Annual report pursuant to Section 13 and 15(d)

Business Segment Reporting

v3.25.0.1
Business Segment Reporting
 12 Months Ended
Dec. 31, 2024
Segment Reporting [Abstract]  
Business Segment Reporting Business Segment Reporting
 
During the periods presented, we reported our financial performance based on the following reportable segments: Land and Resource Management and Water Services and Operations. We eliminate inter-segment revenues and expenses, if any, upon consolidation. There were no inter-segment revenues for the years ended December 31, 2024, 2023 and 2022.

The Land and Resource Management segment encompasses the business of managing our approximately 873,000 surface acres of land and our approximately 207,000 NRA of oil and gas royalty interests, principally concentrated in the Permian Basin. The revenue streams of this segment consist primarily of royalties from oil and gas, revenues from easements and commercial leases, and land and material sales.
The Water Services and Operations segment encompasses the business of providing a full-service water offering to operators in the Permian Basin. The revenue streams of this segment primarily consist of revenue generated from sales of sourced and treated water as well as revenue from produced water royalties
The following table presents segment financial results for Land and Resource Management (“LRM”) and Water Service and Operations (“WSO”) and the reconciliation to consolidated (“Cons”) financial results for the years ended December 31, 2024, 2023 and 2022 (in thousands):
  Years Ended December 31,
  2024 2023 2022
LRM WSO Cons LRM WSO Cons LRM WSO Cons
Revenues:
Oil and gas royalties $ 373,331  $ —  $ 373,331  $ 357,394  $ —  $ 357,394  $ 452,434  $ —  $ 452,434 
Water sales —  150,724  150,724  —  112,203  112,203  —  84,725  84,725 
Produced water royalties —  104,123  104,123  —  84,260  84,260  —  72,234  72,234 
Easements and other surface-related income 63,074  10,183  73,257  67,905  3,027  70,932  44,860  3,488  48,348 
Land sales 4,388  —  4,388  6,806  —  6,806  9,681  —  9,681 
Total revenues 440,793  265,030  705,823  432,105  199,490  631,595  506,975  160,447  667,422 
Expenses:
Salaries and related employee expenses 27,493  26,128  53,621  21,945  21,439  43,384  22,054  19,348  41,402 
Water service-related expenses —  46,124  46,124  —  33,566  33,566  —  17,463  17,463 
General and administrative expenses 25,531  8,952  34,483  39,078  7,372  46,450  14,978  7,042  22,020 
Depreciation, depletion and amortization 10,968  14,194  25,162  3,073  11,684  14,757  2,234  13,142  15,376 
Ad valorem and other taxes 7,257  38  7,295  7,382  3  7,385  8,848  6  8,854 
Total operating expenses 71,249  95,436  166,685  71,478  74,064  145,542  48,114  57,001  105,115 
Operating income 369,544  169,594  539,138  360,627  125,426  486,053  458,861  103,446  562,307 
Other income, net 31,707  7,976  39,683  30,384  1,124  31,508  6,491  57  6,548 
Income before income taxes 401,251  177,570  578,821  391,011  126,550  517,561  465,352  103,503  568,855 
Income tax expense 86,350  38,511  124,861  84,305  27,611  111,916  100,311  22,182  122,493 
Net income $ 314,901  $ 139,059  $ 453,960  $ 306,706  $ 98,939  $ 405,645  $ 365,041  $ 81,321  $ 446,362 

Interest income by segment is included in other income, net in the table above.

The following tables present capital expenditures, total assets, and property, plant and equipment, net by segment (in thousands):
Years Ended December 31,
2024 2023 2022
Capital Expenditures:
Land and resource management $ 279  $ 241  $ 393 
Water services and operations 29,144  15,190  18,574 
Total capital expenditures $ 29,423  $ 15,431  $ 18,967 
  December 31, 2024 December 31, 2023
Assets:    
Land and resource management $ 1,024,188  $ 975,136 
Water services and operations 223,832  181,262 
Total consolidated assets $ 1,248,020  $ 1,156,398 
Property, plant and equipment, net:    
Land and resource management $ 4,805  $ 5,322 
Water services and operations 117,773  84,265 
Total consolidated property, plant and equipment, net $ 122,578  $ 89,587