TPL · Earnings call · 2026Q2T · Full report

Water Royalty Volume Growth

Texas Pacific Land Corp · 2026-08-05 · Importance 36 · Surprise 40

Produced water royalty volumes averaged 4.9 million barrels per day in the second quarter, up 6% sequentially and 15% year-over-year. Growth was driven by demand for TPL's in-basin and out-of-basin pore space. Existing contracts include price escalators, and management expects pore space to become more valuable over time. Transportation royalties are typically below pore-space injection royalties, so a shift in mix toward injection royalties could keep royalty revenue per barrel steady to increasing.

Key facts

• Water sales volumes were 663,000 barrels per day, a 19% decline sequentially and a 38% increase year-over-year.
• Total water production continues to climb and will continue to climb as TPL gets into some Tier 2 zones that have higher water cuts.
• Produced water royalty volumes were 4.9 million barrels per day during the quarter, which represents growth of 6% sequentially and 15% year-over-year.