TXO Energy Partners LP outlined a strategy of steady payout growth and long-dated asset development at the EnerCom Denver – The Energy Investment Conference, emphasizing disciplined capital allocation and organic production expansion.
The company, led by Co-CEOs Brent Clum and Gary Simpson, projected an annualized distribution run rate of about $1.60 per unit over the next 12 months, supported by recent quarterly distributions of $0.30 in November, $0.36 in March, and $0.40 in the most recent quarter. At current unit prices, this implies a distribution yield of approximately 11.6%. Management reiterated its goal of raising distributions annually, citing alignment with long-term ownership interests, as insiders and the board collectively hold about a third of the company’s shares.
TXO’s 2026 capital expenditures are planned at $80 million to $90 million, with roughly 40% allocated to organic growth and the remainder directed toward maintaining production levels. The company targets leverage of 1x to 2x debt, preferring a range of 1x to 1.25x under normal conditions, and currently sits at about 1x with a debt-to-equity ratio of 0.42. Production growth is expected to average 1% to 2% annually, while the long-term decline rate is estimated at 12%, down from 9.5% at the 2023 initial public offering.
The company’s asset base spans approximately 520,000 net acres across the Permian, San Juan, and Williston basins, including 60,000 acres in the New Mexico portion of the Mancos formation. In the Williston Basin’s Elm Coulee field, TXO has drilled seven wells in 2026, with one completed and the remainder expected to be fracked and brought online by the end of October. Average lateral lengths for 2026 wells are 14,700 feet, with over 100 additional locations identified featuring laterals between 15,000 and 20,000 feet. Field operations are transitioning to 2- and 3-well pads, and about 10% of production is currently protected under frac protection arrangements.
TXO also highlighted progress in the San Juan Basin’s Mancos formation, where full development is estimated to require about $2 billion in capital. The project requires realized prices of $3.50 to $4.00 per barrel of oil equivalent to remain economic. Traditional San Juan production outside the Mancos interval averages about 45 barrels of oil equivalent per day, while the Vacuum Field’s decline rate is approximately 6%.
