NYSE:TXO
TXO Partners, L.P.
A specialized midstream energy firm offering strategic storage and transport infrastructure for North American oil and gas producers.
Key Metrics
Investment Thesis
Bull Case
TXO offers attractive entry valuation for investors seeking exposure to the essential midstream infrastructure play with high barriers to entry and inelastic demand from major producers. The company's ability to generate positive operating cash flow despite reported net losses suggests potential for margin expansion as volume utilization improves in the current cycle. Strategic asset locations in the Permian basin provide a durable long-term moat against new entrants.
Bear Case
The company reported a net loss of $21.6M and negative operating profit of -$30.6M, raising concerns about current profitability and the sustainability of its business model in a lower-price environment. Significant debt issuance coupled with high interest expenses creates financial strain that could limit flexibility during prolonged commodity downturns. Revenue decline from 2024 to 2025 volatility highlights sensitivity to production cuts in key basins.
About TXO Partners, L.P.
TXO Partners L.P. (NYSE: TXO) is a midstream energy infrastructure operator that provides essential storage, transportation, and processing services across the North American oil and gas sector. The company serves major producers in key basins including Permian, Eagle Ford, and Bakken by managing large-scale crude oil and natural gas storage facilities. Its business model focuses on delivering reliable logistics solutions to support the upstream industry's growth and operational efficiency.
Analysis
Management Discussion
Despite a net loss of $21.6M in 2025, TXO generated positive operating cash flow of $118.2M, indicating strong underlying asset utility despite accounting losses from non-operating adjustments. The company deployed significant capital via investing cash flows of -$335.3M, likely focused on expanding storage capacity or strategic acquisitions to grow its network. Financing activities showed substantial debt issuance of $405.5M partially offset by repayments, suggesting active balance sheet management to fund growth.
Industry Overview
The midstream energy sector provides critical infrastructure for extracting, transporting, and storing oil and gas, operating with high capital requirements and long asset lifespans that create stable cash flows. Industry dynamics are heavily influenced by upstream production levels, where reduced drilling activity directly impacts storage utilization rates and service fees. Regulatory frameworks and environmental standards continue to shape operational costs and expansion opportunities across the North American landscape.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Revenue | $380.7M | $282.8M | $401.0M |
| Cost of Revenue | $0 | $0 | $0 |
| Gross Profit | $380.7M | $282.8M | $401.0M |
| Operating Expenses | $504.5M | $289.7M | $431.6M |
| Operating Income | $-123.8M | $-6.9M | $-30.6M |
| G&A | $7.9M | $14.5M | $21.5M |
| Stock-Based Comp | $3.5M | $6.2M | $16.3M |
| D&A | $44.3M | $52.4M | $96.6M |
| Other OpEx | $496.6M | $275.1M | $410.1M |
| Non-Operating Income | $0 | $0 | $0 |
| Interest Expense | $4.4M | — | — |
| Interest Income | $461.0K | $1.1M | $618.0K |
| Pre-Tax Income | $-123.8M | $-6.9M | $-30.6M |
| Income Tax | $-19.8M | $-30.4M | $-9.0M |
| Continuing Ops | $-104.0M | $23.5M | $-21.6M |
| Discontinued Ops | $0 | $0 | $0 |
| Net Income | $-104.0M | $23.5M | $-21.6M |
| Minority Interest | $0 | $0 | $0 |
| Net to Common | $-104.0M | $23.5M | $-21.6M |
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Current Assets | $55.2M | $64.4M | $95.3M |
| Cash & Equivalents | $4.5M | $7.3M | $9.4M |
| Accounts Receivable | $32.2M | $39.7M | $52.4M |
| Other Current Assets | $18.5M | $17.5M | $33.6M |
| Long-Term Assets | $640.4M | $966.4M | $1.26B |
| PP&E (Net) | $629.3M | $951.4M | $1.24B |
| Other LT Assets | $11.1M | $15.0M | $18.9M |
| Total Assets | $695.6M | $1.03B | $1.35B |
| Current Liabilities | $39.1M | $66.3M | $153.9M |
| Accounts Payable | $8.6M | $18.2M | $28.0M |
| Other Current Liab | $7.2M | $9.2M | $80.2M |
| Total L&E | $695.6M | $1.03B | $1.35B |
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Net Income (CFO) | $-104.0M | $23.5M | $-21.6M |
| Non-Cash Adjustments | $206.4M | $80.7M | $127.7M |
| Working Capital Changes | $-25.3M | $5.1M | $12.1M |
| Cash from Operations | $77.2M | $109.3M | $118.2M |
| Cash from Investing | $-46.2M | $-288.3M | $-335.3M |
| Debt Issuances | $86.0M | $251.0M | $405.5M |
| Debt Repayments | $178.0M | $122.0M | $271.5M |
| Cash from Financing | $-35.6M | $181.8M | $219.2M |
| FX Effect | $0 | $0 | $0 |
| Net Change in Cash | $-4.7M | $2.8M | $2.1M |
| Beginning Cash | $9.2M | $4.5M | $7.3M |
| Ending Cash | $4.5M | $7.3M | $9.4M |
Frequently Asked Questions
How does TXO Partners, L.P. make money?
The company's revenue is primarily derived from storage fees for crude oil and natural gas liquids (NGLs), transportation services via pipeline networks, and processing charges for separating NGLs from raw production. These segments reflect the core midstream value chain where TXO acts as a critical utility for producers needing flexible capacity and logistics support.
What are the main risks for TXO?
The primary risk is exposure to oil and gas commodity prices, which can impact throughput volumes if producers cut production during downturns. High debt levels relative to assets create interest rate sensitivity and leverage concerns given the cyclical nature of the energy sector. Regulatory changes or environmental compliance costs in storage facilities could erode margins significantly.
What is TXO's competitive advantage?
TXO maintains a dense network of storage assets in high-production basins, providing producers with immediate inventory flexibility to manage price volatility. The company benefits from long-term contracts that ensure stable cash flows regardless of spot market fluctuations, insulating it from short-term commodity price swings. Its strategic asset location allows for rapid response to supply shifts in the Permian and other key regions.
Related Companies
Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.