Texas Pacific Land Corporation (TPL): Business Model Canvas [Dec-2025 Updated]

You're digging into energy plays, trying to find something that breaks the mold of volatile commodity exposure. Well, look at Texas Pacific Land Corporation (TPL). After two decades analyzing these assets, including ten years leading an analyst team, I can tell you their model is an outlier: they own a massive 882,000-acre footprint in the Permian Basin and make money by charging others to use it, not by drilling themselves. This asset-light approach delivered an incredible 89% Adjusted EBITDA margin in Q2 2025, driven by royalties and record water services revenue hitting $80.8 million in Q3 2025. It's a fascinating structure that blends real estate ownership with essential energy services; below, I've broken down exactly how Texas Pacific Land Corporation (TPL) makes this work across all nine building blocks of their business model.

Texas Pacific Land Corporation (TPL) - Canvas Business Model: Key Partnerships

You're looking at the core relationships that let Texas Pacific Land Corporation (TPL) generate high-margin revenue from its massive land position. These aren't just casual agreements; they are foundational to how TPL monetizes its nearly 874,000 acres in West Texas.

Strategic alliances with water infrastructure providers like Aris Water Solutions, Inc.

While the search results heavily feature the WaterBridge alliance, TPL's water segment is clearly a key area for strategic partnerships, including with Aris Water Solutions, Inc. The overall Water Services and Operations segment is a major revenue driver, showing resilience even when commodity prices fluctuate. For instance, in the third quarter of 2025, water sales revenue hit $44.6 million, and produced water royalties revenue was $32.3 million for that same quarter. Over the first nine months of 2025, the WSO segment generated $209.3 million in total revenue. These figures underscore the commercial importance of the water infrastructure relationships TPL maintains.

Long-term water development alliance with WaterBridge NDB LLC in the Delaware Basin

The long-term alliance with WaterBridge NDB LLC is a cornerstone for TPL's water strategy in the Delaware Basin. This agreement specifically targets sustainable development across an expansive, defined region covering over 64,000-plus acres in Loving and Reeves counties. The goal is to provide full-cycle water solutions, which means TPL contributes source water capabilities while WaterBridge expands its produced water management and infrastructure. This partnership supports TPL's ability to optimize water disposal well spacing. To support this, TPL began construction in July 2025 on a 10,000 barrel per day produced water desalination facility in Orla, Texas, with an estimated service date in late 2025.

Oil and gas Exploration & Production (E&P) operators who drill on TPL's royalty acreage

TPL's primary revenue source relies on the development decisions made by its E&P operator partners. These operators, including major players like Chevron, BP, Devon, and Cotera, drive the production volumes from TPL's royalty acreage. The success of these partnerships is clear in the production metrics: TPL's oil and gas royalty production reached a record 36.3 thousand barrels of oil equivalent per day in the third quarter of 2025. This is up significantly from the 31,100 barrels of oil equivalent per day averaged in the first quarter of 2025. The near-term growth potential is also visible in the well inventory; as of March 31, 2025, TPL had a record 24.3 net wells in the permitted, DUC (drilled but uncompleted), and CUP (completed unproducing) categories.

Midstream companies for pipeline, power line, and utility easement agreements

Revenue from easements is a stable, high-margin component of TPL's Land and Resource Management segment, which involves agreements with midstream companies for infrastructure placement. These agreements cover pipeline, power line, and utility needs across the land. The company is definitely looking toward future income from these sources, as management noted an expectation of benefiting from approximately $10 million in easement renewals in 2026, with annual renewals potentially reaching $35 million in the following years. The Land and Resource Management segment, which includes these easements, generated $128.5 million in revenue in the second quarter of 2025.

Financial institutions for the $500 million revolving credit facility

Securing robust financial partnerships is critical for maintaining a fortress balance sheet and funding growth. TPL completed a new revolving credit facility on October 23, 2025, with strong support from twelve financial institutions. This facility has an aggregate principal amount of up to $500 million and matures on October 23, 2029. The facility was substantially oversubscribed and was reported as undrawn at closing, providing immediate liquidity. It includes a $250 million accordion feature, allowing for potential commitment increases. Interest rates are tied to the debt-to-EBITDA leverage ratio, set at SOFR plus 2.25% to 2.50%. The covenants require TPL to maintain a consolidated total leverage ratio not exceeding 3.50 to 1.0 and an interest coverage ratio of not less than 3.0 to 1.0.

Here's a look at the key financial and operational metrics tied to these critical relationships as of late 2025:

The reliance on these external parties is balanced by TPL's own asset strength. For the nine months ended September 30, 2025, TPL's total revenue was $586.6 million, leading to a consolidated net income of $358.0 million. This performance validates the structure of these key partnerships.

The company's operational success is visible in its segment performance, which is directly tied to these relationships:

• Oil and gas royalty production increased 25% year-over-year in Q1 2025.
• Water segment revenues grew 11% year-over-year in Q1 2025.
• The Q3 2025 consolidated net income was $121.2 million.
• The credit facility interest spread is 2.25% to 2.50% over SOFR.
• TPL had 95.4 net producing wells as of June 30, 2025.

Finance: review the covenant compliance impact of a $100 million draw on the new credit facility by next Tuesday.

Texas Pacific Land Corporation (TPL) - Canvas Business Model: Key Activities

You're looking at the core engine of Texas Pacific Land Corporation (TPL) as of late 2025. This is where the rubber meets the Permian, focusing on extracting maximum value from that massive land position.

Land and Resource Management (LRM) for Surface and Royalty Monetization

The primary activity here is managing the vast surface acreage and collecting oil and gas royalties. This segment generates high-margin cash flow, which is crucial for funding growth, even when commodity prices are choppy. For the third quarter of 2025, the operational output was strong:

• Oil and gas royalty production hit a record of approximately 36.3 thousand barrels of oil equivalent (Boe) per day.
• Total oil and gas royalties revenue for Q3 2025 reached $108.7 million.
• As of September 30, 2025, Texas Pacific Land Corporation held 100.5 net producing wells.
• New wells added during the quarter showed an average lateral length of approximately 10,619 feet.

The development pipeline remains active, showing future potential:

• As of September 30, 2025, TPL's royalty acreage had an estimated 19.0 net wells across permits, DUCs (drilled but uncompleted), and CUPs (completed but not producing).

Water Services and Operations (WSO), including Sourcing, Disposal, and Recycling

This segment is showing explosive growth, setting new records in Q3 2025, which helped offset some volatility elsewhere. The focus is on full-service water offerings, treatment, and disposal solutions for operators.

Here's a look at the Water Services and Operations segment performance for Q3 2025:

To support this, operating expenses related to water services increased by $8.0 million in Q3 2025 compared to Q2 2025.

Strategic Acquisition of New Royalty and Surface Acreage

Texas Pacific Land Corporation is actively deploying capital to consolidate high-quality assets, a key activity for long-term royalty growth. The third quarter of 2025 saw significant, all-cash transactions:

• The combined aggregate purchase price for Q3 2025 acquisitions was $505 million.
• This included the closing of approximately 17,306 net royalty acres (standardized to 1/8th) in the Midland Basin on November 3, 2025, for an aggregate price of $474.1 million.
• This royalty acquisition currently produces more than 3,700 barrels of oil equivalent per day.
• The surface acreage component involved acquiring approximately 8,147 surface acres in Martin County, Texas, in September 2025 for $30.9 million.

Infrastructure Development

A major capital activity is the development of water infrastructure to support the WSO segment's growth. The key project nearing completion is the Orla desalination facility.

• Construction began in July 2025 on the 10,000 barrel per day produced water desalination facility in Orla, Texas.
• The estimated service date for this unit to begin taking produced water is by the end of 2025.

Active Capital Management

Managing the balance sheet and returning capital to shareholders are essential activities that underpin investor confidence. Texas Pacific Land Corporation took steps to enhance liquidity and reward owners in late 2025.

Capital structure and shareholder returns for 2025 activity:

The Board also approved a significant corporate action:

• A three-for-one stock split of TPL's common stock was approved on November 3, 2025, subject to finalization, expected in December 2025.

Texas Pacific Land Corporation (TPL) - Canvas Business Model: Key Resources

You're analyzing the core assets that make Texas Pacific Land Corporation (TPL) such a unique entity in the Permian Basin, and honestly, the sheer scale of what they own is the foundation of everything.

The most obvious resource is the land itself. Texas Pacific Land Corporation is one of Texas's largest landowners, holding a massive land portfolio of approximately 882,000 acres, primarily concentrated in West Texas. This isn't just surface area; it's the underlying mineral rights that drive the royalty business.

The company's mineral rights are structured as perpetual, non-participating oil and gas royalty interests (NPRI). This means Texas Pacific Land Corporation gets paid from production without the capital expenditure or operational risk of drilling. They own these NPRIs across over 85,000+ acres. In Q1 2025, this royalty stream generated $111.2 million in revenue from a production rate of 31,100 barrels of oil equivalent (Boe) per day. By Q3 2025, royalty production had climbed to approximately 36,300 barrels of oil equivalent per day.

The surface estate is also a critical resource, covering 799,000 acres of surface land leased for infrastructure like drilling pads and pipelines. This surface monetization is growing rapidly, with Easements and other surface-related income revenue (SLEM) hitting a record $36.2 million in Q2 2025.

Texas Pacific Water Resources (TPWR), a wholly-owned water services subsidiary, represents a major operational asset. This segment is key to monetizing the extensive water rights and infrastructure in the Permian Basin. For the six months ended June 30, 2025, the Water Services and Operations segment generated revenues of $128.4 million. To be fair, the Q3 2025 results show this segment hitting a record $80.8 million in revenue alone. Furthermore, produced water royalty volumes surpassed 4,000,000 barrels per day for the first time in Q2 2025. They are actively building out this capability, having broken ground on a 10,000 barrel per day produced water desalination facility in Orla, Texas, with an estimated service date in late 2025.

You'll notice the balance sheet strength is a resource in itself. Texas Pacific Land Corporation maintains minimal long-term debt, sitting at a negligible $453K as of late 2024. For the twelve months ending September 30, 2025, net long-term debt was reported as $0M. This debt-free status provides exceptional financial flexibility.

Here's a quick look at how these key resources translated into recent financial performance:

The company's operational focus is clearly on maximizing these hard assets, as evidenced by funding over $505 million in new royalty and surface acreage acquisitions with cash year-to-date in 2025.

The key resources are:

• Massive land portfolio of approximately 882,000 acres in West Texas.
• Perpetual, non-participating oil and gas royalty interests (NPRI) across 85,000+ acres.
• Extensive water rights and infrastructure, including a 10,000 barrel per day desalination facility under construction.
• Minimal long-term debt, sitting at a negligible $453K as of late 2024.
• Texas Pacific Water Resources (TPWR), a wholly-owned water services subsidiary, with Q2 2025 revenues of $59.0 million.

Finance: draft 13-week cash view by Friday.

Texas Pacific Land Corporation (TPL) - Canvas Business Model: Value Propositions

For Investors: This is about the high-margin, asset-light structure Texas Pacific Land Corporation offers you.

The model delivered an Adjusted EBITDA margin of 89% for the second quarter of 2025. That quarter saw Adjusted EBITDA reach $166.2 million against total revenue of $187.54 million. Free cash flow was strong at $130.1 million for the same period.

For Investors: You get a revenue stream that isn't solely dependent on the price of oil and gas.

The business is built on multiple, distinct revenue sources, which helps smooth out the volatility you see in commodity markets. For the nine months ended September 30, 2025, total revenue was $586.6 million, with net income at $358.0 million. The company reported record oil and gas royalty production in Q3 2025 at 36.3 thousand barrels of oil equivalent per day (Boe/d), even as the average realized price per Boe declined year-over-year in Q2 2025.

Here's a look at how the segments contributed in Q2 2025:

• Land and Resource Management segment revenue: $128.5 million
• Water Services and Operations segment revenue: $59.0 million

For E&P Operators: You get full-cycle water solutions and critical surface access needed for your development plans.

Texas Pacific Land Corporation is advancing its water management capabilities, which directly supports your operations. They began construction in July 2025 on a 10,000 barrel per day produced water desalination facility in Orla, Texas, with an estimated service date in late 2025. This moves beyond simple disposal to creating a usable resource. In Q2 2025, produced water royalties revenue alone hit $30.7 million.

For E&P Operators: You benefit from a single-source provider for essential services like easements, caliche, and water management.

The company captures value from surface use across its acreage, simplifying your logistics. In the third quarter of 2025, Easements and other surface-related income (SLEM) revenue was a record $36.2 million, driven by large pipeline projects crossing their land. This surface income, combined with the water services, means fewer individual agreements you need to manage for core development needs.

For Midstream: You gain access to strategically located, contiguous land ideal for your infrastructure build-out.

The value proposition here is clear access across large tracts of land for pipelines and facilities. The record SLEM revenue in Q2 2025 of $128.5 million for the Land and Resource Management segment reflects this demand for surface access. The completion of the 10,000 barrel per day desalination facility in late 2025 also signals new, large-scale infrastructure development on the land.

Here are the key financial metrics from the second quarter of 2025:

Texas Pacific Land Corporation (TPL) - Canvas Business Model: Customer Relationships

You're looking at how Texas Pacific Land Corporation (TPL) manages the relationships that drive its revenue, which is fundamentally tied to the activity of energy and infrastructure companies on its vast land holdings. It's less about direct sales and more about managing long-term access and royalties across approximately 874,000 acres in West Texas.

High-touch, collaborative alliances with key water and E&P operators

TPL's relationship with Exploration & Production (E&P) operators is central, as their drilling and production activity directly impacts TPL's royalty income. These relationships are clearly strategic, evidenced by recent capital deployment. For instance, in Q3 2025, TPL executed a purchase agreement for approximately 17,306 net royalty acres (standardized to 1/8th) primarily in the Midland Basin for an aggregate purchase price of $474.1 million. This shows TPL actively deepens relationships by acquiring acreage adjacent to or overlapping existing drilling spacing units (DSUs). A significant portion of this newly acquired acreage, approximately 61%, is operated by major players like Exxon Mobil Corporation and Diamondback Energy, Inc. This mirrors the existing operational base, where Q1 2025 royalty acreage was operated by companies including Chevron and BP.

The water segment, which is a key area of collaboration, saw record performance in Q3 2025, with water sales revenue hitting $44.6 million and produced water royalties reaching $32.3 million. This segment requires close operational coordination for water sourcing, treatment, and disposal services.

Here are some key operational metrics reflecting customer activity in Q3 2025:

Transactional, long-term contracts for easements and commercial leases

Much of the surface relationship is governed by formal, long-term agreements. These contracts cover infrastructure like pipelines, power lines, utility easements, and commercial leases for midstream projects. The revenue from these surface uses is a critical, often fixed-fee component of the business. For the six months ended June 30, 2025, Easements and other surface-related income revenue (SLEM) was $36.2 million for Q2 2025 alone. This revenue stream is expected to provide predictable income through renewals.

• Expected easement renewals in 2026: approximately $10 million.
• Projected annual easement renewals in years following 2026: potentially up to $35 million.
• Total projected easement renewals over the next decade (from Q1 2025 data): over $200 million.

Dedicated account management for large-cap E&P customers on royalty acreage

While TPL doesn't operate the wells, managing the relationship with the operators on its royalty acreage is key to maximizing production and ensuring compliance with surface use terms. The focus on acquiring acreage operated by large-cap entities like Exxon Mobil Corporation and Diamondback Energy, Inc. suggests a deliberate strategy to align with financially stable, high-activity partners. The high Adjusted EBITDA margin of 85% in Q3 2025 is partly a reflection of this high-quality, low-cost revenue derived from these established relationships. TPL's consolidated net income for Q3 2025 was $121.2 million on total revenues of $203.1 million.

Investor Relations for managing shareholder expectations and capital allocation

Managing the shareholder base is a distinct relationship function, especially given TPL's structure and recent corporate actions. As of late 2025, the company has a Market Cap of approximately $19.87B, with Institutions Ownership at 71.95%. Investor Relations must manage expectations around commodity price sensitivity, as Q3 2025 revenue missed analyst forecasts. Capital allocation decisions are communicated directly to this base.

• Q3 2025 Consolidated Net Income: $121.2 million.
• Free Cash Flow for Q3 2025: $122.9 million.
• Latest declared quarterly cash dividend: $1.60 per share, payable on December 15, 2025.
• Corporate Action: Announced a three-for-one stock split, expected in December 2025.

Finance: draft 13-week cash view by Friday.

Texas Pacific Land Corporation (TPL) - Canvas Business Model: Channels

The channels Texas Pacific Land Corporation (TPL) uses to reach its customer segments and deliver its value proposition are multifaceted, spanning direct operational agreements, dedicated subsidiary services, and sophisticated capital market engagement.

Direct negotiation of surface leases, easements, and royalty agreements

This channel is the bedrock of the Land and Resource Management segment. TPL directly negotiates agreements with energy operators across its approximately 880,000 acres in West Texas. These negotiations result in revenue from perpetual royalty interests on oil and gas production, as well as Surface Leases, Easements, and Material (SLEM) income. For instance, in the second quarter of 2025, SLEM revenue reached a company record of $36.2 million, which included $20.0 million from pipeline easements alone, showing the direct channel success in securing large infrastructure agreements.

The direct negotiation process is critical for securing the terms that underpin the company's high-margin structure. The company's royalty acreage is heavily weighted toward top-tier operators; approximately 61% of the royalty acreage acquired in the November 2025 transaction is operated by Exxon, Diamondback, and Occidental.

Key metrics related to the direct royalty channel performance as of late 2025 include:

• Oil and gas royalty production reached approximately 36,300 barrels of oil equivalent per day in Q3 2025.
• This Q3 2025 production represented a 28% increase year-over-year.
• The company ended Q2 2025 with 22.2 net wells categorized as permitted, drilled but uncompleted (DUCs), or completed but not producing (CUPs).

Direct sales and service delivery via Texas Pacific Water Resources (TPWR)

Texas Pacific Water Resources (TPWR) serves as the direct sales channel for water-related services, which includes water sourcing, produced-water treatment, and disposal solutions. This segment has seen significant growth, demonstrating a successful direct service delivery model. In the third quarter of 2025, water sales revenue hit $45 million, a substantial 74% sequential growth. Furthermore, produced water royalty revenues, another direct water-related stream, were $32 million in Q3 2025.

TPWR's channel is supported by significant capital deployment into infrastructure. Since 2017, Texas Pacific Land Corporation has invested nearly $200 million to build out its source water and recycling infrastructure. A major milestone for this channel is the construction of the Phase 2b desalination facility in Orla, Texas, which has a capacity of 10,000 barrels per day and an estimated service date in late 2025.

Investor relations and public markets (NYSE: TPL) for capital access

The public markets channel is vital for capital access and liquidity management, facilitated by the listing on the New York Stock Exchange (NYSE: TPL). As of late 2025, the company held a market capitalization of approximately $22.99 billion. The investor relations function actively communicates financial health and strategic direction to maintain market confidence and access to capital. This channel was recently utilized to secure flexibility via an inaugural $500 million revolving credit facility, which closed in October 2025. The company also announced a three-for-one stock split expected in December 2025 to potentially enhance stock accessibility.

Key financial performance indicators communicated through this channel for the third quarter of 2025 are summarized below:

Corporate website and investor presentations for financial communication

The corporate website, www.texaspacific.com, serves as the central hub for official documentation, including SEC filings and investor presentations. The latest Investor Presentation was posted on November 5, 2025. This digital channel is used to disseminate detailed performance narratives that support the high-level numbers shared in earnings calls. For example, the Q3 2025 earnings call highlighted that the company recorded over $200 million of revenue for the first time in its history. The company also uses this channel to communicate strategic acquisitions, such as the November 3, 2025, purchase of approximately 17,300 net royalty acres for approximately $474 million, funded entirely by cash.

The communication strategy emphasizes resilience, as evidenced by achieving record water royalty revenues of $32 million and record oil and gas royalty production of 36,300 BOE/d in Q3 2025, despite weak benchmark oil prices.

Texas Pacific Land Corporation (TPL) - Canvas Business Model: Customer Segments

You're looking at the core clientele Texas Pacific Land Corporation (TPL) serves across its vast West Texas acreage. The business model is fundamentally about monetizing land ownership through multiple, often non-correlated, revenue streams, meaning the customers fall into distinct, high-value groups.

Oil and Gas Exploration & Production (E&P) operators in the Permian Basin

These operators are the primary drivers of activity on TPL's royalty acreage. They are the ones drilling wells, which directly generates TPL's largest revenue component: oil and gas royalties. TPL is not a producer; it collects a fixed percentage of what they pull out of the ground. The level of activity from these customers dictates the pace of development on TPL's land.

Here's a look at the production volumes tied to these E&P customers through the first three quarters of 2025:

TPL manages approximately 868,000 surface acres, principally concentrated in the Permian Basin. For the acquired interests announced in Q3 2025, approximately 61% of the royalty acreage is operated by Exxon, Diamondback, and Occidental.

Midstream and infrastructure companies requiring easements (pipeline, power line)

These companies are customers for TPL's surface rights, paying fixed fees for the use of the land to build and operate essential infrastructure. This revenue stream is captured under Easements and Other Surface-Related Income (SLEM). This is a critical segment because these contracts often have long terms and renewal payments subject to CPI escalators.

• Easements and other surface-related income revenue (Q2 2025): $36.2 million.
• For the six months ended June 30, 2025, this income increased by $17.2 million year-over-year.
• The H1 2025 increase included $10.6 million from pipeline easements, $2.3 million from wellbore easements, and $1.5 million from commercial leases.

This segment provides a stable, fee-based income component that flexes with broader Permian activity levels.

Commercial users needing caliche, gravel, and other surface materials

This group overlaps with the infrastructure segment, as material sales, like caliche, are used in the construction of the infrastructure mentioned above. The sale of materials is explicitly listed as a way TPL captures revenue over the well lifecycle. While specific standalone revenue for caliche sales isn't isolated in the latest reports, it is bundled into the SLEM/SLIM category, which is tied to development activity.

Public equity investors seeking a royalty-based, high-margin energy-related play

These are the shareholders who value TPL's unique financial profile. They are buying into a business model that generates exceptional profitability with minimal associated operational risk or capital expenditure on the production side. The financial metrics appeal directly to this segment:

• Trailing Twelve Months (TTM) Gross Margin (as of Sep 2025): 94.13%.
• TTM Operating Margin (as of Sep 2025): 76.5%.
• Q3 2025 Adjusted EBITDA Margin: 85%.
• TTM Revenue (as of September 30, 2025): $772.40 million.
• Market Capitalization (as of late 2025 data): Approximately $22.99 billion.
• Cash Position (Q3 2025 end): $532 million in cash and equivalents with no debt.
• Dividend History: Maintained payments for 12 consecutive years.

The recent announcement of a 3-for-1 stock split, expected in December 2025, is also a direct action aimed at this customer segment to improve liquidity.

Texas Pacific Land Corporation (TPL) - Canvas Business Model: Cost Structure

Texas Pacific Land Corporation (TPL) maintains a structure where operating costs are relatively low compared to revenue generation, which is typical for a large-scale landowner deriving income primarily from royalties and surface use. This is evidenced by the profitability metrics reported for the prior year, where operating and net margins were reported at 79% and 64%, respectively, for the full year 2024.

For the first half of 2025, the total operating expenses were $89.7 million for the six months ended June 30, 2025. This compares to $77.2 million for the same period in 2024. The primary driver for this increase was the depletion expense.

The depletion expense, which reflects the consumption of the underlying mineral resources, saw a significant step-up due to recent asset additions. For the six months ended June 30, 2025, the depletion expense increased by $15.0 million compared to H1 2024, directly linked to oil and gas royalty interests acquired in the second half of 2024. Looking at the nine-month period ending September 30, 2025, the total operating expenses reached $143.7 million, with the depletion expense increasing by $23.2 million year-over-year.

Costs associated with managing the vast, dispersed land portfolio are variable, especially within the water segment. For instance, water service-related expenses decreased by $2.7 million in the second quarter of 2025 compared to the first quarter of 2025. However, these expenses subsequently increased by $8.0 million in the third quarter of 2025 compared to the second quarter of 2025.

Capital expenditures are significant when Texas Pacific Land Corporation executes on its growth strategy, particularly for land and water infrastructure. A concrete example of a recent land acquisition expenditure occurred in November 2025, when the company acquired approximately 17,300 net royalty acres for a total purchase price of approximately $474 million, funded entirely by cash on the balance sheet. On the water side, Texas Pacific Land Corporation began construction in July 2025 of a 10,000 barrel per day produced water desalination facility in Orla, Texas, with an estimated service date in late 2025.

Here is a summary of key cost and related financial metrics for the first half of 2025:

The cost structure is heavily influenced by non-cash charges like depletion, but the cash operating costs remain relatively controlled, which is a key feature of the business model. The ongoing capital deployment for water infrastructure and land purchases represents the most significant cash outflows outside of general and administrative costs.

• Water Sales Revenue (2024 Annual): Approximately $150 million.
• Total Operating Expenses (Nine Months Ended Sept 30, 2025): $143.7 million.
• Depletion Expense Increase (Nine Months Ended Sept 30, 2025 vs 2024): $23.2 million.
• Quarterly Cash Dividend Declared (August 2025): $1.60 per share.

Texas Pacific Land Corporation (TPL) - Canvas Business Model: Revenue Streams

You're looking at the revenue generation engine for Texas Pacific Land Corporation (TPL) as of late 2025. It's a multi-pronged approach, heavily weighted toward the Permian Basin's subsurface and surface activity, but with water services showing significant growth momentum.

The largest single component remains the oil and gas royalties. This stream is directly tied to the production volumes of the operators on TPL's acreage. For the third quarter of 2025, the oil and gas royalty production hit a record of approximately 36.3 thousand Boe per day. This volume growth is happening even while benchmark oil and gas prices are reportedly weak, which speaks to the underlying asset quality and operator efficiency.

The Water Services and Operations (WSO) segment is clearly scaling up. This segment generated a record $80.8 million in revenue for Q3 2025. This is a combination of two key water-related revenue lines:

• Water sales revenue hit a record $44.6 million in Q3 2025, showing a 74% sequential growth.
• Produced water royalties reached a record $32 million in Q3 2025, representing a 16% increase year-over-year. (Note: More precise reporting shows this figure as $32.3 million in Q3 2025).

The surface-related income, categorized as Easements and other surface-related income (SLEM), shows more quarterly variability, often dependent on large infrastructure projects. While this segment hit a record $36.2 million in Q2 2025, it normalized down to $16.7 million in Q3 2025. That Q2 record was significantly boosted by about $20,000,000 of pipeline easements. TPL is also actively investing in water infrastructure, including construction on a 10,000 barrel per day produced water desalination facility in Orla, Texas, with commissioning expected by the end of 2025.

Beyond the big three, Texas Pacific Land Corporation captures revenue from other surface uses. This includes the sales of caliche and other materials, plus commercial leases and permits. These activities fall under the Land and Resource Management segment, which reported revenues of $128.5 million in Q2 2025 and contributed to the total Q3 2025 revenue of $203.1 million.

Here's a quick look at the major revenue drivers for the latest reported quarter, Q3 2025:

The company also executed a significant royalty acquisition in November 2025, spending approximately $474.1 million cash for about 17,306 net royalty acres, which is expected to add over 3,700 Boe/d. This acquisition strategy directly feeds the primary oil and gas royalty revenue stream. Finance: draft 13-week cash view by Friday.