TXO Partners: A Steady Stream of Income in 2025 and Beyond

Alright, fellow investors, let's dive into the latest news from TXO Partners, L.P. (NYSE: TXO). The company has just declared a fourth quarter 2024 distribution of $0.61 on common units, provided a 2025 distribution outlook, and filed its annual report on Form 10-K. Buckle up, because we're going to explore what this means for you and your portfolio.



First things first, let's talk about that distribution. A quarterly payout of $0.61 per common unit might not seem like much, but when you consider that TXO Partners has a dividend yield of 12.84%, it starts to look a lot more attractive. That's right, you heard it here first – TXO Partners is offering a pro forma current yield of 12.84% after its recent decline following the 3Q23 financial report. Now, that's what I call a steady stream of income!

But why is this distribution so significant? Well, let's take a look at the company's historical distribution trends. In 2023, TXO Partners declared distributions of $0.52, $0.58, $0.65, and $0.58 per common unit for the first, second, third, and fourth quarters, respectively. This results in an annual distribution of $2.35 per common unit. Now, compare that to the 2025 distribution outlook of $9.52 per share, and you'll see that TXO Partners has maintained a consistent distribution trend, with a slight increase in the annual distribution.



Now, you might be wondering, "What's the deal with TXO Partners' financial performance over the past year?" Well, let me tell you, it's been a bit of a rollercoaster. In 2023, TXO Partners' revenue was $380.72 million, an increase of 54.51% compared to the previous year's $246.40 million. That's some serious growth, folks! However, the company's losses were -$103.99 million in 2023, which is 1256.1% more than in 2022. Ouch! That's a significant increase in losses, and it's something investors should keep an eye on.

But don't let that discourage you from considering TXO Partners as a potential addition to your portfolio. The company has a strong focus on acquiring, developing, optimizing, and exploiting conventional oil, natural gas, and natural gas liquid reserves in North America. With acreage positions concentrated in the Permian Basin of West Texas and New Mexico and the San Juan Basin of New Mexico and Colorado, TXO Partners is well-positioned to capitalize on the region's energy potential.



Moreover, TXO Partners has recently announced the potential for 3 TCFE of natural gas in the Mancos Shale of the San Juan Basin. This discovery could significantly enhance the company's reserves and contribute to future revenue growth. So, while the company's financial performance has been a bit rocky, there's still plenty of reason to be optimistic about TXO Partners' prospects.

In conclusion, TXO Partners' 2025 distribution outlook and consistent distribution trends make it an attractive option for income-focused investors. While the company's financial performance has been volatile, its strong focus on energy reserves in North America and recent natural gas discoveries suggest that TXO Partners is well-positioned for future growth. So, if you're looking for a steady stream of income in your portfolio, TXO Partners might just be the ticket. Just remember to keep an eye on the company's financial performance and maintain a diversified portfolio to mitigate risk. Happy investing!