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YoY shift: Neutral
Year-over-year tone shift - average net-tone change across Risk Factors and MD&A vs the prior 10-K. This filing is 0.07pp more bullish than last year's.
Why YoY instead of absolute: the LM lexicon has ~6.6× more negative words than positive (legal/risk-disclosure language is heavy on hedging), so every 10-K reads bearish on raw tone. Year-over-year change strips that bias and surfaces the actual shift in management's framing.
Tone shift by section
The two components the gauge averages: how Risk Factors and MD&A each shifted in net tone versus last year's 10-K. The headline above is their average, so a green needle over a soft section just means the other section carried it.
Risk Factors
-
Not scored
Net-tone change vs last year's 10-K.
MD&A
+0.07pp
Flat
Net-tone change vs last year's 10-K.
Per-snippet highlights
Sentence-level sentiment highlighting with category and subcategory filters is coming once the snippet-scoring pipeline lands. For now, dig into the actual section text on the Sections tab.
No section text extracted for this filing. The 10-K may use a non-standard template that the parser doesn't recognize - the original doc is still linked in the Stats tab.
Language change vs prior 10-K
MD&A (Item 7) - words with the biggest YoY frequency increase
Negative rising
impairment+1
Positive rising
gains+1
positive+1
MD&A (Item 7)
2,904 words
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Please refer to the consolidated financial statements and related notes in Item 8 of this Form 10-K to supplement this discussion and analysis.
Critical Accounting Estimates
• Estimates of future revenues from oil and gas sales are derived from a combination of factors, which are subject to significant fluctuation over any given period. Reserve estimates, by their nature, are subject to revision in the short-term. The evaluating engineer considers production performance data, reservoir data and geological data available to us, as well as makes estimates of production costs, sale prices and the time period the property can be produced at a profit. A change in any of the above factors can significantly change the timing and amount of net revenues from a property. Our producing properties are composed of many small working interest and royalty interest properties. As a non-operating owner, we have limited access to the underlying data from which working interest reserve estimates are calculated. Estimates of royalty interest reserves are not made because the information required for the estimation is not available to us. While reserve estimates are not accounting estimates, they are the basis for , depreciation, and amortization described below. Additionally, the estimated economic life for each producing property from the reserve estimates is used in the calculation of asset retirement obligations.
• Reserves relating to our proved properties may become uneconomic to produce resulting in impairment of proved properties.
• The provisions for depreciation, depletion and amortization of oil and gas properties all constitute critical accounting estimates. Non-producing leaseholds are amortized over the life of the leases using a straight-line method; however, when leases are impaired or condemned, an appropriate adjustment to the provision is made at that time.
• The provision for impairment of long-lived assets is determined by review of the estimated future cash flows from the individual properties. A significant, unforeseendownward adjustment in future prices and/or potential reserves could result in a material change in estimated long-lived assets impairment.
• Depletion and depreciation of oil and gas properties are computed using the units-of-production method. A significant, unanticipated change in volume of production or estimated reserves would result in a material, unexpected change in the estimated depletion and depreciation provisions.
• We have significant obligations to remove tangible equipment and facilities associated with oil and gas wells and to restore land at the end of oil and gas production operations. Removal and restoration obligations are most often associated with plugging and abandoning wells. Estimating the future restoration and removal costs is difficult and requires estimates and judgments because most of the removal obligations will take effect in the future. Additionally, these operations are subject to private contracts and government regulations that often have vague descriptions of what is required. Asset removal technologies and costs are constantly changing as are regulatory, political, environmental and safety considerations. Inherent in the present value calculations are numerous assumptions and judgments, including the ultimate removal cost amounts, inflation factors and discount rate.
• The estimation of the amounts of income tax to be recorded by us involves interpretation of complex tax laws and regulations as well as the completion of complex calculations, including the determination of our percentage depletion deduction, if any. To calculate the exact excess percentage depletion allowance, a well-by-well calculation is and can only be performed at the end of each year. During interim periods, a high-level estimate is made considering historical data and current pricing. Although our management believes its income tax accruals are adequate, differences may occur in the future depending on the resolution of pending and new tax matters.
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LIQUIDITY AND CAPITAL RESOURCES
To supplement the following discussion, please refer to the consolidated balance sheets and the consolidated statements of cash flows included in this Form 10-K.
In 2025, as in prior years, we funded our business activity using internal sources of capital. For the most part, these internal sources are cash flows from operations, cash, cash equivalents and available-for-sale debt securities. When cash flows from operating activities exceed those needed for other business activities, the remaining balance is used to increase cash, cash equivalents, equity securities, and/or available-for-sale debt securities. When cash flows from operating activities are not adequate to fund other business activities, withdrawals are made from cash, cash equivalents, equity securities, and/or available-for-sale debt securities. Cash equivalents are highly liquid debt instruments purchased with a maturity of three months or less.
In 2025, net cash provided by operating activities was $9,941,805, net cash applied to investing activities was $10,161,873 and net cash applied to financing activities was $1,652,424.
Other than cash and cash equivalents, other significant changes in working capital include the following:
Equity securities increased $2,015,221 (81%) to $4,516,415 in 2025 from $2,501,194 in 2024. The increase is due to purchases in excess of sales of $385,677, and a net increase in market value of $1,629,544.
Refundable income taxes increased $45,829 (19%) to $282,311 in 2025 from $236,482 in 2024, primarily resulting from estimated federal tax deposits.
Accounts receivable increased $220,086 (8%) to $2,994,573 in 2025 from $2,774,487 in 2024, primarily due to an increase in new wells drilled in 2025 that were in first production, but not yet paid by operators as of December 31, 2025.
Accounts payable increased $647,711 (125%) to $1,167,893 in 2025 from $520,182 in 2024, primarily due to the timing of activity and invoices.
Discussion of Selected Material Line Items in Cash Flows
The following is a discussion of material changes in cash flow by activity between the years ended December 31, 2025 and 2024. Also, see the discussion of changes in operating results under “Results of Operations” below in this Item 7.
Operating Activities
Net cash flows provided by operating activities increased $2,022,498 (26%) to $9,941,805 in 2025 from net cash provided by operating activities of $7,919,307 in 2024. For more information on operating activities, see “Operating Revenues” and “Other Income, Net” below.
Investing Activities
Net cash applied to investing activities increased $3,186,996 (46%) to $10,161,873 in 2025, from net cash applied to investing activities of $6,974,877 in 2024. The 2025 amount was the result of net property purchases of $10,009,712, cash provided by equity method and other investments of $233,516 and net cash applied to equity securities of $385,677.
Financing Activities
Net cash applied to financing activities decreased $586,658 (26%) to $1,652,424 in 2025 from net cash applied to financing activities of $2,239,082 in 2024. The 2025 amount was the result of $10 per share cash dividends paid on common stock of $1,517,794, treasury stock purchases of $55,265, payments of principal on the Grand Woods note payable of $147,863, and capital contributions from Grand Woods non-controlling interests of $68,498.
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RESULTS OF OPERATIONS
In 2025 we had net income attributable to common stockholders of $4,903,715 compared to net income of $2,029,278 in 2024. Net income per share attributable to common stockholders, basic and diluted, was $32.32 in 2025, an increase of $19.14 per share from net income of $13.18 in 2024.
Operating Revenues
Operating revenues increased $1,445,498 (9%) to $17,441,161 in 2025 from $15,995,663 in 2024. Oil and gas sales increased $1,560,419 (10%) to $16,699,954 in 2025 from $15,139,535 in 2024. Lease bonuses and other revenues increased $546,054 (280%) to $741,207 in 2025 from $195,153 in 2024. Water well drilling services decreased $660,975 (100%) to $0 in 2025 from $660,975 in 2024, due to the termination of the TWS Agreement in 2024.
The $1,560,419 increase in oil and gas sales was the result of a $2,080,947 increase in gas sales, a $459,155 decrease in oil sales and a $61,373 decrease in miscellaneous oil and gas product sales.
The following price and volume analysis is presented to explain the changes in oil and gas sales from 2024 to 2025. Miscellaneous oil and gas product sales of $347,822 in 2025 and $409,195 in 2024 are not included in the analysis.
Variance
Production (in thousands, except per Unit prices)
Price
Volume
Gas –
MCF
Unit Price
Oil –
Bbls
Unit Price
The $2,080,947 (76%) increase in natural gas sales to $4,802,719 in 2025 from $2,721,772 in 2024 was the cumulative result of an increase in gas sales volumes and an increase in the average price received per thousand cubic feet (MCF). The average price per MCF of natural gas sales increased $0.84 per MCF to $3.56 per MCF in 2025 from $2.72 per MCF in 2024, resulting in a positive gas price variance of $1,131,551. A positive volume variance of $949,396 was the result of an increase in natural gas volumes sold of 348,663 MCF to 1,348,157 MCF in 2025 from 999,494 MCF in 2024.
As disclosed in Supplemental Schedule 1 of the Unaudited Supplemental Financial Information included in Item 8 below, working interests in natural gas extensions and discoveries were adequate to replace working interest reserves produced in 2025 and 2024.
The $459,155 (4%) decrease in crude oil sales to $11,549,413 in 2025 from $12,008,568 in 2024 was the result of a decrease in the average price per barrel (Bbl), offset by an increase in oil sales volumes. The average price received per Bbl of oil decreased $12.32 to $60.03 in 2025 from $72.35 in 2024, resulting in a negative oil price variance of $2,369,412. A positive volume variance of $1,910,257 was the result of an increase in oil sales volumes of 26,403 Bbls to 192,387 Bbls in 2025 from 165,984 Bbls in 2024.
As disclosed in Supplemental Schedule 1 of the Unaudited Supplemental Financial Information included below in Item 8, working interests in oil extensions and discoveries were not adequate to replace working interest reserves produced in 2025 and 2024.
For both oil and gas sales, the price change was mostly the result of a change in the spot market prices upon which most of our oil and gas sales are based. These spot market prices have had significant fluctuations in the past and these fluctuations are expected to continue.
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Operating Costs and Expenses
Operating costs and expenses decreased $589,724 (4%) to $13,154,634 in 2025 from $13,744,358 in 2024.
Production Costs. Production costs increased $157,917 (3%) to $4,740,087 in 2025 from $4,582,170 in 2024. The increase was the cumulative result of a $98,606 (3%) increase in lease operating expense to $3,141,841 in 2025 from $3,043,235 in 2024, a $69,587 (9%) increase in gross production taxes to $883,604 in 2025 from $814,017 in 2024, and a $10,276 (1%) decrease in processing deductions to $714,642 in 2025 from $724,918 in 2024.
Exploration Costs. Under the successful efforts method of accounting used by the Company, geological and geophysical costs are expensed as incurred, as are the costs of unsuccessful exploratory drilling. The costs of successful exploratory drilling and all development costs are capitalized. Total costs of exploration and development, excluding asset retirement obligations but inclusive of geological and geophysical costs, were $9,757,474 in 2025 and $8,088,232 in 2024. See Item 8, Note 10 to the accompanying consolidated financial statements for a breakdown of these costs. Exploration and acquisition costs charged to operations were $441,188 in 2025 and $439,059 in 2024, inclusive of geological and geophysical costs of $41,625 in 2025 and $38,217 in 2024.
For the year ended December 31, 2025, We participated in the drilling of 10 gross exploratory working interest wells and 39 gross development working interest wells, with working interests ranging from a high of 9.0% to a low of 0.06%. Of the 10 exploratory wells, 2 were completed as producing wells, 6 as dry holes and 2 wells were in progress at the end of 2025. Of the 39 development wells, 33 were completed as producing wells and 6 wells were in progress at the end of 2025.
Water Well Drilling Services. Water well drilling services expenses decreased $432,163 (100%) to $0 from $432,163 in 2024. The decrease resulted from the April 19, 2024 termination of the TWS JVA with TWS South for water well drilling services. See Item 8, Note 8 to the accompanying consolidated financial statements for additional information on TWS.
Depreciation, Depletion, Amortization and Valuation Provisions (DD&A). Major components of DD&A are the provision for impairment of undeveloped leaseholds, provision for impairment of long-lived assets, depletion of producing leaseholds and depreciation of tangible and intangible lease and well costs. Undeveloped leaseholds are amortized over the life of the leasehold (most are 3 years) using a straight-line method, except when the leasehold is impaired or condemned by drilling and/or geological interpretation of seismic data; if so, an adjustment to the provision is made at the time of impairment. The provision for impairment of undeveloped leaseholds was $52,202 and $56,881 in December 31, 2025 and 2024, respectively.
As discussed in Item 8, Note 11 to the accompanying consolidated financial statements, accounting principles require the recognition of an impairmentloss on long-lived assets used in operations when indicators of impairment are present. Impairment evaluation is a two-step process. The first step is to measure when the undiscounted cash flows estimated to be generated by those assets, determined on a well-by-well basis, is less than the assets’ carrying amounts. The second step is to adjust those assets meeting the first criterion to estimated fair value. Evaluation for impairment was performed in both 2025 and 2024 with impairmentlosses of $1,540,705 and $1,949,148, respectively.
The depletion and depreciation of oil and gas properties are computed by the units-of-production method. The amount expensed in any year will fluctuate with the change in estimated reserves of oil and gas, a change in the rate of production or a change in the basis of the assets. The provision for depletion and depreciation was $4,290,427 and $3,157,718 in 2025 and 2024, respectively. The provision includes $52,550 and $42,590 in 2025 and 2024, respectively, for the amortization of the asset retirement costs. See Item 8, Note 3 to the accompanying consolidated financial statements for additional information regarding the asset retirement obligation. The provision for depreciation for other assets was $52,025 in 2025 and $55,248 in 2024.
Gain on Disposition of Oil and Gas Properties. We had a gain on oil and gas property sales of $793,764 and $172,935 in 2025 and 2024, respectively, resulting from sales of leasehold in western Oklahoma.
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General, Administrative and Other (G&A). G&A decreased $420,588 (14%) to $2,656,562 from $3,077,150 in 2024. The decrease was primarily due to decreases of $63,373 in human resource costs, bad debt expense of $435,977 related to TWS accounts receivable, and IT costs of $17,762 offset by increases of $76,899 in consulting fees and $21,013 in regulatory fees, legal fees and taxes, with a net decrease in all other G&A accounts of $1,388.
Equity Income in Investees
Equity income in investees was $59,922 in 2025 and $112,481 in 2024. The 2025 net income consisted of Broadway Sixty-Eight, LLC (“Broadway 68”) income of $33,933, Broadway Seventy-Two, LLC (“Broadway 72”) income of $37,369, Victorum BRH Investment, LLC ("BRH") income of $31,440, offset by the Stott's Mill ("Stott's Mill") loss of $40,071 and QSN Office Park, LLC (“QSN”) loss of $2,749.
Other Income, Net
Other income, net was $1,847,233 in 2025 and $191,842 in 2024. See Item 8, Note 12 to the accompanying consolidated financial statements for a breakdown of Other Income, net. The material components of Other Income, Net are discussed below.
Net realized and unrealized gain on equity securities was $1,629,544 in 2025 and $375,461 in 2024. In 2025, we had realized losses of $36,760 and unrealized gains of $1,666,304. In 2024, we had realized gains of $66,168 and unrealized gains of $309,293. Unrealized gains in 2025 were primarily due to the increase in market value of one stock, Chilean Cobalt Corporation of $1,450,814.
Income from other investments increased $366,762 (656%) to $422,699 in 2025 from $55,937 in 2024, primarily resulting from $398,518 in income from the sale of all remaining acreage in OKC Industrial Properties, LC.
Interest income decreased $189,188 (94%) to $12,089 in 2025 from $201,277 in 2024 and dividend income increased $148,297 (151%) to $246,468 in 2025 from $98,171 in 2024, primarily due to a reclassification of bank interest to dividends to align with tax reporting.
Impairment of other investments increased $208,617 to $527,511 in 2025 from $318,894 in 2024, primarily due to impairment of Cloudburst International, Inc. of $356,007 and one VCC investment of $81,504. For more information on the loss on deconsolidation in 2024, please see Item 8, Note 8 – Non-Controlling Interests and Variable Interest Entities. For more information on impairment of other investments, please See Item 8, Note 7 – Investments and Related Commitments and Contingent Liabilities, Including Guaranties.
Income Tax Provision
In 2025, we had an estimated income tax provision of $1,265,135 as the result of a deferred tax provision of $1,252,559 and a current tax provision of $12,576. In 2024, we had an estimated income tax provision of $499,399 as the result of a deferred tax provision of $434,446 and a current tax provision of $64,953. See Item 8, Note 6 to the accompanying consolidated financial statements for an analysis of the various components of income taxes and a discussion of the federal tax rate change.
