Texas Pacific Land Posts Record $273.4 Million in Third-Quarter Revenue
Key Facts
Texas Pacific Land reported record consolidated revenue of $273.4 million in the third quarter of 2026, while net income reached $167.4 million and free cash flow totaled $170.3 million, also records. Chief Executive Tyler Glover said the results benefited from strong development activity in royalty areas, higher oil prices and improved realized gas prices. The company’s oil and gas royalty production was 42.3 thousand barrels of oil equivalent per day, with record revenue from those royalties of $167.3 million. The figures show production growth and improved realized prices both supported royalty business performance. Glover also said operators’ expansion of midstream infrastructure supported pipeline easement revenue.
Net income rose from $153.9 million in the second quarter to $167.4 million in the third quarter. Total revenue increased from $246.1 million to $273.4 million over the same period. The increase was driven mainly by $21.7 million in higher oil and gas royalty revenue, $12.5 million in revenue from easements and other surface income, and $4.3 million in produced water royalties. That progress was partly offset by an $11.3 million decline in water sales. The comparison shows royalty and easement-related revenue offset the decline in water sales, while total revenue remained at a record level.
The average realized price for oil and gas royalties was $44.97 per barrel of oil equivalent in the third quarter, compared with $42.17 in the second quarter. The company’s share of production rose to 42.3 thousand barrels of oil equivalent per day from 39.7 thousand. Glover said strong development activity, higher oil prices and improved realized gas prices contributed to results in royalty areas. He said operators’ expansion of midstream infrastructure was reflected in pipeline easement revenue. This shows that improved prices and higher production both contributed to increased royalty revenue from the previous quarter.
In its water business, produced water royalties generated revenue of $41.4 million, with royalty volumes of 5.5 million barrels per day in the third quarter. Water services and operations revenue totaled $71.8 million. During the first nine months, the company completed construction of its Phase 2B produced water desalination facility in Orla and began operating it, with expected capacity of 10 thousand barrels of incoming water per day. The facility is part of the company’s efforts to develop activities related to produced water and its reuse. On a quarterly basis, produced water royalties rose by $4.3 million, while water sales declined by $11.3 million.
For the nine months ended September 30, 2026, revenue rose to $756.3 million from $586.6 million in the corresponding period of 2025, and net income increased to $464.2 million from $358 million. The company’s share of oil and gas royalty production was 39.7 thousand barrels of oil equivalent per day, compared with 33.6 thousand in the year-earlier period. The average realized price also increased to $41.60 per barrel of oil equivalent, from $36.01. The year-over-year comparison shows growth in production and realized prices alongside increases in revenue and net income. The nine-month figures place the quarterly results within a broader improvement from 2025.
The company is expanding initiatives related to data centers, power generation and water desalination, and said the efforts are advancing as it works to turn them into tangible commercial results. During the first nine months, it acquired land valued at $122.7 million, including tracts in Shackelford and Jones counties tied to data center and power initiatives, as well as in Winkler and Reeves counties. It also reached an agreement with Chevron to provide land and brackish water resources for the Kilby project in Reeves County. The project involves a large power generation facility being developed by Chevron to supply a data center for one of its customers. In October, TPL bought additional land and oil and gas royalty interests in Midland and Glasscock counties for $145 million before acquisition costs.
In the market, TPL shares closed at $272.18 on November 5, 2026, compared with a close of $287.65 the previous day. On November 2, the company announced a quarterly cash distribution of $0.60 per share, payable on December 15 to shareholders of record at the close of business on December 1. It also held its third-quarter results call on November 5 at 9:30 a.m. Central time. The distribution and its dates set a near-term schedule for shareholders following the record quarterly results. Initiatives related to data centers, power and water remain part of the company’s stated efforts to turn projects into tangible commercial results.