Core Insights - The article emphasizes the importance of in-depth research on various income-generating investment vehicles such as REITs, mREITs, Preferreds, BDCs, MLPs, and ETFs [1] Group 1: Research and Analysis - iREIT on Alpha offers comprehensive research services aimed at providing insights into real estate investment trusts and other income alternatives [1] - Leo Nelissen is highlighted as an analyst focusing on significant economic developments, particularly in supply chains, infrastructure, and commodities, contributing to actionable investment ideas [2] Group 2: Analyst Disclosures - The article includes disclosures regarding beneficial long positions in specific shares, indicating the analyst's vested interest in TPL and LB [3] - It clarifies that the opinions expressed are those of the analyst and not influenced by compensation from external sources [3]

Company Overview - Texas Pacific Land Corporation (TPL) has a market capitalization of $22.7 billion and is one of the largest landowners in Texas, owning over 870,000 acres primarily in the Permian Basin [1] - The company generates revenue through oil and gas royalties, land and resource management, and water services, rather than direct energy production [1] Stock Performance - TPL shares have underperformed the broader market, declining 28.5% over the past 52 weeks and 9% in 2025, while the S&P 500 Index has increased by 14.5% over the past year and 16.5% year-to-date [2] - Compared to the SPDR S&P Oil & Gas Exploration & Production ETF, which saw a 6.2% decline over the past 52 weeks, TPL's performance was relatively better [3] Financial Performance - In the third quarter, TPL reported revenue of $203.1 million and net income of $121.2 million, equating to $5.27 per share, driven by strong performance in both the Land & Resource Management segment ($122.3 million) and the Water Services & Operations segment ($80.8 million) [4] - The company maintained a robust cash flow of $122.9 million and enhanced financial flexibility with a new $500 million revolving credit facility [5] Strategic Moves - TPL announced a three-for-one stock split and completed strategic land and royalty acquisitions worth $505 million, which supports its long-term growth outlook in the Permian Basin [5] - Following these announcements, TPL shares increased by 10% in the subsequent trading session [5] Market Position - TPL currently trades above its mean and average price target of $625 [6] - The stock has a consensus "Strong Sell" rating overall [5]

Financial Data and Key Metrics Changes - For Q3 2025, consolidated total revenue reached $203 million, with consolidated adjusted EBITDA at $174 million, resulting in an adjusted EBITDA margin of 85% [17][22] - Free cash flow increased by 15% year-over-year to $123 million [17] - Oil and gas royalty production achieved a record of approximately 36,300 barrels of oil equivalent per day, representing a 9% sequential increase and a 28% year-over-year increase [4][18] Business Line Data and Key Metrics Changes - Water sales revenue reached a record $45 million, reflecting a 74% sequential growth and a 23% year-over-year increase [4] - Produced water royalty revenues were $32 million, showing a 5% sequential growth and a 16% year-over-year increase [4] - The minerals and royalties acquisitions contributed 18% to TPL's consolidated royalty production, generating a mid-teens pre-tax cash flow yield [6] Market Data and Key Metrics Changes - The company noted that current oil prices are around $65 per barrel, below the historical average of $78 since 2010, indicating a favorable long-term outlook for oil prices [9][12] - The Permian Basin continues to be a significant contributor to U.S. oil supply growth, while other shale basins are in decline, suggesting a competitive advantage for TPL [10][11] Company Strategy and Development Direction - The company is focused on consolidating high-quality Permian assets during the current low commodity price environment, leveraging its strong cash flow margins and balance sheet [13][14] - TPL announced the acquisition of approximately 17,300 net royalty acres for $474 million, enhancing its existing portfolio and expected to generate a double-digit pre-tax cash flow yield [14][15] - The company is investing in desalination technology and water infrastructure to support its water services segment, with a 10,000 barrel per day facility under construction [19][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term demand for oil and gas, despite current price volatility, and highlighted the potential for significant revenue growth as production increases [16] - The company remains focused on maximizing shareholder returns and capitalizing on growth opportunities, even in a challenging macroeconomic environment [22] Other Important Information - TPL closed on a $500 million credit facility, enhancing liquidity and providing flexibility for future growth opportunities [12][22] - A three-for-one stock split of the company's common stock was approved, expected to be completed in December 2025 [21] Q&A Session Summary Question: What is a good run rate for the business, and how much of your water sales are recycled barrels versus water from source? - Management indicated that they are working to minimize volatility in water sales and are focused on maximizing recycled water usage, which is influenced by availability and demand [25][35][36] Question: Can you provide details on the royalty acquisition announced? - Management stated that the acquisition is expected to provide a strong growth outlook and is operated by well-capitalized operators, contributing to TPL's legacy asset base [26][28] Question: How is TPL positioned in the power and data center market? - Management expressed confidence in TPL's position, noting that they have significant available land and are in discussions for potential opportunities in West Texas [29][30] Question: What is the outlook for the water resources business? - Management acknowledged recent volatility but emphasized efforts to stabilize operations and maximize recycled water usage [35][36] Question: How does TPL view the competitive landscape for M&A in the Permian? - Management noted ongoing opportunities in the pipeline and expressed optimism about future acquisitions across various regions in the Permian [43][45]

Financial Data and Key Metrics Changes - For Q3 2025, consolidated total revenue reached $203 million, with an Adjusted EBITDA of $174 million, resulting in an Adjusted EBITDA margin of 85% [17][18] - Free cash flow increased by 15% year-over-year to $123 million [18] - Oil and gas royalty production achieved a record of approximately 36,300 barrels of oil equivalent per day, representing a 9% sequential increase and a 28% year-over-year increase [4][18] Business Line Data and Key Metrics Changes - Water sales revenue reached a record $45 million, reflecting a 74% sequential growth and a 23% year-over-year increase [4] - Produced water royalty revenues were $32 million, showing a 5% sequential growth and a 16% year-over-year increase [4] - The portfolio of acquired minerals and royalties contributed to 18% of consolidated royalty production, generating a mid-teens pre-tax cash flow yield [6] Market Data and Key Metrics Changes - Despite weak benchmark oil and gas prices, production volumes benefited from robust activity in northern Culberson, northern Reeves, and central Midland subregions [5] - The average lateral lengths for wells in 2025 are approximately 7% longer than last year and 23% longer compared to 2019 [5] Company Strategy and Development Direction - The company focuses on an active management and consolidation strategy aimed at growing oil and gas royalties, surface, and water assets [4] - TPL is positioned to capitalize on low commodity prices to consolidate high-quality Permian assets, with a belief that longer-term oil prices will be higher than current levels [9][12] - The company announced acquisitions of Permian oil and gas royalties and surface acreage, with a total purchase price of approximately $474 million [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth potential of the Permian Basin, despite current low commodity prices [10][12] - The company believes that global liquids demand continues to grow steadily, and that the U.S. oil supply will rationalize in response to pricing signals [10] - TPL's recent credit facility of $500 million enhances liquidity and allows for greater flexibility in funding growth opportunities [12][22] Other Important Information - The company plans to begin commissioning a 10,000 bbl per day desalination facility by the end of the year [18] - A three-for-one stock split of the company's common stock was approved and is expected to be completed in December 2025 [21] Q&A Session Summary Question: What is a good run rate for the business, and how much of your water sales are recycled barrels versus water from source? - Management indicated that they are working to minimize volatility in water sales and are focused on maximizing recycled water usage, which is influenced by availability and demand [35][36] Question: Can you provide details on the royalty acquisition announced? - Management stated that the acquisition is expected to provide a strong growth outlook and is operated by well-capitalized operators in the Permian [26][28] Question: How does TPL feel about its position in the power and data center market in West Texas? - Management expressed confidence in TPL's positioning, noting that they have significant available land and are in discussions for potential opportunities [29][30] Question: How is the competitive landscape in the Permian for M&A opportunities? - Management noted that while lower commodity prices create challenges, there are still healthy opportunities in the pipeline across various regions in the Permian [43][45]

Financial Data and Key Metrics Changes - For Q3 2025, the company reported consolidated total revenue of $203 million, with an adjusted EBITDA of $174 million, resulting in an adjusted EBITDA margin of 85% [16][17] - Free cash flow increased by 15% year-over-year to $123 million [17] Business Line Data and Key Metrics Changes - Oil and gas royalty production reached a record of approximately 36,300 barrels of oil equivalent per day, marking a 9% sequential increase and a 28% year-over-year increase [4][17] - Water sales revenue hit a record of $45 million, representing a 74% sequential growth and a 23% year-over-year growth [4] - Produced water royalty revenues amounted to $32 million, reflecting a 5% sequential growth and a 16% year-over-year increase [4] Market Data and Key Metrics Changes - The company noted that despite weak benchmark oil and gas prices, production volumes benefited from robust activity in specific subregions [5] - The average lateral lengths for wells year-to-date in 2025 are approximately 7% longer than last year and 23% longer compared to 2019 [5] Company Strategy and Development Direction - The company is focused on consolidating high-quality Permian assets, taking advantage of the current low commodity price environment to acquire additional royalties and surface acreage [9][14] - Investments in water infrastructure have established the company as a competitive player in the Permian, allowing it to maintain and grow market share [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term demand for oil, despite current low prices, citing structural declines in other shale basins [10][12] - The company believes it is well-positioned to capitalize on future price increases due to its strong cash flow margins and a robust balance sheet [13][16] Other Important Information - The company announced a three-for-one stock split of its common stock, expected to be completed in December 2025 [19] - The company closed on a $500 million credit facility, enhancing liquidity and providing flexibility for growth opportunities [12][20] Q&A Session Summary Question: What is a good run rate for the business, and how much of your water sales are recycled barrels versus water from source? - Management indicated that they are working to minimize volatility in water sales and are focused on maximizing recycled water usage [25][26] Question: Can you provide details on the royalty acquisition announced? - Management stated that the acquisition is expected to provide a strong growth outlook and is operated by well-capitalized operators [22][24] Question: How does the company view its position in the power and data center market? - Management expressed confidence in their position, noting that they have significant available land and are in discussions for potential opportunities [22][24] Question: What is the outlook for the water resources business? - Management acknowledged recent volatility but emphasized efforts to stabilize and maximize recycled water production [25][26] Question: How does the company characterize the competitive landscape in the Permian? - Management noted ongoing opportunities in the pipeline and expressed optimism about future acquisitions across various regions [30][31]

Financial Performance - Total revenues for the nine months ended September 30, 2025, were $586.6 million, up 12.7% from $520.0 million in the same period of 2024[113]. - Net income for the nine months ended September 30, 2025, was $358.0 million, representing an increase of 6.9% compared to $335.6 million for the same period in 2024[113]. - Cash provided by operating activities for the nine months ended September 30, 2025, was $432.2 million, an increase of 18.7% compared to $364.1 million for the same period in 2024[103][104]. - EBITDA for the nine months ended September 30, 2025, was $499,167,000, compared to $441,538,000 for the same period in 2024, reflecting a year-over-year increase of about 13.1%[146]. - Free cash flow for the nine months ended September 30, 2025, was $379,476,000, compared to $337,319,000 in the same period of 2024, marking an increase of about 12.5%[146]. - Net income for Q3 2025 was $121,238,000, an increase from $106,594,000 in Q3 2024, representing a growth of approximately 13.4%[146]. Revenue Sources - Oil and gas royalty revenue for the nine months ended September 30, 2025, was $315.0 million, up from $276.4 million in the same period of 2024, an increase of 14.0%[128]. - Total oil and gas royalties for the nine months ended September 30, 2025, reached $314.9 million, compared to $276.4 million in the same period of 2024, a 14.0% increase[129]. - Oil and gas royalty revenue for the three months ended September 30, 2025, was $108.7 million, an increase of 15.2% from $94.4 million for the same period in 2024[118]. - Water sales revenue increased by $8.4 million to $44.6 million in Q3 2025, driven by a 14.3% increase in pricing[124]. - Produced water royalties increased to $32.3 million in Q3 2025 from $27.7 million in Q3 2024, reflecting a 19.8% increase[125]. - Easements and other surface-related income increased to $61.6 million for the nine months ended September 30, 2025, up from $43.6 million in 2024, a 39.0% increase[129]. Expenses and Investments - Total operating expenses for the nine months ended September 30, 2025, were $143.7 million, an increase of 16.4% compared to $123.4 million for the same period in 2024[113]. - Cash used in investing activities decreased to $137.6 million for the nine months ended September 30, 2025, from $225.8 million in the same period of 2024, a reduction of 39.0%[105]. - The company invested approximately $14.1 million to enhance water sourcing assets during the nine months ended September 30, 2025[102]. - General and administrative expenses decreased to $3.4 million in Q3 2025 from $10.4 million in Q3 2024, a reduction of 67.3%[121]. - Salaries and related employee expenses rose to $21.7 million for the nine months ended September 30, 2025, compared to $20.1 million in 2024, an increase of 7.9%[130]. - Depreciation, depletion, and amortization for the nine months ended September 30, 2025, was $27.3 million, significantly up from $3.6 million in the same period of 2024, an increase of 658.3%[132]. Cash Flow and Liquidity - As of September 30, 2025, the Company had cash and cash equivalents of $531.8 million, with a target balance of approximately $700 million for capital allocation[92]. - The Company has no debt or off-balance sheet arrangements as of September 30, 2025, and believes its cash flows and liquidity will be sufficient for ongoing capital expenditures and working capital needs for at least the next 12 months[91]. - Cash used in financing activities decreased to $134.2 million for the nine months ended September 30, 2025, from $335.0 million in the same period of 2024, a decrease of 60.0%[107]. Market Conditions - Average WTI oil prices for the nine months ended September 30, 2025, decreased by approximately 14% compared to the same period last year, while Henry Hub natural gas prices increased by approximately 64%[86]. - For the three months ended September 30, 2025, the average WTI Cushing oil price was $65.78 per barrel, down from $76.43 in 2024, and the average Henry Hub natural gas price was $3.03 per mmbtu, up from $2.11 in 2024[88]. - Average monthly horizontal permits in the Permian Basin decreased from 683 in 2024 to 589 in 2025, while average monthly horizontal wells drilled decreased from 492 to 428 in the same period[88]. - The Permian Basin currently accounts for over 6.6 million barrels per day of oil production, which is higher than any previous year prior to 2025[87]. Acquisitions and Developments - The Company acquired approximately 8,147 acres of land in Martin County, Texas, for an aggregate purchase price of $31.4 million in September 2025[93]. - On November 3, 2025, the Company acquired approximately 17,306 net royalty acres for an aggregate purchase price of $474.1 million, with a deposit of $71.1 million held in escrow as of September 30, 2025[94]. - The company is developing a patented energy-efficient desalination and treatment process to recycle produced water, with an initial capacity of 10,000 barrels per day, expected to be operational by the end of 2025[101]. Accounting and Compliance - There have been no material changes to critical accounting policies or estimates from the previous year[148]. - The company continues to follow GAAP in preparing its financial statements, ensuring consistency and reliability in financial reporting[147]. - No material changes in market risk information have been disclosed since the last annual report[150].

Financial Performance - Record quarterly revenues of $203.1 million for Q3 2025, up from $187.5 million in Q2 2025, driven by a $19.0 million increase in water sales and a $13.7 million increase in oil and gas royalty revenue [9]. - Consolidated net income for Q3 2025 was $121.2 million, or $5.27 per share (diluted), compared to $116.1 million in Q2 2025 [8]. - Total revenues for the nine months ended September 30, 2025, were $586.6 million, compared to $520.0 million for the same period in 2024, reflecting a $38.6 million increase in oil and gas royalty revenue [12]. - Net income for the nine months ended September 30, 2025, was $358.0 million, compared to $335.6 million for the same period in 2024, reflecting an increase of 6.7% [37]. - Operating income for the nine months ended September 30, 2025, reached $442.9 million, up from $396.6 million in the prior year, marking a growth of 11.7% [37]. - Adjusted EBITDA for the nine months ended September 30, 2025, was $509.2 million, compared to $449.4 million for the same period in 2024, indicating an increase of 13.3% [44]. Production Metrics - Oil and gas royalty production reached 36.3 thousand Boe per day in Q3 2025, an increase from 33.2 thousand Boe per day in Q2 2025 [9]. - Oil production volumes increased to 1,284 MBbls in Q3 2025 from 1,209 MBbls in Q2 2025, representing a 6.2% increase [30]. - Natural gas production rose to 6,142 MMcf in Q3 2025, up 8.5% from 5,659 MMcf in Q2 2025 [30]. - Average daily equivalents production was 36.3 MBoe/d in Q3 2025, up from 33.2 MBoe/d in Q2 2025 [30]. Revenue Breakdown - Water sales revenue for Q3 2025 was $44.6 million, with produced water royalties revenue at $32.3 million [5]. - Total oil and gas royalties reached $108.705 million in Q3 2025, a 14.5% increase compared to $95.006 million in Q2 2025 [33]. - Oil and gas royalties generated $315.0 million in revenue for the nine months ended September 30, 2025, compared to $276.4 million in 2024, an increase of 14.0% [37]. - Water sales revenue for the nine months ended September 30, 2025, was $108.9 million, slightly down from $114.0 million in the previous year, a decrease of 4.5% [37]. - Produced water royalties increased to $90.7 million for the nine months ended September 30, 2025, compared to $76.0 million in 2024, reflecting a growth of 19.3% [37]. Cash Flow and Expenses - Free cash flow for Q3 2025 was $122.9 million, contributing to a total of $379.5 million for the nine months ended September 30, 2025 [5][13]. - Free cash flow for the nine months ended September 30, 2025, amounted to $379.5 million, up from $337.3 million in the same period of 2024, representing a growth of 12.5% [45]. - The company’s total operating expenses increased to $53.994 million in Q3 2025 from $43.792 million in Q2 2025, a rise of 23.2% [33]. - Total operating expenses for the nine months ended September 30, 2025, were $143.7 million, compared to $123.4 million in the same period of 2024, an increase of 16.4% [37]. - Income tax expense for the nine months ended September 30, 2025, was $100.5 million, up from $92.2 million in 2024, indicating an increase of 8.5% [37]. Corporate Actions - The company executed a purchase agreement for approximately 17,306 net royalty acres for $505 million, closing on November 3, 2025 [5][18]. - A new $500 million revolving credit facility was completed on October 23, 2025, with an interest rate of SOFR plus 2.25% to 2.50% [17]. - The board approved a three-for-one stock split on November 3, 2025, expected to be completed in December 2025 [20]. - Quarterly cash dividend of $1.60 per share was declared on November 3, 2025, payable on December 15, 2025 [19].

Core Insights - Texas Pacific Land Corporation (TPL) reported record quarterly revenues and net income for the third quarter of 2025, driven by strong performance in its Water Services and Operations segment and oil and gas royalty production [5][6][7]. Financial Results for the Third Quarter of 2025 - Net income for Q3 2025 was $121.2 million, up from $116.1 million in Q2 2025 [6]. - Total revenues reached $203.1 million, compared to $187.5 million in Q2 2025, with increases in water sales ($19.0 million) and oil and gas royalty revenue ($13.7 million) [7]. - The company's share of production was 36.3 thousand Boe per day, an increase from 33.2 thousand Boe per day in Q2 2025, with an average realized price of $34.10 per Boe [7][24]. Financial Results for the Nine Months Ended September 30, 2025 - Net income for the nine months was $358.0 million, compared to $335.6 million for the same period in 2024 [10]. - Total revenues for the nine months were $586.6 million, up from $520.0 million in 2024, primarily due to increases in oil and gas royalty revenue ($38.6 million) and produced water royalties ($14.7 million) [11]. - The company's share of production was 33.6 thousand Boe per day for the nine months, compared to 26.0 thousand Boe per day in 2024 [11]. Operational Highlights - TPL executed a purchase agreement for approximately 17,306 net royalty acres in the Midland Basin for $505 million, which closed on November 3, 2025 [8][14]. - A new $500 million revolving credit facility was completed on October 23, 2025, with an interest rate based on the Secured Overnight Financing Rate (SOFR) plus 2.25% to 2.50% [13]. - The company began construction of a 10,000 barrel per day produced water desalination facility in Orla, Texas, expected to be operational by the end of 2025 [8]. Dividend and Stock Split - A quarterly cash dividend of $1.60 per share was declared on November 3, 2025, payable on December 15, 2025 [15]. - The Board approved a three-for-one stock split of TPL's common stock, expected to be completed in December 2025 [16].

Core Viewpoint - Texas Pacific Land Trust Sub Sha (TPL.US) has had its MSCI ESG rating upgraded from A to AA as of October 14, 2025 [1] Group 1 - The upgrade in ESG rating reflects improved environmental, social, and governance practices within the company [1]

Group 1 - The article discusses the attention garnered by the sitting president of the United States, Donald Trump, due to the government's involvement in taking stakes in certain US companies [1]. Group 2 - The article does not provide specific financial data or performance metrics related to the companies mentioned, focusing instead on the broader implications of government actions on the market [1].