Texas Pacific Land Corp

Texas Pacific Land Corporation is one of the largest landowners in the State of Texas with approximately 882,000 ¹ surface acres of land, principally concentrated in the Permian Basin. The Company also owns a 1/128th nonparticipating perpetual oil and gas royalty interest under approximately 85,000 ² acres of land, a 1/16th NPRI under approximately 371,000 ³ acres of land, and approximately 33,000 ⁴ additional net royalty acres (normalized to 1/8th), for a collective total of approximately 224,000 ⁵ NRA, principally concentrated in the Permian Basin. The Company is not an oil and gas producer but benefits from various revenue sources throughout the life cycle of a well, including fixed fee payments for use of its land, revenue for sales of materials such as caliche and sand, revenue from sourced water and treated produced water, oil and gas royalty interests, saltwater disposal revenue, and revenue from pipeline, power line and utility easements, commercial leases and temporary permits. The Company operates in two reportable segments: Land and Resource Management and Water Services and Operations.

The Land and Resource Management segment has few direct peers, as any owner of property located in areas comparable to the Company is a potential competitor, and the Company's sizable land ownership of approximately 882,000 ⁶ surface acres and extensive commercial development is unique, as few neighboring landowners control land positions of similar scale and/or do not possess the commercial expertise to maximize business opportunities. The Water Services and Operations segment operates in a highly competitive market that includes numerous companies capable of competing effectively on a local basis, including landowners, water supply and transfer companies, and companies that engage in the sale or treatment of produced water. The Company believes its position as a significant landowner of approximately 882,000 ⁷ surface acres gives it a distinct advantage over competitors who must negotiate with existing landowners to source water and then for the right of way to deliver the water to the end user. Approximately 40% ⁸ of the Company's 2025 revenue was derived from only three customers, each of which are investment-grade rated and among the largest companies in the world based on market capitalization.

The Company generates revenue through its surface and royalty ownership, providing revenue opportunities throughout the oil and gas development value chain. During the initial development phase, the Company receives fixed fee payments for use of its land and revenue for sales of materials (caliche) used in construction of infrastructure. During the drilling and completion phase, revenue is generated by providing sourced water and/or treated produced water as well as fixed fee payments from the use of land and revenue related to the sale of sand to operators. During the production phase, the Company receives revenue from its oil and gas royalty interests and revenue related to saltwater disposal on its land. Additionally, revenue is generated from pipeline, power line and utility easements, commercial leases and temporary permits. The business model emphasizes high cash flow margins and relatively low ongoing capital expenditure requirements.

The Land and Resource Management segment encompasses the business of managing the Company's approximately 882,000 ⁹ surface acres of land and approximately 224,000 ¹⁰ NRA of oil and gas royalty interests, principally concentrated in the Permian Basin. Revenue streams consist primarily of royalties from oil and gas, revenues from easements, commercial leases and renewables, and land and material sales. Oil and gas royalty revenue was $411,677,000 ¹¹ for the year ended December 31, 2025, compared to $373,331,000 ¹² for the year ended December 31, 2024. Easements and other surface-related income was $78,230,000 ¹³ for the year ended December 31, 2025, compared to $63,074,000 ¹⁴ for the year ended December 31, 2024. Land sales were $819,000 ¹⁵ for the year ended December 31, 2025, compared to $4,388,000 ¹⁶ for the year ended December 31, 2024. Total revenue for the Land and Resource Management segment was $490,726,000 ¹⁷ for the year ended December 31, 2025, representing 62% ¹⁸ of total consolidated revenue.

The Water Services and Operations segment encompasses the business of providing full-service water offerings to oil and gas operators in the Permian Basin through the wholly-owned subsidiary Texas Pacific Water Resources LLC. Revenue streams principally consist of revenue from sales of sourced and treated water as well as revenue from produced water royalties. Water sales revenue was $169,701,000 ¹⁹ for the year ended December 31, 2025, compared to $150,724,000 ²⁰ for the year ended December 31, 2024. Produced water royalties were $124,218,000 ²¹ for the year ended December 31, 2025, compared to $104,123,000 ²² for the year ended December 31, 2024. Easements and other surface-related income was $13,545,000 ²³ for the year ended December 31, 2025, compared to $10,183,000 ²⁴ for the year ended December 31, 2024. Total revenue for the Water Services and Operations segment was $307,464,000 ²⁵ for the year ended December 31, 2025, representing 38% ²⁶ of total consolidated revenue. Water sales volumes were 278,564 ²⁷ MBbls for the year ended December 31, 2025, compared to 269,281 ²⁸ MBbls for the year ended December 31, 2024. Produced water royalty volumes were 1,566,588 ²⁹ MBbls for the year ended December 31, 2025, compared to 1,257,246 ³⁰ MBbls for the year ended December 31, 2024.

In March 2025, the Company acquired 177 ³¹ NRA located primarily in the Midland Basin for an aggregate purchase price of $3.5 million ³², net of post-closing adjustments, in an all-cash transaction. In May 2025, the Company acquired 787 ³³ acres of land in Reeves County, Texas for an aggregate purchase price, inclusive of closing costs, of $4.5 million ³⁴ in an all-cash transaction. In September 2025, the Company acquired 8,147 ³⁵ acres of land in Martin County, Texas for an aggregate purchase price, inclusive of closing costs, of $31.4 million ³⁶ in an all-cash transaction. In November 2025, the Company acquired 17,306 ³⁷ NRA located primarily in the Midland Basin in Martin, Howard, Midland, and other counties for an aggregate purchase price of $450.7 million ³⁸, net of post-closing adjustments, in an all-cash transaction. In December 2025, the Company made a minority investment of $50.0 million ³⁹ in Bolt Data & Energy, Inc. pursuant to a strategic agreement to develop and enable large scale data center campuses and supporting infrastructure across its land. On October 23, 2025, the Company entered into a credit agreement providing for a revolving credit facility in the aggregate principal amount of up to $500.0 million ⁴⁰, with the ability to request potential increases of up to an additional $250.0 million ⁴¹. On December 22, 2025, the Company effected a three-for-one stock split of its common stock. During the year ended December 31, 2025, the Company repurchased 27,000 ⁴² outstanding shares of Common Stock for an aggregate purchase price of $8.4 million ⁴³. Cumulatively through December 31, 2025, the Company has spent $45.5 million ⁴⁴ ($33.6 million ⁴⁵ during the year ended December 31, 2025) on a new energy-efficient desalination and treatment process and equipment, of which $38.8 million ⁴⁶ has been capitalized as of December 31, 2025. Additionally, during 2025, the Company invested $24.9 million ⁴⁷ in TPWR projects to enhance water sourcing assets.

Total revenues were $798,190,000 ⁴⁸ for the year ended December 31, 2025, compared to $705,823,000 ⁴⁹ for the year ended December 31, 2024. Net income was $481,376,000 ⁵⁰ for the year ended December 31, 2025, compared to $453,960,000 ⁵¹ for the year ended December 31, 2024. Total operating expenses were $206,029,000 ⁵² for the year ended December 31, 2025, compared to $166,685,000 ⁵³ for the year ended December 31, 2024. Net cash provided by operating activities was $545,900,000 ⁵⁴ for the year ended December 31, 2025, compared to $490,700,000 ⁵⁵ for the year ended December 31, 2024. Adjusted EBITDA was $687,369,000 ⁵⁶ for the year ended December 31, 2025, compared to $610,731,000 ⁵⁷ for the year ended December 31, 2024. Free cash flow was $498,333,000 ⁵⁸ for the year ended December 31, 2025, compared to $461,051,000 ⁵⁹ for the year ended December 31, 2024.

The Company continues to explore new opportunities related to renewable energy, environmental sustainability, and technology that can leverage its existing legacy surface and royalty assets. In December 2025, the Company invested $50.0 million ⁶⁰ in Bolt Data & Energy, Inc. pursuant to a strategic agreement to develop and enable large scale data center campuses and supporting infrastructure across its land. Bolt raised $150.0 million ⁶¹ of capital inclusive of the Company's $50.0 million ⁶² investment. The Company received an equity interest, warrants, and a right of first refusal to supply water to Bolt-affiliated projects and related infrastructure, with an opportunity to contribute land in exchange for additional Bolt equity subject to mutual agreement. Bolt is currently pursuing commercial partnerships and anchor customers to develop large-scale data centers on the Company's land. The Company has also entered into agreements with third parties related to renewables and various next generation opportunities including data centers, power generation, grid-connected batteries, and carbon capture and sequestration, structured with multi-year terms that allow for feasibility and/or commercial suitability.

The Company is developing a proprietary produced water desalination technology through its wholly owned subsidiary Transmissive Water Services, LLC. The Company has filed and received a patent application for the desalination and treatment process and has secured exclusive use-rights for the equipment geared towards oil and gas applications. Construction of the Phase 2B test facility, with an initial capacity of 10,000 ⁶³ barrels of produced water per day, was temporarily paused during 2025 to allow testing and potential incorporation of additional desalination equipment and is anticipated to be completed by the end of the first half of 2026. Cumulatively through December 31, 2025, the Company has spent $45.5 million ⁶⁴ ($33.6 million ⁶⁵ during the year ended December 31, 2025) on this new energy-efficient desalination and treatment process and equipment, of which $38.8 million ⁶⁶ has been capitalized as of December 31, 2025. The Permian Basin generates over 20 ⁶⁷ million barrels of produced water per day, and the Company believes this technology would provide an attractive and critical alternative to subsurface injection.

The Company's business model emphasizes high cash flow margins and relatively low ongoing capital expenditure requirements, and new opportunities are expected to generally align with these priorities. The Company has set a target cash and cash equivalents balance of approximately $700 million ⁶⁸, and above this target, the Company will seek to deploy the majority of its free cash flow towards returning capital to stockholders in the form of special dividends and/or share repurchases. The Company's Adjusted EBITDA was $687,369,000 ⁶⁹ for the year ended December 31, 2025, compared to $610,731,000 ⁷⁰ for the year ended December 31, 2024. Free cash flow was $498,333,000 ⁷¹ for the year ended December 31, 2025, compared to $461,051,000 ⁷² for the year ended December 31, 2024.

The Company has invested in enhancing its water sourcing assets, with $24.9 million ⁷³ invested in TPWR projects during 2025. Cumulatively through December 31, 2025, the Company has spent $25.2 million ⁷⁴ of capital on electric infrastructure to increase electrification of water assets in an effort to reduce costs and mitigate the overall emission profile by reducing reliance on diesel generators. The Company has 114 ⁷⁵ full-time employees as of December 31, 2025, of which 35 ⁷⁶ were employees of TPWR. The Company is committed to enhancing gender, racial and ethnic diversity throughout its organization and offers industry competitive pay and benefits, tuition reimbursement and continuing education classes.

The Company has a stock repurchase program approved by the Board on November 1, 2022, which became effective January 1, 2023, to purchase up to an aggregate of $250.0 million ⁷⁷ of outstanding Common Stock. During the year ended December 31, 2025, the Company repurchased 27,000 ⁷⁸ outstanding shares of Common Stock for an aggregate purchase price of $8.4 million ⁷⁹. The Company paid total dividends to stockholders of $147.8 million ⁸⁰ during the year ended December 31, 2025, consisting of cumulative regular cash dividends of $2.13 ⁸¹ per share. The Company has paid a cash dividend each year for the preceding 69 ⁸² years. Purchases of fixed assets for the years ended December 31, 2025 and 2024 were $59.5 million ⁸³ and $29.7 million ⁸⁴, respectively. Debt issuance cost in connection with the Credit Facility was $5.1 million ⁸⁵ for the year ended December 31, 2025.

The Company's oil and gas royalties are dependent upon the market prices of oil and gas which fluctuate, and decreases in such prices negatively impact the revenue realized on oil and gas royalties. Reductions in market prices for oil and gas could also lead to decreased exploration and development activity by operators, which could reduce revenue potential. Average West Texas Intermediate oil prices for the year ended December 31, 2025 were down approximately 15% ⁸⁶ compared to average WTI oil prices during the same period last year. Oil prices continue to be impacted by certain actions by OPEC+, geopolitics, and evolving global supply and demand trends, among other factors. Ambiguity around tariffs implemented by and towards the United States has created incremental global economic uncertainty, which contributed to relatively weaker oil prices in 2025. The Company's revenues are directly and indirectly impacted by oil and natural gas prices and drilling activity in the Permian Basin.

The Company's produced water desalination project creates risks related to invested capital, environmental exposure and reputation. Development of a produced water treatment facility requires substantial capital and may result in total project costs exceeding initial estimates due to inflation, supply chain constraints, labor and equipment availability, design changes, regulatory requirements or technical challenges. Delays in permitting, produced water sourcing, waste disposal arrangements, construction or commissioning could defer or reduce expected cash flows and impair the anticipated return on investment. The Company is exposed to the risk that discharges of treated water and treatment-related waste may have unforeseen adverse environmental effects. Negative public opinion or adverse perceptions of Transmissive's operations or reputation could materially affect the business. The Company's revenues from the sale of land are subject to substantial fluctuation and vary widely from year to year and quarter to quarter.

The Company's oil and gas royalties are dependent upon the market prices of oil and gas which fluctuate, and decreases in such prices negatively impact the revenue realized on oil and gas royalties. Reductions in market prices for oil and gas could also lead to decreased exploration and development activity by operators, which could reduce revenue potential. The Company is not an oil and gas producer, and its oil and gas royalty revenue is subject to the actions of others, as the owners and operators of oil and gas wells make all decisions as to investments in and production from those wells. The Company's estimated proved developed producing reserves are based on many assumptions that may prove to be inaccurate, and any inaccuracies in these estimates or underlying assumptions may materially affect the quantities and present value of reserves. The Company faces the risks of doing business in a new and rapidly evolving market for TPWR and may not be able to successfully address such risks and achieve acceptable levels of success or profits. The Company's produced water desalination project creates risks related to invested capital, environmental exposure and reputation, and development of a produced water treatment facility requires substantial capital and may result in total project costs exceeding initial estimates. The Company's revenues from the sale of land are subject to substantial fluctuation and vary widely from year to year and quarter to quarter. A third party has refused to continue to fulfill its obligations under existing arrangements to which the Trust was a party in connection with the completion of the Corporate Reorganization, and the Company has accrued and/or paid ad valorem taxes since January 1, 2022 ⁸⁷ to protect historical royalty interests from potential tax liens, with no loss recovery receivable recorded as of December 31, 2025.

Management's message emphasizes a thoughtful, long-term approach towards optimizing and building upon the commercial and environmental virtues of the Company's extensive lands and resources. The Company achieved record performance results in 2025, including net income of $481.4 million ⁸⁸, or $6.97 ⁸⁹ per share (diluted), revenues of $798.2 million ⁹⁰, Adjusted EBITDA of $687.4 million ⁹¹, free cash flow of $498.3 million ⁹², and royalty production of 34.6 ⁹³ thousand barrels of oil equivalent per day. The Water Service and Operations segment achieved record performance results in 2025, including water sales revenue of $169.7 million ⁹⁴, produced water royalties revenue of $124.2 million ⁹⁵, total segment revenues of $307.5 million ⁹⁶, and total segment net income of $159.0 million ⁹⁷. Management's strategic priorities include pursuing a thoughtful, long-term approach towards optimizing and building upon the commercial and environmental virtues of the Company's extensive lands and resources, exploring new opportunities related to renewable energy, environmental sustainability, and technology that can leverage existing legacy surface and royalty assets, and maintaining a focus on optimizing long-term value creation and profitability, fostering responsible stewardship of assets, providing quality customer service, and engaging with and advocating for employee and stakeholder interests.