TXO

TXO is a small-cap upstream MLP concentrated in the Permian, San Juan and Williston basins — a structure that pairs decent cash generation with high sensitivity to commodity prices and acquisition cadence. FY2025 revenue rebounded +27.3% to $363M, but the operating line flipped to -$30.6M and net income to -$21.6M (diluted EPS -$0.43), driven in large part by an 84.3% jump in DD&A to $96.6M as the asset base grew (+31.4% to $1.35B). That combination — bigger top line, fatter depletion, GAAP loss — is the classic tell of an acquisition-led E&P where reported earnings lag the cash story.

The cash story is meaningfully better than GAAP suggests: operating cash flow was $118M, well above net income, and the partnership is clearly still capable of funding distributions. But the balance sheet is the problem hiding in plain sight. Long-term debt rose 85.3% YoY to $291M, current liabilities more than doubled to $154M against just $95.3M of current assets (a working-capital deficit), and cash is a thin $9.37M. The risk-factor language is explicit about commodity-price volatility, concentration in three basins, the partnership's ability to 'service our indebtedness,' cost inflation and potential Railroad Commission of Texas shut-ins/curtailments — all of which bite harder when leverage has just doubled.