TXO Partners Reports $84.3 Million Revenue in Q1 2025, Driven by Acquisitions

TXO Partners, L.P. reported a total revenue of $84.3 million for the first quarter of 2025, marking a 25% increase from $67.4 million in the same period of 2024. The growth in revenue was primarily driven by a 282 MBoe increase in production, largely attributed to recent acquisitions in the Williston Basin, which contributed $28.8 million in revenue. However, the company faced challenges with a decrease in natural gas production and a 9% decline in the average selling price of oil, which resulted in a $3.7 million revenue loss. The net income for the quarter was $2.4 million, a significant decrease from $10.3 million in the prior year, reflecting increased operational costs and losses from hedging activities.

Total expenses for the quarter rose to $87.9 million, up from $64.7 million in the previous year, driven by higher production costs, which increased by 28% to $42.3 million. This rise was largely due to the integration of new assets and increased labor and energy costs. Additionally, depreciation, depletion, and amortization expenses surged by 104% to $21.4 million, reflecting the higher production rates associated with the recent acquisitions. The company reported an operating loss of $3.6 million, compared to an operating income of $2.7 million in the first quarter of 2024.

In terms of strategic developments, TXO Partners completed two significant acquisitions in August 2024, acquiring producing properties from Eagle Mountain Energy Partners and Kaiser-Francis Oil Company for a total cash consideration of approximately $260.5 million. These acquisitions are expected to enhance the company’s production capabilities and revenue generation. The company also announced leadership changes, appointing Brent W. Clum and Gary D. Simpson as Co-Chief Executive Officers, effective April 1, 2025, following the resignation of Bob R. Simpson.

Operationally, TXO Partners reported an increase in production volumes, with total production reaching 2,329 MBoe for the quarter, compared to 2,046 MBoe in the prior year. The average selling price for oil and condensate was $72.08 per barrel, while natural gas liquids and natural gas averaged $29.00 per barrel and $1.59 per Mcf, respectively. The company’s cash flow from operating activities improved to $30.6 million, up from $25.2 million in the previous year, indicating stronger operational performance despite the challenges faced.

Looking ahead, TXO Partners anticipates continued volatility in the oil and natural gas markets, which could impact revenue and profitability. The company plans to leverage its cash flows from its long-lived property base to support capital expenditures and maintain distributions to unitholders. Management remains cautious about the economic environment, inflationary pressures, and commodity price fluctuations, which could affect operational costs and financial performance in the coming quarters.