- Texas Pacific Land's (NYSE:TPL) Solid Earnings May Rest On Weak Foundations
May 14, 2026
Texas Pacific Land Corporation's (NYSE:TPL ) stock didn't jump after it announced some healthy earnings. We did some digging and believe investors may be worried about some underlying factors in the report.
We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.NYSE:TPL Earnings and Revenue History May 14th 2026
A Closer Look At Texas Pacific Land's Earnings
As finance nerds would already know, the accrual ratio from cashflow is a key measure for assessing how well a company's free cash flow (FCF) matches its profit. In plain english, this ratio subtracts FCF from net profit, and divides that number by the company's average operating assets over that period. You could think of the accrual ratio from cashflow as the 'non-FCF profit ratio'.
That means a negative accrual ratio is a good thing, because it shows that the company is bringing in more free cash flow than its profit would suggest. That is not intended to imply we should worry about a positive accrual ratio, but it's worth noting where the accrual ratio is rather high. That's because some academic studies have suggested that high accruals ratios tend to lead to lower profit or less profit growth.
For the year to March 2026, Texas Pacific Land had an accrual ratio of 0.45. That means it didn't generate anywhere near enough free cash flow to match its profit. Statistically speaking, that's a real negative for future earnings. To wit, it produced free cash flow of US$43m during the period, falling well short of its reported profit of US$503.6m. Texas Pacific Land's free cash flow actually declined over the last year, but it may bounce back next year, since free cash flow is often more volatile than accounting profits.
That might leave you wondering what analysts are forecasting in terms of future profitability. Luckily, you can click here to see an interactive graph depicting future profitability, based on their estimates.
Our Take On Texas Pacific Land's Profit Performance
As we discussed above, we think Texas Pacific Land's earnings were not supported by free cash flow, which might concern some investors. As a result, we think it may well be the case that Texas Pacific Land's underlying earnings power is lower than its statutory profit. But at least holders can take some solace from the 16% per annum growth in EPS for the last three. At the end of the day, it's essential to consider more than just the factors above, if you want to understand the company properly. So while earnings quality is important, it's equally important to consider the risks facing Texas Pacific Land at this point in time. To that end, you should learn about the 2 warning signs we've spotted with Texas Pacific Land (including 1 which is concerning).
Story Continues
Today we've zoomed in on a single data point to better understand the nature of Texas Pacific Land's profit. But there is always more to discover if you are capable of focussing your mind on minutiae. For example, many people consider a high return on equity as an indication of favorable business economics, while others like to 'follow the money' and search out stocks that insiders are buying. While it might take a little research on your behalf, you may find this free collection of companies boasting high return on equity, or this list of stocks with significant insider holdings to be useful.
Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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- 2 Unpopular Stocks That Should Get More Attention and 1 Facing Headwinds
May 14, 2026
Wall Street has issued downbeat forecasts for the stocks in this article. These predictions are rare - financial institutions typically hesitate to say bad things about a company because it can jeopardize their other revenue-generating business lines like M&A advisory.
At StockStory, we look beyond the headlines with our independent analysis to determine whether these bearish calls are justified. Keeping that in mind, here are two stocks where Wall Street’s pessimism is creating a buying opportunity and one where the skepticism is well-placed.
One Stock to Sell:
Polaris (PII)
Consensus Price Target: $68.33 (0.9% implied return)
Founded in 1954, Polaris (NYSE:PII) designs and manufactures high-performance off-road vehicles, snowmobiles, and motorcycles.
Why Should You Sell PII?
Products and services fail to spark excitement with consumers, as seen in its flat sales over the last five years Projected 3.2 percentage point decline in its free cash flow margin next year reflects the company’s plans to increase its investments to defend its market position Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
Polaris is trading at $67.75 per share, or 48.9x forward P/E. Read our free research report to see why you should think twice about including PII in your portfolio, it’s free.
Two Stocks to Buy:
Dycom (DY)
Consensus Price Target: $467.91 (7.8% implied return)
Working alongside some of the most popular mobile carriers in the world, Dycom (NYSE:DY) builds and maintains telecommunications infrastructure.
Why Will DY Beat the Market?
Annual revenue growth of 15.2% over the past two years was outstanding, reflecting market share gains this cycle Operating profits and efficiency rose over the last five years as it benefited from some fixed cost leverage Performance over the past two years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 21.1% outpaced its revenue gains
Dycom’s stock price of $433.96 implies a valuation ratio of 30x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
Texas Pacific Land (TPL)
Consensus Price Target: $445 (12.6% implied return)
One of America's largest private landowners with roughly 868,000 acres in the Permian Basin, Texas Pacific Land (NYSE:TPL) owns land in West Texas and earns revenue from oil and gas royalties, water services, and land leases.
Why Are We Bullish on TPL?
Annual revenue growth of 31.3% over the last ten years was superb and indicates its market share increased during this cycle Attractive asset base leads to wonderful unit economics and a best-in-class gross margin of 94.9% Strong free cash flow margin of 62.6% enables it to reinvest or return capital consistently
Story Continues
At $395.17 per share, Texas Pacific Land trades at 28.3x forward EV-to-EBITDA. Is now the right time to buy? See for yourself in our full research report, it’s free.
Stocks We Like Even More
WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don't just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.
But our AI platform says the party isn't over. Find out which 9 stocks made the cut this week - FREE. Get Our Top 9 Market-Beating Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
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- Is Texas Pacific Land Corporation (TPL) A Good Stock To Buy Now?
May 13, 2026
Is TPL a good stock to buy? We came across a bullish thesis on Texas Pacific Land Corporation on 41investments’s Substack. In this article, we will summarize the bulls’ thesis on TPL. Texas Pacific Land Corporation's share was trading at $432.83 as of May 4th. TPL’s trailing and forward P/E were 62.21 and 42.37 respectively according to Yahoo Finance.Jim Cramer on Enbridge (ENB): “I’m Not Going to Push Something at a 52-week High Before It Reports”
QiuJu Song/Shutterstock.com
Texas Pacific Land Corporation engages in the land and resource management, and water services and operations businesses. TPL is presented as a uniquely positioned land royalty company operating in the Permian Basin and represents one of the most compelling long-term compounders in the energy infrastructure space, with its asset base rooted in a historic railroad land grant that evolved into approximately 882,000 acres of highly strategic oil, gas, and water-rich land.
Read More: 15 AI Stocks That Are Quietly Making Investors Rich
Read More: Undervalued AI Stock Poised For Massive Gains: 10000% Upside Potential
This structure allows Texas Pacific Land to operate without the capital intensity of traditional E&P firms, instead monetizing production through royalties while benefiting from minimal operating costs and no debt, resulting in extraordinary profitability and free cash flow conversion that consistently ranks among the highest in the sector.
The company’s economics are further enhanced by its underappreciated water services segment, which supports fracking operations and is becoming increasingly important as drilling activity in the Permian Basin remains structurally significant, while TPL also benefits indirectly from higher oil prices that amplify royalty revenue per barrel.
Recent years have shown significant volatility, with 2024 delivering a 127% stock surge driven by water royalty optimism, followed by a 2025 correction of around 20% amid lower oil prices, declining rig counts, and stretched valuations, yet this volatility has not impaired the underlying asset strength or long-term cash generation potential.
The outlook for Texas Pacific Land has been further strengthened by emerging AI-driven demand, including partnerships linked to data center development in West Texas, where the company’s land, energy access, and critical water resources position it as a potential beneficiary of hyperscaler expansion and AI infrastructure buildout upside.
Previously, we covered a bullish thesis on Texas Pacific Land Corporation (TPL) by Six Bravo in December 2024, which highlighted strategic acreage acquisitions, strong water royalty growth, and S&P 500 inclusion-driven volatility. TPL’s stock price has appreciated by approximately 7.22% since our coverage. 41investments shares a similar view but emphasizes structural royalty-driven compounding and emerging AI data center demand as a key incremental upside driver.
Story Continues
Texas Pacific Land Corporation is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 30 hedge fund portfolios held TPL at the end of the fourth quarter which was 31 in the previous quarter. While we acknowledge the risk and potential of TPL as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than TPL and that has 10,000% upside potential, check out our report about this cheapest AI stock.
Disclosure: None.
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- This Inflation ETF Is Beating the Market. Here’s the Catch.
May 12, 2026
The Horizon Kinetics Inflation Beneficiaries ETF has surged this year as oil and commodity prices climbed. But a reversal in energy markets could hit the fund hard.
Continue Reading
- A Look Back at U.S. Shale E&P Stocks’ Q1 Earnings: Permian Resources (NYSE:PR) Vs The Rest Of The Pack
May 11, 2026
Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at Permian Resources (NYSE:PR) and the best and worst performers in the U.S. shale E&P industry.
US shale oil producers extract crude from tight rock formations using horizontal drilling and hydraulic fracturing (fracking) techniques, primarily in basins like the Permian, Bakken, and Eagle Ford. Tailwinds include short-cycle investment flexibility allowing rapid production adjustments, technological improvements enhancing well productivity, and proximity to refining and export infrastructure. Capital discipline has improved financial returns. Headwinds include commodity price sensitivity affecting drilling economics, accelerating well decline rates requiring continuous capital investment, and increasing regulatory and ESG scrutiny. Water usage, induced seismicity concerns, and evolving environmental regulations present ongoing operational challenges.
The 11 U.S. shale E&P stocks we track reported a satisfactory Q1. As a group, revenues beat analysts’ consensus estimates by 2.7%.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 5.6% since the latest earnings results.
Permian Resources (NYSE:PR)
Controlling roughly 450,000 net acres in America's most productive oil patch, Permian Resources (NYSE:PR) is an oil and natural gas producer that drills wells and extracts hydrocarbons from underground reservoirs in West Texas and New Mexico.
Permian Resources reported revenues of $1.39 billion, flat year on year. This print fell short of analysts’ expectations by 0.7%. Overall, it was a slower quarter for the company with a miss of analysts’ EBITDA estimates.Permian Resources Total Revenue
Unsurprisingly, the stock is down 5% since reporting and currently trades at $20.14.
Is now the time to buy Permian Resources? Access our full analysis of the earnings results here, it’s free.
Best Q1: Chord Energy (NASDAQ:CHRD)
Holding the largest acreage position in the Williston Basin, Chord Energy (NASDAQ:CHRD) drills for and produces crude oil, natural gas liquids, and natural gas in North Dakota's Williston Basin.
Chord Energy reported revenues of $1.67 billion, up 37.1% year on year, outperforming analysts’ expectations by 33.1%. The business had an exceptional quarter with a beat of analysts’ EPS and EBITDA estimates.Chord Energy Total Revenue
Chord Energy achieved the biggest analyst estimates beat among its peers. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 7.3% since reporting. It currently trades at $138.35.
Story Continues
Is now the time to buy Chord Energy? Access our full analysis of the earnings results here, it’s free.
Weakest Q1: Texas Pacific Land (NYSE:TPL)
One of America's largest private landowners with roughly 868,000 acres in the Permian Basin, Texas Pacific Land (NYSE:TPL) owns land in West Texas and earns revenue from oil and gas royalties, water services, and land leases.
Texas Pacific Land reported revenues of $236.8 million, up 20.8% year on year, falling short of analysts’ expectations by 0.8%. It was a softer quarter as it posted a significant miss of analysts’ EBITDA estimates.
As expected, the stock is down 4.8% since the results and currently trades at $399.70.
Read our full analysis of Texas Pacific Land’s results here.
Diamondback Energy (NASDAQ:FANG)
Sporting one of Wall Street's most memorable ticker symbols, Diamondback Energy (NASDAQ:FANG) drills for and produces oil and natural gas from underground rock formations in the Permian Basin of West Texas and New Mexico.
Diamondback Energy reported revenues of $4.24 billion, up 4.7% year on year. This print topped analysts’ expectations by 10.5%. Overall, it was an exceptional quarter as it also recorded a beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.
The stock is down 9.8% since reporting and currently trades at $192.75.
Read our full, actionable report on Diamondback Energy here, it’s free.
Cactus (NYSE:WHD)
Named for the spiky wellhead equipment that reminded founders of desert cacti, Cactus (NYSE:WHD) manufactures wellheads, valves, and spoolable pipes used in drilling and producing oil and gas wells.
Cactus reported revenues of $388.3 million, up 38.5% year on year. This number surpassed analysts’ expectations by 2.3%. It was a very strong quarter as it also produced a solid beat of analysts’ EBITDA estimates and a beat of analysts’ EPS estimates.
The stock is up 2.7% since reporting and currently trades at $55.97.
Read our full, actionable report on Cactus here, it’s free.
Market Update
Late in 2025 into early 2026, there was hand wringing around artificial intelligence. For software companies, the fear was that AI would erode pricing power and compress margins as new tools made it easier to replicate what once required expensive enterprise platforms. Crypto investors had their own version of the same anxiety: if AI agents could trade, allocate capital, and manage wallets autonomously, what exactly was the long-term value of today’s crypto infrastructure?
These concerns triggered a noticeable rotation away from these sectors and into safer havens. But markets rarely dwell on one narrative for long. Spring 2026 came, and the focus shifted abruptly from technological disruption to geopolitical risk. The US’ conflict with Iran became the dominant driver of market psychology, and when geopolitics takes center stage, the script changes quickly. Investors stop debating growth rates and start worrying about oil supply, inflation, and global stability.
Want to invest in winners with rock-solid fundamentals? Check out our Hidden Gem Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
StockStory’s analyst team — all seasoned professional investors — uses quantitative analysis and automation to deliver market-beating insights faster and with higher quality.
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- 8 out of 9 S&P 500 energy stocks beat EPS estimates this week
May 9, 2026
Eight out of the nine S&P 500 energy companies that reported their quarterly results this week surpassed earnings expectations, while one came below estimates. On the revenue front, seven companies beat Wall Street forecasts.
The State Street Energy Select Sector SPDR ETF (XLE [https://seekingalpha.com/symbol/XLE]) fell nearly 6% in the week, compared to the S&P 500’s (SP500 [https://seekingalpha.com/symbol/SP500#hasComeFromMpArticle=false#source=section%3Amain_content%7Cbutton%3Abody_link%7Cfirst_level_url%3Anews]) 2% drop.
Over the last three months, the energy sector has been highly volatile, with oil prices surging from ~$70 in January to above $110–$120 per barrel recently, driving strong earnings for oil companies.
The main driver has been geopolitics—especially the 2026 Iran conflict and disruptions in the Strait of Hormuz, causing supply shocks, price spikes, and risk premiums across energy stocks.
Below are the latest quarterly reports from top energy firms this week:
EOG Resources (EOG [https://seekingalpha.com/symbol/EOG]) reported first-quarter results [https://seekingalpha.com/news/4586820-eog-resources-beats-q1-estimates-but-tepid-outlook-weighs-on-shares] that exceeded Wall Street expectations, but flagged muted outlook and signs of limited near-term growth momentum.
Texas Pacific Land (TPL [https://seekingalpha.com/symbol/TPL]) posted [https://seekingalpha.com/news/4587545-texas-pacific-land-gaap-eps-of-2_07-beats-by-0_05-revenue-of-236_82m-misses-by-5_18m] first-quarter earnings beat but revenue fell short of estimates.
Diamondback Energy (FANG [https://seekingalpha.com/symbol/FANG]) reported top-line and bottom-line results beat [https://seekingalpha.com/news/4585109-diamondback-energy-non-gaap-eps-of-4_23-beats-by-0_48-revenue-of-4_24b-beats-by-310m] and announced a Q1 base dividend raise.
The Williams Companies (WMB [https://seekingalpha.com/symbol/WMB]) posted first-quarter earnings [https://seekingalpha.com/news/4585135-williams-non-gaap-eps-of-0_73-beats-by-0_11-revenue-of-3_03b-misses-by-240m] above estimates but quarterly revenue fell below estimates.
Occidental Petroleum (OXY [https://seekingalpha.com/symbol/OXY]) reported first-quarter results that topped Wall Street expectations [https://seekingalpha.com/news/4586427-occidental-petroleum-s-profit-surges-on-asset-sale-higher-oil-prices] on earnings but fell short on revenue, as the company benefited from higher oil prices and a major asset sale.
MORE ON STATE STREET® ENERGY SELECT SECTOR SPDR® ETF
* UAE Leaves OPEC: Here's What It Means For Oil Prices [https://seekingalpha.com/article/4895910-uae-leaves-opec-heres-what-it-means-for-oil-prices]
* Energy Crisis Blows Softer In U.S.: AI Infrastructure Trade Appears Intact [https://seekingalpha.com/article/4894748-energy-crisis-blow-softer-in-us-ai-infrastructure-trade-appears-intact]
* XOP: Re-Rating Non-Conflict Oil Stocks [https://seekingalpha.com/article/4894168-xop-re-rating-non-conflict-oil-stocks]
* Shell CEO flags ~1B barrel crude shortage, warns 'journey back will be a long one' [https://seekingalpha.com/news/4589514-shell-ceo-crude-shortage-warning]
* Crude oil gains after-hours as U.S., Iranian forces exchange fire in Persian Gulf [https://seekingalpha.com/news/4589354-crude-oil-gains-after-hours-as-us-iranian-forces-exchange-fire-in-persian-gulf]
- A Look At Texas Pacific Land’s Valuation After Recent Share Price Pullback
May 8, 2026
Find winning stocks in any market cycle. Join 7 million investors using Simply Wall St's investing ideas for FREE.
Recent share performance and business profile
Texas Pacific Land (TPL) has drawn investor attention after recent share price moves, with the stock showing a 4.9% decline over the past day and a 10.1% decline over the past week.
Over the past month the stock shows an 11.3% decline, while the past 3 months reflect a 9% gain and the year-to-date return stands at 33.9%. The latest close was US$399.08.
Texas Pacific Land Corporation operates through two main businesses: land and resource management, and water services and operations, primarily tied to the Permian Basin. This exposure can make its stock sensitive to energy sector trends.
See our latest analysis for Texas Pacific Land.
For context, the recent share price softness, including a 10.1% 7 day share price return decline and an 11.3% 1 month share price return decline, contrasts with a 33.9% year to date share price return and a 172.2% 3 year total shareholder return. This suggests longer term momentum has been strong even as shorter term sentiment has cooled.
If you are looking beyond Texas Pacific Land and want to see what else is moving in energy related infrastructure, it could be a good time to scan 36 power grid technology and infrastructure stocks
So, with Texas Pacific Land’s recent pullback, solid recent revenue and net income growth, and a share price sitting below the average analyst target, is there still an attractive entry point here, or is the market already pricing in future growth?
Most Popular Narrative: 10.4% Undervalued
Based on the most followed narrative, Texas Pacific Land's fair value of $445.50 sits above the last close at $399.08, framing the current pullback against a richer long term view.
Beneficial reuse and desalination initiatives, combined with advancing transmission and data center infrastructure in the Permian, provide exposure to future monetization avenues (industrial water supply, renewable energy, land leases), enhancing potential for diversified long-term revenue and asset value growth.
Read the complete narrative.
Curious what sits behind that valuation gap? Revenue growth assumptions, margin resilience and a premium future earnings multiple all play a part, but the exact mix may surprise you.
Result: Fair Value of $445.50 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, if Permian activity slows or ESG focused investors continue to step back from fossil fuel exposure, that could challenge the current undervalued narrative.
Story Continues
Find out about the key risks to this Texas Pacific Land narrative.
Another Angle on Valuation
Those fair value narratives say Texas Pacific Land looks 10.4% undervalued at $399.08, yet the current P/E of 54.6x is far above the estimated fair ratio of 25x, the US Oil and Gas industry at 13.9x, and peers at 10.8x. That kind of gap can mean real valuation risk if expectations ease, so which signal do you trust more right now?
For a closer look at how this gap could close over time, and what the numbers imply for future re rating risk or opportunity, it helps to unpack the valuation breakdown behind that fair ratio view, starting with See what the numbers say about this price — find out in our valuation breakdown.NYSE:TPL P/E Ratio as at May 2026
Next Steps
Mixed signals, with both risks and rewards in play, mean the next move is far from obvious. Take a closer look at the underlying data and sentiment, then weigh the 2 key rewards and 2 important warning signs
Looking for more investment ideas?
If Texas Pacific Land has your attention, do not stop here; broaden your watchlist with other focused ideas that could fit your style and goals.
Spot potential value opportunities early and size them up against the market using the 51 high quality undervalued stocks. Prioritize resilience and sleep easier at night by checking companies identified in the 72 resilient stocks with low risk scores. Hunt for future standouts before they hit the spotlight with the screener containing 23 high quality undiscovered gems.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include TPL.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
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- How Texas Pacific Land Could Be One Of The Market's Biggest Winners
May 7, 2026 · seekingalpha.com
Texas Pacific Land Corporation remains a high-conviction long-term Buy, despite volatility and a premium 53x blended P/E valuation. TPL's unique landowner model generates ~60% net income margins, minimal CapEx, and robust free cash flow, driven by oil/gas royalties and booming water businesses. Produced water and data center initiatives in the Permian Basin position TPL for multi-decade secular growth, with early-stage commercialization and partnerships underway.
- TPL expects 10,000 bpd produced water desalination facility to start flowing in coming weeks as it signs $43M land sale paid over 20 years
May 7, 2026
Earnings Call Insights: Texas Pacific Land Corporation (TPL) Q1 2026
MANAGEMENT VIEW
*
“TPL's first quarter 2026 marked a strong start to the year as TPL generated record quarterly total revenue, net income and free cash flow,” said Tyler Glover (President, CEO & Trustee), while noting that “oil and gas royalty production averaged approximately 37,100 barrels of oil equivalent per day, roughly flat sequentially, and up roughly 19% year-over-year.”
*
Glover tied near-term upside to commodity exposure, saying “with crude oil prices spiking dramatically over the last few months, TPL is poised to benefit directly through our oil and gas royalties,” and emphasized positioning, adding, “with our unhedged commodity position, we are fully capturing the direct upside from elevated oil prices.”
*
On “power generation and data centers,” Glover said, “during the quarter, we entered into an agreement to sell a small section of land for $43 million, which is structured into annual payments over a 20-year period,” and added, “we have entered into a separate commercial agreement to supply water for this same development,” while cautioning that “we are currently limited in providing additional details.”
*
On produced water desalination progress, Glover said, “our Phase 2b 10,000 barrel per day facility is nearly complete,” adding, “we expect to begin flowing inlet water barrels in the coming weeks,” and framed the objective as evaluating “whether produced water desalination can work economically at scale.”
*
Chris Steddum (Chief Financial Officer) reported, “consolidated revenues during the first quarter of 2026 were approximately $237 million,” adding that “consolidated adjusted EBITDA was $181 million” and “free cash flow was $136 million.”
OUTLOOK
*
Management did not provide formal revenue, EPS, or full-year guidance figures in this transcript; Glover instead described scenario-driven expectations, saying, “oil prices could very well remain elevated for quite some time,” and “if so, we would expect the industry to ramp rig and frac spread activity over the coming quarters.”
*
Glover positioned TPL’s commercial pipeline as active but not yet fully discloseable, stating, “we hope to provide additional information in the coming months,” and adding, “we hope to provide updates on other significant opportunities as we progress throughout the year.”
*
Relative to Q4 2025 commentary about being “hopeful to have multiple new updates to share before the end of the year,” the Q1 2026 message emphasized a first signed agreement and confidentiality limits, with Glover saying, “it is important to not overextrapolate deal structure and terms from any one deal.”
FINANCIAL RESULTS
*
Steddum said Q1 2026 results were “a quarterly all-time high” for revenue, specifying “approximately $237 million,” and described sequential and year-over-year changes, noting it was “a 12% sequential increase and a 21% increase over last year's first quarter.”
*
Steddum added profitability and cash generation details: “consolidated adjusted EBITDA was $181 million,” and “free cash flow was $136 million,” attributing royalty strength to “strong completion activity in the Delaware Basin by Occidental, BP and Devon” and “in the Midland Basin by Exxon.”
*
On commodity sensitivity (illustrative), Steddum said, “every $10 per barrel increase in oil realizations would equate to approximately $50 million,” and for NGLs, “every $5 per barrel increase to our NGL realization would equate to an additional $17 million of annual revenue,” while reiterating, “TPL remains fully unhedged.”
*
On activity visibility, Steddum said TPL ended the quarter with “20.7 net line-of-sight wells,” and added, “on a net normalized basis, after factoring in longer lateral lengths, our line of sight inventory is up 11% sequentially.”
Q&A
*
Derrick Whitfield, Texas Capital Securities: asked for color on the “land and water agreement with a gas power generation project,” including “counterparty and scale,” and whether “desalinated produced water could be part of the equation”; Tyler Glover (President, CEO & Trustee) responded, “this project is not Bolt related,” adding, “this is one that will likely be brackish water to start, but we are in talks around produced water and using desalinated water at some point on this project and others.”
*
Whitfield, Texas Capital Securities: asked how hyperscaler urgency has changed; Glover answered, “I think substantially, all of the grid power has been taken at this point,” adding developers are “now focusing on behind-the-meter gas-fired generation,” and said that higher water usage “will be much higher,” which he described as “a net benefit.”
*
Timothy Rezvan, KeyBanc: asked what TPL is looking for from the first desalination facility and how funding/partners could work; Robert Crain (Executive Vice President of Texas Pacific Water Resources LLC) said the goal is “research development at scale,” adding, “we want to see how this operates 24/7 day in, day out at scale,” and on structures, “there's a lot of structures that we're chasing and looking at.”
*
Rezvan, KeyBanc: pressed on lumpiness in SLEM and water revenues; Crain said produced water has “some accrual noise,” and suggested viewing it as “a 3-quarter trend look,” while Glover added, “SLEM can get pretty lumpy,” and “I just wouldn't read too much into any one quarter on the SLEM front.”
*
Hsu-Lei Huang, Tudor, Pickering, Holt & Co.: asked whether Bolt power gen is CCGT or modular; Glover replied, “still a little early to tell,” and “I wouldn't rule either out.” Huang also asked about the Permian data-center TAM and TPL’s potential share; Glover responded, “hard to say on total Permian outlook,” while adding, “we feel like multiple multi-gig energy campuses on our acreage are viable.”
SENTIMENT ANALYSIS
*
Analysts’ tone was slightly positive and inquisitive, with Whitfield opening, “Congrats on a really strong quarter across the board,” while repeatedly pressing for deal-specific detail (“any color… around the counterparty and scale”) and Rezvan focusing on uncertainty and variability (“There wasn't a lot of color on desalination in the release”).
*
Management’s tone was positive in prepared remarks and more guarded in Q&A on commercialization details; Glover said, “not a whole lot that we can say,” and emphasized uncertainty around macro response, noting “there is still a lot of industry uncertainty around the duration of this oil supply shock.”
*
Versus Q4 2025’s emphasis on broad momentum and “hopeful to have multiple new updates to share before the end of the year,” Q1 2026 sounded more concrete on an initial agreement but similarly confidentiality-bound, with Glover reiterating that “alignment across parties and final investment decisions will take time to unfold.”
QUARTER-OVER-QUARTER COMPARISON
*
Q1 2026 introduced a signed monetization step for the data center/power theme, with Glover disclosing “an agreement to sell a small section of land for $43 million… over a 20-year period,” whereas Q4 2025 emphasized the strategic “investment into Bolt Data & Energy” and the “right of first refusal to provide water to Bolt affiliated projects.”
*
Q1 2026 macro framing shifted to upside exposure from higher oil prices (“crude oil prices spiking dramatically”), while Q4 2025 highlighted resilience in “this relatively weak oil price environment.”
*
On desalination, Q1 2026 moved from “nearing completion” (Q4 2025) to “nearly complete” with near-term commissioning steps (“expect to begin flowing inlet water barrels in the coming weeks”).
RISKS AND CONCERNS
*
Glover described uncertainty around producer response, saying “we've only seen a marginal uptick in recent operator activity,” and cautioned “there is still a lot of industry uncertainty around the duration of this oil supply shock.”
*
On commercial initiatives, management flagged limited disclosure and timing risk: “the broader commercial details for the project are still being finalized,” and “alignment across parties and final investment decisions will take time to unfold.”
*
Crain and Glover both highlighted quarter-to-quarter noisiness in water and SLEM metrics, referencing “some accrual noise” in produced water and that “SLEM can get pretty lumpy.”
FINAL TAKEAWAY
Management described Q1 2026 as a record quarter financially, emphasized the earnings leverage of remaining “fully unhedged” amid higher oil prices, and pointed to a first signed data-center/power-related land sale ($43 million paid over 20 years) paired with a water supply agreement, while maintaining that project details remain confidential. Management also positioned the produced-water desalination program as nearing commissioning at the 10,000 barrel-per-day Phase 2b facility, with near-term flow expected “in the coming weeks,” and characterized both water and SLEM trends as inherently volatile quarter to quarter, encouraging a longer view as commercial negotiations and industry activity develop.
Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/tpl/earnings/transcripts]
MORE ON TEXAS PACIFIC LAND
* Texas Pacific Land Corporation (TPL) Q1 2026 Earnings Call Transcript [https://seekingalpha.com/article/4900405-texas-pacific-land-corporation-tpl-q1-2026-earnings-call-transcript]
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* Texas Pacific Land plunges after CEO of top shareholder Horizon Kinetics dies [https://seekingalpha.com/news/4573864-texas-pacific-land-plunges-after-ceo-of-top-shareholder-horizon-kinetics-dies]
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- TPL Q1 2026 Earnings Transcript
May 7, 2026
Image source: The Motley Fool.
DATE
May 7, 2026 at 10:30 a.m. ET
CALL PARTICIPANTS
Chief Executive Officer — Tyler Glover Chief Financial Officer — Chris Steddum Executive Vice President, Texas Pacific Water Resources — Robert Crain Vice President of Finance and Investor Relations — Shawn Amini
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Full Conference Call Transcript
Operator: Ladies and gentlemen, greetings, and welcome to the Texas Pacific Land Corporation First Quarter 2026 Earnings Conference Call. At this time, all participants are in listen-only mode. A brief question and answer session will follow the formal presentation. If anyone requires operator assistance during the conference, as a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Shawn Amini, VP of Finance and Investor Relations. Please go ahead.
Shawn Amini: Thank you for joining us today for Texas Pacific Land Corporation's first quarter 2026 earnings conference call. Yesterday afternoon, the company released its financial results and filed its Form 10-Q with the Securities and Exchange Commission. It is available on the investor section of the company's website at texaspacific.com. As a reminder, remarks made on today's conference call may include forward-looking statements. Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those discussed today. We do not undertake any obligation to update our forward-looking statements in light of new information or future events.
For a more detailed discussion of the factors that may affect the company's results, please refer to our earnings release for this quarter and to our recent SEC filings. During this call, we will also be discussing certain non-GAAP financial measures. More information and reconciliations about these non-GAAP financial measures are contained in our earnings release and SEC filings. Please also note, we may at times refer to our company by our stock ticker, TPL. This morning's conference call is hosted by Texas Pacific Land Corporation's Chief Executive Officer, Tyler Glover, and Texas Pacific Land Corporation's Chief Financial Officer, Chris Steddum, and Executive Vice President of Texas Pacific Water Resources, Robert Crain.
Management will make some prepared comments, after which we will open the call for questions. Now I will turn the call over to Ty.
Tyler Glover: Good morning, everyone, and thank you for joining us today. Texas Pacific Land Corporation's first quarter 2026 marked a strong start to the year as Texas Pacific Land Corporation generated record quarterly total revenue, net income, and free cash flow. Oil and gas royalty production averaged approximately 37,001 barrels of oil equivalent per day, roughly flat sequentially and up roughly 19% year over year. In our water segment, both water sales and produced water royalties are the second-best volume numbers in our history.
Story Continues
And now, with crude oil prices spiking dramatically over the last few months, Texas Pacific Land Corporation is poised to benefit directly through our oil and gas royalties and indirectly through our diversified exposure across surface and water. Regarding the macro impact for the Permian Basin overall, from our vantage point we have only seen a marginal uptick in recent operator activity. Although oil prices at these current levels would generally stimulate a more robust response, there is still a lot of industry uncertainty around the duration of this oil supply shock.
However, as this major supply disruption has persisted longer than initially anticipated, and given that global oil and product inventories are rapidly depleting, oil prices could very well remain elevated for quite some time even if the supply disruption were to be resolved in the near term. If so, we would expect the industry to ramp rig and frac spread activity over the coming quarters. With an immense, unmatched amount of undeveloped well locations, the Permian could readily support robust volume growth so long as the price signal persists. For Texas Pacific Land Corporation, we have always viewed a strong balance sheet as our hedge against low commodity prices.
Despite declining oil prices over the last three years, we maintained a strong net cash position throughout and did not need to hedge to protect the balance sheet. Today, with our unhedged commodity position, we are fully exposed to the direct upside from elevated oil prices. In addition to the upward-trending momentum in our legacy oil and gas business, we have also made tangible progress with our NextGen endeavors. Starting with power generation and data centers, during the quarter we entered into an agreement to sell a small section of land for $43 million, which is structured into annual payments over a 20-year period. We have entered into a separate commercial agreement to supply water for this same development.
Given the broader commercial details for the project are still being finalized, we are currently limited in providing additional details. We hope to provide additional information in the coming months. Speaking more broadly about our efforts on this front, our commercial activities continue to pick up speed. Virtually every major hyperscaler and AI lab are evaluating large-scale plans in Texas, and our sense is that urgency to lock up power and compute continues to rise. I would add that it is important to not over-extract deal structure and terms from any one deal. Virtually all of our ongoing discussions and negotiations have substantially different makeups.
Every developer needs something different, and depending on where in the region a development is planned for, Texas Pacific Land Corporation has varying capabilities for capturing commercial opportunities. For some deals, the land piece will be the primary value driver. For other deals, it may be water or aggregates. Given our scale, our unique capabilities across surface, water, and energy, and our relationships across multiple industries, we have significant flexibility to solve problems for developers. These projects often represent tens of billions of dollars of capital, so naturally, across parties, final investment decisions will take time to unfold.
It is clear to me that Texas will become a dominant global hub for large-scale power and compute over the short, medium, and long term. We are excited to get this first agreement, and we hope to provide updates on other significant opportunities as we progress throughout the year. On Texas Pacific Land Corporation's produced water desalination efforts, our Phase 2B 10,000-barrel-per-day facility is nearly complete. The refrigeration inspection is planned for later this month, and we expect to begin flowing inlet water barrels in the coming weeks. This project represents a pathway towards a meaningful solution for the Permian's growing produced water volumes.
This test facility will allow us to evaluate whether produced water desalination can work economically at scale while also providing an opportunity to empirically demonstrate commercial potential for waste heat capture, cooling colocation, and utilization of outlet freshwater and concentrated brine streams. Turning to our upcoming shareholder office and field tour visit in Midland on May 18, 2026, for those of you that have submitted an RSVP, you should have received an email a couple of weeks ago with event details and a schedule. If you have not received that email, please reach out to investor relations. We look forward to hosting and seeing everyone in Midland. On a final note, I wanted to comment on Murray Stall's passing.
Most of you know Murray's firm, Horizon Kinetics, along with its predecessors, has been Texas Pacific Land Corporation's largest shareholder for many decades. Murray himself has been a tremendous longtime advocate for Texas Pacific Land Corporation. He believed in the company while it was still a thinly traded, little-known trust that owned royalties and surface in West Texas. Murray understood the virtues of real property combined with patience, and he was a rare combination of an independent thinker and dedicated practitioner.
Over the years, as horizontal drilling and fracking began to unlock the latent potential of West Texas land, and as our commercial efforts expanded, Texas Pacific Land Corporation grew to become one of the largest publicly traded energy companies in the world. Through it all, as Texas Pacific Land Corporation's share price began to reflect the immense value of our assets, Murray's and Horizon Kinetics' conviction and devotion to Texas Pacific Land Corporation remained unrivaled. While other shareholders would come and go as our share price rose and fell, Murray and Horizon steadfastly remained our largest owner and our biggest fan. Despite these recent tragic events, I am confident that Murray's legacy will live on.
Over the years, we have also gotten to know many of Murray's colleagues at Horizon Kinetics who share his principles and investment philosophy. It is plainly obvious how much Murray is revered and respected by his colleagues. We continue to maintain a close relationship with Horizon Kinetics, and we believe that our combined ongoing stewardship will allow Texas Pacific Land Corporation to attain the full potential Murray envisioned. On behalf of Texas Pacific Land Corporation, I offer our condolences to Murray's colleagues, friends, and family. And with that, I will hand over the call to Chris.
Chris Steddum: Thanks, Ty. Consolidated revenues during the first quarter of 2026 were approximately $237 million. This represents a quarterly all-time high as well as a 12% sequential increase and a 21% increase over last year's first quarter. Consolidated adjusted EBITDA was $181 million, which was up 2% sequentially and 7% over last year. Free cash flow was $136 million, which was up 15% sequentially and up 8% over last year. The continued strong performance of our royalties position was primarily driven by strong completion activity in the Delaware Basin by Occidental, BP, and Devon in Loving and northern Reeves counties, and in the Midland Basin by Exxon in Martin County.
With the high volatility and uncertainty related to global oil prices, I would like to provide some color regarding our commodity price sensitivities. As Ty mentioned earlier, Texas Pacific Land Corporation remains fully unhedged. Using our royalty production volumes for fiscal year 2025 as an illustrative guide, roughly 5 million barrels of annual oil production means that every $10 per barrel increase in oil realizations would equate to approximately $50 million. Our oil price realization last year averaged $65 per barrel. For natural gas liquids, we received production volumes of roughly 3.8 million barrels, which means every $5 per barrel increase to our NGL realization would equate to an additional $17 million of annual revenue.
Moving to our well inventory, as of quarter end, Texas Pacific Land Corporation had 5.8 net permitted wells, 9.6 net drilled but uncompleted wells, or commonly referred to as DUCs, and 5.2 net completed but not producing wells. That amounts to 20.7 net line-of-sight wells, which represents a 6% sequential increase. We continue to see operators push longer laterals, with our new permits and new spuds both having an average lateral length in excess of 13,000 feet. On a net normalized basis, after factoring in longer lateral lengths, our line-of-sight inventory is up 11% sequentially. We continue to see strong permitting and drilling activity across our Delaware and Midland positions. And with that, operator, we will now take questions.
Operator: Thank you. Ladies and gentlemen, we will now begin the question and answer session. To ask a question, please press star and 1 on your telephone keypad. You may press star and 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key.
Operator: We will wait for a moment while we poll for questions. We will take the first question from the line of Derrick Whitfield from Texas Capital. Please go ahead.
Derrick Whitfield: Good morning, all, and congrats on a really strong quarter across the board. And also, Ty, thanks for your comments on Murray and Horizon, as I know many of your investors will appreciate that. Starting with, I guess, first, the land and water agreement with a gas power generation project. While I realize you may be limited in what you can say this morning, any color that you can paint around the kind of counterparty and scale of this development? It would seem to us it is safe to assume that it is not BOLT given the timeline of the development.
And I would also love your thoughts on whether desalinated produced water could be part of the equation for the data center.
Tyler Glover: Thanks, Derrick. Not a whole lot that we can say beyond what we put in the release and what I said in the prepared remarks. But this project is not BOLT-related. We have several projects that we are working with BOLT on, but we also have several that are not BOLT-related. I cannot comment on the size or the counterparty. This is one that will likely use brackish water to start, but we are in talks around produced water and using desalinated water at some point on this project and others.
Derrick Whitfield: Great. And maybe just shifting back to the 30,000-foot level, it seems in your messaging that there is certainly a heightened urgency year over year among the hyperscalers. Could you help frame how that opportunity has changed and what it can mean for Texas Pacific Land Corporation really above and beyond today's announcement?
Tyler Glover: I think speed to power has been the key to these projects all along. Substantially all of the grid power has been taken at this point, and I think a lot of these hyperscalers and developers are now focusing on behind-the-meter gas power generation. That makes a lot of our acreage more viable. And I think the water usage, when you are talking about a gas-fired power plant colocated with a data center, will be much higher. We see that as a net benefit, not only from a revenue standpoint, but also in unlocking additional acreage for Texas Pacific Land Corporation overall.
Operator: Thank you. We will take the next question from the line of Timothy Rezvan from KeyBanc Capital Markets. Please go ahead.
Timothy Rezvan: Good morning, folks, and thank you for taking our questions. There was not a lot of color on the desalination release. I appreciate your comments at the start of the call here. I was hoping to get a bigger picture overview of where you are going. You have given some parameters on OpEx and CapEx around a theoretical 100,000-barrel-per-day facility. So what exactly are you looking for as you start up this first facility to assess the feasibility of moving forward? And then, I know you need to take a first step before you take a second step, but how would you think about funding projects? I believe you talked about like a $100 million CapEx per 100,000-barrel-per-day facility.
Are there discussions going on about a potential partner to help defray those costs? Thanks.
Robert Crain: Yeah, sure. This is Robert. Thanks for the question. I will start with what the goals of the facility are, and I think we have said them for a while. We call this research and development at scale. We knew the industry had to move from pilot phasing to something that we would call commercial sizing at the smallest scale, and from the industry perspective, that is usually 10,000 barrels a day. So strictly from a functional aspect, before we get into colocation, we want to see how this operates 24/7, day in and day out, at scale. That is really going to prove the economic viability strictly from an upstream market.
Now, when we look at colocation, when you start combining these desal facilities with natural gas generation and waste heat capture colocation, yes, there is great benefit for the hyperscalers from a sustainability standpoint. But also, we have to look at the colocation piece for everything we can do to lessen that upstream cost to the operator to make these commercial. We believe in desal strictly from a need from the upstream perspective, minus what we see for colocation benefit. To be determined on what commercial looks like—there are a lot of structures that we are evaluating. Some focus just on that upstream, and then the benefit of colocation as well.
Timothy Rezvan: Okay. I guess we will have to stay tuned throughout the year. And then, as my follow-up, touching on the legacy segments, we saw a step down in revenues in SLEM and in the Water segments from record high levels. If you strip out that one-time land revenue, it is almost flattish quarter over quarter. As we look at the trends here, would you say that 2025 was an upside aberration, or do you think the first quarter was a little bit low? And where I am going with this is, how should we think about the revenue trend across these legacy segments throughout this year, given the volatility in the last couple of quarters? Thanks.
Tyler Glover: I can touch on SLEM, but Robert can start with water.
Robert Crain: On water, when you look at Q4, for the produced segment you have some accrual noise in there. But really, when you look at produced, you have to look at it more as a three-quarter trend. When you start looking at that three-quarter trend, we think that is much more reflective of the contractual and functional nature of what we have been doing to drive volumes. We are still very bullish on the produced water space. You are going to see some noise in activity levels and movement of volumes. You are going to see some accrual noise.
Again, when you look at that kind of three-quarter trend, that is where we see it, and we still see excitement in the produced water space.
Tyler Glover: And I would just add, on the SLEM front, I would not read too much into any single quarter. SLEM can get pretty lumpy. We may have a few big infrastructure projects hit within a quarter, and it was pretty strong last year with some of the gas pipe buildout that we were seeing. So again, I would not read too much into any one quarter on the SLEM front.
Operator: Thank you. We will take the next question from the line of Oliver Wong from TPH and Company. Please go ahead.
Oliver Wong: Good morning, Ty and team, and thanks for taking our questions. For my first question, I was wondering if there is any color on which direction the BOLT partnership is headed from a power generation source perspective. Would the initial phase be going down the path of a CCGT-type infrastructure, or are you thinking about something that could be more modular based? And for my second question, given all the conversations that you are having, looking out over the next five or so years, what do you think the total gigawatts deployed to data centers in the Permian might be, or asked another way, where do you see the TAM of the market potentially headed?
And what type of market share could Texas Pacific Land Corporation grab given your land and water infrastructure footprint?
Tyler Glover: It is still a little early to tell. We are looking at both options on a couple of different projects, depending on end-user design. I would not rule either out. On the broader outlook, it is hard to say on a total Permian basis. For us, we feel like multiple multi-gigawatt energy campuses on our acreage are viable, and that is definitely the goal. We continue to be very pleased with our progress on that front and very excited about the opportunities.
Operator: Thank you. Ladies and gentlemen, with that, we conclude the question and answer session and also conclude today's conference call of Texas Pacific Land Corporation. Thank you for your participation. You may now disconnect your line.
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