EagleRock Land, LLC

Notes to the Unaudited Condensed Consolidated Financial Statements

The Company

Organization

Lea & Eddy Holdings, LLC (together with its Subsidiaries, “the Company”, “we”, “us”, or “our”) was formed as a Texas limited liability company on December 7, 2023. The Company has a single class of equity, designated as Common Units.

The Company commenced business operations in January 2024. The Company has the following wholly owned subsidiaries, Hydrosource Logistics, LLC (“Hydrosource”), and Hydrosource Logistics Waste Management, LLC. Additionally, Desert Ram Holdings, LLC (“Desert Ram”), Desert Ram South, Incorporated (“Desert Ram South”), NGL North Ranch, LLC and NGL South Ranch Inc. were acquired in April 2024 (the "Desert Ram Acquisition"). In January 2025, NGL North Ranch, LLC and NGL South Ranch, Inc. obtained, in connection with the Desert Ram Acquisition, name change certificates from the State of Texas and State of New Mexico to operate as Desert Ram North, LLC and Desert Ram South Ranch, Inc., respectively.

Collectively, these entities are referred to as the "Subsidiaries." The condensed consolidated financial statements include the accounts of Lea & Eddy Holdings, LLC and the Subsidiaries.

In December 2025, in connection with a proposed initial public offering ("IPO"), the Company formed EagleRock Land, LLC, a Texas limited liability company (the “Registrant”). At the closing of the IPO, the Registrant consolidated certain existing assets of the Company together with specified assets acquired in connection with any related acquisition.

Business

The Company provides a range of well site services to U.S. exploration and production (“E&P”) companies in the Southeastern New Mexico and Permian Basin. These services are fundamental to establishing and maintaining the flow of oil and natural gas throughout the productive life of a well. Our service offerings include water sales for oil and gas exploration, surface development activities in connection with oil and gas development and leases of our land.

Summary of Significant Accounting Policies

Basis of Accounting

The accompanying condensed consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") for interim financial information and in accordance with Rule 10-01 of Regulation S-X and reflect all adjustments, consisting of normal recurring adjustments which are, in the opinion of management, necessary for a fair statement of the financial results for the interim periods presented. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements and should be read in conjunction with the Company's annual audited financial statements and accompanying notes for the year ended December 31, 2025, included within the Company’s final prospectus filed with the SEC on May 14, 2026, pursuant to Rule 424(b) under the Securities Act of 1933, as amended.

Principles of Consolidation

The accompanying condensed consolidated financial statements include Lea & Eddy Holdings, LLC, and its Subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

The Company had no other comprehensive income (loss) for the three months ended March 31, 2026 and 2025. As such, net income (loss) is equivalent to total comprehensive income (loss)

Use of Estimates

Management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and revenues and expenses during the reporting period. Such estimates include, but are not limited to, allowance for credit losses, assessment of useful lives and recoverability of long-lived assets, including property, plant and equipment and intangible assets, discount rates underlying our lease right-of-use assets and liabilities, estimates related to deferred tax liabilities, estimates of assets acquired and liabilities assumed in a business combination, and estimates of fair value of warrants and debt. Management bases its estimates on historical experience, current conditions and various other assumptions that it believes to be reasonable under the circumstances. These estimates form the basis for making judgments about the carrying values of assets and liabilities and are not readily apparent from other sources. Actual results could differ from those estimates.

Cash, cash equivalents and restricted cash

The Company considers all highly liquid instruments with an original maturity of three months or less at the time of issuance to be cash equivalents. The Company maintains deposits in financial institutions that are insured by the U.S. Federal Deposit Insurance Corporation (“FDIC”). From time-to-time, the deposits may exceed the amount of deposit insurance available through the FDIC. However, the Company has not experienced any losses related to amounts in excess of FDIC limits.

As of March 31, 2026, the Company held approximately $0.3 millionof restricted cash held as certificates of deposit related to surety bonds associated with right-of-way agreements. There wereno cash amounts restricted as of March 31, 2025. We have recorded these amounts as other noncurrent assets on our condensed consolidated balance sheets. The following table provides a reconciliation of cash and cash equivalents, and restricted cash reported within the condensed consolidated balance sheets to the amounts shown in the condensed consolidated statements of cash flows.

Accounts Receivable

Accounts receivable represents amounts due from third-party and related party customers in connection with our revenue generating activities, and are reported at historical carrying value, net of write-offs and any provision for credit loss. Accounts are written off when they are determined to be uncollectible based upon management's assessment of individual accounts. A provision for credit loss is evaluated on a regular basis by management and is based upon the collectability of the receivables after considering the historical loss rates, age of receivables, credit rating of the counterparty and prevailing economic conditions. As of March 31, 2026 and 2025, there wasno provision for credit loss recorded. At March 31, 2026 and December 31, 2025, the accrued revenue (unbilled receivable) included in accounts receivable, for which the performance obligation has been met to the customer, was approximately $0.3 million and $0.3 million, respectively.

Inventory

Inventory is comprised of cattle, which are stated at the lower of cost or net realizable value, with costs determined utilizing the first-in-first-out method. There were no lower of cost or net realizable value inventory adjustments for the three months ended March 31, 2026 and 2025.

Prepaid Expenses

Prepaid expenses consist primarily of prepaid insurance costs and prepaid subscription and licensing fees, which are amortized using the straight-line method over the term.

Property, Plant, and Equipment, net

Property, plant, and equipment are stated at cost, or upon acquisition, at its fair value and include land, furniture and fixtures, building, leasehold improvements, machinery and equipment, and vehicles. Expenditures for construction activities, major improvements and betterments that extend the useful life of an asset are capitalized while expenditures for repairs and maintenance are expensed as incurred. Upon sale or other retirement of depreciable property, the cost and accumulated depreciation are removed from the related accounts, and any gain or loss is reflected in the condensed consolidated statements of operations. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the respective assets.

The estimated useful lives of the major classes of property, plant, and equipment are as follows:

Impairment of Long-Lived Assets

Management reviews the Company’s property, plant and equipment for impairment whenever events or changes in circumstances indicate that the carrying value of the assets might not be recoverable. Assets are grouped at the lowest level for which there are identifiable cash flows that are largely independent of the cash flows of other groups of assets for purposes of assessing recoverability. Recoverability is generally determined by comparing the carrying value of the asset to the expected undiscounted future cash flows of the asset. If the carrying value of the asset is not recoverable, the amount of impairment loss is measured as the excess, if any, of the carrying value of the asset over its estimated fair value. No impairments were recorded during thethree months ended March 31, 2026 and 2025.

Leases

Contracts are evaluated to determine whether they contain a lease at inception. Leases are classified as either finance leases or operating leases based on criteria in ASC Topic 842, Leases. The Company’s operating leases are generally comprised of corporate offices and vehicles.

Right of Use ("ROU") assets and lease liabilities are recognized on the commencement date based on the present value of lease payments over the lease term. ROU assets are based on the lease liability and are increased by prepaid lease payments and decreased by lease incentives received. Lease incentives are amortized through the lease asset as reductions of expense over the lease term. For leases where the Company is reasonably certain to exercise a renewal option, such option periods have been included in the determination of the Company’s ROU assets and lease liabilities.

The Company reviews its ROU assets for impairment whenever events or changes in circumstances indicate the carrying amount of an asset or asset group may not be recoverable. Recoverability is evaluated by comparing the carrying amount of the ROU asset to the future net undiscounted cash flows the asset is expected to generate. If the comparison indicates that the Company will not be able to recover the carrying amount, the Company recognizes an impairment loss for the amount by which the carrying amount exceeds the estimated fair value. There wasno impairment of ROU assets for thethree months ended March 31, 2026 and 2025.

Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. If the lease provides an implicit rate, the Company uses that rate for determining lease value. If an implicit rate is unavailable, the Company uses the incremental borrowing rate based on the information available at commencement date, including the collateralized borrowing rate for the Company, in determining the present value of lease payments.

The Company’s operating leases are included in short-term lease liability and long-term lease liability in the condensed consolidated balance sheets. Lease costs comprised of office rent associated with the lease are included in operating expenses in the condensed consolidated statements of operations.

Net Investment in Sales-Type Lease

The Company is a lessor in a sales-type lease arrangement related to land. The Company classifies leases in which it is the lessor at lease commencement as operating, direct financing, or sales-type leases in accordance with ASC 842. The Company’s net investment in the sales-type lease is comprised of (i) a lease receivable measured at the present value of remaining lease payments and (ii) an unguaranteed residual asset and is presented within other current assets and net investment in sales-type lease on the condensed consolidated balance sheet, as applicable. Interest income on the net investment is recognized over the lease term using the effective interest method and presented as interest income in the condensed consolidated statement of operations.

Intangible Assets, Net

The Company recognizes an intangible asset as finite-lived if its useful life is limited by legal, contractual, or economic factors. Finite-lived intangible assets are amortized on a straight-line basis over their estimated useful lives. The amortization period reflects the pattern in which the asset's economic benefits are consumed. The Company periodically reviews the remaining useful lives of these assets and revises them if a change in estimate is warranted. Finite-lived intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. An impairment loss is recognized if the carrying amount of an asset is not recoverable from its undiscounted future cash flows. The loss is measured as the excess of the carrying amount over the fair value of the asset. No impairments were recorded during thethree months ended March 31, 2026 and 2025.

The estimated useful lives of the major classes of intangibles are as follows:

Refer to Note 4 – Acquisitions for further details regarding the Company’s intangible assets.

Internal Use Software

We capitalize certain implementation costs incurred for development and costs incurred for cloud computing software implementations. Costs are primarily comprised of contracted labor and related expenses. Costs are capitalized once the project is defined, funding is committed, and it determined that the software will be used for its intended use. Capitalization of these costs concludes once the project is substantially complete and the software is ready for its intended purpose. Post-configuration training and maintenance costs are expensed as incurred. Cloud computing software implementation costs incurred in a hosting arrangement are capitalized and reported as a component of prepaid expenses and other current assets, and other assets. Capitalized software development costs are amortized on a straight-line basis over an estimated useful life of three years. As of March 31, 2026, the Company has capitalized approximately $0.2 million of cloud computing software implementation costs. As of December 31, 2025, the Company had capitalizedno cloud computing software implementation costs.

Deferred Offering Costs

The Company complies with the requirement of the ASC 340-10-S99-1 and SEC Staff Accounting Bulletin Topic 5A — “Expenses of Offering”. Deferred offering costs consist of underwriting, legal, accounting other expenses incurred through the balance sheet date that are directly related to the IPO. As of March 31, 2026 and December 31, 2025, the Company has capitalized approximately $4.9 million and $1.4 million of deferred offering costs, respectively. Such costs were deferred until the closing of the IPO, at which time the deferred costs were offset against the offering proceeds, net of any relevant reimbursements of such costs.

The Company performs an evaluation of acquisition transactions by calculating the relative fair value of the assets acquired to determine if the transaction should be accounted for as a business combination or asset acquisition. If substantially all of the relative fair value is concentrated in a single asset or group of similar assets, or the acquired entity does not meet the definition of a business, the transaction is recorded as an asset acquisition. All other transactions are recorded as business combinations. In accounting for business combinations, all assets acquired and liabilities assumed are recorded at the acquisition date fair value. Any purchase price in excess of the fair value of assets acquired and liabilities assumed is recorded as goodwill.

Warrants

As further discussed in Note 6 - Long Term Debt, the Company issued warrants to the lenders under the Company's long-term debt arrangement. Each holder received the right to acquire Common Units as set forth in the Warrant Agreement. Warrants for common shares are classified as equity if the contracts (1) require physical settlement or net-share settlement or (2) give the Company a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share settlement). Contracts which (1) require net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that event is outside the control of the Company), (2) give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement), or (3) contain variable share provisions that do not qualify for the scope exception are classified as liabilities. The Company assesses classification of its warrants for shares of common stock at each reporting date to determine whether a change in classification between equity and liabilities is required. In April 2025, the Company modified the terms of the outstanding warrants in conjunction with a modification of the Company's long-term debt, removing a variable settlement feature from the warrants. As a result, the outstanding warrants met the requirements for equity classification under ASC 815-40. Accordingly, on April 14, 2025, the Company reclassified the warrant liability to additional paid-in capital. As a result of the transfer from liabilities to equity, the warrants are no longer measured at fair value on a recurring basis as of March 31, 2026.

Fair Value Considerations

Fair value represents the price that would be received to sell the asset or paid to transfer the liability in an orderly transaction between market participants at the reporting date. The Company’s assets and liabilities that are measured at fair value at each reporting date are classified according to a hierarchy that prioritizes inputs and assumptions underlying the valuation techniques. This fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs, and consists of three broad levels:

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Level 1 — Unadjusted quoted prices in active markets for identical, unrestricted assets and liabilities that the reporting entity has the ability to access at the measurement date.

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Level 2— Inputs other than quoted prices included within Level 1 that are observable for the asset and liability or can be corroborated with observable market data for substantially the entire contractual term of the asset or liability.

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Level 3—Unobservable inputs that reflect the entity’s own assumptions about the assumptions market participants would use in the pricing of the asset or liability and are consequently not based on market activity but rather through particular valuation techniques.

There wereno reclassifications between levels during thethree months ended March 31, 2026 and 2025.

Fair Value Measurements

As of March 31, 2025 and up to the reclassification date, the fair value of the Company's liability classified warrants was determined to be de minimis. The valuation of the warrants is considered to be at Level 3 of the fair value hierarchy due to the need to use assumptions in the valuation that are both significant to the fair value measurement and unobservable. The Company’s non-financial assets, which consist primarily of property and equipment, right-of-use assets and intangible assets, are not required to be carried at fair value on a recurring basis and are reported at carrying value. The fair values of these warrant liabilities and non-financial assets are determined, as required, based on Level 3 measurements, including estimates of the amount and timing of future cash flows based upon historical experience, expected market conditions, and management’s plans. All other components of the condensed consolidated balance sheets, such as accounts receivable, cash and cash equivalents, and others approximate fair value as of March 31, 2026 and December 31, 2025.

Revenue Recognition

Revenue is recognized in accordance with ASC 606, Revenue from Contracts with Customers. The Company recognizes revenue when it satisfies the performance obligation to the customer by transferring control over a product or service to the customer.

The Company recognizes revenue following the five-step model under ASC 606: (i) identifying the contract, (ii) identifying performance obligations, (iii) determining the transaction price, (iv) allocating the transaction price, and (v) recognizing revenue as performance obligations are satisfied. The Company’s contracts generally represent a single performance obligation, and revenues are recognized at a point in time.

The Company generates all its revenue from its operations in the State of New Mexico. The Company has disaggregated its revenue as follows which is based on the nature of the products and services rendered:

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Water Sales and Related Party Water Sales: The Company has water rights to obtain water from its constructed water wells within its ranches or acreage in New Mexico. The Company in certain instances may purchase additional water from external sources to supplement its water supply, including treated water. Water sales involve the sales of the Company’s water to its customers for oil and gas completion activities. Revenue from the sale of water, which includes treated water, is recognized at a point in time upon delivery to the customer when the performance obligation has been met. Revenues associated with Water Sales and Related Party Water Sales were approximately $18.8 million and $4.5 million for the three months ended March 31, 2026 and 2025, respectively.

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Surface and Other Revenues: Includes royalty fees, surface damage fees, mining revenues, and cattle sales, which are recognized at a point in time upon completion of the respective performance obligations, when the product or service is delivered to the customer. Royalty revenues are earned from water pumped into saltwater disposal wells on Company land. The Company recognized the royalty revenues when the performance obligations were met, which is based on volume and the Company's contractual royalty percentage. Surface damage fees are earned when the disturbance occurs or restoration services are rendered. Mining (caliche resources) revenues are earned through the sale of caliche mined from the Company’s assets and are recognized when the product has been delivered. Cattle sales are earned through the sale of the Company's cattle inventory. Revenues associated with the Surface and Other Revenues service line were approximately $4.2 million and $2.6 million for the three months ended March 31, 2026 and 2025, respectively. These amounts are inclusive of $0.6 million and $0.4 million of mining (caliche resources) revenues for the three months ended March 31, 2026 and 2025, respectively.

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Lease Revenues: The Company leases certain portions of its land to customers. Income from leases, easement rights, and a man camp is recognized over time as performance obligations are satisfied. Lease revenue has been included as part of our surface and other revenues in the condensed consolidated statements of operations. Revenues associated with the Lease Revenues service line were approximately $0.1 million for the three months ended March 31, 2026 and less than $0.1 million for the three months ended March 31, 2025

The Company evaluates the nature of its contracts and uses judgment primarily in assessing when performance obligations are satisfied. Payment terms do not include significant financing or variable consideration components.

In some instances, we may be entitled to receive payments in advance of satisfying our performance obligations under the contract. We recognize a liability for these payments in excess of revenue recognized within Deferred revenue in our condensed consolidated balance sheets. The following table shows a summary of deferred revenue activity:

Concentrations of Credit Risk, Major Customers and Suppliers

The Company is subject to risk resulting from the concentration of its sales and receivables with several significant customers in the E&P industry. This concentration of customers may impact the Company’s overall credit risk, either positively or negatively, in that these entities may be similarly affected by changes in economic or other conditions. Collateral is not normally required for credit extended in the form of accounts receivable to the Company’s customers.

The Company had significant concentrations in revenue from the following significant customers:

The Company had significant concentrations in accounts receivable from the following significant customers:

The Company is dependent on third-party equipment manufacturers, distributors, and dealers for supplies services, and supplemental water sourcing. The Company is dependent on the ability of its suppliers to provide equipment, products, and services on a timely basis and on favorable pricing terms. Major suppliers are defined as those comprising more than 10% of the Company’s costs of sales and accounts payable.

The Company had concentrations of major suppliers within cost of sales as follows:

The Company had concentrations of major suppliers within accounts payable as follows:

Deferred Loan Costs

The Company capitalized certain costs in connection with obtaining its borrowings, including lender, legal, advisory and accounting fees. These costs are being amortized over the term of the related loan using the effective interest method. Deferred loan cost amortization is included in interest expense. Unamortized deferred loan costs associated with loans paid off or refinanced with different lenders are charged off in the period in which such an event occurs. Deferred loan/debt issuance costs are classified as a reduction of long term debt.

The majority of the Company’s taxable income or loss is passed through to its partners and is reported on the respective partner’s tax returns for federal and state income tax purposes. Accordingly, there is no provision or accrual for income taxes for federal and state income tax purposes included in these condensed consolidated financial statements attributable to the passthrough income. However, as a result of the corporate status of Desert Ram South, the Company has accrued federal and state income taxes related to Desert Ram South’s taxable earnings.

The Company provides for income tax expense based on the liability method of accounting for income taxes. Deferred tax assets and liabilities are recorded based upon differences between the tax basis of assets and liabilities and their carrying values for financial reporting purposes and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. A valuation allowance is established when it is more likely than not that some portion or all of the deferred tax assets will not be realized. The establishment of a valuation allowance requires significant judgment and is impacted by various estimates. Both positive and negative evidence, as well as the objectivity and verifiability of that evidence, is considered in determining the appropriateness of recording a valuation allowance on deferred tax assets. Under U.S. GAAP, the valuation allowance is recorded to reduce the Company’s deferred tax assets to an amount that is more likely than not to be realized and is based upon the uncertainty of the realization of certain federal and state deferred tax assets related to net operating loss carryforwards and other tax attributes. The ultimate realization of the deferred tax assets depends on the generation of sufficient taxable income.

The income tax provision reflects the full benefit of all positions that have been taken in the Company's income tax returns, except to the extent that such positions are uncertain and fall below the recognition requirements. In the event that the Company determines that a tax position meets the uncertainty criteria, an additional liability or benefit will result. The amount of unrecognized tax benefit requires management to make significant assumptions about the expected outcomes of certain tax positions included in filed or yet to be filed tax returns. As of March 31, 2026 and 2025, the Company didnot have any uncertain tax positions. The Company is subject to income taxes in the United States and the state of New Mexico. The Company’s tax filings for 2026, 2025 and 2024 are subject to audit by the federal and state taxing authorities in jurisdictions where we conduct business. None of the Company’s federal or state tax returns are currently under examination. In the event our tax filings are audited, we may be subject to assessments of additional taxes that are resolved with the authorities or through the courts.

Income (Loss) per Common Unit

Basic income (loss) per common unit is computed using the weighted-average number of common units outstanding during the period. Diluted income (loss) per common unit is computed using the weighted-average number of common units and the dilutive effect of contingent units outstanding during the period. Potentially dilutive contingent common units, which consist of warrants for common units have been excluded from the diluted income (loss) per common unit calculation because their effect is anti-dilutive. Subsequent to the modification of warrants in April 2025, the warrants are no longer contingently issuable and as such are included in the calculation of common units for both basic and diluted income (loss) per common unit.

The following represents the computation of basic and diluted earnings per common unit for thethree months ended March 31, 2026 and 2025 (in thousands, except unit and per unit data):

The following weighted average common unit equivalents are excluded from the calculation of weighted average common units outstanding because their inclusion would have been anti-dilutive:

New Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In 2025, we retrospectively adopted ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amendments in this update require entities to disclose specific categories in the effective tax rate reconciliation and provide additional information for reconciling items where the effect of those reconciling items is equal to or greater than 5% of the amount computed by multiplying pretax income/loss by the applicable statutory income tax rate. In addition, entities are required to disclose the year-to-date amount of income taxes paid (net of refunds received) disaggregated by jurisdictions. This ASU is effective for annual periods beginning after December 15, 2024 with early adoption permitted. The adoption of this update did not have a material impact on its consolidated financial statements or related disclosures. Refer to Note 8 – Income Taxes.

Recent Accounting Pronouncements Not Yet Adopted

In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal Use Software (Subtopic 350-40) Targeted Improvements to the Accounting for Internal-Use Software, which removed references to project stages and clarified when the Company is required to begin capitalizing eligible costs. The new guidance is effective for fiscal years beginning after December 15, 2027, and interim periods within those fiscal years, with early adoption permitted. ASU 2025-06 may be applied retrospectively or prospectively. The Company is currently evaluating the effect of this updated standard on its consolidated financial statements and related disclosures.

In November 2024, the FASB issued Accounting Standards Update No. 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses” (“ASU 2024-03”). The guidance in ASU 2024-03 requires public business entities to disclose in the notes to the financial statements, among other things, specific information about certain costs and expenses including purchases of inventory; employee compensation; and depreciation, amortization and depletion expenses for each caption on the income statement where such expenses are included. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted, and the amendments may be applied prospectively to reporting periods after the effective date or retrospectively to all periods presented in the financial statements. We are currently evaluating the potential impact of adopting this new guidance on our consolidated financial statements and related disclosures.

Property, Plant, and Equipment

Property, plant, and equipment at March 31, 2026 and December 31, 2025 consisted of the following:

All property and equipment are held and used in the United States. Depreciation expense for property, plant, and equipment for the three months ended March 31, 2026 and 2025 was approximately $1.2 million and $0.3 million, respectively.

Accelerated Acquisition

On April 14, 2025, the Company acquired 100% of the equity interests in Accelerated Water Resources, LLC (“Accelerated”) from Basin Properties, LLC and NGL Water Solutions Permian, LLC (the "Accelerated Acquisition") in exchange for cash. In connection with the Accelerated Acquisition, the Company acquired two ranches with an aggregate of approximately 72,000 acres consisting of fee acreage and leased acres. The Accelerated Acquisition complements the Company's business by increasing the total acres owned by the Company and resource sales and royalties from water, caliche and other royalties from saltwater disposal. The Accelerated Acquisition was financed through long-term debt.

The transaction was accounted for as a business combination under ASC 805, Business Combinations, with the purchase price allocated to the acquired tangible and intangible assets and liabilities based on their estimated fair values as of the acquisition date. The Company makes various assumptions in estimating the fair values of assets acquired and liabilities assumed. The most significant assumptions relate to the estimated fair values of the acquired intangibles, which were estimated utilizing a discounted cash flow model. These methods are considered Level 3 fair value estimates and include significant assumptions of future revenues and cost estimates, discounted using weighted average cost of capital for industry peers. The most significant input to the valuation was the weighted average cost of capital of 20%. Fair value estimates involve significant assumptions and are classified as Level 3 in the fair value hierarchy.

The following table summarizes the preliminary allocation of the purchase price at the date of acquisition:

Intangible assets acquired include permits, water rights, surface rights, and saltwater disposal rights associated with the operations of the oil and gas services. See Note 2 – Summary of Significant Accounting Policies for further information.

Pro Forma Financial Information

The following unaudited summary financial information for the three months ended March 31, 2025 gives effect to the Accelerated Acquisition as if it had been completed on January 1, 2025. The unaudited pro forma financial information is provided for illustrative purposes only and does not purport to represent what the actual consolidated results of operations or the consolidated financial position of the Company would have been had the Accelerated Acquisition and related financing occurred on the date noted above, nor is it indicative of future results.

Intangible Assets

The following table identifies the weighted average useful lives by class of intangible asset:

Definite lived intangible assets are comprised of the following at March 31, 2026 and December 31, 2025:

Amortization expense for the three months ended March 31, 2026 and 2025, for intangible assets, which include permits, water rights, and surface rights, was approximately $3.4 million and $1.1 million, respectively.

Estimated remaining amortization expense for the future periods is expected to be as follows:

Long Term Debt - Related Party

On April 4, 2024, Hydrosource and Desert Ram entered into a 5-year financing agreement that included a $72.0 million term loan and a revolving credit facility with a maximum borrowing base of $5.0 million, both of which mature on April 4, 2029 (as amended, the “Predecessor Credit Facility”). The Predecessor Credit Facility is fully and unconditionally guaranteed by the Company. Borrowings under the Predecessor Credit Facility bear interest at Secured Overnight Financing Rate (“SOFR”), plus the applicable margin or certain reference rate, plus the applicable margin, which is set at 8.0% -8.5% depending on the applicable leverage ratio for the most recent four consecutive quarters. Additionally, a commitment fee of 0.5% applies to undrawn amounts on the revolving credit facility. Borrowings under the Predecessor Credit Facility are secured by a first priority lien and security interest in substantially all assets of the Company. Principal amounts borrowed under the Predecessor Credit Facility may be repaid early with prepayment penalties varying by year, beginning at 3% and stepping down annually to 1% in the fifth year of the Predecessor Credit Facility. Any principal amounts outstanding on the maturity date, April 4, 2029, become due and payable on such date.

In connection with the Predecessor Credit Facility issuance, the Company additionally issued warrants exercisable for an aggregate of 1,001 Common Units (“April 2024 Warrants”), to designated holders. Each holder received the right to acquire Common Units as set forth in the Warrant Agreement. The April 2024 Warrants may be exercised upon (i) an event of default under the term loan agreement or (ii) an adjustment event, and expireten years from the original issuance date. Because the warrants included a variable settlement feature, the Company concluded the April 2024 Warrants were not indexed to the Company’s own equity and classified them as liabilities. The Company determined the fair value of the April 2024 Warrants at grant date and as of December 31, 2024 to be de minimis. Fair value estimates involve significant assumptions and are classified as Level 3 in the fair value hierarchy.

Interest is payable monthly, with principal payments on the term loan due quarterly, based on the following percentages of the original principal:1.25% from September 30, 2024 through June 30, 2025;2.50% from September 30, 2025 through June 30, 2027; and 3.75% from September 30, 2027 through maturity. All remaining principal and accrued interest are due at maturity.

On February 28, 2025, the Company amended its Predecessor Credit Facility, resulting in an increased maximum borrowing base of $7.5 million on its revolving credit facility. Financing costs incurred related to the amendment of approximately $0.1 million were added to the principal balance as paid-in-kind interest. On April 14, 2025, the Company further amended the Predecessor Credit Facility (“April 2025 Amendment”), resulting in an additional $204 million Term Loan (the “Second Term Loan”). The April 2025 Amendment adjusted the amount and timing of the quarterly principal payments due for the First and Second Term loans as follows:0.3125% from June 30, 2025 through March 31, 2026;0.625% from June 30, 2026 through March 31, 2027;0.9375% from June 30, 2027 through March 31, 2028; and 1.25% from June 30, 2028 through maturity. Additionally, the stepped down prepayment penalties were modified to start at 5.0% and stepping down annually to 4.0%,2.0%,1.0%, andzero after year 5. All remaining principal and accrued interest on both the First and Second Term Loan are due at maturity on April 4, 2029.

In connection with the April 2025 Amendment, the Company (i) issued new warrants to a new creditor (the “April 2025 Warrants”) and (ii) modified the terms of the outstanding April 2024 warrants. The net effect of the issuance and modification reduced the total number of warrants outstanding from 1,001 to 900. The amendment additionally removed the variable settlement feature from the April 2024 Warrants. As a result, both the amended April 2024 Warrants and the April 2025 Warrants met the requirements for equity classification under ASC 815-40. Accordingly, on April 14, 2025, the Company reclassified the April 2024 Warrant liability to additional paid-in capital. The April 2025 Warrants were allocated a value of approximately $0.8 million, which was recorded within additional paid-in-capital, with a corresponding debt discount.

The Company assessed the debt amendment and modified April 2024 Warrants under ASC 470‑50 and concluded that the terms of the new debt are substantially different from the old debt (including the present value of cash flows test exceeding 10%), resulting in extinguishment accounting. Accordingly, the Company derecognized the carrying amount of the old debt and recognized an estimated loss on extinguishment of approximately $70.0 million, which reflects the difference between the carrying amount of the exchanged debt (including unamortized discounts and deferred financing costs of approximately $2.8 million) and the fair value of the new debt, plus fees paid to lenders of approximately $5.6 million and incremental value transferred to the warrantholders of approximately $17.6 million. The $44.1 million premium associated with the debt is primarily attributable to the related party nature of the debt, resulting in a higher interest rate over current market rates. This premium will be amortized over the remaining term of the Predecessor Credit Facility utilizing an effective interest rate of approximately 8.2%.

The Predecessor Credit Facility average interest rates were 12.4% and 13.1% for thethree months ended March 31, 2026 and 2025, respectively.

The outstanding balance on long-term debt is as follows:

The Level 3 fair value of long-term debt as of March 31, 2026 and December 31, 2025 was approximately $323.6 million and $330.0 million, respectively. The disclosed fair value of debt is determined primarily utilizing an income approach.

The principal amounts of long-term debt maturing in future periods related to term loans are as follows:

The Company is subject to financial and non-financial covenants under the Predecessor Credit Facility, including maintaining quarterly and annual audited financial statements, minimum asset coverage ratio of 1:1, and quarterly leverage ratio that steps down over time, ranging from 3:1 to 1:1 as specified in the Predecessor Credit Facility. The Company was in compliance with all covenants as of March 31, 2026.

For the three months ended March 31, 2026, the total interest expense related to long-term debt was approximately$5.8 million, inclusive of $8.3 million of coupon interest expense, net of amortization of net debt premiums and issuance costs of approximately $2.5 million. For the three months ended March 31, 2025, interest expense related to long-term debt of approximately $2.7 million includes approximately $2.5 million of coupon interest and amortization of debt discounts and issuance costs of approximately $0.2 million.

As of March 31, 2026 and December 31, 2025, there was approximately $0.5 million of available borrowing capacity related to our revolving credit facility.

The Company evaluated the prepayment features embedded in its debt agreement, which require the debt to be prepaid upon the occurrence of certain events, including specified asset sales and changes in control, under ASC 815, Derivatives and Hedging. These features represent embedded derivatives that are not clearly and closely related to the host debt. However, the Company has concluded that these embedded derivatives haveno fair value at March 31, 2026 and December 31, 2025, and thereforeno separate embedded derivative liability has been recorded in the accompanying condensed consolidated financial statements.

Subsequent to March 31, 2026, the Predecessor Credit Facility was repaid in full and terminated. See Note 12 –Subsequent Events for additional information.

Leases

The Company has operating leases primarily for corporate offices and vehicles. The Company has subleased a portion of the corporate office, for which the Company receives monthly payments, which have been netted with lease costs in the condensed consolidated statements of operations and related disclosures. Sublease income recorded within the condensed consolidated statements of operations for the three months ended March 31, 2026 and 2025 totaled approximately $0.1 million and $0.1 million, respectively. The operating lease liabilities are included in Short-term lease liability and Long-term lease liability in the condensed consolidated balance sheets. Lease costs and other information related to operating leases are as follows:

Lease terms and discount rates are as follows:

As of March 31, 2026, the future minimum payments under the lease are as follows:

Surface Lease

In 2025, the Company entered into a commercial real estate surface lease agreement with a third-party commercial real estate development company for approximately 6.86 acres of land for the development of a commercial convenience store. The agreement has a total term of up to 60 years, includingtwo extension options. Effective February 2026, the developer completed construction and payments under the lease are expected to commence in the second quarter of 2026. Upon completion, management determined the lease met the criteria to be classified as a sales-type lease because the present value of fixed and determinable future payments exceed the fair value of the associated land. As such, the Company derecognized the land and recognized a net investment in the lease, resulting in a $3.3 million gain on net investment in sales-type lease within the condensed consolidated statement of operations.

We use an estimated annual effective tax rate for purposes of determining the income tax provision during interim reporting periods. In calculating our estimated annual effective tax rate, we consider forecasted annual pre-tax income and estimated permanent book versus tax differences. Adjustments to the effective tax rate and estimates could occur during the year as information and assumptions change which could include, but are not limited to, changes to the forecasted amounts, estimates of permanent book versus tax differences, and changes to tax laws and rates. The Company utilized a discrete effective tax rate method, as allowed by ASC 740 to calculate taxes for the three months ended March 31, 2026. The Company determined that small changes in estimated ordinary income would result in significant changes in the estimated annual effective tax rate (“AETR”), and therefore, the AETR method would not provide a reliable estimate.

Our income tax expense for the three months ended March 31, 2026 was $0.2 million, resulting in an effective tax rate of 6.4 percent. For the three months ended March 31, 2025, there was an effective tax rate ofzero percent. Effective tax rates differ from the U.S. federal statutory rate of 21.0 percent for thethree months ended March 31, 2026 and 2025, primarily due to income attributable to nontaxable entities.

9. Segment Reporting

The Company determines its operating and reportable segment in accordance with ASC 280, Segment Reporting, based on its internal management structure, internal reporting, and the manner in which financial information is reviewed and resources are allocated by the Company’s chief operating decision maker (“CODM”), which is comprised of the Chief Executive Officer and Chief Financial Officer. The CODM regularly evaluates operating results ofone operating and reportable segment. The Company determined that the operating segment is consistent with the organization's structure and CODM's review of operating results. Accordingly, the financial results, assets, and liabilities presented in these financial statements represent the results of the single reporting segment. All of our long-lived assets are located in the United States.

Net income (loss), as presented on our condensed consolidated statement of operations, is the primary measure most consistent with U.S. GAAP used by the Company’s chief operating decision maker to evaluate the performance of and allocate resources within the Company’s business. Further, significant segment expenses the CODM reviews and utilizes to manage the Company's operations are cost of sales and general and administrative expenses at the consolidated level (inclusive of related party amounts), which are presented in the Company's condensed consolidated statement of operations. Other segment items included in consolidated net income (loss) include depreciation and amortization expense, gain on sale of property, plant, and equipment, net, interest expense and income tax benefit (expense), which are included in the condensed consolidated statement of operations. The measure of segment assets is reported on the condensed consolidated balance sheet as total assets. The CODM does not review segment assets and expenses at a different level or category.

Related Party Transactions

The Company reviewed its agreements and relationships to identify related party transactions. The Company has entered into transactions with a related party, which shares common ownership and significant influence over management. The Company’s transactions with the related party were in connection with water treatment services where the related party acted as the contractor providing treated water services to the Company and in certain instances purchased water from the Company.

The Company recognized $0.1 million of related party revenues for the three months ended March 31, 2026. No revenue was recognized from sales to related party for the three months ended March 31, 2025. The Company incurred related party cost of sales of approximately $2.9 million and $1.1 million relating to water treatment services and less than $0.1 million and less than $0.1 million of miscellaneous general and administrative expenses, respectively. As of March 31, 2026 and December 31, 2025, the Company hadno receivables from related party. As of March 31, 2026 and December 31, 2025 the Company had approximately $1.8 million and $2.7 million due to related party, respectively.

During the three months ended March 31, 2025, the Company reimbursed a member related to the purchase of property, plant and equipment in the amount of $0.1 million.

For the three months ended March 31, 2025, the Company incurred approximately $0.1 million in transp ortation service costs with an entity in which a director holds an indirect equity interest.

In 2025, the Company amended its Amended and Restated Limited Liability Company Agreement to increase the number of seats on the Board of Managers, two of which were designated for representatives of lenders under the Predecessor Credit Facility. This amendment granted such lenders board representation and enhanced governance rights with respect to the Company. As a result, the lenders are considered related parties and the Company classifies the Predecessor Credit Facility as long-term debt - related party and the related warrants as warrants - related party in the condensed consolidated financial statements.

There were no other significant transactions or balances with related parties for the three months ended March 31, 2026 and 2025.

Commitments and Contingencies

From time to time the Company enters into certain commitments in the normal course of business and is a party to litigation or other legal proceedings that the Company considers to be part of the ordinary course of business. The Company is currently not involved in any legal proceedings that it considers probable or reasonably possible, individually or in aggregate, to result in a material adverse effect on its financial condition, results of operations or liquidity.

12. Subsequent Events

Intrepid Acquisition. On April 1, 2026, Hydrosource acquired assets, including approximately 22,000 fee surface acres and 28,000 federal grazing lease acres and the related water rights, contracts and permits from Intrepid-Potash New Mexico, LLC ("Intrepid Acquisition") for total consideration of approximately $70.0 million. The transaction was funded with related party debt resulting in additional term loan principal of $70.0 million and associated debt discount and debt issuance costs of approximately $2.5 million, with a maturity date of December 31, 2027. In connection with the Intrepid Acquisition, the Company evaluated the amendment of its term loan and concluded the change in terms did not result in a significant change in the economics of the debt and thus will be accounted for as a debt modification and not an extinguishment of the debt. As such, the related financing costs of $2.1 million will be recorded as additional debt issuance costs and will be amortized over the term of the credit facility. Additionally, the Company incurred $0.3 million in transaction costs in connection with the Intrepid Acquisition. The assets acquired in the Intrepid Acquisition were not contributed to the Registrant in connection with the IPO and have not been offered to be sold to the Registrant.

Deconsolidation of Hydrosource. Immediately prior to the IPO, the Company contributed all interests in Hydrosource to Hydrosource Midstream, LLC (“Hydrosource Midstream”) for no consideration. Hydrosource retained the assets acquired in the Intrepid Acquisition. For the avoidance of doubt, Hydrosource was not contributed to the Registrant in connection with the IPO.

Initial Public Offering. On May 4, 2026, the Registrant, EagleRock Land Operating, LLC ("OpCo") and certain contributing entities, including, including the Company (collectively the "Contributors") entered into a Contribution and Assignment Agreement pursuant to which certain contributions and corporate reorganization steps were effected on May 15, 2026 in connection with the upon, the closing of the IPO

In the IPO, the Registrant issued 17,300,000 Class A shares at a price to the public of $18.50 per Class A share. In addition, the Registrant granted the underwriters a 30-day option to purchase up to an additional 2,595,000 Class A shares at the public offering price, less underwriting discounts and commissions, which the underwriters exercised in full on May 16, 2026. The Class A shares began trading on the New York Stock Exchange and NYSE Texas, Inc. under the ticker symbol "EROK" on May 14, 2026, and the IPO closed on May 15, 2026. The underwriters' option closed on May 19, 2026. The Company received net proceeds from the IPO, including the underwriters' option, of approximately $328.5 million, net of underwriting discounts and offering expenses. The Registrant contributed all of the net proceeds from the IPO to OpCo in exchange for newly issued limited liability company interests in OpCo ("OpCo Units") at a per-unit price equal to the per-share price paid by the underwriters for the Registrant's Class A shares in the IPO. OpCo used a portion of the net proceeds from the IPO to repay in full, and terminate, the Predecessor Credit Facility and intends to use the remainder for general corporate purposes.

Corporate Reorganization Concurrently with the closing of the IPO, the following transactions (the Corporate Reorganization) occurred, in substantially the following order

•

OpCo was formed by the Registrant

•

Each of the Company, the existing owners of Shallow Valley Ranch (the “Shallow Valley Owners”) and Double Eagle IV Midco, LLC (“Double Eagle”) contributed cash to us in exchange for a total of 109,724,999 Class B shares;

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The Company contributed all of its subsidiaries in OpCo in exchange for 42,716,738, OpCo Units and OpCo's assumption of the Predecessor Credit Facility.

•

•

Each of the Registrant’s and OpCo’s operating agreements was amended and restated to facilitate the IPO;

•

Pursuant to a Warrant Exercise Agreement, each holder of warrants of the Company (including funds and accounts managed by TCW Asset Management Company LLC, CCLF Holdings (D41) LLC and AWC Aqua, LLC (collectively, the “TCW Entities” and such warrants, the “Predecessor Warrants”)) exercised a portion of its Predecessor Warrants (the “Exercised Warrants”) and forfeited the remaining portion, which were irrevocably cancelled, immediately following which (i) the Company distributed 14,939,952 OpCo Units and a corresponding number of Class B shares to the TCW Entities in redemption of the units of itself received in respect of the Exercised Warrants, (ii) each warrant agreement between the Company and the TCW Entities was terminated and (iii) certain of such TCW Entities merged with one or more newly formed subsidiaries of the Registrant and received one Class A share in exchange for each OpCo Unit (and Class B share) it held, or an aggregate 4,560,688 Class A shares;

•

The Registrant issued 17,300,000 Class A shares in the IPO to the public, representing 100% of the economic rights in the Registrant, in exchange for the net proceeds of the IPO at a price of $18.50 per Class A share;

•

The Registrant contributed all of the net proceeds from the IPO to OpCo in exchange for a number of OpCo Units equal to the number of Class A shares issued in the IPO; and

•

Sixth Amendment. On May 4, 2026, certain subsidiaries of the Company entered into the Sixth Amendment to the Predecessor Credit Facility (the “Sixth Amendment”). The Sixth Amendment, among other things, (i) provided the lenders’ consent to the IPO, (ii) effected the joinder of OpCo as the new parent under the Predecessor Credit Facility, (iii) released Hydrosource and the Predecessor from their obligations thereunder, with the Fifth Amendment Term Loans (as defined in the Sixth Amendment) being transferred to a separate credit agreement, and (iv) required the establishment of a segregated account with a minimum balance of $270.0 million to be funded from the IPO proceeds.

Repayment of the Predecessor Credit Facility. On June 3, 2026, the Registrant repaid the entire balance of the Predecessor Credit Facility with a cash payment of $269.1 million. The unamortized premium balance associated with the Predecessor Credit Facility was derecognized as a result of the facility being paid off.

EagleRock Credit Facility. On May 4, 2026, OpCo entered into a credit agreement (the "Credit Facility") with JPMorgan Chase Bank, N.A. as administrative agent, and the lenders party thereto. The Effective Date (as defined in the Credit Facility) of the Credit Facility was June 8, 2026. The Credit Facility provides for a senior secured revolving credit facility in an aggregate principal amount of up to $200.0 million, including a $10.0 million letter of credit sublimit, together with the ability to request increases in the commitments of up to an additional $100.0 million; provided that any such request for an increase must be in a minimum amount of $25.0 million and is limited to a maximum offour such requests. The Credit Facility and all borrowings thereunder will mature on June 8, 2031. Borrowings under the Credit Facility bear interest at a rate per annum equal to, at the borrower’s option, the Term SOFR Rate (as defined in the Credit Facility) or Daily Simple SOFR (as defined in the Credit Facility), plus an applicable margin ranging from 2.25% to 3.00%, depending on OpCo’s Net Total Leverage Ratio (as defined in the Credit Facility). The Credit Facility includes a commitment fee on undrawn amounts ranging from 0.375% to 0.50%. The Credit Facility contains customary affirmative and negative covenants, as well as financial covenants requiring maintenance of a minimum Interest Coverage Ratio of 2.75:1.00 and a maximum Net Total Leverage Ratio of 3.50:1.00 (or 4.00:1.00 following a Material Permitted Acquisition (as defined in the Credit Facility)), and contains customary affirmative covenants, negative covenants, and events of default. The Credit Facility remains undrawn, with no letters of credit outstanding, as of the date these financials were able to be issued.

DE Flow Contribution On May 15, 2026, concurrently with the closing of the IPO, Double Eagle contributed its interests in DE Flow including the integrated water infrastructure system in the Midland Basin (the "DE Flow System"), to OpCo in exchange for 45,873,930 OpCo Units and a corresponding number of Class B shares (the "DE Flow Contribution"). The value of the consideration transferred was $988.6 million. The DE Flow System consists of produced water gathering systems, saltwater disposal wells, water sourcing and delivery pipelines and recycling facilities, and is capable of handling up to approximately 400 MBbls/dof produced water. The DE Flow Contribution was accounted for as a business combination under ASC 805. The Company was determined to be the accounting acquirer in the DE Flow Contribution. The initial accounting for the DE Flow Contribution was not complete at the time the financial statements were issued due to the limited time between the IPO and the filing of the Registrant's Quarterly Report of Form 10-Q. As a result, the disclosures required under ASC 805-10-50, Business Combinations, cannot be made at this time. The Registrant is still gathering the necessary information to provide such disclosures in future filings.

Shallow Valley Contribution On May 15, 2026, in connection with the closing of the IPO, the Shallow Valley Owners contributed their interests in the Shallow Valley Ranch, including approximately 41,000 surface acres in the Midland Basin and associated assets, to OpCo in exchange for 21,134,331 OpCo Units and a corresponding number of Class B shares (the "Shallow Valley Contribution"). The value of the consideration transferred was $455.5 million. The Shallow Valley Contribution was accounted for as a business combination under ASC 805. The Company was determined to be the accounting acquirer in the Shallow Valley Contribution. The initial accounting for the Shallow Valley Contribution was not complete at the time the financial statements were issued due to the limited time between the IPO and the filing of the Registrant's Quarterly Report of Form 10-Q. As a result, the disclosures required under ASC 805-10-50, Business Combinations, cannot be made at this time. The Registrant is still gathering the necessary information to provide such disclosures in future filings.

DE Flow WSMA Concurrently with the IPO, OpCo entered into the Water System Management Agreement (the “DE Flow WSMA”) with DEF Operating, LLC (“DEF Operating”), an affiliate of Double Eagle. The DE Flow WSMA governs revenue arrangements with respect to the DE Flow System. The initial term of the DE Flow WSMA is 10 years. Pursuant to the terms of the DE Flow WSMA, OpCo is entitled to a royalty equal to 90% of the net proceeds (gross revenues less costs associated with operating the system) generated by the assets operated by DEF Operating and a minimum annual royalty of $40.0 million for the first five years of the initial term and $10.0 million for the last five years of the initial term. The DE Flow WSMA is supported by an acreage dedication of up to approximately 70,000 acres related to the Registrant's Midland Basin water infrastructure assets. Pursuant to a put option agreement between Double Eagle and Hydrosource, Double Eagle has the right to sell, and Hydrosource has the obligation to purchase, DEF Operating if Double Eagle undergoes certain change of control events or at any time following five years from the date of the IPO.

Hydrosource Recycling Agreement Concurrently with the IPO, OpCo entered into the Produced Water Recycling Rights Agreement (the "Hydrosource Recycling Agreement") with Hydrosource. The Hydrosource Recycling Agreement governs royalty revenue arrangements with respect to recycled water activities on the Registrant's land. The initial term of the Hydrosource Recycling Agreement is 10 years. Pursuant to the terms of the Hydrosource Recycling Agreement OpCo is entitled to(i) a royalty equal to 31% of the gross selling price for each barrel of recycled water stored, treated, processed, recycled, disposed, purchased or sold on the Registrant's land by Hydrosource less applicable taxes, (ii) a royalty equal to 5% of the gross selling price for each barrel of recycled water sold in New Mexico off of the Registrant's land, (iii) a $0.04 per barrel transit tariff for volumes of produced water or recycled water transported across the Registrant's land solely for purposes of transit to a facility located outside of our land, (iv) a royalty equal to 50% of the gross selling price received by Hydrosource less the amount paid to the supplier for produced water sourced pursuant to a long-term agreement that provides Hydrosource access to 3 MMBbls/d of produced water, (v) Hydrosource's payment of 50% of the gross revenue received from the sale of skim oil recovered from the facilities or other operations on our land, (vi) afive-year minimum royalty commitment of $5.0 million per year and (vii) Hydrosource'stwo-year exclusive option to develop a solid waste facility on the Registrant's land.

Long Term Incentive Plan. On May 13, 2026, the Company, as the sole member of the Registrant approved a Long-Term Incentive Plan (“LTIP”) for employees, service providers, and directors of the Registrant, which became effective upon the consummation of the Registrant’s IPO. The LTIP authorizes up to 13,012,499 Class A shares for issuance and provides the Registrant’s board of directors (the “Board”) with the authority to offer several different types of long-term incentives, including stock options, stock appreciation rights, restricted stock, restricted stock units, stock awards, dividend equivalents, other stock-based awards, cash awards, or substitute awards. On May 20, 2026, the Board authorized the Registrant’s Chief Executive Officer to grant up to 810,811 restricted stock units (“RSUs”) to current and future employees and service providers of the Registrant (other than executive officers). As of June 23, 2026,367,567 RSUs have been granted to certain non-executive employees and service providers under the LTIP. Each RSU represents the right to receive one share of the Registrant's Class A Shares upon vesting, and the right to receive dividends paid to each Class A shareholder between the grant date and vesting date. The RSUs have vesting terms ranging fromone tothree years.

Employee Stock Purchase Plan. On May 13, 2026, the Company, as the sole member of the Registrant approved an Employee Stock Purchase Plan (“ESPP”), which became effective upon consummation of the Registrant's IPO. The ESPP authorizes up to 1,377,784 Class A shares for issuance. As of June 23, 2026, there areno awards granted under the plan.

IPO Bonuses On May 15, 2026, in connection with the closing of the IPO, as previously disclosed in the final prospectus filed with the SEC on May 14, 2026, the Registrant granted an aggregate of approximately 3,100,001 Class A shares to certain members of the Registrant's management team. Based on the IPO price of $18.50 per share, the awards have an aggregate value of approximately $57.4 million subject to tax withholdings. The Company is in the process of finalizing the grant-date fair value. Because the awards were fully vested upon completion of the IPO, the Company expects to recognize the grant-date fair value amount as stock-based compensation expense on the IPO closing date.

Pitcock Ranch Land Acquisition On June 17, 2026, Shallow Valley EagleRock Holdco, LLC, a wholly owned subsidiary of EagleRock Land LLC, acquired approximately 642.8 feesurface acres and the related water-handling accessories, including a frac pit, submersible pumps, pressure tanks, corrals, and gates, from Jerrod Pitcock, an individual (“Pitcock Ranch Land Acquisition”), for total cash considerationof approximately $2.0 million. The transaction was funded with cash on hand, and no third-party or related-party debt was incurred in connection with the Acquisition.