MACH NATURAL RESOURCES LP

We do not directly employ directors, officers or employees; instead, all of the employees that conduct our business are either employed by Mach Resources or its subsidiaries. We depend on Mach Resources and such employees to provide us and our General Partner with services necessary to operate our business. The management, maintenance and operational functions of our business are currently provided by Mach Resources pursuant to the MSA. The MSA provides that we will reimburse Mach Resources for the direct and indirect costs associated with such services and pay an annual management fee of approximately $7.4 million. Neither our general partner nor the Sponsor currently receive any management fee or other compensation with respect to the management of our business; however, to the extent they did provide services in the future, they would be entitled to reimbursement under the partnership agreement. Our partnership agreement does not set a limit on the amount of expenses for which our General Partner and its affiliates may be reimbursed. These expenses include salary, bonus, incentive compensation and other amounts paid to persons who perform services for us or on our behalf and expenses allocated to our General Partner by its affiliates. Our partnership agreement provides that our General Partner will determine the expenses that are allocable to us. The reimbursement of expenses to our General Partner and its affiliates will reduce the amount of cash available for distribution to our unitholders. During the year ended December 31, 2023, we paid $52.3 million to Mach Resources, which consists of $4.8 million for an annual management fee and $47.5 million for reimbursements of its costs and expenses under the Predecessor MSA and the MSAs in effect between Mach Resources, on the one hand, and each of BCE-Mach and BCE-Mach II, on the other hand, prior to the Offering.

For a description of our other relationships with our affiliates, please read “Certain Relationships and Related Party Transactions and Director Independence” included in Item 13 of Part III of this Annual Report. Although all of the employees that conduct our business are employed by Mach Resources, we sometimes refer to these individuals in this Annual Report as our employees.

Emerging Growth Company Status

We are currently considered an “emerging growth company,” within the meaning of the Securities Act, for purposes of the SEC’s executive compensation disclosure rules. Accordingly, we are required to provide a Summary Compensation Table and an Outstanding Equity Awards at Fiscal Year End Table, as well as limited narrative disclosures regarding executive compensation for our last completed fiscal year. Furthermore, our reporting obligations extend only to our “named executive officers,” who are the individuals who served as our principal executive officer during 2023 and our next two most highly compensated executive officers at the end of 2023. Accordingly, our “Named Executive Officers” for 2023 are:

2023 Summary Compensation Table

The following table summarizes the compensation awarded to, earned by or paid to our Named Executive Officers for the fiscal year ended December 31, 2023.

Narrative Disclosure to Summary Compensation Table

No Employment Agreements and/or Offer Letters

We have not entered into any employment agreement, offer letter or similar employment contract with any of our Named Executive Officers.

Base Salary

Each Named Executive Officer’s base salary is a fixed component of compensation for performing specific job duties and functions. Base salaries are generally set at levels deemed necessary to attract and retain individuals with superior talent commensurate with their relative expertise and experience. Mr. White received a base salary increase from $475,000 to $546,250 on January 1, 2023, and Mr. Reineke received a base salary increase from $660,960 to $760,100 on January 1, 2023.

Annual Bonuses

Annual cash bonuses are used to motivate and reward our executives and other employees. The annual bonuses paid to our Named Executive Officers (other than Mr. Ward) for the 2023 and 2022 fiscal years were discretionary bonuses ultimately determined by Mr. Ward and not linked to any performance metrics of the Company or otherwise. Mr. Ward historically has not been considered for annual bonuses and, accordingly, Mr. Ward did not receive an annual bonus in 2023 or 2022. The target annual bonus opportunity for each of Messrs. White and Reineke is not memorialized in any written plan or other document but has historically been approximately 10% of their base salaries. For 2023, the payments of annual bonuses for Messrs. White and Reineke were divided into two installments, with half of the bonuses becoming payable in July 2023 and the remaining half becoming payable in January 2024.

Equity Incentives

Class B Units in the Mach Companies

In connection with the formation of each of the Mach Companies, each of our Named Executive Officers received one-time awards of Class B Units in each of the Mach Companies. The Mach Companies Class B Units were equity incentive awards intended to qualify as “profits interests” for U.S. federal income tax purposes and were subject to service-based vesting over a period of 3 years for Mr. Ward and 2 years for Messrs. White and Reineke. Under the applicable equity agreements between each of the Named Executive Officers and the Mach Companies, if a Named Executive Officer’s employment was terminated due to his death or disability, then the next tranche of unvested Mach Companies Class B Units, as applicable, held by the Named Executive Officer scheduled to vest on the next vesting date following the termination date would immediately vest as of the termination date. In addition, each Named Executive Officer’s unvested Mach Companies Class B Units would become fully vested immediately prior to a “Change of Control” (as defined in the applicable operating agreement of the Mach Companies and including an initial public offering), subject to the Named Executive Officer’s continued employment through the Change of Control. In connection with the Corporate Reorganization, the Mach Companies Class B Units became fully vested and exchanged for their respective pro rata portions of the common units of the Company, after which the Mach Companies Class B Units were cancelled and ceased to exist. See notes 9 and 12 of our audited consolidated financial statements included in Item 8 of Part II of this Annual Report.

2023 Long-Term Incentive Plan

In connection with the consummation of the Offering, the Board adopted a long-term incentive plan (the “Long-Term Incentive Plan”) in which our Named Executive Officer, employees, consultants and directors are eligible to participate. The Long-Term Incentive Plan provides for the grant of cash awards, options to purchase common units of the Company, unit appreciation rights, restricted units, phantom units (“Award Units”), unit awards, distribution equivalent rights (“DERs”) and other unit-based awards intended to align the interests of service providers, including our Named Executive Officers, with those of our unitholders. The Long-Term Incentive Plan is filed herewith as Exhibit 10.1.

In connection with the consummation of the Offering, we granted awards under the Long-Term Incentive Plan. The awards granted to our Named Executive Officers were comprised of Award Units, each of which was issued in tandem with a corresponding DER, which entitles the Named Executive Officer to receive a cash payment equal to the total distributions paid by the Company in respect of a common unit during the time the corresponding Award Unit is outstanding. The Award Units vest ratably on each of the first three anniversaries of the date of grant, subject to the Named Executive Officer’s continued employment through the applicable vesting date, and an Award Unit’s corresponding DER vests at the same time the Award Unit vests. The Award Units (and their corresponding DERs) held by the Named Executive Officers are subject to accelerated vesting as discussed under “Additional Narrative Disclosure — Potential Payments Upon Termination or Change in Control.”

Outstanding Equity Awards at 2023 Fiscal Year-End

The following table sets forth information regarding all outstanding equity incentive awards held by each of our Named Executive Officers as of December 31, 2023.

Additional Narrative Disclosure

Retirement Benefits

We do not have a defined benefit pension plan or nonqualified deferred compensation plan. We currently maintain a retirement plan intended to provide benefits under Section 401(k) of the Code, pursuant to which employees, including the Named Executive Officers, can make voluntary pre-tax contributions. We match 100% of elective deferrals up to 10% of salary for our Named Executive Officers. Our employer matching contributions vest in equal, annual installments on the first four anniversaries of a participant’s commencement of service, and our Named Executive Officers are 100% vested in employer matching contributions. All contributions under the retirement plan are subject to certain annual dollar limitations, which are periodically adjusted for changes in the cost of living.

Potential Payments Upon Termination or Change in Control

Under the applicable Award Unit grant agreements with each of the Named Executive Officers, if a Named Executive Officer is terminated by our General Partner or one of its affiliates (including the Company) without “Cause” (as defined below) or the Named Executive Officer resigns for “Good Reason” (as defined below) within the two-year period beginning on the occurrence of a “Change in Control” (as defined in the Long-Term Incentive Plan), then all unvested and outstanding Award Units (and all DERs corresponding to such Award Units) will vest in full as of such termination. In addition, the vesting of the Award Units may be accelerated in the discretion of the Board’s compensation committee within the 30 days following certain terminations of the Named Executive Officers.

“Cause” is generally defined to mean (subject to notice and cure provisions for clauses (iii), (iv) and (v)): (i) conviction of, or plea of guilty ornolo contendereto, any felony or any crime involving theft, embezzlement, dishonesty or moral turpitude; (ii) any act constituting theft, embezzlement, fraud or similar conduct in the performance of the employee’s duties with respect to the Company, the General Partner or one of their affiliates; (iii) any act constituting willful misconduct, deliberate malfeasance or gross negligence in the performance of the employee’s duties with respect to the Company, the General Partner or one of their affiliates; (iv) willful and continued failure to perform any of the employee’s duties; or (v) any material breach by the employee of the Long-Term Incentive Plan, any award agreement thereunder or any other agreement between the employee and the Company, the General Partner or one of their affiliates.

“Good Reason” is generally defined to mean (subject to customary notice and cure provisions): (i) a material diminution in title, position or duties; (ii) a material reduction in any component of the employee’s compensation (provided that, for clarity, a reduction in the fair market value of any common units or other equity securities granted as compensation to the employee shall not be considered to be a reduction in compensation); (iii) relocation of the employee’s primary office location by more than 50 miles; or (iv) any material breach by the Company, the General Partner or one of their affiliates of any agreement between the employee, on the one hand, and the Company, the General Partner or one of their affiliates, on the other hand, in each case, unless mutually agreed in writing.

Non-Employee Director Compensation

The Board has adopted a compensation program for our non-employee directors, or the “Non-Employee Director Compensation Policy.” The Non-Employee Director Compensation Policy became effective as of October 27, 2023. Pursuant to the Non-Director Compensation Policy, each member of the Board who is not our employee will receive the following cash compensation for board services, as applicable:

a.$75,000 per year for service as a board member; and

b. an additional $25,000 per year for service as chairperson of the Audit Committee.

In addition, pursuant to the Non-Employee Director Compensation Policy, annually, on a date determined by the Board, each individual who serves as a non-employee director as of such date will receive grants of Award Units with a grant date value equal to approximately $150,000 and, for each such Award Unit, a corresponding DER, which entitles the director to receive a cash payment equal to the total distributions paid by the Company in respect of a common unit during the time the corresponding Award Unit is outstanding. The Award Units (and their corresponding DERs) will vest on the earlier of (i) the first anniversary of the date of grant and (ii) a Change in Control (as defined in the Long-Term Incentive Plan), in each case, subject to such director’s continuing service on the Board through such date or Change in Control, as applicable. Our Non-Employee Director Compensation Policy provides that the Award Units and corresponding DERs shall be granted under and shall be subject to the terms and provisions of the Long-Term Incentive Plan and shall be granted subject to the execution and delivery of award agreements.

Director Compensation Table

The following table summarizes the compensation awarded or paid to certain non-employee members of the Board for the fiscal year ended December 31, 2023. For summary information on the provision of the plans and programs, refer to the “Non-Employee Director Compensation” discussion immediately preceding this table.