, the Company agreed to acquire approximately 560 surface acres within our area of operations for total consideration of approximately $20 million. The Company expects to fund the transaction through a combination of borrowings incurred under the 2025 Revolving Credit Facility and cash on hand. The transaction is expected to close in the third quarter of 2026, concurrently with the acquisition by WaterBridge of an environmental waste management facility located on such lands, subject to customary closing conditions and receipt of all required consents and approvals. Concurrent with such acquisition, WaterBridge and LandBridge will enter into a long-term surface use agreement for the operation of an environmental waste management facility on such lands. The acquisition, including the valuation and the surface use agreement, was approved by a conflicts committee of the Company’s board of directors consisting entirely of independent directors.
On June 15, 2026, we announced the Company’s board of directors formed a special committee of independent directors (the “Special Committee”) to evaluate a potential conversion from a Delaware limited liability company to a Texas corporation (the “Conversion and Redomestication”), primarily driven by index eligibility considerations. On August 4, 2026, our board of directors, upon the
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recommendation of the Special Committee, unanimously adopted resolutions (i) approving the Conversion and Redomestication and the plan of conversion (the “Plan of Conversion”), (ii) directing that the Plan of Conversion be submitted for shareholder approval and (iii) establishing a record date of August 14, 2026 for determination of shareholders entitled to vote thereon. LandBridge Holdings, which holds shares representing a majority of the total votes that may be cast generally in the election of directors by holders of all of our outstanding common shares, is expected to act by written consent, in lieu of a meeting of shareholders, to approve the Plan of Conversion on or promptly following such record date. We expect the Conversion and Redomestication to be completed during the third quarter of 2026, although we can provide no assurance that it will be completed or the timing thereof. In addition, there can be no assurance that if we are converted to a corporate entity, we will be included in any particular index or that any such index inclusion will generate the expected benefits.
We intend to file an Information Statement on Schedule 14C regarding the Conversion and Redomestication. For a more complete description of the Conversion and Redomestication, please read such Information Statement when it becomes available.
Market Condition and Outlook
The global economy and the oil and natural gas industry have continued to face substantial volatility. This has been driven by geopolitical conflicts, domestic political uncertainties, potential U.S. and foreign tariffs, evolving international trade policies and conflicts, OPEC+ production decisions, persistent elevated inflation, higher interest rates and capital costs and continued industry consolidation. In particular, the war between the United States and Iran has driven significant commodity price and inflation volatility during the first half of 2026. Sustained disruption in the Strait of Hormuz, a key global oil and petrochemical chokepoint, could materially increase commodity prices and shipping costs, while further de-escalation could cause prices to decline – either outcome may influence E&P operators’ drilling and production decisions. Given the unresolved nature of the Iran War, we cannot predict the extent or duration of related volatility or its ultimate impact on our business. Additionally, volatility in realized prices at the Waha Hub given gas takeaway constraints in the region may also influence E&P operators’ development plans, rig counts and overall activity levels. Elevated interest rates and a stronger U.S. dollar have also increased capital costs, which may further temper E&P operators’ spending despite elevated commodity prices.
Broader macroeconomic and policy developments and shifts in international trade policies (such as the imposition of tariffs or product restrictions), could impair our customers’ ability to secure raw materials, equipment or financing. This, in turn, may reduce their operational activity on or around our surface acreage in the Delaware Basin. Any escalation in U.S. trade disruptions or retaliatory measures from other nations could further adversely affect demand for our land.
Despite these challenges, we believe the outlook for energy and infrastructure development, particularly within the Permian Basin, remains positive. Notwithstanding volatility from the Iran War and broader geopolitical conditions, E&P activity in the Permian Basin, including the Delaware Basin, has remained largely resilient given favorable well economics. This continued development may be aided by President Trump’s various Executive Orders relating to energy production, which include expedited approvals for energy resource infrastructure as well as the removal of various impediments to the development of domestic energy resources, including oil and gas. We are well-positioned to benefit from the continued build out of supporting infrastructure in the region which will require access to surface acreage. In addition, we expect to benefit from advancements in alternative forms of energy. Alternative energy technologies often require access to material surface acreage and supporting infrastructure, which we are also well positioned to provide and facilitate.
Second Quarter Results
Significant financial and operating highlights for the second quarter of 2026 include:
•Revenues of $66.8 million, an increase of 41% as compared to the second quarter of 2025;
•Net income of $31.0 million, an increase of 68% as compared to the second quarter of 2025;
•Net income margin of 46% as compared to net income margin of 39% in the second quarter of 2025;
•Adjusted EBITDA(1) of $59.8 million, an increase of 41% as compared to the second quarter of 2025;
•Adjusted EBITDA Margin(1) of 89%, which remained consistent with the second quarter of 2025;
•Cash flow from operating activities of $41.4 million, an increase of 11% as compared to the second quarter of 2025;
•Free Cash Flow(1) of $40.2 million, an increase of 11% as compared to the second quarter of 2025;
•Operating cash flow margin of 62%, a decrease of 22% as compared to the second quarter of 2025; and
•Free Cash Flow Margin(1) of 60%, a decrease of 21% as compared to the second quarter of 2025.
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(1)Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow and Free Cash Flow Margin are non-GAAP financial measures. Refer to “Non-GAAP Financial Measures” for more information regarding these non-GAAP financial measures and reconciliations to the most comparable GAAP measures.
Operating cash flow margin and Free Cash Flow Margin for the second quarter of 2026 decreased primarily due to the semi-annual interest payment of $16.1 million paid during the quarter related to our senior unsecured notes.
Factors Affecting the Comparability of Our Results of Operations
Our future results of operations may not be directly comparable to our historical results of operations for the periods presented, primarily for the reasons described below.
Acquisitions
Subsequent to the second quarter of 2025, we acquired approximately 47,000 acres, inclusive of approximately 12,000 leasehold acres and approximately 3,600 acres subject to a long-term management agreement, through various acquisitions including the 1918 Acquisition, which will impact the comparability of our results of operations. We expect to pursue opportunistic future land acquisitions that complement or expand our current land position, which may impact the comparability of our results.
Credit Facility and Notes
In November 2025, OpCo entered into the 2025 Revolving Credit Facility with available capacity of $275.0 million which matures on the earlier of (a) June 30, 2030, and (b) the date that is 91 days prior to the stated maturity of the Notes, if, on such date, the outstanding principal amount of the Notes is greater than $50 million.
Additionally, in November 2025, OpCo issued $500.0 million aggregate principal amount of 6.25% fixed-rate senior unsecured notes due 2030.
Refer to Note 7 — Debt within the notes to our unaudited condensed consolidated financial statements for additional information on our 2025 Revolving Credit Facility and Notes.
Results of Operations
Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025
Three Months Ended June 30, Variance
2026 2025 Amount Percent (1)
Revenues:
Surface use royalties $ 25,566 $ 16,695 $ 8,871 53 %
Easements and other surface-related revenues 26,603 17,519 9,084 52 %
Resource sales 6,281 5,637 644 11 %
Resource royalties 4,816 4,948 (132 ) (3 %)
Oil and gas royalties 3,574 2,734 840 31 %
Total revenues 66,840 47,533 19,307 41 %
Resource sales-related expense 1,133 489 644 132 %
Other operating and maintenance expense 1,328 1,065 263 25 %
General and administrative expense 15,900 14,800 1,100 7 %
Depreciation, depletion and amortization 4,374 2,545 1,829 72 %
Other (income) operating expense, net (53 ) 132 (185 ) (140 %)
Operating income 44,158 28,502 15,656 55 %
Interest expense 9,190 7,879 1,311 17 %
Other expense, net 17 - 17 NM
Income before income taxes 34,951 20,623 14,328 69 %
Income tax expense 3,902 2,148 1,754 82 %
Net income $ 31,049 $ 18,475 $ 12,574 68 %
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(1)NM - Not meaningful.
Total revenues. Total revenues increased by $19.3 million for the three months ended June 30, 2026, as compared to the three months ended June 30, 2025. Please see our discussion below regarding comparative period variances in revenue sources.
Surface use royalties. Surface use royalties increased by $8.9 million for the three months ended June 30, 2026, as compared to the three months ended June 30, 2025. The increase was attributable to increased produced water handling and associated skim oil royalties on our surface. The increase associated with produced water handling royalties is primarily driven by a significant increase in produced water handling volume of approximately 622 MBbl/d. The volume and associated revenue increase was primarily attributable to the Wolf Bone Ranch Acquisition and the 1918 Acquisition coupled with organic growth on our overall Stateline surface acreage.
Easements and other surface-related revenues. Easements and other surface-related revenues increased by $9.1 million for the three months ended June 30, 2026, as compared to the three months ended June 30, 2025. The increase was primarily attributable to oil and natural gas gathering and transportation pipelines and produced water handling infrastructure of $10.8 million and $0.9 million in other surface easements partially offset by $2.6 million related to the expansion of an existing industrial waste facility surface use agreement during the three months ended June 30, 2025.
Resource sales. Resource sales increased by $0.6 million for the three months ended June 30, 2026, as compared to the three months ended June 30, 2025. The increase was primarily attributable to caliche sales of $1.1 million due to construction of infrastructure assets in the areas surrounding our surface acreage partially offset by lower brackish water sales of $0.5 million. Brackish water sales volume decreased by 1.9 million barrels, or 17%, to 9.5 million barrels for the three months ended June 30, 2026, as compared to 11.4 million barrels for the three months ended June 30, 2025, partially offset by a per unit sales price increase of approximately 8%, primarily driven by the customer contract mix for the three months ended June 30, 2026, as compared to the three months ended June 30, 2025.
Oil and gas royalties. Oil and gas royalties increased by $0.8 million for the three months ended June 30, 2026, as compared to the three months ended June 30, 2025. The increase was primarily attributable to higher realized commodity prices of $1.0 million due to higher oil and condensate prices partially offset by $0.2 million due to lower net royalty volumes resulting from natural production decline.
Three Months Ended June 30, Variance
2026 2025 Amount Percent (1)
General and administrative expense:
General and administrative expense, excluding share-based compensation $ 4,726 $ 3,586 $ 1,140 32 %
Share-based compensation 11,174 11,214 (40 ) NM
Total general and administrative expense $ 15,900 $ 14,800 $ 1,100 7 %
(1)NM - Not meaningful
General and administrative expense. General and administrative expense, excluding share-based compensation expense, increased by $1.1 million for the three months ended June 30, 2026, as compared to the three months ended June 30, 2025. The increase was primarily attributable to increased corporate shared services allocation from WaterBridge of $0.4 million to support underlying growth of the business, increased professional services fees of $0.4 million primarily related to commercial opportunities, and personnel-related expenses of $0.2 million due to incremental personnel headcount.
Depreciation, depletion and amortization. Depreciation, depletion and amortization increased by $1.8 million for the three months ended June 30, 2026, as compared to the three months ended June 30, 2025. The increase was primarily attributable to amortization of intangible assets acquired in the 1918 Acquisition during 2025.
Three Months Ended June 30, Variance
2026 2025 Amount Percent
Interest on credit facilities $ 8,617 $ 7,340 $ 1,277 17 %
Debt issuance costs amortization 573 539 34 6 %
Total interest expense $ 9,190 $ 7,879 $ 1,311 17 %
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Interest expense. Interest expense increased by $1.3 million for the three months ended June 30, 2026, as compared to the three months ended June 30, 2025. The increase was primarily attributable to a higher weighted average debt balance during the three months ended June 30, 2026 partially offset by lower interest on the Notes and 2025 Revolving Credit Facility.
Income tax expense. Income tax expense increased by $1.8 million for the three months ended June 30, 2026, as compared to the three months ended June 30, 2025. The increase was primarily attributable to higher taxable income, while the effective tax rate remained relatively consistent.
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Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025
Six Months Ended June 30, Variance
2026 2025 Amount Percent (1)
Revenues:
Surface use royalties $ 47,798 $ 34,131 $ 13,667 40 %
Easements and other surface-related revenues 41,366 26,292 15,074 57 %
Resource sales 11,711 12,989 (1,278 ) (10 %)
Resource royalties 10,359 11,952 (1,593 ) (13 %)
Oil and gas royalties 6,546 6,120 426 7 %
Other 65 - 65 NM
Total revenues 117,845 91,484 26,361 29 %
Resource sales-related expense 1,530 947 583 62 %
Other operating and maintenance expense 2,597 2,189 408 19 %
General and administrative expense 31,626 29,492 2,134 7 %
Depreciation, depletion and amortization 8,799 5,146 3,653 71 %
Other (income) operating expense, net (43 ) 171 (214 ) (125 %)
Operating income 73,336 53,539 19,797 37 %
Interest expense 18,701 15,856 2,845 18 %
Other expense, net 27 - 27 NM
Income before income taxes 54,608 37,683 16,925 45 %
Income tax expense 5,691 3,749 1,942 52 %
Net income $ 48,917 $ 33,934 $ 14,983 44 %
(1)NM - Not meaningful.
Total revenues. Total revenues increased by $26.4 million for the six months ended June 30, 2026, as compared to the six months ended June 30, 2025. Please see our discussion below regarding comparative period variances in revenue sources.
Surface use royalties. Surface use royalties increased by $13.7 million for the six months ended June 30, 2026, as compared to the six months ended June 30, 2025. The increase was attributable to increased produced water handling and associated skim oil royalties of $13.6 million and solid waste disposal and reclamation royalties of $0.1 million on our surface. The increase associated with produced water handling royalties is primarily driven by a significant increase in produced water handling volume of approximately 468 MBbl/d. The volume and associated revenue increase was primarily attributable to the Wolf Bone Ranch Acquisition and 1918 Acquisition.
Easements and other surface-related revenues. Easements and other surface-related revenues increased by $15.1 million for the six months ended June 30, 2026, as compared to the six months ended June 30, 2025. The increase was primarily attributable to oil and natural gas gathering and transportation pipelines and produced water handling infrastructure of $13.9 million and road easements of $1.1 million.
Resource royalties. Resource royalties decreased by $1.6 million for the six months ended June 30, 2026, as compared to the six months ended June 30, 2025. The decrease was primarily attributable to lower brackish water royalties of $0.8 million and sand mine royalties of $0.8 million primarily related to lower throughput volumes. Brackish water royalty volume decreased by 3.7 million barrels, or 19%, to 15.8 million barrels for the six months ended June 30, 2026, as compared to 19.5 million barrels for the six months ended June 30, 2025, partially offset by a per unit royalty price increase of approximately 10%, primarily driven by the customer contract mix and minimum royalty payments for the six months ended June 30, 2026, as compared to the six months ended June 30, 2025.
Six Months Ended June 30, Variance
2026 2025 Amount Percent (1)
General and administrative expense:
General and administrative expense, excluding share-based compensation $ 9,254 $ 7,197 $ 2,057 29 %
Share-based compensation 22,372 22,295 77 NM
Total general and administrative expense $ 31,626 $ 29,492 $ 2,134 7 %
(1)NM - Not meaningful
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General and administrative expense. General and administrative expense, excluding share-based compensation expense, increased by $2.1 million for the six months ended June 30, 2026, as compared to the six months ended June 30, 2025. The increase was primarily attributable to increased professional services fees of $0.9 million primarily related to commercial opportunities, increased corporate shared services allocation from WaterBridge of $0.5 million to support underlying growth of the business, personnel-related expenses of $0.4 million due to incremental personnel headcount and $0.3 million due to insurance and other corporate expenses.
Depreciation, depletion and amortization. Depreciation, depletion and amortization increased by $3.7 million for the six months ended June 30, 2026, as compared to the six months ended June 30, 2025. The increase was primarily attributable to amortization of intangibles acquired in the 1918 Acquisition during 2025.
Six Months Ended June 30, Variance
2026 2025 Amount Percent
Interest on credit facilities $ 17,563 $ 14,777 $ 2,786 19 %
Debt issuance costs amortization 1,138 1,079 59 5 %
Total interest expense $ 18,701 $ 15,856 $ 2,845 18 %
Interest expense. Interest expense increased by $2.8 million for the six months ended June 30, 2026, as compared to the six months ended June 30, 2025. The increase was primarily attributable to higher interest of $6.8 million due to a higher weighted average debt balance of $173.9 million, partially offset by lower interest of $4.3 million due to a lower weighted average interest rate on the Notes and 2025 Revolving Credit Facility.
Income tax expense. Income tax expense increased by $1.9 million for the six months ended June 30, 2026, as compared to the six months ended June 30, 2025. The increase was primarily attributable to higher taxable income, while the effective tax rate remained relatively consistent.
Non-GAAP Financial Measures
We use certain non-GAAP performance measures to evaluate current and past performance and prospects for the future to supplement our financial information presented in accordance with GAAP. Although these non-GAAP financial and liquidity measures are important factors in assessing our operating results, profitability and performance they should not be considered in isolation or as a substitute for net income or gross margin or any other measures presented under GAAP.
Adjusted EBITDA and Adjusted EBITDA Margin
Adjusted EBITDA and Adjusted EBITDA Margin are used by our management and by external users of our financial statements, such as investors, research analysts and others, to assess the financial performance of our assets over the long term to generate sufficient cash to return capital to equity holders or service indebtedness. We define Adjusted EBITDA as net income (loss) before interest; taxes; depreciation, depletion and amortization; share-based compensation; non-recurring transaction-related expenses; litigation settlements and expenses incurred outside of the ordinary course of business; debt modification and extinguishment costs; gains or losses on disposal of assets; and other non-cash or non-recurring expenses. We define Adjusted EBITDA Margin as Adjusted EBITDA divided by total revenues.
We exclude the items listed above from net income (loss) in arriving at Adjusted EBITDA and Adjusted EBITDA Margin because these amounts can vary substantially from company to company within our industry depending upon accounting methods, book values of assets, capital structures and the method by which the assets were acquired.
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The following table sets forth a reconciliation of net income and net income margin as determined in accordance with GAAP to Adjusted EBITDA and Adjusted EBITDA Margin for the periods indicated.
Three Months Ended June 30, Six Months Ended June 30,
2026 2025 2026 2025
Net income $ 31,049 $ 18,475 $ 48,917 $ 33,934
Adjustments:
Depreciation, depletion and amortization 4,374 2,545 8,799 5,146
Interest expense, net 9,190 7,879 18,701 15,856
Income tax expense 3,902 2,148 5,691 3,749
EBITDA 48,515 31,047 82,108 58,685
Adjustments:
Share-based compensation - LBH Management Units 8,964 9,044 17,966 17,989
Share-based compensation - RSUs 2,276 2,227 4,538 4,422
Transaction-related expenses - 135 - 135
Adjusted EBITDA $ 59,755 $ 42,453 $ 104,612 $ 81,231
Net income margin 46 % 39 % 42 % 37 %
Adjusted EBITDA Margin 89 % 89 % 89 % 89 %
Free Cash Flow and Free Cash Flow Margin
Free Cash Flow and Free Cash Flow Margin are used by our management and by external users of our financial statements, such as investors, research analysts and others, to assess our ability to repay our indebtedness, return capital to our shareholders and fund potential acquisitions without access to external sources of financing for such purposes. We define Free Cash Flow as cash flow from operating activities less investment in capital expenditures.
The following table sets forth a reconciliation of cash flows from operating activities determined in accordance with GAAP to Free Cash Flow and Free Cash Flow Margin, respectively, for the periods indicated.
Three Months Ended June 30, Six Months Ended June 30,
2026 2025 2026 2025
Net cash provided by operating activities $ 41,371 $ 37,332 $ 82,491 $ 53,245
Net cash used in investing activities (11,274 ) (2,079 ) (13,422 ) (19,946 )
Cash provided by operating and investing activities 30,097 35,253 69,069 33,299
Adjustments:
Acquisitions 10,171 944 12,166 18,762
Proceeds from disposal of assets (28 ) (105 ) (55 ) (125 )
Free Cash Flow $ 40,240 $ 36,092 $ 81,180 $ 51,936
Operating cash flow margin (1) 62 % 79 % 70 % 58 %
Free Cash Flow Margin 60 % 76 % 69 % 57 %
(1)Operating cash flow margin is calculated by dividing net cash provided by operating activities by total revenue.
Liquidity and Capital Resources
Overview
Our primary sources of liquidity are cash flows from operating activities and, if required, proceeds from borrowings under the 2025 Revolving Credit Facility. Our primary liquidity and capital requirements will be for our operating expenses, servicing of our debt, the payment of dividends to our shareholders, general company needs and investing in our business, including the potential acquisition of additional surface acreage. Although we believe that we will be able to partially or fully fund our short-term and long-term capital expenditures, working capital requirements and other capital needs with cash on hand and cash flows from operating activities, we may elect to use borrowings under the 2025 Revolving Credit Facility to finance our operating and investing activities. Refer to Note 7 — Debt within the notes to our unaudited condensed consolidated financial statements for more information.
We strive to maintain financial flexibility and proactively monitor potential capital sources, including equity and debt financing, to meet our target liquidity and capital requirements. If market conditions were to change and our revenues were to decline significantly or
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operating costs were to increase, our cash flows and liquidity could be reduced and we could be required to seek alternative financing sources.
As of June 30, 2026, the Company had $500.0 million of principal debt related to our 6.25% fixed-rate senior unsecured notes due 2030 and $45.0 million of outstanding borrowings under the 2025 Revolving Credit Facility. As of June 30, 2026, the Company had $269.8 million of liquidity comprised of the $230.0 million of available borrowing capacity under the 2025 Revolving Credit Facility and $39.8 million of cash and cash equivalents.
Dividends and Distributions
(in thousands, except for per share amounts) Cash Dividends Date of Record Dividends Paid to Class A Shareholders Distributions Paid to OpCo Unitholders(1) Rate Per Share
2026:
First Quarter March 5, 2026 $ 3,341 $ 5,910 $ 0.12
Second Quarter June 4, 2026 3,388 5,854 $ 0.12
Total $ 6,729 $ 11,764
2025:
First Quarter March 6, 2025 $ 2,326 $ 5,319 $ 0.10
Second Quarter June 5, 2025 2,515 5,124 $ 0.10
Total $ 4,841 $ 10,443
On August 4, 2026, our board of directors declared a dividend on our Class A shares of $0.12 per share, payable on September 10, 2026 to shareholders of record as of August 27, 2026, and a corresponding required cash distribution to OpCo unitholders.
On August 4, 2026, our board of directors approved a payment for tax distributions from OpCo to OpCo unitholders (other than the Company) in the amount of $8.1 million. This amount is inclusive of OpCo unitholders’ (other than the Company) pro rata share of estimated federal income tax and an additional tax distribution in excess of the Company’s then-current income tax obligation as provided for under the OpCo LLC Agreement. This amount is expected to be paid during the third quarter of 2026.
Cash Flows
The following table summarizes our cash flow for the six months ended June 30, 2026 and 2025:
Six Months Ended June 30, Variance
(in thousands) 2026 2025 Amount Percent
Net cash provided by operating activities $ 82,491 $ 53,245 $ 29,246 55 %
Net cash used in investing activities (13,422 ) (19,946 ) 6,524 33 %
Net cash used in financing activities (60,013 ) (49,986 ) (10,027 ) 20 %
Net increase (decrease) in cash and cash equivalents $ 9,056 $ (16,687 ) $ 25,743 154 %
Net Cash Provided by Operating Activities. Net cash provided by operating activities increased $29.2 million. The increase was attributable to cash flow related to higher net income, net of adjustment items, of $19.4 million and an increase attributable to working capital accounts of $9.9 million. The increase in net income, net of adjustment items, is primarily attributable to revenue growth related to continued commercialization of acreage, partially offset by higher adjustment items primarily related to intangible asset amortization related to the 1918 Acquisition in 2025. The increase in cash flow attributable to working capital accounts was primarily attributable to the timing of collections.
Net Cash Used in Investing Activities. Net cash used in investing activities decreased $6.5 million. The decrease was primarily attributable to lower acquisition and acquisition-related expenditures for the six months ended June 30, 2026 of $12.2 million as compared to $18.8 million for the six months ended June 30, 2025. See Note 4 — Asset Acquisitions within the notes to our Financial Statements.
Net Cash Used In Financing Activities. Net cash used in financing activities increased $10.0 million. Net cash used in financing activities for the six months ended June 30, 2026 primarily consisted of $33.3 million of dividends, dividend equivalents and distributions paid to shareholders and $26.7 million of debt repayments and debt issuance cost. Net cash used in financing activities for six months ended
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June 30, 2025 primarily consisted of $37.9 million of dividends, dividend equivalents and distributions paid to shareholders, $11.0 million of debt repayments, net of proceeds, and $1.0 million of offering costs paid related to the December 2024 private placement.
Capital Requirements
We focus our business model on entering into agreements under which our customers bear substantially all of the operating and capital expenditures related to their operations on our land, while minimizing our capital requirements for both current and future commercial opportunities, resulting in the ability to create significant Free Cash Flows. Our contracts generally include inflation escalators, which, when combined with our relatively low operating and capital expenditures, may assist in mitigating our exposure to broader inflationary pressures. As a landowner, we incur the initial cost to acquire our acreage, but thereafter we incur modest development capital expenditures and operating expenses as it relates to operations on our land or our mineral and royalty interests, as such expenses are borne primarily by our customers. As a result, we expect that additional significant capital expenditures would be related to our acquisition of additional surface acreage, should we elect to do so.
The amount and allocation of future acquisition-related capital expenditures will depend upon a number of factors, including the size of the acquisition opportunity, our cash flows from operating activities and our investing and financing activities. For the three and six months ended June 30, 2026, we incurred $10.2 million and $12.2 million in acquisition-related capital expenditures, respectively.
We periodically assess changes in current and projected cash flows, acquisition and divestiture activities and other factors to determine the effects on our liquidity. We believe that our cash on hand and cash flow from operating activities will provide us with sufficient liquidity to execute our current strategy. However, our ability to generate cash is subject to a number of factors that may directly or indirectly affect us, many of which are beyond our control, including commodity prices and general economic, financial, competitive, legislative, regulatory and other factors. If we require additional capital for acquisitions or other reasons, we may seek such capital through traditional borrowings under our debt instruments, offerings of debt and equity securities or other means. If we are unable to obtain funds when needed or on acceptable terms, we may not be able to complete acquisitions that may be favorable to us.
As our board of directors declares cash dividends to our Class A shareholders, we expect the dividend to be paid from Free Cash Flow. We do not currently expect to borrow funds or to adjust planned capital expenditures to finance dividends on our Class A shares. The timing, amount and financing of dividends, if any, will be subject to the discretion of our board of directors from time to time.
Share Repurchase Program
On February 24, 2026, our board of directors approved a share repurchase program. The program permits the repurchase of up to $50 million of the Company’s Class A shares through December 2027. The shares may be repurchased from time to time in open market transactions, block trades, accelerated share repurchases, or privately negotiated transactions or by any combination of such methods. The timing, as well as the number and value of shares repurchased under the program, will be determined by the Company at its discretion and will depend on a variety of factors, including management’s assessment of the intrinsic value of the Company’s Class A shares, the market price of the Company’s Class A shares, general market and economic conditions, available liquidity, compliance with the Company’s debt and other agreements, applicable legal requirements, and other considerations. The Company is not obligated to purchase any shares under the share repurchase program, and the program may be suspended, modified or discontinued at any time without prior notice.
Critical Accounting Estimates
The preparation of our Financial Statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the amounts reported in the Financial Statements and the accompanying notes. There have been no significant changes to our critical accounting estimates from those disclosed in the 2025 Form 10-K.
Recently Issued Accounting Pronouncements Not Yet Adopted
For a summary of recently issued accounting pronouncements, refer to Note 2 — Summary of Significant Accounting Policies within the notes to our unaudited condensed consolidated financial statements.
Off Balance Sheet Arrangements
We currently have no material off-balance sheet arrangements.
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