Thank you for standing by. My name is Tina, and I will be your conference operator today. At this time, I would like to welcome everyone to the LandBridge Third Quarter 2025 Results Call. [Operator Instructions] It is now my pleasure to turn the call over to Mae Harrington, Director of Investor Relations. Ma'am, the floor is yours.

Good morning, and thank you for joining LandBridge'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 and 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 discussion 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.

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 position. In the near term, we continue to focus on delivering a differentiated value proposition for our pore space offering. To summarize three core advantages of our approach, First, we control over 300,000 highly contiguous acres, largely insulated from the elevated pore pressure challenges impacting other areas of the statewide region. Second, our partnerships, particularly with WaterBridge enable critical transportation of produced water to underutilize pore space our acreage. WaterBridge, one of the largest produce water infrastructure operators in the U.S. 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 overconcentration 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 the sale of a 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 ONEOK for a natural gas processing facility in Loving County, Texas. Further, we continue to execute our strategy of accretive land acquisitions as demonstrated in our recent acquisition of approximately 37,500 acres for Mike's 1918 Ranch & Royalty. 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 we'll 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 through 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 used 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%. The 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 borrowings outstanding under our term loan and credit facility were $369.3 million, down from $374.3 million at the end of Q2. Our net leverage ratio was 2.1x at the end of the third quarter compared to 2.4x 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 2.5x. And finally, returning capital to shareholders through dividends and opportunistic share repurchases. This quarter, we declared a quarterly dividend of $0.10 per share payable on December 18, 2025, to shareholders of record as of December 4. 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?

[Operator Instructions] Our first question comes from the line of John Mackay with Goldman Sachs.

Can we talk about the new acquisition a little bit? You framed up some related to EBITDA for '26. Maybe you can kind of talk about your visibility on that visibility of growth on the footprint. And maybe more broadly, as part of that, how you think right now about kind of what's the right kind of price to pay for some of these acreage packages out there? Is it multiple? Is it dollar per barrel pore space available? Maybe just walk us through the framework as well.

Thanks for the thoughtful question. Yes, so really excited about 1918, as we kind of think through it here, kind of conservatively expecting $20 million of EBITDA being contributed from that acquisition to next year. That's not really predicated on any growth relative to the run rate when we bought it. And so kind of conservatively forecasting that flat. But that said, the economic profile of this acquisition is very similar to what we've seen previously. When we acquired Hanging H Ranch, we acquired East Stateline Ranch is two good examples kind of stepping in at 12-ish x investment multiple and then through driving growth, getting that down to more of a 3 to 4x investment multiple over several years. When you think through what is driving the potential there I'd really categorize it into two buckets. The first on the eastern portion of the footprint, there's roughly 900,000 barrels a day of incremental pore space capacity that not just adds to the depth of our pore space inventory, but also gives us additional reach into the Southern Loving County, which really unlocks some new commercial opportunities. So that pore space just at today's prevailing market rate for royalties could generate mid-50s of EBITDA. And then on the western side of the footprint, there's already a very impressive but down of transmission and power infrastructure that makes it a very attractive location for clean energy and energy transition projects. And then incremental to those two, I've just summarized by also saying this is a fantastic surface as you think through potential for digital infrastructure. So all of that would be obviously very additive incremental growth. And so yes, as you know, as we see kind of the investment here, again, it's very similar to the underwriting thought process that went into those prior investments that have worked out well for us, and we're excited to get this one done. Now to the second part of your question, how do we think through acquisitions. There's no magic formula. Ultimately, we look through underwriting each acquisition a bit differently, and it's really a function of ensuring the land we're buying has both an attractive entry point as well as a lot of upside that we can capture through our active land management strategy. 1918 is a great example of that, where the sellers very sharp group of folks, but not necessarily folks that look to monetize it in the same way and same fashion that we did. And so we think there's a lot of upside there. So when we think through kind of stepping into new M&A deals, very similar. We're going to look for the right land in the right locations that have just been undercommercialized historically relative to our expectations. And as long as the math works and we feel good about that option value, the M&A could opportunities could make sense in that context.

I appreciate those comments. Maybe just a second one for me. I understand you guys aren't really ready on this call to talk about anything kind of formal on the power side. But I guess if we look more broadly, compared to a year ago, we are starting to see a bunch of kind of power and data center projects pop up kind of more formally across the Permian. Can you just walk us through one more time when you guys are having these conversations, what are you seeing you're bringing to the table relative to some of those other kind of locations or partners out there?

Yes. I mean the announcements have come out recently are no surprise. I mean, the economic fundamentals of West Texas just made that inevitable. And as I've said before, it was always a when, not if discussion, and we're starting to see those come to fruition here. I mean, from our seat, we are further along into existing conversations and also engaged with a number of new blue-chip counterparties in these discussions. And so we're very excited and very optimistic about the progress we're making, and we look forward to sharing new milestones when the time is right. Ultimately, being able to deliver what is a packaged solution of land, power via our power partnerships and water as well as in locations that are very conducive to both power and data centers, particularly as you think through things like fiber availability. It really just allows us to deliver this, call it, derisked package that's just challenging for others to match. And that's something that's been very well received by counterparties. Again, several processes kind of fairly far along, and we're really excited about what's to come.

The next question comes from the line of Theresa Chen with Barclays.

I have a follow-up to the 1918 transaction. Scott, specifically to your comments about the southern portion of Loving County, unlocking new opportunities and reaching potentially that incremental mid-$50 million of EBITDA. What kind of time frame or cadence are you expecting for that how much commercial visibility do you have on inking those agreements? And then on the Western side, as far as opportunities for incremental transmission and power it sounds like these could come as more discrete events, if you will. How much visibility do you have there as well, please?

Yes. Theresa, the -- on the Western side of the pore space, we're already actively engaged with discussions on opportunities for folks to unlock that pore space. And so while we're not baking that into the $20 million figure, we've included for next year. I certainly think we could start seeing, call it, incremental EBITDA outperformance, particularly in the back half of the year, just given the pace of those conversations at this point. When you think through growing to kind of the levels you alluded to, we think that's, call it, a 3- to 4-year timeline in terms of our ability to go out and action that. On the western side on those energy transition and clean energy projects, those are just inherently longer runway projects but ones we're actively engaged on now. And so when you think through the ability for us to get those commercialized here over the next, call, 6 to 12 months. We'll certainly kind of make those announcements, let the public know the progress we're making, although the material EBITDA contribution on those types of projects are typically 3 to 4 years out, just given the development runway.

And on your solar project transaction, understanding that there are many commercial sensitivities here, but if you can help us frame up even qualitatively, what this economically means for your company? Or what are the next steps or milestones that would be really helpful.

Yes. I mean this is one that we're excited to get done. We've voiced over both with you all on the analyst side as well as the public effectively since our IPO that we have been working towards this towards getting this opportunity across the finish line. We're excited about the counterparty, the large, very reputable public clean energy developer and operator out of respect to their ask for confidentiality here. We can't share their name or were too much about the details on the project. But that said, I'll just say we're excited to get it done. I think it's a great win for the company as we kind of see the project come online here and get developed out over the next several years, we would expect to see those milestone payments hit. And then once the project is online and running, we would expect to see more recurring revenue as a result of that.

Next question is from Alexander Goldfarb with Piper Sandler.

Just a question for you -- just two questions. First, just going back to the amount of the number of people talking about building power data centers in West Texas. Is this one of these things like sort of field of dreams, if it's built, the hyperscalers will come? Or are the hyperscalers already like committing that they want to access West Texas and therefore, it's just a matter of people coming online and building the facilities and then the hyperscalers will be there. I'm just trying to figure out the sort of field of dreams or the hyperscalers are already out there and they want to be and they're just waiting for someone to build.

Yes. I think the kind of chicken and egg dynamic you're speaking to was more prevalent last year when West Texas really kind of got on the map, so to speak, when it relates to data centers. I mean, the engagement we've seen call it, over the last 6 to 12 months has shifted a bit, where typically these hyperscalers or the data center developers and operators are partnering directly with power providers. And so it's more of a package negotiation, not necessarily waiting for the power to be committed to in the hopes that the data center comes. And so I would say it's a much more sophisticated, call it, packaged approach now. And as a result of that, I think you're seeing just a lot more willingness for folks to kind of move quickly and get these projects across the finish line.

Okay. And then can we get an update on the existing data center deal that you did. I think it's been a few quarters since you received the initial deposit. And I think Five Point is still in sort of that option window. Are they -- do you think they're close to getting everything signed and fully committed and rolling out? Or just what's the update on their process?

Yes. Just to kind of remind the group. It's a 2-year option period, that partnership between Five Point and Commonwealth Asset Management, which also works in partnership with Silver Lake still active. I can't provide any specifics on where they're at in their process, though.

Next question comes from Charles Meade with Johnson Rice.

Jason, I want to ask a question about the natural gas processing lease with ONEOK. And I respect in your prepared comments, you have to balance transparency with, I guess, your commercially sensitive terms. But can you give us some detail on how those sorts of deals are typically structured whether it's an upfront payment, an annual payment duration? Just anything you could add to just kind of help size that, at least in our mind?

Yes, no problem. These are all usually upfront payments for long-term lease and we have additional payments per year. The other thing that opens up a big opportunity here is just the amount of infrastructure associated with these plants, the pipelines, the electrical, et cetera. So there's a recurring revenue associated with these.

Got it. Got it. So it's not just -- if I understand you correctly, it's not just this processing plant, but it's all the infrastructure and pipelines and electrical transmission that needs to get there. That's all other revenue opportunities for whether gas...

Yes.

Okay. Great. And then I want to ask a question about just this new slide or is at least new to me on Page 15 where you guys are putting out the long-term, I guess, shortfall of disposal capacity in the Delaware Basin. And I think I get the main point of the slide, which is access pore space is going to become more valuable over time not less. But I wonder if you could just give your interpretation of why you guys put this slide together and also maybe talk through what some of the important assumptions are? Like I know it looks like this is specific to the Delaware Basin. So this is -- does that shortfall exclude the possibility of moving, say, Delaware Basin produced water up to the Central Basin platform, things like that?

Charles, I'll take this one. Jason is struggling with his voice from a cold, if you can pick up on that. So yes, we take -- continue to take a close look at pore space in the Delaware Basin. And I think the punch line on this slide is that, that pore space is not a commodity. There truly is a differentiation as it relates to pore space. and the approach with managing that pore space. And we've spoken in the past about the overconcentration of assets along the state line and just the negative pore space or the negative geology reaction as a result of that. And as a reminder, the recognition of that is ultimately what drove us to start LandBridge initially in 2021 as we wanted to ensure that we did have a very different differentiated pore space solution. We wanted to have large amounts of contiguous acres. We wanted to have geographic proximity to operations, and we wanted to have not just a clean slate from a pore space perspective to ensure it's unencumbered by historical mismanagement, but control of that pore space to ensure that going forward, we weren't going to be burdened with the mismanagement of other landowners or other operators. And so what we're really showing on this slide is the byproduct of some of that overconcentration, again, particularly along the state line and what it's doing to pore space capacity and operating capacity of existing produced water infrastructure assets. And so on the bottom left, we're showing a chart of just produced water growth that's expected in the Delaware Basin through 2035, after 2026, this is effectively assuming a 1% growth rate on oil. And this was a forecast that was put out by a combined effort between the Pickering Energy consulting…

Next question is from Derrick Whitfield with Texas Capital.

Congrats on all of your operational accomplishments over the last quarter. With my first question, I wanted to focus on your outlook. While I realize you're not offering 2026 guidance today, how would you frame the step-up in EBITDA in next year -- over the next year, kind of based on the line of sight growth you have from WaterBridge, the acquisition you've recently closed and the other service agreements you recently announced?

Yes. No, great question. When we look through next year and kind of the primary growth drivers, obviously, the 1918 acquisition is going to be an immediate step change. But in addition to that, just given the line of sight on produced water volumes we have from WaterBridge, we would expect to see pretty healthy growth through the course of the year on the surface use royalty side. And I want to -- we're going to wait to provide full year 2026 guidance. And when we do that, we'll break down kind of more quantitative specifics. But I do think the surface use royalties piece is worth calling out because we have line of sight there and that is going to be a meaningful driver. But incremental to that, we've got a great backlog right now of commercial opportunities on the other surface-use revenues piece. So we continue to see both the surface use royalties as well as the other revenues be the primary growth driver for our business stepping into 2026. It continues to exceed our expectations. I think that, generally speaking, not just the oil and gas industry, but more broadly, the economic industries out in West Texas are eager to partner with landowners like ourselves who have the right surface in the right areas. And are very eager to do commercial deals. And so I would expect the surface use side, both -- again in both on royalties as well as the rents and other revenues to be the main growth driver stepping into next year. But as it sits today, I would say our 2026 expectations are certainly exceeding what they were a year ago.

Terrific. And as my follow-up, I wanted to take a slightly different approach on the power and data center discussion. As you guys kind of think about the sheer magnitude of power and AI developments that have recently been announced across West Texas, and the implication it has for the opportunity set for LandBridge. How do you -- I guess, how do you see that? I mean while we've clearly seen the size of data center development double since we first started talking about it, I mean do you still see a pathway to 2 to 4, 4 to 6 developments? Just how do you think about it?

It's a great question. I would say we've got a number in the pipeline right now, and I don't want to give what that specific number is, but it is an opportunity set that has only expanded, I would say, relative to what we thought when we initially started exploring this opportunity initially. I would add outside of just those primary opportunities, there are just so many secondary opportunities that exist because of the compounding ecosystem that's kind of growing in West Texas as a result of all this activity. And when you think through just what's going to be needed to support these data centers outside of just the direct power, but just the broader commercial ecosystem, the broader industrial ecosystem, all of that is going to necessitate land access. And again, we are in the best position to be the providers of that. And so we obviously will continue to pursue, and we're very excited about our direct opportunities as it relates to power and data centers, but we are also going to catch the broader macro tailwinds that are benefiting West Texas as we continue to see the ecosystem out there compound.

Your final question comes from Kevin MacCurdy with Pickering Energy Partners.

I wanted to dig in a little bit into the segment results. We see easement and other surface-related revenues, it's kind of outpacing our expectations pretty handily this year. And I wonder if you could talk a little bit about the drivers of growth in that segment over the last several quarters? And was there anything that kind of surprised you guys to the upside there?

Yes. It's a great question, Kevin. I appreciate you hopping on. I would say when we put out expectations at the beginning of the year, coming off of the back of both the Wolf Bone acquisition as well as the larger a series of acquisitions earlier. We took a conservative stance on expectations there, obviously, relative to what's come to fruition, very much by design. And I think kind of with where we sit today, we've got a really healthy view of that commercial backlog stepping into next year. But ultimately, that outperformance we saw this year is going to be driven by call it intentional conservatism coming off of acquisitions. But as we've said many times over, there is a very high demand for access to our surface by a number of different counterparties. And what you're really seeing is the financial impact of that reality coming to fruition here.

I appreciate that, Scott. And then maybe on the produced water side, going back to the forecasted shortfall in disposal capacity, I mean, is there anything that you can share like high level on what you're seeing on royalty rates on new contracts versus legacy contracts? And do you think that the market is kind of beginning to forecast and realize those constraints in pore spaces?

Yes. As it sits today, we haven't seen, call it, any meaningful shift in the prevailing market rate for royalties relative to within the last 1 or 2 quarters, call it. Obviously, supply-demand economics continue to play out. That is certainly subject to change. And just base on the dynamics we spoke to just a few minutes ago with Charles. That's certainly very real potential for us to capture additional econs going forward. Now does the market generally, call it, recognized pore space constraints going forward? I would say absolutely. And I would say the prudent operators out there are the ones that are getting ahead of it. Like we announced last quarter, Devon is a fantastic example of a forward-thinking operator in our area who is very intentional about securing pore space that they need access to over the long term, and that led to the minimum volume commitment and pore space access agreement directly with LandBridge rather than with WaterBridge or another water infrastructure company. And so there's absolutely an acknowledgment of the criticality of what it is we bring to the table. It's already been validated commercially, again, by Devon and others, and we expect that trend to continue.

With no further questions in queue. I will hand the call back to Scott McNeely for closing remarks.

Yes. Thanks again for joining us today. Again, we're very excited about the quarter. We're very excited about what we're working through commercially at the moment and across multiple opportunity sets, and we look forward to circling back and sharing more news with you here in the future. But again, I appreciate you all's efforts on learning more a bit about us and look forward to staying in touch. Thanks.

And this concludes today's conference call. You may now disconnect.