TXO Partners (TXO) completes Cross Timbers sale, cuts debt with $100M proceeds

Rhea-AI Filing Summary

TXO Partners, L.P. has completed the sale of oil and gas properties owned by its 50%-owned joint venture, Cross Timbers Energy, LLC, for approximately $200 million in aggregate consideration. The largest piece was the CTOC Transaction at about $123.5 million, with CTOC owned by family members of board chairman Bob R. Simpson and unanimously approved by the Board and its Conflicts Committee.

The Cross Timbers Transactions represent substantially all Cross Timbers assets and generated net proceeds to TXO Partners of about $100 million, which were used to pay down debt on its credit facility. On a pro forma basis at March 31, 2026, long‑term debt falls from $277.1 million to $177.1 million.

Pro forma 2025 results show revenue declining from $401.0 million to $332.5 million, but net income improving from a loss of $21.6 million to profit of $28.5 million, helped by lower depreciation, impairments and interest expense. Total proved reserves decline from 129.1 to 106.4 MBoe, and the standardized measure of discounted future net cash flows decreases from $1,095.5 million to $969.9 million.

Positive

• Pro forma 2025 net results improve from a $21.6 million loss to $28.5 million of net income after the Cross Timbers disposition and related interest savings.
• Net proceeds of about $100 million from the Cross Timbers Transactions are used to reduce credit facility borrowings, lowering long‑term debt from $277.1 million to $177.1 million on a pro forma basis.

Negative

• Total proved reserves decline materially from 129.1 MBoe to 106.4 MBoe on a pro forma basis, reflecting the sale of substantially all Cross Timbers assets.
• The standardized measure of discounted future net cash flows falls from $1,095.5 million to $969.9 million, indicating a reduced long‑term reserve value base after the disposition.

Insights

Energy sector equity analyst

TXO swaps JV reserves and cash flow for debt reduction and cleaner earnings.

TXO Partners has effectively exited most of its Cross Timbers JV assets for about $200 million in aggregate consideration, receiving roughly $100 million of net proceeds. Those proceeds are applied to its credit facility, cutting long‑term debt from $277.1 million to $177.1 million on a pro forma basis.

The sale removes a sizable block of producing assets and reserves: total proved reserves fall from 129.1 to 106.4 MBoe, and the standardized measure of discounted future net cash flows declines from $1,095.5 million to $969.9 million. Pro forma 2025 revenue drops to $332.5 million, but earnings improve to net income of $28.5 million, helped by eliminating an impairment charge, lower DD&A and reduced interest expense.

The CTOC Transaction is with an entity owned by family members of the board chair and was unanimously approved by the Board and its Conflicts Committee of independent directors. Future company filings will show how TXO redeploys its stronger balance sheet and how its remaining asset base performs after the Cross Timbers exit.

8-K Event Classification

2 items: 2.01, 9.01

2 items

Item 2.01 Completion of Acquisition or Disposition of Assets Financial

The company completed a significant acquisition or sale of business assets.

Item 9.01 Financial Statements and Exhibits Exhibits

Financial statements, pro forma financial information, and exhibit attachments filed with this report.

Key Figures

Aggregate Cross Timbers consideration: $200 million Net proceeds to TXO Partners: $100 million Pro forma long-term debt: $177.1 million +4 more

7 metrics

Aggregate Cross Timbers consideration $200 million Total consideration for oil and gas properties sold by Cross Timbers

Net proceeds to TXO Partners $100 million Net cash received by TXO Partners from Cross Timbers Transactions

Pro forma long-term debt $177.1 million Debt at March 31, 2026 after applying sale proceeds

2025 pro forma revenue $332.5 million Pro forma year ended December 31, 2025 after CTE Disposition

2025 net income (pro forma) $28.5 million Net income for 2025 after giving effect to the disposition

Total proved reserves (pro forma) 106.4 MBoe Total proved reserves at December 31, 2025 after CTE Disposition

Standardized measure (pro forma) $969.9 million Discounted future net cash flows at December 31, 2025

Key Terms

unaudited pro forma financial statements, Credit Facility, asset retirement obligation, standardized measure of discounted future net cash flows, +2 more

6 terms

unaudited pro forma financial statements financial

"The unaudited pro forma financial statements have been prepared in accordance with Article 11 of Regulation S-X"

Credit Facility financial

"The Partnership intends to use the net proceeds to pay down existing debt on our Credit Facility."

A credit facility is a flexible loan arrangement that allows a borrower to access funds up to a set limit whenever needed, similar to a company having an overdraft option on a bank account. It matters to investors because it indicates how easily a business can secure cash when required, affecting its ability to manage expenses, invest, or respond to financial challenges.

asset retirement obligation financial

"Asset retirement obligation, current portion"

A liability recorded for the future cost to retire, dismantle or clean up a long-lived asset — for example removing an oil rig, closing a mine, or decommissioning a plant. Investors care because it reduces reported profit and ties up capital: companies must estimate and set aside money now for a known future expense, and changes to that estimate can swing earnings, debt ratios and the company’s cash needs much like setting aside savings to repair or return a rented property later.

standardized measure of discounted future net cash flows financial

"The following pro forma standardized measure of the discounted net future cash flows and changes applicable to TXO Partners’ proved reserves"

A standardized measure of discounted future net cash flows is a single number that converts a company’s expected future incoming and outgoing cash into today’s dollars by reducing later amounts for the time value of money and risk. Investors use it like a common yardstick to compare what a business or project is truly worth today versus its market price; imagine choosing between a promised series of future paychecks or a one-time lump sum now. This helps assess whether an investment appears over- or under-valued.

proved developed reserves financial

"Proved Developed Reserves January 1, 2025"

Proved developed reserves are quantities of oil or natural gas that have been confirmed by engineering data and can be produced with existing wells, equipment and infrastructure without significant additional drilling or work. Investors care because these reserves are the most reliable source of near-term production and cash flow—think of it as fruit already in a basket rather than fruit still growing on the tree—so they carry lower technical and timing risk and directly affect short‑term valuation.

impairment financial

"Impairment 42,425 42,425 - -"

Impairment occurs when the value of an asset, such as property, equipment, or investments, drops below its recorded worth on the books. This situation signals that the asset may be less valuable than originally thought, similar to discovering that an item you own is worth less than what you paid for it. For investors, recognizing impairment is important because it can affect the overall financial health and future prospects of a business.

Understanding 8-K Material Events →

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 28, 2026

TXO Partners, L.P.

(Exact name of Registrant as Specified in Its Charter)

Delaware			001-04321	32-0368858
(State or Other Jurisdiction of Incorporation)			(Commission File Number)	(IRS Employer Identification No.)
400 West 7th Street
Fort Worth, Texas				76102
(Address of Principal Executive Offices)				(Zip Code)

Registrant’s Telephone Number, Including Area Code: 817 334-7800

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐		Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐		Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐		Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐		Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Units		TXO		New York Stock Exchange
Common Units		TXO		NYSE Texas

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☒

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. ☐

Item 2.01 Completion of Acquisition or Disposition of Assets.

Cross Timbers Transactions

As previously announced on March 10, 2026, Cross Timbers Energy, LLC (“Cross Timbers”), a joint venture in which TXO Partners, L.P. (the “Partnership”) holds a 50% interest, executed purchase and sale agreements with multiple private buyers to sell oil and gas properties totaling approximately $200 million in aggregate consideration (collectively, the “Cross Timbers Transactions”), including a purchase and sale agreement (the “Purchase Agreement”) with CTOC Energy, LLC (“CTOC”) for approximately $123.5 million in aggregate consideration (the "CTOC Transaction"). The Cross Timbers Transactions represent substantially all of the assets owned by Cross Timbers. CTOC is owned by certain family members of Mr. Bob R. Simpson, a member of the Board of Directors of the Partnership (the "Board") and Chairman of the Board. The Purchase Agreement was unanimously approved by the Board and the Conflicts Committee of the Board, comprised solely of independent directors.

As of May 28, 2026, the Cross Timbers Transactions were closed and resulted in net proceeds to the Partnership of approximately $100 million, subject to customary purchase price adjustments. The Partnership intends to use the net proceeds to pay down existing debt on our Credit Facility.

Item 9.01 Financial Statements and Exhibits

(b) Pro Forma Financial Information.

The unaudited pro forma condensed combined balance sheet of the Partnership as of March 31, 2026, and the unaudited pro forma condensed combined statements of operations of the Partnership for the three months ended March 31, 2026 and for the year ended December 31, 2025, including the related notes thereto, giving effect to the Cross Timbers Transactions are filed herewith as Exhibit 99.1. The unaudited pro forma financial information gives effect to the Cross Timbers Transactions on the basis, and subject to the assumptions, set forth in accordance with Article 11 of Regulation S-X.

(d) Exhibits

Exhibit No.		Description
2.1		Purchase and Sale Agreement with CTOC, dated as of March 10, 2026 (incorporated by reference to the Current Report on Form 8-K filed on March 10, 2026)
99.1		Unaudited Pro Forma Condensed Financial Information of TXO Partners, L.P. as of and for the three months ended March 31, 2026 and for the year ended December 31, 2025
104.0		Cover Page Interactive Data File (embedded within the Inline XBRL document)

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 hereunto duly authorized.

		TXO Partners, L.P.
		By:	TXO Partners GP, LLC its general partner
Date:	May 28, 2026	By:	/s/ Brent W. Clum
		Name:	Brent W. Clum
		Title	Co-Chief Executive Officer and Chief Financial Officer

TXO PARTNERS, L.P.

PRO FORMA FINANCIAL STATEMENTS

(Unaudited)

Introduction

TXO Partners, L.P. ( “TXO Partners”) engages in oil and natural gas exploration and production. The unaudited pro forma financial statements have been prepared in accordance with Article 11 of Regulation S-X, using assumptions set forth in the notes to the unaudited pro forma financial statements. The following unaudited pro forma financial statements of the TXO Partners reflect the historical results of TXO Partners, on a pro forma basis to give effect to the following transactions, which are described in further detail below, as if they had occurred on March 31, 2026, for pro forma balance sheet purposes, and on January 1, 2025, for pro forma statement of operations purposes:

•in the case of the unaudited pro forma statements of operations, the disposition of oil and gas properties of Cross Timbers Energy, LLC (“Cross Timbers”) to multiple buyers in April and May 2026 (“CTE Disposition”);

The unaudited pro forma balance sheet of TXO Partners is based on the historical balance sheet of TXO Partners as of March 31, 2026 and includes pro forma adjustments to give effect to the described transactions as if they had occurred on March 31, 2026. The unaudited pro forma statements of operations of TXO Partners are based on the audited historical statement of operations of TXO Partners for the year ended December 31, 2025, and the unaudited historical statement of operations of TXO Partners for the three months ended March 31, 2026, both having been adjusted to give effect to the described transaction as if they occurred on January 1, 2025.

The pro forma data presented reflect events directly attributable to the described transaction and certain assumptions TXO Partners believes are reasonable. The pro forma data are not necessarily indicative of financial results that would have been attained had the described transaction occurred on the date indicated or which could be achieved in the future because they necessarily exclude various operating efficiencies, such as decreased general and administrative expenses associated with being a smaller company. The adjustments are based on currently available information and certain estimates and assumptions. Therefore, the actual adjustments may differ from the pro forma adjustments. However, management believes that the assumptions provide a reasonable basis for presenting the significant effects of the transaction and the pro forma adjustments give appropriate effect to those assumptions and are properly applied in the unaudited financial statements.

The unaudited pro forma financial statements and related notes are presented for illustrative purposes only. If the CTE Disposition described herein had occurred in the past, TXO Partners’ operating results might have been materially different from those presented in the unaudited pro forma financial statements. The unaudited pro forma financial statements should not be relied upon as an indication of operating results that TXO Partners would have achieved if the CTE Disposition described herein had taken place on the specified date. In addition, future results may vary significantly from the results reflected in the unaudited pro forma financial statements of operations and should not be relied upon as an indication of the future results TXO Partners will have after the CTE Disposition described herein by these unaudited pro forma financial statements.

1

TXO PARTNERS, L.P.

PRO FORMA BALANCE SHEET

March 31, 2026

(in thousands)

	TXO Partners Historical				CTE Disposition				Pro Forma
ASSETS					(a)
Current Assets:
Cash and cash equivalents	$	7,886			$	-			$	7,886
Accounts receivable, net		58,448				-				58,448
Derivative fair value		6,221				-				6,221
Other		17,672				-				17,672
Total Current Assets		90,227				-				90,227
Property and Equipment, at cost – successful efforts method:
Proved properties		2,340,193				1,158,052				1,182,141
Unproved properties		18,998				8,961				10,037
Other		89,202				331				88,871
Total Property and Equipment		2,448,393				1,167,344				1,281,049
Accumulated depreciation, depletion and amortization		(1,232,891	)			(1,008,645	)			(224,246	)
Net Property and Equipment		1,215,502				158,699				1,056,803
Other Assets:
Note receivable from related party		7,168				-				7,168
Derivative fair value		1,401				-				1,401
Other		7,489				-				7,489
Total Other Assets		16,058				-				16,058
TOTAL ASSETS	$	1,321,787			$	158,699			$	1,163,088
LIABILITIES AND PARTNERS’ CAPITAL
Current Liabilities:
Accounts payable	$	38,991			$	-			$	38,991
Deferred payment		70,000				-				70,000
Accrued liabilities		37,766				-				37,766
Derivative fair value		56,017				-				56,017
Asset retirement obligation, current portion		3,500				1,500				2,000
Other current liabilities		3,726				-				3,726
Total Current Liabilities		210,000				1,500				208,500
Long-term Debt		277,100				100,000				177,100
Other Liabilities:
Asset retirement obligation		221,476				67,111				154,365
Derivative fair value		8,481				-				8,481
Other liabilities		262				-				262
Total Other Liabilities		230,219				67,111				163,108
Commitments and Contingencies
Partners’ Capital:
Partners’ capital		604,468				(9,912	)			614,380
Total Partners' Capital		604,468				(9,912	)			614,380
TOTAL LIABILITIES AND PARTNERS’ CAPITAL	$	1,321,787			$	158,699			$	1,163,088

The accompanying notes are an integral part of these unaudited pro forma financial statements.

2

TXO PARTNERS, L.P.

Pro Forma Statement of Operations for the Year Ended December 31, 2025

(Unaudited)

(in thousands, except for per unit information)

		TXO Partners Historical				CTE Disposition				Adjustments				Pro Forma
REVENUES
Oil and condensate		$	283,192			$	43,326			$	-			$	239,866
Natural gas liquids			32,121				6,915				-				25,206
Gas			85,699				18,242				-				67,457
Total Revenues			401,012				68,483				-				332,529
EXPENSES
Production			186,229				43,147				-				143,082
Exploration			469				20				-				449
Taxes, transportation and other			68,781				12,634				-				56,147
Depreciation, depletion and amortization			96,574				16,791				-				79,783
Impairment			42,425				42,425				-				-
Accretion of discount in asset retirement obligation			15,651				4,845				-				10,806
General and administrative			21,464				(609	)	(b)		5,200				27,273
Total Expenses			431,593				119,253				5,200				317,540
OPERATING (LOSS) INCOME			(30,581	)			(50,770	)			(5,200	)			14,989
OTHER INCOME (EXPENSE)
Other income			25,308				3,043				-				22,265
Interest income			618				357				-				261
Interest expense			(16,964	)			-		(c)		7,903				(9,061	)
Total Other Income			8,962				3,400				7,903				13,465
NET (LOSS) INCOME		$	(21,619	)		$	(47,370	)		$	2,703			$	28,454
NET (LOSS) INCOME PER COMMON UNIT
Basic		$	(0.43	)		$	-			$	-			$	0.57
Diluted		$	(0.43	)		$	-			$	-			$	0.56
WEIGHTED AVERAGE COMMON UNITS OUTSTANDING
Basic			49,769				-				-				49,769
Diluted			49,769				-				951				50,720

The accompanying notes are an integral part of these unaudited pro forma financial statements.

3

TXO PARTNERS, L.P.

Pro Forma Statement of Operations for the Three Months Ended March 31, 2026

(Unaudited)

(in thousands, except for per unit information)

		TXO Partners Historical				CTE Disposition				Adjustments				Pro Forma
REVENUES
Oil and condensate		$	(2,746	)		$	10,718			$	-			$	(13,464	)
Natural gas liquids			9,335				1,455				-				7,880
Gas			21,687				4,506				-				17,181
Total Revenues			28,276				16,679				-				11,597
EXPENSES
Production			47,737				9,295				-				38,442
Exploration			108				9				-				99
Taxes, transportation and other			19,762				2,293				-				17,469
Depreciation, depletion and amortization			28,838				2,970				-				25,868
Accretion of discount in asset retirement obligation			4,568				1,394				-				3,174
General and administrative			4,814				578		(b)		1,375				5,611
Total Expenses			105,827				16,539				1,375				90,663
OPERATING (LOSS) INCOME			(77,551	)			140				(1,375	)			(79,066	)
OTHER INCOME (EXPENSE)
Other income			8,856				201				-				8,655
Interest income			99				84				-				15
Interest expense			(5,740	)			-		(c)		1,822				(3,918	)
Total Other Income			3,215				285				1,822				4,752
NET (LOSS) INCOME		$	(74,336	)		$	425			$	447			$	(74,314	)
NET (LOSS) INCOME PER COMMON UNIT
Basic		$	(1.35	)		$	-			$	-			$	(1.35	)
Diluted		$	(1.35	)		$	-			$	-			$	(1.35	)
WEIGHTED AVERAGE COMMON UNITS OUTSTANDING
Basic			55,090				-				-				55,090
Diluted			55,090				-				-				55,090

The accompanying notes are an integral part of these unaudited pro forma financial statements.

4

TXO PARTNERS, L.P.

1. BASIS OF PRESENTATION AND CORPORATE REORGANIZATION

The historical financial information is derived from the financial statements of TXO Partners included in the Annual Report on Form 10-K for the year ended December 31, 2025 and in the Quarterly Report on Form 10-Q for the three months ended March 31, 2026. For purposes of the unaudited pro forma balance sheet and statements of operations, it is assumed that the CTE Disposition had taken place on January 1, 2025.

2. PRO FORMA ADJUSTMENTS AND ASSUMPTIONS

TXO Partners made the following adjustments and assumptions in the preparation of the unaudited pro forma financial statements:

(a)Adjustment reflects the CTE Disposition proceeds, to TXO Partners, used to pay down outstanding debt on our Credit Facility and removal of related oil and gas assets.

(b)Adjustment reflects the removal of the management fee paid by CTE to TXO Partners.

(c)Adjustment reflects savings in interest expense from disposition proceeds used to pay down debt, had such the transaction closed on January 1, 2025. The average interest rate was 7.9% for the year ended December 31, 2025 and 7.4% for the three months ended March 31, 2026.

3. SUPPLEMENTARY DISCLOSURE OF OIL AND NATURAL GAS OPERATIONS

The following pro forma standardized measure of the discounted net future cash flows and changes applicable to TXO Partners’ proved reserves reflect the effect of Texas state franchise taxes which TXO Partners is subject to. The future cash flows are discounted at 10% per year and assume continuation of existing economic conditions.

The standardized measure of discounted future net cash flows, in management’s opinion, should be examined with caution. The basis for this table is the reserve studies prepared by independent petroleum engineering consultants, which contain imprecise estimates of quantities and rates of production of reserves. Revisions of previous year estimates can have a significant impact on these results. Also, exploration costs in one year may lead to significant discoveries in later years and may significantly change previous estimates of proved reserves and their valuation. Therefore, the standardized measure of discounted future net cash flow is not necessarily indicative of the fair value of TXO Partners’ proved oil and natural gas properties.

The data presented should not be viewed as representing the expected cash flow from, or current value of, existing proved reserves since the computations are based on a large number of estimates and assumptions. Reserve quantities cannot be measured with precision, and their estimation requires many judgmental determinations and frequent revisions. Actual future prices and costs are likely to be substantially different from the prices and costs utilized in the computation of reported amounts.

The following table provides a pro forma rollforward of the total proved reserves for the year ended December 31, 2025, as well as pro forma proved developed and proved undeveloped reserves at the beginning and end of the year, as if the CTE Disposition occurred on January 1, 2025.

5

Oil (MBbls)		TXO Partners Historical				CTE Disposition				Pro Forma
January 1, 2025			47,191.9				7,528.0				39,663.9
Extensions, additions and discoveries			1,868.1				61.2				1,806.9
Revisions			(4,615.6	)			(513.5	)			(4,102.1	)
Production			(4,173.7	)			(687.5	)			(3,486.2	)
Purchase in place			19,080.4				3.8				19,076.6
December 31, 2025			59,351.1				6,392.0				52,959.1
Proved Developed Reserves
January 1, 2025			37,894.6				7,180.7				30,713.9
December 31, 2025			44,974.0				6,050.6				38,923.4
Proved Undeveloped Reserves
January 1, 2025			9,297.3				347.3				8,950.0
December 31, 2025			14,377.0				341.4				14,035.6

Natural Gas Liquids (MBbls)		TXO Partners Historical				CTE Disposition				Pro Forma
January 1, 2025			13,794.4				3,806.3				9,988.1
Extensions, additions and discoveries			305.6				24.0				281.6
Revisions			2,253.0				767.5				1,485.5
Production			(1,497.0	)			(331.3	)			(1,165.7	)
Purchase in place			3,863.8				-				3,863.8
December 31, 2025			18,719.8				4,266.5				14,453.3
Proved Developed Reserves
January 1, 2025			13,194.9				3,783.9				9,411.0
December 31, 2025			16,383.1				4,244.5				12,138.6
Proved Undeveloped Reserves
January 1, 2025			599.5				22.4				577.1
December 31, 2025			2,336.7				22.0				2,314.7

6

Natural Gas (MMcf)		TXO Partners Historical				CTE Disposition				Pro Forma
January 1, 2025			197,035.7				65,378.9				131,656.8
Extensions, additions and discoveries			47,872.2				1,124.9				46,747.3
Revisions			75,099.5				12,167.1				62,932.4
Production			(27,883.8	)			(6,575.5	)			(21,308.3	)
Purchase in place			14,112.1				-				14,112.1
December 31, 2025			306,235.7				72,095.4				234,140.3
Proved Developed Reserves
January 1, 2025			196,013.7				65,285.1				130,728.6
December 31, 2025			254,095.1				72,003.3				182,091.8
Proved Undeveloped Reserves
January 1, 2025			1,022.0				93.8				928.2
December 31, 2025			52,140.6				92.1				52,048.5

Total (MBoe)		TXO Partners Historical				CTE Disposition				Pro Forma
January 1, 2025			93,825.6				22,230.9				71,594.7
Extensions, additions and discoveries			10,152.4				272.7				9,879.7
Revisions			10,153.8				2,281.8				7,872.0
Production			(10,317.9	)			(2,114.7	)			(8,203.2	)
Purchase in place			25,296.2				3.8				25,292.4
December 31, 2025			129,110.1				22,674.5				106,435.6
Proved Developed Reserves
January 1, 2025			83,758.5				21,845.5				61,913.0
December 31, 2025			103,706.3				22,295.7				81,410.6
Proved Undeveloped Reserves
January 1, 2025			10,067.1				385.4				9,681.7
December 31, 2025			25,403.8				378.8				25,025.0

7

The pro forma standardized measure of discounted estimated future net cash flows was as follows as of December 31, 2025 (in thousands):

December 31, 2025		TXO Partners Historical				CTE Disposition				Pro Forma
Future cash inflows		$	4,849,920			$	616,768			$	4,233,152
Future costs:
Production			(2,300,106	)			(347,874	)			(1,952,232	)
Development			(719,027	)			(98,902	)			(620,125	)
Income taxes			(1,286	)			176				(1,462	)
Future net cash flows			1,829,501				170,168				1,659,333
10% annual discount			(734,008	)			(44,597	)			(689,411	)
Standardized measure		$	1,095,493			$	125,571			$	969,922

The change in the pro forma standardized measure of discounted estimated future net cash flows was as follows for 2025 (in thousands):

December 31, 2025		TXO Partners Historical				CTE Disposition				Pro Forma
Standardized measure, beginning of period		$	976,587			$	151,108			$	825,479
Revisions:
Prices and costs			(87,185	)			(29,147	)			(58,038	)
Quantity estimates			(126,411	)			(3,343	)			(123,068	)
Income tax			217				49				168
Future development costs			(8,058	)			1,366				(9,424	)
Accretion of discount			97,659				15,111				82,548
Production rates and other			(68,292	)			(5,028	)			(63,264	)
Net revisions			(192,070	)			(20,992	)			(171,078	)
Additions and discoveries			(15,442	)			843				(16,285	)
Production			(108,136	)			(12,701	)			(95,435	)
Development costs			71,138				7,247				63,891
Purchases in place			363,416				66				363,350
Net change			118,906				(25,537	)			144,443
Standardized measure, end of period		$	1,095,493			$	125,571			$	969,922

8

FAQ

What did TXO (TXO) sell in the Cross Timbers Transactions?

TXO Partners’ 50%-owned joint venture, Cross Timbers Energy, sold oil and gas properties for about $200 million in aggregate consideration. These properties represented substantially all assets owned by Cross Timbers, significantly reshaping TXO’s indirect asset base and future production profile.

How much cash did TXO (TXO) receive and how will it be used?

TXO Partners reports net proceeds of approximately $100 million from the Cross Timbers Transactions. The partnership intends to apply these proceeds to repay borrowings under its credit facility, reducing leverage and associated interest expense on a pro forma basis.

How does the Cross Timbers sale affect TXO (TXO) pro forma earnings?

For 2025, pro forma revenue falls from $401.0 million to $332.5 million, but net results improve from a $21.6 million loss to $28.5 million profit. Lower depreciation, no Cross Timbers impairment, and reduced interest expense drive the improvement.

What happens to TXO (TXO) reserves after the Cross Timbers disposition?

Pro forma total proved reserves at December 31, 2025, decline from 129.1 MBoe to 106.4 MBoe. Proved developed reserves fall from 103.7 to 81.4 MBoe, reflecting removal of the sold Cross Timbers properties from TXO’s reserve base.

How does the transaction impact TXO (TXO) future cash flow measures?

The standardized measure of discounted future net cash flows decreases from $1,095.5 million to $969.9 million on a pro forma basis. Future cash inflows fall, partially offset by lower projected production and development costs across the remaining reserves.

Was the CTOC Transaction a related-party deal for TXO (TXO)?

Yes. CTOC Energy, LLC is owned by certain family members of board chairman Bob R. Simpson. The Purchase Agreement with CTOC for about $123.5 million received unanimous approval from TXO’s Board and its Conflicts Committee of independent directors.

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