Thank you for your patience. My name is Tina, and I will be your conference operator today. I would like to welcome everyone to the LandBridge Third Quarter 2025 Results Call. It is now my pleasure to turn the call over to Mae Harrington, Director of Investor Relations. The floor is yours, Mae.

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 discussions 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 underutilized pore space on our acreage. WaterBridge, one of the largest produced 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 the 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 pore space 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.

Our first question comes from 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, 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 as two good examples, kind of stepping in at a 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 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 amount 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 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.

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 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 that 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 several 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 timeframe 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, 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 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 it, 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 from 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, a 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 too much about the details of 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.

I have a couple of questions. First, regarding the discussions about building power data centers in West Texas, is this a situation where it's a 'field of dreams' concept, meaning if we build it, the hyperscalers will come? Or are the hyperscalers already expressing their desire to access West Texas, indicating that it's just a matter of construction and then they will be there? I'm trying to understand if this is a hope that the hyperscalers will show up, or if they are already committed and just waiting for the facilities to be built.

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 move quickly and get these projects across the finish line.

Can we get an update on the existing data center deal you entered into? It has been a few quarters since you received the initial deposit. Is Five Point getting close to finalizing everything and fully committing to the rollout? What is the update on their progress?

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, is 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 leases, 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, etc. So there's a recurring revenue associated with these.

I understand. So it's not just this processing plant; it's all the infrastructure, pipelines, and electrical transmission that needs to be in place. Those represent additional revenue opportunities, whether for gas or other services.

Yes.

I would like to ask about the new slide on Page 15, which discusses the long-term shortfall of disposal capacity in the Delaware Basin. It seems to highlight that access to pore space will increase in value over time. Could you explain the reasoning behind creating this slide and discuss some key assumptions? For instance, does this shortfall consider the option of transporting Delaware Basin produced water to the Central Basin platform?

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 continue to take a close look at pore space in the Delaware Basin. And I think the punch line on this slide is 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, assuming a 1% growth rate on oil. This was a forecast that was put out by a combined effort between the Pickering Energy consulting arm as well as B3 Insights, which is a great consulting firm that's very sharp on this type of stuff. And as you can see, I mean, there's a healthy amount of produced water growth, but the unfortunate byproduct of these pore space issues is the existing produced water infrastructure today represented by that yellow line is going to be losing operating capacity going forward. And you see that delta continue to grow over time. By the time you're at year-end 2035, there's going to be a 9 million barrel-a-day shortfall between the produced water that's expected in the Delaware Basin and the infrastructure based on what's currently in place today. And so it really drives two very real needs. The first is just the need for more produced water handling infrastructure. But the second, more importantly, in this context, is the need for access to the kind of pore space that LandBridge offers to serve as an outlet. And so we really like this slide because it highlights not just the fact that pore space isn't a commodity and a differentiated approach matters, but also that the macro tailwinds are really going to drive the need for further pore space access, and we're in full position to capture a lot of that.

Next question comes from Derrick Whitfield with Texas Capital.

Congratulations on your operational achievements over the last quarter. For my first question, I wanted to discuss your outlook. Although I understand you are not providing guidance for 2026 today, how would you describe the expected increase in EBITDA over the next year, particularly considering the growth potential from WaterBridge, the recent acquisition you completed, and the new service agreements you announced?

Yes, that's a great question. Looking ahead to next year, the 1918 acquisition is expected to create a significant immediate impact. Additionally, considering the projected produced water volumes from WaterBridge, we anticipate strong growth in surface-use royalties throughout the year. While we will wait to provide guidance for 2026, we plan to offer more specific details then. It's important to note that the surface-use royalties are poised to be a key growth factor, given our clear visibility in that area. Beyond that, we have a solid backlog of commercial opportunities related to other surface-use revenues. Both surface-use royalties and additional revenues are expected to drive growth for our business as we move into 2026, and our expectations are definitely higher than they were a year ago. Generally, not just in the oil and gas sector but across various economic industries in West Texas, there is a strong willingness to partner with landowners like us who have suitable surfaces in favorable locations, and there is significant interest in commercial agreements. Therefore, I expect both royalties and other surface-use revenues to be the main growth drivers next year.

Terrific. In my follow-up, I wanted to take a slightly different approach to the power and data center discussion. Considering the significant developments in power and AI recently announced in West Texas, what are your thoughts on the opportunities for LandBridge? We've seen the size of data center development double since we started discussing it. Do you still see a pathway for 2 to 4 or 4 to 6 developments? How do you view that?

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 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 any meaningful shift in the prevailing market rate for royalties relative to the last 1 or 2 quarters. Obviously, supply-demand economics continue to play out. That is certainly subject to change. And based on the dynamics we spoke to just a few minutes ago with Charles, there's certainly a very real potential for us to capture additional economies going forward. Now does the market generally recognize 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 your efforts on learning more about us and look forward to staying in touch. Thanks.

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