Texas Pacific Land (TPL) - 2025 Q2 - Quarterly Results

Performance Highlights TPL achieved record Q2 2025 results, driven by all-time highs in key royalty and surface income streams Second Quarter 2025 Highlights Q2 2025 Key Metrics | Metric | Value | | :--- | :--- | | Oil and Gas Royalty Production | 33.2 thousand Boe per day (Record) | | Easements and Other Surface-Related Income (SLEM) | $36.2 million (Record) | | Produced Water Royalties Revenue | $30.7 million (Record) | | Land and Resource Management Segment Revenues | $128.5 million | | Water Services and Operations Segment Revenues | $59.0 million | | Consolidated Net Income | $116.1 million | | Diluted EPS | $5.05 per share | | Adjusted EBITDA | $166.2 million | | Free Cash Flow | $130.1 million | - In July, the company began construction of a 10,000 barrel per day produced water desalination facility in Orla, Texas, with an estimated service date in late 2025[5] - As of June 30, 2025, TPL's royalty acreage had a total of 22.2 net wells in the development pipeline, consisting of 6.0 net well permits, 11.1 net DUCs, and 5.1 net CUPs[5] Six Months Ended June 30, 2025 Highlights H1 2025 Key Metrics | Metric | Value | | :--- | :--- | | Oil and Gas Royalty Production | 32.2 thousand Boe per day | | Produced Water Royalties Revenue | $58.4 million | | Land and Resource Management Segment Revenues | $255.1 million | | Water Services and Operations Segment Revenues | $128.4 million | | Consolidated Net Income | $236.8 million | | Diluted EPS | $10.29 per share | | Adjusted EBITDA | $335.6 million | | Free Cash Flow | $256.6 million | Management Commentary - CEO Tyler Glover highlighted the company's financial resilience amid commodity price volatility, citing record quarterly revenues in both SLEM and produced water royalties[7] - Management emphasized TPL's unique position to deliver essential solutions for produced water management, including procuring out-of-basin disposal space, developing desalination technology, and advancing beneficial reuse, all of which represent significant revenue potential[7] Financial Results Analysis Q2 2025 net income decreased sequentially, while H1 2025 net income and revenue grew year-over-year due to increased production Second Quarter 2025 - Sequential Comparison Q2 2025 vs Q1 2025 Financials (in millions) | Metric | Q2 2025 | Q1 2025 | Change | | :--- | :--- | :--- | :--- | | Net Income | 116.1 | 120.7 | (4.6) | | Total Revenues | 187.5 | 196.0 | (8.5) | | Oil and Gas Royalty Revenue | 95.0 | 111.2 | (16.2) | | Water Sales | 25.6 | 38.8 | (13.2) | | SLEM Revenue | 36.2 | 18.2 | +18.0 | | Total Operating Expenses | 43.8 | 45.9 | (2.1) | Q2 2025 vs Q1 2025 Production & Pricing | Metric | Q2 2025 | Q1 2025 | | :--- | :--- | :--- | | Production (MBoe/d) | 33.2 | 31.1 | | Avg. Realized Price ($/Boe) | $32.94 | $41.58 | Six Months Ended June 30, 2025 - Year Over Year Comparison H1 2025 vs H1 2024 Financials (in millions) | Metric | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Net Income | 236.8 | 229.0 | +7.8 | | Total Revenues | 383.5 | 346.5 | +37.0 | | Oil and Gas Royalty Revenue | 206.3 | 181.9 | +24.3 | | SLEM Revenue | 54.4 | 37.2 | +17.2 | | Total Operating Expenses | 89.7 | 77.2 | +12.5 | H1 2025 vs H1 2024 Production & Pricing | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Production (MBoe/d) | 32.2 | 24.9 | | Avg. Realized Price ($/Boe) | $37.10 | $42.07 | - The increase in operating expenses was primarily due to a $15.0 million increase in depletion expense related to oil and gas royalty interests acquired in the second half of 2024[13] Shareholder Information A $1.60 per share quarterly cash dividend was declared, with Q2 2025 earnings call and 2025 Annual Meeting details announced - On August 5, 2025, the Board of Directors declared a quarterly cash dividend of $1.60 per share, payable on September 16, 2025, to stockholders of record as of September 2, 2025[14] - The Q2 results conference call is scheduled for Thursday, August 7, 2025, at 9:30 a.m. Central Time[16] - The 2025 Annual Meeting of Stockholders will be held in person on November 6, 2025, at 11:00 a.m. Central Time in Dallas, Texas[18] Financial Statements and Non-GAAP Measures This section provides unaudited financial tables, including operational data, income statements, segment results, and non-GAAP reconciliations Financial and Operational Results Production Volumes (MBoe/d) | Period | Production (MBoe/d) | | :--- | :--- | | Q2 2025 | 33.2 | | Q1 2025 | 31.1 | | H1 2025 | 32.2 | | H1 2024 | 24.9 | Realized Prices ($/Boe) | Period | Realized Price ($/Boe) | | :--- | :--- | | Q2 2025 | $32.94 | | Q1 2025 | $41.58 | | H1 2025 | $37.10 | | H1 2024 | $42.07 | Condensed Consolidated Statements of Income Income Statement Summary (in thousands) | Line Item | Q2 2025 | Q1 2025 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $187,543 | $195,983 | $383,526 | $346,476 | | Total Operating Expenses | $43,792 | $45,910 | $89,702 | $77,213 | | Operating Income | $143,751 | $150,073 | $293,824 | $269,263 | | Net Income | $116,140 | $120,652 | $236,792 | $229,006 | | Diluted EPS | $5.05 | $5.24 | $10.29 | $9.95 | Segment Operating Results Q2 2025 Segment Revenues (in thousands) | Segment | Q2 2025 Revenue | Q1 2025 Revenue | | :--- | :--- | :--- | | Land and Resource Management | $128,497 | $126,581 | | Water Services and Operations | $59,046 | $69,402 | H1 2025 vs H1 2024 Segment Revenues (in thousands) | Segment | H1 2025 Revenue | H1 2024 Revenue | | :--- | :--- | :--- | | Land and Resource Management | $255,078 | $215,517 | | Water Services and Operations | $128,448 | $130,959 | H1 2025 vs H1 2024 Segment Net Income (in thousands) | Segment | H1 2025 Net Income | H1 2024 Net Income | | :--- | :--- | :--- | | Land and Resource Management | $172,113 | $161,100 | | Water Services and Operations | $64,679 | $67,906 | Non-GAAP Performance Measures - The company uses non-GAAP measures such as EBITDA, Adjusted EBITDA, and Free Cash Flow to supplement GAAP net income in analyzing operating performance[33][34] Reconciliation of Net Income to Free Cash Flow (in thousands) | Line Item | Q2 2025 | Q1 2025 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Income | $116,140 | $120,652 | $236,792 | $229,006 | | EBITDA | $162,690 | $166,335 | $329,025 | $300,359 | | Adjusted EBITDA | $166,175 | $169,418 | $335,593 | $305,279 | | Free Cash Flow | $130,057 | $126,556 | $256,613 | $230,454 |