DORCHESTER MINERALS, L.P.

Previous wording

This discussion, which presents our results of operations for the three months ended March 31, 2026 and 2025, should be read in conjunction with our unaudited 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 six months ended June 30, 2026 and 2025, should be read in conjunction with our unaudited condensed consolidated financial statements and the accompanying notes. We intend for this discussion to provide the reader with information that will assist in understanding our financial statements, the changes in certain key items in those financial statements from period to period, and the primary factors that accounted for those changes.

Previous wording

We own producing and nonproducing mineral, royalty, overriding royalty, net profits and leasehold interests. We refer to these interests as the Royalty Properties. We currently own Royalty Properties in 594 counties and parishes in 28 states.

Current wording

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

Previous wording

From a cash perspective, as of March 31, 2026, the NPI was in a surplus position and had outstanding capital commitments, primarily in the Bakken region, of $11.7 million.

Current wording

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

Previous wording

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

Current wording

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

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, 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.

Current wording

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

Previous wording

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

Current wording

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

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 $1.9 million is included in the net cash contributed in acquisitions on the consolidated statement of cash flows for the three months ended March 31, 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. Final settlement net cash received, net of capitalized transaction costs paid, of $2.0 million is included in the net cash contributed in acquisitions on the condensed consolidated statement of cash flows for the three months ended June 30, 2025.

Previous wording

Three Months Ended March 31, 2026 as compared to Three Months Ended March 31, 2025

Current wording

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

Previous wording

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

Current wording

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

Previous wording

The increase in oil sales volumes attributable to our NPI properties from the first quarter of 2025 to the same period of 2026 is primarily due to higher suspense releases on new wells in the Bakken region and the recognition of sales volumes from July 2021 through May 2025 associated with the $15.5 million of legal settlement proceeds received by the Operating Partnership in the first quarter of 2026 from resolution of ordinary course litigation affecting certain leasehold in Midland County, Texas, which is owned by the Operating Partnership and subject to the NPI . The increase in natural gas sales volumes attributable to our NPI properties for the first quarter of 2025 to the same period of 2026 is primarily due to the recognition of sales volumes from July 2021 through May 2025 associated with legal settlement proceeds noted above, partially offset by decreased baseline production on legacy wells in the Permian Basin.

Current wording

The increase in oil sales volumes attributable to our NPI properties from the second quarter of 2025 to the same period of 2026 is primarily a result of higher suspense releases on new wells in the Permian Basin and increased baseline production in the Bakken region and Rockies, partially offset by decreased baseline production on legacy wells in the Permian Basin. The increase in oil sales volumes attributable to our NPI properties from the first six months of 2025 to the same period of 2026 is primarily a result of higher suspense releases on new wells in the Permian Basin and Bakken region, increased baseline production in the Bakken region and Rockies, and the recognition of sales volumes from July 2021 through May 2025 associated with the $15.5 million of legal settlement proceeds received by the Operating Partnership in the first quarter of 2026 from resolution of ordinary course litigation affecting certain leasehold in Midland County, Texas, which is owned by the Operating Partnership and subject to the NPI. This increase was partially offset by decreased baseline production on legacy wells in the Permian Basin. The increase in natural gas sales volumes attributable to our NPI properties from the second quarter of 2025 to the same period of 2026 is primarily a result of increased baseline production in the Permian Basin, Bakken region, and Mid-Continent. The increase in natural gas sales volumes attributable to our NPI properties from the first six months of 2025 to the same period of 2026 is primarily due to the recognition of sales volumes from July 2021 through May 2025 associated with legal settlement proceeds noted above and increased baseline production in the Bakken region and Mid-Continent in the second quarter of 2026 compared to the same period of 2025, partially offset by decreased baseline production on legacy wells in the Permian Basin, particularly in the first quarter of 2026 compared to the same period of 2025.

Previous wording

Operating costs, including production taxes, attributable to our Royalty Properties remained consistent from the first quarter of 2025 to the same period of 2026. This is primarily a result of higher proportionate oil production taxes due to higher oil sales revenue, offset by lower proportionate natural gas production taxes due to lower natural gas sales revenue and lower ad valorem taxes.

Current wording

Operating costs, including production taxes, attributable to our Royalty Properties increased 123% from the second quarter of 2025 to the same period of 2026 and 46% from the first six months of 2025 to the same period of 2026. This is primarily a result of higher proportionate oil production taxes due to higher oil sales revenue, higher post-production costs, such as compression, transportation, processing, and marketing, due to higher oil and natural gas sales volumes, and higher ad valorem taxes, partially offset by lower proportionate natural gas production taxes due to lower natural gas sales revenue.

Previous wording

Depreciation, depletion and amortization increased 21% from the first quarter of 2025 to the same period of 2026. 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 8% from the second quarter of 2025 to the same period of 2026 and 17% from the first six months of 2025 to the same period of 2026. 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 decreased 1% from the first quarter of 2025 to the same period of 2026. The decrease is primarily a result of lower regulatory fees due to the Partnership’s S-4 filing in the first quarter of 2025, partially offset by increased professional service fees and higher compensation expenses, including an expanded Operating Partnership equity program designed for employee retention.

Current wording

General and administrative expenses increased 33% from the second quarter of 2025 to the same period of 2026. The increase is primarily attributable to higher professional services fees and increased compensation expenses, including an expanded Operating Partnership equity program designed for employee retention. General and administrative expenses increased 12% from the first six months of 2025 to the same period of 2026. The increase is primarily attributable to higher professional services fees and increased compensation expenses, including an expanded Operating Partnership equity program designed for employee retention, partially offset by lower regulatory fees due to the Partnership’s S-4 filing in the first quarter of 2025.

Previous wording

Net cash provided by operating activities decreased 28% from the first quarter of 2025 to the same period of 2026 primarily due to lower revenue receipts attributable to our Royalty Properties and lower NPI payment receipts, partially offset by higher lease bonus receipts and lower general and administrative expenses.

Current wording

Net cash provided by operating activities increased 38% from the first six months of 2025 to the same period of 2026 primarily due to higher revenue receipts attributable to our Royalty Properties and higher NPI payment receipts, partially offset by lower lease bonus receipts and higher general and administrative expense payments.

Previous wording

Cash receipts attributable to our Royalty Properties during the third quarter of 2026 totaled $26.6 million. Approximately 76% of these receipts reflect oil sales during December 2025 through February 2026 and natural gas sales during November 2025 through January 2026, and approximately 24% from prior sales periods. The average realized prices for oil and natural gas sales cash receipts attributable to the Royalty Properties during the first quarter of 2026 were $51.79/bbl and $2.27/mcf, respectively.

Current wording

Cash receipts attributable to our Royalty Properties during the second quarter of 2026 totaled $50.4 million. Approximately 66% of these receipts reflect oil sales during March 2026 through May 2026 and natural gas sales during February 2026 through April 2026, and approximately 34% 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 2026 were $70.37/bbl and $1.68/mcf, respectively.

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 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 Note 5 to the unaudited consolidated financial statements included in “Item 1 – Financial Statements” of this Quarterly Report for additional information regarding 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 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 Note 5 to the unaudited condensed consolidated financial statements included in “Item 1 – Financial Statements” of this Quarterly Report for additional information regarding cash distributions to unitholders.

Previous wording

The Partnership leases its office space at 3838 Oak Lawn Avenue, Suite 300, Dallas, Texas, through an operating lease (the “Office Lease”). The third amendment to our Office Lease was executed in April 2017 for a term of 129 months, beginning June 1, 2018 and expiring in 2029. Under the third amendment to the Office Lease, monthly rental payments range from $25,000 to $30,000. Future maturities of Office Lease liabilities representing monthly cash rental payment obligations as of March 31, 2026 are summarized as follows:

Current wording

The Partnership leases its office space at 3838 Oak Lawn Avenue, Suite 300, Dallas, Texas, through an operating lease (the “Office Lease”). The third amendment to our Office Lease was executed in April 2017 for a term of 129 months, beginning June 1, 2018 and expiring February 28, 2029. The fourth amendment to our Office Lease was executed in May 2026 for a term of 86 months, beginning March 1, 2029 and expiring April 30, 2036. Under the third and fourth amendments to the Office Lease, monthly rental payments range from $25,000 to $52,000. Future maturities of Office Lease liabilities representing monthly cash rental payment obligations are summarized in Note 7 to the unaudited condensed consolidated financial statements included in “Item 1 – Financial Statements” of this Quarterly Report.

Previous 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.

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, including the conflict in Iran; 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 totaled $28.2 million at March 31, 2026 and $41.9 million at December 31, 2025.

Current wording

Cash and cash equivalents totaled $72.5 million at June 30, 2026 and $41.9 million at December 31, 2025.