Thank you for standing by and welcome to the LandBridge 4th Quarter 2024 results conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number 1 on your telephone keypad. If you would like to withdraw your question, again press star 1. Thank you. I'd now like to turn the call over to Jason Long, Chief Executive Officer. You may begin.

Good morning, everyone, and thank you for joining our fourth quarter and fiscal year 2024 earnings conference call. We continue our exceptional growth trajectory in the fourth quarter of 2024, growing revenue 109% and adjusted EBITDA 108% year-over-year with an 87% adjusted EBITDA margin. For the full year ended December 31, 2024, we grew revenues 51% year-over-year, adjusted EBITDA by 55% year-over-year, and achieved 88% adjusted EBITDA margins. As we reflect on our first six months as a public company, it is clear that our active land management strategy is working as expected to create value for our shareholders. 2024 was a year of expansion for LandBridge. We more than tripled our land holdings, growing our total surface acreage from approximately 72,000 surface acres to approximately 273,000 surface acres, with 53,000 of those acres acquired in the fourth quarter alone. in december we acquired 46 000 largely contiguous surface acres known as the wolf bone ranch which expanded our position in reeves and pencos counties texas a highly strategic location for oil and natural gas production that also provides us access to the waha natural gas hub as part of the acquisition lambridge secured a minimum annual revenue commitment of 25 million for each of the next five years from btx and its affiliates which includes surface operations brackish water and royalties from produced water handling We've continued that momentum into 2025, closing on an acquisition in February for approximately 3,000 acres, contiguous to our current land position in Lee County, New Mexico. This acquisition increased our current acreed position to approximately 276,000 acres. Additionally, we see significant future growth opportunities from digital infrastructure, renewable energy, and commercial real estate. Subsequent to the quarter, we executed two notable agreements. We executed a development agreement with Western Midstream Partners LP, providing a surface and pore space solution for a portion of the recently announced Pathfinder Produced Water Pipeline and related produced water handling facilities on our East State Line Ranch. Additionally, we executed solar energy project development agreements with affiliates of DESRI, a leading developer, owner, and operator of renewable energy projects. The agreements include 6,700 acres in Andrews County, Texas, and Lee County, New Mexico, for which DESRI has submitted interconnection requests to the Southwest Power Pool. We're excited to be able to announce these two agreements that speak to our continued success to actively commercialize our land. We remain confident that digital infrastructure will be an important growth driver for our business moving forward. The rapid development of AI and related need for data centers, among other high computing power demands such as crypto mining, will continue to require access to cheap power and water for cooling. Our acreage in West Texas is well positioned to support these requirements and will remain actively engaged in seeking potential opportunities with these interested parties. As a reminder, in November 2024, we officially signed our first lease development agreement for the development of a data center and subsequently received an $8 million payment in December.

The payment is a one-time, non-refundable deposit for a two-year site selection period with the potential for a data center to be constructed within four years thereafter. the success of our ipo the increase of our circus acreage and the signing of new commercial agreements speak to the momentum of our active land management strategy scott now over to you thank you jason and good morning to everyone joining us today to echo jason we're pleased with the results this quarter proud of the milestones we reached in 2024 and excited for the promising growth opportunities ahead in 2025. our fourth quarter revenues increased to 36.5 million, up 28% sequentially and 109% year-over-year. Our full year 2024 revenues increased to 110 million, up 51% year-over-year. Sequential revenue growth for the fourth quarter was driven by surface use royalties and revenues, which increased 54% sequentially, including the $8 million payment related to the data center lease development agreement Jason mentioned, as well as increased produced water royalty volumes. Revenue from oil and gas royalties also increased 54% sequentially in q4 driven by an increase in net royalty production resource sales and royalties declined 28 sequentially which is driven by a decrease in brackish water sales and royalty volumes as highlighted the past few quarters we continue to shift our revenue mix towards non-oil and gas royalty-based arrangements to further insulate our exposure to commodity price fluctuations 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 percent of overall revenue, approximately flat from the prior quarter and up about 20 percent year over year. For the full year, non-oil and gas mineral royalty revenue represented 85 percent of total revenue, an increase of more than 13 percent year over year. Importantly, our results in 2024 validate our ability to capitalize on growth in the Permian Basin without incurring meaningful operating and capital expenditures. This key feature of our business model translated to an adjusted EBITDA margin of 88% and free cash flow margin of 61% in 2024. In the fourth quarter, we delivered $31.7 million of adjusted EBITDA, up 27% sequentially and 108% year-over-year, with an adjusted EBITDA margin of 87%. For the full year ended in 2024, we delivered $97.1 million of adjusted EBITDA. We also generated free cash flow of approximately $26.7 million and a free cash flow margin of 73 percent in the fourth quarter and for the full year ended 2024 we generated 66.7 million of free cash flow as noted last quarter our free cash flow in 2024 was impacted by non-recurring ipo related expenses and lease termination cost our q4 free cash flow margin of around 70 is more in line with our long-term expectations additionally we'd like to discuss our surface use economic efficiency which we define as total revenues less oil and gas mineral royalty revenues divided by the applicable acreage. This metric for our legacy 72,000 acre position has increased from $465 per acre in 2022 to $724 per acre in 2023 to $1,018 per acre in 2024. We think this speaks to our unique ability to significantly increase cash flows on our acreage over time through our active land management strategy, and we believe similar growth potential exists on the surface acquired in 2024, again, without any meaningful cash outlay for capital expenditures. Moving forward, we will continue to execute on our capital allocation priorities, which include pursuing value-enhancing land acquisitions with a focus on underutilized and undercommercialized surface. As a reminder, we seek to acquire a surface that is not just financially accretive, but also offers long-term growth potential that mirrors our existing portfolio. We are also focused on maintaining a strong balance sheet to maximize financial flexibility over time we ended the year with 385 million of debt outstanding under our credit and debt facilities which is up from 281.3 million at the end of the third quarter of 2024. we updated and amended our debt facilities in part to fund our recent acquisitions as part of the amendments the requirement for quarterly amortization payments was removed which will improve cash flow and liquidity to allow for more flexibility and optionality for future capital allocation alternatives as a result of these updates we ended the year with total liquidity of 107 million including cash and cash equivalents of 37 million and 70 million available under our amended revolving credit facility finally similar to last quarter we've declared a cash dividend to shareholders of 10 cents per share while we will revisit the amount of the dividend on a quarterly basis with our board we'll continue to focus our capital allocation strategy on the robust pipeline of attractive acquisition opportunities available to us looking ahead we are reaffirming our previously announced guidance for 2025. for the full year we expect 170 to 190 million of adjusted EBITDA driven by incremental contributions from our recent acquisitions initial solar facility contributions to surface use revenues and growth of surface use royalties through higher produced water volumes among other factors detailed in our press release in conclusion we delivered another

outstanding quarter to close out a year of strong growth our momentum remains promising and we look forward to advancing development on our surface acreage and partnership with industry-leading developers and operators and now we'd like to open up the line for questions operator thank you we will now begin the question and answer session if you would like to ask a question please press star one on your telephone keypad to raise your hand and join the queue if you would like to withdraw your question simply press star one again your first question comes from a line of Jackie Colettis from Goldman Sachs. Your line is open.

Hi, good morning. Thank you so much for the time. First, just wanted to start, you know, you called out your ability to increase surface use economic efficiency year over year. You know, looking ahead, where do you think this metric can go from here as you see the growth across your footprint?

Yeah, hey, good morning, Jackie. It's a great question. You know, we haven't defined a hard cap by any means right now, but we think there's still a lot of room to move that up and just to quantify that a bit you know we can look at a section or one square mile 640 acres as a good example and you know in that in that section we can fit you know one produced water handling facility that can generate one and a half million dollars per year at that facility uh in royalty revenue but then on top of that you know there's there's a lot of acreage that isn't used by just that 10 acre produced water handling facility sites that we can do quite a bit with. I'll give an obvious example. We can fill in, call it that extra space with opportunities like solar, similar to the opportunity we announced on this earnings release. And that could add easily another $500,000 plus across that section. So to think we can do $2 million per section or per square mile, which equates to a little over $3,000 an acre, I would say is very, very achievable. And that's not giving credit to some of the more, call it economically dense opportunities, such as sand mines, such as digital infrastructure, and so on. And so a lot of running room left. Again, I think that 3,000 plus is a pretty good bogey here in the near term, but we definitely don't think that's the hard cap.

Got it. Appreciate it. And then just following up on your agreement with Wes, can you provide just more details on the size and expected upside from that contract. And then on, are there more third party agreements that you can win from here beyond, you know, Waterbridge in general?

Yeah, good question. So just to start with the West piece, the agreement is a bit bespoke, just given the fact that we are a portion of the solution there, albeit we think that we're one of the critical pieces of the solution. You know, in terms of just the economic impact, you know, we expect to get just low single digit millions in terms of surface damages rights away and those types of payments here, you know, over the next 12 to 18 months as they work out the construction of that asset. You know, once everything is operational, you know, we could see high single digit millions to call it low to mid teens of royalties. It really just depends on the total volumes and the source of those volumes. But I would say a good deal for us, a good deal for Wes. We're happy to partner with them on this. And I think there's a great upside for both of us here. Now, as it relates to the second part of the question, we are in process with in talks with a lot of other folks out there, a lot of the third parties out there. And so, you know, this this west agreement is certainly not uh just call it a a one and done um you know obviously we have a lot going on with water bridge but there are a lot of other folks in the water infrastructure space in the upstream space uh that find both access to our surface and through our surface incredibly valuable uh we continue to have those commercial discussions and hope to share more wins later this year well thank you i'll leave it there thanks jackie your next question comes from a line of charles meade from johnson rice your line is open yes good morning jason scott um jason i want to go back to you know i want to go back to some of your uh prepared comments on

the uh on the data center first it was great and you guys have been talking about this for a while it's great to see that eight million in uh in december but can you uh i think if i heard you right you said you've got a two-year site selection period and then a four-year construction period Can you give us a sense of the, you know, what the roadmap is from here, what the milestones would be for future revenue, and, you know, whether there's going to be anything when we exit that two-year site selection period, and then what the, you know, along the lines of what Scott was saying, what the kind of annual revenue opportunity is perhaps after that four-year construction period?

Yeah. Hey, Charles, I'll tackle this one. Yeah. So, you know, as we've mentioned previously, this two-year option period, our site selection period, kind of in the process of that right now, you know, the voiceover to us has been expectations likely closer to 12 to 18 months, but they do have that full 24 months. You know, after that site selection wraps up, we start to see called a ratchet of cash flows that work to our benefit. And so So it'll start with a smaller, more subsidized lease component as they kind of stage for construction. But once they actually break ground on construction, we would expect to see that full $8 million a year in lease payments for that 2,000 acres. Now, as different phases come online, that's when we would expect to see incremental revenue streams to include the profits interest on the power generation, as well as potentially any water sales that are needed for cooling either the power generation or the actual data center itself. But, you know, as you alluded to, it is a multi-year timeline. These are large capital projects. And so, you know, I think we're in a really good spot right now with everything moving forward as contemplated. But, you know, I guess the takeaway is we would expect to start seeing more revenues from that likely next year and seeing those continue to ratchet up over the subsequent years through construction as different phases of operations come online, and I think finally kind of targeting again that one gigawatt being probably a few years after that first phase is online.

Got it. I know. Thank you for all that detail. It's got to know you talked about it before, but it's good to get that refresher. Yeah, of course. The Wolfbone Ranch, can you talk about how that integration is going and what, if anything, you've learned and any kind of opportunities that you may be aware of that you weren't when you struck that deal?

Yeah. I mean, from an integration standpoint, the beauty of Surface and, again, not being necessarily an operating company is the integration component is actually pretty light other than just some back office work. And so that has gone seamlessly. I would say kudos to both our accounting and legal teams as well as those over at VTOL and VTX. It was a very smooth process there. But I mean, as we kind of think through opportunities, I think what we've found is just a lot of the, not necessarily the commercial underwriting, but the investment thesis that went into that acquisition. So proximity to Waha, large contiguous blocks, access to various infrastructure. Highway frontage. Highway frontage. All of that, yeah, is coming to fruition very, very quickly. And we've gotten quite a bit of interest in that, such are having a number of conversations right now for access to surface because of those various resources. So, you Obviously, having just closed on that a couple of months ago, we're still kind of in the early innings here. But I would say it's somewhat off to the races, and we've got great traction out of the gate here. And again, hope to be able to share some of the wins later this year as a result of that acquisition.

That's great detail. Thanks, Scott. Thanks, Jason. Yeah, thanks, Charles.

Your next question comes from a line of Derek Whitfield from Texas Capital. Your line is open.

Good morning, all, and congrats on an impressive first year as a public company.

Thanks, sir.

First, I wanted to start with the land strategy on page four. Previously, you were building a wall around the state line for the benefit of advantage water captures, northern and Delaware water disposal needs grew. Could you speak to the opportunity you're seeing with the BLM, SLO leases in Lee County?

So, on the BLM and stately stuff, the majority of those acreage positions that we've bought, obviously, were very strategic in the fact that it gave us the ability to bring some of our supply water from Texas up into New Mexico, as well as the produced water piece. So, really leveraging on the fee pieces that we bought in and around those leases is where we've been able to get some really good tailwinds.

Yeah, I think it's important to note that we're not necessarily underwriting any value to those leases when we work through our M&A strategy. Now, just by nature of, call it, the New Mexico landscape, a lot of this fee surface includes some of these leases. So you tend to be able to capture those in one foul swoop, call it. But when we think through, like, where is the real value proposition in these acquisitions, it is going to be largely on that fee surface. For the sake of the map, we wanted to call that out just to be transparent with folks.

Terrific. And then perhaps bigger picture, a question on data centers for my follow-up. We've seen a trend of data centers being built in more remote locations like Stargate. And thinking about the progression of discussions with your customers, how are you seeing that picture unfold for more data centers in the Permian? I guess directionally, are you guys more bullish than three to six months ago?

Take this one, Jason.

Yeah, look, I think that, you know, there is, we definitely are, I think, more bullish. I think that, you know, timing is everything here. Once this first domino falls, I think there'll be a lot more to come with it. um you know power is a big piece of this and obviously access to surface access to the grid access to gas are all very important important pieces of the puzzle um so look i think i think that um the data center hyperscalers are definitely getting um more comfortable with these remote locations as we've seen on the stargate side of things so um yeah we're very excited about the opportunity uh our position in our surface gives us you know really good running room as we have these conversations that's great thanks for taking my questions yep thanks derek

your next question comes from a line of alexander goldfarb from piper sandler your line is open hey hey good morning morning down there uh hey morning just a few questions first uh you know you guys are certainly blessed with a great cost of capital uh in your equity but you also talked about restructuring your credit facility i think to eliminate amortization have you know go to io so i guess my question is as you guys look at the landscape certainly the market is placing a premium in your stock for for data centers but those deals take a lot longer cash flow wise to materialize versus water solar etc that seem to be much sooner in monetization so how are you guys thinking about the projects that you're looking at from a cash flow perspective versus the funding side where the market is paying a premium for the data centers, but those take longer?

Yeah, I think that it's a good question. I think, you know, that you're spot on. I mean, the market is definitely leaning into the data center theme, not just for us, I would say more broadly to anyone that kind of touches at this point. You know, the point I always make when folks bring that up is first, I think we're in a fortunate spot where that opportunity is very real for us, and we're obviously working through that. We've discussed that quite publicly, but totally insulated from that data center narrative is this core oil and gas story, or we'll call it energy infrastructure and land story that you alluded to, that provides just substantial growth here in the near term. And I mean, we talked to the surface use economic efficiency metric, the growth there, spoke a bit about where we think that could go. And I think it's important to remember all of that is very achievable outside of the data center narrative, which is only going to provide further uplift as those come to fruition. And ultimately, when we think through our strategy and the action plan on our side, it's all of the above. I mean, I think we've got these very real opportunities to grow cash flows here in the near term that, again, cost us no capital that we are going to continue to pursue. Now, we're trying to be mindful about the opportunity costs of certain areas of our surface where, you know, we think data centers could be best suited relative to some of the other opportunities. But at the end of the day, I mean, there is a lot of runway we have out there on the surface today for opportunities outside of data centers. And we're going to continue to push on those. And those will be the driver of the growth that we expect to see here in the coming, you know, couple of years. The data centers, you know, call it tailwinds are very real. And we think, you know, three, five plus years down the road, all of that will start to get layered on to the successes that we achieve, you know, in a lot of these other things, a lot of these other investment opportunities. And so, you know, I tell folks it's great because, you know, we can increase or we believe we can increase our cash flows at orders of magnitude outside of data centers. And I think we're executing on that. We're proving we're executing on that. And there's a lot of runway left. The data center story is additive. And so the combination of those two things, I think, makes this a very, very powerful story in the market, which is why the market's received it the way it has. And it's on us to continue to execute on both fronts if we want to hold our ground here.

And then along those lines, your funding, do you think that you'll go back and raise more equity? Are you planning to use debt? What should we be modeling for capital raises for this year?

Yeah. I mean, I think if the right opportunity presents itself, we would raise equity. I think that said, we obviously generate an immense amount of free cash flow. I think keeping the balance sheet healthy is a priority. I mean, we're not afraid to put a little bit of leverage on there when it makes sense. But I think keeping a sensible balance is probably the best approach here. I mean, we're in a very healthy position, not just from a leverage standpoint, but just from a debt service coverage standpoint. And we want to make sure it stays that way. I mean, that will give us the ability to navigate any volatility or risk that may come up in the future that's unforeseen at the moment. We like that. But for us to issue equity, it's got to make sense. It's got to have, you know, that the acquisition opportunity needs to have a growth profile that we think, you know, mirrors our own in attractiveness. And it needs to be a story that we can go out and tell the public, you know, like, look, this is why equity made sense in this context. And, you know, it's, it's, there's no one size fits all, I think it's really going to depend on the situation, but ultimately maintaining a prudent balance sheet, making sure we're not diluting folks unnecessarily, but ensuring that we're staying kind of responsible in the full context of the company and continuing to drive growth. All of those aspects are top of mind.

Okay. And just one more question. On the water needs for the data centers, and forgive me, obviously coming from a real estate side, not an oil guy, the brackish water and the water that you guys take from others who are drilling or fracking for oil, does that brackish water, can that be converted to use in cooling data centers, or do data centers require pure, fresh, first-generation water, if you will?

Yeah, good question. So you've got just brackish water, which is not necessarily the same as produced water. So you've got your brackish water wells out of the ground. You've got produced water, which is coming up with the oil and gas. I think, you know, the latter certainly would require more treatment. You know, there's likely to be some level of treatment for either, most definitely with produced water. And so I don't want to give the impression it's, you know, you just connect the pipe up to the data center and it's good. I think there would be some costs associated with getting that water to the quality that's needed. And all of that, you know, is kind of taken into consideration as a lot of these data center developers and operators work through their diligence and underwriting. But I think that said, where we have a big advantage in West Texas is we have an abundance of these resources, both in terms of brackish water and produced water. And while there may be some incremental costs associated with treatment, there isn't a large metropolitan area that you're competing with for these resources. And I think, generally speaking, that is very attractive. Jason, you want to add?

Well, one thing to be clear is that cost would not be something that at Lambridge. Great point. Yeah. Great point. Yeah. Okay. Thank you.

Yeah. Thanks, Allison.

Your next question comes from a line of Kevin McCurdy from Pickering Energy Partners. Your line is open.

Good morning, Jason and Scott. My first question is on the macro outlook and the impact on your business. Oil prices have kind of taken a hit over the last week. What oil price and corresponding level activity is built into your 2025 guide, and how sensitive do you expect your EBITDA to be at oil prices this year?

Yeah, good question, Kevin. Good to hear from you. So no meaningful ramps whatsoever built into our 2025 guide. All that's based on firm guidance from operators we have, both from the Waterbridge side and others. And I think generally speaking, as it relates to commodity price sensitivity, there would need to be a pretty massive swing to the economic potential for the Delaware Basin for that to move off track. You know, outside of our small minerals position, which is, you know, we expect to be sub 10% of our business this year, we really don't have any meaningful commodity price sensitivity. So I would say, you know, in summary, as long as the, you know, commodity prices kind of hold to a point where producers continue with their development plans this year, as kind of spoken to the public, no real impact on us.

Great. Appreciate that detail. And thank you for, you know, the earlier comments on the Western midstream EBITDA impact.

I wonder if you could share the same thing for the newly announced solar agreement, looking for any EBITDA impact on the timing. yeah yeah so it you know it for those those deals it takes somewhere between two and three years to get through the permitting and development um you know in that interim period we get you know a smaller call it uh we call it option fee development fee something to that extent um but you know two to three years down the road once that comes online we would expect a project like this about 7 000 acres 550 megawatts to contribute um call it mid to high single digit

millions of cash flow per year great thank you yeah thanks your next question comes from the line of teresa chen from barclays your line is open morning um you have been uh very busy with a flurry of activity within the last year, both on the organic and inorganic front. I wanted to ask on your M&A outlook from here, if you could just remind us, you know, how fragmented is the market at this point? And are there still many areas of desirable surface acreage left near your footprint that would fit well within your portfolio?

Yeah. Hey, good morning, Teresa. We have been busy. No, I think to answer your question, there's still quite a bit out there. And I think that's, you know, I alluded to that in the prepared remarks, you know, from a capital allocation standpoint, you know, M&A continues to be, by a wide margin, the best use of our capital. You know, generally speaking, the landscape is still very, very fragmented. There are still a lot of opportunities out there. And, you know, we're in talks with a number of those right now. I think, you know, there is a real benefit that we bring to the table, particularly in opportunities where the surface owner may own the underlying minerals and wants to encourage more development activity on that surface. That's something we can bring to the table. Or in situations where a seller may have, you know, tax considerations, the ability to do, you know, a more tax-advantaged deal via our public currency is also another advantage that we have. And so, you know, we continue to look at all the tools that we have to execute on our M&A strategy. We think that, again, the pipeline is very robust right now. We think there's a lot out there that makes a lot of sense and is incredibly additive to our platform. So we will continue to pursue those.

And on the topic of surface efficiency for the assets already within your portfolio and getting to that incremental 3,000 per acre target, understanding that some of it will be relatively capital light and some of these opportunities might be more involved. But when we think about the average going forward, how much CapEx do you expect to deploy in order to realize this target?

Yeah, I mean, you know, just as a reminder, we don't do any of the developing of any of these assets whatsoever. You know, I think for this upcoming year, we had expected somewhere between one and two million of CapEx total. And that's just kind of nickel and dime things on like trucks and other kind of field assets that we need just to to manage the business and so the beauty of the business model is you know we we acquire surface we you know we'll go through some of the the efforts needed to make that surface commercially viable that typically does not involve any capital um and then we go out and we try to drive business to that surface uh you know from other folks looking for sophisticated landowners uh in the right areas to know who know how to work with them and that that has gone very very well for us. And that has allowed us to drive that surface use efficiency metric on that legacy position, you know, up more than a hundred percent in a couple of years. And like I mentioned earlier, we think that that is a very replicable growth strategy on the rest of our surface. And so, you know, there is a very long runway for us to continue to drive growth on the position as it exists today. Like I mentioned, we think that M&A is only going to be additive and going to help drive that growth.

But the point I'd make is outside of acquiring surface, all of that growth does not necessitate capex which is again the beauty of the business model here thank you yeah thank you theresa your next question comes from a line of roger reed from wells fargo your line is open yeah good morning um let me take a slightly different tack here just with the texas legislature in session and some of the uh water issues are are on their agenda we don't know exactly where it'll shake out, but is there anything you're watching there in terms of regulation that would be potentially enhancing for you or create an opportunity?

Kind of ties into the earlier question on, you know, what kind of water you need for a data center, because I understand some of the legislation or proposed legislation is about recycling water as opposed to just you know permanent disposal underground yeah great question we 100 are watching everything that's going on obviously uh it not only potentially could be a benefit for land bridge but also uh the same with water bridge on that on the water bridge side as well um as you think through the recycling piece of that which uh you know our our surface position gives us a really good opportunity to to take advantage of that opportunity right so you need need access to

large surface large contiguous surface to create these recycling uh ponds and and and basically centers so um yeah i mean it we we do think it's a great opportunity um and are watching it extremely closely and then one of the other things out there was uh and this gets back to you know the issue with some of the minor earthquakes out in west texas uh disposal of water from neighboring states which in this case would obviously be new mexico is there anything that you're looking at you might have to do differently or that would force the industry to be more likely to lean on land bridge in order to deal with uh with produced

water from new mexico yeah i mean that has been one of our you know biggest thesis from the start is taking a lot of this water out of New Mexico, where historically it's been handled in deep injection, which in our view, and I think in the regulatory body's view, that's what's causing a lot of this seismicity. And actually getting that out of basin, that's one solution, but also just spreading out that injection in whole. And having access to this large contiguous surface gives us the ability to give people like Wes, and that's a prime example with this recent deal we did with less give them the opportunity to to spread that injection out and bring that water from new mexico we get we've got that opportunity with with every other third party water provider out there as well and then just as a follow-up on that are you seeing any change in how you i say how you i guess what your what your costs are or what your revenue potential could change as a result of, you know, call it regulation, legislation needs to spread out?

I mean, is that impacting at all what you are able to charge per gallon, per barrel? And then think about that on the revenue per acre that you were talking about earlier.

Yeah, obviously we have no costs associated with it. I do think that, you know, access to good and poor space that's spread out and can be handled in a sustainable way um the price of that i think will go up over time um we we have seen uh royalties increase over time as you have access to this poor space so we feel like we're in a really good spot and we continue to be optimistic as we think through you know adding to our portfolio of acreage being very mindful of poor space going forward all right thank you thank you your next question comes from the line of sean milligan from janny your line is open hey good morning guys thanks for taking the questions um on the 2025 guidance i was curious

if you'd be willing to provide any guard rails around kind of expected produced water volume growth you know that's embedded in that guidance range yeah hey good morning sean um yeah i can talk through a high level here.

I think the way to think about it is, you know, with the inclusion of the Wolfbone Ranch acquisition, which wrapped up at the end of 2024, you know, that'll put us call it just over a million barrels a day, kind of low millions. You know, through the course of the year, we've got a handful of projects coming online, two of which we've spoken about publicly, so I'll reiterate those. The first is Waterbridge's construction of the BPX Kraken line that will come online at the end of second quarter, and that will add meaningful volumes. We've talked about that a bit. That has been published in a press release, so I won't go over the details of that. But that's going to be fairly additive from a volume perspective towards the end of second quarter. And then the second piece is there are a number of new assets coming online on our legacy surface position that will also be used to handle Devon volumes that are flowing today that are being diverted off of their legacy position. And so I would expect to see a pretty meaningful full-step change in produced water volume, starting to hit in second quarter, but really fully materializing in third quarter. But I would say it's very easy, you know, relative to the cost of a million or so barrels a day today to see, you know, low to mid double digit, call it growth in those produced water volumes through the course of the year and kind of exiting 25.

Great, that's really helpful. And then on the solar side, I think previously had talked about kind of receiving prepayments. those had been pushed to 2025. I guess like I was expecting those to sort of be in line with what the data center payment was in the fourth quarter. Is that still the right way to think about those payments in 2025?

Yeah, great, great question. So you didn't ask this, but I'll clarify an obvious point that the Desiree deal that we announced alongside earnings is different and additive relative to the solar opportunity we've spoken to previously. um yeah so that you know we are in the process of evaluating different proposals on that right now um you know i've i've spoken previously about the you know call it the the lack of call it conformity around how those proposals uh will look you know everyone or each of these developers and operators will put forward some upfront consideration and some recurring you know rent effectively. And it is our job then to go through those proposals and determine what presents the best value for the company. Now, we would expect to receive those upfront milestone payments this year. From a total size perspective, it's about, you're thinking it the right way, it's probably eight to 10 million this year. But I kind of caveat that a bit with what I said initially, which is, you know, we will not favor the proposal that has the most caught cash up front. If we get a situation where there is a smaller upfront, but a much larger residual over an extended period of time, that would just generate more value for the company. You know, we would, of course, go with that. But that's something that, you know, as the dust settles and we choose a path forward, I'll be transparent to the market about just so folks can, you know, adjust their forecast and expectations accordingly.

But just to confirm, so the DESRI deal is separate from the prior deal that you talked about developing yourself. Okay, thank you. That's helpful. Yeah, you got it.

And that concludes our question and answer session. I will now turn the call back over to Scott McNeely for closing remarks.

Yeah, thank you, Rob, and thank you, everyone, for joining us this morning. Again, we were very happy with how the year wrapped up and are very enthusiastic about the tailwinds of our business. stepping into 2025. We look forward to sharing just more of our wins and successes with you through the course of this year. To the extent there are any questions or any follow-up discussions would be helpful, please feel free to reach out to contact at lambridgeco.com so we can get a call scheduled. Thanks again, we hope you all enjoy the weekend.

This concludes today's conference call. Thank you for your participation. You may now disconnect.