dmlp20230630

dmlp20230630_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION
Washington, DC. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended September 30, 2023

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

For the transition period from __________ to __________

Commission File Number: 000-50175

DORCHESTER MINERALS, L.P.

(Exact name of registrant as specified in its charter)

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

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

(Address of principal executive offices) (Zip Code)

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

None

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

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which

registered

Common Units Representing Limited

Partnership Interest

DMLP

NASDAQ Global Select Market

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

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

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

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

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐

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

Number of common units representing limited partnership interests outstanding as of November 2, 2023: 39,583,243

DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS			1

PART I – FINANCIAL INFORMATION			1

	ITEM 1.	FINANCIAL STATEMENTS (UNAUDITED)	1

		CONDENSED CONSOLIDATED BALANCE SHEETS	2

		CONDENSED CONSOLIDATED INCOME STATEMENTS	3

		CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERSHIP CAPITAL	4

		CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS	5

		NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS	6

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

	ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	13

	ITEM 4.	CONTROLS AND PROCEDURES	13

PART II – OTHER INFORMATION			13

	ITEM 1.	LEGAL PROCEEDINGS	13

	ITEM 1A.	RISK FACTORS	13

	ITEM 5.	OTHER INFORMATION	13

	ITEM 6.	EXHIBITS	14

SIGNATURES			16

	*September 30,*			*December 31,*
	*2023*			*2022*

ASSETS
Current assets:
Cash and cash equivalents	$	43,492		$	40,754
Trade and other receivables		14,224			14,543
Net profits interest receivable - related party		5,394			7,170
Total current assets		63,110			62,467

Oil and natural gas properties (full cost method)		507,119			472,974
Accumulated full cost depletion		(379,252	)		(360,724	)
Total		127,867			112,250

Leasehold improvements		989			989
Accumulated amortization		(491	)		(422	)
Total		498			567

Operating lease right-of-use asset		812			959
Total assets	$	192,287		$	176,243

LIABILITIES AND PARTNERSHIP CAPITAL

Current liabilities:
Accounts payable and other current liabilities	$	7,466		$	3,131
Operating lease liability		275			281
Total current liabilities		7,741			3,412

Operating lease liability		1,108			1,313
Total liabilities		8,849			4,725

Commitments and contingencies (Note 4)

Partnership capital:
General Partner		38			676
Unitholders		183,400			170,842
Total partnership capital		183,438			171,518
Total liabilities and partnership capital	$	192,287		$	176,243

	*Three Months Ended*				*Nine Months Ended*
	*September 30,*				*September 30,*
	*2023*		*2022*		*2023*		*2022*

Operating revenues
Royalties	$	35,790	$	33,530	$	84,087	$	105,549
Net profits interest		6,033		2,995		26,810		17,478
Lease bonus and other		771		7,532		2,483		8,890

Total operating revenues		42,594		44,057		113,380		131,917

Costs and expenses
Operating, including production taxes		3,714		3,184		9,186		10,259
Depreciation, depletion and amortization		6,619		4,247		18,597		13,486
General and administrative		2,798		2,425		8,260		6,023

Total costs and expenses		13,131		9,856		36,043		29,768

Net income	$	29,463	$	34,201	$	77,337	$	102,149

Allocation of net income
General Partner	$	1,029	$	1,288	$	2,445	$	3,623
Unitholders	$	28,434	$	32,913	$	74,892	$	98,526
Net income per common unit (basic and diluted)	$	0.73	$	0.88	$	1.94	$	2.64
Weighted average basic and diluted common units outstanding		38,792		37,564		38,514		37,372

	*General Partner*			*Unitholders*			*Total*			*Unitholder Units*
Three Months Ended September 30, 2022
Balance at July 1, 2022	$	1,497		$	169,876		$	171,373			37,555
Net income		1,288			32,913			34,201
Acquisition of assets for units		-			20,402			20,402			817
Distributions ($0.969012 per Unit)		(1,357	)		(36,391	)		(37,748	)
Balance at September 30, 2022	$	1,428		$	186,800		$	188,228			38,372

Three Months Ended September 30, 2023
Balance at July 1, 2023	$	(60	)	$	145,392		$	145,332			38,372
Net income		1,029			28,434			29,463
Acquisition of assets for units		-			35,777			35,777			1,211
Distributions ($0.676818 per Unit)		(931	)		(26,203	)		(27,134	)
Balance at September 30, 2023	$	38		$	183,400		$	183,438			39,583

	Three Months Ended							Nine Months Ended
	September 30,							September 30,
Accrual basis sales volumes:	2023		2022		% Change			2023		2022		% Change
Royalty properties gas sales (mmcf)		1,344		1,086		24	%		3,827		3,338		15	%
Royalty properties oil sales (mbbls)		477		322		48	%		1,114		1,009		10	%
NPI gas sales (mmcf)		412		290		42	%		1,751		963		82	%
NPI oil sales (mbbls)		135		80		69	%		562		313		80	%

Accrual basis average sales price:
Royalty properties gas sales ($/mcf)	$	2.23	$	6.91		(68	)%	$	2.37	$	5.93		(60	)%
Royalty properties oil sales ($/bbl)	$	68.66	$	80.90		(15	)%	$	67.34	$	85.03		(21	)%
NPI gas sales ($/mcf)	$	1.92	$	6.42		(70	)%	$	2.69	$	6.48		(58	)%
NPI oil sales ($/bbl)	$	66.29	$	82.99		(20	)%	$	67.83	$	82.61		(18	)%

	(In Thousands)
2023	$	88
2024		356
2025		362
2026		368
2027		374
Thereafter		443
Total lease payments		1,991
Less amount representing interest		(608	)
Total lease obligation	$	1,383

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

101.SCH*	Inline XBRL Taxonomy Extension Schema Document

101.CAL*	Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF*	Inline XBRL Taxonomy Extension Definition Document

101.LAB*	Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE*	Inline XBRL Taxonomy Extension Presentation Linkbase Document

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

	* Filed herewith
	**Furnished herewith

	By:	/s/ Bradley Ehrman
		Bradley Ehrman
Date: November 2, 2023		Chief Executive Officer

	By:	/s/ Leslie Moriyama
		Leslie Moriyama
Date: November 2, 2023		Chief Financial Officer