Dorchester Minerals, L.P.

What they do

Dorchester holds non-operated mineral and royalty interests, meaning it owns fractional interests in oil and natural gas properties but does not operate wells or bear development costs. Its two principal asset categories are Royalty Properties (mineral, royalty and overriding royalty interests) and a Net Profits Interest (NPI) backed by working interests held at Dorchester Minerals Operating LP. Because it does not drill or operate, revenue comes from its share of production sold by third-party operators, plus lease bonuses and leasehold assignment proceeds.

Revenue drivers

• Royalty Properties oil and natural gas sales — Oil and gas production sold from the Partnership's mineral and royalty interests; growth in 2025 came from 2024 and 2025 acquisitions and continued Rockies drilling, partly offset by lower realized oil prices.
• Net Profits Interest (NPI) — A net profits overriding royalty interest on working-interest properties operated through Dorchester Minerals Operating LP; NPI oil and gas sales volumes fell in 2025 on lower Bakken drilling activity and higher capital expenditures deducted in the NPI calculation.
• Lease bonuses and leasehold assignments — Non-production proceeds from leasing undeveloped minerals and assigning leasehold; 2025 included $4.0 million of lease bonus and a $5.4 million assignment of leasehold in Upton County, Texas.

Recent performance

Full-year 2025 revenue was $152.8 million and net income was $57.4 million ($1.16 diluted per unit), down from $161.5 million and $92.4 million in 2024. The 2025 decline was primarily lower industrywide realized oil prices, lower NPI oil and gas sales volumes tied to reduced Bakken drilling, and higher capital expenditures deducted under the NPI calculation, partly offset by higher Royalty Properties volumes and better natural gas prices. The Partnership paid $132.0 million of distributions in 2025. Quarterly revenue has since accelerated to $58.9 million for the period ended March 31, 2026 and $56.1 million for the period ended June 30, 2026. Total assets were $314.0 million, total liabilities $10.3 million, and cash $72.5 million as of June 30, 2026.

Strategy

Management states its primary objective is providing an attractive yield to unitholders by managing assets, protecting the balance sheet, and minimizing cost structure. Growth has come through non-taxable contribution and exchange transactions in which the Partnership issues common units for mineral and royalty acreage: roughly 1,485 net royalty acres in Colorado in March 2024, 1,204 net royalty acres in Weld County, Colorado and approximately 14,225 net mineral acres in 14 New Mexico and Texas counties on September 30, 2024, and approximately 3,050 net royalty acres in Adams County, Colorado valued at $23.0 million in August 2025. The Partnership does not participate as a working-interest owner to avoid unrelated business taxable income. It had 49,091,408 common units outstanding as of August 6, 2026.

Risks

• Oil and natural gas price volatility — Cash distributions depend significantly on realized oil and natural gas prices, which the Partnership states are historically volatile and driven by factors outside its control.
• No operational control — Dorchester owns fractional interests and does not operate or control development of the Royalty Properties or the properties underlying the NPI, so drilling decisions rest with third-party operators.
• Limited influence on undeveloped acreage — The Partnership states its ability to influence development of nonproducing properties is severely limited.
• Restriction on working-interest participation — To avoid unrelated business taxable income, the Partnership is prohibited from participating in development as a working-interest or other expense-bearing owner.

Outlook

The 2025 annual report attributes the year's results to lower industrywide realized oil prices, reduced Bakken drilling, and higher NPI capital expenditure deductions, partly offset by acquisitions and Rockies drilling. Management identifies capitalizing on development of the mineral interests underlying its properties as a stated strategy, though it does not control that development. No forward guidance figures are provided in the source excerpts. Note that the 10-K does not include a separate 2026 first-half MD&A here, so quarter-specific commentary is limited to reported revenue figures.