Texas Pacific Land Corp. has a long history of stomping the market, and it has lesser-known growth potential beyond oil and gas.Shares of the largest landowner in the Permian Basin, Texas Pacific Land Corp. (TPL -7.62%), are down 8% as of 1 p.m. ET on Thursday, according to data provided by S&P Global Market Intelligence.Texas Pacific Land (TPL) grew sales and free cash flow by 9% and 12% during the second quarter, despite average oil prices sinking to a level not seen since 2021.Regardless of these steady ...

Texas Pacific Land (TPL) Q2 2025 Earnings Call August 07, 2025 10:30 AM ET Speaker0Ladies and gentlemen, greetings and welcome to Texas Pacific Land Corporation Second Quarter twenty twenty five Earnings Conference Call. At this time, all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Sean Amini.Please go ahead.Speaker1Thank you for joining us toda ...

Financial Data and Key Metrics Changes - For Q1 2025, consolidated revenues reached $196 million, with an adjusted EBITDA of $169 million, resulting in an adjusted EBITDA margin of 86.4% [14] - Free cash flow was reported at $127 million, reflecting an 11% year-over-year increase [14] - Oil and gas royalty production averaged approximately 31,100 barrels of oil equivalent per day, marking a 25% increase year-over-year [5][14] Business Line Data and Key Metrics Changes - Oil and gas royalty production saw a 7% growth quarter-over-quarter and a 25% growth year-over-year, driven by strong development in specific subregions [5] - Water segment revenues totaled $69 million, representing a 3% sequential growth and an 11% year-over-year growth [5] Market Data and Key Metrics Changes - The company noted that while oil prices have weakened, there has not yet been a widespread downturn in activity, although some operators have announced plans to reduce rigs [6] - The company expects that if oil prices remain below $60 for an extended period, more significant activity declines may occur in the latter half of the year [6] Company Strategy and Development Direction - The company aims to maximize shareholder value and is positioned to take advantage of opportunities that may arise, including acquiring high-quality royalties and ramping up buybacks [13] - TPL's royalty acreage is primarily operated by supermajors and large independents, which tend to exhibit more inertia in their development plans compared to mid-cap independents [7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in TPL's ability to withstand potential downturns in oil prices due to its strong financial position and high-margin cash flow streams [12] - The company anticipates that renewal payments from easements will significantly increase, with estimates exceeding $200 million over the next decade [11] Other Important Information - TPL maintains a net cash position with zero debt and $460 million in cash and cash equivalents as of March 31 [12] - The company is advancing its desalination and beneficial reuse initiatives, with a new desalination unit expected to come online by the end of the year [17] Q&A Session Summary Question: Thoughts on macro oil and gas activity and impacts on business segments - Management noted that there is significant demand for water handling in the Delaware Basin, with expectations for produced water volumes to grow rapidly over the next decade [23][24] Question: Impact of pipeline projects on TPL - Management indicated that new pipeline projects would benefit the basin and TPL's mineral development, with compensation expected from barrels moved through these projects [25] Question: Perspective on the M&A landscape in the basin - Management stated that there are still opportunities in the M&A front, with no significant pullback from sellers observed, although a decrease in commodity prices could widen the bid-ask spread [29]