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Texas Pacific Land Corporation owns land and oil and gas royalty interests concentrated in the Permian Basin. Oil and gas operators pay it royalties on production covered by those interests, providing most of its revenue. It does not drill or produce oil and gas itself, and its royalty interests require no spending on well development or operation. Companies also pay to use or cross its land for pipelines, power lines and facilities supporting oil and gas operations.
Water is another substantial business. Its subsidiary Texas Pacific Water Resources LLC sells sourced and treated water to oil and gas operators for activities such as drilling and well completion. It also receives contractual royalties when other companies transfer or dispose of produced water—the water brought to the surface during oil and gas production—on its land. Texas Pacific Land does not operate the saltwater disposal wells itself.
The business depends on oil and gas prices and on operators’ decisions about drilling, investment and production. A small group of customers supplies a substantial share of revenue, reflecting the concentration of its land and rights in the Permian Basin. Water-use rules and restrictions on wastewater injection also constrain the water business; Texas regulators have restricted some disposal wells in response to increased earthquake activity.
The risk section is the longest, dullest part of the filing. This keeps only what can really hurt you: where it hits, how hard, when it plays out.
Every company claims an edge. Each one is checked against hard numbers like margins and returns: which hold, and which line gives way first.
LandBridge Company LLC and Texas Pacific Land earn water sales, land-use fees and royalties from neighboring Permian acreage, with shared revenue and reciprocal land-crossing rights in their Stateline area. Watch LandBridge’s water sales to producers within Stateline: that revenue is shared with Texas Pacific Land.
Viper Energy, Inc. shares Texas Pacific Land’s exposure to Permian oil and gas prices and well operators’ production decisions: both collect mineral royalties while operators pay to develop and run the wells. Viper’s royalty production offers a read on the production side of Texas Pacific Land’s royalty income, not its water or land-use business.
EagleRock Land, LLC competes with Texas Pacific Land for Permian operators’ spending on water, land access and construction materials, and both earn royalties from handling water that comes up with oil and gas. EagleRock’s revenue from that water handling is a useful comparison for Texas Pacific Land’s produced-water royalties.
WaterBridge Infrastructure LLC pays Texas Pacific Land royalties and revenue shares for using its land for water pipelines and handling facilities, while charging oil and gas producers to collect, move and handle water from their wells. Watch WaterBridge’s Delaware Basin water volumes for a read on the activity behind Texas Pacific Land’s produced-water royalties.
Permian Resources Corporation sells oil and gas from the Delaware Basin, where producers’ output and development spending underpin Texas Pacific Land’s royalties, water sales and land-use income. Its drilling plans and production provide a basin-level read on those drivers, rather than evidence of payments directly to Texas Pacific Land.
MATADOR RESOURCES COMPANY’s Delaware Basin oil and gas production and water-handling services track the activity that generates Texas Pacific Land’s royalties and water revenue; Matador serves both its own wells and third-party producers. Its Delaware drilling and completion spending is worth watching for the water demand associated with developing wells.
Diamondback Energy, Inc.’s Permian oil and gas production shares the price and development cycle behind Texas Pacific Land’s royalties, water revenue and land-use fees. Diamondback’s control over development pace makes its drilling plans useful to watch for changes in basin water and infrastructure demand.
ConocoPhillips’s large Permian oil-producing business shares the oil-price and operator-investment cycle that drives Texas Pacific Land’s royalties and demand for use of its land.
EOG Resources, Inc.’s substantial Delaware Basin oil and gas operations participate in the same drilling and production cycle that supports Texas Pacific Land’s royalty income and water business.
Targa Resources collects and processes natural gas in the Permian Basin, so its business depends on the production growth that also generates Texas Pacific Land’s oil and gas royalties and water activity.
EIA Crude Oil Stocks Change (Oct/16)
Texas Pacific Land earns oil and gas royalties tied to market prices and provides water services to Permian operators, so US crude and gasoline stocks—which show how much oil and fuel is stored—can affect royalty income and demand for its water services.
A draw in crude and gasoline stocks points to tighter supply, which can support oil prices and operators’ activity, helping Texas Pacific Land’s royalties and water-service demand; a build points to looser supply and can weigh on both.
EagleRock Land, LLC earningsEROK
EagleRock Land, LLC's report will show how operators’ spending and activity in water handling are changing, a useful comparison for Texas Pacific Land’s produced-water royalties.
Compare EagleRock Land, LLC’s water-handling revenue with Texas Pacific Land’s produced-water royalties. Growth at EagleRock would point to firmer water-handling activity and provide a stronger market read-through for Texas Pacific Land; a decline would point to softer activity. Their land and contracts differ, however, so this is a signal about the market, not proof that Texas Pacific Land’s revenue will move in step.
Viper Energy, Inc. earningsVNOM
Viper Energy’s report will show production behind its mineral royalties, offering a read on the output that drives Texas Pacific Land’s oil and gas royalties.
Check whether Viper Energy’s royalty production is rising, and compare it with Texas Pacific Land’s oil and gas production. Higher Viper output means wells on its acreage are producing more, a stronger reference point for the production that supports Texas Pacific Land’s royalties; falling output signals weaker support. Their acreage and royalty interests differ, so Viper is a read on well production, not a substitute for Texas Pacific Land’s own results.
Diamondback Energy, Inc. earningsFANG
Diamondback Energy’s report will show how its Permian production and development plans are changing, offering clues to the activity behind Texas Pacific Land’s royalties and demand for water and land use.
Read Diamondback Energy’s Permian production alongside its development plans. Strong output and continued development would show that operator activity is holding up, supporting the activity behind Texas Pacific Land’s royalties and demand for water and land use. If development plans weaken while current output remains steady, demand for water and infrastructure from new wells could ease. This is a read on basin activity, not a direct disclosure of Texas Pacific Land’s revenue.
Texas Pacific Land Corporation earningsThis company
Texas Pacific Land's report will show how oil and gas production and prices shape royalty income, and whether water sales and handling volumes keep bringing in revenue.
Read oil and gas royalty revenue alongside production and realized prices: if higher production offsets lower prices, operators’ output is supporting royalty income; if production weakens, falling prices are harder to offset. Then pair water-sales revenue with its volume and pricing, and produced-water royalties with handling volumes. Growth in water revenue alongside higher sales and handling volumes would show that operators are buying more water services and producing more water to handle; weakness in those measures would point to less support for water growth. The two segments’ revenue and net income show whether that growth is reaching profit.
LandBridge Corporation earningsLB
LandBridge’s report will show whether water sales in the shared Stateline area are growing or shrinking, activity from which Texas Pacific Land shares revenue.
Focus on LandBridge’s water-sales revenue in the Stateline area. Growth would mean more water business in the shared area and a stronger activity base for the revenue Texas Pacific Land shares; a decline would mean less support from that activity. The figure covers this shared area, not all of Texas Pacific Land’s water business, and does not by itself show how much revenue Texas Pacific Land receives.
WaterBridge Infrastructure LLC earningsWBI
WaterBridge Infrastructure LLC’s report will show how its Delaware Basin water volumes are changing, activity tied to the royalties and revenue shares it pays Texas Pacific Land.
Look at WaterBridge Infrastructure LLC’s Delaware Basin water volumes. Rising volumes mean more water for it to collect, move and handle for operators, strengthening the activity behind the royalties and revenue shares it pays Texas Pacific Land for using its land; falling volumes point to less activity on that path. Contract terms and other business also affect what Texas Pacific Land receives, so volume is not a direct measure of its payment.
