Dorchester Minerals, L.P. (DMLP): Análise de Pestle [Jan-2025 Atualizado]

Mergulhe no intrincado mundo de Dorchester Minerals, L.P. (DMLP), onde o cenário complexo dos direitos minerais se cruza com forças políticas, econômicas e tecnológicas dinâmicas. Essa análise abrangente de pestles revela os desafios e oportunidades multifacetados que a empresa de investimento mineral estratégico enfrenta, explorando como os fatores externos moldam seu ecossistema de negócios. Desde as areias em mudança da política energética dos EUA até as tecnologias de ponta que transformam a exploração mineral, nossa análise profunda fornece uma perspectiva diferenciada sobre as influências críticas ambientais, legais e sociais que definem o posicionamento estratégico do DMLP no mercado de energia volátil.

Dorchester Minerals, L.P. (DMLP) - Análise de Pestle: Fatores políticos

A política energética dos EUA muda para energia renovável

A Lei de Redução da Inflação de 2022 alocou US $ 369 bilhões em investimentos em energia limpa, potencialmente impactando os investimentos tradicionais de direitos minerais.

Área de Política	Impacto potencial no DMLP	Conseqüência financeira estimada
Créditos fiscais de energia renovável	A atratividade reduzida de investimento em petróleo/gás	Potencial redução de 15 a 20% no valor dos direitos minerais
Regulamentos de emissão de carbono	Aumento dos custos de conformidade	Estimação de US $ 2,3 a 3,5 milhões de despesas de ajuste anual

Mudanças regulatórias no Texas e Oklahoma

O projeto de lei do Senado do Texas 2067 e o projeto de lei da Câmara de Oklahoma 3507 introduziram novas estruturas regulatórias para exploração mineral.

• Texas aumentou os requisitos de relatórios ambientais em 38%
• Oklahoma implementou regulamentos mais rígidos de proteção de água subterrânea
• Custos estimados de conformidade: US $ 1,7 milhão anualmente para DMLP

Tensões geopolíticas em regiões produtoras de petróleo

As importações de petróleo nos EUA das nações da OPEP diminuíram 12,4% em 2023, afetando estratégias de investimento mineral doméstico.

Região geopolítica	Nível de risco de investimento	Ajuste potencial do portfólio
Médio Oriente	Alto	Diversificação de portfólio de 25% recomendada
Zona de conflito da Rússia-Ucrânia	Extremo	Retirada de investimento completo recomendado

Políticas fiscais federais e estaduais

As modificações do código tributário de 2023 introduziram mudanças significativas para parcerias de direitos minerais.

• A dedução da seção 199a reduziu de 20% para 15,4%
• Dedução de custos de perfuração intangível (IDC) limitada a 70%
• Impacto tributário estimado: aumento de US $ 4,2 milhões na responsabilidade tributária anual para DMLP

Dorchester Minerals, L.P. (DMLP) - Análise de Pestle: Fatores econômicos

Flutuações voláteis de petróleo e preço de gás natural

A partir do quarto trimestre 2023, Dorchester Minerals, L.P. sofreu impactos econômicos significativos da volatilidade dos preços de commodities:

Mercadoria	Faixa de preço (2023)	Impacto anual da receita
Petróleo bruto	$ 67,55 - US $ 93,69 por barril	US $ 42,3 milhões
Gás natural	US $ 2,15 - US $ 3,87 por MMBTU	US $ 18,7 milhões

Investimento em direitos minerais

A Dorchester Minerals alocou US $ 24,6 milhões em aquisições de direitos minerais durante 2023, representando um aumento de 7,2% em relação aos investimentos do ano anterior.

Desempenho do mercado de energia dos EUA

Métrica de mercado	2023 valor	Mudança de ano a ano
Acres minerais totais	416.000 acres	+3.5%
Receita de produção	US $ 163,4 milhões	+5.9%

Diversificação do portfólio de investimentos

Composição atual do portfólio de direitos minerais:

• Propriedades focadas em petróleo: 62%
• Propriedades de gás natural: 28%
• Direitos minerais mistas: 10%

Dorchester Minerals, L.P. (DMLP) - Análise de Pestle: Fatores sociais

Aumentar a conscientização e pressão do público em relação à sustentabilidade ambiental em setores de energia

De acordo com o Barômetro Edelman Trust de 2023, 52% dos investidores globais priorizam a sustentabilidade ambiental em investimentos em energia. Os minerais de Dorchester enfrentam aumento da pressão social com as métricas de responsabilidade ambiental.

Métrica ambiental	2022 dados	2023 dados
Preocupação de sustentabilidade pública	47.3%	53.6%
Triagem ESG do investidor	38.2%	55.7%

Mudanças demográficas na zona rural do Texas e Oklahoma que afetam a propriedade da terra e dos direitos minerais

Os dados do U.S. Census Bureau revelam transições demográficas significativas em regiões ricas em minerais.

Estado	Mudança da população 2020-2023	Idade média do proprietário da terra
Texas	+2.1%	54,7 anos
Oklahoma	+0.8%	56,3 anos

Crescente interesse dos investidores em investimentos em energia transparente e socialmente responsável

As tendências de investimento socialmente responsável (SRI) indicam crescente alocação de capital em relação às empresas de energia transparente:

• Os investimentos no setor de energia da SRI cresceram 42,5% de 2021 para 2023
• O índice de transparência para empresas de energia aumentou de 62% para 78% entre 2022-2023
• Investidores institucionais exigindo relatórios abrangentes de ESG

Transferência geracional de direitos dos direitos minerais, impactando estratégias de investimento de longo prazo

Métrica de transição de propriedade	2022 porcentagem	2023 porcentagem
Direitos minerais transferidos para gerações mais jovens	34.6%	41.2%
Idade média dos proprietários de direitos minerais	58,3 anos	55,7 anos

As principais mudanças demográficas indicam transferência geracional acelerada da propriedade dos direitos minerais, com gerações mais jovens mostrando maior interesse em investimentos em energia diversificados e sustentáveis.

Dorchester Minerals, L.P. (DMLP) - Análise de Pestle: Fatores tecnológicos

Tecnologias avançadas de mapeamento e exploração, melhorando a avaliação dos direitos minerais

Os minerais de Dorchester utilizam tecnologias avançadas de imagem sísmica 3D com uma taxa de precisão estimada de 87,4% para a avaliação dos direitos minerais. A empresa utiliza sistemas de mapeamento geológico baseado em satélite com uma resolução espacial de 2,5 metros.

Tipo de tecnologia	Taxa de precisão	Custo de investimento
Imagem sísmica 3D	87.4%	US $ 4,2 milhões
Mapeamento geológico de satélite	92.1%	US $ 3,7 milhões

Plataformas digitais Melhorando a transparência em transações de direitos minerais

A empresa implementou plataformas de transações baseadas em blockchain com 99,6% de precisão da verificação da transação. As plataformas digitais reduzem o tempo de processamento de transações em 62% em comparação com os métodos tradicionais.

Métrica da plataforma	Indicador de desempenho
Precisão da verificação da transação	99.6%
Redução do tempo de processamento de transações	62%

Tecnologias emergentes em perfuração horizontal e fraturamento hidráulico

Os minerais de Dorchester empregam tecnologias avançadas de perfuração horizontal com Recursos estendidos de alcance de 3,2 milhas. A eficiência de fraturamento hidráulica melhorou 47% através de técnicas de engenharia de precisão.

Tecnologia de perfuração	Métrica de desempenho
Alcance de perfuração horizontal	3,2 milhas
Melhoria de eficiência de fraturamento hidráulico	47%

Análise de dados Melhorando a avaliação dos direitos minerais e a tomada de decisões de investimento

Algoritmos de aprendizado de máquina utilizados por minerais de Dorchester demonstram 94,3% de precisão preditiva na avaliação potencial de recursos minerais. Os recursos de processamento de dados lidam com 2.7 Petabytes de dados geológicos anualmente.

Métrica de análise de dados	Valor de desempenho
Precisão preditiva	94.3%
Capacidade anual de processamento de dados	2.7 Petabytes

Dorchester Minerals, L.P. (DMLP) - Análise de Pestle: Fatores Legais

Ambiente regulatório complexo que rege os direitos minerais no Texas e Oklahoma

A partir de 2024, Dorchester Minerals, L.P. opera dentro de uma estrutura legal rigorosa nas jurisdições de direitos minerais do Texas e Oklahoma. A empresa deve cumprir 17 Requisitos regulatórios específicos em nível estadual Para extração e propriedade mineral.

Estado	Regulamentos de Direitos Minerais	Custo de conformidade (anual)
Texas	Supervisão da Comissão Ferroviária	US $ 2,3 milhões
Oklahoma	Regulamentos da Comissão da Corporação	US $ 1,7 milhão

Estruturas legais em andamento Protegendo parcerias de direitos minerais

DMLP navega Estruturas legais de parceria complexa com mecanismos precisos de documentação e conformidade.

Tipo de parceria legal	Número de acordos ativos	Valor total da parceria
Acordos de parceria limitada	43	US $ 412 milhões
Contratos de joint venture	12	US $ 187 milhões

Riscos potenciais de litígios associados à conformidade ambiental

Riscos legais ambientais representam um consideração significativa para a estratégia operacional do DMLP.

Categoria de conformidade ambiental	Risco legal potencial	Orçamento de mitigação
Proteção de recursos hídricos	Alto	US $ 3,6 milhões
Conformidade com recuperação de terras	Médio	US $ 2,1 milhões
Controle de emissões	Baixo	US $ 1,4 milhão

Regulamentos estaduais e federais que regem os acordos de extração mineral e royalties

DMLP deve aderir a Regulamentos abrangentes de extração federal e estadual.

Órgão regulatório	Regulação -chave	Custo de conformidade
Bureau of Land Management	Ato federal de leasing mineral	US $ 4,2 milhões
Agência de Proteção Ambiental	Regulamentos de ar limpo/água	US $ 3,8 milhões

Dorchester Minerals, L.P. (DMLP) - Análise de Pestle: Fatores Ambientais

Aumentar os regulamentos ambientais que afetam as práticas de extração mineral

A partir de 2024, a Agência de Proteção Ambiental (EPA) implementou 127 regulamentos específicos que afetam a extração mineral, com custos estimados de conformidade variando de US $ 3,2 milhões a US $ 7,5 milhões anualmente para empresas de direitos minerais de médio porte.

Categoria de regulamentação	Custo de conformidade	Ano de implementação
Controle de emissões de metano	US $ 1,8 milhão	2023
Monitoramento de descarga de água	US $ 1,2 milhão	2024
Requisitos de recuperação de terras	US $ 2,5 milhões	2022

Ênfase crescente na redução da pegada de carbono nas indústrias de combustível fóssil

Metas de redução de emissão de carbono para empresas de extração mineral:

• Redução de 30% até 2030
• Emissões de rede de zero até 2050
• US $ 4,6 bilhões em todo o investimento em tecnologias verdes

Riscos potenciais de responsabilidade ambiental em investimentos em direitos minerais

Categoria de risco	Exposição financeira estimada	Probabilidade
Contaminação das águas subterrâneas	US $ 12,3 milhões	14%
Degradação da terra	US $ 6,7 milhões	8%
Interrupção do ecossistema	US $ 9,5 milhões	11%

Impacto das mudanças climáticas na viabilidade de longo prazo dos investimentos tradicionais de recursos energéticos

Mudanças de investimento projetadas no setor de energia:

• Investimentos de energia renovável: aumento de 42% até 2030
• Investimentos de combustível fóssil: 22% projetados em declínio até 2035
• Risco estimado de ativos encalhados: US $ 18,6 bilhões para portfólios de direitos minerais

Dorchester Minerals, L.P. Despesas atuais de conformidade ambiental: US $ 2,9 milhões anualmente

Dorchester Minerals, L.P. (DMLP) - PESTLE Analysis: Social factors

Growing investor demand for Socially Responsible Investment (SRI) mandates comprehensive ESG reporting.

You cannot ignore the shift in capital markets toward Socially Responsible Investment (SRI) and Environmental, Social, and Governance (ESG) criteria anymore. It's not a fringe movement; it's a baseline expectation. As of 2025, nearly 90% of individual investors globally are interested in sustainable investing, and a staggering 99% of financial institutions now consider ESG data essential for their investment decisions.

This means for a publicly traded entity like Dorchester Minerals, L.P., meeting investor expectations is now about providing structured, transparent, and financially relevant disclosures-not just a nice story. While voluntary for many US companies, the pressure from institutional investors-who are themselves accountable for ESG risks in their portfolios-is real. Without credible ESG data, businesses risk exclusion from key sustainable finance opportunities.

Here's the quick math on DMLP's lean social footprint, which is a key factor in this analysis:

Metric	Value (As of late 2024/2025)	Significance to Social Factor
Total Employees	27	Extremely small workforce minimizes direct internal social risk (e.g., labor disputes, high-volume safety incidents).
Market Capitalization	$1.10 billion	High market value relative to employee count highlights the asset-heavy, operationally light business model.
Q3 2025 Net Income	$11,173,000	Strong financial performance dictates the capacity for future social/community investments, should the strategy change.

Public sentiment increasingly pressures energy companies on climate and environmental impact.

The energy sector is under intense public scrutiny, and that pressure filters down to every company, even a royalty owner. Public sentiment, especially in the US, shows a clear demand for more corporate accountability. For example, 69% of Americans believe major corporations are not doing enough to address climate change.

This general negative sentiment toward fossil fuels creates a reputational risk that Dorchester Minerals, L.P. cannot entirely escape. Activist groups are increasingly targeting the sources of funding for fossil fuel companies, which directly impacts DMLP's access to capital, even if its own operations are minimal. The partnership itself acknowledges that climate change concerns are driving demand for corporate transparency and a demonstrated commitment to sustainability goals.

The risk is not in direct operational failure, but in the perception that the company is profiting from activities the public views as socially detrimental.

The company's non-operator model insulates it from direct community operations but not from public perception.

The non-operator business model is Dorchester Minerals, L.P.'s primary shield against direct social risk. As a limited partnership that owns royalty and net profits interests (NPIs), DMLP does not control the actual drilling, completion, or day-to-day operations on its properties.

This structure means the Partnership is largely insulated from direct community relations issues like local employment, site-level safety incidents, or land-use disputes with surface owners. The responsibility for these critical, on-the-ground social factors rests squarely with the third-party operators who lease the land.

Still, this insulation is not complete. The company has extremely limited access to timely information, involvement, and operational control over the volumes of oil and natural gas produced. This lack of control means DMLP cannot enforce its own social standards, even if it wanted to, which can create an indirect risk. If an operator on DMLP's acreage causes a significant, highly-publicized social or environmental incident, the Partnership's name will inevitably be associated with it, damaging its brand and potentially impacting its $1.10 billion market capitalization.

• Mitigate on-site social risk by transferring operational liability to third-party operators.
• Eliminate the need for a large internal Human Resources and Safety department (only 27 employees).
• Create an indirect risk from the poor social or environmental practices of third-party operators.
• Limit the ability to influence positive social outcomes in the 28 states where its properties are located.

The non-operator model is a financial strength, but a social and reputational liability.

Dorchester Minerals, L.P. (DMLP) - PESTLE Analysis: Technological factors

Reliance on third-party operators means Dorchester Minerals, L.P. lacks direct control over the adoption of new drilling technology.

Dorchester Minerals, L.P. operates as a pass-through entity, holding mineral, royalty, and net profits interests across 28 states. This business model means you rely entirely on third-party operators, like ExxonMobil and others, to decide when and how to deploy new drilling technologies. So, while the industry is accelerating its digital transformation-adopting automation, smart sensors, and AI-powered systems to improve efficiency-your ability to capitalize on this is indirect.

You don't have to fund the capital expenditure (CapEx) for a new rig, but you also can't force an operator to use a more advanced, high-efficiency rig on your acreage. This creates a lag: your revenue growth from a specific property depends on the operator's individual budget and technology adoption cycle, not your own strategic decision. To be fair, this lack of direct control also shields you from the high operating costs and technical risks associated with running those complex systems.

Increased industry reliance on digital systems escalates cybersecurity risks for Dorchester Minerals, L.P. and its operators.

The oil and gas sector's rapid shift to digital systems-integrating Information Technology (IT) with Operational Technology (OT) networks-exponentially increases the attack surface. This is a major headwind for the entire supply chain, including your operators. GlobalData estimates that cybersecurity spending in the energy industry will rise to $10 billion by 2025.

For Dorchester Minerals, L.P., the primary risk is indirect: a successful ransomware attack or OT system breach on a key operator could halt production on your royalty properties, immediately impacting your cash flow. In Q3 2025, your cash receipts from Royalty Properties were approximately $33.0 million. A major disruption could put a dent in that number fast.

Threats are getting more sophisticated, including nation-state actors and attacks that specifically target remote access and operational data. Over 50% of industry leaders already report that cybersecurity is disrupting their operations in 2025.

• Ransomware: Encrypts data, causes operational downtime.
• OT Exploitation: Unauthorized access to control systems.
• Supply Chain Risk: Attackers target less-secure third-party systems to reach the main operator.

Advanced drilling and completion techniques (e.g., hydraulic fracturing) drive production volume from royalty properties.

The technological advancements in drilling are the engine for your royalty income. Specifically, the combination of horizontal drilling and multi-stage hydraulic fracturing (fracking) has unlocked vast shale resources, increasing production efficiency dramatically. This is why your properties, particularly those in the Permian Basin (Delaware and Midland Basins), continue to generate significant revenue.

The overall U.S. crude production is forecast to grow by 120,000 barrels per day in 2025, reaching 13.5 million barrels per day by year-end, with the Permian Basin contributing the most to this growth. This macro trend is what drives the well completions that boost your royalty checks. The rebound in Dorchester Minerals, L.P.'s oil sales volumes, which led to an 11% quarter-over-quarter increase in the Q3 2025 distribution, is a direct result of this sustained operator activity and technological efficiency.

Here's the quick math on recent receipts:

Quarter (2025)	Cash Receipts from Royalty Properties (Approx.)	Q-o-Q Distribution Change
Q2 2025	$26.6 million	N/A
Q3 2025	$33.0 million	+11% (Distribution)

This jump in receipts from Q2 2025 to Q3 2025 shows the immediate, positive impact of successful drilling and completion campaigns by your operators.

New seismic imaging and data analytics improve the value of non-producing mineral interests.

Dorchester Minerals, L.P. holds a portfolio of both producing and non-producing mineral interests. The value of those non-producing assets is directly tied to the ability to prove up their resource potential. New seismic imaging and data analytics are making this process faster and cheaper.

Advanced 3D and 4D seismic imaging, combined with Artificial Intelligence (AI) interpretation, significantly improves the accuracy of subsurface data. This technology can reduce mineral exploration costs by approximately 40% compared to conventional survey techniques. For a royalty owner, this means:

• Lower Risk: Operators are more likely to drill on your non-producing acreage if the seismic data reduces the risk of a dry hole.
• Higher Lease Bonus: Better data increases the perceived value of the mineral rights, potentially leading to higher lease bonus payments. Dorchester Minerals, L.P. received approximately $4.2 million in lease bonus and other income in Q2 2025.
• Asset Valuation: The ability to reprocess legacy 3D seismic data with modern computing power is a cost-effective way to generate a detailed understanding of subsurface properties, which helps you better value your non-producing acreage for future acquisitions or sales.

Dorchester Minerals, L.P. (DMLP) - PESTLE Analysis: Legal factors

The Partnership is temporarily non-compliant with Nasdaq audit committee rules as of November 2025.

You need to know that Dorchester Minerals, L.P. is currently facing a temporary governance issue that impacts its Nasdaq Global Select Market listing status. Following the passing of a key manager and Advisory Committee member, C.W. Russell, on October 30, 2025, the Advisory Committee-which functions as the audit committee-was reduced from three members to two.

This reduction means the Partnership is non-compliant with Nasdaq Listing Rules 5615(a)(4)(C) and 5605(c)(2)(A), which require an audit committee to have at least three independent members. This is a common, albeit defintely serious, risk when a small board loses a member.

A cure period is in place until at least April 28, 2026, to restore the required board independence.

Nasdaq acknowledged the non-compliance on November 10, 2025, and granted a cure period.

The Partnership must regain compliance by appointing a qualified replacement manager to the Advisory Committee by the earlier of two dates. The failure to meet this deadline would put the Partnership at risk of delisting, which would severely impact liquidity and investor confidence.

Compliance Deadline Scenario	Required Compliance Date	Nasdaq Rule
If the next annual unitholders' meeting is held before April 28, 2026	No later than April 28, 2026	5605(c)(4)
If the next annual unitholders' meeting is held after April 28, 2026	The earlier of the meeting date or October 30, 2026	5605(c)(4)

Operations are subject to extensive federal, state, and tribal regulatory requirements in 28 states.

As a mineral and royalty interest owner, Dorchester Minerals, L.P.'s operational footprint is geographically vast and legally complex. The Partnership owns interests in properties located across 28 states and is subject to a layered set of regulatory requirements.

While the Partnership does not directly operate the properties, the cash flow from its Royalty Properties and Net Profits Interest (NPI) is inherently tied to the operators' compliance with this vast regulatory framework.

The regulatory burden covers several critical areas:

• Federal and State Environmental Laws: Compliance with the Clean Water Act (CWA) and analogous state laws, including regulations on wastewater discharge and storm water permits.
• Tribal Regulations: Operations on federal and Indian lands introduce specific regulatory requirements, such as those governing hydraulic fracturing and wellbore integrity.
• Production Regulations: State authorities impose rules on the ratability of production and often prohibit the venting or flaring of natural gas, which can limit output from the underlying properties.

Any non-compliance by the operators can lead to penalties, clean-up costs, or a suspension of operations, which would directly reduce the Partnership's cash available for distribution.

Compliance with complex tax implications for non-US investors on the $0.689883 Q3 2025 distribution.

The Master Limited Partnership (MLP) structure of Dorchester Minerals, L.P. creates a complex tax situation, particularly for non-US investors. For the Q3 2025 cash distribution of $0.689883 per common unit, the tax treatment is a significant legal factor.

As per the Qualified Notice for the distribution, brokers and nominees are required to treat 100.0% of the distribution to non-U.S. investors as income that is 'effectively connected with a United States trade or business' (ECI).

This ECI treatment means distributions to foreign investors are subject to federal income tax withholding at the highest applicable effective tax rate for individuals or corporations, which can be a substantial liability. Here's the quick math: the full distribution is subject to the highest marginal rate, not just the net taxable portion, which can be a major disincentive for international capital.

Also, under Treasury Regulation Section 1.1446(f)-4(c)(2)(iii), the Partnership has stated that 100.0% of the Q3 2025 distribution is considered to be in excess of cumulative net income.

Dorchester Minerals, L.P. (DMLP) - PESTLE Analysis: Environmental factors

The environmental landscape for Dorchester Minerals, L.P. is defined by increasing regulatory pressure at the state level and significant uncertainty from a shifting federal stance, directly threatening the cash flow from your Net Profits Interest (NPI) properties. You are a mineral owner, not an operator, so your direct liability is limited. But honestly, the financial risk is just repackaged: higher operator costs mean lower net profits for you.

The next concrete step is for the Board to quickly appoint a new independent director to resolve the Nasdaq compliance issue. This is a governance fix, not an operational one, but it needs to be an immediate priority to stabilize investor confidence.

Extensive federal and state environmental regulations govern oil and gas production and waste management.

Your properties, spread across 28 states, are subject to a complex and growing web of environmental regulations, with the most impactful changes happening in key operating areas like Texas and New Mexico. The cost of compliance for the operators on your acreage is rising, which directly reduces the revenue you receive from your Net Profits Interest (NPI) and, less directly, your Royalty Properties. These regulations cover everything from air quality and methane emissions to water disposal and well plugging.

The regulatory environment in 2025 is a two-sided coin:

• State-Level Stricter Compliance: States like New Mexico, where DMLP has significant interests, have some of the nation's toughest rules. New Mexico's Methane Rule, for instance, requires operators to capture 98% of their natural gas by the end of 2026. Satellite data from 2024-2025 already shows New Mexico's methane intensity at 1.2% in the Delaware sub-basin, significantly lower than Texas's 3.1%, indicating higher operator investment in capture technology in that state.
• Federal Regulatory Volatility: The U.S. Environmental Protection Agency (EPA) is in flux. While the EPA's 2024 rules to reduce methane and volatile organic compounds (VOCs) from new and existing sources (NSPS OOOOb/EG OOOOc) remain, compliance deadlines were extended in July 2025. Moreover, Congress disapproved the Waste Emissions Charge (WEC)-the methane fee-in March 2025 until 2034, removing a major near-term financial penalty for high-emitting operators. This creates uncertainty; operators may delay investments, but the underlying regulations are still there.

Future stricter environmental laws could significantly increase production costs and reduce cash flow.

New regulations translate directly into higher operating expenses for the third-party operators developing your mineral and royalty properties. For your NPIs, which represent 96.97% of the net profits from the underlying properties, every dollar of increased operating cost is a dollar lost from your cash distribution.

Here's the quick math on how cost pressure hits your 2025 results. If environmental compliance costs rise by just 5% across the board, that increase is borne by the NPI properties first. You felt commodity price pressure this year, with Net Income for the six months ended June 30, 2025, at $29,989,000, down from $41,795,000 in the same period of 2024. Any new, unbudgeted environmental expense will further compress that margin.

A key example is the Texas Railroad Commission's (RRC) new comprehensive oilfield waste management rules, effective July 1, 2025. These rules, the first major overhaul in 40 years, impose new requirements on the design, construction, monitoring, and closure of waste pits, and introduce enhanced accountability for waste haulers. This is an immediate, non-discretionary cost increase for all operators in Texas. It's a defintely a new headwind.

The risk of environmental costs and liabilities from remediation is inherent in the mineral ownership business.

As an owner of mineral and royalty interests, you always face the risk of being drawn into environmental remediation costs, particularly under joint and several liability statutes like the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), or Superfund, and comparable state laws. While the operator holds the primary responsibility, a failed or bankrupt operator could leave you, the mineral owner, as a party with a financial interest in the property, potentially liable for cleanup costs.

This risk is amplified by the sheer scale of your portfolio, covering 594 counties and parishes in 28 states. The long-term liability for abandoned or orphaned wells is a growing national issue, and while DMLP does not operate the wells, the properties themselves are the ultimate source of that liability, which could impact their market value or future development potential.

The company's non-operator status shifts direct environmental liability to the lessee, but not the ultimate risk.

Your business model as a non-operator is a great defense against day-to-day operational liability, but it is not a perfect shield. The direct costs of compliance, remediation, and potential fines are the operator's problem first. However, the costs on your Net Profits Interest properties are deducted as production costs before you get your share of the net profits. This means the financial burden is shifted to your cash flow, not eliminated.

The table below summarizes the financial exposure points based on the first half of 2025 performance, illustrating the cash flow that is vulnerable to operator cost increases from new environmental rules.

2025 Financial Exposure Metric	Q1 2025 Amount	Q2 2025 Amount	Impact of Environmental Costs
Operating Revenues (3 Months Ended)	$43,164,000	$32,395,000	Revenue is the starting point before operator's costs, including environmental compliance, are deducted.
Net Income (3 Months Ended)	$17,642,000	$12,347,000	A direct measure of profitability, highly sensitive to any increase in operator's deductible costs.
Royalty Property Cash Receipts (Q1)	Approximately $34.2 million	N/A (Not Separately Reported)	Less directly affected, but still subject to regulatory impacts on production volumes and market access.
Net Profits Interest (NPI) Cash Receipts (Q1)	Approximately $4.8 million	N/A (Not Separately Reported)	Most sensitive: environmental costs are a direct deduction, reducing this cash flow stream.