TXO Partners Eyes Higher 2027 Distributions as Williston Drilling Gains Momentum

TXO Partners NYSE: TXO is positioning itself as a “production and distribution company” focused on generating cash distributions while selectively investing in a portfolio spanning the Permian, San Juan and Williston basins, Co-CEO and CFO Brent W. Clum said at an EnerCom presentation.

Clum said the company’s board and insiders own about one-third of its stock, which he said supports a long-term ownership mindset. He described TXO’s strategy as similar to the acquire-and-exploit approach used at XTO Energy, the predecessor business sold to Exxon for $41 billion in 2010.

“We were not interested in being bigger. We were interested in making a more valuable company,” Clum said, citing high-margin assets, lower operating costs and sustainable distributions as the company’s priorities.

TXO has approximately 520,000 net acres across the Permian, San Juan and Williston basins, along with roughly $1 billion in proved developed producing, or PDP, assets, according to Clum. The company estimates its portfolio’s long-term decline rate at about 12% and said it seeks to keep that rate below 15%.

Clum said the company repositioned its portfolio beginning in 2020, acquiring assets in the San Juan Basin that year and two Permian assets from Chevron in 2021. TXO went public in 2023 and subsequently expanded into Montana’s Elm Coulee area of the Williston Basin, including through its White Rock acquisition in 2025. The company also has moved to unwind a joint venture with Exxon after completing the White Rock transaction.

Clum said TXO entered transactions with three buyers, with the final transaction closing in May. The full effect of the transactions would appear on the balance sheet at the end of the second quarter, with a clearer view expected by the third quarter.

TXO intends to operate with debt of roughly one to two times through commodity cycles and transactions, although Clum said its preferred leverage level is closer to one to 1.25 times.

In the Williston Basin, TXO initially expected Elm Coulee development to center largely on refracturing older wells. Instead, the company has concluded that advances in horizontal drilling and completion technology allow for broader redevelopment of the field, Clum said.

The field was originally developed with open-hole completions and lateral lengths of up to 5,000 feet. TXO drilled three organic wells in 2025 with average lateral lengths of about 10,000 feet. In 2026, the company plans seven organic wells with average lateral lengths of nearly 15,000 feet. Clum said all seven wells were already drilled, one had been completed, and the company expected all seven to be hydraulically fractured and online by the end of October. The program also is shifting from single-well pads t...