Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations is based on, and should be read in conjunction with, our Financial Statements and notes thereto in Part I, Item 1. "Financial Statements" of this Quarterly Report. The forward-looking statements are dependent upon events, risks and uncertainties that may be outside our control. Factors that could cause or contribute to such differences include, but are not limited to, market prices for oil and natural gas, production volumes, economic and competitive conditions, regulatory changes and other uncertainties, as well as those factors discussed below and elsewhere in this Quarterly Report, particularly in the sections titled "Risk Factors" and "Cautionary Note Regarding Forward Looking Statements," all of which are difficult to predict. In light of these risks, uncertainties and assumptions, actual results may differ materially from those contained in our forward-looking statements. We assume no obligation to publicly update any of these forward-looking statements except as otherwise required by applicable law.

The historical financial information in this "Management's Discussion and Analysis of Financial Condition and Results of Operations" reflects only the historical financial results of the Predecessor, and does not give pro forma effect to the DE Flow Contribution, the Shallow Valley Contribution, the Up-C Reorganization, or the IPO (as defined herein), each of which is described further below. Each of the DE Flow Contribution, the Shallow Valley Contribution, the Up-C Reorganization, and the IPO is reflected in the historical financial information in this "Management's Discussion and Analysis of Financial Condition and Results of Operations" solely from and after its respective completion.

Overview

We are a land management company that owns or controls approximately 236,000 acres in the heart of the Delaware and Midland sub-basins within the prolific Permian Basin. In addition, we have an interest in up to approximately 70,000 acres pursuant to an acreage dedication related to our Midland Basin water infrastructure assets. Our acreage is vital to the efficient development of oil and natural gas resources in the Permian Basin and is strategically located to support the growing surface, resource, infrastructure and related commercial development needs of the power and other emerging industries in the Permian Basin. We do not own the oil and gas mineral interests that underlie our surface acreage.

Our assets are situated in the most active oil and natural gas development and production areas in Texas and New Mexico. The Permian Basin is regarded as the premier region for upstream development due to its prolific remaining resource, low break-even costs and robust network of service and infrastructure companies that support upstream activity. The depth and quality of the remaining resource has attracted large, public and well-capitalized producers who have largely consolidated the core of the Midland and Delaware sub-basins. In turn, the abundance of economic and highly reliable energy has underpinned a number of emerging industries within the Permian Basin, including traditional and renewable power generation, transmission and storage and data centers.

Market Condition and Outlook

Over the last several years, the global economy and the oil and natural gas industry have experienced considerable volatility driven by a range of macroeconomic and geopolitical factors. Global conflicts, ongoing ambiguity surrounding tariffs and international trade policies, domestic political developments, elevated inflation, higher interest rates and changing costs of capital have influenced business activity across the energy sector, contributing to broader economic uncertainty that continues to affect short-term and long-term development decisions of energy companies.

These conditions, combined with the war in the Middle East involving the U.S., Israel and Iran, as well as other Middle Eastern countries, the situation in Venezuela, OPEC+ actions and evolving global supply-demand fundamentals, have driven increased volatility in commodity prices. From December 31, 2024, to December 31, 2025, average WTI oil prices decreased approximately 14.7% year-over-year, while average Henry Hub natural gas prices increased approximately 60.2% over the same period. However, in March 2026, as a result of the escalating Middle East conflict, the WTI posted price increased to over $94.0 per barrel or 38.0%, since December 31, 2025 as a result of production shut-ins, interruptions in global shipping routes and other uncertainties. Volatility in oil and natural gas prices may have an impact on customer activity levels on our land. If global oil prices continue to increase or remain high, we believe there could be increased oil and gas development activities in the Permian Basin where our acreage and assets are located. However, sustained higher crude oil prices could result in general price increases and ultimately increased cost inflation, which could adversely impact our and our customers' future profitability if we and they are unable to timely pass through the cost increases to our customers. Alternatively, resolution of the conflict in the Middle East, particularly if new sources of crude oil supply become available, could result in a decrease in crude oil prices, which could reduce the activity levels of customers on our acreage.

Despite the significant volatility in the global oil market, we believe the outlook for energy and infrastructure development, particularly in the Permian Basin, remains favorable. The focus on energy independence is promoting continued activity in the U.S., which is expected to drive significant investment in infrastructure, especially in the prolific Permian Basin where our land and assets are located. U.S. energy policy developments, including Executive Orders promoting domestic energy production through expedited infrastructure

approvals and reduced barriers to resource development, may further support investment and operational activity in the basin. At the same time, federal incentives for alternative and renewable energy technologies may accelerate the broader energy transition. Many of these emerging energy initiatives, similar to traditional oil and gas development, require substantial surface acreage and related infrastructure, positioning companies with significant land and infrastructure assets to benefit from both traditional and renewable energy sources.

First Quarter Results

Significant financial and operating highlights of the Predecessor for the first quarter ended March 31, 2026 and 2025 include:

(1) Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow and Free Cash Flow Margin are non-GAAP financial measures. See "Non-GAAP Financial Measures" for more information regarding these non-GAAP financial measures along with reconciliations to the most comparable measures calculated and presented in accordance with GAAP.

How We Generate Revenue

We generate revenue from multiple sources, including the use of our surface acreage, the sale of water and other resources from our land and our water handling infrastructure. The fees, royalty rates, payment structures and other commercial terms under our contracts are negotiated individually, reflecting the specific surface use, type of resource development, anticipated operational intensity and expected production or extraction volumes associated with each agreement. Further, the amount and composition of revenue we receive from a particular customer may vary significantly from period to period based on the nature, timing and scope of that customer's activities on our land. We are focused on actively growing revenue from the use of our surface acreage and the sale of resources from our land. We believe that our largely fee-based SUAs, as well as our strong base of royalty fees, support cash flow stability through commodity price cycles.

The table below summarizes revenues of the Predecessor on a historical basis for the periods indicated:

(1) Three months ended March 31, 2026 and 2025 Resource sales referenced above consists of $18.4 million and $4.5 million reported as "Water sales," $0.1 million reported as "Related party water sales" for the three months ended March 31, 2026 (with none for the three months ended March 31, 2025) and $0.6 million and $0.4 million of mined caliche resource sales reported as "Surface and other revenues," respectively, on the Predecessor's Consolidated Statement of Operations. The remaining revenues reported on the Predecessor's Consolidated Statement of Operations have been disaggregated between Surface use royalties and Surface use related revenues above.

In the early stages of a customer's development program, we typically generate usage-based fees and other revenues related to the installation of infrastructure required to support long-term operations. As development progresses, these revenues generally transition toward royalty or lease revenues and resource sales based on the customer's ongoing use of our land and the extraction of resources to support its oil and gas development activities.

The following table summarizes our revenue streams:

Resource Sales and Royalties

Under our SUAs, we supply water to upstream operators primarily for use in their well completions in exchange for a per barrel fee. These fees are negotiated and vary depending on the delivery point. Our SUAs provide us with the exclusive right to supply water and certain resources to support an operator's completion activities on certain parts of our acreage at a negotiated fixed fee per barrel. Similarly, our customers are required to purchase caliche from us for the construction of access roads and well pads for which we receive a fixed-fee per cubic yard of caliche extracted from our surface acreage as stipulated in such SUAs.

Surface Use Royalties and Revenue

Under our SUAs, we receive a royalty based on a percentage of gross revenue derived from the use of our land and/or volumetric use of infrastructure installed on our land in exchange for rights of use of our land, one-time or annual payments and additional fees at each renewal period. We typically receive royalties from such operations under our SUAs throughout the lifecycle of our customers' activities on our land. Surface use royalties include royalties from certain saltwater disposal wells ("SWDs") on and off our ranches and lease payments with a base rate from use of our subsurface pore space, third-party sales of recycled water, development and use of drilling sites, new and existing roads, pipeline easements and electric transmission easements.

Under the Produced Water Recycling Rights Agreement (the "Hydrosource Recycling Agreement") with Hydrosource Logistics, LLC ("Hydrosource") that was entered into in connection with the IPO, we receive a fee for each barrel of recycled water Hydrosource sells on our land and within certain designated areas outside of our land, and Hydrosource is required to generate minimum annual royalty revenue of $5.0 million from its activities during the initial five years of the agreement. The Company and Hydrosource have access to supplemental off-ranch water (either recycled or brackish water), and the Company's surface pipeline has the capacity to move approximately 100 MBbls/d, or approximately 36.5 MMBbls per year, of off-ranch water from Texas to its land in New Mexico. Under the Hydrosource Recycling Agreement, we may designate to Hydrosource the rights to manage certain of our customers' brackish water demand for which we would expect to receive a royalty payment. Additionally, Hydrosource has a long-term agreement that provides it with access to up to 3 MMBbls/d of produced water for treatment and recycling within certain designated areas in the Permian Basin (the Hydrosource Recycled Water Supply Agreement").

Additionally, pursuant to the Water System Management Agreement ("DE Flow WSMA") with DEF Operating, LLC ("DEF Operating") that was entered into in connection with the IPO, we receive revenue from our integrated water infrastructure system in the Midland Basin, which is operated by DEF Operating, LLC, an affiliate of Double Eagle Energy Holdings IV, LLC. The operating costs and maintenance expenses of these water infrastructure assets, which include produced water gathering systems, SWDs, water sourcing and delivery pipelines and recycling facilities, are primarily borne by DEF Operating, with minimal operating costs or capital expenditures borne by us.

Our revenues may fluctuate materially from period to period due to variations in producer activity on and around our land, the introduction of new revenue streams, movements in commodity prices, changes in production volumes and the execution of our acquisition strategy, among other factors. Because our business is closely tied to the operational decisions of our customers, shifts in their development plans directly affect our revenue profile and periods of sustained oil and natural gas price declines have historically led customers to reduce activity levels, which would adversely impact our revenues. We expect to evaluate and pursue opportunities to expand and diversify our revenue base, including potential projects related to solar power generation, energy storage, water treatment and desalination, fueling infrastructure, data centers, telecommunications assets and other complementary uses of our land, although there can be no assurance that these initiatives will be successful or that any resulting revenues will materially diversify our overall revenue mix. In addition, we have grown our revenues, Adjusted EBITDA and cash flow through strategic acquisitions, customer pricing

and volume improvements enabled by our ability to consolidate acreage with significant oil and gas development activity, and by working collaboratively with customers on and around our controlled surface acreage to sign new agreements and promote increased use of our land and resources. Our ability to source new commercial opportunities for assets we own or have acquired has contributed to strong financial results, and our business model and significant free cash flow generation continue to be underpinned by low or no capital expenditures with minimal operating costs and employee headcount. In addition, our long-term contracts provide predictable, stable cash flows that are protected from commodity price fluctuations.

Costs of Conducting our Business

Our costs consist primarily of the cost of sales and general and administrative expenses. Our business model and significant free cash flow generation continue to be underpinned by low or no capital expenditures with minimal operating costs and headcount. Our principal costs are as follows:

Cost of Sales. Cost of sales consists primarily of expenses incurred to manage our land and its resources, which include our field personnel's compensation and related benefits, third-party water purchases, water treatment and handling costs, including cost of repairs and maintenance of ancillary water storage facilities and costs associated with compliance with our leased land obligations. These costs generally fluctuate with changes in volumes and activity levels of our customers. Water sourced from our water wells typically has insignificant lifting costs associated with the pumping and logistics of the water resources. In certain instances, we source and purchase supplemental water from other third parties to meet our incremental customer demands. We pass through the costs of our third-party sourced water and handling costs to our customers at cost plus a markup.

General and Administrative Expenses. General and administrative expenses consist primarily of corporate personnel costs, including salaries, bonuses, service fees, payroll taxes and employee-related insurance. These expenses also include professional services such as legal, consulting and accounting fees, as well as information technology and software costs that support our corporate functions. Office-related expenses, such as rent, office equipment rentals, supplies, communications, bank charges and dues and subscriptions, represent an additional component of our administrative cost structure. We also incur various commercial insurance costs, including general liability, directors and officers insurance, umbrella liability, workers' compensation, auto insurance and property insurance, along with other corporate overhead, such as marketing, travel, meals, vehicle lease expenses and miscellaneous administrative expenses. These costs reflect the resources required to manage our business, comply with regulatory and public company requirements and support the organizational infrastructure needed to execute our strategic objectives.

How We Evaluate Our Operations

We use a variety of financial and operational metrics to assess the performance of our business.

(1) For the three months ended March 31, 2026 and 2025, Resource sales referenced above consists of $18.4 million and $4.5 million reported as "Water sales," $0.1 million reported as "Related party water sales" for the three months ended March 31, 2026 (with none for the three months ended March 31, 2025) and $0.6 million and $0.4 million of mined caliche resource sales reported as "Surface and other revenues," respectively, on the Predecessor's Consolidated Statement of Operations. The remaining revenues reported on the Predecessor's Consolidated Statement of Operations have been disaggregated between Surface use royalties and Surface use related revenues above.

(2) See "Non-GAAP Financial Measures" for a reconciliation of these measures to the nearest financial measures calculated and presented in accordance with GAAP.

(3) See "Total Water Volumes" below for more information on the use of this metric.

Revenue

Revenue is a key performance indicator for our business. We monitor realized revenue on a monthly, quarterly and annual basis and compare these results to our internal forecasts and budgets. This analysis helps us validate, and when necessary, update, our assumptions regarding the macroeconomic factors influencing our business, the mix of contracts affecting average unit-level revenues, and the level of development activity and commodity pricing associated with our E&P customers, independent of the impact of our operating costs.

Total Water Volumes

Total water volumes sold or handled are an important revenue driver for our business. We generally charge a fixed per-barrel fee for water sales and receive royalties for water activity under the Hydrosource Recycling Agreement and the DE Flow WSMA. Our SUAs provide us with the exclusive right to supply water and certain resources to support an operator's completion activities on certain parts of our acreage. Revenue increases as total water volumes sold or handled increase, and these volumes are an indicator of activity on our land, which can be driven by our customers' drilling and completion schedules. We believe this metric is useful because our revenues increase as total water volumes sold or handled increase. In addition, water volumes are an indicator of activity on our land and give visibility into our customers' drilling and completion schedules, which influence our financial performance.

Adjusted EBITDA and Adjusted EBITDA Margin

Adjusted EBITDA and Adjusted EBITDA Margin are used by our management and by external users of our financial statements, such as investors, research analysts and others, to assess the financial performance of our assets over the long term to generate sufficient cash to return capital to equity holders or service indebtedness and to evaluate our performance relative to our peers. For more information regarding Adjusted EBITDA and Adjusted EBITDA Margin, including reconciliations to the most comparable measures calculated and presented in accordance with GAAP, please read "Non-GAAP Financial Measures."

Free Cash Flow and Free Cash Flow Margin

Free Cash Flow and Free Cash Flow Margin are used by our management and by external users of our financial statements, such as investors, research analysts and others, to assess our ability to repay our indebtedness, return capital to our shareholders, fund potential acquisitions without access to external sources of financing for such purposes and to evaluate our performance relative to our peers. For more information regarding Free Cash Flow and Free Cash Flow Margin, including reconciliations to the most comparable measures calculated and presented in accordance with GAAP, please read "Non-GAAP Financial Measures."

Key Factors Affecting our Results of Operations

In this Quarterly Report, we present the historical results of operations of the Predecessor for the three months ended March 31, 2026 and 2025. Our future results of operations will not be directly comparable to the historical results of operations of the Predecessor for the periods presented as a result of the Corporate Reorganization (as defined herein), significant growth of our business and new contracting activity completed during each year of our operations, which are not reflected in our operating results until such contracting activity has been completed.

Dependence on Hydrocarbon Activity and Commodity Prices

Our results of operations are substantially dependent on the level of oil and natural gas exploration, development and production activity on and around our surface acreage in the Permian Basin, including our properties in the Delaware Basin in New Mexico and the Midland Basin in Texas, which activity is significantly influenced by prevailing and expected commodity prices. Although we are not an E&P company and have limited physical operations, we primarily generate revenues from surface use fees, easements and rights-of-way, resource sales, such as brackish water and caliche, and royalties associated with third-party development and infrastructure on or adjacent to our lands, rather than by operating drilling or midstream assets. As a result, any sustained reduction in operator activity on or around our lands could materially reduce our revenues, earnings and cash flows. Periods of lower commodity prices may cause operators to curtail drilling and completion programs, defer or renegotiate commercial arrangements or surrender leases, any of which could reduce demand for surface access, water and other resources sourced from our lands and diminish volumetric royalties tied to produced-water handling and disposal, thereby adversely affecting our ability to realize anticipated revenues from our existing asset base. While certain arrangements, such as our Hydrosource Recycling Agreement and DE Flow WSMA, which include minimum annual royalty revenues can partially mitigate volume risk, these features do not eliminate our exposure to reduced activity levels, delays or cancellations driven by commodity price weakness or volatility.

Our ability to grow also depends on continued demand for access to our lands and associated surface rights by E&P operators, midstream providers and other energy and infrastructure users, which demand is closely linked to commodity price expectations, industry capital

spending and basin-level capital allocation. If oil and natural gas prices remain depressed or volatile for an extended period, or if operators reallocate capital away from the Delaware or Midland basins where our properties are concentrated, we could experience slower growth in new surface-use arrangements, reduced renewals or expansions of existing agreements and intensified competition for fewer development opportunities. In particular throughput and related royalties from our Midland Basin produced-water handling network (operated by DEF Operating and currently designed for peak handling capacity of approximately 400 MBbls/d) depend on producer activity levels and the pace of tie-ins, constraints such as pore-space availability, recycling and injection permitting, supply-chain delays or deferrals of drilling and completion schedules can limit volumetric growth and associated payments to us notwithstanding contractual protections. More broadly, because a substantial portion of our revenues are activity-linked, arising from surface use fees, rights-of-way and easements, water sales, produced-water transportation, recycling and disposal royalties and resource sales (including caliche), industry slowdowns can directly reduce the number, timing and scale of projects undertaken on our land, negatively affecting our results of operations and our ability to execute our growth strategy.

Public Company Costs

As a result of the IPO, we incurred incremental, non-recurring costs associated with our transition to a publicly traded and taxable entity. These transition-related expenses include IPO-related professional fees and other IPO costs, as well as the initial design, documentation, implementation and testing of enhanced internal controls over financial reporting under the Sarbanes-Oxley Act ("SOX"). We also incurred one-time investments in governance structures and policies, board and committee operations, director onboarding and training and upgrades to financial reporting, disclosure and compliance systems necessary to support public company requirements.

In addition to these non-recurring items, we expect to incur significant recurring costs as a public company. These ongoing expenses include SEC reporting and compliance obligations (including the preparation, review and filing of annual, quarterly and current reports), registrar and transfer agent fees, national securities exchange listing fees, recurring audit and legal fees, investor relations activities and related communications and increased director and officer liability insurance premiums and director compensation. We also expect to incur continuing costs to maintain and periodically test internal controls and disclosure controls and procedures, sustain cybersecurity and data privacy programs appropriate for a public company environment and retain external advisors to support technical accounting, tax compliance and other specialized governance and regulatory matters. These expenses are not included in our results of operations prior to the closing of the IPO.

We expect to hire additional employees and engage consultants, including accounting, finance, compliance, internal audit, tax and legal personnel, to support the operational, reporting and compliance requirements of being a publicly traded company. The timing and magnitude of these costs will vary based on the pace of our transition activities, evolving regulatory requirements and market practices, and could increase over time as our operations grow or as standards change. While we believe these investments are necessary to support our long-term strategy as a public entity, they will result in higher general and administrative expenses relative to historical periods.

Corporate Reorganization

We were formed solely to serve as the issuer in the IPO and, other than activities related to the IPO, have not conducted any material business operations to date. As a result, the historical consolidated financial statements and other historical financial information included in this Quarterly Report are based on the results of the Predecessor prior to the Corporate Reorganization in connection with the IPO. As a result, the historical consolidated financial data may not give you an accurate indication of what our actual results would have been if the Corporate Reorganization had been completed at the beginning of the periods presented or of what our future results of operations are likely to be. See "-Recent Developments - Corporate Reorganization"

Following the Corporate Reorganization, we are a holding company and the sole managing member of EagleRock Land Operating, LLC ("OpCo"), consolidating OpCo for financial reporting purposes while initially reflecting a noncontrolling interest for limited liability company interests of OpCo ("OpCo Units") not owned by us. Our structure is commonly referred to as an "Up-C," in which public investors hold our Class A shares and thereby an indirect interest in OpCo, while our Existing Owners (as defined herein) and the TCW Entities (as defined herein) initially hold a majority of OpCo Units paired with our Class B shares representing limited liability company interests ("Class B shares"). Our and OpCo's capital structures will generally mirror one another to maintain a one-for-one exchange ratio between OpCo Units and our Class A shares. Although organized as a limited liability company, we have elected to be taxed as a corporation for U.S. federal income tax purposes.

The timing and magnitude of redemptions or exchanges of OpCo Units for our Class A shares over time will change our relative economic interest in OpCo and the amount of noncontrolling interest reflected in our consolidated financial statements, which may affect the comparability of our future results to historical periods.

Acquisitions

Concurrently with the closing of the IPO, we consummated the Corporate Reorganization, through which we acquired significant surface acreage and water infrastructure assets that expanded our operating footprint and revenue-generating asset base. See "-Recent Developments - Corporate Reorganization" for more information on these acquisitions. These transactions will be accounted for in accordance with applicable GAAP, which may result in recognition of identifiable intangible assets and property, plant and equipment of the accounting acquirees at fair value and included differences in the timing and classification of acquisition-related costs depending on the final accounting conclusion. As a result, our post-IPO results will reflect a larger asset base and a different mix of revenues and expenses than those presented in the Predecessor's financial statements.

These acquisitions will impact the comparability of our results of operations across periods. In particular, we expect changes in depreciation and amortization expense associated with the fair value step-up in the carrying value of the acquired assets (if applicable), incremental operating and maintenance costs tied to the newly acquired water infrastructure and potential changes in revenue composition and margins as utilization ramps and commercial terms across the combined asset base are harmonized. We may also incur one-time integration and transition-related expenses, including costs to align systems, processes and contracts; rationalize overlapping functions; and implement common safety, environmental and operational standards. Accordingly, results in periods following the Corporate Reorganization may not be comparable to our historical results.

We may pursue additional acquisitions of surface acreage and related infrastructure in the future where we believe opportunities are strategic and appropriately priced. Any such transactions could further affect period-to-period comparability due to changes in scale, asset mix, contract profile, capital structure and purchase accounting effects, and could require incremental integration efforts and costs. The timing, size, structure and financing of any acquisitions will depend on market conditions, availability of suitable targets and our capital allocation priorities.

EagleRock Credit Facility

On May 4, 2026, OpCo entered into a credit agreement (the "Credit Facility") with JPMorgan Chase Bank, N.A. as administrative agent, and the lenders party thereto. The Effective Date (as defined in the Credit Facility) of the Credit Facility was June 8, 2026. The Credit Facility provides for a senior secured revolving credit facility in an aggregate principal amount of up to $200.0 million, including a $10.0 million letter of credit sublimit, together with the ability to request increases in the commitments of up to an additional $100.0 million; provided that any such request for an increase must be in a minimum amount of $25.0 million and is limited to a maximum of four such requests. The Credit Facility and all borrowings thereunder will mature on June 8, 2031. Borrowings under the Credit Facility bear interest at a rate per annum equal to, at the borrower's option, the Term SOFR Rate (as defined in the Credit Facility) or Daily Simple SOFR (as defined in the Credit Facility), plus an applicable margin ranging from 2.25% to 3.00%, depending on OpCo's Net Total Leverage Ratio (as defined in the Credit Facility). The Credit Facility includes a commitment fee on undrawn amounts ranging from 0.375% to 0.50%. The Credit Facility contains customary affirmative and negative covenants, as well as financial covenants requiring maintenance of a minimum Interest Coverage Ratio of 2.75:1.00 and a maximum Net Total Leverage Ratio of 3.50:1.00 (or 4.00:1.00 following a Material Permitted Acquisition (as defined in the Credit Facility)), and contains customary affirmative covenants, and events of default. The Credit Facility remains undrawn, with no letters of credit outstanding, as of the date the Company's financials were able to be issued.

On June 3, 2026, OpCo repaid the entire balance of the Predecessor Credit Facility (as defined herein) with a cash payment of $269.1 million.

The paydown of the Predecessor Credit Facility and the subsequent entrance into the Credit Facility will result in a change in the amount of our outstanding indebtedness and a change in our borrowing costs relative to those of the Predecessor.

Long Term Incentive Plan

In order to incentivize individuals providing services to us or our affiliates, our board of directors adopted a Long Term Incentive Plan ("LTIP"), which became effective upon the closing of the IPO, for employees and directors. Any individual who is our officer or employee or an officer or employee of any of our affiliates, and any other person who provides services to us or our affiliates, including our directors, are eligible to receive awards under the LTIP at the discretion of our board of directors or a committee thereof, as applicable. The LTIP provides for the grant, from time to time, at the discretion of our board of directors, or a committee thereof, of options, share appreciation rights, restricted shares, restricted share units, share awards, dividend equivalents, other share-based awards, cash awards, substitute awards and performance awards intended to align the interests of employees, directors and service providers with those of our shareholders. Our historical financial data may not present an accurate indication of what our actual results would have been if we had implemented the LTIP program prior to the periods presented within this Quarterly Report.

Income Taxes

Prior to the IPO, we and our subsidiaries were primarily entities that were treated as partnerships for federal income tax purposes. Accordingly, there is no provision or accrual for income taxes for federal and state income tax purposes included in the Predecessor's financial statements attributable to the passthrough income. However, as a result of the corporate status of Desert Ram South, Incorporated. ("Desert Ram South"), the Company has historically accrued federal and state income taxes related to Desert Ram South's taxable earnings.

As a result of our predominately non-taxable structure historically, income taxes on taxable income or losses realized by the Predecessor were generally the obligation of the individual members or partners, with the exception of Desert Ram South. Accordingly, the financial data attributable to the Predecessor contains no provision for U.S. federal income taxes or income taxes in any state or locality (other than as it relates to Desert Ram South.). Following closing of the IPO, although we are a limited liability company, we have elected to be taxed as a corporation and will be subject to U.S. federal, state and local income taxes.

C-Store Sales-Type Lease

During the three months ended March 31, 2026, we recognized a non-recurring $3.3 million gain on net investment in sales-type lease related to the C-Store lease on our acreage upon completion of the construction and commencement of the lease. This gain is not expected to recur in future periods.

Recent Developments

Initial Public Offering

In the IPO, we issued 17,300,000 Class A shares at a price to the public of $18.50 per Class A share. In addition, we granted the underwriters a 30-day option to purchase up to an additional 2,595,000 Class A shares at the public offering price, less underwriting discounts and commissions, which the underwriters exercised in full on May 16, 2026. The Class A shares began trading on the New York Stock Exchange and NYSE Texas, Inc. under the ticker symbol "EROK" on May 14, 2026, and the IPO closed on May 15, 2026. The underwriters' option closed on May 19, 2026

We received net proceeds from the IPO, including the underwriters' option, of approximately $328.5 million, net of underwriting discounts and offering expenses. We contributed all of the net proceeds from the IPO to OpCo in exchange for newly issued OpCo Units at a per-unit price equal to the per-share price paid by the underwriters for our Class A shares in the IPO. OpCo used a portion of the net proceeds from the IPO to repay in full and terminate the Predecessor Credit Facility and intends to use the remainder for general corporate purposes.

Corporate Reorganization

We were formed as a Texas limited liability company by the Predecessor on December 1, 2025. We have elected to be treated as a corporation for U.S. federal income tax purposes. We did not conduct any material business operations prior to the completion of the Corporate Reorganization, other than certain activities related to the IPO.

Following the Corporate Reorganization, we are the sole managing member of OpCo, are responsible for all operational, management and administrative decisions relating to OpCo's business and consolidate the financial results of OpCo and its subsidiaries. OpCo owns all of the outstanding membership interests in our operating subsidiaries and operates our assets through these various subsidiaries.

Concurrently with the closing of the IPO, the following transactions (the Corporate Reorganization) occurred, in substantially the following order:

For more information regarding the Corporate Reorganization, please see "Corporate Reorganization" in the Prospectus.

Recent Acquisitions and Material Agreements

On May 4, 2026, certain subsidiaries of the Predecessor entered into the Sixth Amendment to the Predecessor Credit Facility (the "Sixth Amendment"). The Sixth Amendment, among other things, (i) provided the lenders' consent to the IPO, (ii) effected the joinder of OpCo as the new parent under the Predecessor Credit Facility, (iii) released Hydrosource and the Predecessor from their obligations thereunder, with the Fifth Amendment Term Loans (as defined in the Sixth Amendment) being transferred to a separate credit agreement, and (iv) required the establishment of a segregated account with a minimum balance of $270.0 million to be funded from the IPO proceeds. The Predecessor Credit Facility was subsequently repaid in full and terminated following the closing of the IPO.

On May 4, 2026, OpCo entered into the Credit Facility with JPMorgan Chase Bank, N.A. as administrative agent, and the lenders party thereto providing for a $200.0 million revolving credit facility. See "-Key Factors Affecting our Results of Operations-EagleRock Credit Facility" for additional information regarding the terms of the Credit Facility. The Effective Date (as defined in the Credit Facility) of the Credit Facility occurred on June 8, 2026.

On May 15, 2026, concurrently with the closing of the IPO, Double Eagle contributed its interests in DE IV Flow, LLC ("DE Flow"), including the integrated water infrastructure system in the Midland Basin (the "DE Flow System"), to OpCo in exchange for 45,873,930 OpCo Units and a corresponding number of Class B shares (the "DE Flow Contribution"). The DE Flow System consists of produced water gathering systems, saltwater disposal wells, water sourcing and delivery pipelines and recycling facilities, and is capable of handling up to approximately 400 MBbls/d of produced water. The DE Flow Contribution was accounted for as a business combination under ASC 805.

On May 15, 2026, concurrently with the closing of the IPO, the Shallow Valley Owners contributed their interests in the Shallow Valley Ranch ("Shallow Valley"), including approximately 41,000 surface acres in the Midland Basin and associated assets, to OpCo in exchange for 21,134,331 OpCo Units and a corresponding number of Class B shares (the "Shallow Valley Contribution"). The Shallow Valley Contribution was accounted for as a business combination under ASC 805.

In connection with the completion of the IPO, OpCo entered into the following material agreements with affiliates of our Existing Owners relating to the use of our land and our resources:

For more information regarding foregoing agreements, please see "Certain Relationships and Related Party Transactions" in the Prospectus filed with the SEC.

Results of Operations

Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025

NM - not meaningful

Water sales. Water sales increased by $14.3 million, or 318%, to $18.8 million for the three months ended March 31, 2026, as compared to $4.5 million for the three months ended March 31, 2025. The increase was driven by significant growth in both fresh water and recycled water volumes, primarily attributable to the acquisition of Accelerated Water Resources, LLC completed in April 2025 (the "Accelerated Acquisition"), which contributed approximately $11.6 million of water sales revenue for the three months ended March 31, 2026 (such revenue was not present in the three months ended March 31, 2025). The remaining increase was attributable to organic growth in our legacy water business, supported by sustained drilling and completion activity by our E&P customers in the Permian Basin.

Cost of sales (exclusive of depreciation and amortization). Cost of sales (excluding depreciation and amortization, and inclusive of related party cost of sales) increased by $4.7 million, or 159%, to $7.7 million for the three months ended March 31, 2026, as compared to $3.0 million for the three months ended March 31, 2025. The increase was consistent with the significant increase in water sales volumes. Fresh water sourcing costs, transfer costs, and field personnel costs all increased proportionally with higher activity levels, primarily attributable to the Accelerated Acquisition, which accounted for approximately $2.0 million of the increase. $1.7 million of

the increase was primarily attributable to additional water treatment services obtained from related parties during the period. The remaining increase was representative of overall growth in business activity.

General and administrative expense. General and administrative expense (inclusive of related party amounts) increased by $3.6 million, or 343%, to $4.6 million for the three months ended March 31, 2026, as compared to $1.0 million for the three months ended March 31, 2025. The increase was attributable to increased administrative costs related to the Accelerated Acquisition and incremental professional service fees incurred in connection with the IPO.

Depreciation and amortization expense. Depreciation and amortization expense increased by $3.2 million, or 230%, to $4.6 million for the three months ended March 31, 2026, as compared to $1.4 million for the three months ended March 31, 2025. The increase was attributable to the increase in property, plant and equipment and intangible asset balances throughout 2025, primarily resulting from the Accelerated Acquisition (which contributed $138.9 million of intangible assets at acquisition) and ongoing capital expenditures.

Gain on investment in sales-type lease. During the three months ended March 31, 2026, we recognized a non-recurring and non-cash gain of $3.3 million on net investment in sales-type lease related to the C-Store lease on our acreage. The C-Store lease was classified as a sales-type lease during the period following the completion of construction in February 2026, with the gain reflecting the excess of the present value of the future lease payments over the fair value of the land derecognized. No comparable gain was recognized in the three months ended March 31, 2025.

Interest expense. Interest expense increased by $3.1 million, or 115%, to $5.8 million for the three months ended March 31, 2026 as compared to $2.7 million for the three months ended March 31, 2025. The increase was primarily attributable to having a higher average borrowing amount under the Predecessor Credit Facility during the three months ended March 31, 2026, as compared to borrowings under our then-existing debt instruments for the three months ended March 31, 2025. This is partially offset by the amortization of $2.5 million of debt premium amortization in the three months ended March 31, 2026 as compared to $0.2 million of debt discount amortization for the three months ended March 31, 2025. See "-Liquidity and Capital Resources" for additional information regarding the Company's debt instruments and interest expense.

Non-GAAP Financial Measures

Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow and Free Cash Flow Margin are supplemental non-GAAP financial measures that we use to evaluate current, past and expected future performance. Although these non-GAAP financial measures are important factors in assessing our operating results and cash flows, they should not be considered in isolation or as a substitute for net income or gross margin or any other measures of financial performance presented in accordance with GAAP.

Adjusted EBITDA and Adjusted EBITDA Margin

Adjusted EBITDA and Adjusted EBITDA Margin are used by our management and by external users of our financial statements, such as investors, research analysts and others, to assess the financial performance of our assets over the long term to generate sufficient cash to return capital to equity holders or service indebtedness. We define Adjusted EBITDA as net income (loss) minus interest, taxes, depreciation, amortization, depletion and accretion, which we refer to as "EBITDA" and from which we further deduct share-based compensation, non-recurring transaction-related expenses and other non-cash or non-recurring expenses. We define Adjusted

EBITDA Margin as Adjusted EBITDA divided by total revenues.

Management believes Adjusted EBITDA and Adjusted EBITDA Margin are useful because they allow us and external users of our financial statements to more effectively evaluate our operating performance and compare the results of our operations from period to period, and against our peers, without regard to our financing methods or capital structure. We exclude the items listed above from net income (loss) in arriving at Adjusted EBITDA and Adjusted EBITDA Margin because these amounts can vary substantially from company to company within our industry, depending upon accounting methods, book values of assets, capital structures and the method by which the assets were acquired. Our computations of these measures may differ from the computations of similarly titled measures of other companies.

The following table sets forth a reconciliation of net income (loss) as determined in accordance with GAAP to Adjusted EBITDA and Adjusted EBITDA Margin for the periods indicated.

(1) Transaction-related expenses consist of nonrecurring professional services expenses, including banker fees, legal and professional fees and integration costs directly attributable to completed or contemplated transactions. We do not adjust for ongoing integration or optimization costs unless they are incremental, and directly attributable to the transaction.

(2) Other consists of a loss on sale of property, plant and equipment for the three months ended March 31, 2025.

Free Cash Flow and Free Cash Flow Margin

Free Cash Flow and Free Cash Flow Margin are performance measures used by our management and by external users of our financial statements, such as investors, research analysts and others, to assess our ability to generate cash from operations to repay our indebtedness, return capital to our shareholders and fund potential acquisitions without access to external sources of financing for such purposes. To calculate Free Cash Flow, net income is adjusted by the same items discussed above for EBITDA and Adjusted EBITDA and then further adjusted by deducting incurred capital expenditures, which includes changes in accounts payable related to capital expenditures. Free Cash Flow Margin is calculated as Free Cash Flow divided by total revenues.

Management believes Free Cash Flow and Free Cash Flow Margin are useful because they allow for an effective evaluation of both our operating and financial performance, as well as the capital intensity of our business, and subsequently the ability of our operations to generate cash flow that is available to distribute to our shareholders, reduce leverage or support acquisition activities. Our computations of these measures may differ from the computations of similarly titled measures of other companies.

The following table sets forth a reconciliation of cash flows from operating activities as determined in accordance with GAAP to Free

Cash Flow and Free Cash Flow Margin, respectively, for the periods indicated.

(1) Transaction-related expenses consist of nonrecurring professional services expenses, including banker fees, legal and professional fees and integration costs directly attributable to completed or contemplated transactions. We do not adjust for ongoing integration or optimization costs unless they are incremental, and directly attributable to the transaction.

(2) Other consists of a loss on sale of property, plant and equipment for the three months ended March 31, 2025.

Liquidity and Capital Resources

Overview

Historically, our principal sources of liquidity have included borrowings under the Predecessor Credit Facility as well as capital contributions from our various equity owners. The Predecessor was formed on December 7, 2023, and has made two major acquisitions, the acquisition of Desert Ram Holdings, LLC, Desert Ram South, NGL North Ranch, LLC and NGL South Ranch Inc. in April 2024 (the "Desert Ram Acquisition") and the Accelerated Acquisition. These acquisitions were funded with borrowings under the Predecessor Credit Facility. Other than land acquisitions, our business requires a minimal amount of capital expenditure and is able to support operations with cash on hand.

As of March 31, 2026, our working capital, calculated as current assets minus current liabilities, was $8.9 million, and we had cash and cash equivalents of $4.1 million.

Cash Flow

The following table summarizes our cash flow for the periods indicated:

Three Months Ended March 31, 2026 Compared to the Three Months Ended March 31, 2025

Operating Activities. Net cash used in operating activities was $2.4 million for the three months ended March 31, 2026, as compared to net cash provided by operating activities of $0.2 million for the three months ended March 31, 2025, an unfavorable variance of $2.7 million. The change was primarily driven by an increase in accounts receivable of $3.9 million during the three months ended March 31, 2026, reflecting higher activity levels and growth of our business following the Accelerated Acquisition (which contributed $11.6 million in revenue for the three months ended March 31, 2026) and timing of customer billings and collections (consistent with the significant growth in water sales revenue), partially offset by an increase in net income of $4.5 million reflecting higher activity levels and growth in our business following the Accelerated Acquisition ($3.4 million for the three months ended March 31, 2026, as compared to a net loss of $1.1 million for the three months ended March 31, 2025) and an increase in depreciation and amortization expense of

$3.2 million related to additional assets acquired in the Accelerated Acquisition. The increase in our top-line operating performance is partially offset by working capital outflows associated with the growth in business activity.

Investing Activities. Net cash provided by investing activities was $1.3 million for the three months ended March 31, 2026, as compared to net cash used in investing activities of $4.1 million for the three months ended March 31, 2025. The change was primarily driven by $2.1 million of proceeds received from the sale of property, plant and equipment during the three months ended March 31, 2026, as well as the absence of acquisition-related cash outflows, which totaled $3.4 million in the three months ended March 31, 2025 related to the deposit for the Accelerated Acquisition. Capital expenditures slightly increased by $0.1 million to $0.8 million for the three months ended March 31, 2026, as compared to $0.7 million for the three months ended March 31, 2025. Capital expenditures during the period were funded by cash on hand and cash flows from operating activities.

Financing Activities. Net cash used in financing activities was $3.8 million for the three months ended March 31, 2026, as compared to net cash provided by financing activities of $3.8 million for the three months ended March 31, 2025. The change reflected (i) the absence of new borrowings under the Predecessor Credit Facility in the three months ended March 31, 2026 (as compared to $4.8 million of proceeds in the three months ended March 31, 2025), (ii) higher scheduled principal payments under the Predecessor Credit Facility of $2.3 million in the three months ended March 31, 2026 (as compared to $0.9 million in the three months ended March 31, 2025), and (iii) $1.5 million of cash paid for deferred offering costs in the three months ended March 31, 2026 in connection with the IPO (as compared to minimal offering costs in the three months ended March 31, 2025).

Capital Requirements

Predecessor Credit Facility

On April 4, 2024, certain subsidiaries of the Predecessor entered into a 5-year financing agreement that included a $72.0 million term loan and a revolving credit facility (as amended, the "Predecessor Revolver") with a maximum borrowing base of $5.0 million, both of which mature on April 4, 2029 (the "Predecessor Credit Facility"). On February 28, 2025, the Predecessor amended the Predecessor Credit Facility to increase maximum borrowing base by $7.5 million, and further amended it in on April 14, 2025 to increase the maximum Term Loan borrowing base by an additional $204.0 million term. On April 1, 2026, the Predecessor Credit Facility was amended again to increase the Term Loan borrowing base by an additional $70.0 million term loan ("Intrepid Term Loan") in order to fund the acquisition of approximately 22,000 fee surface acres and 28,000 federal grazing lease acres and the related water rights, contracts and permits from Intrepid-Potash New Mexico, LLC (the "Intrepid Acquisition") for total consideration of approximately $70.0 million. The assets acquired in the Intrepid Acquisition as well as the Intrepid Term Loan were not contributed to us in connection with the IPO.

Borrowings (other than the Intrepid Term Loan) under the Predecessor Credit Facility bear interest at the secured overnight financing rate ("SOFR"), plus the applicable margin or certain reference rate, plus the applicable margin, which is set at 8.0%-8.5% depending on the applicable leverage ratio for the most recent four consecutive quarters. The Intrepid Term Loan bears interest at SOFR, plus the applicable margin or certain reference rate, plus the applicable margin, which is set at 8.25%-8.75% depending on the applicable leverage ratio for the most recent four consecutive quarters. Principal amounts borrowed under the Predecessor Revolver may be repaid from time to time without penalty. Any principal amounts outstanding on the maturity date become due and payable on such date.

As of March 31, 2026, we had $263.3 million of total outstanding borrowings, consisting of $7.0 million of revolving credit borrowings and $256.3 million of term loan borrowings, excluding $32.6 million of unamortized premium. The weighted average interest rate on the total amount of borrowings outstanding under the Predecessor Credit Facility as of March 31, 2026 was 12.48% in the case of revolving credit borrowings, and 12.56% in the case of term loan borrowings. We were in compliance with all affirmative and negative covenants under the facility.

As of December 31, 2025, we had $265.6 million of total outstanding borrowings consisting of $7.0 million of revolving credit borrowings and $258.6 million of term loan borrowings and excluding $35.1 million of unamortized premium. The weighted average interest rate on the total amount of borrowings outstanding under the Predecessor Credit Facility as of December 31, 2025 was 12.83% in the case of revolving credit borrowings, and 12.81% in the case of term loan borrowings. We were in compliance with all affirmative and negative covenants under the facility.

After March 31, 2026, the Predecessor Credit Facility was repaid in full and terminated in connection with the IPO. See "-Key Factors Affecting our Results of Operations-EagleRock Credit Facility" above for additional information regarding our current debt instruments.

Predecessor Warrants

In connection with its entry into the Predecessor Credit Facility, the Predecessor issued the Predecessor Warrants, which were

exercisable for equity interests in the Predecessor, to the TCW Entities. In connection with the amendment to the Predecessor Credit Facility in April 2025 referenced above, the Predecessor issued Predecessor Warrants to a new creditor and modified the terms of the original Predecessor Warrants. The net effect of the issuance and modification reduced the total number of Predecessor Warrants outstanding from 1,001 to 900. See "Note 6-Long Term Debt-Related Party" within the notes to the Predecessor's consolidated financial statements and included elsewhere in this Quarterly Report for further information with respect to the Predecessor Warrants. The Predecessor Warrants are obligations of the Predecessor and are not obligations of us or OpCo.

As described in "Corporate Reorganization," in connection with the IPO, each TCW Entity, pursuant to the Warrant Exercise Agreement, exercised a portion of its Predecessor Warrants and forfeited the remaining portion, which were irrevocably cancelled, immediately following which (i) the Predecessor distributed 14,939,952 OpCo Units and a corresponding number of Class B shares to the TCW Entities in redemption of the units of itself received in respect of the Exercised Warrants, (ii) each Warrant Agreement between the Predecessor and the TCW Entities was terminated and (iii) each of the Rollover TCW Entities merged with one or more newly formed subsidiaries of the Company and received one Class A share in exchange for each OpCo Unit (and Class B share) it held, or an aggregate 4,560,688 Class A shares. As a result, the Predecessor Warrants are no longer outstanding following the IPO

Critical Accounting Estimates

Business Combinations

We account for business combinations using the acquisition method of accounting, whereby the identifiable assets and liabilities of the acquired business, including contingent consideration, as well as any non-controlling interest in the acquired business, are recorded at their estimated fair values as of the date that we obtain control of the acquired business. Any purchase consideration in excess of the estimated fair values of the net assets acquired is recorded as goodwill. Significant estimates may be used to determine the fair value of assets acquired and liabilities assumed. Critical estimates in valuing intangible assets include, but are not limited to, expected future cash flows and discount rates. Fair value estimates are based on the assumptions management believes a market participant would use in pricing the asset or liability. Amounts recorded in a business combination may change during the measurement period, which is a period not to exceed one year from the date of acquisitions, as additional information about conditions existing at the acquisition date becomes available.

Warrants

The Company accounts for the warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant's specific terms and applicable authoritative guidance in ASC 480, Distinguishing Liabilities from Equity ("ASC 480") and ASC 815. The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company's own shares, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. The determination of the fair value of the warrants at issuance and each reporting period is performed using a third-party valuation specialist and is subject to a variety of estimates.

Impairment of Long-lived assets

Management evaluates property, plant and equipment and definite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. Asset groups are identified at the lowest level for which cash flows are largely independent. The recoverability assessment compares the carrying amount of the asset group to the expected undiscounted future cash flows. If the carrying amount is not recoverable, we measure the impairment loss as the excess of the carrying amount over the asset group's estimated fair value.

Recently Issued Accounting Pronouncements Not Yet Adopted

For a summary of recently issued accounting pronouncements, refer to Note 2 - Summary of Significant Accounting Policies within the notes to our Unaudited Condensed Consolidated Financial Statements.

Off-Balance Sheet Arrangements

We currently have no material off-balance sheet arrangements.

Emerging Growth Company Status

We are an "emerging growth company," as defined in the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"), and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not "emerging growth companies." We may take advantage of these exemptions until we are no longer an "emerging growth company." Section 107 of the JOBS Act provides that an "emerging growth company" can take advantage of the extended transition period afforded by the JOBS Act for the implementation of new or revised accounting standards. We have elected to use the extended transition period for complying with new or revised accounting standards and as a result of this election, our financial statements may not be comparable to companies that comply with public company effective dates. We may take advantage of these exemptions up until the last day of the fiscal year following the fifth anniversary of our IPO or such earlier time that we are no longer an emerging growth company. We would cease to be an emerging growth company if we have more than $1.235 billion in annual revenue, we have more than $700.0 million in market value of our stock held by non-affiliates (and we have been a public company for at least 12 months and have filed one annual report on Form 10-K) or we issue more than $1.0 billion of non-convertible debt securities over a three-year period.