Texas Pacific Land Corporation

Record quarter across the core model (good surprise) - TPL reported all-time high quarterly total revenue, net income, and free cash flow for the 3rd consecutive quarter. - Consolidated revenue: ~$273M, +11% sequential and +35% YoY. - Adjusted EBITDA: $238M, +11% sequential, +37% YoY; margin ~87%. - Free cash flow: $170M, +10% sequential, +39% YoY. - Net income: $167M ( $2.42 diluted EPS, +38% YoY). - Investor takeaway: strong operating leverage and cash generation remain intact.

Energy royalty performance strong—oil power + gas/basis dynamics improved (good) - Oil production: 17.1k bpd (quarterly record) and total daily production: 42.3k boe/d (record). - Management emphasized they remain fully unhedged, so elevated oil prices are captured directly (oil supported by persistence of Middle East conflict). - Natural gas realization improved sharply: from $0.40/Mcf (Q2) to $2.40/Mcf (Q3), attributed to pipeline capacity helping reduce in-basin glut/basis weakness. - Outlook expectation: with new Permian egress capacity expanding, management is optimistic that negative in-basin pricing and wide basis are behind them, supporting steadier royalty economics.

Permian activity supports the next 1–2 quarters—despite lower near-term well inventory (mixed/constructive) - Well inventory at quarter end: 5.7 net permitted wells, 8.6 net DUCs, 2.5 net CUPs (16.8 net line-of-sight). - Inventory has declined, explained by operators drawing down DUCs/CUPs early to place wells into production while rigs dropped—then bids/rig additions started to rise in Q3. - Forecast/expectations from management: - As rigs and frac spreads rise, DUC drawdown should level off. - They believe the Permian is still on a path to another oil production record in 2026 and increasingly likely a 2027 record. - Near-term base-business expectation: improved permitting/robust completion schedule—Q4 to be stronger than Q3 across legacy segments.