stockrowWhat it does
Texas Pacific Land Corporation (TPL) owns land and oil and gas royalty interests, principally in the Permian Basin of West Texas. It is not an oil and gas producer. Instead, it earns money when operators develop and produce from properties where TPL owns royalty interests, and when customers use its land, water and other resources.
At December 31, 2025, TPL owned approximately 882,000 surface acres and approximately 224,000 net royalty acres. A royalty interest gives TPL a share of revenue from oil and gas production; its surface ownership gives it separate opportunities to charge for uses of the land. The company’s royalty interests do not require it to fund well development or pay the associated operating expenses.
TPL supplies water to oil and gas operators for drilling and completing wells, and earns contractual royalties when produced water is transferred or disposed of on its land. Produced water is water that comes out of a well alongside oil and gas. TPL also receives payments for pipelines, power lines, facilities and other uses of its property, and sells materials used in oilfield construction and well completions.
The company operates through Land and Resource Management and Water Services and Operations. Its president and chief executive officer is Tyler Glover.
How it makes money
TPL’s total revenue was $798.2 million for the year ended December 31, 2025 and approximately $273 million for the third quarter of 2026.
Land and Resource Management earns oil and gas royalties, easement and lease payments, and proceeds from land and material sales. Oil and gas royalty revenue was $411.7 million in FY2025, or 51.6% of revenue. The amount depends on production from wells in which TPL has royalty interests and on the prices received for oil, gas and natural gas liquids. The company receives royalties as production continues, but the amounts vary with volumes and prices.
Surface income includes payments for pipelines and other infrastructure crossing TPL land, as well as commercial leases for facilities such as processing, storage and compression sites. Easements typically have a 30-plus year term and subsequently renew every 10 years with an additional payment subject to consumer price index escalators. Land sales occur when TPL accepts offers for particular tracts; their timing and proceeds vary.
Water Services and Operations sells sourced and treated water and earns contractual produced-water royalties. Water sales brought in $169.7 million in FY2025. Water pricing and volumes both affect that revenue. Produced-water royalties, paid for transfer or disposal on TPL land, were $124.2 million in FY2025. TPL does not operate saltwater disposal wells.
The company can receive different payments at different stages of a well’s life: land-use and material payments during infrastructure construction, water sales during drilling and completion, and oil, gas and produced-water royalties during production.
| Product or service | Revenue, FY2025 | Share | Change on the year |
|---|---|---|---|
| Oil and gas royalties | $411.7 million | 51.6% | 10.3% |
| Water sales | $169.7 million | 21.3% | 12.6% |
| Produced water royalties | $124.2 million | 15.6% | 19.3% |
| Easements and other surface-related income | $91.8 million | 11.5% | 25.3% |
| Land sales | $819,000.00 | 0.10% | −81.3% |
Customers and how it sells
TPL’s business is concentrated principally in the Permian Basin, where its land and royalty interests are located. Its customers include oil and gas operators developing wells, as well as water-management businesses that operate facilities to supply water or dispose of produced water. Pipeline, utility and other infrastructure users pay for access to or use of its surface land.
Three customers accounted for 39.6% of FY2025 revenue. TPL’s choice of customers depends substantially on the location of its mineral royalties and surface rights and on which oil and gas companies operate nearby. The company also leases land to a third party that operates a nonhazardous oilfield solids waste disposal site.
TPL provides water services through its wholly owned subsidiary Texas Pacific Water Resources. Its services include sourcing water, treating produced water, developing infrastructure and providing disposal solutions. The company also uses third-party disposal systems on and off its acreage to facilitate completion-water sales in the Midland Basin.
TPL has increased efforts to extend its water-business reach into the Midland Basin and New Mexico. It has also established commercial teams for data center and power customers and is working with developers on land, water and easements for potential projects.
| Segment | Revenue, FY2025 | Share | Change on the year |
|---|---|---|---|
| LRM | $490.7 million | 61.5% | 11.3% |
| WSO | $307.5 million | 38.5% | 16.0% |
Suppliers and costs
TPL does not bear well-development capital expenditures or operating expenses for its oil and gas royalty interests. Its water business, by contrast, incurs costs to supply and treat water and invests in water infrastructure. Its principal liquidity needs include acquisitions, water-segment capital expenditures, working capital and general corporate needs.
Water-service expenses include treatment, transfer, water purchases, repairs and maintenance, equipment rental and fuel. These costs vary as customers’ requirements change. Rights-of-way and other expenses also vary with the location of customer deliveries. TPL uses third-party disposal systems to help support completion-water sales in the Midland Basin, and its water business faces uncertainty concerning outsourced water-treatment services.
The company has worked with an industrial technology and manufacturing firm on a produced-water desalination process and equipment. It has secured exclusive use-rights for the equipment in oil and gas applications. Development has required research spending and investment in a test facility, while the company has also invested in assets used to source water.
Other operating costs include employee compensation, general and administrative expenses, and depreciation, depletion and amortization. Depletion expense increased in FY2025 in connection with royalty interests acquired during the second half of 2025 and 2024.
- Revenue$798.2M
- Selling, general and administrative−$81.7M
- Other operating costs−$124.3M
- Operating income$592.2M
Competitive position
TPL competes in different markets for land access and water services. For Land and Resource Management, comparable property owners can compete to sell or lease land or provide access to it. In water services, competitors include landowners, water-supply and transfer businesses, and companies that sell or treat produced water. No competing company is named in the evidence as a direct competitor.
TPL’s surface holdings allow it to offer land access and water services across its own property. Its water network includes wells, storage ponds, recycling assets and pipelines. Other water providers may need to negotiate with landowners both to source water and to obtain rights-of-way for delivery.
Our reading: The land position is a substantial source of competitive protection because customers need access to particular locations and alternatives may require negotiations with other owners. That protection is location-specific: another property owner can compete where its land is comparable.
Our reading: The water network adds a practical advantage by connecting sourcing, storage, recycling and delivery, but it is not an exclusive position across the basin. TPL describes the water market as highly competitive and uses third-party disposal systems where its own acreage is less concentrated.
Our reading: The company’s exclusive equipment use-rights could support its produced-water treatment offering, but their competitive value remains unproven while the Orla facility is in commissioning.
Growth opportunities
TPL can grow its existing business when operators drill and produce more on acreage where it owns royalty interests, when demand for water services rises, or when new infrastructure requires access to its land. In FY2025, oil and gas royalty revenue increased even though average realized prices fell, because TPL’s share of production rose. Water sales revenue also rose, driven by higher pricing and volumes.
The company acquires additional land and royalty interests. In November 2025, it acquired 17,306 net royalty acres primarily in the Midland Basin for $450.7 million. After the third quarter of 2026, TPL acquired approximately 9,700 surface acres and 238 net royalty acres in Midland and Glasscock counties. The acquired acreage was already generating cash flow from water, surface activities and mineral interests.
TPL is developing a process to desalinate produced water for potential reuse. Its Orla facility was in commissioning during the third quarter of 2026, with equipment being tested using synthetic brine. The company hoped to begin flowing field-produced water into the facility by the end of 2026, and was working on designs to place desalination facilities alongside data centers and power generation.
Data centers and related infrastructure are another area of development. TPL invested $50.0 million in Bolt Data & Energy in December 2025 under an agreement to develop and enable data center campuses on TPL land. Commercial agreements for projects on its land were still being negotiated in the third quarter of 2026, while planning, design and site work had progressed.
- $451.0MFY2021
- $667.4MFY2022
- $631.6MFY2023
- $705.8MFY2024
- $798.2MFY2025
Structural risks
- Commodity prices: Oil and gas royalties depend on market prices that fluctuate. TPL remained unhedged against commodity prices in the third quarter of 2026, and its realized prices can affect royalty revenue even when production changes in the opposite direction.
- Operator decisions: TPL does not control the investments or production decisions of the companies operating wells on its royalty acreage. Operators’ decisions also affect demand for water, easements and other surface-related services.
- Concentration: Ownership is concentrated in the Permian Basin, and three customers accounted for 39.6% of FY2025 revenue. TPL’s results can fluctuate with conditions and activity in that region.
- Water operations: The water business faces pricing pressure from competition, potentially volatile operating and maintenance costs, customer losses, increased regulation and uncertainty involving outsourced treatment providers.
- New projects and regulation: Desalination was still in commissioning in the third quarter of 2026. TPL said data center projects faced additional regulatory diligence, including a pause in permit issuance pending a grid review and environmental considerations; commercial agreements remained under negotiation.
Bottom line
Our reading
Our reading: TPL is a land and royalty business that earns from several stages of Permian development without operating oil and gas wells. Its acreage and water infrastructure give it ways to serve operators, but revenue remains exposed to commodity prices, customers’ decisions and activity in one basin. Desalination and data centers offer additional uses for its assets, although those projects have not yet reached the same stage as its established royalty and water businesses.