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]