Investment Thesis
TXO Partners is in severe financial distress with massive operating losses (-$77.6M on $28.3M revenue) and a critical liquidity crisis (current ratio 0.43x). The company cannot service its $277.1M debt burden from operations (interest coverage -79.5x) and holds only $7.9M cash against substantial liabilities, indicating acute solvency risk.
Strengths
- Positive operating cash flow of $33.4M despite net losses
- Positive free cash flow of $33.4M indicating some cash generation ability
- Total asset base of $1.3B provides tangible collateral value
Risks
- Severe liquidity crisis with current ratio of 0.43x indicating inability to meet short-term obligations
- Operating margin of -274.3% shows fundamental business unprofitability at operations level
- Negative interest coverage ratio of -79.5x demonstrates inability to service debt from operations
- Minimal cash position ($7.9M) relative to long-term debt ($277.1M) creates refinancing risk
- Persistent operating losses suggest structural business challenges in current commodity environment
Key Metrics to Watch
- Quarterly operating cash flow trend and sustainability
- Debt refinancing schedule and covenant compliance status
- Cash balance and working capital adequacy
- Operating losses and path to breakeven
- Commodity price sensitivity and realized well economics
Financial Metrics
Revenue
28.3M
Net Income
-74.3M
EPS (Diluted)
$-1.35
Free Cash Flow
33.4M
Total Assets
1.3B
Cash
7.9M
Profitability Ratios
Gross Margin
N/A
Operating Margin
-274.3%
Net Margin
-262.9%
ROE
N/A
ROA
-5.6%
FCF Margin
118.1%
Balance Sheet & Liquidity
Current Ratio
0.43x
Quick Ratio
0.43x
Debt/Equity
N/A
Debt/Assets
0.0%
Interest Coverage
-79.46x
Long-term Debt
277.1M
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-05-09T13:35:04.682986 |
Data as of: 2026-03-31 |
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