Company Overview

Texas Pacific Land Corporation (TPL) is one of the largest landowners in the State of Texas, operating under two primary business segments: Land and Resource Management and Water Services and Operations. As of 2022, the corporation owned approximately 880,000 acres of land spread across 20 West Texas counties. Founded in 1888, Texas Pacific Land Corporation is headquartered in Dallas, Texas, and is the corporate successor to the Texas Pacific Land Trust, also formed in 1888.

Business Operations

The company's operations are divided into two key segments:

#### Land and Resource Management

This segment focuses on managing surface acres of land and oil and gas royalty interests within the prolific Permian Basin. It also engages in managing easements, which include rights for transporting oil, gas, and related hydrocarbons, as well as power line, utility, and subsurface wellbore easements. Furthermore, this segment leases its land for various industrial purposes, such as processing, storage, and compression facilities, and for constructing roads. It is also involved in the sale of raw materials like caliche and sand, and the direct sale of land parcels.

In terms of royalty interests, the company holds:

- A 1/128th nonparticipating perpetual oil and gas royalty interest (NPRI) under approximately 85,000 acres.

- A 1/16th NPRI under approximately 371,000 acres.

- Approximately 16,000 additional net royalty acres.

- In total, approximately 207,000 net royalty acres (NRA) located within the Permian Basin.

#### Water Services and Operations

The Water Services and Operations segment provides comprehensive water management solutions to operators in the Permian Basin. This includes crucial services such as water sourcing, produced-water treatment, infrastructure development, and disposal solutions. This segment also benefits from produced water royalties.

To bolster these services, in June 2017, TPL established Texas Pacific Water Resources, LLC, a wholly-owned subsidiary. This subsidiary was built with a team from EOG Resources and specializes in brackish water sourcing, water disposal, water recycling, and other water services critical for hydrocarbon extraction operations.

Revenue Streams

TPL's income is diversified, with approximately two-thirds of its revenue derived from oil and gas royalties. An additional 30% comes from its water services, specifically supplying and disposing of water used in the hydraulic fracturing of shale formations. This unique strategic position allows TPL to capitalize on both traditional energy extraction and the increasing demand for water management services within the energy sector.

Financial Performance and Market Position

#### Q2 2025 Results (as of August 2025)

- Net Income: $116.1 million (vs. $120.7 million in Q1 2025)

- Total Revenues: $187.5 million (vs. $196.0 million in Q1 2025)

- Average Realized Price: $32.94 per Boe (vs. $41.58 per Boe in Q1 2025)

- Share of Production: 33.2 thousand Boe per day (vs. 31.1 thousand Boe per day in Q1 2025)

#### Six-Month Performance (January-June 2025)

- Net Income: $236.8 million (vs. $229.0 million for Jan-June 2024)

- Total Revenues: $383.5 million (vs. $346.5 million for Jan-June 2024)

- Share of Production: 32.2 thousand Boe per day (vs. 24.9 thousand Boe per day for Jan-June 2024)

- Average Realized Price: $37.10 per Boe (vs. $42.07 per Boe for Jan-June 2024)

#### Full Year 2024 Performance

For the full year 2024, TPL achieved record-breaking performance across nearly all key metrics, including oil and gas royalty production, water sales volumes and revenues, produced water royalty volumes and revenues, net income, and free cash flow per share. Throughout 2024, the company invested over $400 million in accretive, high-quality royalty interests and surface assets, which provided an incremental growth tailwind.

- Share of Production: 26.8 thousand Boe per day (vs. 23.5 thousand Boe per day in 2023)

- Average Realized Price: $39.87 per Boe (vs. $42.58 per Boe in 2023)

Key Financial Metrics

- Q2 2025 Net Income: $116.1 million

- Q2 2025 Revenues: $187.5 million

- H1 2025 Net Income: $236.8 million

- H1 2025 Revenues: $383.5 million

- Full Year 2024 Production: 26.8 thousand Boe per day

- Dividend Per Share (Q3 2025): $1.60

Recent Developments and Growth Initiatives

#### Asset Acquisitions

In October 2024, TPL completed the acquisition of mineral interests across 7,490 net royalty acres, primarily located in the Midland Basin. The purchase price was $275.2 million, net of post-close adjustments, in an all-cash transaction.

#### Infrastructure Development

- In July 2025, construction commenced on a 10,000 barrel per day produced water desalination facility in Orla, Texas, with an estimated service date in late 2025.

- Construction has also begun on a sub-scale produced water desalination test facility, which remains on track for completion by mid-2025.

#### Current Operations Status (as of June 30, 2025)

- Estimated Net Wells Permitted: 6.0

- Estimated Net Wells Drilled but Uncompleted (DUCs): 11.1

- Estimated Net Wells Completed but Not Producing (CUPs): 5.1

- Total Net Wells (Permits, DUCs, CUPs): 22.2

- Net Producing Wells: 95.4

- Average Lateral Length of New Producing Wells (Q2 2025): Approximately 9,376 feet.

Dividend Policy

On August 5, 2025, the Company's Board of Directors declared a quarterly cash dividend of $1.60 per share. This dividend is payable on September 16, 2025, to stockholders of record as of the close of business on September 2, 2025.

Historical Context

Texas Pacific Land Holdings was established in 1888 following the bankruptcy of the Texas and Pacific Railway, serving as a mechanism to divest the railway's extensive land holdings. The advent of hydraulic fracturing and horizontal drilling in 2010 significantly unlocked the oil and gas potential within the Permian shale, an area where TPL held approximately 909,000 acres of land.

Consequently, the company's annual revenue saw substantial growth, rising from $66 million in 2016 to $451 million in 2021. In 2021, the company transitioned from a trust structure to a corporation, was subsequently renamed Texas Pacific Land Corporation, and appointed a formal board of directors to oversee its governance.

TPL's strategic position as one of Texas's largest landowners, combined with its diversified revenue streams from oil and gas royalties and essential water services, positions the company favorably to benefit from the continued development in the Permian Basin. The company remains committed to expanding its operations through strategic acquisitions and infrastructure development projects, aimed at capturing additional value from its vast land portfolio.