dmlp20220630

dmlp20220630_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 June 30, 2022

☐	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 August 4, 2022: 37,554,774

DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS			1

PART I – FINANCIAL INFORMATION			1

	ITEM 1.	FINANCIAL STATEMENTS	1

		CONDENSED CONSOLIDATED BALANCE SHEETS AS OF JUNE 30, 2022 AND DECEMBER 31, 2021 (UNAUDITED)	2

		CONDENSED CONSOLIDATED INCOME STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2022 AND 2021 (UNAUDITED)	3

		CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERSHIP CAPITAL FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2022 AND 2021 (UNAUDITED)	4

		CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 2022 AND 2021 (UNAUDITED)	5

		NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS	6

	ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	8

	ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	12

	ITEM 4.	CONTROLS AND PROCEDURES	12

PART II – OTHER INFORMATION			12

	ITEM 1.	LEGAL PROCEEDINGS	12

	ITEM 1A.	RISK FACTORS	12

	ITEM 6.	EXHIBITS	13

SIGNATURES			15

	June 30, 2022			December 31, 2021

ASSETS
Current assets:
Cash and cash equivalents	$	42,976		$	28,306
Trade and other receivables		20,341			11,533
Net profits interest receivable - related party		9,331			6,822
Total current assets		72,648			46,661

Oil and natural gas properties (full cost method)		453,799			440,052
Accumulated full cost depletion		(350,926	)		(341,733	)
Total		102,873			98,319

Leasehold improvements		989			989
Accumulated amortization		(376	)		(330	)
Total		613			659

Operating lease right-of-use asset		1,061			1,168
Total assets	$	177,195		$	146,807

LIABILITIES AND PARTNERSHIP CAPITAL

Current liabilities:
Accounts payable and other current liabilities	$	4,084		$	2,512
Operating lease liability		286			291
Total current liabilities		4,370			2,803

Operating lease liability		1,452			1,594
Total liabilities		5,822			4,397

Commitments and contingencies (Note 4)

Partnership capital:
General Partner		1,497			982
Unitholders		169,876			141,428
Total partnership capital		171,373			142,410
Total liabilities and partnership capital	$	177,195		$	146,807

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021

Net operating revenues:
Royalties	$	37,140	$	16,770	$	72,019	$	31,141
Net profits interests		9,013		4,224		14,483		7,199
Lease bonus		1,253		7		1,253		444
Other		53		360		105		366

Total net operating revenues		47,459		21,361		87,860		39,150

Costs and expenses:
Operating, including production taxes		3,807		1,644		7,075		3,165
Depreciation, depletion and amortization		4,773		2,484		9,239		4,782
General and administrative expenses		1,555		724		3,598		2,893

Total costs and expenses		10,135		4,852		19,912		10,840

Net income	$	37,324	$	16,509	$	67,948	$	28,310

Allocation of net income:
General partner	$	1,253	$	551	$	2,335	$	948
Unitholders	$	36,071	$	15,958	$	65,613	$	27,362
Net income per common unit (basic and diluted)	$	0.96	$	0.46	$	1.76	$	0.79
Weighted average basic and diluted common units outstanding		37,555		34,688		37,275		34,684

	General Partner			Unitholders			Total			Unitholder Units
Three Months Ended June 30, 2021
Balance at April 1, 2021	$	654		$	87,030		$	87,684			34,680
Net income		551			15,958			16,509
Acquisition of assets for units		-			12,216			12,216			725
Distributions ($0.303441 per Unit)		(374	)		(10,523	)		(10,897	)
Balance at June 30, 2021	$	831		$	104,681		$	105,512			35,405
Three Months Ended June 30, 2022
Balance at April 1, 2022	$	1,209		$	162,118		$	163,327			37,555
Net income		1,253			36,071			37,324
Distributions ($0.753926 per Unit)		(965	)		(28,313	)		(29,278	)
Balance at June 30, 2022	$	1,497		$	169,876		$	171,373			37,555

	Six Months Ended June 30,
	2022			2021

Net cash provided by operating activities	$	67,444		$	28,211

Cash flows provided by investing activities:
Net cash contributed in acquisitions of oil and natural gas properties		1,003			352
Proceeds from the sale of oil and natural gas properties		-			262
Total cash flows provided by investing activities		1,003			614

Cash flows used in financing activities:
Distributions paid to General Partner and unitholders		(53,777	)		(19,578	)

Increase in cash and cash equivalents		14,670			9,247
Cash and cash equivalents at beginning of period		28,306			11,232

Cash and cash equivalents at end of period	$	42,976		$	20,479


Non-cash investing and financing activities:
Fair value of common units issued for acquisition of oil and natural gas properties	$	14,792		$	12,216

	In Thousands
2022	$	173
2023		350
2024		356
2025		362
2026		368
Thereafter		817
Total lease payments		2,426
Less amount representing interest		(688	)
Total lease obligation	$	1,738

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		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)

3.6		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)

3.7		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)

3.8		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)

3.9		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)

3.10		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)

3.11		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)

3.12		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)

3.13		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)

3.14		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)

3.15		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)

3.16		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)

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

	DORCHESTER MINERALS, L.P.

	By:	Dorchester Minerals Management LP
		its General Partner

	By:	Dorchester Minerals Management GP LLC
		its General Partner

	By:	/s/ William Casey McManemin
		William Casey McManemin
Date: August 4, 2022		Chief Executive Officer

	Three Months Ended							Six Months Ended
	June 30,							June 30,
Accrual basis sales volumes:	2022		2021		% Change			2022		2021		% Change
Royalty properties natural gas sales (mmcf)		1,105		1,014		9	%		2,252		1,754		28	%
Royalty properties oil sales (mbbls)		318		225		41	%		687		471		46	%
NPI natural gas sales (mmcf)		353		415		(15	%)		673		693		(3	%)
NPI oil sales (mbbls)		139		97		43	%		233		187		25	%

Accrual basis average sales price:
Royalty properties natural gas sales ($/mcf)	$	6.46	$	3.48		86	%	$	5.46	$	2.97		84	%
Royalty properties oil sales ($/bbl)	$	94.52	$	58.88		61	%	$	86.96	$	55.01		58	%
NPI natural gas sales ($/mcf)	$	7.67	$	3.37		128	%	$	6.51	$	3.19		104	%
NPI oil sales ($/bbl)	$	84.24	$	58.08		45	%	$	82.48	$	53.96		53	%

	By:	/s/ Leslie Moriyama
		Leslie Moriyama
Date: August 4, 2022		Chief Financial Officer

SEC Form 10-Q filed by Dorchester Minerals L.P.