DORCHESTER MINERALS, L.P.

Previous wording

Our results during 2024 were mainly driven by increases in Royalty Properties sales volumes from continued drilling activity in the Permian Basin and Bakken region and incremental production from 2023 and 2024 acquisitions, offset by decreases in NPI sales volumes, leasing activity, and lower industrywide realized natural gas sales prices versus 2023. Significant results include the following:

Current wording

Our results during 2025 were mainly driven by lower industrywide realized oil prices versus 2024, decreases in NPI properties oil and natural gas sales volumes due to lower drilling activity in the Bakken region, and increased capital expenditures deducted under the NPI calculation, offset by increases in Royalty Properties oil and natural gas sales volumes from incremental production from 2024 and 2025 acquisitions and continued drilling activity in the Rockies, increased leasing activity, and higher industrywide realized natural gas sales prices versus 2024. Significant results include the following:

Previous wording

The Partnership’s consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United State (“U.S. GAAP”), which requires us to make certain estimates and apply judgments that affect our financial position and results of operations as reflected in our consolidated financial statements. Actual results may differ from those estimates. The Partnership’s accounting policies are summarized in Note 2 of the Notes to Consolidated Financial Statements in “Item 8 – Financial Statements and Supplementary Data”.

Current wording

The Partnership’s consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”), which requires us to make certain estimates and apply judgments that affect our financial position and results of operations as reflected in our consolidated financial statements. Actual results may differ from those estimates. The Partnership’s accounting policies are summarized in Note 2 of the Notes to Consolidated Financial Statements in “Item 8 – Financial Statements and Supplementary Data”.

Previous wording

The decrease in oil sales volumes attributable to our NPI properties during 2024 versus 2023 is primarily the result of lower suspense releases on new wells in the Permian Basin, partially offset by increased baseline production in the Permian Basin and Bakken region and higher suspense releases on new wells in the Bakken region. The decrease in natural gas sales volumes attributable to our NPI properties during 2024 compared to 2023 is primarily the result of lower suspense releases on new wells in the Permian Basin and Mid-Continent, partially offset by higher suspense releases on new wells in the Bakken region and increased baseline production in the Permian Basin, Bakken region, and Mid-Continent.

Current wording

The increase in oil sales volumes attributable to our Royalty Properties during 2025 versus 2024 is primarily a result of incremental increases in baseline production in the Permian Basin and Rockies from wells acquired in 2024 and 2025 and higher suspense releases on new wells on legacy acreage in the Rockies, partially offset by lower suspense releases on new wells on legacy acreage in the Permian Basin and Bakken region and decreased baseline production from legacy wells in the Permian Basin. The increase in natural gas sales volumes attributable to our Royalty Properties during 2025 versus 2024 is primarily a result of incremental increases in baseline production in the Permian Basin and Rockies from wells acquired in 2024 and 2025 and higher suspense releases on new wells on legacy acreage in the Rockies, partially offset by lower suspense releases on new wells on legacy acreage in the Permian Basin and lower suspense releases on new wells on legacy acreage and decreased baseline production from legacy wells in the Mid-Continent and East Texas.

Previous wording

The decrease in lease bonus revenue from 2023 to 2024 is primarily attributable to receipt of $11.8 million from a lease and lease amendment transaction executed in 2023, wherein the Partnership leased 243 net acres in two tracts of land in Reagan County, Texas for $30,000 per acre and a 25% royalty and amended an existing lease on two separate tracts of land also totaling 243 net acres in Reagan County, Texas for $18,750 per acre.

Current wording

The increase in lease bonus revenue from 2024 to 2025 is primarily attributable to receipt of $3.6 million in 2025 from an extension of an existing lease, wherein the Partnership leased 243 net acres in two tracts of land in Reagan County, Texas for $15,000 per acre, and receipt of $5.4 million from an assignment of leasehold interests.

Previous wording

Production taxes and operating expenses increased a combined 19% from 2023 to 2024. The increase is primarily a result of higher proportionate oil production taxes due to higher oil sales revenue attributable to our Royalty Properties and higher proportionate post-production costs, such as compression, transportation, processing, and marketing, due to higher oil and natural gas sales volumes attributable to our Royalty Properties.

Current wording

Production taxes and operating expenses attributable to our Royalty Properties increased a combined 9% from 2024 to 2025. The increase is 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, partially offset by lower proportionate oil production taxes due to lower oil sales revenue.

Previous wording

Depreciation, depletion and amortization increased 62% from 2023 to 2024. 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 56% from 2024 to 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 7% from 2023 to 2024. The increase is primarily attributable to higher compensation expenses due to market adjustments, increased bonuses and an expanded Equity Incentive Program designed for employee retention, and increased legal and other professional services fees, partially offset by a decrease resulting from one-time, non-recurring professional services expenses of $1.2 million related to an unsuccessful acquisition in the first nine months of 2023.

Current wording

General and administrative expenses increased 12% from 2024 to 2025. The increase is primarily attributable to increased legal and other professional services fees, higher regulatory filing fees due to the Partnership’s S-4 registration statement filing in the first quarter of 2025, increased data service and technology costs, and higher compensation expense, including an expanded Operating Partnership equity program designed for employee retention.

Previous wording

Net cash provided by operating activities decreased 5% from 2023 to 2024. The decrease is primarily due to lower NPI payment receipts and lower lease bonus receipts, partially offset by higher revenue receipts attributable to our Royalty Properties, net of production and operating expenses.

Current wording

Net cash provided by operating activities remained consistent from 2024 to 2025. The lack of change is primarily due to lower NPI payment receipts, lower revenue receipts attributable to our Royalty Properties, net of production taxes and operating expenses, and higher general and administrative expenses being offset by higher lease bonus and other income.

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, the Partnership acquired mineral, royalty, and overriding royalty interests in producing and non-producing oil and natural gas properties representing approximately 14,225 net mineral acres located in 14 counties across New Mexico and Texas in exchange for 6,721,144 common units representing limited partnership interests in the Partnership valued at $202.6 million and issued pursuant to the Partnership’s registration statements on Form S-4. We believe that the acquisition is considered complementary to our business. The transaction was accounted for as an acquisition of assets under U.S. GAAP. Accordingly, the cost of the acquisition was allocated on a relative fair value basis and transaction costs were capitalized as a component of the cost of the assets acquired. Contributed cash delivered at closing and final settlement net cash received, net of capitalized transaction costs paid, of $8.8 million is included in net cash contributed in acquisitions on the consolidated statement of cash flows for the year ended December 31, 2024.

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, the Partnership acquired mineral, royalty, and overriding royalty interests in producing and non-producing oil and natural gas properties representing approximately 14,225 net mineral acres located in 14 counties across New Mexico and Texas in exchange for 6,721,144 common units representing limited partnership interests in the Partnership valued at $202.6 million and issued pursuant to the Partnership’s registration statements on Form S-4. We believe that the acquisition is considered complementary to our business. The transaction was accounted for as an acquisition of assets under U.S. GAAP. Accordingly, the cost of the acquisition was allocated on a relative fair value basis and transaction costs were capitalized as a component of the cost of the assets acquired. Contributed cash delivered at closing and final settlement net cash received, net of capitalized transaction costs paid, of $8.8 million is included in net cash contributed in acquisitions on the consolidated statement of cash flows for the year ended December 31, 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 consolidated statement of cash flows for the year ended December 31, 2025.

Previous wording

On August 31, 2023, pursuant to a non-taxable contribution and exchange agreement with multiple unrelated third parties, the Partnership acquired mineral and royalty interests totaling approximately 568 net royalty acres located in three counties in Texas in exchange for 374,000 common units representing limited partnership interests in the Partnership valued at $10.4 million and issued pursuant to the Partnership’s registration statement on Form S-4. We believe that the acquisition is considered complementary to our business. The transaction was accounted for as an acquisition of assets under U.S. GAAP. Accordingly, the cost of the acquisition was allocated on a relative fair value basis and transaction costs were capitalized as a component of the cost of the assets acquired. Contributed cash delivered at closing and final settlement net cash received, net of capitalized transaction costs paid, of $0.3 million is included in net cash contributed in acquisitions on the consolidated statement of cash flows for the year ended December 31, 2023. Final settlement net cash received, net of capitalized transaction costs paid, of $0.2 million is included in net cash contributed in acquisitions on the consolidated statement of cash flows for the year ended December 31, 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. We believe that the acquisition is considered complementary to our business. The transaction was accounted for as an acquisition of assets under U.S. GAAP. Accordingly, the cost of the acquisition was allocated on a relative fair value basis and transaction costs were capitalized as a component of the cost of the assets acquired. 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 consolidated statement of cash flows for the year ended December 31, 2024. Final settlement net cash received, net of capitalized transaction costs paid, of $0.2 million is included in net cash contributed in acquisitions on the consolidated statement of cash flows for the year ended December 31, 2025.

Previous wording

Our primary sources of capital, on both a short-term and long-term basis, are our cash flows from the Royalty Properties and the NPI. Our partnership agreement requires that we distribute quarterly an amount equal to all funds that we receive from the Royalty Properties and NPIs (other than cash proceeds received by the Partnership from a public or private offering of securities of the Partnership) less certain expenses and reasonable reserves. Additional cash requirements include the payment of oil and natural gas production and property taxes not otherwise deducted from gross production revenues and general and administrative expenses incurred on our behalf and allocated to the Partnership in accordance with the partnership agreement. Because the distributions to our unitholders are, by definition, determined after the payment of all expenses actually paid by us, the only cash requirements that may create liquidity concerns for us are the payment of expenses. Because many of these expenses vary directly with oil and natural gas sales prices and volumes, we anticipate that sufficient funds will be available at all times for payment of these expenses. See below for the dates of cash distributions to unitholders.

Current wording

Our primary sources of capital, on both a short-term and long-term basis, are our cash flows from the Royalty Properties and the NPI. Our partnership agreement requires that we distribute quarterly an amount equal to all funds that we receive from the Royalty Properties and NPI (other than cash proceeds received by the Partnership from a public or private offering of securities of the Partnership) less certain expenses and reasonable reserves. Additional cash requirements include the payment of oil and natural gas production and property taxes not otherwise deducted from gross production revenues and general and administrative expenses incurred on our behalf and allocated to the Partnership in accordance with the partnership agreement. Because the distributions to our unitholders are, by definition, determined after the payment of all expenses actually paid by us, the only cash requirements that may create liquidity concerns for us are the payment of expenses. Because many of these expenses vary directly with oil and natural gas sales prices and volumes, we anticipate that sufficient funds will be available at all times for payment of these expenses. See below for the dates of cash distributions to unitholders.

Previous wording

We currently expect to have sufficient liquidity to fund our distributions to unitholders and operations despite potential material uncertainties that may impact us as a result of increased oil and natural gas market volatility caused by ongoing global military conflicts, global supply chain disruptions and the recent rise in inflation and interest rates. Although demand and market prices for oil and natural gas have remained strong due to the rising energy use and worldwide shortage of oil due to sanctions implemented on Russia, we cannot predict events that may lead to future price volatility. Our ability to fund future distributions to unitholders may be affected by the prevailing economic conditions in the oil and natural gas market and other financial and business factors, including the evolution of COVID-19 and any ongoing variants, along with the military conflict between Russia and Ukraine and the conflict between Israel and Hamas which are beyond our control. If market conditions were to change due to declines in oil prices or uncertainty created by COVID-19 or any ongoing variants and our revenues were reduced significantly or our operating costs were to increase significantly, our cash flows and liquidity could be reduced. Despite recent improvements, the current economic environment is volatile, and therefore, we cannot predict the ultimate impact that COVID-19, the ongoing military conflict between Russia and Ukraine or the ongoing conflict between Israel and Hamas will have on our liquidity or cash flows.

Current wording

We currently expect to have sufficient liquidity to fund our distributions to unitholders and operations. However, our liquidity and ability to fund future distributions may be affected by material uncertainties arising from factors beyond our control, including: ongoing global military conflicts such as those in Ukraine and the Middle East; current inflation and interest rates; political uncertainty in Venezuela; changes to tariff and import/export regulations by the United States or other countries; and prevailing economic conditions in the oil and natural gas market and other financial and business factors. We cannot predict events that may lead to future oil and natural gas price volatility. If market conditions were to change due to declines in oil prices, uncertainty created by military conflicts, or changes in trade policy, and our revenues were reduced significantly or our operating costs were to increase significantly, our cash flows and liquidity could be reduced. The current economic environment is volatile, and we cannot predict the ultimate long-term impact on our liquidity or cash flows from these factors.

Previous wording

Cash and cash equivalents were $42.5 million as of December 31, 2024 and $47.0 million as of December 31, 2023.

Current wording

Cash and cash equivalents were $41.9 million as of December 31, 2025, and $42.5 million as of December 31, 2024.

Previous wording

We receive monthly payments from the Operating Partnership equal to 96.97% of the net proceeds realized by the Operating Partnership from the properties underlying the Net Profits Interest (or “NPI”). The Operating Partnership retains the 3.03% balance of these net proceeds. Net proceeds generally reflect gross proceeds attributable to oil and natural gas production actually received during the month, less production costs actually paid during the same month, net of budgeted capital expenditures. Production costs generally reflect drilling, completion, operating and general and administrative costs and exclude depletion, amortization and other non-cash costs. The Operating Partnership made NPI payments to us totaling $23.9 million during October 2023 through September 2024, which payments reflected 96.97% of total net proceeds of $24.6 million realized from September 2023 through August 2024. Net proceeds realized by the Operating Partnership during September through November 2024 were reflected in NPI payments made during October through December 2024. These payments were included in the fourth quarter distribution paid February 13, 2024 and are excluded from this 2024 analysis.

Current wording

We receive monthly payments from the Operating Partnership equal to 96.97% of the net proceeds realized by the Operating Partnership from the properties underlying the Net Profits Interest (or “NPI”). The Operating Partnership retains the 3.03% balance of these net proceeds. Net proceeds generally reflect gross proceeds attributable to oil and natural gas production actually received during the month, less production costs actually paid during the same month, net of budgeted capital expenditures. Production costs generally reflect drilling, completion, operating and general and administrative costs and exclude depletion, amortization and other non-cash costs. The Operating Partnership made NPI payments to us totaling $18.3 million during October 2024 through September 2025, which payments reflected 96.97% of total net proceeds of $18.9 million realized from September 2024 through August 2025. Net proceeds realized by the Operating Partnership during September through November 2025 were reflected in NPI payments made during October through December 2025. These payments were included in the fourth quarter distribution paid February 12, 2026, and are excluded from this 2025 analysis.

Previous wording

Revenues from the Royalty Properties are typically paid to us with proportionate severance (production) taxes deducted and remitted by others. Additionally, we generally pay ad valorem taxes, general and administrative costs, and marketing and associated costs because royalties and lease bonuses generally do not otherwise bear operating or similar costs. After deduction of the costs described above, including cash reserves, our net cash receipts from the Royalty Properties during October 2023 through September 2024 were $128.0 million, of which $122.9 million (96%) was distributed to the limited partners and $5.1 million (4%) was distributed to the General Partner. Proceeds received by us from the Royalty Properties during October through December 2024 became part of the fourth quarter distribution paid in early 2025, which is excluded from this 2024 analysis.

Current wording

Revenues from the Royalty Properties are typically paid to us with proportionate severance (production) taxes deducted and remitted by others. Additionally, we generally pay ad valorem taxes, general and administrative costs, and marketing and associated costs because royalties and lease bonuses generally do not otherwise bear operating or similar costs. After deduction of the costs described above, including cash reserves, our net cash receipts from the Royalty Properties during October 2024 through September 2025 were $118.6 million, of which $113.9 million (96%) was distributed to the limited partners and $4.7 million (4%) was distributed to the General Partner. Proceeds received by us from the Royalty Properties during October through December 2025 became part of the fourth quarter distribution paid on February 12, 2026, and are excluded from this 2025 analysis.

Previous wording

Cash receipts attributable to the Partnership's Royalty Properties during the 2024 fourth quarter totaled $34.9 million. Approximately 68% of these receipts reflect oil sales during September 2024 through November 2024 and natural gas sales during August 2024 through October 2024, and approximately 32% from prior sales periods. The average indicated prices for oil and natural gas sales attributable to the Royalty Properties during the 2024 fourth quarter were $64.25/bbl and $1.22/mcf, respectively.

Current wording

Cash receipts attributable to the Partnership's Royalty Properties during the fourth quarter of 2025 totaled $32.2 million. Approximately 62% of these receipts reflect oil sales during September 2025 through November 2025 and natural gas sales during August 2025 through October 2025, and approximately 38% from prior sales periods. The average indicated prices for oil and natural gas sales attributable to the Royalty Properties during the 2025 fourth quarter were $54.98/bbl and $1.91/mcf, respectively.

Previous wording

Cash receipts attributable to the Partnership's NPI during the 2024 fourth quarter totaled $5.4 million. Approximately 61% of these receipts reflect oil and natural gas sales during August 2024 through October 2024, and approximately 39% from prior sales periods. The average indicated prices for oil and natural gas sales attributable to the NPI were $63.93/bbl and $1.24/mcf, respectively.

Current wording

Cash receipts attributable to the Partnership's NPI during the fourth quarter of 2025 totaled $4.0 million. Approximately 66% of these receipts reflect oil and natural gas sales during August 2025 through October 2025, and approximately 34% from prior sales periods. The average indicated prices for oil and natural gas sales attributable to the NPI were $54.47/bbl and $2.16/mcf, respectively.