Dorchester Minerals第二季純利倍增至3090萬美元 收入升73%

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Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION
 Washington, DC. 20549

FORM 10-Q

 

(Mark One)

 ☒
 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 

 

For the quarterly period ended June 30, 2026

or

 

 ☐
 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 

 

For the transition period from __________ to __________ 

 

Commission File Number: 000-50175

 

DORCHESTER MINERALS, L.P.

(Exact name of registrant as specified in its charter)

 

 Delaware
 81-0551518
 

 (State or other jurisdiction of incorporation or organization)
 (I.R.S. Employer Identification No.)
 

 

3838 Oak Lawn Avenue, Suite 300, Dallas, Texas 75219

(Address of principal executive offices) (Zip Code)

 

Registrant's telephone number, including area code: (214) 559-0300

 

None

(Former name, former address and former fiscal year, if changed since last report)

 

Securities registered pursuant to Section 12(b) of the Act:

 

 Title of each class
   Trading Symbol(s)
   Name of each exchange on which 
 registered
 

 
Common Units Representing Limited
 Partnership Interest

   DMLP
   NASDAQ Global Select Market
 

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

  Large accelerated filer ☒
 Accelerated filer ☐
 Non-accelerated filer ☐
 

  Smaller reporting company ☐
 Emerging growth company ☐
  

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

 

Number of common units representing limited partnership interests outstanding as of August 6, 2026: 49,091,408

 

 
  
 

 
 
 
 
 Table of Contents
 

 

 

   

 
  
 

 
 TABLE OF CONTENTS

  

 
 
 
 DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
 
 1
 
 

 
  
  
 

 
 PART I – FINANCIAL INFORMATION
 
 1
 
 

 
  
  
 

 
  
 ITEM 1.
 
 FINANCIAL STATEMENTS (UNAUDITED)
 
 1
 
 

 
  
  
  
  
 

 
  
  
 CONDENSED CONSOLIDATED BALANCE SHEETS
 
 2
 
 

 
  
  
  
  
 

 
  
  
 CONDENSED CONSOLIDATED INCOME STATEMENTS
 
 3
 
 

 
  
  
  
  
 

 
  
  
 CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERSHIP CAPITAL
 
 4
 
 

 
  
  
  
  
 

 
  
  
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 
 5
 
 

 
  
  
  
  
 

 
  
  
 NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 
 6
 
 

 
  
  
  
  
 

 
  
 ITEM 2. 
 
 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
 9
 
 

 
  
  
  
  
 

 
  
 ITEM 3.
 
 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 
 12
 
 

 
  
  
  
  
 

 
  
 ITEM 4.
 
 CONTROLS AND PROCEDURES
 
 12
 
 

 
  
  
  
  
 

 
 PART II – OTHER INFORMATION
 
 12
 
 

 
  
  
 

 
  
 ITEM 1.
 
 LEGAL PROCEEDINGS
 
 12
 
 

 
  
  
  
  
 

 
  
 ITEM 1A.
 
 RISK FACTORS
 
 12
 
 

 
  
  
  
  
 

 
  
 ITEM 2.
 UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
 13
 

 
  
  
  
  
 

 
  
 ITEM 5.
 OTHER INFORMATION
 13
 

 
  
  
  
  
 

 
  
 ITEM 6.
 
 EXHIBITS
 
 14
 
 

 
  
  
 

 
 SIGNATURES
 
 16
 
 

 
 
 
  
 

  

 
 
  
 

 
 
 
 
 Table of Contents
 

 

 
 
 DORCHESTER MINERALS, L.P.
 

 

 
 
 (A Delaware Limited Partnership)
 

 

 

 

  

 

 
  
 

 DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

  

 Statements included in this report (this “Quarterly Report”) that are not historical facts (including any statements concerning plans and objectives of management for future operations or economic performance, or assumptions or forecasts related thereto), are forward-looking statements. These statements can be identified by the use of forward-looking terminology including “may,” “believe,” “will,” “expect,” “anticipate,” “estimate,” “continue,” or other similar words. These statements discuss future expectations, contain projections of results of operations or of financial condition or state other forward-looking information. In this Quarterly Report, the terms “us,” “our,” “we,” and “its” are sometimes used as abbreviated references to the Partnership.

  

  

 These forward-looking statements are made based upon management's current plans, expectations, estimates, assumptions and beliefs concerning future events impacting us and, therefore, involve a number of risks and uncertainties. We caution that forward-looking statements are not guarantees and that actual results could differ materially from those expressed or implied in the forward-looking statements for a number of important reasons, including those discussed under “Item 1A – Risk Factors” in the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2025 (the “Annual Report”) and in this Quarterly Report, in the Partnership’s other filings with the SEC and elsewhere in this Quarterly Report. Examples of such reasons include, but are not limited to, changes in the price or demand for oil and natural gas, public health crises, the conflicts in the Middle East, including the ongoing military conflict in Iran, and Ukraine, the political uncertainty in Venezuela, changes in the operations on or development of our properties, changes in economic and industry conditions (including changes to tariff and import/export regulations by the United States or other countries) and changes in regulatory requirements (including changes in environmental requirements) and our financial position, business strategy and other plans and objectives for future operations.

  

  

 You should read these statements carefully because they may discuss our expectations about our future performance, contain projections of our future operating results or our future financial condition, or state other forward-looking information. Before you invest, you should be aware that the occurrence of any of the events herein described in “Item 1A – Risk Factors” in the Partnership’s Annual Report and its other filings with the SEC and elsewhere in this Quarterly Report could substantially harm our business, results of operations and financial condition and that upon the occurrence of any of these events, the trading price of our common units could decline, and you could lose all or part of your investment.

  

  

  

 PART I – FINANCIAL INFORMATION

  

  

 
 
 
 ITEM 1.
 
 FINANCIAL STATEMENTS
 
 

 
 
  

 See attached financial statements on the following pages.

 
  
 

 
 
 
 
 1
 

 

 

 
 
 
 
 Table of Contents
 

 

 
 
 DORCHESTER MINERALS, L.P.
 

 

 
 
 (A Delaware Limited Partnership)
 

 

 

 

  

 
  
 

 CONDENSED CONSOLIDATED BALANCE SHEETS

 (In Thousands)

 (Unaudited)

  

 
    June 30,
    December 31,
  

   2026
    2025
  

         

 ASSETS
         

 Current assets:
         

 Cash and cash equivalents
  $72,500  $41,937 

 Accounts receivable
   15,025   13,968 

 Net profits interest receivable - related party
   11,987   2,513 

 Prepaid expenses and other current assets
   270   526 

 Total current assets
   99,782   58,944 

         

 Oil and natural gas properties (full cost method)
   743,141   745,539 

 Accumulated full cost depletion
   (532,324)  (495,643)

 Total
   210,817   249,896 

         

 Leasehold improvements
   989   989 

 Accumulated amortization
   (744)  (698)

 Total
   245   291 

         

 Operating lease right-of-use asset
   3,171   423 

 Total assets
  $314,015  $309,554 

         

 LIABILITIES AND PARTNERSHIP CAPITAL
         

         

 Current liabilities:
         

 Accounts payable and other current liabilities
  $6,848  $3,538 

 Operating lease liability
   355   256 

 Total current liabilities
   7,203   3,794 

         

 Operating lease liability
   3,136   521 

 Total liabilities
   10,339   4,315 

         

 Commitments and contingencies (Note 4)
           

         

 Partnership capital:
         

 General Partner
   (5,092)  (4,825)

 Unitholders (48,256 common units issued and outstanding as of June 30, 2026 and December 31, 2025, respectively)
   308,768   310,064 

 Total partnership capital
   303,676   305,239 

 Total liabilities and partnership capital
  $314,015  $309,554 

 

  

 The accompanying notes are an integral part of these condensed consolidated financial statements.

  

 
 
 2
 

 
 
 
 
 Table of Contents
 

 

 
 
 DORCHESTER MINERALS, L.P.
 

 

 
 
 (A Delaware Limited Partnership)
 

 

 

 

  

 
  
 

 CONDENSED CONSOLIDATED INCOME STATEMENTS

 (In Thousands, except per unit amounts)

 (Unaudited)

  

 
    Three Months Ended
    Six Months Ended
  

   June 30,
    June 30,
  

   2026
    2025
    2026
    2025
  

                 

 Operating revenues
                 

 Royalties
  $43,900  $24,432  $84,865  $62,262 

 Net profits interest - related party
   9,585   3,794   26,114   8,587 

 Lease bonus
   1,233   3,696   2,082   3,807 

 Other
   1,357   473   1,889   903 

 Total operating revenues
   56,075   32,395   114,950   75,559 

                 

 Costs and expenses
                 

 Operating, including production taxes
   5,620   2,517   10,187   6,964 

 Depreciation, depletion and amortization
   15,820   14,709   36,727   31,468 

 General and administrative expenses
   868   315   2,129   1,694 

 General and administrative expenses - related party
   2,896   2,507   5,899   5,444 

 Total costs and expenses
   25,204   20,048   54,942   45,570 

                 

 Net income
  $30,871  $12,347  $60,008  $29,989 

                 

 Allocation of net income
                 

 General Partner
  $1,037  $442  $1,914  $1,074 

 Unitholders
  $29,834  $11,905  $58,094  $28,915 

 Net income per common unit (basic and diluted)
  $0.62  $0.25  $1.20  $0.61 

 Weighted average basic and diluted common units outstanding
   48,256   47,340   48,256   47,340 

 

  

 The accompanying notes are an integral part of these condensed consolidated financial statements.

  

 
 
 3
 

 
 
 
 
 Table of Contents
 

 

 
 
 DORCHESTER MINERALS, L.P.
 

 

 
 
 (A Delaware Limited Partnership)
 

 

 

 

  

 
  
 

 CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERSHIP CAPITAL

 (In Thousands)

 (Unaudited)

  

 
    General Partner
    Unitholders
    Total
    Unitholder Units
  

 Three Months Ended June 30, 2025
                 

 Balance at April 1, 2025
  $(2,656) $345,791  $343,135   47,340 

 Net income
   442   11,905   12,347     

 Distributions ($0.725835 per common unit)
   (1,283)  (34,360)  (35,643)    

 Balance at June 30, 2025
  $(3,497) $323,336  $319,839   47,340 

                 

 Three Months Ended June 30, 2026
                 

 Balance at April 1, 2026
  $(5,174) $301,857  $296,683   48,256 

 Net income
   1,037   29,834   30,871     

 Distributions ($0.475036 per common unit)
   (955)  (22,923)  (23,878)    

 Balance at June 30, 2026
  $(5,092) $308,768  $303,676   48,256 

 

  

  

 
    General Partner
    Unitholders
    Total
    Unitholder Units
  

 Six Months Ended June 30, 2025
                 

 Balance at January 1, 2025
  $(1,997) $363,785  $361,788   47,340 

 Net income
   1,074   28,915   29,989     

 Distributions ($1.465247 per common unit)
   (2,574)  (69,364)  (71,938)    

 Balance at June 30, 2025
  $(3,497) $323,336  $319,839   47,340 

                 

 Six Months Ended June 30, 2026
                 

 Balance at January 1, 2026
  $(4,825) $310,064  $305,239   48,256 

 Net income
   1,914   58,094   60,008     

 Distributions ($1.230748 per common unit)
   (2,181)  (59,390)  (61,571)    

 Balance at June 30, 2026
  $(5,092) $308,768  $303,676   48,256 

 

  

 The accompanying notes are an integral part of these condensed consolidated financial statements.

  

 
 
 4
 

 
 
 
 
 Table of Contents
 

 

 
 
 DORCHESTER MINERALS, L.P.
 

 

 
 
 (A Delaware Limited Partnership)
 

 

 

 

 
  
 

 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 (In Thousands)

 (Unaudited)

  

 
    Six Months Ended
  

   June 30,
  

   2026
    2025
  

 Cash flows from operating activities:
         

 Net income
  $60,008  $29,989 

 Adjustments to reconcile net income to net cash provided by operating activities:
         

 Depreciation, depletion and amortization
   36,727   31,468 

 Amortization of operating lease right-of-use asset
   104   83 

 Changes in operating assets and liabilities:
         

 Accounts receivable
   (2,667)  2,330 

 Net profits interest receivable - related party
   (9,474)  (664)

 Prepaid expenses and other current assets
   256   (269)

 Accounts payable and other current liabilities
   3,310   1,112 

 Operating lease liability
   (138)  (133)

 Net cash provided by operating activities
   88,126   63,916 

         

 Cash flows provided by investing activities:
         

 Net cash contributed in acquisitions of oil and natural gas properties
   4,008   2,028 

         

 Cash flows used in financing activities:
         

 Distributions paid to General Partner and unitholders
   (61,571)  (71,938)

 Increase (decrease) in cash and cash equivalents
   30,563   (5,994)

 Cash and cash equivalents at beginning of period
   41,937   42,508 

 Cash and cash equivalents at end of period
  $72,500  $36,514 

 

  

 The accompanying notes are an integral part of these condensed consolidated financial statements.

  

 
 
 5
 

 
 
 
 
 Table of Contents
 

 

 
 
 DORCHESTER MINERALS, L.P.
 

 

 
 
 (A Delaware Limited Partnership)
 

 

 

 

 
  
 

 NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 (Unaudited)

 
  
 

 
 1. 
 Business and Basis of Presentation
 

  

 Description of the Business

  

 Dorchester Minerals, L.P. (the “Partnership”) is a publicly traded Delaware limited partnership that commenced operations on January 31, 2003. Our business may be described as the acquisition, ownership and administration of Royalty Properties (which consist of producing and nonproducing mineral, royalty, overriding royalty, net profits, and leasehold interests located in 593 counties and parishes in 28 states (“Royalty Properties”)) and net profits overriding royalty interests (referred to as the “Net Profits Interest”, or “NPI”).

  

 Basis of Presentation

  

 The accompanying unaudited condensed consolidated financial statements of the Partnership have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). The unaudited condensed consolidated financial statements do not include all of the disclosures required for complete annual financial statements prepared in conformity with U.S. GAAP. Therefore, the accompanying unaudited condensed consolidated financial statements and related notes should be read in conjunction with the consolidated financial statements and notes thereto included in the Partnership’s Annual Report. The accompanying unaudited condensed consolidated financial statements reflect all adjustments (consisting only of normal and recurring adjustments unless indicated otherwise) that are, in the opinion of management, necessary for the fair presentation of our financial position and operating results for the interim period. Interim period results are not necessarily indicative of the results for the calendar year. Per unit information is calculated by dividing the income or loss applicable to holders of the Partnership’s common units by the weighted average number of units outstanding. The Partnership has no potentially dilutive securities and, consequently, basic and diluted income per unit do not differ.

  

 The unaudited condensed consolidated financial statements include the accounts of the Partnership and its wholly-owned subsidiaries Dorchester Minerals Oklahoma LP, Dorchester Minerals Oklahoma GP, Inc., Maecenas Minerals LLP, Dorchester-Maecenas GP LLC, The Buffalo Co., A Limited Partnership, DMLPTBC GP LLC, and DMLP Terra Firma LLC. All significant intercompany balances and transactions have been eliminated in consolidation.

  

 Certain amounts in the prior‑period condensed consolidated financial statements have been reclassified to conform to the current‑period presentation. Management believes these reclassifications enhance the clarity and consistency of the financial statement presentation. These are presentation only reclassifications and had no effect on total assets, total liabilities, shareholders’ equity, net income, or cash flows for any periods presented.

 
 
  
 

 
 2. 
 Summary of Significant Accounting Policies
 

  

 The Partnership’s significant accounting policies are described in Note 2 of the consolidated financial statements included in the Partnership’s Annual Report on Form 10‑K for the year ended December 31, 2025. There have been no changes in such policies or the application of such policies during the six months ended June 30, 2026.

  

 Use of Estimates — The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Partnership evaluates these estimates on an ongoing basis, using historical experience, consultation with experts and other methods the Partnership considers reasonable in each circumstance. Any effects on the Partnership’s business, financial position, or results of operations resulting from revisions to these estimates are recorded in the period in which the facts that give rise to the revision become known. Although the Partnership believes these estimates are reasonable, actual results could differ from those estimates.

  

 Receivables — The following table presents the Partnership’s receivables as of the dates indicated:

  

 
    In Thousands
  

   June 30, 2026
    December 31, 2025
    December 31, 2024
  

 Royalty Properties receivable
  $14,882  $13,810  $19,120 

 Other
   143   158   121 

 Accounts receivable
   15,025   13,968   19,241 

 Net profits interest receivable - related party
   11,987   2,513   5,544 

 Total Receivables
  $27,012  $16,481  $24,785 

 
  

 Revenues — The following table disaggregates the Partnership’s oil and natural gas revenues from production on the Royalty Properties for the three and six months ended June 30, 2026 and 2025:

  

 
    In Thousands
  

   Three Months Ended
    Six Months Ended
  

   June 30,
    June 30,
  

   2026
    2025
    2026
    2025
  

 Oil sales (1)
  $43,622  $22,568  $80,260  $55,190 

 Natural gas sales
   278   1,864   4,605   7,072 

 Total Royalties operating revenue
  $43,900  $24,432  $84,865  $62,262 

 
  

 (1)Includes natural gas liquids sales.

  

 
 
 
 
 6
 

 

 

 
 
 
 
 Table of Contents
 

 

 

 
  
 Recent Accounting Pronouncements

  

 Recently Adopted Pronouncements

  

 In July 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2025-05, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets” (“ASU 2025-05”), which provides a practical expedient for calculating current expected credit losses on accounts receivable and current contract assets. This practical expedient permits a reporting entity to assume that current conditions as of the balance sheet date remain unchanged over the remaining life of the assets. This ASU was effective for the Partnership beginning January 1, 2026, under a prospective approach. The adoption of this ASU did not have a material effect on the Partnership’s financial statements.

  

 Accounting Pronouncements Not Yet Adopted

  

 In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses” (“ASU 2024-03”), which requires public entities to disclose additional information about certain costs and expenses included in relevant expense captions presented on the income statement. ASU 2024-03 is effective for annual periods beginning after December 15, 2026, and for interim periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. Management is evaluating ASU 2024-03 to determine its impact on the Partnership’s disclosures.

  

 In December 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2025-11, “Interim Reporting (Topic 270): Narrow-Scope Improvements” (“ASU 2025-11”), which improves the guidance in Topic 270 by improving the navigability of the required interim disclosures and clarifying when that guidance is applicable. The ASU includes a comprehensive list of required interim disclosures and adds a principle that requires entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. ASU 2025-11 is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. Management is evaluating ASU 2025-11 to determine its impact on the Partnership’s disclosures.

  

 The Partnership considers the applicability and impact of all ASUs. There are no other recent accounting pronouncements not yet adopted that are expected to have a material effect on the Partnership upon adoption

 
 
  
 

 
 3. 
 Acquisitions for Common Units
 

  

 On July 31, 2026, pursuant to a non-taxable contribution and exchange agreement with multiple unrelated third parties, the Partnership acquired mineral and royalty interests totaling approximately 3,100 net royalty acres located in five counties across the Williston Basin in North Dakota in exchange for 835,958 common units representing limited partnership interests in the Partnership valued at $23.1 million and issued pursuant to the Partnership’s registration statement on Form S-4. At closing, in addition to conveying mineral and royalty interests to the Partnership, the contributors delivered funds to the Partnership in an amount equal to their cash receipts during the period from April 1, 2026 through June 30, 2026 of $3.6 million, which will be included in the calculation of the Partnership’s third quarter 2026 cash distribution to unitholders.

  

 On August 29, 2025, pursuant to a non-taxable contribution and exchange agreement with multiple unrelated third parties, the Partnership acquired mineral interests totaling approximately 3,050 net royalty acres located in Adams County, Colorado in exchange for 915,694 common units representing limited partnership interests in the Partnership valued at $23.0 million and issued pursuant to the Partnership’s registration statement on Form S-4. We believe that the acquisition is considered complementary to our business. The transaction was accounted for as an acquisition of assets under U.S. GAAP. Accordingly, the cost of the acquisition was allocated on a relative fair value basis and transaction costs were capitalized as a component of the cost of the assets acquired. Oil and natural gas properties, at cost, on the consolidated balance sheet as of December 31, 2025 includes $19.7 million of net capitalized costs attributable to proved oil and natural gas properties acquired in the transaction. Final settlement net cash received of $4.0 million is included in net cash contributed in acquisitions on the condensed consolidated statement of cash flows for the six months ended June 30, 2026.

  

 On September 30, 2024, pursuant to a non-taxable contribution and exchange agreement with West Texas Minerals LLC, a Delaware limited liability company, Carrollton Mineral Partners, LP, a Texas limited partnership, Carrollton Mineral Partners Fund II, LP, a Texas limited partnership, Carrollton Mineral Partners III, LP, a Texas limited partnership, Carrollton Mineral Partners III-B, LP, a Texas limited partnership, Carrollton Mineral Partners IV, LP, a Texas limited partnership, CMP Permian, LP, a Texas limited partnership, CMP Glasscock, LP, a Texas limited partnership, and Carrollton Royalty, LP, a Texas limited partnership, the Partnership acquired mineral, royalty, and overriding royalty interests in producing and non-producing oil and natural gas properties representing approximately 14,225 net mineral acres located in 14 counties across New Mexico and Texas in exchange for 6,721,144 common units representing limited partnership interests in the Partnership valued at $202.6 million and issued pursuant to the Partnership’s registration statements on Form S-4. We believe that the acquisition is considered complementary to our business. The transaction was accounted for as an acquisition of assets under U.S. GAAP. Accordingly, the cost of the acquisition was allocated on a relative fair value basis and transaction costs were capitalized as a component of the cost of the assets acquired. Final settlement net cash received, net of capitalized transaction costs paid, of $2.0 million is included in net cash contributed in acquisitions on the condensed consolidated statement of cash flows for the six months ended June 30, 2025.

 
 
  
 

 
 4. 
 Commitments and Contingencies
 

  

 Our Partnership and Dorchester Minerals Operating LP, a Delaware limited partnership owned directly and indirectly by our General Partner (the “Operating Partnership”), are involved in legal and/or administrative proceedings arising in the ordinary course of their businesses, none of which have predictable outcomes and none of which are believed to have any significant effect on consolidated financial position, cash flows, or operating results. During the first quarter of 2026, our Partnership and the Operating Partnership entered into a settlement and mutual release agreement with unrelated third parties resolving ordinary course litigation affecting certain leasehold in Midland County, Texas, which is owned by the Operating Partnership and subject to the NPI. The Operating Partnership received proceeds of $15.5 million, which were included in the calculation of the April 2026 NPI payment.

 
 
  
 

 
 5. 
 Distributions to Holders of Common Units
 

  

 On July 23, 2026, the Partnership announced its cash distribution for the second quarter of 2026 of $1.272943 per common unit, representing activity for the three-month period ended June 30, 2026, payable to common unitholders of record as of August 3, 2026. This distribution will be paid on August 13, 2026. The partnership agreement requires the next cash distribution to be paid by November 14, 2026.

  

 
 
 
 
 7
 

 

 

 
 
 
 
 Table of Contents
 

 

 

 
  
 
 
  
 

 
 6.
 Segment Reporting
 

  

 The Partnership operates in a single operating and reportable segment. The Partnership’s Chief Executive Officer (“CEO”) has been determined to be the chief operating decision maker of the Partnership. The CEO uses net income to assess financial performance and allocate resources on a consolidated basis. The CEO manages and evaluates the results of the Partnership on a consolidated basis, and net income is used to evaluate key operating decisions, such as making strategic acquisitions, determining transaction structures to capitalize on the development of the properties underlying our mineral interests, and allocating resources for general and administrative expenditures. Disaggregated operating revenues of the Partnership’s single segment and all significant segment expenses are presented separately on the Partnership’s condensed consolidated income statements. There are no other significant segment expenses or other segment items that would require disclosure.

 
 
  
 

 
 7.
 Leases
 

  

 The Partnership leases its office space at 3838 Oak Lawn Avenue, Suite 300, Dallas, Texas (the “Office Lease”). The third amendment to the Office Lease was executed in April 2017 for a term of 129 months, beginning June 1, 2018 and expiring February 28, 2029. At lease commencement, the Partnership concluded the Office Lease was an operating lease. Under the third amendment to the Office Lease, monthly rental payments range from approximately $25,000 to $30,000.

  

 In May 2026, the Partnership executed the fourth amendment to the Office Lease, extending the lease term for an additional 86 months, beginning March 1, 2029 and expiring April 30, 2036. Monthly rental payments under the fourth amendment range from approximately $45,000 to $52,000.

  

 Upon commencement of the fourth amendment, the Partnership concluded that the amendment constituted a lease modification and did not represent a separate contract under ASC 842 as the amendment did not grant the Partnership additional right of use not included in the existing Office Lease. As the fourth amendment did not represent a separate contract and extended the contractual term of the existing Office Lease, the Partnership reassessed the classification of the Office Lease and concluded that it continues to be an operating lease. Therefore, upon the effective date of the modification, the Partnership remeasured the operating lease liability using a discount rate of 7% and recognized a corresponding adjustment to the operating lease right-of-use asset. As the Office Lease does not provide an implicit rate of return and as the Partnership is precluded from incurring any borrowings above a nominal amount under its partnership agreement, the Partnership used a discount rate commensurate with the incremental borrowing rate of a group of peers based on information available at the application date in determining the present value of lease payments. The modification was accounted for as a non-cash exchange in which the Partnership obtained additional operating lease right-of-use asset in exchange for the remeasured operating lease liability. The non-cash exchange resulted in an increase of $2.8 million to both the operating lease right-of-use asset and operating lease liability on the condensed consolidated balance sheet.

  

 Maturities of lease liabilities under the fourth amendment to the Office Lease are as follows:

  

 
    In Thousands
  

   As of
  

   6/30/2026
  

 2026
  $184 

 2027
   374 

 2028
   380 

 2029
   428 

 2030
   546 

 Thereafter
   3,133 

 Total lease payments
   5,045 

 Less amount representing interest
   (1,554)

 Total lease obligation
  $3,491 

 
 
 
 
 
 8
 

 

 

 
 
 
 
 Table of Contents
 

 

 

 
   

 
 
  
 

 
 
 
 ITEM 2.
 
 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
 

 
 
  

 The following discussion contains forward-looking statements. For a description of limitations inherent in forward-looking statements, see page 1 of this Quarterly Report.

  

 Objective

  

 This discussion, which presents our results of operations for the three and six months ended June 30, 2026 and 2025, should be read in conjunction with our unaudited condensed consolidated financial statements and the accompanying notes. We intend for this discussion to provide the reader with information that will assist in understanding our financial statements, the changes in certain key items in those financial statements from period to period, and the primary factors that accounted for those changes.

  

 Overview

  

 We own producing and nonproducing mineral, royalty, overriding royalty, net profits and leasehold interests. We refer to these interests as the Royalty Properties. We currently own Royalty Properties in 593 counties and parishes in 28 states.

  

 As of June 30, 2026, we own a net profits overriding royalty interest (referred to as the “Net Profits Interest”, or “NPI”) in various properties owned by Dorchester Minerals Operating LP (the “Operating Partnership”), a Delaware limited partnership owned directly and indirectly by our General Partner. We receive a monthly payment from the NPI equaling 96.97% of the net profits actually realized by the Operating Partnership from these properties in the preceding month. In the event that costs, including budgeted capital expenditures, exceed revenues on a cash basis in a given month for properties subject to the Net Profits Interest, no payment is made, and any deficit is accumulated and reflected in the following month's calculation of net profit.

  

 In the event the NPI has a deficit of cumulative revenue versus cumulative costs, the deficit will be borne solely by the Operating Partnership.

  

 From a cash perspective, as of June 30, 2026, the NPI was in a surplus position and had outstanding capital commitments, primarily in the Bakken region, of $10.4 million.

  

 Commodity Price Risks

  

 The pricing of oil and natural gas sales is primarily determined by supply and demand in the global marketplace and can fluctuate considerably. As a royalty owner and non-operator, we have extremely limited access to timely information and no operational control over the volumes of oil and natural gas produced and sold or the terms and conditions on which such volumes are marketed and sold.

  

 Our profitability is affected by oil and natural gas market prices. Oil and natural gas market prices have fluctuated significantly in recent years in response to factors outside of our control, including the war in Ukraine, conflicts in the Middle East, including the ongoing military conflict in Iran, fluctuations in interest rates, global supply chain disruptions, political uncertainty in Venezuela, and actions taken by OPEC+. It is not possible for us to predict or determine how these factors might affect oil and natural gas market prices in the future. We continue to monitor factors impacting commodity supply and demand situations, including changes to tariff and import/export regulations by the United States or other countries, and assess their impact on our business.

  

 Tariffs and Trading Relationships

  

 The U.S. government has announced, adjusted and rescinded multiple tariffs on many foreign jurisdictions, which has increased uncertainty regarding the ultimate effect of the tariffs on economic conditions. Continued uncertainties about tariffs and their effects on trading relationships may affect costs for and availability of raw materials or contribute to inflation in the markets in which we own properties. Although we are continuing to monitor the economic effects of such announcements and adjustments, as well as opportunities to mitigate their related impacts, costs and other effects associated with the tariffs remain uncertain.

  

 Global oil markets are contending with tariff impacts, geopolitical tensions, including the recent military conflict in Iran, and oil supply dynamics, including the evolving OPEC+ production strategy, potential constraints on Iranian, Russian, and Venezuelan oil exports, disruptions to the flow of oil through the Strait of Hormuz, and the withdrawal of the United Arab Emirates from OPEC and OPEC+. It is unclear how recent volatility in commodity prices will affect changes in North American production activity and oil producers are evaluating a range of scenarios in anticipation of oil price pressure in light of the foregoing. Gas producers could prove to be beneficiaries of potentially lower associated gas production in oil-weighted basins if oil production is curtailed. Larger, well-capitalized producers that comprise a greater portion of present North American shale production, are better able to withstand a broader range of commodity prices.

  

 
 
 9
 

 
 
 
 
 Table of Contents
 

 

 

 

  

 Results of Operations

  

 Acquisitions for Common Units

  

 On July 31, 2026, pursuant to a non-taxable contribution and exchange agreement with multiple unrelated third parties, the Partnership acquired mineral and royalty interests totaling approximately 3,100 net royalty acres located in five counties across the Williston Basin in North Dakota in exchange for 835,958 common units representing limited partnership interests in the Partnership valued at $23.1 million and issued pursuant to the Partnership’s registration statement on Form S-4. At closing, in addition to conveying mineral and royalty interests to the Partnership, the contributors delivered funds to the Partnership in an amount equal to their cash receipts during the period from April 1, 2026 through June 30, 2026 of $3.6 million, which will be included in the calculation of the Partnership’s third quarter 2026 cash distribution to unitholders.

  

 On August 29, 2025, pursuant to a non-taxable contribution and exchange agreement with multiple unrelated third parties, the Partnership acquired mineral interests totaling approximately 3,050 net royalty acres located in Adams County, Colorado in exchange for 915,694 common units representing limited partnership interests in the Partnership valued at $23.0 million and issued pursuant to the Partnership’s registration statement on Form S-4. We believe that the acquisition is considered complementary to our business. The transaction was accounted for as an acquisition of assets under U.S. GAAP. Accordingly, the cost of the acquisition was allocated on a relative fair value basis and transaction costs were capitalized as a component of the cost of the assets acquired. Final settlement net cash received of $4.0 million is included in net cash contributed in acquisitions on the condensed consolidated statement of cash flows for the six months ended June 30, 2026.

  

 On September 30, 2024, pursuant to a non-taxable contribution and exchange agreement with West Texas Minerals LLC, a Delaware limited liability company, Carrollton Mineral Partners, LP, a Texas limited partnership, Carrollton Mineral Partners Fund II, LP, a Texas limited partnership, Carrollton Mineral Partners III, LP, a Texas limited partnership, Carrollton Mineral Partners III-B, LP, a Texas limited partnership, Carrollton Mineral Partners IV, LP, a Texas limited partnership, CMP Permian, LP, a Texas limited partnership, CMP Glasscock, LP, a Texas limited partnership, and Carrollton Royalty, LP, a Texas limited partnership (collectively, the “Contributors”), the Partnership acquired mineral, royalty, and overriding royalty interests in producing and non-producing oil and natural gas properties representing approximately 14,225 net mineral acres located in 14 counties across New Mexico and Texas in exchange for 6,721,144 common units representing limited partnership interests in the Partnership valued at $202.6 million and issued pursuant to the Partnership’s registration statements on Form S-4. Final settlement net cash received, net of capitalized transaction costs paid, of $2.0 million is included in the net cash contributed in acquisitions on the condensed consolidated statement of cash flows for the three months ended June 30, 2025.

  

 Three and Six Months Ended June 30, 2026 as compared to Three and Six Months Ended June 30, 2025

    

 Our period-to-period changes in net income and cash flows from operating activities are principally determined by changes in oil and natural gas sales volumes and prices, and to a lesser extent, by capital expenditures deducted under the NPI calculation. Our portion of oil and natural gas sales volumes and average sales prices are shown in the following table. Oil sales volumes include volumes attributable to natural gas liquids and oil sales prices include natural gas liquids prices combined by volumetric proportions.

  

 
 
 
  
  
 Three Months Ended
 
  
  
  
  
  
  
 Six Months Ended
 
  
  
  
  
  
 

 
  
  
 June 30,
 
  
  
  
  
  
  
 June 30,
 
  
  
  
  
  
 

 
 Accrual basis sales volumes:
 
  
 2026
 
  
  
 2025
 
  
  
 % Change
 
  
  
 2026
 
  
  
 2025
 
  
  
 % Change
 
  
 

 
 Royalty Properties natural gas sales (mmcf)
 
  
  
 1,430
  
  
  
 1,341
  
  
  
 7
 %
  
  
 3,093
  
  
  
 2,824
  
  
  
 10
 %
 

 
 Royalty Properties oil sales (mbbls)
 
  
  
 573
  
  
  
 399
  
  
  
 44
 %
  
  
 1,198
  
  
  
 917
  
  
  
 31
 %
 

 
 NPI natural gas sales (mmcf)
 
  
  
 677
  
  
  
 493
  
  
  
 37
 %
  
  
 1,318
  
  
  
 929
  
  
  
 42
 %
 

 
 NPI oil sales (mbbls)
 
  
  
 170
  
  
  
 163
  
  
  
 4
 %
  
  
 523
  
  
  
 298
  
  
  
 76
 %
 

 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 

 
 Accrual basis average sales prices:
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 

 
 Royalty Properties natural gas sales ($/mcf)
 
  
 $
 0.19
  
  
 $
 1.39
  
  
  
 (86
 )%
  
 $
 1.49
  
  
 $
 2.50
  
  
  
 (40
 )%
 

 
 Royalty Properties oil sales ($/bbl)
 
  
 $
 76.12
  
  
 $
 56.51
  
  
  
 35
 %
  
 $
 67.00
  
  
 $
 60.18
  
  
  
 11
 %
 

 
 NPI natural gas sales ($/mcf)
 
  
 $
 1.18
  
  
 $
 2.20
  
  
  
 (46
 )%
  
 $
 2.78
  
  
 $
 3.00
  
  
  
 (7
 )%
 

 
 NPI oil sales ($/bbl)
 
  
 $
 74.22
  
  
 $
 61.86
  
  
  
 20
 %
  
 $
 72.83
  
  
 $
 61.62
  
  
  
 18
 %
 

 
 
   

 Both oil and natural gas sales price changes reflected in the table above resulted from changing market conditions.

  

 The increase in oil sales volumes attributable to our Royalty Properties from the second quarter of 2025 to the same period of 2026 is primarily a result of higher suspense releases on new wells on legacy acreage in the Permian Basin, increased baseline production from legacy wells in the Permian Basin, and Rockies wells acquired in the third quarter of 2025. The increase in oil sales volumes attributable to our Royalty Properties from the first six months of 2025 to the same period of 2026 is primarily a result of higher suspense releases on new wells on legacy acreage in the Permian Basin, and suspense releases on first time payments and increased baseline production from Rockies wells acquired in the third quarter of 2025, partially offset by decreased baseline production in the Permian Basin, particularly in the first quarter of 2026 compared to the same period of 2025, and lower suspense releases on new wells on legacy acreage in the Rockies in the first quarter of 2026 compared to the same period of 2025. The increase in natural gas sales volumes attributable to our Royalty Properties from the second quarter and first six months of 2025 to the same periods of 2026 is primarily a result of higher suspense releases on new wells on legacy acreage in the Permian Basin, and suspense releases on first time payments and increased baseline production from Rockies wells acquired in the third quarter of 2025, partially offset by decreased baseline production in the Permian Basin and lower suspense releases on new wells on legacy acreage in the Rockies in the first quarter of 2026 compared to the same period of 2025.

  

 Th