Texas Pacific Land Q2 Earnings Call Highlights

Texas Pacific Land Q2 Earnings Call Highlights

Record second-quarter results: Revenue rose 31% year over year to approximately $246 million, while adjusted EBITDA reached $216 million and free cash flow totaled $156 million. Oil and gas royalty production increased 20% year over year, and produced-water royalty volumes rose 15%. Expanding data-center and power strategy: TPL acquired more than 10,000 acres in Texas for about $100 million and is in advanced discussions involving 25 gigawatts of potential projects with hyperscalers, AI labs and power generators. The company also disclosed that its previously announced land and water agreement supports Chevron’s Project Kilby data-center power facility. Desalination facility enters commissioning: TPL began commissioning its Orla, Texas, Phase 2B facility, which is designed to process up to 10,000 barrels of produced water per day and supply freshwater for industrial and data-center cooling. Full-year capital expenditure guidance remains $65 million to $75 million.

Texas Pacific Land NYSE: TPL reported record quarterly revenue, net income and free cash flow for the second quarter of 2026, supported by higher oil and gas royalty production, produced-water royalty volumes and surface-related revenue. Chief Executive Officer Ty Glover said the company generated record results across major financial and operating measures while advancing initiatives involving data-center infrastructure, power generation and produced-water desalination.

Revenue, Cash Flow and Royalty Activity The S&P 500's 3 Best-Performing Stocks So Far in 2026 Chief Financial Officer Chris Steddum said consolidated revenue totaled approximately $246 million, a quarterly record and an increase of 4% from the prior quarter and 31% from a year earlier. Adjusted EBITDA was $216 million, up 19% sequentially and 30% year over year, with an adjusted EBITDA margin of 88%. Free cash flow reached $156 million, rising 14% from the first quarter and 20% from the second quarter of 2025, Steddum said.

Oil and gas royalty production averaged about 39,700 barrels of oil equivalent per day, increasing 7% sequentially and 20% year over year. Glover said the company’s unhedged royalty position enabled it to benefit from the stronger oil-price environment during the quarter. Produced-water royalty volumes reached 4.9 million barrels per day, a 6% sequential increase and a 15% year-over-year increase. Glover attributed the gain to demand for TPL’s in-basin and out-of-basin pore space. Water sales volumes were 663,000 barrels per day, down 19% from the prior quarter but up 38% from a year earlier. According to Glover, quarterly water-sales volumes were affected by weak in-basin natural-gas prices, which led operators to shift some development away from the Delaware Basin. He said the company expects new gas-pipeline capacity entering service over the next several quarters to improve local gas-price differentials and potentially support a mix shift back toward the Delaware Basin. Surface, land and material revenue, or SLEM revenue, totaled $24 million, up 37% sequentially, driven by pipeline and wellbore easements, Glover said. As of the end of the quarter, TPL had 5.6 net permitted wells, 9.5 net drilled-but-uncompleted wells and 3.4 net completed-but-not-producing wells, for a total of 18.4 net line-of-sight wells. Year-to-date capital expenditures were $29 million.

Data Center and Power Development Efforts The company disclosed that a previously announced land sale and water-supply agreement relates to Project Kilby, a large-scale power-gen...