dmlp20240331

dmlp20240331_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION
Washington, DC. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission File Number: 000-50175

DORCHESTER MINERALS, L.P.

(Exact name of registrant as specified in its charter)

Delaware	81-0551518
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

3838 Oak Lawn Avenue, Suite 300, Dallas, Texas 75219

(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (214) 559-0300

None

(Former name, former address and former fiscal year, if changed since last report)

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 Representing Limited

Partnership Interest

DMLP

NASDAQ Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

	Large accelerated filer ☒	Accelerated filer ☐	Non-accelerated filer ☐
	Smaller reporting company ☐	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 ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Number of common units representing limited partnership interests outstanding as of May 2, 2024: 40,088,612

DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS			1

PART I – FINANCIAL INFORMATION			1

	ITEM 1.	FINANCIAL STATEMENTS (UNAUDITED)	1

		CONDENSED CONSOLIDATED BALANCE SHEETS	2

		CONDENSED CONSOLIDATED INCOME STATEMENTS	3

		CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERSHIP CAPITAL	4

		CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS	5

		NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS	6

	ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	9

	ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	13

	ITEM 4.	CONTROLS AND PROCEDURES	13

PART II – OTHER INFORMATION			13

	ITEM 1.	LEGAL PROCEEDINGS	13

	ITEM 1A.	RISK FACTORS	13

	ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	13

	ITEM 5.	OTHER INFORMATION	13

	ITEM 6.	EXHIBITS	14

SIGNATURES			16

	*March 31,*			*December 31,*
	*2024*			*2023*

ASSETS
Current assets:
Cash and cash equivalents	$	37,737		$	47,025
Trade and other receivables		13,840			14,407
Net profits interest receivable - related party		7,025			8,275
Total current assets		58,602			69,707

Oil and natural gas properties (full cost method)		518,875			507,057
Accumulated full cost depletion		(393,836	)		(386,939	)
Total		125,039			120,118

Leasehold improvements		989			989
Accumulated amortization		(537	)		(514	)
Total		452			475

Operating lease right-of-use asset		719			765
Total assets	$	184,812		$	191,065

LIABILITIES AND PARTNERSHIP CAPITAL

Current liabilities:
Accounts payable and other current liabilities	$	4,214		$	4,195
Operating lease liability		270			272
Total current liabilities		4,484			4,467

Operating lease liability		975			1,041
Total liabilities		5,459			5,508

Commitments and contingencies (Note 4)

Partnership capital:
General Partner		(799	)		113
Unitholders (40,088 and 38,372 common units issued and outstanding as of March 31, 2024 and December 31, 2023, respectively)		180,152			185,444
Total partnership capital		179,353			185,557
Total liabilities and partnership capital	$	184,812		$	191,065

	Three Months Ended
	March 31,
	2024		2023

Operating revenues
Royalties	$	24,877	$	24,684
Net profits interest		5,598		14,947
Lease bonus and other		504		536
Total operating revenues		30,979		40,167

Costs and expenses
Operating, including production taxes		2,623		2,718
Depreciation, depletion and amortization		6,920		6,641
General and administrative		3,269		2,738
Total costs and expenses		12,812		12,097

Net income	$	18,167	$	28,070

Allocation of net income
General Partner	$	605	$	760
Unitholders	$	17,562	$	27,310
Net income per common unit (basic and diluted)	$	0.44	$	0.71
Weighted average basic and diluted common units outstanding		39,605		38,372

	*General Partner*			*Unitholders*			*Total*			*Unitholder Units*
Three Months Ended March 31, 2023
Balance at January 1, 2023	$	676		$	170,842		$	171,518			38,372
Net income		760			27,310			28,070
Distributions ($0.884339 per common unit)		(1,117	)		(33,933	)		(35,050	)
Balance at March 31, 2023	$	319		$	164,219		$	164,538			38,372

Three Months Ended March 31, 2024
Balance at January 1, 2024	$	113		$	185,444		$	185,557			39,583
Net income		605			17,562			18,167
Acquisition of assets for units		-			17,041			17,041			505
Distributions ($1.007874 per common unit)		(1,517	)		(39,895	)		(41,412	)
Balance at March 31, 2024	$	(799	)	$	180,152		$	179,353			40,088

	*Three Months Ended*
	*March 31,*
	*2024*			*2023*

Net cash provided by operating activities	$	27,967		$	38,745

Cash flows provided by investing activities:
Net cash contributed in acquisitions of oil and natural gas properties		4,157			550

Cash flows used in financing activities:
Distributions paid to General Partner and unitholders		(41,412	)		(35,050	)

(Decrease) increase in cash and cash equivalents		(9,288	)		4,245
Cash and cash equivalents at beginning of period		47,025			40,754

Cash and cash equivalents at end of period	$	37,737		$	44,999

Non-cash investing and financing activities:
Fair value of common units issued for acquisition of oil and natural gas properties	$	17,041		$	-

	Three Months Ended
	March 31,
Accrual basis sales volumes:	2024		2023		% Change
Royalty Properties natural gas sales (mmcf)		1,268		1,330		(5	)%
Royalty Properties oil sales (mbbls)		343		302		14	%
NPI natural gas sales (mmcf)		489		864		(43	)%
NPI oil sales (mbbls)		176		269		(35	)%

Accrual basis average sales prices:
Royalty Properties natural gas sales ($/mcf)	$	1.62	$	3.01		(46	)%
Royalty Properties oil sales ($/bbl)	$	66.59	$	68.48		(3	)%
NPI natural gas sales ($/mcf)	$	1.52	$	3.39		(55	)%
NPI oil sales ($/bbl)	$	66.39	$	70.56		(6	)%

	(In Thousands)
2024	$	268
2025		362
2026		368
2027		374
2028		380
Thereafter		63
Total lease payments		1,815
Less amount representing interest		(570	)
Total lease obligation	$	1,245

Number	Description
3.1	Certificate of Limited Partnership of Dorchester Minerals, L.P. (incorporated by reference to Exhibit 3.1 to Dorchester Minerals’ Registration Statement on Form S-4, Registration Number 333-88282)

3.2	Amended and Restated Agreement of Limited Partnership of Dorchester Minerals, L.P. (incorporated by reference to Exhibit 3.2 to Dorchester Minerals’ Annual Report on Form 10-K filed for the year ended December 31, 2002)

3.3	Amendment No. 1 to Amended and Restated Partnership Agreement of Dorchester Minerals, L.P. (incorporated by reference to Exhibit 3.1 to Dorchester Minerals’ Current Report on Form 8-K filed with the SEC on December 22, 2017)

3.4	Amendment No. 2 to Amended and Restated Partnership Agreement of Dorchester Minerals, L.P. (incorporated by reference to Exhibit 3.4 to Dorchester Minerals’ Quarterly Report on Form 10-Q filed with the SEC on August 6, 2018)

3.5	Amendment No. 3 to Amended and Restated Partnership Agreement of Dorchester Minerals, L.P. (incorporated by reference to Exhibit 3.1 to Dorchester Minerals’ Current Report on Form 8-K filed with the SEC on October 6, 2023)

3.6	Certificate of Limited Partnership of Dorchester Minerals Management LP (incorporated by reference to Exhibit 3.4 to Dorchester Minerals’ Registration Statement on Form S-4, Registration Number 333-88282)

3.7	Amended and Restated Limited Partnership Agreement of Dorchester Minerals Management LP (incorporated by reference to Exhibit 3.4 to Dorchester Minerals’ Annual Report on Form 10-K for the year ended December 31, 2002)

3.8	Certificate of Formation of Dorchester Minerals Management GP LLC (incorporated by reference to Exhibit 3.7 to Dorchester Minerals’ Registration Statement on Form S-4, Registration Number 333-88282)

3.9	Amended and Restated Limited Liability Company Agreement of Dorchester Minerals Management GP LLC (incorporated by reference to Exhibit 3.6 to Dorchester Minerals’ Annual Report on Form 10-K for the year ended December 31, 2002)

3.10	Certificate of Formation of Dorchester Minerals Operating GP LLC (incorporated by reference to Exhibit 3.10 to Dorchester Minerals’ Registration Statement on Form S-4, Registration Number 333-88282)

3.11	Limited Liability Company Agreement of Dorchester Minerals Operating GP LLC (incorporated by reference to Exhibit 3.11 to Dorchester Minerals’ Registration Statement on Form S-4, Registration Number 333-88282)

3.12	Certificate of Limited Partnership of Dorchester Minerals Operating LP (incorporated by reference to Exhibit 3.12 to Dorchester Minerals’ Registration Statement on Form S-4, Registration Number 333-88282)

3.13	Amended and Restated Agreement of Limited Partnership of Dorchester Minerals Operating LP (incorporated by reference to Exhibit 3.10 to Dorchester Minerals’ Annual Report on Form 10-K for the year ended December 31, 2002)

3.14	Certificate of Limited Partnership of Dorchester Minerals Oklahoma LP (incorporated by reference to Exhibit 3.11 to Dorchester Minerals’ Annual Report on Form 10-K for the year ended December 31, 2002)

3.15	Agreement of Limited Partnership of Dorchester Minerals Oklahoma LP (incorporated by reference to Exhibit 3.12 to Dorchester Minerals’ Annual Report on Form 10-K for the year ended December 31, 2002)

3.16	Certificate of Incorporation of Dorchester Minerals Oklahoma GP, Inc. (incorporated by reference to Exhibit 3.13 to Dorchester Minerals’ Annual Report on Form 10-K for the year ended December 31, 2002)

3.17	Bylaws of Dorchester Minerals Oklahoma GP, Inc. (incorporated by reference to Exhibit 3.14 to Dorchester Minerals’ Annual Report on Form 10-K for the year ended December 31, 2002)

10.1	Amendment No. 1 to the Dorchester Minerals Management LP Equity Incentive Program (incorporated by reference to Exhibit 10.2 to Dorchester Minerals’ Current Report on Form 8-K filed with the SEC on October 6, 2023)

31.1*	Certification of Chief Executive Officer of the Partnership pursuant to Rule 13a-14(a) / 15d-14(a) of the Securities Exchange Act of 1934

31.2*	Certification of Chief Financial Officer of the Partnership pursuant to Rule 13a-14(a) / 15d-14(a) of the Securities Exchange Act of 1934

32.1**	Certification of Chief Executive Officer and Chief Financial Officer of the Partnership pursuant to 18 U.S.C. Sec. 1350

101.INS*	XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

101.SCH*	Inline XBRL Taxonomy Extension Schema Document

101.CAL*	Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF*	Inline XBRL Taxonomy Extension Definition Document

101.LAB*	Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE*	Inline XBRL Taxonomy Extension Presentation Linkbase Document

104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

	* Filed herewith
	**Furnished herewith

	By:	/s/ Bradley Ehrman
		Bradley Ehrman
Date: May 2, 2024		Chief Executive Officer

	By:	/s/ Leslie Moriyama
		Leslie Moriyama
Date: May 2, 2024		Chief Financial Officer