Form 4: TXO Partners Officer Reports Stock Transactions

Scott T. Agosta, Chief Accounting Officer of TXO Partners, reports acquisition and disposal of common units, including phantom and performance units, and sales to cover tax obligations.

Summary

• On January 31, 2025, Scott T. Agosta, Chief Accounting Officer of TXO Partners, acquired 21,110 phantom units and 24,080 performance units, both with a price of $0.
• These units are the economic equivalent of common units and will be settled in common units upon vesting.
• The phantom units will vest in three substantially equal installments beginning on January 31, 2026.
• The performance units will vest in two substantially equal installments beginning on January 31, 2026.
• Agosta also sold 5,775 common units at $18.59 per unit.
• This sale was to satisfy tax withholding obligations related to the vesting of equity awards and was conducted under a Rule 10b5-1 trading arrangement.
• Following these transactions, Agosta beneficially owns 159,498 common units.
• The reporting person is Chief Accounting Officer of TXO Partners GP LLC, the general partners of the Issuer (the 'General Partner').
• The issuer is managed by the directors and executive officers of the General Partner.

Sentiment

Score: 6

Explanation: The sentiment is neutral. The transactions are routine and related to equity compensation and tax obligations. There's no indication of unusual activity or concern.

Positives

• The acquisition of phantom and performance units indicates a continued alignment of the officer's interests with the company's performance.

Negatives

• The sale of common units, even for tax obligations, could be perceived negatively by some investors, although it's a standard practice.

Risks

• The vesting of phantom and performance units is contingent on future performance, which introduces uncertainty.

Future Outlook

The vesting of phantom and performance units in 2026 suggests an expectation of continued performance and alignment of interests.

Management Comments

• The sale of units was mandated by the Issuer's policy requiring the satisfaction of tax withholding obligations through a 'sell to cover' transaction and does not represent a discretionary transaction by the Reporting Person.

Industry Context

Insider transactions are closely monitored by investors as they can provide insights into management's confidence in the company's prospects. Rule 10b5-1 plans are common for executives to manage sales in compliance with insider trading regulations.

Comparison to Industry Standards

• The use of phantom and performance units is a common practice in the energy industry to incentivize executives and align their interests with shareholders.
• Many companies, such as EOG Resources and Pioneer Natural Resources, utilize similar equity-based compensation plans.
• The 'sell to cover' practice for tax obligations is also standard across the industry to simplify tax management for employees and the company.

Stakeholder Impact

• The transactions have a minor impact on shareholders, primarily through the potential dilution from the vesting of phantom and performance units.

Key Dates