Valued at a market cap of $22.7 billion, Texas Pacific Land Corporation (TPL) is one of the largest landowners in Texas, with over 870,000 acres primarily located in the oil-rich Permian Basin. Headquartered in Dallas, the company generates revenue through oil and gas royalties, land and resource management, and water services, rather than directly producing energy. TPL shares have substantially underperformed the broader market over the past year, dipping28.5% over the past 52 weeks and 9% in 2025. Meanw ...

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 - Total revenues for Q3 2025 were $571.4 million, down from $613.6 million in Q3 2024, primarily due to lower coal sales prices and transportation revenues, partially offset by higher coal sales volumes [4][5] - Average coal sales price per ton decreased by 7.5% year-over-year to $58.78, but increased by 1.5% sequentially [5] - Net income attributable to the company was $95.1 million, including a $3.7 million favorable increase in the fair value of digital assets [10] - Adjusted EBITDA for the quarter was $185.8 million, up 9% year-over-year and 14.8% sequentially [10][11] Business Line Data and Key Metrics Changes - Total coal production in Q3 2025 was 8.4 million tons, an increase of 8.5% compared to Q3 2024, while total coal sales volumes increased by 3.9% to 8.7 million tons [5][6] - In the Illinois Basin, coal sales volumes increased by 10.8% year-over-year but decreased by 0.8% sequentially [6] - Coal sales volumes in Appalachia decreased by 13.3% year-over-year but increased by 21.8% sequentially due to improved mining conditions [6][7] - Total revenues from royalty segments were $57.4 million, up 11.9% year-over-year, driven by higher coal royalty tons sold [9] Market Data and Key Metrics Changes - Year-to-date utility coal consumption increased by 15% in MISO and 16% in PJM, reflecting strong demand fundamentals [17] - Analysts project 4% to 6% annual growth in electricity demand in PJM and other markets over the next several years [18] - The recent PJM capacity auction cleared at maximum allowable prices, indicating a need for every available megawatt of dispatchable generation [19] Company Strategy and Development Direction - The company is focused on maintaining a strong balance sheet, investing prudently in core operations, and positioning for long-term growth while delivering attractive returns to unitholders [20] - The company has secured additional contract commitments for 2026, with 29.1 million tons contracted, up 9% from the previous quarter [13] - The company plans to reduce sustaining capital needs in coal segments, enhancing free cash flow visibility for 2026 and beyond [20] Management's Comments on Operating Environment and Future Outlook - Management noted that favorable federal energy policies and rising electricity demand are supporting coal demand [17] - The company expects to increase production at Tunnel Ridge and in the Illinois Basin in 2026 to meet anticipated demand [18] - Management expressed confidence in the sustainability of lower costs in Appalachia due to improved mining conditions [86] Other Important Information - Total liquidity at the end of Q3 2025 was $541.8 million, including $94.5 million in cash [11] - The company declared a quarterly distribution of $0.60 per unit, unchanged from the previous quarter [20] Q&A Session Summary Question: Duration and structure of supply contracts - Most contracts are for two to three years, primarily fixed pricing with some tariff protection [26][27] Question: Pricing guidance for 2026 - Pricing is expected to decline around 5% year-over-year due to contracts rolling off, but improved conditions at Tunnel Ridge may help maintain margins [34][36] Question: Impact of Department of Energy investments - Increased interest from utilities in extending the life of coal plants could enhance demand for coal [38][40] Question: Equity method investment income - Modestly positive numbers are anticipated for Q4, with some investments starting to yield distributions [45][46] Question: Production increase logistics - No new staffing is required; existing personnel will be utilized more efficiently due to favorable conditions [63] Question: Confidence in uncommitted met coal sales - Anticipation of selling uncommitted met coal based on current pricing trends [67] Question: Coal vs. gas competition - Competition between coal and gas is less significant due to increasing electricity demand and data center growth [72][75] Question: Capital expenditures outlook - Full year CapEx is expected to be closer to the midpoint of guidance, with Q4 anticipated to be higher [81] Question: Future M&A outlook - Focus is more on minerals rather than expanding coal operations, with limited expectations for coal M&A [59][84]

Financial Performance & Metrics - TPL's 2Q 2025 total revenues reached $187.5 million [12] - Adjusted EBITDA for 2Q 2025 was $166.2 million, with an 89% margin [12] - Free cash flow for 2Q 2025 amounted to $130.1 million, representing a 69% margin [12] - The company held $544 million in cash and cash equivalents as of June 30, 2025, with no debt [28, 32] - FY 2024 Adjusted EBITDA was $611 million [26] - FY 2024 Free Cash Flow was $461 million [26] Operational Highlights - Oil and gas royalties contributed $95.0 million to the total revenue in 2Q 2025 [12] - Water sales generated $25.6 million in revenue during 2Q 2025 [12] - Produced water royalties amounted to $30.7 million in 2Q 2025 [12] - Easements and other surface income reached $36.2 million in 2Q 2025 [12] Assets and Strategy - TPL has approximately 874,000 surface acres located in the Permian Basin [28, 38] - The company has ~25,800 net royalty acres [28, 32] - TPL is focused on maximizing shareholder value through active management of surface and royalty interests [38]

Financial Data and Key Metrics Changes - Total revenues for Q2 2025 were $547.5 million, down from $593.4 million in Q2 2024, primarily due to lower coal sales prices and transportation revenues, partially offset by higher coal sales volumes [4] - Average coal sales price per ton decreased by 11.3% year-over-year to $57.92, driven by the roll-off of higher-priced legacy contracts and a higher proportion of Illinois Basin tons [4] - Net income for Q2 2025 was $59.4 million, compared to $100.2 million in Q2 2024, reflecting variances in revenues and higher depreciation expenses [9] - Adjusted EBITDA for the quarter was $161.9 million, down 10.8% year-over-year but up 1.2% sequentially [10] Business Line Data and Key Metrics Changes - Coal production in Q2 2025 was 8.1 million tons, a decrease of 3.9% compared to Q2 2024, while coal sales volumes increased by 6.8% to 8.4 million tons [4] - In the Illinois Basin, coal sales volumes increased by 15.2% year-over-year, driven by record shipments from Riverview and Hamilton mines [5] - Coal sales volumes in Appalachia decreased by 16.8% year-over-year due to challenging mining conditions at Tunnel Ridge [5] - Segment adjusted EBITDA expense per ton sold for coal operations was $41.27, a decrease of 9% year-over-year [6] Market Data and Key Metrics Changes - Total coal inventory at the end of Q2 2025 was 1.2 million tons, down 200,000 tons from the previous quarter [5] - Year-to-date electricity generation in key Eastern regions was up over 18% compared to last year, with utility inventories 18% below the prior year [18] - The domestic coal market is showing strong fundamentals, driven by increased demand for electricity and natural gas prices remaining elevated [18] Company Strategy and Development Direction - The company is optimistic about long-term growth opportunities, having committed an additional 17.4 million tons for delivery from 2025 to 2029 [12] - The company is increasing its volume guidance for the Illinois Basin to 25 to 25.75 million tons based on solid domestic demand [12] - The company is focused on maintaining margins through cost savings and is exploring investments in high-quality basins for oil and gas royalties [20][76] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the domestic coal market, citing supportive actions from the current administration and increased demand from AI data centers and manufacturing [18][21] - The company anticipates improved results from Appalachia in the second half of 2025 following the completion of a longwall move at Tunnel Ridge [5] - Management noted that the current regulatory environment is the most favorable for coal in decades, which is expected to support demand [23] Other Important Information - The company generated free cash flow of $79 million after investing $65.3 million in coal operations [11] - The quarterly distribution rate was adjusted to $0.60 per unit, reflecting a strategic decision to strengthen the balance sheet and provide financial flexibility for growth opportunities [22][32] Q&A Session Summary Question: Can you provide more details on the $25 million investment for the acquisition of the Gavin Power plant? - The investment was made to participate as a limited partner in a fund set up to acquire the Gavin Power plant, which is expected to be accretive upon closing [28] Question: What is the rationale behind the distribution cut despite a strong outlook for domestic coal? - The distribution was adjusted to align with a more sustainable operating margin and to provide flexibility for growth opportunities, not due to declining fortunes [32] Question: What growth opportunities are being considered? - The company is exploring investments in minerals, energy infrastructure for data centers, and potential acquisitions of coal plants [36] Question: How many customers will benefit from the recent legislation? - The legislation is expected to help utilities maintain and operate fossil fuel plants, which could stabilize and potentially increase demand for coal [40] Question: What is the outlook for coal pricing given the decline in Chinese demand for seaborne coal? - Domestic pricing remains prioritized, and there are signs of improved pricing for exports, which could lead to higher export tonnage next year [74] Question: Will there be continued investments in royalty assets? - The company plans to invest in its royalty segment, primarily targeting the Permian and Delaware Basins, with a goal of over $100 million in investments annually [76]

Financial Performance - LandBridge's Q1 2025 revenue increased by 131% year-over-year[10] - Adjusted EBITDA for Q1 2025 increased by 129% year-over-year[10] - Non-oil and gas royalty revenue reached approximately 92% of total revenue in Q1 2025[10] - Adjusted EBITDA margin was 88% in Q1 2025[11] - Free Cash Flow Margin was 36% in Q1 2025[11] Operational Highlights - Surface use royalty volumes increased by approximately 72% to approximately 14 million barrels per day (MMBPD) in Q1 2025[10] - LandBridge acquired approximately 3000 surface acres in Lea County, NM and approximately 800 surface acres in Reeves County, Texas, bringing total surface acreage owned to approximately 277000 acres[10] Capital Allocation - A quarterly cash dividend of $010 per share was announced[10] - The company targets a net leverage ratio of 20-25x by mid-year 2025[28] Revenue Streams - Surface Use Royalties and Revenues accounted for 59% of YTD diversified streams[23] - Resource Sales and Royalties accounted for 33% of YTD diversified streams[23] - Oil & Gas Royalties accounted for 8% of YTD diversified streams[23]

Financial Data and Key Metrics Changes - Total revenues for Q1 2025 were $540.5 million, down from $651.7 million in Q1 2024, primarily due to reduced coal sales volumes and prices as well as lower transportation revenues [5] - Average coal sales price per ton decreased by 6.9% year-over-year to $60.29, but increased by 0.5% sequentially [5] - Net income for Q1 2025 was $74 million, compared to $158.1 million in Q1 2024, reflecting lower coal sales volumes and realized prices [11] - Adjusted EBITDA for Q1 2025 was $159.9 million [11] - Total debt outstanding was $484.1 million, with total liquidity at $514.3 million [12] Business Line Data and Key Metrics Changes - Total coal production in Q1 2025 was 8.5 million tons, a decrease of 7.2% compared to Q1 2024, while coal sales volumes decreased by 10.4% to 7.8 million tons [5][6] - In the Illinois Basin, coal sales price per ton decreased by 4.2%, while in Appalachia, it decreased by 8.5% [5] - Segment adjusted EBITDA expense per ton sold for coal operations was $42.75, an increase of 4.7% year-over-year [7] Market Data and Key Metrics Changes - The domestic market strengthened in early 2025 due to cold weather, higher natural gas prices, and declining coal inventories, leading to increased coal consumption [19] - The company has secured commitments for an additional 17.7 million tons over the 2025 to 2028 period, with 32.5 million tons committed in price for 2025 [14] - Coal consumption in Q1 2025 was 20% higher than the previous year [69] Company Strategy and Development Direction - The company plans to prioritize domestic market contracts over new export contracts due to strong domestic demand [19] - The company is committed to maintaining a strong balance sheet and disciplined capital allocation while monitoring trade policy impacts [27] - The company expects to see cost improvements in Appalachia as mining conditions improve [18] Management's Comments on Operating Environment and Future Outlook - Management noted that the executive orders from the administration regarding coal and grid reliability are positive for the industry [21][22] - The company anticipates a material improvement in full-year costs to offset lower realized pricing in the coal business for 2025 [15] - Management expressed confidence in achieving cost guidance for Appalachia as operations improve [45] Other Important Information - The company declared a quarterly distribution of $0.70 per unit for Q1 2025, unchanged from previous quarters [12][27] - The company plans to invest in oil and gas minerals and data center infrastructure, depending on market conditions [50][56] Q&A Session Summary Question: Comments on President Trump's executive orders and coal plant retirement delays - Management indicated that most utilities served intend to take advantage of extensions for coal plants and are responsive to increased electricity demand [36][37] Question: Impact of trade policies on business - Management discussed the impact of tariff increases on steel and aluminum and the uncertainty surrounding trade policies, but noted the administration's awareness of the energy sector's importance [41][43] Question: Confidence in achieving cost per ton guidance for Appalachia - Management expressed confidence in achieving cost guidance, with improvements expected in the second half of 2025 as operations stabilize [45][46] Question: Capital allocation strategy in the current environment - Management stated that capital allocation is focused on maintenance capital for coal operations, while also evaluating growth opportunities in data center infrastructure [49][50]

Financial Data and Key Metrics Changes - For the full year 2024, total revenues were $2.4 billion, adjusted EBITDA was $714.2 million, net income was $360.9 million, and earnings per unit were $2.77 [5] - Q4 2024 total revenues were $590.1 million, down from $625.4 million in Q4 2023, primarily due to lower coal and oil and gas prices, reduced coal sales volumes, and lower transportation revenues [5][6] - Net income for Q4 2024 was $16.3 million compared to $115.4 million in Q4 2023, reflecting lower coal sales volumes and realized prices [11] Business Line Data and Key Metrics Changes - Total coal production in Q4 2024 was 6.9 million tons, a decrease of 12.4% compared to Q4 2023, while coal sales volumes decreased by 2.3% to 8.4 million tons [7][8] - In the Illinois Basin, coal sales volumes increased by 2.8% compared to Q4 2023 due to increased volumes from specific mines [7] - Royalty segment revenues in Q4 2024 were $48.5 million, down 8.6% compared to Q4 2023, reflecting lower realized oil and gas commodity pricing [9] Market Data and Key Metrics Changes - The average coal sales price per ton for the full year 2024 was $63.38, close to the record level of $64.17 achieved in 2023 [6] - The total coal sales price per ton in Q4 2024 was $59.97, a decrease of 1% year-over-year and 5.7% sequentially [7] - The company anticipates coal sales volumes in 2025 to be in the range of 32.25 to 34.25 million tons, with over 78% of these volumes committed and priced [14] Company Strategy and Development Direction - The company plans to run two production units at MC Mining for all of 2025 to reduce operating costs [8] - Strategic capital improvements were executed at several mines, and the company remains committed to investing in its oil and gas minerals business [12][19] - The company expects improved coal production costs to counterbalance lower market prices, maintaining coal segment margins near 2024 levels [20] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about gradually improving market fundamentals and the potential for increased domestic sales in 2025 [15][21] - The company highlighted the importance of coal in meeting growing electricity demand and the strategic need for grid reliability [21][22] - Management noted that the new administration's policies are expected to support the continued operation of coal generation assets [23] Other Important Information - The company generated free cash flow of $383.5 million in 2024 after investing $410.9 million in coal operations [12] - The company declared a quarterly distribution of $0.70 per unit for Q4 2024, unchanged from the previous quarter [13] - The fair value of the company's digital assets was approximately $45 million at year-end 2024, positively impacting net income [24] Q&A Session Summary Question: Impact of recent tariffs on ARLP's business - Management indicated uncertainty regarding the impact of tariffs, suggesting that recent announcements appear to be more about negotiation than creating a tariff war [28][30] Question: Confidence in reaching domestic shipment goals - Management expressed confidence in reaching the 30 million ton goal for domestic shipments, with ongoing conversations expected to conclude soon [32][33] Question: Pricing expectations for 2024 - Management noted that pricing is influenced by supply and demand dynamics, with potential upside if weather conditions are favorable [61][62] Question: Changes in the oil and gas segment - Management acknowledged increased competition for acquiring new properties but remains focused on opportunities in the Permian Basin [84][85]