TXO Partners, L.P. Stock Compensation Disclosure

Unit Incentive Plans

At the time of the public offering in January 2023, we adopted a new long-term incentive plan. Under the 2023 Long-Term Incentive Plan (the "LTIP"), the general partner may issue long-term equity-based awards to directors, officers and employees of our general partner or its affiliates, or to any consultants, affiliates of our general partner or other individuals who perform services for us. The LTIP provides for the grant, from time to time at the discretion of the Board or any delegate thereof, of cash awards, unit awards, restricted units, phantom units, unit options, unit appreciation rights, distribution equivalent rights and other unit-based awards. As of December 31, 2025, 3.9 million units were available for future grants of awards under the LTIP. Effective January 1, 2026, an additional 2.7 million units became available for grants under the LTIP pursuant to the LTIP’s “evergreen” feature.

In January 2026, the Compensation Committee of the Board (the "Compensation Committee") approved grants of 632,353 time-vesting phantom units with distribution equivalent rights to the non-employee directors, officers and certain key employees. These phantom units will vest ratably over a three-year period for the officers and key employees and will fully vest on the one-year anniversary of the grant for the non-employee directors. The phantom units will be settled in common units and distribution equivalents will be paid to holders of outstanding phantom units, including unvested phantom units.

Additionally, in January 2026, the Compensation Committee approved grants of 510,552 performance-vesting phantom units to the officers and certain key employees. These performance-based phantom units will be earned based on the Company’s performance during the 2026 calendar year according to certain performance objectives and will vest in one-half increments on January 31, 2028 and January 31, 2029. Prior to determination of the achievement of the performance objectives, distribution equivalent rights will be paid according to the target number of phantom unit grants; following determination of the number of earned phantom units based on achievement of the performance objectives, distribution equivalent rights will be paid according to the number of earned phantom units. The phantom units will be settled in common units and distribution equivalents will be paid to holders of outstanding phantom units, including unvested phantom units.
 

In conjunction with the announcement that Brent W. Clum and Gary D. Simpson were named Co-Chief Executive Officers of the General Partner, effective April 1, 2025, on March 31, 2025, the Compensation Committee granted the following awards, effective April 1, 2025, to each of Mr. Clum and Mr. Simpson: (i) 100,000 phantom units which vested on April 1, 2025 and (ii) 100,000 phantom units, along with distribution equivalent rights, which vest on April 1, 2026.
 

In January 2025, the Compensation Committee approved grants of 301,180 time-vesting phantom units with distribution equivalent rights to the non-employee directors, officers and certain key employees. These phantom units will vest ratably over a three-year period for the officers and key employees and will fully vest on the one-year anniversary of the grant for the non-employee directors. The phantom units will be settled in common units and distribution equivalents will be paid to holders of outstanding phantom units, including unvested phantom units.

Additionally, in January 2025, the Compensation Committee approved grants of 249,380 performance-vesting phantom units to the officers and certain key employees. Based on the results of the Company’s performance during 2025 according to certain performance objectives, 243,142 performance-vesting phantom units were earned and will vest in one-half increments on January 31, 2027 and January 31, 2028. The phantom units will be settled in common units and distribution equivalents will be paid to holders of outstanding phantom units, including unvested phantom units.

In January 2024, the Compensation Committee approved grants of 208,875 time-vesting phantom units with distribution equivalent rights to the non-employee directors, officers and certain key employees. These phantom units will vest ratably over a three-year period for the officers and key employees and will fully vest on the one-year anniversary of the grant for the non-employee directors. The phantom units will be settled in common units and distribution equivalents will be paid to holders of outstanding phantom units, including unvested phantom units.

Additionally, in January 2024, the Compensation Committee approved grants of 159,475 performance-vesting phantom units to the officers and certain key employees. Based on the results of the Company’s performance during 2024 according to certain performance objectives, 215,977 performance-vesting phantom units were earned and will vest in one-half increments on January 31, 2026 and January 31, 2027. The phantom units will be settled in common units and distribution equivalents will be paid to holders of outstanding phantom units, including unvested phantom units.

The performance-vesting phantom units are earned based on TXO Partners annual performance. The objectives for 2025 and 2024 were (1) distributions to unitholders, (2) lease operating expenses plus cash general and operating expenses per Boe and (3) discretionary factors as determined by the Compensation Committee. These three objectives are essentially equally weighted. The objectives are scored using a range from 50% to 200% depending on the actual results. Generally, exceeding the objective is scored at 200% of target, meeting the objective is scored at 100% of target and missing the objective is scored at 50% of target. The same objectives and scoring will be used to measure the 2026 awards. Additionally, we expense the performance-vesting performance phantom units assuming 100% of the phantom units will be earned. We only change this estimate when we have information that the earned awards will be different than 100% or at such time as the awards are earned.

In connection with the offering, the Board approved grants of 545,000 phantom units with distribution equivalent rights to the non-employee directors, officers and certain key employees. These phantom units will vest ratably over a three-year period for the officers and key employees and fully vested on the one-year anniversary of the grant for the non-employee directors. The phantom

We recognized non-cash restricted unit compensation expense of $16.3 million in 2025, $6.2 million in 2024 and $3.5 million in 2023. Total deferred compensation at December 31, 2025 related to restricted units was $11.6 million. We estimate that incentive compensation for service periods after December 31, 2025 will be approximately$7.4 million in 2026, $3.9 million in 2027, and $0.3 million in 2028. The weighted-average remaining vesting period is 1.0 years for restricted units.