AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-2: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 3/6 · 19/10/2026
Moat63
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
structural advantage · 3/4 · Large-scale ownership of specific land and royalty rights is supported by realized royalty, easement and water revenues, plus a disclosed exclusive sourcing right. Relative water cost superiority is not established.
durability · 3/4 · Persistent ownership and producing royalty interests support durability. Estimated PDP reserves increased from 67.2 million to 73.1 million Boe in 2025, with extensions exceeding production, although acquisitions contributed and revisions were negative. Depletion and development dependence limit confidence beyond the evidenced period.
customer dependency · 2/4 · Operators using TPL's specific land, access corridors and contracted disposal arrangements depend on those rights; an exclusive aquifer-sourcing agreement provides another specific dependency. Alternative routes and sources, customer concentration and actual switching costs are undisclosed.
erosion resilience · 2/4 · Growing water volumes and income show continued monetization, and royalty well development imposes no capital or operating expense burden on TPL. Commodity exposure, lower first-half easement income, reserve revisions and an actual tax-payment dispute temper resilience; regulatory risks remain possibilities rather than demonstrated failures.
Pricing power56
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
realized pricing · 2/4 · First-half 2026 average realized water pricing increased 15.5% alongside 16.4% volume growth, demonstrating favorable outcomes. However, 2025 realized oil and equivalent prices declined, and royalty exposure is substantial. The combined evidence supports selective rather than broad pricing power; water mix effects are unspecified.
retention · 2/4 · Higher water sales and produced-water volumes, together with ongoing royalty production, indirectly demonstrate continuing demand. These aggregate results do not establish same-customer retention, renewals or absence of substitution.
margin resilience · 3/4 · First-half operating income increased from $293.8 million to $374.1 million while operating expenses rose more slowly than revenue. Fee-based produced-water royalties and the absence of royalty well-development costs support resilience. Commodity recovery, revenue mix and a financed land-sale gain contributed, so these results do not independently prove pricing power.
contractual freedom · 2/4 · TPL can negotiate commercial access and water arrangements, including an exclusive sourcing right, and produced-water fees are contractual. Payments through 2046 illustrate negotiated long-term terms, but unilateral repricing rights and escalation clauses are undisclosed. Commodity royalty realization provides limited price-setting discretion.
Predictability—
Missing exact annual revenue, free cash flow or FCF margin; operating cash flow and capex must both be reported for all five years.
Financial strength—
Missing required inputs: debtFcfGrade. Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, or reported pretax profit plus reported interest expense when operating income is unavailable. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- netDebtEbitGrade
- 100.00
- interestCoverageGrade
- 100.00
- currentRatioGrade
- 100.00
- Net debt / operating income (x)
- -0.24
- Interest coverage (x)
- 858.20
- Current ratio (x)
- 4.40
Capital allocation—
Missing required inputs: operatingReturn, cashConversionGrade. Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income or, if unavailable, EBIT calculated from reported pretax profit plus reported interest expense; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. Nonpositive invested capital has no defined return and remains unavailable. Does not establish acquisition quality or buyback timing.
- 3-year average dilution (%)
- -0.26
- 3-year average SBC / revenue (%)
- 1.77
Management69
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 3/4 · First-half operating cash flow of $334.9 million covered $139.4 million of investing outflows and $83.2 million of dividends, while cash increased and the credit facility remained undrawn. Reported 2025 acquisition returns exceeded disclosed objectives. New initiative spending and deferred land-sale collections still require outcome validation; no exceptional long-term allocation record is established.
incentive alignment · 3/4 · The actual compensation program includes performance-based equity and extended vesting. Certified 2023–2025 awards linked earned shares to relative shareholder return and free cash flow per share, demonstrating implementation beyond stated intentions. Actual executive ownership and the full incentive-risk profile remain unestablished.
execution · 3/4 · Water price and volume growth, higher operating cash generation and reported acquisition returns demonstrate operating execution. Attribution to management is partly indirect because commodity conditions and customer development decisions also drive results. New data-center and power initiatives have not demonstrated comparable execution outcomes.
governance · 2/4 · Independent director sessions, actual meeting attendance and disclosed absence of compensation-committee insider relationships support functioning oversight. These process disclosures do not establish exceptional accountability. The proposed Texas conversion introduces potential shareholder-enforcement changes, including derivative-demand waiting requirements; adoption and resulting effects are not established.
Evidence
Organization and Description of Business Organization Texas Pacific Land Corporation (which, together with its subsidiaries as the context requires, may be referred to as “TPL,” the “Company,” “our,” “we,” or “us”) is a Delaware corporation and one of the largest land and royalty owners in the State of Texas with approximately 894,000 surface acres of land, principally concentrated in the Permian Basin.
Note 1, Organization and Description of Business · Filed 05/08/2026
3 Table of Contents Operations Revenues from the Land and Resource Management segment for the last three years were as follows (dollars presented in thousands): Years Ended December 31, 2025 2024 2023 Segment Revenue % of Total Consolidated Revenue Segment Revenue % of Total Consolidated Revenue Segment Revenue % of Total Consolidated Revenue Oil and gas royalties $ 411,677 52 % $ 373,331 53 % $ 357,394 57 % Easements and other surface-related income 78,230 10 % 63,074 9 % 67,905 11 % Land sales 819 — % 4,388 1 % 6,806 1 % Total Revenue – Land and Resource Management segment $ 490,726 62 % $ 440,793 63 % $ 432,105 69 % Oil and Gas Activity The table below provides financial and operational data by oil and gas royalty stream for the years ended December 31, 2025, 2024, and 2023: Years Ended December 31, 2025 2024 2023(2) Our share of production volumes (1): Oil (MBbls) 4,936 4,118 3,701 Natural gas (MMcf) 23,359 17,074 14,528 NGL (MBbls) 3,784 2,841 2,453 Equivalents (MBoe) 12,613 9,804 8,575 Equivalents per day (MBoe/d) 34.6 26.8 23.5 Oil and gas royalties (in thousands): Oil royalties $ 304,930 $ 298,074 $ 273,304 Natural gas royalties 37,432 18,512 29,915 NGL royalties 69,315 56,745 45,510 Total oil and gas royalties $ 411,677 $ 373,331 $ 348,729 Realized prices: Oil ($/Bbl) $ 64.69 $ 75.80 $ 77.33 Natural gas ($/Mcf) $ 1.73 $ 1.17 $ 2.23 NGL ($/Bbl) $ 19.81 $ 21.60 $ 20.05 Equivalents ($/Boe) $ 34.18 $ 39.87 $ 42.58 (1) Commonly used definitions in the oil and gas industry: “Bbl” represents one barrel of 42 U.S.
Business, Land and Resource Management revenue and royalty operating data · Filed 18/02/2026
Easements and other surface-related income was $78.2 million for the year ended December 31, 2025, an increase of 24.0% compared to $63.1 million for the year ended December 31, 2024.
MD&A, easements and other surface-related income · Filed 18/02/2026
Our extensive land holdings contain and are adjacent to extensive pore space, and, through various commercial agreements, we allow produced water operators to transport and dispose of produced water across our surface footprint.
MD&A, produced-water transport and disposal agreements · Filed 05/08/2026
We believe we have a competitive advantage in this market with our significant surface footprint and a large network of owned and operated water wells, storage ponds, recycling assets, and pipelines that can source and deliver water to customers throughout the Permian Basin.
MD&A, management's water competitive-advantage assertion · Filed 05/08/2026
As part of the agreement, we sold land for aggregate consideration of $42.5 million and acquired the exclusive right to source aquifer-derived water for the power generation facility and other associated aspects of the project.
Real Estate Activity, land-sale consideration and exclusive water sourcing right · Filed 05/08/2026
The increase in water sales was principally due to increases of 16.4% in water sales volumes and 15.5% in average realized pricing for the six months ended June 30, 2026 compared to the same period of 2025.
MD&A, first-half 2026 water volume and realized-pricing changes · Filed 05/08/2026
Six Months Ended June 30, 2026 2025 Water volumes (in MBbls): Water sales 134,090 115,159 Produced water royalties 857,787 722,205 Water volumes in barrels per day (in MBbls/d): Water sales 741 636 Produced water royalties 4,739 3,990 Water revenue (in thousands): Water sales $ 86,596 $ 64,390 Produced water royalties $ 70,604 $ 58,437 Easements and other surface-related income.
MD&A, first-half water volumes and revenue · Filed 05/08/2026
Although our revenues are directly and indirectly impacted by oil and natural gas prices, we believe our royalty interests (which require no capital expenditures or operating expense burden from us for well development), strong balance sheet, and liquidity position will help us navigate through potential commodity price volatility.
MD&A, royalty well-development cost obligations and management's resilience assessment · Filed 05/08/2026
As we are a significant land and royalty owner in the Permian Basin and not an oil and gas producer, our revenue is affected by the development decisions made by companies that operate in the areas where we own royalty interests and land.
MD&A, dependence on third-party development decisions · Filed 05/08/2026
Produced water royalties. Produced water royalties are received from the transfer or disposal of produced water on our land and are contractual and not paid as a matter of right.
MD&A, contractual basis of produced-water royalties · Filed 05/08/2026
However, indirectly, volumes may vary from period to period depending upon development activity levels and operator decisions involving recycling versus disposal of produced water.
MD&A, development and recycling effects on produced-water volumes · Filed 05/08/2026
Saltwater disposal availability varies throughout the Permian Basin depending on regulations, permitted injected rates, and the availability of pore space and infrastructure.
MD&A, disposal regulation, injection limits and infrastructure availability · Filed 05/08/2026
F-33 Table of Contents The following table presents changes in estimated PDP reserves and was prepared in accordance with the rules and regulations of the SEC: Crude Oil and Condensate (MBbls)(1) Natural Gas (MMcf)(1) Natural Gas Liquids (MBbls)(1) Total (MBoe)(1) Net PDP reserves at December 31, 2022 16,233 99,996 15,329 48,228 Extensions and discoveries 6,858 31,196 5,010 17,067 Acquisition of reserves 89 664 102 302 Production (3,701) (14,528) (2,453) (8,575) Net PDP reserves at December 31, 2023 19,479 117,328 17,988 57,022 Extensions and discoveries 5,587 23,483 3,824 13,324 Acquisition of reserves 2,378 13,317 2,042 6,639 Production (4,118) (17,074) (2,841) (9,804) Net PDP reserves at December 31, 2024 23,326 137,054 21,013 67,181 Extensions and discoveries 5,376 30,285 4,636 15,059 Acquisition of reserves 3,352 13,876 2,237 7,902 Production (4,936) (23,359) (3,784) (12,613) Revisions (2,927) (9,844) 154 (4,413) Net PDP reserves at December 31, 2025 24,191 148,012 24,256 73,116 Net PDP reserves December 31, 2022 16,233 99,996 15,329 48,228 December 31, 2023 19,479 117,328 17,988 57,022 December 31, 2024 23,326 137,054 21,013 67,181 December 31, 2025 24,191 148,012 24,256 73,116 (1)Commonly used definitions in the oil and gas industry not previously defined: MBbls represents one thousand barrels of crude oil, condensate or NGLs.
Supplemental oil and gas information, changes in estimated PDP reserves · Filed 18/02/2026
This agreement also provides for a put option held by the developer and a call option held by us regarding our repurchase of the land if certain development milestones are not achieved.
Real Estate Activity, development-contingent land repurchase options · Filed 05/08/2026
Furthermore, as discussed below, our desalination project could potentially provide an additional solution for produced water by reducing the amount of water required to be injected subsurface.
MD&A, prospective desalination project · Filed 05/08/2026
1 Table of Contents TEXAS PACIFIC LAND CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND TOTAL COMPREHENSIVE INCOME (in thousands, except shares and per share amounts) (Unaudited) Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Revenues: Oil and gas royalties $ 145,589 $ 95,006 $ 263,756 $ 206,251 Water sales 39,733 25,577 86,596 64,390 Produced water royalties 37,075 30,737 70,604 58,437 Easements and other surface-related income 23,662 36,223 40,977 54,448 Land sales — — 20,944 — Total revenues 246,059 187,543 482,877 383,526 Expenses: Salaries and related employee expenses 15,562 14,072 30,549 28,644 Water service-related expenses 11,570 8,451 25,857 19,577 General and administrative expenses 8,004 5,693 16,635 11,765 Depreciation, depletion and amortization 16,639 13,699 30,682 25,640 Ad valorem and other taxes 2,467 1,877 5,009 4,076 Total operating expenses 54,242 43,792 108,732 89,702 Operating income 191,817 143,751 374,145 293,824 Interest expense (973) — (1,965) — Other income, net 2,854 5,240 5,082 9,561 Income before income taxes 193,698 148,991 377,262 303,385 Income tax expense 39,768 32,851 80,430 66,593 Net income $ 153,930 $ 116,140 $ 296,832 $ 236,792 Other comprehensive loss — periodic pension costs, net of income taxes for the three and six months ended June 30, 2026 and 2025 of $96, $10, $191, $21, respectively (358) (39) (717) (78) Total comprehensive income $ 153,572 $ 116,101 $ 296,115 $ 236,714 Net income per share of common stock Basic $ 2.23 $ 1.68 $ 4.30 $ 3.43 Diluted $ 2.23 $ 1.68 $ 4.30 $ 3.43 Weighted average number of shares of common stock outstanding Basic 68,974,580 68,961,978 68,966,839 68,952,087 Diluted 69,034,580 69,040,740 69,019,380 69,026,862 Cash dividends per share of common stock $ 0.60 $ 0.53 $ 1.20 $ 1.06 See accompanying notes to condensed consolidated financial statements.
Condensed consolidated statements of income, first-half 2026 and comparative periods · Filed 05/08/2026
After the completion of our Corporate Reorganization, we received notice from a third party that it no longer intended to pay the ad valorem taxes related to such historical royalty interests.
Commitments and Contingencies, third-party refusal to continue royalty tax payments · Filed 18/02/2026
2 Table of Contents TEXAS PACIFIC LAND CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (Unaudited) Six Months Ended June 30, 2026 2025 Cash flows from operating activities: Net income $ 296,832 $ 236,792 Adjustments to reconcile net income to net cash provided by operating activities: Land sale with financing arrangement (20,944) — Depreciation, depletion and amortization 30,682 25,640 Share-based compensation 9,451 7,882 Deferred taxes 5,191 1,329 Other 111 — Changes in operating assets and liabilities: Operating assets, excluding income taxes (8,549) 8,154 Operating liabilities, excluding income taxes (6,549) (1,964) Income taxes payable 24,926 (207) Prepaid income taxes 3,716 — Cash provided by operating activities 334,867 277,626 Cash flows from investing activities: Purchases of fixed assets (29,201) (12,277) Acquisition of real estate (110,162) (4,505) Acquisition of royalty interests, net of post-close adjustments — (3,546) Post-close adjustment from seller related to prior year asset acquisition — 3,878 Cash used in investing activities (139,363) (16,450) Cash flows from financing activities: Dividends paid (83,183) (74,216) Shares exchanged for tax withholdings (9,113) (14,311) Cash settlement of common stock repurchases — (100) Cash used in financing activities (92,296) (88,627) Net increase in cash, cash equivalents and restricted cash 103,208 172,549 Cash, cash equivalents and restricted cash, beginning of period 145,404 371,381 Cash, cash equivalents and restricted cash, end of period $ 248,612 $ 543,930 Supplemental disclosure of cash flow information: Income taxes paid $ 46,406 $ 65,450 Interest paid $ 1,307 $ — Supplemental non-cash investing and financing information: (Decrease) increase in accounts payable related to purchases of fixed assets $ (1,360) $ 1,439 Accrued dividends on unvested stock awards $ (222) $ (411) Financing receivable from land sale $ 21,425 $ — See accompanying notes to condensed consolidated financial statements.
Condensed consolidated statements of cash flows, first-half 2026 · Filed 05/08/2026
The Credit Facility remains undrawn, and the Company is in compliance with all covenants under the Credit Facility as of June 30, 2026.
Liquidity and Capital Resources, undrawn credit facility and covenant compliance · Filed 05/08/2026
Capital Returns: For minerals/royalties, achieve 12% pre-tax cash flow yield for acquired minerals and royalties portfolio; for surface and water assets, achieve 8% ROIC for acquisitions closed since 2023 Royalties/minerals portfolio generated 16% pre-tax cash flow yield for 2025.
Executive compensation, acquisition return objectives and achieved royalty portfolio yield · Filed 25/09/2026
Surface/water acquisitions generated a 9% ROIC for 2025 including acquisitions closed since 2023.
Executive compensation, achieved surface and water acquisition ROIC · Filed 25/09/2026
The 2025 executive compensation program consisted principally of a salary, an annual cash incentive (sometimes referred to as awards under a non-equity incentive plan), and long-term share-based compensation as discussed below: Texas Pacific Land Corporation | Proxy Statement 75 TABLE OF CONTENTS EXECUTIVE OFFICER AND DIRECTOR COMPENSATION Key Compensation Component Purpose Philosophy Base Salary • Provide a competitive level of fixed compensation • Set at a competitive level annually by the Compensation Committee and the Board, as applicable • Based on evaluation of executive officers’ performance, contributions and competitive market data Annual Cash Incentive • Align executive officer pay with performance • Reward for achievement of annual goals, both financial and non-financial • Establish strategic priorities for the year through the strategic portion of the award • Individual target levels set at a competitive level based on competitive market data and executive officers’ contribution level • Payouts heavily influenced by performance against pre-set goals • Portion of award earned through achievements against strategic priorities Long-Term Incentives • Align executive pay with long-term stockholder value creation through share ownership • Encourage long-term retention through extended vesting periods • Tie executive pay outcomes to long-term performance through performance-based awards • Individual awards set at a competitive level based on competitive market data and executive officers’ contribution level • At least 50% of each executive officer’s awards are performance-based • Performance tied to long-term share price and financial performance, based on pre-set goals As part of its compensation program, TPL also maintains a qualified defined contribution plan, which is available to employees generally, including the Named Executive Officers.
Compensation Discussion and Analysis, actual 2025 compensation program structure · Filed 25/09/2026
2023-2025 Performance Period PSU Vestings Following the end of the 2023-2025 performance period, the Compensation Committee certified the results of the PSU awards granted to our Named Executive Officers in 2023.
2023–2025 performance-period PSU vestings, certification of results · Filed 25/09/2026
The results for each are presented in the following table: PSUs Threshold (25% Payout) Target (100% Payout) Maximum (200% Payout) Actual Results Percentage of Targeted Shares Earned RTSR PSUs 25th percentile 50th percentile 90th percentile 78th percentile 171% FCF PSUs(1) $12.78/share $17.22/share $21.67/share $20.06/share 164% (1) Share amounts reflect the three-for-one stock split effected on December 22, 2025.
2023–2025 performance-period PSU vestings, achieved results and shares earned · Filed 25/09/2026
The Board meets at least quarterly, and the independent directors serving on the Board meet in executive session (i.e., without the presence of any non-independent directors and management) immediately following regularly scheduled Board meetings.
Corporate Governance and Board Structure, independent director executive sessions · Filed 25/09/2026
All of the directors attended at least 75% of the total number of meetings held by the Board and of the committees on which they served during the Last Fiscal Year.
Corporate Governance and Board Structure, actual director attendance · Filed 25/09/2026
None of the persons who served on the Compensation Committee during the Last Fiscal Year is or has been an officer or employee of the Company, and none had any relationship with the Company or any of its subsidiaries during the Last Fiscal Year that would be required to be disclosed as a transaction with a related person.
Compensation Committee Interlocks and Insider Participation · Filed 18/02/2026
4 To approve the redomestication of the Company from Delaware to Texas by conversion.
Annual meeting proposals, proposed Texas redomestication · Filed 25/09/2026
A shareholder may not institute a derivative proceeding until the 91st day after the date a written demand is filed with the corporation stating with particularity the act, omission, or other matter that is the subject of the claim or challenge and requesting that the corporation take suitable action.
Proposed redomestication, comparison of derivative-proceeding requirements · Filed 25/09/2026
The consideration consisted of a nominal cash payment received at closing and annual payments due to us through 2046.
Real Estate Activity, nominal closing cash and annual payments through 2046 · Filed 05/08/2026
Produced water royalties are also fee based and not directly impacted by lower commodity prices.
MD&A, fee-based produced-water royalties · Filed 05/08/2026
The acquisitions included land in Shackelford and Jones Counties, Texas, in connection with our data center and power generation initiatives.
Real Estate Activity, acquisitions associated with data-center and power initiatives · Filed 05/08/2026
