Texas Pacific Land Posts Record Revenue on Oil Royalties, Data-Center Land Sale
The land and royalty company reported $236.8 million in quarterly revenue, a 21% year-over-year increase driven by higher oil prices and a new data-center land transaction.
Texas Pacific Land Corp. (TPL) reported record first-quarter revenue of $236.8 million, a 21% increase from a year earlier, as higher realized oil prices and a new land sale tied to a data-center project offset a pullback in water sales. Net income also reached a record $142.9 million, or $2.07 a share, up 18% year-over-year.
The results marked an acceleration from the prior quarter, with revenue rising 12% sequentially from $211.6 million in the fourth quarter of 2025. The company's Land and Resource Management segment led the advance, with revenue climbing 35% sequentially to $153.6 million, bolstered by the $20.9 million land sale and a rebound in oil and gas royalties.
Oil and gas royalty revenue, the company's largest business line, totaled $118.2 million, up 22% from the prior quarter. The sequential gain was driven almost entirely by a jump in realized prices to $37.06 per barrel of oil equivalent, from $29.33 in the fourth quarter, while production held roughly flat at 37,100 Boe per day. On a year-over-year basis, royalty revenue rose 6%, as a 19% increase in production volumes to 37,100 Boe per day was partially offset by lower prices.
A new revenue stream emerged in the quarter: a $20.9 million land sale connected to a data-center and power-generation project, a transaction with no comparable in prior periods. The company separately announced a new agreement with Chevron to supply land and brackish water for Project Kilby, a large-scale power facility supporting a data center in Reeves County, Texas. The land sale was structured with a financing arrangement, which the company reflected as a new deduction in its Adjusted EBITDA reconciliation.
Water Services and Operations segment revenue fell 15% sequentially to $83.3 million, as water sales volumes declined to 73,700 barrels per day from 92,100 and pricing weakened. Despite the quarterly dip, water sales revenue was up 21% from a year earlier on both higher volumes and pricing, while produced water royalties also rose 21% year-over-year to $33.5 million.
Adjusted EBITDA reached $181.4 million, up 2% sequentially and 7% year-over-year. Free cash flow was $136.4 million, a 15% sequential increase but a 7% decline from the year-ago quarter. Total operating expenses fell 13% sequentially to $54.5 million, driven by lower depreciation, though they were up 19% from a year earlier.
The company's drilling activity continued to build, with net producing wells rising to 124.4 from 116.1 at the end of 2025. Wells in progress, including permits, drilled-but-uncompleted wells, and completed-but-unproduced wells, increased to 20.7 from 19.5, with completed-but-unproduced wells rising to 5.2 from 4.0, signaling near-term production additions.
Texas Pacific Land raised its quarterly dividend to $0.60 a share, a 12.5% increase from the $0.53 paid in the fourth quarter. The company also carried $992,000 in interest expense, up from $690,000 in the prior quarter, reflecting borrowings under the $500 million revolving credit facility entered in late 2025.