TXOHIGH SIGNALFINANCIAL10-K

TXO completed a major $331.6 million acquisition while substantially increasing debt levels and expanding its asset base by over 30%.

The White Rock Energy acquisition represents a transformative transaction that significantly expanded TXO's footprint in the Elm Coulee field, funded primarily through debt financing that increased total borrowings by 85%. The company's outstanding unit count grew from 41.2 million to 55.2 million units, indicating substantial equity dilution alongside the debt financing, which will impact per-unit metrics going forward.

Comparing 2026-02-26 vs 2025-03-04View on EDGAR →
FINANCIAL ANALYSIS

TXO's financial profile expanded meaningfully with total assets growing 31% to $1.4 billion and revenue increasing 42% to $401 million, reflecting the impact of the major acquisition. Total debt increased substantially to $291 million as the company leveraged up to fund the transaction, though interest expense declined 46% suggesting improved borrowing terms or timing effects. The combination of asset growth, revenue expansion, and increased leverage signals an aggressive growth strategy that has fundamentally altered the company's scale and risk profile.

FINANCIAL STATEMENT CHANGES
Total Debt
Balance Sheet
+85.3%
$157.1M→$291.1M

Debt increased 85.3% — substantial leverage increase; assess whether deployed for growth or covering losses.

Current Assets
Balance Sheet
+47.9%
$64.4M→$95.3M

Current assets grew 47.9% — improving short-term liquidity or inventory/receivables build.

Interest Expense
P&L
-46%
$8.2M→$4.4M

Interest expense declined — debt repayment or refinancing at lower rates improving earnings quality.

Revenue
P&L
+41.8%
$282.8M→$401.0M

Strong top-line growth of 41.8% — accelerating demand or successful expansion into new markets.

Accounts Receivable
Balance Sheet
+32%
$39.7M→$52.4M

Receivables surged 32% — revenue recognized but not yet collected; watch for collection issues or channel stuffing.

Total Assets
Balance Sheet
+31.4%
$1.0B→$1.4B

Asset base grew 31.4% — expansion through organic growth, acquisitions, or capital deployment.

Cash & Equivalents
Balance Sheet
+28.3%
$7.3M→$9.4M

Cash grew 28.3% — improving liquidity position supports investment and shareholder returns.

LANGUAGE CHANGES
NEW — 2026-02-26
PRIOR — 2025-03-04
ADDED
The registrant had 55,242,507 Common Units outstanding as of February 26, 2026.
Management's Discussion and Analysis of Financial Condition and Results of Operations 66 Item 7A.
We opportunistically use derivative instruments to economically hedge exposure to changes in commodity price and, as a result, are exposed to credit risk and market risk.
Our development budget is approximately $70 million for 2026.
Significant Acquisitions and Dispositions 2025 WRE Acquisition In July 2025, we completed the acquisition of certain oil and gas assets from White Rock Energy, LLC, which are located in the Elm Coulee field in Montana and North Dakota for cash consideration of $331.6 million (the WRE Acquisition ), including a deferred payment of $70.0 million which is due on July 31, 2026.
Pending Cross Timbers Transactions In February 2026, Cross Timbers Energy, LLC ("Cross Timbers"), a joint venture in which we hold a 50% interest, executed agreements to dispose of certain of the oil and gas assets owned by Cross Timbers pursuant to purchase and sale agreements with multiple private buyers (the "Cross Timbers Transactions").
We anticipate realizing about $40 million of aggregate proceeds from the Cross Timbers Transactions, subject in each case to customary purchase price adjustments, which we intend to use to pay a portion of the deferred payment for the WRE Acquisition.
The Cross Timbers Transactions are expected to close in the second quarter of 2026, subject to customary closing conditions.
There can be no assurance that all of the conditions to closing any or all of the Cross Timbers Transactions will be satisfied.
Our Properties As of December 31, 2025, our assets consisted of 1,294,761 gross (641,865 net) leasehold and mineral acres located primarily in the Permian Basin, San Juan Basin and Williston Basin.
REMOVED
`The registrant had 41,167,625 Common Units outstanding as of March 4, 2025.
Management's Discussion and Analysis of Financial Condition and Results of Operations 71 Item 7A.
If commodity prices decline and remain depressed for a prolonged period, production from a significant portion of our properties may become uneconomic and cause downward adjustments of our reserve estimates and write downs of the value of such properties, which may adversely affect our financial condition and our ability to make distributions to our unitholders.
We operate certain of our properties through a joint venture over which we have shared control.
2 Table of Content s We opportunistically use derivative instruments to economically hedge exposure to changes in commodity price and, as a result, are exposed to credit risk and market risk.
We may issue an unlimited number of additional units, including units that are senior to the common units, without unitholder approval.
Our development budget is approximately $30 - $50 million for 2025.
The members of our management team have over 30 years experience in the oil and gas industry on average.
Our management team has successfully executed on a strategy of acquiring and exploiting long-lived and low decline assets for more than 30 years, completing hundreds of acquisitions totaling over $15 billion.
Additionally, our management team has collectively invested more than $500 million in us since our inception.
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