REAL ESTATE OPERATIONS

9 Months Ended

Sep. 30, 2024

REAL ESTATE OPERATIONS

REAL ESTATE OPERATIONS

NOTE 6. REAL ESTATE OPERATIONS

Real Estate Operations

Land and development costs at September 30, 2024 and December 31, 2023 were as follows (in thousands):

	As of
	September 30, 2024		December 31, 2023
Land and Development Costs	$	300	$	358
Subsurface Interests		—		373
Total Land and Development Costs	$	300	$	731

Subsurface Interests. As of December 31, 2023, the Company owned 352,000 acres of Subsurface Interests. The Company sold its remaining acres of Subsurface Interests during the nine months ended September 30, 2024 for $5.0 million, or a gain on sale of $4.5 million.

The Company historically leased certain of the Subsurface Interests to mineral exploration firms for exploration. The Company’s subsurface historical operations consisted of revenue from the leasing of exploration rights and in some instances, additional revenues from royalties applicable to production from the leased acreage, which revenues are included within real estate operations in the consolidated statements of operations. There were no sales of subsurface oil, gas, and mineral rights during the nine months ended September 30, 2024. During the three and nine months ended September 30, 2023, the Company sold subsurface oil, gas, and mineral rights of 465 acres for a sales price of $0.6 million and 3,481 acres for a sales price of $1.0 million, respectively.

The Company historically released surface entry rights or other rights upon request of a surface owner for a negotiated release fee typically based on a percentage of the surface value. Cash payments for the release of surface entry rights totaled $0.1 million and $0.5 million in the nine months ended September 30, 2024 and 2023, respectively.

Mitigation Credits. During the nine months ended September 30, 2024, the Company sold its remaining mitigation credits. As of December 31, 2023, the Company owned mitigation credits with an aggregate cost basis of $1.0 million.

Revenues and the cost of sales of mitigation credit sales are reported as revenues from, and direct costs of, real estate operations, respectively, in the consolidated statements of operations. During the nine months ended September 30, 2024, 14.99 mitigation credits were sold for $1.8 million, resulting in a gain on sale of $0.5 million. During the nine months ended September 30, 2023, 9.45 mitigation credits were sold for $1.1 million, resulting in a gain on sale of $0.3 million.