LandBridge Company LLC

to turn the call over to may harrington director of investor relations ma'am the floor is yours good morning and thank you for joining lambridge's third quarter 2025 earnings call i'm joined today by our chief executive officer jason long and our chief financial officer scott mcneely before we begin i'd like to remind you that in this call in the related presentation we will make forward-looking statements regarding our current beliefs plans and expectations which are not guarantees of future performance and which are subject to a number of known and unknown risks and uncertainties that could cause actual results to differ materially from results and events contemplated by such forward-looking statements. You are cautioned not to place undue reliance on forward-looking statements. Please refer to the risk factors and other cautionary statements included in our filings with the SEC. I would also like to point out that our investor presentation and today's conference call will contain discussions of non-GAAP financial measures which we believe are useful in evaluating our performance. These supplemental measures should not be considered in isolation or as a substitute for financial measures prepared in accordance with GAAP. Reconciliations to the most directly comparable GAAP measures are included in our earnings release and the appendix of today's accompanying presentation. I'll now turn the call over to our CEO, Jason Long.

Thanks, Maddie. We're pleased to report another strong quarter, marking our sixth consecutive quarter of revenue and EBITDA growth since going public. In Q3, revenue increased 7% sequentially. Adjusted EBITDA rose 6% with contributions from all of our key revenue streams. Our growth strategy remains focused on maximizing the economic output of our surplus pools. In the near term, we continue to focus on delivering a differentiated value proposition for our core space offering. To summarize three core advantages of our approach, first, we control over 300,000 highly contiguous acres, largely insulated from the elevated port pressure challenges impacting other areas in the state library. Second, our partnerships, particularly with WaterBridge, enable critical transportation of produced water to underutilized pore space across our acreage. WaterBridge, one of the largest produced water infrastructure operators in the US, continues to expand its footprint on our land, reinforcing mutual growth. Third, our development strategy aligns with recent guidance from Texas Railroad Commission, which emphasizes responsible pore space management. We actively avoid over concentration of produced water handling assets by our customers to preserve pore space integrity. Further, this quarter demonstrated the value of our active land management strategy beyond the oil and gas industry. We continue to unlock new opportunities with leading developers across energy, infrastructure, and environmental sectors, creating diverse and resilient cash flow streams that we believe will continue to compound over the long term. Let me highlight a few of our recent and ongoing commercial developments. First, we finalized to sell the 3,000 acre solar energy project in Reeves County with the proposed generation capacity of up to 250 megawatts. The transaction includes an upfront payment and contingent milestone-based payments. We also entered into a new long-term lease with a subsidiary of 1-0 for a natural gas processing facility in Loving County, Texas. Further, we continue to execute our strategy of creative land acquisitions, as demonstrated in our recent acquisition of approximately 37,500 acres from Mike's 18 Ranch and Rural Team. This acquisition brings immediate cash flows and long-term growth potential. The Loving County acreage enhances our force-based offering, while the Reeves County position is well-suited for future alternative energy development. We expect this acquisition to contribute approximately $20 million in EBITDA beginning in 2026. And finally, our progress on power infrastructure and data center initiatives is accelerating, and we're eager to keep you informed as new milestones are achieved. Before I turn it over to Scott, I want to briefly address our approach to transparency. We remain committed to keeping investors informed and will continue to share meaningful updates on our commercial progress. At times, the level of detail we can provide may be limited due to commercial sensitivities, contractual obligations, or legal constraints. We appreciate your understanding and continued engagement as we balance transparency with these considerations. With that, I'll turn the call over to Scott to talk to the financial results.

Thank you, Jason. We delivered another quarter of strong financial performance, with total revenue reaching $50.8 million, up 7% sequentially and 78% year-over-year. Quarterly growth was broad-based across all three revenue streams. Surface use royalties and revenue increased 2%, driven by higher commercial activity, new project easements, and increased royalties from WaterBridge's BPX cracking development, which commenced operations early in the quarter. Resource sales and royalties also rose 2%, supported by a rebound in water sales from Q2 levels. Oil and gas royalties posted a 22% sequential increase, with net royalty production rising from 814 barrels of oil equivalent per day in Q2 to 912 in Q3. Importantly, our direct exposure to commodity prices remains limited, with oil and gas royalties representing approximately 7% of year-to-date revenue. Adjusted EBITDA for the quarter was $44.9 million, up 6% sequentially and 79% year-over-year, with a margin of 88%. This strong margin performance underscores the efficiency and scalability of our operating model. Cash flow from operations totaled $34.9 million, and free cash flow was $33.7 million. Capital expenditures were $1.2 million, and net cash used in investing activities was $1.1 million. At quarter end, total liquidity stood at $108.3 million, including $28.3 million in cash and $80 million in available borrowing capacity. Total borrowing is outstanding under our term loan and credit facility for $369.3 million, down from $374.3 million at the end of Q2. Our net leverage ratio was 2.1 times at the end of the third quarter compared to 2.4 times last quarter. We continue to deploy free cash flow in a disciplined and balanced manner, focused on three priorities. First, pursuing accretive M&A opportunities, particularly in acquiring underutilized and undercommercialized land, where we remain committed to rigorous underwriting criteria. Second, maintaining a strong balance sheet with an optimal capital structure, targeting a net leverage ratio of 2 to 2.5 times. And finally, returning capital to shareholders through dividend and opportunistic share repurchases. This quarter, we've declared a quarterly dividend of 10 cents per share, available on December 18th, 2025, to shareholders of record as of December 4th. Finally, we are reaffirming the midpoint of our full year 2025 guidance with adjusted EBITDA expected between 165 million and 175 million. We're proud of our consistent performance and remain focused on executing our growth strategy, expanding our asset portfolio, and delivering long-term value to our shareholders. Thank you for your continued support. With that, we'll now open the line for questions. Operator?