DORCHESTER MINERALS, L.P.

Previous wording

This discussion, which presents our results of operations for the three and six months ended June 30, 2025 and 2024, 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.

Current wording

This discussion, which presents our results of operations for the three and nine months ended September 30, 2025 and 2024, 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.

Previous wording

From a cash perspective, as of June 30, 2025, the NPI was in a surplus position and had outstanding capital commitments, primarily in the Bakken region, equaling cash on hand of $7.3 million.

Current wording

From a cash perspective, as of September 30, 2025, the NPI was in a surplus position and had outstanding capital commitments, primarily in the Bakken region, equaling cash on hand of $8.4 million.

Previous wording

In April 2025, the U.S. government announced a baseline tariff of 10% on products imported from all countries and an additional individualized reciprocal tariff on the countries with which the United States has the largest trade deficits, including China. Increased tariffs by the United States have led and may continue to lead to the imposition of retaliatory tariffs by foreign jurisdictions. Additionally, the U.S. government has announced and rescinded multiple tariffs on several foreign jurisdictions, which has increased uncertainty regarding the ultimate effect of the tariffs on economic conditions. Current 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, as well as opportunities to mitigate their related impacts, costs and other effects associated with the tariffs remain uncertain.

Current wording

In April 2025, the U.S. government announced a baseline tariff of 10% on products imported from all countries and an additional individualized reciprocal tariff on the countries with which the United States has the largest trade deficits, including China. Increased tariffs by the United States have led and may continue to lead to the imposition of retaliatory tariffs by foreign jurisdictions. Additionally, the U.S. government has announced, adjusted and rescinded multiple tariffs on several 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.

Previous wording

Global oil markets are contending with tariff impacts, geopolitical tensions, and oil supply dynamics, including the evolving OPEC+ production strategy and potential constraints on Iranian, Russian, and Venezuelan oil exports. While recent volatility in commodity prices is not immediately driving changes in North American production activity, 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.

Current wording

Global oil markets are contending with tariff impacts, geopolitical tensions, and oil supply dynamics, including the evolving OPEC+ production strategy and potential constraints on Iranian, Russian, and Venezuelan oil exports. 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.

Previous wording

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 net cash contributed in acquisitions on the condensed consolidated statement of cash flows for the six months ended June 30, 2025.

Current wording

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. Contributed cash delivered at closing, net of capitalized transaction costs paid, of $5.8 million is included in net cash contributed in acquisitions on the condensed consolidated statement of cash flows for the nine months ended September 30, 2024. Final settlement net cash received, net of capitalized transaction costs paid, of $1.9 million is included in net cash contributed in acquisitions on the condensed consolidated statement of cash flows for the nine months ended September 30, 2025.

Previous wording

On September 30, 2024, pursuant to a non-taxable contribution and exchange agreement with an unrelated third party, the Partnership acquired royalty interests totaling approximately 1,204 net royalty acres located in Weld County, Colorado in exchange for 530,000 common units representing limited partnership interests in the Partnership valued at $16.0 million and issued pursuant to the Partnership’s registration statement on Form S-4.

Current wording

On September 30, 2024, pursuant to a non-taxable contribution and exchange agreement with an unrelated third party, the Partnership acquired royalty interests totaling approximately 1,204 net royalty acres located in Weld County, Colorado in exchange for 530,000 common units representing limited partnership interests in the Partnership valued at $16.0 million and issued pursuant to the Partnership’s registration statement on Form S-4. Contributed cash delivered at closing, net of capitalized transaction costs paid, of $0.9 million is included in net cash contributed in acquisitions on the condensed consolidated statement of cash flows for the nine months ended September 30, 2024.

Previous wording

On March 28, 2024, pursuant to a non-taxable contribution and exchange agreement with multiple unrelated third parties, the Partnership acquired mineral interests totaling approximately 1,485 net royalty acres located in two counties in Colorado in exchange for 505,369 common units representing limited partnership interests in the Partnership valued at $17.0 million and issued pursuant to the Partnership’s registration statement on Form S-4. Contributed cash delivered at closing and final settlement net cash received, net of capitalized transaction costs paid, of $4.4 million is included in net cash contributed in acquisitions on the condensed consolidated statement of cash flows for the six months ended June 30, 2024.

Current wording

On March 28, 2024, pursuant to a non-taxable contribution and exchange agreement with multiple unrelated third parties, the Partnership acquired mineral interests totaling approximately 1,485 net royalty acres located in two counties in Colorado in exchange for 505,369 common units representing limited partnership interests in the Partnership valued at $17.0 million and issued pursuant to the Partnership’s registration statement on Form S-4. Contributed cash delivered at closing and final settlement net cash received, net of capitalized transaction costs paid, of $4.4 million is included in net cash contributed in acquisitions on the condensed consolidated statement of cash flows for the nine months ended September 30, 2024.

Previous wording

Three and Six Months Ended June 30, 2025 as compared to Three and Six Months Ended June 30, 2024

Current wording

Three and Nine Months Ended September 30, 2025 as compared to Three and Nine Months Ended September 30, 2024

Previous wording

The decrease in oil sales volumes attributable to our Royalty Properties from the second quarter of 2024 to the same period of 2025 is primarily a result of lower suspense releases on new wells on legacy acreage and decreased baseline production from legacy wells, partially offset by suspense releases on first time payments and increased baseline production from Permian Basin properties acquired in the third quarter of 2024. The increase in oil sales volumes attributable to our Royalty Properties from the first six months of 2024 to the same period of 2025 is primarily a result of suspense releases on first time payments and increased baseline production from Permian Basin properties acquired in the third quarter of 2024, increased baseline production from Rockies wells acquired in the first and third quarters of 2024, and increased second quarter of 2025 baseline production from Permian Basin legacy wells, partially offset by lower suspense releases on new wells on legacy acreage in the Permian Basin in the second quarter of 2025. The increases in natural gas sales volumes attributable to our Royalty Properties from the second quarter and first six months of 2024 to the same periods of 2025 are primarily a result of suspense releases on first time payments and increased baseline production from Permian Basin properties acquired in the third quarter of 2024 and increased baseline production from wells acquired in the first and third quarters of 2024 in the Rockies, partially offset by lower suspense releases on new wells on legacy acreage in the Permian Basin in the second quarter of 2025 and lower suspense releases on new wells on legacy acreage and decreased baseline production on legacy wells in the Mid-Continent and East Texas.

Current wording

The decrease in oil sales volumes attributable to our Royalty Properties from the third quarter of 2024 to the same period of 2025 is primarily a result of lower suspense releases on new wells on legacy acreage and decreased baseline production from legacy wells, partially offset by suspense releases on first time payments and increased baseline production from Permian Basin properties acquired in the third quarter of 2024. Oil sales volumes attributable to our Royalty Properties remained flat from the first nine months of 2024 to the same period of 2025. The lack of change is primarily a result of suspense releases on first time payments and increased baseline production from Permian Basin properties acquired in the third quarter of 2024 and increased baseline production from Rockies wells acquired in the first and third quarters of 2024, offset by lower suspense releases on new wells on legacy acreage in the Permian Basin, particularly in the second and third quarters of 2025 when compared to the same periods of 2024, and lower suspense releases on new wells on legacy acreage and decreased baseline production on legacy wells in the Bakken region. The increase in natural gas sales volumes attributable to our Royalty Properties from the third quarter of 2024 to the same period of 2025 is primarily a result of increased baseline production from Permian Basin properties acquired in the third quarter of 2024. The increase in natural gas sales volumes attributable to our Royalty Properties from the first nine months of 2024 to the same period of 2025 is primarily a result of suspense releases on first time payments and increased baseline production from Permian Basin properties acquired in the third quarter of 2024 and increased baseline production from wells acquired in the first and third quarters of 2024 in the Rockies, partially offset by lower suspense releases on new wells on legacy acreage in the Permian Basin, particularly in the second and third quarters of 2025 when compared to the same periods of 2024, and lower suspense releases on new wells on legacy acreage and decreased baseline production on legacy wells in the Mid-Continent and East Texas.

Previous wording

The increase in oil sales volumes attributable to our NPI properties from the second quarter of 2024 to the same period of 2025 is primarily a result of higher suspense releases on new wells in the Permian Basin, partially offset by lower suspense releases on new wells in the Bakken region. The decrease in oil sales volumes attributable to our NPI properties from the first six months of 2024 to the same period of 2025 is primarily a result of decreased baseline production in the Permian Basin and Bakken region and lower suspense releases on new wells in the Bakken region, partially offset by higher suspense releases on new wells in the Permian Basin in the second quarter of 2025. Natural gas sales volumes attributable to our NPI properties remained flat from the second quarter of 2024 to the same period of 2025. The lack of change is primarily a result of higher suspense release on new wells in the Permian Basin, offset by decreased baseline production and lower suspense releases on new wells in the Mid-Continent and Bakken region and decreased Fayetteville Shale production in 2025 and higher prior period adjustments in 2024. The decrease in natural gas sales volumes attributable to our NPI properties from the first six months of 2024 to the same period of 2025 is primarily a result of decreased baseline production and lower suspense releases on new wells in the Mid-Continent and Bakken region and decreased Fayetteville Shale production in 2025 and to higher prior period adjustments in 2024, partially offset by increased suspense releases on new wells in the Permian Basin.

Current wording

The decreases in oil sales volumes attributable to our NPI properties from the third quarter and first nine months of 2024 to the same periods of 2025 is primarily a result of decreased baseline production and lower suspense releases on new wells in the Permian Basin and Bakken region, partially offset by suspense releases on existing wells in the Permian Basin in the second and third quarters of 2025. The decrease in natural gas sales volumes for the third quarter and first nine months of 2024 to the same period of 2025 is primarily a result of decreased baseline production and lower suspense releases on new wells in the Permian Basin and decreased baseline production in the Bakken region, Mid-Continent, and Fayetteville Shale, partially offset by suspense releases on existing wells in the Permian basin in the second and third quarters of 2025.

Previous wording

Lease bonus revenue for the second quarter and first six months of 2025 is primarily attributable to the receipt of $3.6 million from the extension of a lease that was originally executed on November 6, 2023, in Reagan County, Texas for $15,000 per acre and retained a 25% royalty.

Current wording

Lease bonus revenue for the first nine months of 2025 is primarily attributable to the receipt of $3.6 million in the second quarter of 2025 from the extension of a lease that was originally executed on November 6, 2023, in Reagan County, Texas for $15,000 per acre and retained a 25% royalty.

Previous wording

Operating costs, including production taxes, decreased 28% from the second quarter of 2024 to the same period of 2025. The decrease is primarily the result of lower proportionate production taxes and post-production costs, such as transportation, due to lower oil sales volumes and revenue. Operating costs, including production taxes, increased 13% from the first six months of 2024 to the same period of 2025. The increase is primarily a result of higher proportionate production taxes due to higher oil and natural gas sales revenue, higher proportionate post-production costs, such as compression, transportation, processing, and marketing, due to higher oil and natural gas sales volumes, and higher ad valorem taxes attributable to our Royalty Properties.

Current wording

Operating costs, including production taxes, increased 5% from the third quarter of 2024 to the same period of 2025 and 10% from the first nine months of 2024 to the same period of 2025. The increases are primarily a result of higher proportionate natural gas production taxes and post-production costs, such as compression, transportation, processing, and marketing, due to higher natural gas sales revenue and volumes and higher ad valorem taxes attributable to our Royalty Properties, partially offset by lower proportionate oil production taxes due to lower oil sales revenue.

Previous wording

Depreciation, depletion and amortization increased 92% from the second quarter of 2024 to the same period of 2025 and 116% from the first six months of 2024 to the same period of 2025. Depletion is the amount of cost basis of oil and natural gas properties at the beginning of a period attributable to the volume of reserves extracted during such period, calculated on a units-of-production basis. Estimates of proved developed producing reserves are a major component in the calculation of depletion. We adjust our depletion rate each quarter for significant changes in our estimates of oil and natural gas reserves, including recent acquisitions and suspense releases on new wells.

Current wording

Depreciation, depletion and amortization increased 69% from the third quarter of 2024 to the same period of 2025 and 97% from the first nine months of 2024 to the same period of 2025. Depletion is the amount of cost basis of oil and natural gas properties at the beginning of a period attributable to the volume of reserves extracted during such period, calculated on a units-of-production basis. Estimates of proved developed producing reserves are a major component in the calculation of depletion. We adjust our depletion rate each quarter for significant changes in our estimates of oil and natural gas reserves, including recent acquisitions and suspense releases on new wells.

Previous wording

General and administrative expenses increased 11% from the second quarter of 2024 to the same period of 2025. The increase is primarily a result of increased data services costs and higher compensation expenses, including an expanded Operating Partnership equity program designed for employee retention, partially offset by decreased legal fees. General and administrative expenses increased 23% from the first six months of 2024 to the same period of 2025. The increase is primarily a result of increased legal fees in the first quarter of 2025, higher regulatory filing fees due to the Partnership’s S-4 registration statement filing in the first quarter of 2025, increased data service costs, and higher compensation expenses, including an expanded Operating Partnership equity program designed for employee retention.

Current wording

General and administrative expenses increased 1% from the third quarter of 2024 to the same period of 2025. The increase is primarily a result of higher compensation expenses, including an expanded Operating Partnership equity program designed for employee retention. General and administrative expenses increased 16% from the first nine months of 2024 to the same period of 2025. The increase is primarily a result of increased legal fees in the first quarter of 2025, higher regulatory filing fees due to the Partnership’s S-4 registration statement filing in the first quarter of 2025, increased data service costs, and higher compensation expenses, including an expanded Operating Partnership equity program designed for employee retention.

Previous wording

Net cash provided by operating activities increased 11% from the first six months of 2024 to the same period of 2025 primarily due to higher revenue receipts attributable to our Royalty Properties, net of production taxes and operating expenses and higher lease bonus receipts, partially offset by lower NPI payment receipts and higher general and administrative expenses.

Current wording

Net cash provided by operating activities decreased 3% from the first nine months of 2024 to the same period of 2025 primarily due to lower NPI payment receipts and higher general and administrative expenses, partially offset by higher lease bonus receipts.

Previous wording

Cash receipts attributable to our Royalty Properties during the second quarter of 2025 totaled $26.6 million. Approximately 73% of these receipts reflect oil sales during March 2025 through May 2025 and natural gas sales during February 2025 through April 2025, and approximately 27% from prior sales periods. The average realized prices for oil and natural gas sales cash receipts attributable to the Royalty Properties during the second quarter of 2025 were $59.60/bbl and $2.46/mcf, respectively.

Current wording

Cash receipts attributable to our Royalty Properties during the third quarter of 2025 totaled $33.0 million. Approximately 70% of these receipts reflect oil sales during June 2025 through August 2025 and natural gas sales during May 2025 through July 2025, and approximately 30% from prior sales periods. The average realized prices for oil and natural gas sales cash receipts attributable to the Royalty Properties during the third quarter of 2025 were $57.83/bbl and $2.05/mcf, respectively.

Previous wording

Cash receipts attributable to the Partnership's NPI during the second quarter of 2025 totaled $3.1 million. Approximately 66% of these receipts reflect oil and natural gas sales during February 2025 through April 2025, and approximately 34% from prior sales periods. The average realized prices for oil and natural gas sales cash receipts attributable to the NPI properties during the second quarter of 2025 were $60.73/bbl and $3.09/mcf, respectively.

Current wording

Cash receipts attributable to the Partnership's NPI during the third quarter of 2025 totaled $5.1 million. Approximately 47% of these receipts reflect oil and natural gas sales during May 2025 through July 2025, and approximately 53% from prior sales periods. The average realized prices for oil and natural gas sales cash receipts attributable to the NPI properties during the third quarter of 2025 were $64.45/bbl and $2.82/mcf, respectively.

Previous wording

Cash and cash equivalents totaled $36.5 million at June 30, 2025 and $42.5 million at December 31, 2024.

Current wording

Cash and cash equivalents totaled $41.6 million at September 30, 2025 and $42.5 million at December 31, 2024.