LandBridge Company LLC Q4 FY2024 earnings call

• In 2024, LandBridge more than tripled its land holdings, growing total surface acreage from ~72,000 to ~273,000 acres, with 53,000 acres acquired in the fourth quarter alone, including the Wolf Bone Ranch acquisition. In 2025, it closed on an acquisition of ~3,000 acres in New Mexico, increasing acreage to ~276,000 acres. - Executed development agreements with Western Midstream Partners LP and DESRI for digital infrastructure and renewable energy. - Surface use economic efficiency metric increased from $465 per acre in 2022 to $1,018 per acre in 2024, and management sees potential to further increase this. - Ended 2024 with $385 million of debt outstanding, updated and amended debt facilities to remove quarterly amortization payments, and declared a $0.10 per share cash dividend.

In the fourth quarter of 2024, LandBridge's revenue was $36.5 million, up 28% sequentially and 109% year-over-year. Full-year 2024 revenue was $110 million, a 51% year-over-year increase. Adjusted EBITDA in the fourth quarter was $31.7 million, up 27% sequentially and 108% year-over-year, with an 87% margin. For the full year, adjusted EBITDA was $97.1 million with an 88% margin. Non-oil and gas royalty revenue was significant: in the fourth quarter, non-oil and gas royalty revenue, including surface use royalties and revenues and resource sales and royalties, accounted for nearly 90% of overall revenue. For the full year, non-oil and gas mineral royalty revenue represented 85% of total revenue, an increase of over 13% year-over-year.

LandBridge reaffirmed its 2025 guidance, expecting $170 million to $190 million of adjusted EBITDA for the full year. This is driven by incremental contributions from recent acquisitions, initial solar facility contributions to surface use revenues, and growth of surface use royalties through higher produced water volumes.

• Commodity price fluctuations could impact revenue as a portion of revenue is tied to oil and gas royalties. - Regulatory changes related to water disposal, such as those in Texas legislature, could affect water handling and related revenues. - Execution risks associated with large capital projects like data centers, including delays or challenges in site selection, construction, and meeting quality requirements for water used in cooling.

Q: Looking ahead, where can the surface use economic efficiency metric go?

A: Jason Long stated there's still room to increase, with examples like $1.5 million per year from a produced water handling facility in a section and potential for additional revenue from solar and other opportunities, aiming for ~$3,000 per acre.

Q: Can you provide details on the data center road map?

A: Scott McNeely explained a 2-year site selection period, with revenues starting to ratchet up after that, including lease components and incremental revenues from power generation and water cells once construction begins.

Q: How is the Wolf Bone Ranch integration going?

A: Scott McNeely said integration is light, mainly back office work, and the acquisition has provided access to resources and interest in surface access.

Q: What's the outlook on data centers in the Permian?

A: Jason Long is bullish, citing power, surface, grid, and gas access as important, and data center hyperscalers becoming more comfortable with remote locations.

Q: How much CapEx is expected for surface efficiency?

A: Jason Long mentioned expected CapEx for 2025 is between $1 million and $2 million, mainly for field assets to manage the business, with growth not requiring significant CapEx.

Q: Impact of Texas legislature on business?

A: Jason Long and Scott McNeely noted watching regulatory changes, especially around water recycling, which could enhance opportunities, and water disposal from New Mexico affecting produced water handling and revenue potential.