LandBridge Q3 2026 revenue rises 39% to $70.9M
LandBridge's board declared a $0.12-per-share Class A dividend payable December 10, 2026, to holders of record November 25, 2026.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Rhea-AI Filing Summary
LandBridge Corp (LB) reported third-quarter 2026 revenue of $70.9 million, up 39% from $50.8 million, and net income of $34.0 million, up 68%. Cash flow from operating activities was $49.6 million, up 42%; Adjusted EBITDA was $63.7 million, up 42%, and Free Cash Flow was $49.0 million, up 45% (both non-GAAP). Growth reflected higher surface royalties and easement revenue; produced-water handling volume increased approximately 652 MBbl/d.
During the nine months ended September 30, 2026, LandBridge acquired approximately 34,000 surface acres for total purchase consideration of $254.6 million, including transaction costs. On October 1, OpCo issued $125.0 million of additional 6.25% senior unsecured notes due 2030, bringing aggregate notes principal to $625.0 million; net proceeds were used to repay part of revolving-credit borrowings. On October 13, the company completed its conversion from a Delaware LLC to a Texas corporation, converting each outstanding Class A and Class B share one-for-one.
PowerBridge began construction in September on an 825-acre ground lease for Alpha Phase I, within an option covering up to approximately 3,400 acres. The project is expected to include more than 300 megawatts of the planned 2-gigawatt data-center campus, with first power delivery anticipated in the fourth quarter of 2027; the ground lease has an initial ten-year term.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointThird-quarter revenue rose 39% to $70.9 million year over year.
- Moderate pointThird-quarter net income rose 68% to $34.0 million year over year.
- Moderate pointThird-quarter Adjusted EBITDA rose 42% to $63.7 million year over year.
- Moderate pointThird-quarter cash flow from operating activities rose 42% to $49.6 million year over year.
Negative
- None.
Filing Explained
The ten-point-eight-million-dollar land purchase remains subject to closing conditions; the twelve-cent dividend is scheduled for December tenth.
On November 3, the board declared a
The share repurchase program permits up to
After September 30, the company used cash on hand to acquire approximately 1,600 surface acres for
The company also agreed in September to acquire approximately 3,000 surface acres for
Key Figures
Key Terms
Adjusted EBITDA financial
Free Cash Flow financial
reverse 1031 exchange financial
Term SOFR Loans financial
noncontrolling interest financial
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
How much revenue did LandBridge (LB) report for Q3 2026?
What were LandBridge's (LB) net income and operating cash flow in Q3 2026?
What dividend did LandBridge (LB) declare for December 2026?
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number:
(Exact Name of Registrant as Specified in its Charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
(Address of principal executive offices) |
(Zip Code) |
Registrant’s telephone number, including area code: (
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class |
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Trading Symbol(s) |
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Name of Each Exchange on Which Registered |
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NYSE Texas, Inc. |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Non-accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
As of November 4, 2026, the registrant had
TABLE OF CONTENTS
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Page |
PART I — FINANCIAL INFORMATION
Glossary |
3 |
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Cautionary Note Regarding Forward-Looking Statements |
5 |
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Item 1. |
Financial Statements (Unaudited) |
7 |
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Condensed Consolidated Balance Sheets |
7 |
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Condensed Consolidated Statements of Operations |
8 |
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Condensed Consolidated Statements of Shareholders’ Equity |
9 |
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Condensed Consolidated Statements of Cash Flows |
11 |
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Notes to the Condensed Consolidated Financial Statements |
12 |
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
24 |
Item 3. |
Quantitative and Qualitative Disclosures About Market Risk |
36 |
Item 4. |
Controls and Procedures |
36 |
PART II — OTHER INFORMATION |
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Item 1. |
Legal Proceedings |
37 |
Item 1A. |
Risk Factors |
37 |
Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds |
39 |
Item 3. |
Defaults Upon Senior Securities |
39 |
Item 4. |
Mine Safety Disclosures |
39 |
Item 5. |
Other Information |
40 |
Item 6. |
Exhibits |
41 |
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Signatures |
43 |
2
GLOSSARY
The following are abbreviations and definitions of certain terms used in this document, many of which are commonly used in the industry:
1918 Acquisition. The acquisition of approximately 37,500 total acres across Reeves, Loving, Winkler and Ward counties, Texas, and certain related assets from 1918 Ranch & Royalty, LLC, completed in November 2025.
Alpha Digital Campus. A giga-scale data center campus in Reeves County, Texas, with up to 2 gigawatts of initial co-located power generation under development by PowerBridge and its power partners.
Bbl. One barrel of volume used for measuring oil.
Brackish water. Water with salinity levels between seawater and freshwater.
Completion. The process of preparing a well for the production of oil and gas by injecting high-pressure fluids mixed with proppants to create fractures in reservoir rock to enhance permeability.
Conversion and Redomestication. Effective on October 13, 2026, LandBridge Company LLC, a Delaware limited liability company, completed its conversion to LandBridge Corporation, a Texas corporation, pursuant to a plan of conversion effected under the Delaware Limited Liability Company Act and the Texas Business Organizations Code.
Crude oil. A mixture of hydrocarbons that exists in liquid phase in natural underground reservoirs and remains liquid at atmospheric pressure after passing through surface separating facilities.
Delaware Basin. A geological depositional and structural basin in West Texas and southeastern New Mexico, which is a part of the Permian Basin.
E&P. Oil and natural gas exploration and production.
Five Point. Five Point Infrastructure LLC, a Delaware limited liability company and our legacy financial sponsor.
GAAP. Accounting principles generally accepted in the United States of America.
LandBridge. LandBridge Company LLC, a Delaware limited liability company (NYSE: LB, NYSE TX: LB), and its subsidiaries, for the periods prior to the Conversion and Redomestication and LandBridge Corporation, a Texas corporation (NYSE: LB, NYSE TX: LB), and its subsidiaries, for the periods after the Conversion and Redomestication.
LandBridge Holdings. LandBridge Holdings LLC, a Delaware limited liability company and portfolio company of funds affiliated with Five Point.
LBH Management Units. Prior to May 1, 2026, management incentive units consisted of time-based awards of profits interests in LandBridge Holdings. Effective May 1, 2026, LandBridge Holdings recapitalized all outstanding equity interests of LandBridge Holdings, including management incentive units, into a single class of equity consisting of common units representing equity interests in LandBridge Holdings.
MBbls. One thousand barrels.
MBbl/d. One thousand barrels per day.
Mineral interest. Real property interests that grant ownership of oil and natural gas under a tract of land and the rights to explore for, develop, and produce oil and natural gas on that land or to lease those exploration and development rights to a third party.
OpCo. DBR Land Holdings LLC, a Delaware limited liability company.
Operator. The individual or company responsible for the development and/or production of an oil or natural gas well.
Permian Basin. A large sedimentary basin located in West Texas and southeastern New Mexico.
PowerBridge. PowerBridge LLC, a portfolio company of Five Point.
3
Produced water. Water produced from an oil and natural gas well alongside crude oil and natural gas.
Produced water handling facilities. Facilities utilized for the treatment, handling and disposal of produced water.
Royalty. A real property interest that entitles the owner to the right to receive a portion of the production (or the proceeds therefrom) produced from the underlying real property or a payment for the use of such underlying real property, and does not require the owner to pay any portion of the production or development costs.
Stateline Position. Our surface acreage located primarily in Loving, Reeves and Winkler counties, Texas, and Lea County, New Mexico, near and along the Texas-New Mexico state border.
SUAs. Surface use agreements.
WaterBridge. WaterBridge Infrastructure LLC, a Delaware limited liability company (NYSE: WBI; NYSE TX: WBI), and its subsidiaries.
Wolf Bone Ranch Acquisition. The acquisition of approximately 46,000 largely contiguous surface acres in the Southern Delaware Basin, completed in December 2024.
4
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
The information in this Quarterly Report on Form 10-Q (this “Quarterly Report”) includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) which reflect our current views with respect to, among other things, our operations and financial performance. All statements, other than statements of historical fact included in this Quarterly Report, regarding our strategy, future operations, estimated revenues and losses, projected costs, prospects, plans and objectives of management are forward-looking statements. When used in this Quarterly Report, words such as “assume,” “could,” “would,” “should,” “will,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “project,” “forecast,” “may,” “objective,” “plan,” “budget” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. These forward-looking statements are based on our current expectations and assumptions about future events, using currently available information as to the outcome and timing of future events at the time such statements were made. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond our control. Consequently, actual future results could differ materially and adversely from our expectations due to a number of factors, including, but not limited to:
5
The forward-looking statements included in this Quarterly Report speak only as of the date of this report, represent management’s current reasonable expectations as of such date and are subject to the risks and uncertainties identified above as well as those described elsewhere in this Quarterly Report and in other reports and materials we file with the SEC. We cannot guarantee the accuracy of our forward-looking statements, and readers are urged to carefully review and consider the various disclosures made in this Quarterly Report and in other reports and materials we file with the SEC, in particular, the items under the heading “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 (the “2025 Form 10-K”) and our Quarterly Reports on Form 10-Q.
All forward-looking statements, expressed or implied, included in this Quarterly Report are expressly qualified in their entirety by this cautionary note. This cautionary note should also be considered in connection with any subsequent written or oral forward-looking statements that we or persons acting on our behalf may issue. Except as otherwise required by applicable law, we disclaim any duty to update any forward-looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date of this Quarterly Report.
6
Item 1. Financial Statements (Unaudited)
LandBridge Company LLC and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
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September 30, |
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December 31, |
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2026 |
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2025 |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
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$ |
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Accounts receivable, net |
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Related party accounts receivable |
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Prepaid expenses and other current assets |
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Total current assets |
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Non-current assets: |
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Property, plant and equipment, net |
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Intangible assets, net |
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Deferred tax assets |
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Other assets |
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Total non-current assets |
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Total assets |
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$ |
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$ |
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Liabilities and equity |
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Current liabilities: |
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Accounts payable |
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$ |
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$ |
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Related party accounts payable |
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Taxes payable |
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Accrued liabilities |
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Current portion of long-term debt |
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Contract liabilities |
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Other current liabilities |
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Total current liabilities |
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Non-current liabilities: |
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Long-term debt, net of debt issuance costs |
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Other long-term liabilities |
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Total non-current liabilities |
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Total liabilities |
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Class A shares, shares authorized and |
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Class B shares, shares authorized and |
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Retained earnings |
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Total shareholders’ equity attributable to LandBridge Company LLC |
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Noncontrolling interest |
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Total shareholders’ equity |
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Total liabilities and equity |
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$ |
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$ |
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See accompanying notes to the unaudited condensed consolidated financial statements
7
LandBridge Company LLC and Subsidiaries
Condensed Consolidated Statements of Operations
(in thousands, except share and per share amounts)
(unaudited)
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Three Months Ended September 30, |
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Nine Months Ended September 30, |
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2026 |
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2025 |
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2026 |
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2025 |
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Revenues: |
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Surface use royalties |
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$ |
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$ |
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$ |
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$ |
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Surface use royalties - related party |
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Easements and other surface-related revenues |
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Easements and other surface-related revenues - related party |
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Resource sales |
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Resource sales - related party |
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Resource royalties |
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Resource royalties - related party |
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Oil and gas royalties |
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Other |
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Total revenues |
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Resource sales-related expense |
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Other operating and maintenance expense |
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General and administrative expense |
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Depreciation, depletion and amortization |
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Other operating (income) expense, net |
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( |
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( |
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Operating income |
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Interest expense |
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Other expense, net |
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Income before income taxes |
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Income tax expense |
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Net income |
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Net income attributable to noncontrolling interest |
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Net income attributable to LandBridge Company LLC |
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$ |
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$ |
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$ |
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$ |
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Net income per share of Class A shares |
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Basic |
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$ |
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$ |
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$ |
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$ |
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Diluted |
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$ |
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$ |
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$ |
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$ |
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Weighted average shares outstanding of Class A shares |
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Basic |
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Diluted |
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See accompanying notes to the unaudited condensed consolidated financial statements
8
LandBridge Company LLC and Subsidiaries
Condensed Consolidated Statements of Shareholders’ Equity
(in thousands, except share amounts)
(unaudited)
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Class A |
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Class B |
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Retained Earnings |
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Non- |
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Total |
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Shares |
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Amount |
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Shares |
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Amount |
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Amount |
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Amount |
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Amount |
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Balance at December 31, 2025 |
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$ |
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$ |
- |
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$ |
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$ |
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$ |
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Net income |
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- |
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- |
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- |
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- |
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Deemed non-cash contributions |
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- |
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- |
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- |
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- |
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- |
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RSU share-based compensation expense |
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- |
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- |
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- |
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- |
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Class A shares issued on vesting of RSUs, net of shares withheld for tax |
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( |
) |
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- |
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- |
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- |
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- |
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( |
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Cancellation of Class B shares |
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- |
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- |
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( |
) |
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- |
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- |
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- |
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- |
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Tax distributions |
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- |
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- |
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- |
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- |
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- |
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( |
) |
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( |
) |
Dividends and distributions |
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- |
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- |
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- |
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- |
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( |
) |
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( |
) |
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( |
) |
RSU dividend equivalent rights |
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- |
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- |
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- |
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- |
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( |
) |
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( |
) |
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( |
) |
Changes in ownership interest adjustment |
|
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- |
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( |
) |
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- |
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- |
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- |
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- |
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Tax impact of ownership interest adjustment |
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- |
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( |
) |
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- |
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- |
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- |
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- |
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( |
) |
Balance at March 31, 2026 |
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$ |
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$ |
- |
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$ |
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$ |
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$ |
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Net income |
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- |
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- |
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- |
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- |
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Deemed non-cash contributions |
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- |
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- |
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- |
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- |
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- |
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RSU share-based compensation expense |
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- |
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- |
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- |
|
|
|
- |
|
|
|
|
|
|
|
|||
Redemption of Class B shares for Class A shares |
|
|
|
|
- |
|
|
|
( |
) |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
Class A shares issued on vesting of RSUs, net of shares withheld for tax |
|
|
|
|
( |
) |
|
|
- |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
Cancellation of Class B shares |
|
|
- |
|
|
- |
|
|
|
( |
) |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Tax distributions |
|
|
- |
|
|
- |
|
|
|
- |
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
Dividends and distributions |
|
|
- |
|
|
- |
|
|
|
- |
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
RSU dividend equivalent rights |
|
|
- |
|
|
- |
|
|
|
- |
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Changes in ownership interest adjustment |
|
|
- |
|
|
|
|
|
- |
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
Balance at June 30, 2026 |
|
|
|
$ |
|
|
|
|
$ |
- |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Net income |
|
|
- |
|
|
- |
|
|
|
- |
|
|
- |
|
|
|
|
|
|
|
|
|
|
|||
Deemed non-cash contributions |
|
|
- |
|
|
- |
|
|
|
- |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
||
RSU share-based compensation expense |
|
|
- |
|
|
|
|
|
- |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|||
Redemption of Class B shares for Class A shares |
|
|
|
|
- |
|
|
|
( |
) |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
Class A shares issued on vesting of RSUs, net of shares withheld for tax |
|
|
|
|
( |
) |
|
|
- |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
Cancellation of Class B shares |
|
|
- |
|
|
- |
|
|
|
( |
) |
|
- |
|
|
|
|
|
|
|
|
|
|
|||
Tax distributions |
|
|
- |
|
|
- |
|
|
|
- |
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
Dividends and distributions |
|
|
- |
|
|
- |
|
|
|
- |
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
RSU dividend equivalent rights |
|
|
- |
|
|
- |
|
|
|
- |
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Changes in ownership interest adjustment |
|
|
- |
|
|
|
|
|
- |
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
Tax impact of ownership interest adjustment |
|
|
- |
|
|
|
|
|
- |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
||
Balance at September 30, 2026 |
|
|
|
$ |
|
|
|
|
$ |
- |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
See accompanying notes to the unaudited condensed consolidated financial statements
9
LandBridge Company LLC and Subsidiaries
Condensed Consolidated Statements of Shareholders’ Equity (Continued)
(in thousands, except share amounts)
(unaudited)
|
|
Class A |
|
|
Class B |
|
|
Retained Earnings |
|
|
Non- |
|
|
Total |
|
|||||||||||
|
|
Shares |
|
Amount |
|
|
Shares |
|
Amount |
|
|
Amount |
|
|
Amount |
|
|
Amount |
|
|||||||
Balance at December 31, 2024 |
|
|
|
$ |
|
|
|
|
$ |
- |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Net income |
|
|
- |
|
|
- |
|
|
|
- |
|
|
- |
|
|
|
|
|
|
|
|
|
|
|||
Deemed non-cash contributions |
|
|
- |
|
|
- |
|
|
|
- |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
||
RSU share-based compensation expense |
|
|
- |
|
|
|
|
|
- |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|||
Cancellation of Class B shares |
|
|
- |
|
|
- |
|
|
|
( |
) |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Tax distributions |
|
|
- |
|
|
- |
|
|
|
- |
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
Dividends and distributions |
|
|
- |
|
|
- |
|
|
|
- |
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
RSU dividend equivalent rights |
|
|
- |
|
|
- |
|
|
|
- |
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Changes in ownership interest adjustment |
|
|
- |
|
|
|
|
|
- |
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
Offering costs |
|
|
- |
|
|
( |
) |
|
|
- |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
Balance at March 31, 2025 |
|
|
|
$ |
|
|
|
|
$ |
- |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Net income |
|
|
- |
|
|
- |
|
|
|
- |
|
|
- |
|
|
|
|
|
|
|
|
|
|
|||
Deemed non-cash contributions |
|
|
- |
|
|
- |
|
|
|
- |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
||
RSU share-based compensation expense |
|
|
- |
|
|
|
|
|
- |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|||
Redemption of Class B shares for Class A shares |
|
|
|
|
- |
|
|
|
( |
) |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
Cancellation of Class B shares |
|
|
- |
|
|
- |
|
|
|
( |
) |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Tax distributions |
|
|
- |
|
|
- |
|
|
|
- |
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
Dividends and distributions |
|
|
- |
|
|
- |
|
|
|
- |
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
RSU dividend equivalent rights |
|
|
- |
|
|
- |
|
|
|
- |
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Changes in ownership interest adjustment |
|
|
- |
|
|
|
|
|
- |
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
Tax impact of ownership interest adjustment |
|
|
- |
|
|
|
|
|
- |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
||
Offering costs |
|
|
- |
|
|
( |
) |
|
|
- |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
Balance at June 30, 2025 |
|
|
|
$ |
|
|
|
|
$ |
- |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Net income |
|
|
- |
|
|
- |
|
|
|
- |
|
|
- |
|
|
|
|
|
|
|
|
|
|
|||
Deemed non-cash contributions |
|
|
- |
|
|
- |
|
|
|
- |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
||
RSU share-based compensation expense |
|
|
- |
|
|
|
|
|
- |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|||
Class A shares issued on vesting of RSUs, net of shares withheld for tax |
|
|
|
|
( |
) |
|
|
- |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
Cancellation of Class B shares |
|
|
- |
|
|
- |
|
|
|
( |
) |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Tax distributions |
|
|
- |
|
|
- |
|
|
|
- |
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
Dividends and distributions |
|
|
- |
|
|
- |
|
|
|
- |
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
RSU dividend equivalent rights |
|
|
- |
|
|
- |
|
|
|
- |
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Changes in ownership interest adjustment |
|
|
- |
|
|
|
|
|
- |
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
Tax impact of ownership interest adjustment |
|
|
- |
|
|
|
|
|
- |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
||
Offering costs |
|
|
- |
|
|
|
|
|
- |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
||
Balance at September 30, 2025 |
|
|
|
$ |
|
|
|
|
$ |
- |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
See accompanying notes to the unaudited condensed consolidated financial statements
10
LandBridge Company LLC and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
|
|
Nine Months Ended September 30, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Cash flows from operating activities |
|
|
|
|
|
|
||
Net income |
|
$ |
|
|
$ |
|
||
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
||
Depreciation, depletion and amortization |
|
|
|
|
|
|
||
Amortization of debt issuance costs |
|
|
|
|
|
|
||
Share-based compensation |
|
|
|
|
|
|
||
Deferred income tax expense |
|
|
|
|
|
|
||
Other |
|
|
( |
) |
|
|
|
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
||
Accounts receivable |
|
|
( |
) |
|
|
( |
) |
Related party accounts receivable |
|
|
( |
) |
|
|
( |
) |
Prepaid expenses and other assets |
|
|
( |
) |
|
|
( |
) |
Accounts payable |
|
|
|
|
|
|
||
Related party accounts payable |
|
|
|
|
|
|
||
Taxes payable |
|
|
|
|
|
|
||
Accrued and other liabilities |
|
|
|
|
|
|
||
Net cash provided by operating activities |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Cash flows from investing activities |
|
|
|
|
|
|
||
Acquisitions |
|
|
( |
) |
|
|
( |
) |
Capital expenditures |
|
|
( |
) |
|
|
( |
) |
Proceeds from disposal of assets |
|
|
|
|
|
|
||
Net cash used in investing activities |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
||
Cash flows from financing activities |
|
|
|
|
|
|
||
Proceeds from debt |
|
|
|
|
|
|
||
Repayments of debt |
|
|
( |
) |
|
|
( |
) |
Dividends, dividend equivalents and distributions paid |
|
|
( |
) |
|
|
( |
) |
Taxes paid related to net share settlement of RSUs |
|
|
( |
) |
|
|
( |
) |
Debt issuance costs |
|
|
( |
) |
|
|
( |
) |
Offering costs |
|
|
|
|
|
( |
) |
|
Other |
|
|
( |
) |
|
|
|
|
Net cash provided by (used in) financing activities |
|
|
|
|
|
( |
) |
|
Net decrease in cash and cash equivalents |
|
|
( |
) |
|
|
( |
) |
Cash and cash equivalents - beginning of period |
|
|
|
|
|
|
||
Cash and cash equivalents - end of period |
|
$ |
|
|
$ |
|
||
See accompanying notes to the unaudited condensed consolidated financial statements
11
LandBridge Company LLC and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements
Effective October 13, 2026 (the “Effective Date”), the Company completed its conversion from LandBridge Company LLC, a Delaware limited liability company, to LandBridge Corporation, a Texas corporation, pursuant to a plan of conversion effected under the Delaware Limited Liability Company Act and the Texas Business Organizations Code (the “Conversion and Redomestication”). The legal existence of the Company continued without interruption. On the Effective Date, each outstanding Class A share and Class B share representing limited liability company interests in LandBridge Company LLC was converted, on a one-for-one basis, into one share of Class A common stock, par value $
References to the “Company,” “LandBridge,” “we,” “our,” or “us” refer to LandBridge Corporation and its consolidated subsidiaries for periods following the Conversion and Redomestication and LandBridge Company LLC and its consolidated subsidiaries for periods prior to the Conversion and Redomestication. Because the Conversion and Redomestication became effective October 13, 2026, the accompanying unaudited condensed consolidated financial statements as of and during the three and nine months ended September 30, 2026 and related notes reflect the results of LandBridge Company LLC.
We are a holding company whose principal asset consists of membership interests (“OpCo Units”) in DBR Land Holdings LLC (“OpCo”). As the managing member of OpCo and its subsidiaries, we operate and control all of the business and affairs of OpCo and its subsidiaries, and through OpCo and its subsidiaries, conduct our business. The Company has no other operations, cash flows, or material assets or liabilities other than our investment in OpCo and certain deferred tax assets and income tax liabilities. Refer to Note 6 — Income Taxes for additional information.
We generate revenue primarily from the use of our surface acreage, the sale of resources from our land and oil and natural gas royalties. The use of surface acreage generally includes easements or leases and various surface use royalties. Sale of resources generally includes sales of brackish water and other surface composite materials. Our assets consist mainly of fee surface acreage, oil and natural gas mineral interests, brackish water wells and ponds and related facilities.
We own surface acreage in the Delaware Basin and the adjacent Central Basin Platform in Texas and New Mexico and oil and natural gas mineral interests in the Delaware Basin in Texas.
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements (the “Financial Statements”) of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and in accordance with Rule 10-01 of Regulation S-X and reflect all adjustments, consisting of normal recurring adjustments which are, in the opinion of management, necessary for a fair statement of the financial results for the interim periods presented. Accordingly, these Financial Statements should be read in conjunction with the Company’s annual audited financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 (the “2025 Form 10-K”). When necessary, certain reclassifications are made to prior period financial information to conform with current period presentation. All dollar amounts in the Financial Statements and tables in the notes are stated in thousands of dollars unless otherwise indicated.
Results of operations for the three and nine months ended September 30, 2026 are not necessarily indicative of the results of operations that will be realized for the year ending December 31, 2026.
Consolidation
The Financial Statements include the accounts of the Company, its wholly owned subsidiaries, and the variable interest entities (“VIEs”) described below for which the Company is the primary beneficiary. All intercompany transactions and balances have been eliminated upon consolidation.
We consolidate a VIE when we are the primary beneficiary of the entity. In determining whether the Company is the primary beneficiary of an entity, the Company applies a qualitative approach to determine whether it has both (1) the power to direct the economically significant activities of the entity and (2) the obligation to absorb losses of, or the right to receive benefits from, the entity that could potentially be significant to that entity.
12
LandBridge Company LLC and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)
OpCo
Members with equity at risk in OpCo lack the authority, through voting or similar rights, to direct the activities that most significantly affect OpCo’s economic performance; therefore, OpCo is considered a VIE. As OpCo’s managing member, we operate and control all of its business and affairs and also have the obligation to absorb losses or the right to receive benefits that could be potentially significant to us. The Company has determined it is the primary beneficiary and consolidates OpCo within its unaudited condensed consolidated financial statements.
Reverse 1031 exchange
In September 2026, the Company acquired properties through a reverse like-kind exchange under Section 1031 of the Internal Revenue Code (a “reverse 1031 exchange”), in which legal title to the acquired properties is held by an Exchange Accommodation Titleholder (“EAT”) until the exchange is completed. The EAT is a VIE as it lacks sufficient equity at risk to finance its activities because we funded the acquisition cost through secured, non-interest-bearing promissory notes. As manager of the EAT, we direct its most significant activities and have the obligation to absorb losses or the right to receive benefits that could be potentially significant to us. The Company has determined it is the primary beneficiary and consolidates the EAT within its unaudited condensed consolidated financial statements.
The EAT’s assets consist primarily of the acquired property, which the Company operates under a property management agreement with the titleholder entities. Because that arrangement is a management agreement rather than a lease, it is not accounted for under Accounting Standards Codification (“ASC”) Topic 842. The agreement terminates on the earliest of (i) transfer of the properties to the Company or an affiliate, (ii) transfer of the EAT ownership interests to the Company or an affiliate, or (iii) 180 days after legal title transfers to the EAT. The acquired properties are recorded at cost, and no gain or loss was recognized on consolidation.
The assets of the consolidated titleholder entities may be used only to settle those entities’ obligations, and their creditors have no recourse to the general credit of the Company. The Company’s maximum exposure to loss is limited to the carrying amount of the acquired properties. As of September 30, 2026, the consolidated EAT held assets of approximately $
Segment Information
The Company operates in a single operating and reportable segment. All of our assets are located in the United States. ASC Topic 280, Segment Reporting, defines characteristics of operating segments as being components of an enterprise in which separate discrete financial information is available for evaluation by the chief operating decision maker (“CODM”) in making decisions on how to allocate resources and assess performance. The Company’s
Significant Accounting Policies
As of September 30, 2026, our significant accounting policies are consistent with those discussed in Note 2 — Summary of Significant Accounting Policies included in Part II, Item 8 of our 2025 Form 10-K. There were no significant updates or revisions to our accounting policies during the three and nine months ended September 30, 2026.
Recent Accounting Pronouncements Not Yet Adopted
In January 2025, the Financial Accounting Standards Board (“FASB”) issued ASU 2025-01, Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date, which clarifies the effective date of ASU 2024-03 and does not change its underlying disclosure requirements. ASU 2024-03 requires tabular disclosure of specified natural expenses within certain income statement expense captions, a qualitative description of amounts not separately disaggregated, and disclosure of our definition and total amount of selling expenses. We plan to adopt this guidance and comply with the disclosure requirements when it becomes mandatorily effective for annual periods beginning after December 15, 2026. The adoption
13
LandBridge Company LLC and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)
of ASU 2024-03 is not expected to have any effect on the Company’s financial position, results of operations or cash flows as it modifies disclosure requirements only.
In December 2025, FASB issued ASU 2025-12, Codification Improvements, which includes updates for a broad range of Accounting Topics arising from technical corrections, unintended application of the Codification, clarifications and other minor improvements. We plan to adopt this guidance and comply with the disclosure requirements when it becomes mandatorily effective for annual periods beginning after December 15, 2026. We are currently assessing the impact of this standard on our Financial Statements and related disclosures.
Contract Liabilities
The Company’s contract liabilities primarily relate to revenue sharing arrangements or other surface use agreements where the Company may receive payments from customers in advance of the related performance obligation being satisfied. During the nine months ended September 30, 2026, the Company recognized revenue of $
Supplemental Cash Flow Information
Supplemental cash flow information is as follows:
|
|
Nine Months Ended September 30, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Supplemental cash flow information: |
|
|
|
|
|
|
||
Cash paid for income taxes, net |
|
$ |
|
|
$ |
|
||
Cash paid for interest |
|
$ |
|
|
$ |
|
||
Commitments
During September 2026, the Company agreed to acquire from a third party approximately
During the nine months ended September 30, 2026, the Company acquired approximately
Certain acquisitions included in the amounts above were structured as a reverse 1031 exchange, as described in Note 2 — Summary of Significant Accounting Policies. Under this structure, the Company acquired approximately
In addition, during the nine months ended September 30, 2026, the Company acquired approximately
14
LandBridge Company LLC and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)
As of September 30, 2026 and December 31, 2025, property, plant and equipment, net of accumulated depreciation and depletion consisted of the following:
|
|
September 30, |
|
|
December 31, |
|
||
|
|
2026 |
|
|
2025 |
|
||
Oil and natural gas properties |
|
|
|
|
|
|
||
Proved |
|
$ |
|
|
$ |
|
||
Unproved |
|
|
|
|
|
|
||
Total oil and natural gas properties |
|
|
|
|
|
|
||
Land and land improvements |
|
|
|
|
|
|
||
Water wells, pipelines, facilities, ponds and related equipment |
|
|
|
|
|
|
||
Buildings, vehicles, equipment, furniture and other |
|
|
|
|
|
|
||
Construction in progress |
|
|
|
|
|
|
||
Total property, plant and equipment |
|
|
|
|
|
|
||
Less: accumulated depreciation and depletion |
|
|
( |
) |
|
|
( |
) |
Total property, plant and equipment, net |
|
$ |
|
|
$ |
|
||
Depreciation and depletion expense attributable to property, plant and equipment are as follows for the three and nine months ended September 30, 2026 and 2025:
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Depreciation expense |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Depletion expense |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total depreciation and depletion expense |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
In calculating the provision for income taxes on an interim basis, the Company uses an estimate of the annual effective tax rate based upon currently known facts and circumstances and applies that rate to its year-to-date earnings or losses. The Company’s effective tax rate is based on expected income and statutory tax rates and takes into consideration permanent differences between financial statement and tax return income applicable to the Company in the various jurisdictions in which the Company operates. The effect of discrete items, such as changes in estimates, changes in enacted tax laws or rates or tax status, and unusual or infrequently occurring events, is recognized in the interim period in which the discrete item occurs. The accounting estimates used to compute the provision for income taxes may change as new events occur, additional information is obtained, or as the result of new judicial interpretations or regulatory or tax law changes.
The calculation of the Company’s effective tax rate was as follows for the three and nine months ended September 30, 2026 and 2025:
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Income before income taxes |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Income tax expense |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Effective tax rate |
|
|
% |
|
|
% |
|
|
% |
|
|
% |
||||
The effective tax rates for the three and nine months ended September 30, 2026 and 2025 differed from the statutory rate of
During the nine months ended September 30, 2026, members of OpCo redeemed
15
LandBridge Company LLC and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)
against the created deferred tax asset. Because the deferred tax asset and associated valuation allowance arose in connection with a transaction between the Company and its shareholders, the initial deferred tax asset and associated valuation allowance are recorded in Class A shares on the condensed consolidated balance sheets.
As of September 30, 2026 and December 31, 2025, debt consisted of the following:
|
|
September 30, |
|
|
December 31, |
|
||
|
|
2026 |
|
|
2025 |
|
||
Notes |
|
$ |
|
|
$ |
|
||
2025 Revolving Credit Facility |
|
|
|
|
|
|
||
Other |
|
|
|
|
|
|
||
Total debt |
|
|
|
|
|
|
||
Current portion of long-term debt |
|
|
( |
) |
|
|
( |
) |
Unamortized debt issuance costs |
|
|
( |
) |
|
|
( |
) |
Long-term debt, net of debt issuance costs |
|
$ |
|
|
$ |
|
||
Notes
In November 2025, OpCo, as the issuer, issued $
In connection with the offering of the Notes, OpCo and each of the Guarantors (as defined below) entered into an indenture (the “Indenture”), with UMB Bank, N.A., as trustee, relating to the issuance of the Notes. The Indenture contains customary terms, events of default and covenants relating to, among other things, the incurrence of debt, the payment of dividends or similar restricted payments, undertaking transactions with OpCo’s unrestricted affiliates, and limitations on asset sales.
The Notes are guaranteed (the “Guarantees”), jointly and severally, on a senior unsecured basis by all of OpCo’s existing subsidiaries (collectively, the “Guarantors”).
At any time prior to December 1, 2027, OpCo may on any one or more occasions redeem up to
If a Change of Control (as defined in the Indenture) occurs with respect to any series of notes (along with a downgrade of the notes by two rating agencies), OpCo may be required to offer to purchase the Notes at a purchase price equal to
The Notes and the Guarantees rank equally in right of payment with all of OpCo’s and the Guarantors’ existing and future senior indebtedness and senior to all of OpCo’s and the Guarantors’ future subordinated indebtedness. The Notes and the Guarantees are effectively subordinated in right of payment to all of OpCo’s and the Guarantors’ existing and future secured debt, including debt under OpCo’s 2025 Revolving Credit Facility (as defined below), to the extent of the value of the assets securing such debt, and will be structurally subordinated to all liabilities of any future subsidiaries of OpCo’s that do not guarantee the Notes.
As of September 30, 2026 and December 31, 2025, the carrying amount and fair value of the Notes are as follows:
|
|
September 30, 2026 |
|
|
December 31, 2025 |
|
||||||||||
|
|
Carrying Amount |
|
|
Estimated Fair Value (1) |
|
|
Carrying Amount |
|
|
Estimated Fair Value (1) |
|
||||
Notes |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
16
LandBridge Company LLC and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)
2025 Revolving Credit Facility
In November 2025, OpCo entered into a revolving credit agreement (as may be amended, restated, supplemented or otherwise modified from time to time, the “2025 Revolving Credit Facility”), which provides for aggregate revolving commitments of $
In August 2026, OpCo entered into an amendment (the “August 2026 Amendment”) to the 2025 Revolving Credit Facility to increase its aggregate revolving commitments from $
Borrowings under the 2025 Revolving Credit Facility are secured by a first-priority lien on substantially all assets of OpCo and its subsidiaries, and are also guaranteed by each of its subsidiaries. The weighted average interest rate on the total amount of borrowings under the 2025 Revolving Credit Facility for the three and nine months ended September 30, 2026 was
Short-term debt issuance costs of $
The 2025 Revolving Credit Facility provides for revolving borrowings subject to compliance with various financial and other covenants common in such agreements that apply to OpCo and its restricted subsidiaries, including (i) a minimum interest coverage ratio of
These covenants are subject to exceptions and qualifications provided in the 2025 Revolving Credit Facility, including the ability to make unlimited restricted payments subject to (i) a maximum net total leverage ratio of less than
Principal amounts borrowed under the 2025 Revolving Credit Facility may be prepaid from time to time and commitments thereunder may be terminated without premium or penalty. Any principal amounts outstanding on the Maturity Date will become due and payable on such date.
At OpCo’s election, principal amounts under the 2025 Revolving Credit Facility may be borrowed as Term SOFR Loans or Base Rate Loans. Term SOFR Loans under the 2025 Revolving Credit Facility bear interest at a variable rate equal to Term SOFR for the applicable tenor plus a leverage-based applicable margin between
17
LandBridge Company LLC and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)
Shareholders’ Equity
Holders of Class A shares and Class B shares vote together as a single class on all matters presented to our shareholders, except as otherwise required by applicable law or by the Company’s First Amended & Restated Limited Liability Company Agreement, dated as of July 1, 2024. Class B shares are not entitled to participate in any dividends the Company’s board of directors may declare.
Share Repurchase Program
On February 24, 2026, the Company’s board of directors approved a share repurchase program. The program permits the repurchase of up to $
Redemptions
During the nine months ended September 30, 2026, LandBridge Holdings LLC and Stable Land Resources, LLC redeemed
Cancellations
In lieu of the payment of tax distributions by OpCo to the Company in excess of the Company’s then-current income tax obligation, OpCo and the Company cancelled OpCo Units held by Class B shareholders, along with a corresponding number of Class B shares. The number of cancelled OpCo Units was determined based on the Company’s volume weighted average Class A share price for the
|
|
|
|
|
|
Nine Months Ended |
|
|||||
Class B Share Cancellations Due to Tax Distributions |
|
|
|
2026 |
|
|
2025 |
|
||||
First Quarter |
|
|
|
|
|
|
|
|
|
|
||
Second Quarter |
|
|
|
|
|
|
|
|
|
|
||
Third Quarter |
|
|
|
|
|
|
|
|
|
|
||
Total |
|
|
|
|
|
|
|
|
|
|
||
Dividends and Distributions
(in thousands, except for per share amounts) |
|
Date of Record |
|
Dividends Paid to Class A Shareholders |
|
|
Distributions |
|
|
Rate Per |
|
|||
2026: |
|
|
|
|
|
|
|
|
|
|
|
|||
First Quarter |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Second Quarter |
|
|
|
|
|
|
|
|
$ |
|
||||
Third Quarter |
|
|
|
|
|
|
|
|
$ |
|
||||
Total |
|
|
|
$ |
|
|
$ |
|
|
|
|
|||
2025: |
|
|
|
|
|
|
|
|
|
|
|
|||
First Quarter |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Second Quarter |
|
|
|
|
|
|
|
|
$ |
|
||||
Third Quarter |
|
|
|
|
|
|
|
|
$ |
|
||||
Total |
|
|
|
$ |
|
|
$ |
|
|
|
|
|||
18
LandBridge Company LLC and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)
|
|
|
|
|
|
Nine Months Ended |
|
|||||
Tax Distributions to OpCo Unitholders(1) |
|
|
|
|
|
2026 |
|
|
2025 |
|
||
First Quarter |
|
|
|
|
|
$ |
|
|
$ |
|
||
Second Quarter |
|
|
|
|
|
|
|
|
|
|
||
Third Quarter |
|
|
|
|
|
|
|
|
|
|
||
Total |
|
|
|
|
|
$ |
|
|
$ |
|
||
A summary of the Company’s aggregate share-based compensation expense is shown below. Share-based compensation expense related to LBH Management Units (defined below) that is allocated to the Company is recognized as a deemed non-cash contribution to shareholders’ equity on the condensed consolidated balance sheets. Substantially all share-based compensation expense is included in general and administrative expense on the condensed consolidated statements of operations.
Prior to May 1, 2026, management incentive units consisted of time-based awards of profits interests in LandBridge Holdings (“LBH Incentive Units”). Effective May 1, 2026, LandBridge Holdings recapitalized all outstanding equity interests of LandBridge Holdings, including profits interests, into a single class of equity (the “Recapitalization”) consisting of common units representing equity interests in LandBridge Holdings (collectively with LBH Incentive Units, the “LBH Management Units”). The Recapitalization did not modify (i) any of the inputs used in determining the fair-value-based measurement of the awards, (ii) the vesting conditions, vesting schedules or other substantive terms of the awards, and (iii) the equity classification of the awards. Accordingly, the Company determined the Recapitalization did not constitute a modification under ASC 718-20-35 and no incremental compensation cost was recognized.
Any actual cash expense associated with LBH Management Units will be borne solely by LandBridge Holdings and not the Company. LBH Management Units are not dilutive of public ownership.
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
LBH Management Units |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Restricted Share Units |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total share-based compensation expense |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Subsequent to the Recapitalization discussed above, the LBH Incentive Units are no longer outstanding. However, the LandBridge Holdings common units will continue to vest under the existing terms, and therefore the Company will continue to recognize the associated share-based compensation expense. As of September 30, 2026, remaining unrecognized compensation expense for the LBH Management Units was $
Restricted Share Units
Under the Company’s Long Term Incentive Plan, participants were granted restricted share units (“RSUs”) which are subject to graded vesting generally ranging from one to three years. The fair value of the awards is based on the Company’s Class A share price on the date of grant with compensation expense recognized on a straight-line basis over the applicable vesting period.
19
LandBridge Company LLC and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)
A summary of RSU activity during the nine months ended September 30, 2026 is shown in the following table:
|
|
RSUs |
|
|
Weighted Average Grant Date Fair Value |
|
||
Nonvested at December 31, 2025 |
|
|
|
|
$ |
|
||
Granted |
|
|
|
|
$ |
|
||
Forfeited |
|
|
( |
) |
|
$ |
|
|
Vested (1) |
|
|
( |
) |
|
$ |
|
|
Nonvested at September 30, 2026 |
|
|
|
|
$ |
|
||
As of September 30, 2026, remaining unrecognized compensation expense for the RSUs was $
The Company’s unvested RSUs are deemed to be participating securities; therefore, the Company applies the two-class method for the calculation of basic earnings per share (“EPS”) for the Class A shares. Diluted EPS attributable to Class A shares is calculated under both the two-class method and the treasury stock method, and the more dilutive of the two calculations is presented.
Class B shares are considered potentially dilutive of Class A shares because Class B shares are convertible into Class A shares on a one-for-one basis; therefore, the Company applies the if-converted method for the calculation of diluted EPS for the Class A shares.
The following table sets forth the computation of basic and diluted EPS attributable to our Class A shares for the three and nine months ended September 30, 2026 and 2025.
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
(in thousands, except for share and per share amounts) |
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Numerator |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Less: Net income attributable to noncontrolling interest |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income attributable to LandBridge Company LLC |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Less: Earnings allocated to participating securities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic net income attributable to LandBridge Company LLC |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Plus: Net income attributable to noncontrolling interest |
|
|
- |
|
|
|
|
|
|
|
|
|
|
|||
Plus: Undistributed earnings reallocation adjustment to participating securities |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
Diluted net income attributable to shareholders |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Denominator |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic weighted average shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Dilutive Class B shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Diluted weighted average shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic net income per share of Class A shares |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Diluted net income per share of Class A shares |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
20
LandBridge Company LLC and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)
For the three and nine months ended September 30, 2026, weighted-average RSUs of
|
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
Financial Statements Location |
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Revenues - Related Party |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Affiliate facility access agreements |
Surface use royalties - related party |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Lease development agreement |
Easements and other surface-related revenues - related party |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Affiliate facility access agreements |
Easements and other surface-related revenues - related party |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Affiliate facility access agreements |
Resource royalties - related party |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Affiliate facility access agreements |
Resource sales - related party |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
|
September 30, |
|
|
December 31, |
|
||
|
Financial Statements Location |
|
2026 |
|
|
2025 |
|
||
Accounts Receivable - Related Party |
|
|
|
|
|
|
|
||
Affiliate facility access agreements |
Related party accounts receivable |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
|
||
Accounts Payable - Related Party |
|
|
|
|
|
|
|
||
Shared services agreement |
Related party accounts payable |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
|
||
Contract Liabilities - Related Party |
|
|
|
|
|
|
|
||
Affiliate facility access agreements |
Contract liabilities |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
|
||
Deferred Rent - Related Party |
|
|
|
|
|
|
|
||
Affiliate facility access agreements |
Other long-term liabilities |
|
$ |
|
|
$ |
|
||
Shared Services Agreement
The Company is party to a services agreement with WaterBridge, an affiliate of the Company, pursuant to which the Company receives common management and general, administrative, overhead and operating services in support of the Company’s operations and development activities. The Company reimburses all fees incurred by WaterBridge for services provided to the Company under the agreement. For shared services, the basis of allocation is an approximation of time spent on activities supporting the Company. For shared expenses paid on behalf of the Company, the costs are directly allocated to the Company based on its pro rata share of the expenses. For the three months ended September 30, 2026 and 2025, the Company paid approximately $
Affiliate Facility Access Agreements
DBR Land LLC, a Delaware limited liability company and subsidiary of the Company (“DBR”), is party to facility access, surface use agreements and easements and rights-of-way with subsidiaries of WaterBridge. Under these agreements, the Company has granted WaterBridge certain rights to construct, operate and maintain produced water, brackish water and environmental waste management facilities on the Company’s land, as applicable, in the ordinary course of business. Each of these agreements includes a standard fee schedule and provision for specified surface use activities. Each of these agreements also includes a provision for royalties related to certain specified activities.
21
LandBridge Company LLC and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)
Legacy Financial Sponsor Services Agreement
Five Point Infrastructure LLC (“Five Point”), the Company’s legacy financial sponsor, invoices the Company, and the Company reimburses Five Point in cash, for expenses associated with the Company’s use of Five Point’s geographic information system (“GIS”) and certain legal services provided by Five Point. The reimbursement includes allocated Five Point personnel costs and third-party software and hardware expenses and is determined based on the Company’s use of Five Point’s total services for such period. For the three months ended September 30, 2026 and 2025, the Company paid reimbursements to Five Point of $
PowerBridge Lease Development Agreement and Ground Lease
The Company is party to a lease development agreement with PowerBridge LLC, a portfolio company of Five Point (“PowerBridge”). The lease development agreement provides PowerBridge the option to lease up to approximately
Land Acquisition from WaterBridge
In September 2026, the Company acquired approximately
Concurrent with such acquisition, the Company and WaterBridge entered into a long-term surface use agreement on terms substantially similar to the existing affiliate surface use agreements between the Company and WaterBridge described above. Under such agreement, WaterBridge has certain rights to construct, operate and maintain an environmental waste management facility. Refer to Note 4 — Asset Acquisitions for additional information.
Desert 302 Transaction
In August 2026, the Company sold a permit for an environmental waste management facility to WaterBridge and concurrently entered into a long-term surface use agreement with WaterBridge on terms substantially similar to the existing affiliate surface use agreements between the Company and WaterBridge described above. The Company received $
Acquisitions
Subsequent to the third quarter of 2026, the Company used cash on hand to acquire approximately
Debt
On October 1, 2026, OpCo issued an additional $
22
LandBridge Company LLC and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)
Dividends and Distributions
On
On November 3, 2026, the Company’s board of directors, acting on behalf of the Company in its capacity as the managing member of OpCo, approved a payment for tax distributions from OpCo to OpCo unitholders (other than the Company) in the amount of $
23
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations is based on, and should be read in conjunction with, the audited consolidated financial statements and related notes in our Annual Report on Form 10‑K for the fiscal year ended December 31, 2025 (the “2025 Form 10‑K”) and the accompanying unaudited condensed consolidated financial statements (“Financial Statements”) and notes thereto in “Part I — Item 1. Financial Statements” of this Quarterly Report.
The following discussion contains “forward-looking statements” reflecting our current expectations, future plans, estimates, beliefs and assumptions concerning events and financial trends that may be outside our control and may affect our future results of operations, cash flows and financial position. Actual results and the timing of events may differ materially from those contained in these forward-looking statements due to a number of factors, which include those factors discussed below and elsewhere in this Quarterly Report, particularly in the sections titled “Part I — Item 1A. Risk Factors” in the 2025 Form 10-K and “Cautionary Note Regarding Forward-Looking Statements,” all of which are difficult to predict. In light of these risks, uncertainties and assumptions, actual results may differ materially from such forward-looking statements. We do not undertake any obligation to publicly update any forward-looking statements except as otherwise required by applicable law.
Unless the context otherwise requires, references to “LandBridge,” the “Company,” “we,” “us,” “our” and similar terms refer to (i) LandBridge Company LLC and its subsidiaries prior to the Conversion and Redomestication and (ii) LandBridge Corporation and its subsidiaries following the Conversion and Redomestication.
Overview
Land is a fundamental requirement for the development and production of energy and the construction and operation of critical infrastructure. As of September 30, 2026, we owned or managed more than 350,000 surface acres in the Delaware Basin and adjacent Central Basin Platform sub-regions in the prolific Permian Basin, which is the most active area for oil and gas exploration and development in the United States. Access to expansive surface acreage is necessary for oil and natural gas development, solar power generation, power storage, digital infrastructure and non-hazardous oilfield reclamation and solid waste facilities. Further, the significant industrial economy that exists to service and support energy and infrastructure development requires access to surface acreage to support those activities. Our strategy is to actively manage our land and resources to support and encourage energy and infrastructure development and other land uses that will generate long-term revenue and Free Cash Flow for us and returns to our shareholders.
We share a legacy financial sponsor, Five Point, and our management team with WaterBridge. WaterBridge is one of the largest water midstream companies in the United States and operates a large-scale network of pipelines and other infrastructure in the Delaware Basin. These relationships provide our shared management team visibility into key areas of oil and natural gas production and long-term trends, which we leverage to encourage and support the development of critical infrastructure on our land and generate additional revenue for us. We receive royalties for each barrel of produced water that WaterBridge handles on our land as well as surface use payments for infrastructure constructed on our land.
Recent Developments
On October 1, 2026, OpCo issued an additional $125.0 million aggregate principal amount of 6.25% fixed-rate senior unsecured notes due 2030 (the “Additional Notes”) under the indenture, dated November 25, 2025, by and among OpCo, all of OpCo’s existing subsidiaries (collectively, the “Guarantors”) and UMB Bank, N.A., as trustee (the “Indenture”), entered in connection with OpCo’s issuance of $500.0 million aggregate principal amount of 6.25% fixed-rate senior unsecured notes due 2030 (the “Notes”). The Additional Notes have terms identical to those of the Notes, other than the issue date and issue price. The Additional Notes and the Notes are treated as a single series for all purposes under the Indenture, bringing the total aggregate principal amount to $625.0 million.
On October 13, 2026 (the “Effective Date”), LandBridge completed the Conversion and Redomestication. On the Effective Date, each outstanding Class A share and Class B share representing limited liability company interests of the Company was converted, on a one-for-one basis, into one share of Class A common stock, par value $0.001 per share (“Class A Common Stock”) or Class B common stock, par value $0.001 per share (“Class B Common Stock” and, together with the Class A Common Stock, the “Common Stock”), as applicable.
In September 2026, following the partial execution of its option to lease, the Company and PowerBridge entered into a ground lease for an initial 825-acre portion of up to approximately 3,400 total acres under option for the previously announced Alpha Digital Campus on LandBridge’s acreage in Reeves County, Texas (“Alpha Phase I”). On September 1, 2026, PowerBridge and LandBridge entered into a long-term ground lease for Alpha Phase I and concurrently entered into a power royalty agreement for power generated by PowerBridge on the Alpha Phase I campus. PowerBridge subsequently commenced construction on Alpha Phase I in September 2026, which is expected to include more than 300 megawatts of the planned 2 gigawatt powered data center campus project on the Alpha Digital Campus, with first power delivery date anticipated in the fourth quarter of 2027.
24
Market Condition and Outlook
The global economy and the oil and natural gas industry have continued to face substantial volatility, driven by geopolitical conflicts, domestic political uncertainties, potential U.S. and foreign tariffs, evolving international trade policies and conflicts, OPEC+ production decisions, persistent elevated inflation, higher interest rates and capital costs and continued industry consolidation. In particular, the war between the United States and Iran (the “Iran War”) has driven significant commodity price and inflation volatility during 2026. Ongoing disruption in the Strait of Hormuz, a key global oil and petrochemical chokepoint, has contributed to elevated commodity prices and shipping costs. Further escalation could increase prices further, while de-escalation could cause prices to decline, and either outcome may influence E&P operators’ drilling and production decisions. Given the unresolved nature of the Iran War, we cannot predict the extent or duration of related volatility or its ultimate impact on our business. In addition, while new pipeline capacity placed in service in 2026 has eased natural gas takeaway constraints in the Permian Basin, realized prices at the Waha Hub remain volatile, which may influence E&P operators’ development plans, rig counts and overall activity levels. The Federal Reserve’s recent interest rate increase and a stronger U.S. dollar have also increased capital costs, which may temper E&P operators’ spending despite elevated oil prices.
Broader macroeconomic and policy developments and shifts in international trade policies (such as the imposition of tariffs or product restrictions) could impair our customers’ ability to secure raw materials, equipment or financing. This, in turn, may reduce their operational activity on or around our surface acreage in the Delaware Basin. Any escalation in U.S. trade disruptions or retaliatory measures from other nations could adversely affect demand for our land.
Despite these challenges, we believe the outlook for energy and infrastructure development, particularly within the Permian Basin, remains positive. E&P activity in the Permian Basin, including the Delaware Basin, has remained largely resilient given favorable well economics. This continued development may be aided by President Trump’s various executive orders relating to energy production, which include expedited approvals for energy resource infrastructure and the removal of various impediments to the development of domestic energy resources, including oil and gas. We are well positioned to benefit from the continued build-out of supporting infrastructure in the region, which will require access to surface acreage. In addition, we expect to benefit from growing demand for digital infrastructure, such as data centers, and from advancements in alternative forms of energy, both of which often require access to material surface acreage and supporting infrastructure that we are well positioned to provide and facilitate.
Third Quarter Results
Significant financial and operating highlights for the third quarter of 2026 include:
Factors Affecting the Comparability of Our Results of Operations
Our future results of operations may not be directly comparable to our historical results of operations for the periods presented, primarily for the reasons described below.
Acquisitions
Subsequent to the third quarter of 2025, we acquired approximately 72,000 acres, inclusive of approximately 12,000 leasehold acres and approximately 3,600 acres subject to a long-term management agreement, through various acquisitions including the 1918
25
Acquisition, which will impact the comparability of our results of operations. We expect to pursue opportunistic future land acquisitions that complement or expand our current land position, which may impact the comparability of our results.
Credit Facility and Notes
In November 2025, OpCo entered into a revolving credit agreement (as may be amended, restated, supplemented or otherwise modified from time to time, the “2025 Revolving Credit Facility”), which provides for aggregate revolving commitments of $275.0 million and matures on the earlier of (a) June 30, 2030, and (b) the date that is 91 days prior to the stated maturity of the Notes, if, on such date, the outstanding principal amount of the Notes is greater than $50 million (the “Maturity Date”).
In August 2026, OpCo entered into an amendment (the “August 2026 Amendment”) to the 2025 Revolving Credit Facility to increase aggregate revolving commitments from $275.0 million to $375.0 million through the full exercise of the incremental commitment capacity available under the 2025 Revolving Credit Facility and established an additional incremental commitment capacity of up to $100.0 million, which may be exercised by OpCo from time to time, subject to the receipt of additional lender commitments and satisfaction of the other conditions set forth in the 2025 Revolving Credit Facility. The August 2026 Amendment also reduced the applicable margins and the applicable percentage for letter of credit fees for each pricing level by 0.25%. All other material terms of the 2025 Revolving Credit Facility, including the Maturity Date, the commitment fee and the financial and other covenants, remained unchanged after giving effect to the August 2026 Amendment.
In November 2025, OpCo, as the issuer, issued $500.0 million aggregate principal amount of 6.25% fixed-rate senior unsecured notes due 2030.
Refer to Note 7 — Debt within the notes to our unaudited condensed consolidated financial statements for additional information on our 2025 Revolving Credit Facility and Notes.
Results of Operations
Three Months Ended September 30, 2026 Compared to Three Months Ended September 30, 2025
|
Three Months Ended September 30, |
|
|
Variance |
|
||||||||||
|
2026 |
|
|
2025 |
|
|
Amount |
|
|
Percent (1) |
|
||||
Revenues: |
|
|
|
|
|
|
|
|
|||||||
Surface use royalties |
$ |
26,372 |
|
|
$ |
18,387 |
|
|
$ |
7,985 |
|
|
|
43 |
% |
Easements and other surface-related revenues |
|
27,938 |
|
|
|
16,647 |
|
|
|
11,291 |
|
|
|
68 |
% |
Resource sales |
|
6,726 |
|
|
|
5,232 |
|
|
|
1,494 |
|
|
|
29 |
% |
Resource royalties |
|
5,794 |
|
|
|
5,533 |
|
|
|
261 |
|
|
|
5 |
% |
Oil and gas royalties |
|
4,060 |
|
|
|
3,332 |
|
|
|
728 |
|
|
|
22 |
% |
Other |
|
- |
|
|
|
1,700 |
|
|
|
(1,700 |
) |
|
|
(100 |
%) |
Total revenues |
|
70,890 |
|
|
|
50,831 |
|
|
|
20,059 |
|
|
|
39 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Resource sales-related expense |
|
1,094 |
|
|
|
438 |
|
|
|
656 |
|
|
|
150 |
% |
Other operating and maintenance expense |
|
1,370 |
|
|
|
1,160 |
|
|
|
210 |
|
|
|
18 |
% |
General and administrative expense |
|
15,890 |
|
|
|
15,864 |
|
|
|
26 |
|
|
NM |
|
|
Depreciation, depletion and amortization |
|
4,555 |
|
|
|
2,584 |
|
|
|
1,971 |
|
|
|
76 |
% |
Other operating income, net |
|
(266 |
) |
|
|
(100 |
) |
|
|
(166 |
) |
|
|
166 |
% |
Operating income |
|
48,247 |
|
|
|
30,885 |
|
|
|
17,362 |
|
|
|
56 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest expense |
|
9,854 |
|
|
|
7,889 |
|
|
|
1,965 |
|
|
|
25 |
% |
Income before income taxes |
|
38,393 |
|
|
|
22,996 |
|
|
|
15,397 |
|
|
|
67 |
% |
Income tax expense |
|
4,345 |
|
|
|
2,705 |
|
|
|
1,640 |
|
|
|
61 |
% |
Net income |
$ |
34,048 |
|
|
$ |
20,291 |
|
|
$ |
13,757 |
|
|
|
68 |
% |
Total revenues. Total revenues increased by $20.1 million for the three months ended September 30, 2026, as compared to the three months ended September 30, 2025. Please see our discussion below regarding comparative period variances in revenue sources.
Surface use royalties. Surface use royalties increased by $8.0 million for the three months ended September 30, 2026, as compared to the three months ended September 30, 2025. The increase was attributable to increased produced water handling and associated skim
26
oil royalties on our surface. The increase associated with produced water handling royalties is primarily driven by a significant increase in produced water handling volume of approximately 652 MBbl/d. The volume and associated revenue increase was primarily attributable to the Wolf Bone Ranch Acquisition and the 1918 Acquisition coupled with organic growth on our overall Stateline Position.
Easements and other surface-related revenues. Easements and other surface-related revenues increased by $11.3 million for the three months ended September 30, 2026, as compared to the three months ended September 30, 2025. The increase was primarily attributable to oil and natural gas gathering and transportation pipelines and produced water handling infrastructure of $15.5 million partially offset by a decrease of $2.6 million in road easements and $1.6 million in subsurface easements during the three months ended September 30, 2025.
Resource sales. Resource sales increased by $1.5 million for the three months ended September 30, 2026, as compared to the three months ended September 30, 2025. The increase was primarily attributable to caliche sales of $0.8 million due to construction of infrastructure assets in the areas surrounding our surface acreage and brackish water sales of $0.7 million. Brackish water sales volume were relatively flat at 10.1 million barrels for the three months ended September 30, 2026, as compared to 10.0 million barrels for the three months ended September 30, 2025, with a per unit sales price increase of approximately 19%, primarily driven by the customer contract mix and job locations for the three months ended September 30, 2026, as compared to the three months ended September 30, 2025.
Oil and gas royalties. Oil and gas royalties increased by $0.7 million for the three months ended September 30, 2026, as compared to the three months ended September 30, 2025. The increase was primarily attributable to higher realized commodity prices of $0.7 million due to higher oil and condensate prices.
Other revenue. Other revenue decreased by $1.7 million for the three months ended September 30, 2026, as compared to the three months ended September 30, 2025. The decrease is attributable to the minimum revenue commitment (“MRC”) related to the Wolf Bone Ranch Acquisition recognized during the three months ended September 30, 2025. The MRC is being met during the three months ended September 30, 2026.
Resource sales-related expense. Resource sales-related expense increased by $0.7 million for the three months ended September 30, 2026, as compared to the three months ended September 30, 2025. The increase is related to higher brackish water purchases of $0.4 million related to brackish water sales and brackish water royalties of $0.2 million related to managed water assets utilized in conjunction with assets acquired in the 1918 Acquisition.
|
Three Months Ended September 30, |
|
|
Variance |
|
||||||||||
|
2026 |
|
|
2025 |
|
|
Amount |
|
|
Percent (1) |
|
||||
General and administrative expense: |
|
|
|
|
|
|
|
|
|
|
|
||||
General and administrative expense, excluding share-based compensation |
$ |
6,798 |
|
|
$ |
4,700 |
|
|
$ |
2,098 |
|
|
|
45 |
% |
Share-based compensation |
|
9,092 |
|
|
|
11,164 |
|
|
|
(2,072 |
) |
|
|
(19 |
%) |
Total general and administrative expense |
$ |
15,890 |
|
|
$ |
15,864 |
|
|
$ |
26 |
|
|
NM |
|
|
General and administrative expense. General and administrative expense, excluding share-based compensation expense, increased by $2.1 million for the three months ended September 30, 2026, as compared to the three months ended September 30, 2025. The increase was primarily attributable to higher professional services fees of $0.9 million primarily related to the corporate conversion, corporate shared services allocation from WaterBridge of $0.7 million to support underlying growth of the business, personnel-related expenses of $0.3 million due to incremental personnel headcount and $0.2 million of other corporate expenses primarily related to ratings agency monitoring and board-related fees.
Share-based compensation decreased by $2.1 million for the three months ended September 30, 2026, as compared to the three months ended September 30, 2025. The decrease is attributable to lower amortization of $2.6 million related to fully amortized LBH Management Units partially offset by higher restricted share units (“RSUs”) amortization of $0.5 million related to new issuances.
Depreciation, depletion and amortization. Depreciation, depletion and amortization increased by $2.0 million for the three months ended September 30, 2026, as compared to the three months ended September 30, 2025. The increase was primarily attributable to amortization of intangible assets acquired in the 1918 Acquisition during 2025.
27
|
Three Months Ended September 30, |
|
|
Variance |
|
||||||||||
|
2026 |
|
|
2025 |
|
|
Amount |
|
|
Percent |
|
||||
Interest on debt |
$ |
9,246 |
|
|
$ |
7,349 |
|
|
$ |
1,897 |
|
|
|
26 |
% |
Debt issuance costs amortization |
|
608 |
|
|
|
540 |
|
|
|
68 |
|
|
|
13 |
% |
Total interest expense |
$ |
9,854 |
|
|
$ |
7,889 |
|
|
$ |
1,965 |
|
|
|
25 |
% |
Interest expense. Interest expense increased by $2.0 million for the three months ended September 30, 2026, as compared to the three months ended September 30, 2025. The increase was primarily attributable to a higher interest of $3.9 million due to a higher weighted average debt balance during the three months ended September 30, 2026 partially offset by lower interest of $2.0 million due to a lower weighted average interest rate on the Notes and 2025 Revolving Credit Facility.
Income tax expense. Income tax expense increased by $1.6 million for the three months ended September 30, 2026, as compared to the three months ended September 30, 2025. The increase was primarily attributable to higher taxable income, while the effective tax rate remained relatively consistent.
28
Nine Months Ended September 30, 2026 Compared to Nine Months Ended September 30, 2025
|
Nine Months Ended September 30, |
|
|
Variance |
|
||||||||||
|
2026 |
|
|
2025 |
|
|
Amount |
|
|
Percent (1) |
|
||||
Revenues: |
|
|
|
|
|
|
|
|
|||||||
Surface use royalties |
$ |
74,170 |
|
|
$ |
52,518 |
|
|
$ |
21,652 |
|
|
|
41 |
% |
Easements and other surface-related revenues |
|
69,304 |
|
|
|
42,940 |
|
|
|
26,364 |
|
|
|
61 |
% |
Resource sales |
|
18,437 |
|
|
|
18,220 |
|
|
|
217 |
|
|
|
1 |
% |
Resource royalties |
|
16,153 |
|
|
|
17,485 |
|
|
|
(1,332 |
) |
|
|
(8 |
%) |
Oil and gas royalties |
|
10,606 |
|
|
|
9,452 |
|
|
|
1,154 |
|
|
|
12 |
% |
Other |
|
65 |
|
|
|
1,700 |
|
|
|
(1,635 |
) |
|
|
(96 |
%) |
Total revenues |
|
188,735 |
|
|
|
142,315 |
|
|
|
46,420 |
|
|
|
33 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Resource sales-related expense |
|
2,624 |
|
|
|
1,384 |
|
|
|
1,240 |
|
|
|
90 |
% |
Other operating and maintenance expense |
|
3,967 |
|
|
|
3,349 |
|
|
|
618 |
|
|
|
18 |
% |
General and administrative expense |
|
47,516 |
|
|
|
45,356 |
|
|
|
2,160 |
|
|
|
5 |
% |
Depreciation, depletion and amortization |
|
13,354 |
|
|
|
7,730 |
|
|
|
5,624 |
|
|
|
73 |
% |
Other operating (income) expense, net |
|
(309 |
) |
|
|
71 |
|
|
|
(380 |
) |
|
|
(535 |
%) |
Operating income |
|
121,583 |
|
|
|
84,425 |
|
|
|
37,158 |
|
|
|
44 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest expense |
|
28,555 |
|
|
|
23,745 |
|
|
|
4,810 |
|
|
|
20 |
% |
Other expense, net |
|
27 |
|
|
|
- |
|
|
|
27 |
|
|
NM |
|
|
Income before income taxes |
|
93,001 |
|
|
|
60,680 |
|
|
|
32,321 |
|
|
|
53 |
% |
Income tax expense |
|
10,036 |
|
|
|
6,455 |
|
|
|
3,581 |
|
|
|
55 |
% |
Net income |
$ |
82,965 |
|
|
$ |
54,225 |
|
|
$ |
28,740 |
|
|
|
53 |
% |
Total revenues. Total revenues increased by $46.4 million for the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025. Please see our discussion below regarding comparative period variances in revenue sources.
Surface use royalties. Surface use royalties increased by $21.7 million for the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025. The increase was attributable to increased produced water handling and associated skim oil royalties of $21.3 million and solid waste disposal and reclamation royalties of $0.4 million on our surface. The increase associated with produced water handling royalties is primarily driven by a significant increase in produced water handling volume of approximately 530 MBbl/d. The volume and associated revenue increase was primarily attributable to the Wolf Bone Ranch Acquisition and 1918 Acquisition as well as continued development across our Stateline Position.
Easements and other surface-related revenues. Easements and other surface-related revenues increased by $26.4 million for the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025. The increase was primarily attributable to oil and natural gas gathering and transportation pipelines and produced water handling infrastructure of $29.3 million partially offset by a decrease of $1.5 million in road easements and $1.4 million in subsurface easements during the nine months ended September 30, 2025.
Resource royalties. Resource royalties decreased by $1.3 million for the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025. The decrease was primarily attributable to lower sand mine royalties of $0.8 million and brackish water royalties of $0.5 million primarily related to lower produced royalty volumes. Brackish water royalty volume decreased by 3.3 million barrels, or 12%, to 24.5 million barrels for the nine months ended September 30, 2026, as compared to 27.8 million barrels for the nine months ended September 30, 2025, partially offset by a per unit royalty price increase of approximately 8%, primarily driven by the customer contract mix and minimum royalty payments for the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025.
Other revenue. Other revenue decreased by $1.6 million for the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025. The decrease is attributable to the MRC related to the Wolf Bone Ranch Acquisition recognized during the nine months ended September 30, 2025. The MRC is being met during the nine months ended September 30, 2026.
29
Resource sales-related expense. Resource sales-related expense increased by $1.2 million for the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025. The increase is related to higher brackish water purchases of $0.6 million related to brackish water sales and brackish water royalties of $0.6 million related to managed water assets utilized in conjunction with assets acquired in the 1918 Acquisition.
|
Nine Months Ended September 30, |
|
|
Variance |
|
||||||||||
|
2026 |
|
|
2025 |
|
|
Amount |
|
|
Percent |
|
||||
General and administrative expense: |
|
|
|
|
|
|
|
|
|
|
|
||||
General and administrative expense, excluding share-based compensation |
$ |
16,052 |
|
|
$ |
11,897 |
|
|
$ |
4,155 |
|
|
|
35 |
% |
Share-based compensation |
|
31,464 |
|
|
|
33,459 |
|
|
|
(1,995 |
) |
|
|
(6 |
%) |
Total general and administrative expense |
$ |
47,516 |
|
|
$ |
45,356 |
|
|
$ |
2,160 |
|
|
|
5 |
% |
General and administrative expense. General and administrative expense, excluding share-based compensation expense, increased by $4.2 million for the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025. The increase was primarily attributable to higher professional services fees of $1.8 million primarily related to corporate conversion as well as commercial opportunities, corporate shared services allocation from WaterBridge of $1.2 million to support underlying growth of the business, personnel-related expenses of $0.7 million due to incremental personnel headcount and $0.5 million of other corporate expenses primarily related to ratings agency monitoring and board-related fees.
Share-based compensation decreased by $2.0 million for the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025. The decrease is attributable to lower amortization of $2.6 million related to fully amortized LBH Management Units partially offset by higher RSU amortization of $0.6 million related to new issuances.
Depreciation, depletion and amortization. Depreciation, depletion and amortization increased by $5.6 million for the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025. The increase was primarily attributable to amortization of intangibles acquired in the 1918 Acquisition during 2025.
|
Nine Months Ended September 30, |
|
|
Variance |
|
||||||||||
|
2026 |
|
|
2025 |
|
|
Amount |
|
|
Percent |
|
||||
Interest on debt |
$ |
26,809 |
|
|
$ |
22,126 |
|
|
$ |
4,683 |
|
|
|
21 |
% |
Debt issuance costs amortization |
|
1,746 |
|
|
|
1,619 |
|
|
|
127 |
|
|
|
8 |
% |
Total interest expense |
$ |
28,555 |
|
|
$ |
23,745 |
|
|
$ |
4,810 |
|
|
|
20 |
% |
Interest expense. Interest expense increased by $4.8 million for the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025. The increase was primarily attributable to higher interest of $10.7 million due to a higher weighted average debt balance of $184.0 million, partially offset by lower interest of $6.3 million due to a lower weighted average interest rate on the Notes and 2025 Revolving Credit Facility.
Income tax expense. Income tax expense increased by $3.6 million for the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025. The increase was primarily attributable to higher taxable income, while the effective tax rate remained relatively consistent.
Non-GAAP Financial Measures
We use certain non-GAAP performance measures to evaluate current and past performance and prospects for the future to supplement our financial information presented in accordance with GAAP. Although these non-GAAP financial and liquidity measures are important
30
factors in assessing our operating results, profitability and performance, they should not be considered in isolation or as a substitute for net income or gross margin or any other measures presented under GAAP.
Adjusted EBITDA and Adjusted EBITDA Margin
Adjusted EBITDA and Adjusted EBITDA Margin are used by our management and by external users of our financial statements, such as investors, research analysts and others, to assess the financial performance of our assets over the long term to generate sufficient cash to return capital to equity holders or service indebtedness. We define Adjusted EBITDA as net income (loss) before interest; taxes; depreciation, depletion and amortization; share-based compensation; non-recurring transaction-related expenses; litigation settlements and expenses incurred outside of the ordinary course of business; debt modification and extinguishment costs; gains or losses on disposal of assets; and other non-cash or non-recurring expenses. We define Adjusted EBITDA Margin as Adjusted EBITDA divided by total revenues.
We exclude the items listed above from net income (loss) in arriving at Adjusted EBITDA and Adjusted EBITDA Margin because these amounts can vary substantially from company to company within our industry depending upon accounting methods, book values of assets, capital structures and the method by which the assets were acquired.
The following table sets forth a reconciliation of net income and net income margin as determined in accordance with GAAP to Adjusted EBITDA and Adjusted EBITDA Margin for the periods indicated.
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Net income |
|
$ |
34,048 |
|
|
$ |
20,291 |
|
|
$ |
82,965 |
|
|
$ |
54,225 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Depreciation, depletion and amortization |
|
|
4,555 |
|
|
|
2,584 |
|
|
|
13,354 |
|
|
|
7,730 |
|
Interest expense |
|
|
9,854 |
|
|
|
7,889 |
|
|
|
28,555 |
|
|
|
23,745 |
|
Income tax expense |
|
|
4,345 |
|
|
|
2,705 |
|
|
|
10,036 |
|
|
|
6,455 |
|
EBITDA |
|
|
52,802 |
|
|
|
33,469 |
|
|
|
134,910 |
|
|
|
92,155 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Share-based compensation - LBH Management Units |
|
|
6,504 |
|
|
|
9,144 |
|
|
|
24,470 |
|
|
|
27,133 |
|
Share-based compensation - RSUs |
|
|
2,638 |
|
|
|
2,081 |
|
|
|
7,176 |
|
|
|
6,503 |
|
Corporate conversion costs |
|
|
1,224 |
|
|
|
- |
|
|
|
1,224 |
|
|
|
- |
|
Transaction-related expenses |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
135 |
|
Other(1) |
|
|
504 |
|
|
|
156 |
|
|
|
504 |
|
|
|
156 |
|
Adjusted EBITDA |
|
$ |
63,672 |
|
|
$ |
44,850 |
|
|
$ |
168,284 |
|
|
$ |
126,082 |
|
Net income margin |
|
|
48 |
% |
|
|
40 |
% |
|
|
44 |
% |
|
|
38 |
% |
Adjusted EBITDA Margin |
|
|
90 |
% |
|
|
88 |
% |
|
|
89 |
% |
|
|
89 |
% |
31
Free Cash Flow and Free Cash Flow Margin
Free Cash Flow and Free Cash Flow Margin are used by our management and by external users of our financial statements, such as investors, research analysts and others, to assess our ability to repay our indebtedness, return capital to our shareholders and fund potential acquisitions without access to external sources of financing for such purposes. We define Free Cash Flow as cash flow from operating activities less investment in capital expenditures. We define Free Cash Flow Margin as Free Cash Flow divided by total revenues.
The following table sets forth a reconciliation of cash flows from operating activities determined in accordance with GAAP to Free Cash Flow and Free Cash Flow Margin, respectively, for the periods indicated.
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Net cash provided by operating activities |
|
$ |
49,563 |
|
|
$ |
34,912 |
|
|
$ |
132,054 |
|
|
$ |
88,157 |
|
Net cash used in investing activities |
|
|
(267,372 |
) |
|
|
(1,107 |
) |
|
|
(280,794 |
) |
|
|
(21,053 |
) |
Cash (used in) provided by operating and investing activities |
|
|
(217,809 |
) |
|
|
33,805 |
|
|
|
(148,740 |
) |
|
|
67,104 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Acquisitions |
|
|
266,795 |
|
|
|
5 |
|
|
|
278,961 |
|
|
|
18,767 |
|
Proceeds from disposal of assets |
|
|
- |
|
|
|
(85 |
) |
|
|
(55 |
) |
|
|
(210 |
) |
Free Cash Flow |
|
$ |
48,986 |
|
|
$ |
33,725 |
|
|
$ |
130,166 |
|
|
$ |
85,661 |
|
Operating cash flow margin (1) |
|
|
70 |
% |
|
|
69 |
% |
|
|
70 |
% |
|
|
62 |
% |
Free Cash Flow Margin |
|
|
69 |
% |
|
|
66 |
% |
|
|
69 |
% |
|
|
60 |
% |
Liquidity and Capital Resources
Overview
Our primary sources of liquidity are cash flows from operating activities and, if required, proceeds from borrowings under the 2025 Revolving Credit Facility. Our primary liquidity and capital requirements will be for our operating expenses, servicing of our debt, the payment of dividends to our shareholders, general company needs and investing in our business, including the potential acquisition of additional surface acreage. Although we believe that we will be able to partially or fully fund our short-term and long-term capital expenditures, working capital requirements and other capital needs with cash on hand and cash flows from operating activities, we may elect to use borrowings under the 2025 Revolving Credit Facility to finance our operating and investing activities. Refer to Note 7 — Debt within the notes to our unaudited condensed consolidated financial statements for more information.
We strive to maintain financial flexibility and proactively monitor potential capital sources, including equity and debt financing, to meet our target liquidity and capital requirements. If market conditions were to change and our revenues were to decline significantly or operating costs were to increase, our cash flows and liquidity could be reduced and we could be required to seek alternative financing sources.
As of September 30, 2026, the Company had $500.0 million in principal amount of debt related to the Notes and $265.0 million of outstanding borrowings under the 2025 Revolving Credit Facility. As of September 30, 2026, the Company had $126.8 million of liquidity comprised of the $110.0 million of available borrowing capacity under the 2025 Revolving Credit Facility and $16.8 million of cash and cash equivalents.
32
Dividends and Distributions
(in thousands, except for per share amounts) |
Date of Record |
|
Dividends Paid to Class A Shareholders |
|
|
Distributions |
|
|
Rate Per |
|
|||
2026: |
|
|
|
|
|
|
|
|
|
|
|||
First Quarter |
March 5, 2026 |
|
$ |
3,341 |
|
|
$ |
5,910 |
|
|
$ |
0.12 |
|
Second Quarter |
June 4, 2026 |
|
|
3,388 |
|
|
|
5,854 |
|
|
$ |
0.12 |
|
Third Quarter |
August 27, 2026 |
|
|
3,558 |
|
|
|
5,692 |
|
|
$ |
0.12 |
|
Total |
|
|
$ |
10,287 |
|
|
$ |
17,456 |
|
|
|
|
|
2025: |
|
|
|
|
|
|
|
|
|
|
|||
First Quarter |
March 6, 2025 |
|
$ |
2,326 |
|
|
$ |
5,319 |
|
|
$ |
0.10 |
|
Second Quarter |
June 5, 2025 |
|
|
2,515 |
|
|
|
5,124 |
|
|
$ |
0.10 |
|
Third Quarter |
September 4, 2025 |
|
|
2,534 |
|
|
|
5,121 |
|
|
$ |
0.10 |
|
Total |
|
|
$ |
7,375 |
|
|
$ |
15,564 |
|
|
|
|
|
On November 3, 2026, the Company’s board of directors declared a dividend on our Class A Common Stock of $0.12 per share, payable on December 10, 2026 to Class A Common Stock holders of record as of November 25, 2026 and a corresponding required cash distribution to OpCo unitholders.
On November 3, 2026, the Company’s board of directors, acting on behalf of the Company in its capacity as the managing member of OpCo, approved a payment for tax distributions from OpCo to OpCo unitholders (other than the Company) in the amount of $5.2 million. This amount is inclusive of OpCo unitholders’ (other than the Company) pro rata share of estimated federal income tax liability and an additional tax distribution in excess of the Company’s then-current income tax obligation as provided for under the Second Amended and Restated Limited Liability Company Agreement of DBR Land Holdings LLC, dated as of October 13, 2026. This amount is expected to be paid during the fourth quarter of 2026.
Cash Flows
The following table summarizes our cash flow for the nine months ended September 30, 2026 and 2025:
|
Nine Months Ended |
|
|
Variance |
|
||||||||||
(in thousands) |
2026 |
|
|
2025 |
|
|
Amount |
|
|
Percent |
|
||||
Net cash provided by operating activities |
$ |
132,054 |
|
|
$ |
88,157 |
|
|
$ |
43,897 |
|
|
|
50 |
% |
Net cash used in investing activities |
|
(280,794 |
) |
|
|
(21,053 |
) |
|
|
(259,741 |
) |
|
|
1234 |
% |
Net cash provided by (used in) financing activities |
|
134,774 |
|
|
|
(75,820 |
) |
|
|
210,594 |
|
|
|
278 |
% |
Net decrease in cash and cash equivalents |
$ |
(13,966 |
) |
|
$ |
(8,716 |
) |
|
$ |
(5,250 |
) |
|
|
60 |
% |
Net Cash Provided by Operating Activities. Net cash provided by operating activities increased $43.9 million. The increase was attributable to cash flow related to higher net income, net of adjustment items, of $33.7 million and an increase attributable to working capital accounts of $10.2 million. The increase in net income, net of adjustment items, is primarily attributable to revenue growth related to continued commercialization of acreage, partially offset by higher adjustment items, primarily intangible asset amortization related to the 1918 Acquisition in 2025. The increase in cash flow attributable to working capital accounts was primarily attributable to higher accrued interest due to timing of interest payments related to the Notes issued in November 2025.
Net Cash Used in Investing Activities. Net cash used in investing activities increased $259.7 million. The increase was primarily attributable to higher acquisition and acquisition-related expenditures for the nine months ended September 30, 2026 of $279.0 million as compared to $18.8 million for the nine months ended September 30, 2025. See Note 4 — Asset Acquisitions within the notes to our Financial Statements.
Net Cash Provided by (Used in) Financing Activities. Net cash provided by financing activities increased $210.6 million. Net cash provided by financing activities for the nine months ended September 30, 2026 primarily consisted of $192.3 million of debt borrowings, net of repayments and debt issuance costs, partially offset by $50.7 million of dividends, dividend equivalents and distributions paid to
33
shareholders and $6.6 million of required tax withholding related to the net settlement of Class A shares. Net cash used in financing activities for the nine months ended September 30, 2025 primarily consisted of $52.8 million of dividends, dividend equivalents and distributions paid to shareholders, $16.2 million of debt repayments, net of proceeds, $5.7 million of required tax withholding related to the net settlement of Class A shares, and $1.1 million of offering costs paid related to the December 2024 private placement.
Capital Requirements
We focus our business model on entering into agreements under which our customers bear substantially all of the operating and capital expenditures related to their operations on our land, while minimizing our capital requirements for both current and future commercial opportunities, resulting in the ability to create significant Free Cash Flows. Our contracts generally include inflation escalators, which, when combined with our relatively low operating and capital expenditures, may assist in mitigating our exposure to broader inflationary pressures. As a landowner, we incur the initial cost to acquire our acreage, but thereafter we incur modest development capital expenditures and operating expenses as it relates to operations on our land or our mineral and royalty interests, as such expenses are borne primarily by our customers. As a result, we expect that additional significant capital expenditures would be related to our acquisition of additional surface acreage, should we elect to do so.
The amount and allocation of future acquisition-related capital expenditures will depend upon a number of factors, including the size of the acquisition opportunity, our cash flows from operating activities and our investing and financing activities. For the three and nine months ended September 30, 2026, we incurred $266.8 million and $279.0 million in acquisition-related capital expenditures, respectively.
We periodically assess changes in current and projected cash flows, acquisition and divestiture activities and other factors to determine the effects on our liquidity. We believe that our cash on hand and cash flow from operating activities will provide us with sufficient liquidity to execute our current strategy. However, our ability to generate cash is subject to a number of factors that may directly or indirectly affect us, many of which are beyond our control, including commodity prices and general economic, financial, competitive, legislative, regulatory and other factors. If we require additional capital for acquisitions or other reasons, we may seek such capital through traditional borrowings under our debt instruments, offerings of debt and equity securities or other means. If we are unable to obtain funds when needed or on acceptable terms, we may not be able to complete acquisitions that may be favorable to us.
As our board of directors declares cash dividends to our Class A shareholders, we expect the dividend to be paid from Free Cash Flow. We do not currently expect to borrow funds or to adjust planned capital expenditures to finance dividends on our Class A shares. The timing, amount and financing of dividends, if any, will be subject to the discretion of our board of directors from time to time.
Debt Instruments
In November 2025, OpCo entered into the 2025 Revolving Credit Facility, which provides for aggregate revolving commitments of $275.0 million and matures on the Maturity Date.
In August 2026, OpCo entered into the August 2026 Amendment to increase aggregate revolving commitments from $275.0 million to $375.0 million through the full exercise of the incremental commitment capacity available under the 2025 Revolving Credit Facility and establish an additional incremental commitment capacity of up to $100.0 million, which may be exercised by OpCo from time to time, subject to the receipt of additional lender commitments and satisfaction of the other conditions set forth in the 2025 Revolving Credit Facility. The August 2026 Amendment also reduced the applicable margins and the applicable percentage for letter of credit fees for each pricing level by 0.25%. All other material terms of the 2025 Revolving Credit Facility, including the Maturity Date, the commitment fee and the financial and other covenants, remained unchanged after giving effect to the August 2026 Amendment.
In November 2025, OpCo, as the issuer, issued $500.0 million aggregate principal amount of 6.25% fixed-rate senior unsecured notes due 2030.
Refer to Note 7 — Debt within the notes to our unaudited condensed consolidated financial statements for additional information on our 2025 Revolving Credit Facility and the Notes.
34
Share Repurchase Program
On February 24, 2026, our board of directors approved a share repurchase program. The program permits the repurchase of up to $50 million of the Company’s Class A shares through December 2027. The shares may be repurchased from time to time in open market transactions, block trades, accelerated share repurchases, or privately negotiated transactions or by any combination of such methods. The timing, as well as the number and value of shares repurchased under the program, will be determined by the Company at its discretion and will depend on a variety of factors, including management’s assessment of the intrinsic value of the Company’s Class A shares, the market price of the Company’s Class A shares, general market and economic conditions, available liquidity, compliance with the Company’s debt and other agreements, applicable legal requirements, and other considerations. The Company is not obligated to purchase any shares under the share repurchase program, and the program may be suspended, modified or discontinued at any time without prior notice.
Critical Accounting Estimates
The preparation of our Financial Statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the amounts reported in the Financial Statements and the accompanying notes. There have been no significant changes to our critical accounting estimates from those disclosed in the 2025 Form 10-K.
Recently Issued Accounting Pronouncements Not Yet Adopted
For a summary of recently issued accounting pronouncements, refer to Note 2 — Summary of Significant Accounting Policies within the notes to our unaudited condensed consolidated financial statements.
Off Balance Sheet Arrangements
We currently have no material off-balance sheet arrangements.
35
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Interest Rate Risks
Our ability to borrow and the rates offered by lenders can be adversely affected by deterioration in the credit markets and/or deterioration of our credit profile rating. We may elect for outstanding borrowings under the 2025 Revolving Credit Facility to accrue interest at a rate based on either the Term SOFR, or the base rate, plus an applicable margin, which exposes us to interest rate risk to the extent we have borrowings outstanding under the 2025 Revolving Credit Facility.
As of September 30, 2026, we had $265.0 million of outstanding borrowings under the 2025 Revolving Credit Facility. We are obligated to pay interest at variable rates and other customary fees on borrowings under this facility. For the three and nine months ended September 30, 2026, the 2025 Revolving Credit Facility had a weighted average interest rate of 5.57% and 5.79% respectively.
As of September 30, 2026, we also had aggregate principal amounts outstanding of $500.0 million under the Notes. Since our Notes bear interest at fixed rates and are carried at amortized cost, fluctuations in interest rates do not have any impact on our unaudited condensed consolidated financial statements. However, the fair value of the Notes will fluctuate with movements in market interest rates, increasing in periods of declining interest rates and declining in periods of increasing interest rates.
Refer to Note 7 — Debt within the notes to our unaudited condensed consolidated financial statements for more information.
Item 4. Controls and Procedures
Disclosure Controls and Procedures
As required by Rule 13a-15(b) under the Exchange Act, we have evaluated, under the supervision and with the participation of management, including our principal executive officer and principal financial officer, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of September 30, 2026. Based on such evaluation, our principal executive officer and principal financial officer have concluded that, as of such date, our disclosure controls and procedures were effective.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting identified in management’s evaluation pursuant to Rules 13a-15(d) or 15d-15(d) of the Exchange Act during the quarter ended September 30, 2026 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
36
PART II – OTHER INFORMATION
Item 1. Legal Proceedings
Due to the nature of our business, we may become, from time to time, involved in routine litigation or subject to disputes or claims related to our business activities. In the opinion of our management, there are no pending litigation, disputes or claims against us which, if decided adversely, would be expected to have a material adverse effect on our financial condition, cash flows or results of operations.
Item 1A. Risk Factors
This Quarterly Report should be read in conjunction with the risk factors disclosed under the heading “Risk Factors” in the 2025 Form 10-K. There have been no material changes to the risk factors disclosed under the heading “Risk Factors” in the 2025 Form 10-K except as set forth below.
Risks Related to the Conversion and Redomestication
We may fail to realize the anticipated benefits of the Conversion and Redomestication or those benefits may take longer to realize than expected, which could have a material and adverse impact on the trading price of our securities.
We believe that the Conversion and Redomestication will, among other things, improve trading liquidity, expand our global investor base and drive greater value for all of our shareholders over time. However, the level of investor interest in our Common Stock may not meet our expectations. For example, benchmark stock indices may change their eligibility requirements in a manner that is adverse to us or otherwise determine not to include our Common Stock. Moreover, even if we succeed in having our shares included in key stock indices, this may not result in the increased demand for our stock that we anticipate. Consequently, we may fail to realize the anticipated benefits of the Conversion and Redomestication or those benefits may take longer to realize than we expect. Our failure to achieve the anticipated benefits of the Conversion and Redomestication at all or in a timely manner, or a failure of any benefits realized to offset its costs, could have a material and adverse impact on the trading price of our securities.
Our Certificate of Formation includes certain provisions that could increase costs to bring a claim, discourage claims, limit the ability of our shareholders to bring a claim, limit the ability of our shareholders to bring a claim in a judicial forum viewed by the shareholders as more favorable for disputes with us or our directors, officers, or other employees and affect the procedures, rights and remedies available to our shareholders in bringing such claims.
Our Certificate of Formation (the “Charter”) contains a section (the “Forum Selection Provision”) that provides that, unless we consent in writing to the selection of an alternative forum, the Texas Business Court in the Eleventh Business Court Division of the State of Texas (the “Texas Business Court”) will, to the fullest extent permitted by applicable law, be the sole and exclusive forum for (1) any derivative action or proceeding brought on our behalf; (2) any action asserting a claim for or based on a breach of fiduciary duty owed by any of our current or former directors, officers, other employees to us or our shareholders, including any claim alleging a conspiracy to breach a fiduciary duty, knowing participation in a breach of a fiduciary duty, or aiding and abetting a breach of fiduciary duty; (3) any action asserting a claim against us or any current or former director or officer or other employee of ours arising pursuant to any provision of the Texas Business Organizations Code (the “TBOC”) or our Charter or Bylaws; (4) any action to interpret, apply, enforce or determine the validity of our Charter or Bylaws; (5) any action asserting a claim relating to or involving us that is governed by the internal affairs doctrine; (6) any other action asserting an “internal entity claim” as that term is defined in the TBOC; or (7) any other action within the jurisdiction of the Texas Business Court, including any claims within the supplemental jurisdiction of the Texas Business Court (each, an “Internal Dispute”).
The selection of the Texas Business Court as the exclusive forum for Internal Disputes may limit a shareholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, or other employees, which may discourage lawsuits against us and our directors, officers, and other employees. Except to the extent that we consent in writing, or a court of competent jurisdiction determines in a final and unappealable judgment, that an Internal Dispute is not subject to the sole and exclusive venue and forum or jurisdiction of the Texas Business Court or arbitration (as described further below), a shareholder will not be permitted to litigate an Internal Dispute in federal court or in any state court other than the Texas Business Court, and will not be able to avail itself of any potential advantages or potential protections of such other forums, other than with respect to any complaint asserting a cause of action arising under the Securities Act or the Exchange Act. Our Charter provides that, to the fullest extent permitted by applicable law, the United States District Court for the Southern District of Texas, Houston Division (the “Federal Court”) will be the sole and exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act or the Exchange Act. Any person or entity holding or purchasing or otherwise acquiring any interest in shares of our capital stock shall be deemed to have notice of and consented to these provisions and the personal jurisdiction and venue of the Business Court, the Federal Court and the state district court of Texas situated in Harris County (the “Harris County Court”).
37
Further, our Charter provides that, to the fullest extent permitted by law, to the extent a court of competent jurisdiction determines in a final and unappealable judgment that an Internal Dispute is not subject to the exclusive jurisdiction of the Texas Business Court (such dispute, an “Other Dispute”), such Other Dispute will be exclusively and finally settled by arbitration under the Expedited Procedure Provisions of the Rules of the International Chamber of Commerce and governed by the Texas Arbitration Act. The Charter additionally provides that the place of arbitration shall be Houston, Texas and judicial review of the tribunal’s award must be brought in the Texas Business Court. The governing law of such Other Dispute would be the federal law of the United States or the law of the State of Texas, as applicable to the issues raised in the Other Dispute. If a court declines to transfer an Internal Dispute to the Business Court, but such court is later held not to have personal or subject matter jurisdiction with respect to such Internal Dispute, the arbitration provision would not be triggered because such action would be required to be dismissed and subsequently brought in a court of competent jurisdiction.
Given the unsettled nature of the law in this area, there is some risk that a court that has denied a motion to transfer an Internal Dispute to the Texas Business Court pursuant to the Forum Selection Provision would also deny a motion to compel arbitration of such Other Dispute pursuant to the Forum Selection Provision. Accordingly, the Forum Selection Provision further provides that, if the arbitration provisions in our Charter are determined to be unenforceable, the exclusive forum for such disputes will be the Federal Court or, if it lacks jurisdiction, the Harris County Court.
Regardless of the forum, venue or procedures selected for an Internal Dispute or Other dispute, our Charter provides that Internal Disputes and Other Disputes must be brought only as an individual action or derivative proceeding, and, to the fullest extent permitted by law, may not be brought as a class action, mass action, or other form of collective action, and may not be consolidated or joined, in whole or in part, consistent with the Texas Rules of Civil Procedure. However, we may, at our sole option, elect to seek consolidation or joinder of matters as consistent with the Texas Rules of Civil Procedure or Expedited Procedure Provisions of the Rules of the International Chamber of Commerce, respectively.
In addition, our Charter provides that, unless we consent in writing to a jury trial, we and each of our shareholders, directors and officers irrevocably and unconditionally waive any right we or it may have to a trial by jury in any legal action, proceeding, cause of action, cross-claim or counterclaim concerning any “internal entity claim” as that term is defined in Section 2.115 of the TBOC. Our Charter additionally provides that each shareholder agrees that such shareholder’s holding or acquisition of shares of our stock or, to the extent permitted by law, options or rights to acquire shares of our stock, constitutes such shareholder’s intentional and knowing waiver of any right to trial by jury with respect to such claims. This provision is designed to prevent a shareholder from requesting that a jury decide disputed issues of fact and may discourage lawsuits against us and our directors, officers, and other employees.
These dispute resolution rules, as well as the arbitration rules (to the extent they will apply), are different from the procedural rules that would normally apply to the litigation of Internal Disputes in state or federal court. They may prevent a shareholder from availing itself of the procedural protections that would be available under litigation in state or federal court and may render available or affect adversely the rights and remedies available to shareholders in such proceedings. Particularly in the case of arbitration, including its prohibition on class or collective actions, these dispute resolution rules may also result in greater costs being imposed on shareholders to litigate Internal Disputes, and in some cases involving lower amounts in controversy, the additional costs that may be imposed on shareholders to litigate Internal Disputes could exceed the potential recovery from such litigation.
Although we maintain that our Charter, including the Forum Selection Provision, accords with the law and is enforceable, it is possible that one or more provisions of our Charter, including those regarding the exclusive forum for Internal Disputes, mandatory arbitration for Other Disputes, or waiver of the right to proceed on class, mass, or collective basis, may be found by a court to be inapplicable or unenforceable. In addition, the mandatory arbitration provision in our Charter could be subject to litigation or regulatory scrutiny, which could result in the provision being enjoined or additional costs or uncertainty. In such case, we may incur additional costs or delays associated with resolving such actions, including in other jurisdictions, which could adversely affect our business, financial condition, or results of operations.
Additionally, our Charter provides that we affirmatively elect to be governed by Section 21.419 of the TBOC and any successor provision thereto. Section 21.419 sets forth certain presumptions concerning compliance by directors and officers with respect to their duties to a corporation, including the duty of care and duty of loyalty. Specifically, in taking or declining to take any action on any matters of a corporation’s business, Section 21.419 provides that a director or an officer is presumed to have acted (i) in good faith, (ii) on an informed basis, (iii) in furtherance of the interests of the corporation and (iv) in obedience to the law and the corporation’s governing documents. These provisions are described as codifying the “business judgment rule.” In order to succeed in a cause of action against a director or an officer, the Company or a shareholder pursuing such an action must rebut one or more of the foregoing presumptions and prove with particularity the director’s or officer’s act or omission constituted a breach of duty as a director or officer and that such breach involved fraud, intentional misconduct, an ultra vires act or a knowing violation of law.
Our Charter further provides that at any time that we have any series of common stock listed on a national securities exchange (as defined in the TBOC) or have 500 or more shareholders, no shareholder (as defined in the TBOC) may institute or maintain a derivative
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proceeding in our right unless such shareholder, at the time the derivative proceeding is instituted, holds at least three percent of the outstanding shares of our common stock.
These provisions of our Charter may increase costs to bring a claim, discourage claims, limit a shareholder’s ability to bring a claim, limit a shareholder’s ability to bring a claim in a judicial forum that such shareholder finds favorable for disputes with us or our directors, officers, or other employees and affect the procedures, rights and remedies available to our shareholders in bringing such claims. Alternatively, if a court were to find any of the provisions contained in our Charter to be inapplicable or unenforceable in an action, we could incur additional costs associated with resolving such actions, which could adversely affect our results of operations, cash flows and financial position.
Our Charter imposes minimum stock ownership and solicitation requirements on shareholders seeking to submit proposals for shareholder approval, which could limit the ability of our shareholders to bring matters before a meeting of shareholders.
Our Charter provides that we affirmatively elect to be governed by Section 21.373 of the TBOC, including the requirement that, except with respect to director nominations and procedural resolutions ancillary to the conduct of the shareholders’ meeting, to submit a proposal on a matter to the shareholders for approval at a meeting of the shareholders, a shareholder or group of shareholders must satisfy specified ownership, holding period and solicitation requirements. Under these provisions, a shareholder or group of shareholders must (in addition to the other requirements of our Charter and Bylaws): (i) hold an amount of our voting shares (as defined in the TBOC), determined as of the date of submission of the proposal, equal to the greater of at least: $1,000,000 in market value or three percent of our voting shares; (ii) hold such shares for a continuous period of at least six months before the date of the meeting and throughout the entire duration of the meeting; and (iii) solicit the holders of shares representing at least 67% of the voting power of shares entitled to vote on the proposal. These requirements apply during any time that (i) our principal office is located in the State of Texas or (ii) we are admitted to listing on a stock exchange that (A) has its principal office in the State of Texas and (B) has received approval by the securities commissioner of the State of Texas under Subchapter C, Chapter 4005, Government Code of the State of Texas. As of the date of this report, these requirements are applicable. These requirements are more restrictive than the requirements that would otherwise apply absent such a Charter provision and may make it more difficult, or in some cases impracticable, for shareholders to submit proposals for consideration at a shareholders’ meeting. As a result, our shareholders may have fewer opportunities to present proposals for shareholder approval, even on matters they believe are important, which could limit shareholder influence over corporate governance and other matters. Section 21.373 of the TBOC was enacted in 2025 and, while its enforceability has not yet been challenged in court and we do not have any material concerns related to enforceability or Section 21.373 or the related charter provision, like many new laws, we expect the enforceability of Section 21.373 will eventually be challenged.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Issuer Purchases of Equity Securities
Neither we nor any affiliated purchaser repurchased any of our equity securities during the period covered by this Quarterly Report.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
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Item 5. Other Information
(a) Disclosure in lieu of reporting on a Current Report on Form 8-K.
None.
(b) Material changes to the procedures by which security holders may recommend nominees to the board of directors.
None.
(c) Trading arrangements and policies.
During the three months ended September 30, 2026, none of our officers (as defined in Rule 16a-1(f) under the Exchange Act) or directors
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Item 6. Exhibits
Exhibit Number |
Description |
2.1#+ |
Purchase, Sale and Contribution Agreement, dated October 3, 2025, by and among LandBridge Company LLC, DBR Land Holdings LLC, 1918 Ranch & Royalty, LLC and the other parties thereto (incorporated by reference to Exhibit 2.1 to the Company’s Quarterly Report on Form 10-Q (File No. 001-42150) filed with the SEC on November 12, 2025). |
2.2 |
Plan of Conversion (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K (File No. 001-42150) filed with the SEC on October 13, 2026). |
3.1 |
Delaware Certificate of Conversion of LandBridge Company LLC (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 001-42150) filed with the SEC on October 13, 2026). |
3.2 |
Texas Certificate of Conversion of LandBridge Company LLC (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K (File No. 001-42150) filed with the SEC on October 13, 2026). |
3.3 |
Certificate of Formation of LandBridge Corporation (incorporated by reference to Exhibit 3.3 to the Company’s Current Report on Form 8-K (File No. 001-42150) filed with the SEC on October 13, 2026). |
3.4 |
Bylaws of LandBridge Corporation (incorporated by reference to Exhibit 3.4 to the Company’s Current Report on Form 8-K (File No. 001-42150) filed with the SEC on October 13, 2026). |
4.1 |
Description of Securities (incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K (File No. 001-42150) filed with the SEC on October 13, 2026). |
4.2* |
First Supplemental Indenture, dated as of July 24, 2026, among DBR Land Holdings LLC, the guarantors party thereto and UMB Bank, N.A., as trustee. |
4.3* |
Second Supplemental Indenture, dated as of September 21, 2026, among DBR Land Holdings LLC, the guarantors party thereto and UMB Bank, N.A., as trustee. |
10.1 |
First Amendment to Credit Agreement, dated as of August 4, 2026, among DBR Land Holdings LLC, Texas Capital Bank, as administrative and collateral agent, and the lenders party thereto (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q (File No. 001-42150) filed with the SEC on August 6, 2026). |
10.2 |
Second Amended and Restated Limited Liability Company Agreement of DBR Land Holdings LLC, dated as of October 13, 2026 (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K (File No. 001-42150) filed with the SEC on October 13, 2026). |
10.3† |
Form of Indemnification Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 001-42150) filed with the SEC on October 13, 2026). |
10.4† |
Amended and Restated LandBridge Corporation Long Term Incentive Plan (incorporated by reference to Exhibit 99.1 to the Company’s Post-Effective Amendment to Registration Statement on Form S-8 (File No. 333-280696) filed with the SEC on October 13, 2026). |
10.5† |
Form of Restricted Share Unit Award Agreement under the Amended and Restated LandBridge Corporation Long Term Incentive Plan (incorporated by reference to Exhibit 99.2 to the Company’s Post Effective Amendment to Registration Statement on Form S-8 (File No. 333-280696) filed with the SEC on October 13, 2026). |
10.6* |
Second Amendment to Credit Agreement, dated as of September 16, 2026, among DBR Land Holdings LLC, Texas Capital Bank, as administrative and collateral agent, and the lenders party thereto. |
31.1* |
Certification of Chief Executive Officer of LandBridge Corporation pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
31.2* |
Certification of Chief Financial Officer of LandBridge Corporation pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
32.1** |
Certification of Chief Executive Officer of LandBridge Corporation pursuant to 18 U.S.C. § 1350, as adopted pursuant to the Sarbanes-Oxley Act of 2002. |
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Exhibit Number |
Description |
32.2** |
Certification of Chief Financial Officer of LandBridge Corporation pursuant to 18 U.S.C. § 1350, as adopted pursuant to the Sarbanes-Oxley Act of 2002. |
101.INS* |
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
101.SCH* |
Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents. |
104* |
Cover Page Interactive Data File (embedded within the Inline XBRL document). |
* |
Filed herewith. |
** |
Furnished herewith. |
# |
Certain schedules and exhibits to this agreement have been omitted in accordance with Item 601(a)(5) of Regulation S-K. A copy of any omitted schedule and/or exhibit will be furnished to the U.S. Securities and Exchange Commission on request. |
+ |
Certain portions of this exhibit (indicated by “[***]”) have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company agrees to furnish supplementally a copy of any omitted information to the U.S. Securities and Exchange Commission or its staff upon request. |
† |
Identifies management contracts and compensatory plans or arrangements. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
|
LandBridge Corporation |
|
|
|
|
|
Date: |
November 4, 2026 |
By: |
/s/ Jason Long |
|
|
|
Jason Long |
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|
|
Chief Executive Officer |
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