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What changed in Texas Pacific Land Corporation's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Texas Pacific Land Corporation's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+395 added−297 removedSource: 10-K (2026-02-18) vs 10-K (2025-02-19)

Top changes in Texas Pacific Land Corporation's 2025 10-K

395 paragraphs added · 297 removed · 244 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

129 edited+40 added−15 removed86 unchanged
Biggest changeInc/(Loss) Retained Earnings Total Equity Shares Amount Balances as of January 1, 2022 23,234,085 $ 78 $ (15,417) $ 28 $ (1,007) $ 668,029 $ 651,711 Net income — — — — — 446,362 446,362 Repurchases of common stock (146,877) — (87,900) — — — (87,900) Regular dividends paid and accrued — $4.00 per share of common stock — — — — — (92,737) (92,737) Special dividends paid and accrued — $6.67 per share of common stock — — — — — (154,742) (154,742) Share-based compensation, net of forfeitures 2,097 — 940 8,265 — (773) 8,432 Shares exchanged for tax withholdings (2,268) — (1,762) — — — (1,762) Periodic pension costs, net of income taxes of $940 — — — — 3,523 — 3,523 Balances as of December 31, 2022 23,087,037 78 (104,139) 8,293 2,516 866,139 772,887 Net income — — — — — 405,645 405,645 Repurchases of common stock and related excise taxes (82,857) — (42,801) — — — (42,801) Regular dividends paid and accrued — $4.33 per share of common stock — — — — — (99,972) (99,972) Share-based compensation, net of forfeitures 6,996 — 4,006 6,320 — (140) 10,186 Shares exchanged for tax withholdings (3,495) — (2,064) — — — (2,064) Periodic pension costs, net of income taxes of $184 — — — — (685) — (685) Balances as of December 31, 2023 23,007,681 78 (144,998) 14,613 1,831 1,171,672 1,043,196 Net income — — — — — 453,960 453,960 Issuance of common stock related to stock split — 153 — (153) — — — Repurchases of common stock and related excise taxes (42,902) — (29,350) — — — (29,350) Regular dividends paid and accrued — $5.11 per share of common stock — — — — — (117,474) (117,474) Special dividends paid and accrued — $10.00 per share of common stock — — — — — (229,834) (229,834) Share-based compensation, net of forfeitures 9,972 — 7,128 5,440 — (730) 11,838 Shares exchanged for tax withholdings (2,948) — (1,623) — — — (1,623) Periodic pension costs, net of income taxes of $301 — — — — 1,752 — 1,752 Balances as of December 31, 2024 22,971,803 $ 231 $ (168,843) $ 19,900 $ 3,583 $ 1,277,594 $ 1,132,465 See accompanying notes to consolidated financial statements.
Biggest changeInc/(Loss) Retained Earnings Total Equity Shares Amount Balances as of January 1, 2023 69,261,111 $ 78 $ (104,139) $ 8,293 $ 2,516 $ 866,139 $ 772,887 Net income — — — — — 405,645 405,645 Repurchases of common stock and related excise taxes (248,571) — (42,801) — — — (42,801) Regular dividends paid and accrued — $1.44 per share of common stock — — — — — (99,972) (99,972) Share-based compensation, net of forfeitures 20,988 — 4,006 6,320 — (140) 10,186 Shares exchanged for tax withholdings (10,485) — (2,064) — — — (2,064) Periodic pension costs, net of income taxes of $184 — — — — (685) — (685) Balances as of December 31, 2023 69,023,043 78 (144,998) 14,613 1,831 1,171,672 1,043,196 Net income — — — — — 453,960 453,960 Issuance of common stock related to stock split — 153 — (153) — — — Repurchases of common stock and related excise taxes (128,706) — (29,350) — — — (29,350) Regular dividends paid and accrued — $1.70 per share of common stock — — — — — (117,474) (117,474) Special dividends paid and accrued — $3.33 per share of common stock — — — — — (229,834) (229,834) Share-based compensation, net of forfeitures 29,916 — 7,128 5,440 — (730) 11,838 Shares exchanged for tax withholdings (8,844) — (1,623) — — — (1,623) Periodic pension costs, net of income taxes of $301 — — — — 1,752 — 1,752 Balances as of December 31, 2024 68,915,409 231 (168,843) 19,900 3,583 1,277,594 1,132,465 Net income — — — — — 481,376 481,376 Issuance of common stock related to stock split — 460 — (460) — — — Repurchases of common stock and related excise taxes (27,000) — (8,363) — — — (8,363) Regular dividends paid and accrued — $2.13 per share of common stock — — — — — (147,798) (147,798) Share-based compensation, net of forfeitures 82,833 — 40,759 (9,534) — (15,770) 15,455 Shares exchanged for tax withholdings (33,012) — (14,795) — — — (14,795) Periodic pension costs, net of income taxes of $151 — — — — 567 — 567 Balances as of December 31, 2025 68,938,230 $ 691 $ (151,242) $ 9,906 $ 4,150 $ 1,595,402 $ 1,458,907 See accompanying notes to consolidated financial statements.
Concentrations of Credit Risk We invest our cash and cash equivalents (which include U.S. Treasury bills, money market funds, and commercial paper with maturities of three months or less) among three major financial institutions in an attempt to minimize exposure to risk from any one of these entities.
Concentrations of Credit Risk We invest our cash and cash equivalents (which include U.S. Treasury bills, money market funds, and commercial paper with maturities of three months or less) among major financial institutions in an attempt to minimize exposure to risk from any one of these entities.
The Acquired Assets generate revenue streams across water sales, produced water royalties, and SLEM revenue, and provide additional commercial growth opportunities for the Company to expand water sourcing and produced water opportunities to both new and existing customers. The Acquired Assets are located in the Midland Basin.
The Acquired Assets generate revenue streams across water sales, produced water royalties, and SLEM, and provide additional commercial growth opportunities for the Company to expand water sourcing and produced water opportunities to both new and existing customers. The Acquired Assets are located in the Midland Basin.
An estimate of fair value would also take into account, among other things, the recovery of reserves not presently classified as proved, anticipated future changes in prices and costs, and a discount factor more representative of the time value of money and the risks inherent in oil and natural gas reserve estimates.
An estimate of fair value would also take into account, among other things, the recovery of reserves not presently classified as proved, anticipated future changes in prices and costs, and a discount factor more representative of the time value of money and the risks inherent in oil and gas reserve estimates.
Fair value is determined primarily by discounted cash flows, supported by available market valuations, if applicable. The factors used to determine fair value of proved oil and gas royalty interests include estimates of proved reserves, future commodity prices, timing of future production, and a risk-adjusted discount rate.
Fair value is determined primarily by discounted cash flows, supported by available market valuations, if applicable. The factors used to determine fair value of proved oil and gas royalty interests include estimates of PDP reserves, future commodity prices, timing of future production, and a risk-adjusted discount rate.
Supplemental Oil and Gas Reserve Information (Unaudited) The Company’s oil and natural gas reserves are attributable solely to properties within the United States. Our Share of Oil and Gas Produced We measure our share of oil and gas produced in barrels of oil equivalent (“Boe”).
Supplemental Oil and Gas Reserve Information (Unaudited) The Company’s oil and gas reserves are attributable solely to properties within the United States. Our Share of Oil and Gas Produced We measure our share of oil and gas produced in barrels of oil equivalent (“Boe”).
The Company’s oil and gas properties are located in the Permian Basin. The PDP reserve estimates and their associated future net cash flows were prepared by Ryder Scott Company, L.P. (“Ryder Scott”), an independent third-party petroleum engineering firm, as of December 31, 2024. The reserve report covers only PDP reserves and does not include undeveloped minerals or royalties.
The Company’s oil and gas properties are located in the Permian Basin. The PDP reserve estimates and their associated future net cash flows were prepared by Ryder Scott Company, L.P. (“Ryder Scott”), an independent third-party petroleum engineering firm, as of December 31, 2025. The reserve report covers only PDP reserves and does not include undeveloped minerals or royalties.
Organization and Description of Business Organization Texas Pacific Land Corporation (which, together with its subsidiaries as the context requires, may be referred to as “TPL,” the “Company,” “our,” “we,” or “us”) is a Delaware corporation and one of the largest landowners in the State of Texas with approximately 873,000 surface acres of land, principally concentrated in the Permian Basin.
Organization and Description of Business Organization Texas Pacific Land Corporation (which, together with its subsidiaries as the context requires, may be referred to as “TPL,” the “Company,” “our,” “we,” or “us”) is a Delaware corporation and one of the largest landowners in the State of Texas with approximately 882,000 surface acres of land, principally concentrated in the Permian Basin.
As a result, the Company operates two operating segments which represent our reportable segments: Land and Resource Management and Water Services and Operations. The segments enable the alignment of strategies and objectives of TPL and provide a framework for timely and rational allocation of resources within businesses. See Note 15, “Business Segment Reporting” for further information regarding our segments.
As a result, the Company operates two operating segments which represent our reportable segments: Land and Resource Management and Water Services and Operations. The segments enable the alignment of strategies and objectives of TPL and provide a framework for timely and rational allocation of resources within businesses. See Note 16, “Business Segment Reporting” for further information regarding our segments.
Factors used in the assessment of fair value of unproved oil and gas royalty interests include, but are not limited to, commodity price outlooks and current and future operator activity in the Permian. No impairments were recorded for the years ended December 31, 2024, 2023 or 2022.
Factors used in the assessment of fair value of unproved oil and gas royalty interests include, but are not limited to, commodity price outlooks and current and future operator activity in the Permian. No impairments were recorded for the years ended December 31, 2025, 2024, or 2023.
The acquisition was accounted for as a business combination using the acquisition method, and therefore, the Acquired Assets were recorded based on their fair value on a nonrecurring basis on the date of acquisition and are subject to fair value adjustments under certain circumstances. In determining the fair values of assets acquired, management made estimates, judgements and assumptions.
The acquisition was accounted for as a business combination using the acquisition method and, therefore, the Acquired Assets were recorded based on their fair value on a nonrecurring basis on the date of acquisition and are subject to fair value adjustments under certain circumstances. In determining the fair values of the Acquired Assets, management made estimates, judgments and assumptions.
As unproved properties are determined to have proved reserves, the related costs are transferred to proved properties and become subject to depletion at that time. Estimates of crude oil, natural gas, and NGL reserves affect the calculation of depletion and impairment and also the unaudited standardized measure disclosures associated with our oil and gas royalty interests.
As unproved properties are determined to have PDP reserves, the related costs are transferred to proved properties and become subject to depletion at that time. Estimates of crude oil, gas, and NGL reserves affect the calculation of depletion and impairment and also the unaudited standardized measure disclosures associated with our oil and gas royalty interests.
For depletion purposes, and as required by the guidelines and definitions established by the Securities and Exchange Commission (the “SEC”), the reserve estimates were based on the average prices during the 12-month period prior to December 31, 2024 determined as an unweighted arithmetic average of the first day of the month for each month within the period.
For depletion purposes, and as required by the guidelines and definitions established by the Securities and Exchange Commission (the “SEC”), the reserve estimates were based on the average prices during the 12-month period prior to December 31, 2025 determined as an unweighted arithmetic average of the first day of the month for each month within the period.
Equity Plan for Non-Employee Directors The maximum aggregate number of shares of Common Stock that may be issued under the 2021 Directors Plan is 30,000 shares, which may consist, in whole or in part, of authorized and unissued shares (if any), treasury shares, or shares reacquired by the Company in any manner.
Equity Plan for Non-Employee Directors The maximum aggregate number of shares of Common Stock that may be issued under the 2021 Directors Plan is 90,000 shares, which may consist, in whole or in part, of authorized and unissued shares (if any), treasury shares, or shares reacquired by the Company in any manner.
See Note 13, “Commitments and Contingencies” for additional information. Income Taxes Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry-forwards.
See Note 14, “Commitments and Contingencies” for additional information. Income Taxes Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry-forwards.
Incentive Plan for Employees The maximum aggregate number of shares of Common Stock that may be issued under the 2021 Plan is 225,000 shares, which may consist, in whole or in part, of authorized and unissued shares (if any), treasury shares, or shares reacquired by the Company in any manner.
Incentive Plan for Employees The maximum aggregate number of shares of Common Stock that may be issued under the 2021 Plan is 675,000 shares, which may consist, in whole or in part, of authorized and unissued shares (if any), treasury shares, or shares reacquired by the Company in any manner.
F-14 Table of Contents The Acquired Assets included the following: Acquired Assets Balance Sheet Classification Business Segment 4,120 acres of land Real estate acquired Land and Resource Management Water sourcing assets, including water pits, water wells, pipes and electrical infrastructure Property, plant and equipment Water Services and Operations A 25% non-operating working interest in an existing saltwater disposal (“SWD”) system Property, plant and equipment Water Services and Operations Contractual right to a 10% royalty on produced water revenue generated from the SWD system Intangible assets Water Services and Operations Contractual right to a 7.5% royalty on revenue generated from nonhazardous oilfield solids waste disposal site Intangible assets Land and Resource Management The combination of the 25% non-operating working interest and the 10% royalty interest from the SWD system entitles the Company to 32.5% of produced water revenues generated from the SWD system.
The Acquired Assets included the following: Acquired Assets Balance Sheet Classification Business Segment 4,120 acres of land Real estate acquired Land and Resource Management Water sourcing assets, including water pits, water wells, pipes and electrical infrastructure Property, plant and equipment Water Services and Operations A 25% non-operating working interest in an existing saltwater disposal (“SWD”) system Property, plant and equipment Water Services and Operations Contractual right to a 10% royalty on produced water revenue generated from the SWD system Intangible assets Water Services and Operations Contractual right to a 7.5% royalty on revenue generated from nonhazardous oilfield solids waste disposal site Intangible assets Land and Resource Management The combination of the 25% non-operating working interest and the 10% royalty interest from the SWD system entitles the Company to 32.5% of produced water revenues generated from the SWD system.
As of December 31, 2024 and 2023, we had cash and cash equivalents deposited in our financial institutions in excess of federally-insured levels. We regularly monitor the financial condition of these financial institutions and believe that we are not exposed to any significant credit risk in cash and cash equivalents.
As of December 31, 2025 and 2024, we had cash and cash equivalents deposited in our financial institutions in excess of federally-insured levels. We regularly monitor the financial condition of these financial institutions and believe that we are not exposed to any significant credit risk in cash and cash equivalents.
Commitments and Contingencies Litigation Management is not aware of any legal, environmental or other commitments or contingencies that would have a material effect on the Company’s financial condition, results of operations or liquidity as of December 31, 2024, other than as described below.
Commitments and Contingencies Litigation Management is not aware of any legal, environmental or other commitments or contingencies that would have a material effect on the Company’s financial condition, results of operations or liquidity as of December 31, 2025, other than as described below.
The Pension Plan provides for a normal retirement benefit at age 65. Contributions to the Pension Plan reflect benefits accrued with respect to participants’ services to date, as well as the amount actuarially determined to pay lifetime benefits to participants and their beneficiaries upon retirement.
The Pension Plan provided for a normal retirement benefit at age 65. Contributions to the Pension Plan reflect benefits accrued with respect to participants’ services to date, as well as the amount actuarially determined to pay lifetime benefits to participants and their beneficiaries upon retirement.
While we intend to seek reimbursement from the third party for such taxes, we are unable to estimate the amount and/or likelihood of such reimbursement, and accordingly, no loss recovery receivable has been recorded as of December 31, 2024.
While we intend to seek reimbursement from the third party for such taxes, we are unable to estimate the amount and/or likelihood of such reimbursement, and accordingly, no loss recovery receivable has been recorded as of December 31, 2025.
Of our total NRA, approximately 191,000 was acquired in 1888 and was recorded with no value. The remaining approximately 16,000 NRA have been acquired over recent years and are included in royalty interests acquired on the consolidated balance sheet.
Of our total NRA, approximately 191,000 was acquired in 1888 and was recorded with no value. The remaining approximately 33,000 NRA have been acquired over recent years and are included in royalty interests acquired on the consolidated balance sheet.
We engaged an independent consulting petroleum firm, with assistance from us, to prepare an estimate of proved developed producing reserves, future production and income attributable to our royalty interests as of December 31, 2024.
We engaged an independent consulting petroleum firm, with assistance from us, to prepare an estimate of proved developed producing reserves, future production and income attributable to our royalty interests as of December 31, 2025.
The liability for unrecognized tax benefits was zero as of December 31, 2024 and 2023. We recognize interest and penalties related to unrecognized tax benefits in the provision for income taxes in the consolidated statements of income and total comprehensive income.
The liability for unrecognized tax benefits was zero as of December 31, 2025 and 2024. We recognize interest and penalties related to unrecognized tax benefits in the provision for income taxes in the consolidated statements of income and total comprehensive income.
Inputs used to determine fair values of assets included internally-developed models, risk-adjusted discount rates by asset class, publicly available data on land sales comparisons and other costs analysis. These fair values are considered Level 3 assets in the fair value hierarchy. There was no goodwill recorded on this acquisition.
Inputs used to determine fair values of assets included internally-developed models, risk-adjusted discount rates by asset class, publicly available data on land sales comparisons and other cost analysis. These fair values are considered Level 3 assets in the fair value hierarchy. There was no goodwill recorded in connection with this acquisition.
Revenue is recognized on land sales when the performance obligation to the purchaser (customer) is complete. Revenue from land exchanges is recognized based upon the estimated fair value of the consideration exchanged. F-9 Table of Contents Cash, Cash Equivalents and Restricted Cash We consider investments in bank deposits, money market funds, and other highly-liquid cash investments, such as U.S.
Revenue is recognized on land sales when the performance obligation to the purchaser (customer) is complete. Revenue from land exchanges is recognized based upon the estimated fair value of the consideration exchanged. Cash, Cash Equivalents and Restricted Cash We consider investments in bank deposits, money market funds, and other highly-liquid cash investments, such as U.S.
Depreciable lives by category are as follows: Range of Estimated Useful Lives (in years) Water wells and other water-related assets 3 to 20 Furniture, fixtures and equipment 3 to 15 F-12 Table of Contents Leases We lease certain facilities under operating leases. A determination of whether a contract contains a lease is made at the inception of the arrangement.
Depreciable lives by category are as follows: Range of Estimated Useful Lives (in years) Water wells and other water-related assets 3 to 20 Furniture, fixtures and equipment 3 to 15 Leases We lease certain facilities under operating leases. A determination of whether a contract contains a lease is made at the inception of the arrangement.
Additionally, we own a 1/128th nonparticipating perpetual oil and gas royalty interest (“NPRI”) under approximately 85,000 acres of land, a 1/16th NPRI under approximately 371,000 acres of land, and approximately 16,000 additional net royalty acres (normalized to 1/8th) (“NRA”) for a collective total of approximately 207,000 NRA, principally concentrated in the Permian Basin.
Additionally, we own a 1/128th nonparticipating perpetual oil and gas royalty interest (“NPRI”) under approximately 85,000 acres of land, a 1/16th NPRI under approximately 371,000 acres of land, and approximately 33,000 additional net royalty acres (normalized to 1/8th) (“NRA”) for a collective total of approximately 224,000 NRA, principally concentrated in the Permian Basin.
Level 3 – Inputs that are unobservable and significant to the overall fair value measurement. The degree of judgment exercised by us in determining fair value is greatest for fair value measurements categorized in Level 3. We use the highest level of observable market data if such data is available without undue cost and effort.
F-10 Table of Contents Level 3 – Inputs that are unobservable and significant to the overall fair value measurement. The degree of judgment exercised by us in determining fair value is greatest for fair value measurements categorized in Level 3. We use the highest level of observable market data if such data is available without undue cost and effort.
Of the 4,120 acres of land acquired, 392 acres are leased to, and operated by, an environmental solution (“ES”) company that operates a nonhazardous oilfield solids waste disposal site. The ES company pays a 7.5% royalty, on revenue generated, to the Company. The Company reports the royalty received as SLEM revenue.
Of the 4,120 acres of land acquired, 392 acres are leased to, and operated by, an environmental solution (“ES”) company that operates a nonhazardous oilfield solids F-15 Table of Contents waste disposal site. The ES company pays a 7.5% royalty, on revenue generated, to the Company. The Company reports the royalty received as SLEM revenue.
F-10 Table of Contents Business Combinations and Asset Acquisitions Our acquisition activities generally include acquisitions of royalty interests and/or land (real estate), and at times, may also include acquisitions of intangible assets or other tangible assets. When accounting for acquisition activities, we evaluate whether a transaction meets the definition of a business.
Business Combinations and Asset Acquisitions Our acquisition activities generally include acquisitions of royalty interests and/or land (real estate), and at times, may also include acquisitions of intangible assets or other tangible assets. When accounting for acquisition activities, we evaluate whether a transaction meets the definition of a business.
An allowance is recorded for expected credit losses and is based upon our historical write-off experience, aging of trade accounts receivable and collectability patterns of our customers. The allowance for expected credit loss was approximately $0.2 million as of December 31, 2024 and 2023.
An allowance is recorded for expected credit losses and is based upon our historical write-off experience, aging of trade accounts receivable and collectability patterns of our customers. The allowance for expected credit loss was approximately $0.1 million and $0.2 million as of December 31, 2025 and 2024, respectively.
While certain of our lease agreements contain covenants governing the use of the leased assets or require us to maintain certain levels of insurance, none of our lease agreements include material financial covenants or limitations. There are no residual value guarantees in our lease commitments. The weighted-average lease term for our operating lease liabilities is approximately 23 months.
While certain of our lease agreements contain covenants governing the use of the leased assets or require us to maintain certain levels of insurance, none of our lease agreements include material financial covenants or limitations. There are no residual value guarantees in our lease commitments. The weighted-average lease term for our operating lease liabilities is approximately 10.2 years.
On March 1, 2024, we filed a Certificate of Amendment to the Second Amended and Restated Certificate of Incorporation of the Company (the “Certificate of Incorporation”) with the Secretary of State of the State of Delaware, pursuant to which the Certificate of Incorporation was amended and restated to provide that the total number of authorized shares of capital stock of the Company be increased to 47,536,936 shares of capital stock, consisting of 1,000,000 shares of Preferred Stock and 46,536,936 shares of Common Stock.
On March 1, 2024, the Company filed a Certificate of Amendment to the Certificate of Incorporation with the Secretary of State of the State of Delaware, pursuant to which the Certificate of Incorporation was amended to provide that the total number of authorized shares of capital stock of the Company be increased to 47,536,936 shares of capital stock, consisting of 1,000,000 shares of Preferred Stock and 46,536,936 shares of Common Stock.
One Boe equals one barrel of crude oil, condensate, NGLs (natural gas liquids) or approximately 6,000 cubic feet of gas. For the years ended December 31, 2024, 2023 and 2022, our share of oil and gas produced was approximately 26.8, 23.5 and 21.3 thousand Boe per day, respectively.
One Boe equals one barrel of crude oil, condensate, NGLs (natural gas liquids) or approximately 6,000 cubic feet of gas. For the years ended December 31, 2025, 2024, and 2023 our share of oil and gas produced was approximately 34.6, 26.8, and 23.5 thousand Boe per day, respectively.
Expected volatility in the model was estimated based on the volatility of historical stock prices over a period matching the expected term of the awards. The risk-free interest rate was based on U.S. Treasury yield constant maturities for a term matching the expected term of the awards.
Expected volatility in the model was estimated based on the volatility of historical stock prices over a period matching the expected term of the awards. The risk-free interest rate was based on U.S. Treasury yield constant F-24 Table of Contents maturities for a term matching the expected term of the awards.
The initial lease deposits and annual payments are recorded as unearned revenue upon receipt and amortized over the life of the lease. Advance lease payments are deferred and amortized over the appropriate accounting period. Other surface-related income includes revenue from permits, material sales, and renewable energy sources.
The initial lease deposits and annual payments are recorded as unearned revenue upon receipt and amortized over the life of the lease. Advance lease payments are deferred and amortized over the appropriate accounting period. Other surface-related income includes revenue from permits, material sales, renewable energy sources, and lease bonuses related to royalty interests acquired.
F-11 Table of Contents Depletion of Royalty Interests Acquired Capitalized costs for proved oil and gas royalty interests are depleted on a unit-of-production basis over total proved reserves. For depletion of proved oil and gas properties, interests are grouped in a reasonable aggregation of properties with common geological structural features or stratigraphic conditions.
Depletion of Royalty Interests Acquired Capitalized costs for proved oil and gas royalty interests are depleted on a unit-of-production basis over total PDP reserves. For depletion of proved oil and gas properties, interests are grouped in a reasonable aggregation of properties with common geological structural features or stratigraphic conditions.
If the maximum amount of the performance metrics described in the applicable PSU agreements are achieved, the actual number of shares that will ultimately vest pursuant to the PSU agreements will exceed target PSUs by 100% (i.e., a collective 12,738 additional shares would be issued).
If the maximum of the performance metrics described in the applicable PSU agreements are achieved, the actual number of shares that will ultimately vest pursuant to the PSU agreements will exceed target PSUs by 100% (i.e., a collective 63,234 additional shares would be issued).
Any significant variance in the assumptions could materially affect the estimated quantity of reserves, which could affect the carrying value of our oil and gas royalty interests and/or the rate of depletion related to the oil and gas royalty interests.
Any significant F-11 Table of Contents variance in the assumptions could materially affect the estimated quantity of reserves, which could affect the carrying value of our oil and gas royalty interests and/or the rate of depletion related to the oil and gas royalty interests.
The asset allocation is reviewed annually with respect to the target allocations and rebalancing adjustments and/or target allocation changes are made as appropriate. Our current funding policy is to maintain the Pension Plan’s fully funded status on an ERISA minimum funding basis.
The asset allocation will be reviewed regularly with respect to the target allocations and rebalancing adjustments and/or target allocation changes will be made as appropriate. Our current funding policy is to maintain the Pension Plan’s fully funded status on an ERISA minimum funding basis.
The oil and gas royalty accrual is based upon historical production volumes, estimates of the timing of future payments and recent market prices for oil and gas. Accrued oil and gas royalties included in accounts receivable and accrued receivables, net totaled $60.7 million and $52.2 million as of December 31, 2024 and 2023, respectively.
The oil and gas royalty accrual is based upon historical production volumes, estimates of the timing of future payments and recent market prices for oil and gas. Accrued oil and gas royalties included in accounts receivable and accrued receivables, net totaled $61.3 million and $60.7 million as of December 31, 2025 and 2024, respectively.
The interest rate implicit in the lease is generally not determinable in transactions where we are the lessee. For real estate leases, we account for lease components and non-lease components (such as common area maintenance) as a single lease component.
The interest rate implicit in the lease is generally not determinable in transactions where we are the lessee. F-13 Table of Contents For real estate leases, we account for lease components and non-lease components (such as common area maintenance) as a single lease component.
Share-Based Compensation The Company grants share-based compensation to employees under the Texas Pacific Land Corporation 2021 Incentive Plan (the “2021 Plan”) and to its non-employee directors under the 2021 Non-Employee Director Stock and Deferred Compensation Plan (the “2021 Directors Plan” and, with the 2021 Plan, collectively referred to herein as the “Plans”).
Share-Based Compensation The Company grants share-based compensation to employees under the Texas Pacific Land Corporation 2021 Incentive Plan (the “2021 Plan”) and to its non-employee directors under the 2021 Non-Employee Director Stock and Deferred Compensation Plan (the “2021 Directors Plan” and, together with the 2021 Plan, the “Plans”).
The following table summarizes the projected benefit obligation in excess of Pension Plan assets and Pension Plan assets in excess of accumulated benefit obligation as of December 31, 2024 and 2023 (in thousands): December 31, 2024 December 31, 2023 Projected benefit obligation in excess of Pension Plan assets: Projected benefit obligation $ 3,567 $ 10,553 Fair value of Pension Plan assets $ 12,611 $ 14,201 Plan assets in excess of accumulated benefit obligation: Accumulated benefit obligation $ 3,567 $ 6,417 Fair value of Pension Plan assets $ 12,611 $ 14,201 F-20 Table of Contents The following are weighted-average assumptions used to determine benefit obligations and costs as of December 31, 2024, 2023 and 2022: Years Ended December 31, 2024 2023 2022 Weighted average assumptions used to determine benefit obligations as of December 31: Discount rate 5.75 % 5.00 % 5.25 % Rate of compensation increase N/A (1) 7.29 % 7.29 % Weighted average assumptions used to determine benefit costs for the years ended December 31: Discount rate 5.00 % 5.25 % 3.00 % Expected return on Pension Plan assets 7.00 % 7.00 % 7.00 % Rate of compensation increase 7.29 % 7.29 % 7.29 % (1) As the Pension plan was frozen effective December 31, 2024, this assumption is not applicable in the calculation of the benefit obligations as of December 31, 2024.
F-21 Table of Contents The following table summarizes the projected benefit obligation in excess of Pension Plan assets and Pension Plan assets in excess of accumulated benefit obligation as of December 31, 2025 and 2024 (in thousands): December 31, 2025 December 31, 2024 Projected benefit obligation in excess of Pension Plan assets: Projected benefit obligation $ 3,930 $ 3,567 Fair value of Pension Plan assets $ 14,565 $ 12,611 Plan assets in excess of accumulated benefit obligation: Accumulated benefit obligation $ 3,930 $ 3,567 Fair value of Pension Plan assets $ 14,565 $ 12,611 The following are weighted-average assumptions used to determine benefit obligations and costs as of December 31, 2025, 2024, and 2023: Years Ended December 31, 2025 2024 2023 Weighted average assumptions used to determine benefit obligations as of December 31: Discount rate 5.47 % 5.75 % 5.00 % Rate of compensation increase N/A (1) N/A (1) 7.29 % Weighted average assumptions used to determine benefit costs for the years ended December 31: Discount rate 5.75 % 5.00 % 5.25 % Expected return on Pension Plan assets 7.00 % 7.00 % 7.00 % Rate of compensation increase N/A (1) 7.29 % 7.29 % (1) As the Pension Plan was frozen effective December 31, 2024, this assumption is not applicable in the calculation of the benefit obligations as of December 31, 2025 and 2024.
See Note 12, “Earnings Per Share.” Treasury Stock Treasury stock purchases are accounted for under the cost method whereby the entire cost of the shares of the Company’s common stock, par value $0.01 per share (“Common Stock”), acquired is recorded as treasury stock.
See Note 13, “Earnings Per Share.” F-14 Table of Contents Treasury Stock Treasury stock purchases are accounted for under the cost method whereby the entire cost of the shares of the Company’s common stock, par value $0.01 per share (“Common Stock”), acquired is recorded as treasury stock.
Subsequent Events We evaluated events that occurred after the balance sheet date through the date these financial statements were issued, and the following events that met recognition or disclosure criteria were identified: Dividends Declared On February 18, 2025, our Board declared a quarterly cash dividend of $1.60 per share, payable on March 17, 2025 to stockholders of record at the close of business on March 3, 2025. 17.
Subsequent Events We evaluated events that occurred after the balance sheet date through the date these financial statements were issued, and the following events that met recognition or disclosure criteria were identified: Dividends Declared On February 10, 2026, our Board declared a quarterly cash dividend of $0.60 per share, payable on March 16, 2026 to stockholders of record at the close of business on March 2, 2026. 18.
Pension and Other Postretirement Benefits TPL has a defined contribution plan available to all eligible employees. Qualifying participants may receive a matching contribution based on the amount participants contribute to the plan up to 6% of their qualifying compensation.
The facility was undrawn during the period. 9. Pension and Other Postretirement Benefits Defined Contribution Plan TPL has a defined contribution plan available to all eligible employees. Qualifying participants may receive a matching contribution based on the amount participants contribute to the plan up to 6% of their qualifying compensation.
Diluted EPS is computed based upon the weighted average number of shares outstanding during the period plus unvested RSAs and other nonvested awards granted pursuant to our incentive and equity compensation plans.
Earnings Per Share Basic earnings per share (“EPS”) is computed based on the weighted average number of shares outstanding during the period. Diluted EPS is computed based upon the weighted average number of shares outstanding during the period plus unvested RSAs and other nonvested awards granted pursuant to our incentive and equity compensation plans.
The standardized measure of discounted future net cash flows is not intended to represent the replacement cost or fair value of the properties.
F-34 Table of Contents The standardized measure of discounted future net cash flows is not intended to represent the replacement cost or fair value of the properties.
The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that correspond to the same such amounts shown in the consolidated statements of cash flows (in thousands): December 31, 2024 December 31, 2023 Cash and cash equivalents $ 369,835 $ 725,169 Tax like-kind exchange escrow 1,546 5,380 Total cash, cash equivalents and restricted cash shown in the statement of cash flows $ 371,381 $ 730,549 Receivables Receivables consist primarily of royalty income due related to our oil, gas and produced water royalties and trade accounts receivable related to water and material sales.
The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that correspond to the same such amounts shown in the consolidated statements of cash flows (in thousands): December 31, 2025 December 31, 2024 Cash and cash equivalents $ 144,809 $ 369,835 Tax like-kind exchange escrow 595 1,546 Total cash, cash equivalents and restricted cash shown in the statement of cash flows $ 145,404 $ 371,381 Receivables Receivables consist primarily of royalty income due related to our oil, gas and produced water royalties and trade accounts receivable related to water and material sales.
Other changes in Pension Plan assets and benefit obligations recognized in other comprehensive (income) loss for the years ended December 31, 2024, 2023 and 2022 were as follows (in thousands): Years Ended December 31, 2024 2023 2022 Net actuarial (gain) loss $ (2,919) $ 739 $ (4,422) Recognized actuarial gain (loss) 866 130 (41) Total recognized in other comprehensive (income) loss, before taxes $ (2,053) $ 869 $ (4,463) Total recognized in net benefit cost and other comprehensive (income) loss, before taxes $ (5,396) $ 1,892 $ (1,958) TPL reclassified $0.6 million (net of income tax benefit of $0.1 million) out of accumulated other comprehensive loss for net periodic pension (benefit) cost to other income, net for the year ended December 31, 2024, $0.5 million (net of income tax benefit of $0.1 million) for the year ended December 31, 2023 and $0.4 million (net of income tax benefit of $0.1 million) for the year ended December 31, 2022.
Other changes in Pension Plan assets and benefit obligations recognized in other comprehensive (income) loss for the years ended December 31, 2025, 2024, and 2023 were as follows (in thousands): Years Ended December 31, 2025 2024 2023 Net actuarial (gain) loss $ (915) $ (2,919) $ 739 Recognized actuarial gain (loss) 197 866 130 Total recognized in other comprehensive (income) loss, before taxes $ (718) $ (2,053) $ 869 Total recognized in net benefit cost and other comprehensive (income) loss, before taxes $ (1,591) $ (5,396) $ 1,892 TPL reclassified $0.9 million (net of income tax benefit of $0.2 million) out of accumulated other comprehensive loss for net periodic pension (benefit) cost to other income, net for the year ended December 31, 2025, $0.6 million (net of income tax benefit of $0.1 million) for the year ended December 31, 2024 and $0.5 million (net of income tax benefit of $0.1 million) for the year ended December 31, 2023.
Intangible Assets Intangible assets, net consisted of the following as of December 31, 2024 and 2023 (in thousands): December 31, 2024 December 31, 2023 Intangible assets, at cost: Saltwater disposal easement $ 17,557 $ 17,557 Contracts acquired in a business combination (1) 15,700 — Groundwater rights acquired 3,846 3,846 Total intangible assets, at cost (2) 37,103 21,403 Less: accumulated amortization (1,915) (378) Intangible assets, net $ 35,188 $ 21,025 (1) See further discussion in Note 3, “Assets Acquired in a Business Combination.” (2) The remaining weighted average amortization period for total intangible assets was 11.8 years as of December 31, 2024.
Intangible Assets Intangible assets, net consisted of the following as of December 31, 2025 and 2024 (in thousands): December 31, 2025 December 31, 2024 Intangible assets, at cost: Saltwater disposal easement $ 17,557 $ 17,557 Contracts acquired in a business combination (1) 15,700 15,700 Groundwater rights acquired 3,846 3,846 Total intangible assets, at cost (2) 37,103 37,103 Less: accumulated amortization (4,257) (1,915) Intangible assets, net $ 32,846 $ 35,188 (1) For further information, see Note 3, “Assets Acquired in a Business Combination.” (2) The remaining weighted average amortization period for total intangible assets was 9.8 years as of December 31, 2025.
Share-Based Compensation Expense The following table summarizes our share-based compensation expense by line item in the consolidated statements of income (in thousands): Years Ended December 31, 2024 2023 2022 Salaries and related employee expenses (employee awards) $ 11,364 $ 9,124 $ 7,583 General and administrative expenses (director awards) 1,134 1,219 849 Total share-based compensation expense (1) $ 12,498 $ 10,343 $ 8,432 (1) The Company recognized a tax benefit of $2.6 million, $2.2 million and $1.8 million related to share-based compensation for the years ended December 31, 2024, 2023 and 2022, respectively.
Share-Based Compensation Expense The following table summarizes our share-based compensation expense by line item in the consolidated statements of income (in thousands): Years Ended December 31, 2025 2024 2023 Salaries and related employee expenses (employee awards) $ 13,817 $ 11,364 $ 9,124 General and administrative expenses (director awards) 1,314 1,134 1,219 Total share-based compensation expense (1) $ 15,131 $ 12,498 $ 10,343 (1) The Company recognized a tax benefit of $3.2 million, $2.6 million, and $2.2 million related to share-based compensation for the years ended December 31, 2025, 2024, and 2023, respectively.
For further information, see Note 3, “Assets Acquired in a Business Combination.” Depreciation expense was $13.6 million, $12.2 million and $14.2 million for the years ended December 31, 2024, 2023 and 2022, respectively. F-17 Table of Contents 7.
For further information, see Note 3, “Assets Acquired in a Business Combination.” Depreciation expense was $17.1 million, $13.6 million, and $12.2 million for the years ended December 31, 2025, 2024, and 2023, respectively. 7.
Lease Commitments As of December 31, 2024 and 2023, we have recorded right-of-use assets of $1.2 million and $1.9 million, respectively, and lease liabilities for $1.3 million and $2.0 million, respectively, primarily related to operating leases in connection with our administrative offices located in Dallas and Midland, Texas.
Lease Commitments As of December 31, 2025 and 2024, we have recorded right-of-use assets of $13.7 million and $1.2 million, respectively, and lease liabilities of $17.8 million and $1.3 million, respectively, primarily related to operating leases in connection with our administrative offices located in Dallas and Midland, Texas.
F-31 Table of Contents Analysis of Changes in Oil and Natural Gas PDP Reserves Proved developed producing (“PDP”) reserves are proved reserves that can be expected to be recovered through existing wells with existing equipment and operating methods, or in which the cost of the required equipment is relatively minor compared to the cost of a new well.
Analysis of Changes in Oil and Gas PDP Reserves PDP reserves are reserves that can be expected to be recovered through existing wells with existing equipment and operating methods, or in which the cost of the required equipment is relatively minor compared to the cost of a new well.
As of December 31, 2024, there was $10.5 million of total unrecognized compensation cost related to unvested share-based compensation arrangements granted under existing share-based plans expected to be recognized over a weighted average period of 1.0 year. 10. Other Income, Net Other income, net, includes interest earned on our cash balances, and other miscellaneous income (expense).
As of December 31, 2025, there was $12.4 million of total unrecognized compensation cost related to unvested share-based compensation arrangements granted under existing share-based plans expected to be recognized over a weighted average period of 11 months. 11. Other Income, Net Other income, net, includes interest earned on our cash balances, and other miscellaneous income (expense).
The fair values of the Pension Plan assets (all considered Level 1 assets in the fair value hierarchy) are classified by major asset category as of December 31, 2024 and 2023, were as follows (in thousands): December 31, 2024 December 31, 2023 Cash and cash equivalents — money markets $ 574 $ 1,179 Equities 8,600 8,182 Equity funds 1,049 401 Fixed income funds — 1,000 Taxable bonds 2,388 3,439 Total $ 12,611 $ 14,201 While no funding requirements are expected for 2025, management intends to fund the Pension Plan for 2025 to the extent of any minimum amount required under ERISA.
F-22 Table of Contents The fair values of the Pension Plan assets (all considered Level 1 assets in the fair value hierarchy) are classified by major asset category as of December 31, 2025 and 2024, were as follows (in thousands): December 31, 2025 December 31, 2024 Cash and cash equivalents — money markets $ 2,579 $ 574 Equities — 8,600 Equity funds 7,282 1,049 Fixed income funds — — Taxable bonds 4,704 2,388 Total $ 14,565 $ 12,611 While no funding requirements are expected for 2026, management intends to fund the Pension Plan for 2026 to the extent of any minimum amount required under ERISA.
Amounts recognized in accumulated other comprehensive income on the consolidated balance sheets consisted of the following as of December 31, 2024 and 2023 (in thousands): December 31, 2024 December 31, 2023 Net actuarial gain $ 4,371 $ 2,319 Amounts recognized in accumulated other comprehensive income, before taxes 4,371 2,319 Income tax expense (918) (488) Amounts recognized in accumulated other comprehensive income, after taxes $ 3,453 $ 1,831 F-19 Table of Contents Net periodic pension (benefit) cost for the years ended December 31, 2024, 2023 and 2022 included the following components (in thousands): Years Ended December 31, 2024 2023 2022 Components of net periodic (benefit) cost: Curtailment gain $ (3,864) $ — $ — Realized gain on settlement (752) — — Service cost 1,848 1,537 2,870 Interest cost 503 423 336 Expected return on Pension Plan assets (964) (807) (741) Recognized actuarial (gain) loss (114) (130) 41 Net periodic pension (benefit) cost $ (3,343) $ 1,023 $ 2,506 Service cost, a component of net periodic pension (benefit) cost, is reflected in our consolidated statements of income and total comprehensive income within salaries and related employee expenses.
Amounts recognized in accumulated other comprehensive income on the consolidated balance sheets consisted of the following as of December 31, 2025 and 2024 (in thousands): December 31, 2025 December 31, 2024 Net actuarial gain $ 5,090 $ 4,371 Amounts recognized in accumulated other comprehensive income, before taxes 5,090 4,371 Income tax expense (1,069) (918) Amounts recognized in accumulated other comprehensive income, after taxes $ 4,021 $ 3,453 Net periodic pension (benefit) cost for the years ended December 31, 2025, 2024, and 2023 included the following components (in thousands): Years Ended December 31, 2025 2024 2023 Components of net periodic (benefit) cost: Curtailment gain $ — $ (3,864) $ — Realized gain on settlement — (752) — Service cost — 1,848 1,537 Interest cost 206 503 423 Expected return on Pension Plan assets (882) (964) (807) Recognized actuarial (gain) loss (197) (114) (130) Net periodic pension (benefit) cost $ (873) $ (3,343) $ 1,023 Service cost, a component of net periodic pension (benefit) cost, is reflected in our consolidated statements of income and total comprehensive income within salaries and related employee expenses.
Other income, net for the years ended December 31, 2024, 2023 and 2022 was as follows (in thousands): Years Ended December 31, 2024 2023 2022 Other income, net: Interest earned on cash and cash equivalents, net $ 32,140 $ 28,630 $ 6,207 Curtailment gain (1) 3,864 — — Realized gain on pension settlement (1) 752 — — Other employee pension costs 575 514 363 Miscellaneous other income (expense), net (2) 2,352 2,364 (22) Total other income, net $ 39,683 $ 31,508 $ 6,548 F-24 Table of Contents (1) See Note 8, “Pension and Other Postretirement Benefits” for discussion of curtailment gain and realized gain on pension settlement.
F-25 Table of Contents Other income, net for the years ended December 31, 2025, 2024, and 2023 was as follows (in thousands): Years Ended December 31, 2025 2024 2023 Other income, net: Interest earned on cash and cash equivalents, net $ 17,970 $ 32,140 $ 28,630 Curtailment gain (1) — 3,864 — Realized gain on pension settlement (1) — 752 — Other employee pension costs 873 575 514 Miscellaneous other income (expense), net (2) 15 2,352 2,364 Total other income, net $ 18,858 $ 39,683 $ 31,508 (1) See Note 9, “Pension and Other Postretirement Benefits” for discussion of curtailment gain and realized gain on pension settlement.
F-18 Table of Contents The following table sets forth the Pension Plan’s changes in benefit obligation, changes in fair value of assets, and funded status as of December 31, 2024 and 2023 using a measurement date of December 31 (in thousands): December 31, 2024 December 31, 2023 Change in projected benefits obligation: Projected benefit obligation at beginning of year $ 10,553 $ 8,177 Curtailment gain (3,864) — Annuity buyout settlement (3,439) — Service cost 1,848 1,537 Interest cost 503 423 Actuarial gain (loss) (1,812) 658 Benefits paid (222) (242) Projected benefit obligation at end of year $ 3,567 $ 10,553 Change in Pension Plan assets: Fair value of Pension Plan assets at beginning of year $ 14,201 $ 11,650 Annuity buyout settlement (3,439) — Actual return on Pension Plan assets 2,071 725 Contributions by employer — 2,068 Benefits paid (222) (242) Fair value of Pension Plan assets at end of year 12,611 14,201 Funded status at end of year $ 9,044 $ 3,648 The projected Pension Plan benefit obligation as of December 31, 2024 was impacted by changes in assumptions used as of that date compared to assumptions used as of December 31, 2023.
The following table sets forth the Pension Plan’s changes in benefit obligation, changes in fair value of assets, and funded status as of December 31, 2025 and 2024 using a measurement date of December 31 (in thousands): December 31, 2025 December 31, 2024 Change in projected benefits obligation: Projected benefit obligation at beginning of year $ 3,567 $ 10,553 Curtailment gain — (3,864) Annuity buyout settlement — (3,439) Service cost — 1,848 Interest cost 206 503 Actuarial gain (loss) 164 (1,812) Benefits paid (7) (222) Projected benefit obligation at end of year $ 3,930 $ 3,567 Change in Pension Plan assets: Fair value of Pension Plan assets at beginning of year $ 12,611 $ 14,201 Annuity buyout settlement — (3,439) Actual return on Pension Plan assets 1,961 2,071 Contributions by employer — — Benefits paid (7) (222) Fair value of Pension Plan assets at end of year 14,565 12,611 Funded status at end of year $ 10,635 $ 9,044 The projected Pension Plan benefit obligation as of December 31, 2025, was impacted by changes in assumptions used as of that date compared to assumptions used as of December 31, 2024.
The weighted average discount rate of our operating leases is 4.7%.
The weighted average discount rate of our operating leases is 6.6%.
See further discussion of the business combination in Note 3, “Assets Acquired in a Business Combination.” Additionally, we acquired 1,009 acres of land for an aggregate purchase price of $1.5 million for the year ended December 31, 2024. For the year ended December 31, 2023, we acquired 12,141 acres of land for an aggregate purchase price of $20.0 million.
For the year ended December 31, 2024, we acquired 4,120 acres through a business combination with a fair value of $12.1 million. See further discussion of the business combination in Note 3, “Assets Acquired in a Business Combination.” Additionally, we acquired 1,009 acres of land for an aggregate purchase price of $1.5 million for the year ended December 31, 2024.
Significant Customers Three customers represented, in the aggregate, 40.9% of TPL’s total revenues for the year ended December 31, 2024. Three customers represented, in the aggregate, 42.5% of TPL’s total revenues for the year ended December 31, 2023. Four customers represented, in the aggregate, 51.8% of TPL’s total revenues for the year ended December 31, 2022. 3.
Significant Customers Three customers represented, in the aggregate, 39.6% of TPL’s total revenues for the year ended December 31, 2025. Three customers represented, in the aggregate, 40.9% of TPL’s total revenues for the year ended December 31, 2024. Three customers represented, in the aggregate, 42.5% of TPL’s total revenues for the year ended December 31, 2023. 3.
Minimal real estate improvements are made to land Impairment of Long-Lived Assets We evaluate long-lived assets, including intangible assets with finite lives and royalty interests acquired with proved oil and gas reserves, for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable.
F-12 Table of Contents Impairment of Long-Lived Assets We evaluate long-lived assets, including intangible assets with finite lives and royalty interests acquired with proved oil and gas reserves, for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable.
The Restated Texas Pacific Land Corporation Employees’ Pension Plan (the “Pension Plan”) is a noncontributory defined benefit pension plan qualified under Section 401 of the Internal Revenue Code of 1986, as amended (the “Code”), and is available to all eligible employees who have completed one year of continuous service with TPL during which they completed at least 1,000 hours of service.
Prior to the freezing of the Pension Plan, the Pension Plan was a noncontributory defined benefit pension plan qualified under Section 401 of the Internal Revenue Code of 1986, as amended (the “Code”), and was available to all eligible employees who had completed one year of continuous service with TPL during which they completed at least 1,000 hours of service.
Share-based compensation expense for PSU awards with market conditions is recognized ratably over the measurement period regardless of whether the market condition is satisfied if the service for the award is rendered.
Share-based compensation expense for PSU awards with performance conditions is recognized ratably over the measurement period at such time as the awards are probable and estimable. Share-based compensation expense for PSU awards with market conditions is recognized ratably over the measurement period regardless of whether the market condition is satisfied if the service for the award is rendered.
Certain stock awards granted are not included in the dilutive securities in the table above as they are anti-dilutive for the year ended December 31, 2023. There were no dilutive securities for the year ended December 31, 2024. F-26 Table of Contents 13.
Certain stock awards granted are not included in the dilutive securities in the table above as they are anti-dilutive for the years ended December 31, 2025 and 2023. There were no anti-dilutive securities for the year ended December 31, 2024. 14.
F-32 Table of Contents Standardized Measure of Oil and Gas The standardized measure of discounted future net cash flows before income taxes related to the oil and natural gas PDP reserves of the interests is as follows (in thousands): Years Ended December 31, 2024 2023 2022 Future cash inflows $ 2,566,234 $ 2,150,816 $ 2,662,176 Future production costs (191,879) (157,805) (205,483) Future income taxes (423,633) (422,629) (528,926) Future net cash flows 1,950,722 1,570,382 1,927,767 Less: 10% annual discount (942,086) (748,864) (932,146) Standard measure of discounted future net cash flows $ 1,008,636 $ 821,518 $ 995,621 Reserve estimates and future cash flows are based on the average market prices for sales of oil and natural gas adjusted for basis differentials, on the first calendar day of each month during the year.
Standardized Measure of Oil and Gas The standardized measure of discounted future net cash flows before income taxes related to the oil and gas PDP reserves of the interests is as follows (in thousands): Years Ended December 31, 2025 2024 2023 Future cash inflows $ 2,357,725 $ 2,566,234 $ 2,150,816 Future production costs (175,564) (191,879) (157,805) Future income taxes (297,366) (423,633) (422,629) Future net cash flows 1,884,795 1,950,722 1,570,382 Less: 10% annual discount (869,261) (942,086) (748,864) Standard measure of discounted future net cash flows $ 1,015,534 $ 1,008,636 $ 821,518 Reserve estimates and future cash flows are based on the average market prices for sales of oil and natural gas adjusted for basis differentials, on the first calendar day of each month during the year.
Amortization of intangible assets was $1.5 million and $0.4 million for the years ended December 31, 2024 and 2023, respectively. There was no amortization of intangible assets for the year ended December 31, 2022.
Amortization of intangible assets was $2.3 million, $1.5 million, and $0.4 million for the years ended December 31, 2025, 2024, and 2023, respectively.
As of December 31, 2024, 24,219 shares of Common Stock remained available under the 2021 Directors Plan for future grants.
As of December 31, 2025, 69,093 shares of Common Stock remained available under the 2021 Directors Plan for future grants.
The rate was determined based on a long-term allocation of about two-thirds fixed income and one-third equity securities; historical real rates of return of about 2.5% and 8.5% for fixed income and equity securities, respectively; and assuming a long-term inflation rate of 2.5%. The Pension Plan has a formal investment policy statement.
The rate was determined based on a long-term allocation of about two-thirds short-term cash equivalent securities and one-third fixed income; historical real rates of return of about and 2.5% and 8.5% for cash equivalent securities and fixed income, respectively; and assuming a long-term inflation rate of 2.5%.
For the year ended December 31, 2023, miscellaneous other income (expense), net includes $1.4 million of interest and damages resulting from an arbitration settlement with an operator. See Note 13, “Commitments and Contingencies” for further information regarding the arbitration. 11.
For the year ended December 31, 2023, miscellaneous other income (expense), net includes $1.4 million of interest and damages resulting from an arbitration settlement with an operator. 12.
As of December 31, 2024, 136,238 shares of Common Stock remained available under the 2021 Plan for future grants.
As of December 31, 2025, 366,381 shares of Common Stock remained available under the 2021 Plan for future grants.
Amounts recognized on the consolidated balance sheets as of December 31, 2024 and 2023 consisted of (in thousands): December 31, 2024 December 31, 2023 Assets $ 9,044 $ 3,648 Liabilities — — $ 9,044 $ 3,648 The Pension Plan asset is included in other assets on the consolidated balance sheets.
Amounts recognized on the consolidated balance sheets as of December 31, 2025 and 2024 consisted of (in thousands): December 31, 2025 December 31, 2024 Assets $ 10,635 $ 9,044 Liabilities — — $ 10,635 $ 9,044 F-20 Table of Contents The Pension Plan asset is included in other assets on the consolidated balance sheets.
Equity Increase in Authorized Shares of Common Stock As of December 31, 2023, the Company had authorized shares consisting of 1,000,000 shares of preferred stock, par value $0.01 per share (“Preferred Stock”), and 7,756,156 shares of Common Stock, par value $0.01 per share.
Equity Increases in Authorized Shares of Common Stock As of December 31, 2025, the Company had authorized shares consisting of 1,000,000 shares of preferred stock, par value $0.01 per share (“Preferred Stock”) and 139,610,808 shares of Common Stock.
The office lease agreements require monthly rent payments and expire in December 2025 and July 2027, respectively. Operating lease expense is recognized on a straight-line basis over the lease term. Operating lease cost was $0.9 million and $0.8 million for the years ended December 31, 2024 and 2023, respectively.
The office lease agreements require monthly rent payments, and the operating lease expense is recognized on a straight-line basis over the lease term. Operating lease costs were $1.4 million and $0.9 million for the years ended December 31, 2025 and 2024, respectively.
The following table presents changes in estimated PDP reserves and was prepared in accordance with the rules and regulations of the SEC: Crude Oil and Condensate (MBbls) (1) Natural Gas (MMcf) (1) Natural Gas Liquids (MBbls) (1) Total (MBoe) (1) Net PDP reserves at January 1, 2022 14,190 88,579 13,579 42,533 Extensions and discoveries 5,427 24,441 3,949 13,449 Acquisition of reserves 17 62 9 37 Production (3,401) (13,086) (2,208) (7,791) Net PDP reserves at December 31, 2022 16,233 99,996 15,329 48,228 Extensions and discoveries 6,858 31,196 5,010 17,067 Acquisition of reserves 89 664 102 302 Production (3,701) (14,528) (2,453) (8,575) Net PDP reserves at December 31, 2023 19,479 117,328 17,988 57,022 Extensions and discoveries 5,587 23,483 3,824 13,324 Acquisition of reserves 2,378 13,317 2,042 6,639 Production (4,118) (17,074) (2,841) (9,804) Net PDP reserves at December 31, 2024 23,326 137,054 21,013 67,181 Net PDP reserves December 31, 2022 16,233 99,996 15,329 48,228 December 31, 2023 19,479 117,328 17,988 57,022 December 31, 2024 23,326 137,054 21,013 67,181 (1) Commonly used definitions in the oil and gas industry not previously defined: MBbls represents one thousand barrels of crude oil, condensate or NGLs.
F-33 Table of Contents The following table presents changes in estimated PDP reserves and was prepared in accordance with the rules and regulations of the SEC: Crude Oil and Condensate (MBbls) (1) Natural Gas (MMcf) (1) Natural Gas Liquids (MBbls) (1) Total (MBoe) (1) Net PDP reserves at December 31, 2022 16,233 99,996 15,329 48,228 Extensions and discoveries 6,858 31,196 5,010 17,067 Acquisition of reserves 89 664 102 302 Production (3,701) (14,528) (2,453) (8,575) Net PDP reserves at December 31, 2023 19,479 117,328 17,988 57,022 Extensions and discoveries 5,587 23,483 3,824 13,324 Acquisition of reserves 2,378 13,317 2,042 6,639 Production (4,118) (17,074) (2,841) (9,804) Net PDP reserves at December 31, 2024 23,326 137,054 21,013 67,181 Extensions and discoveries 5,376 30,285 4,636 15,059 Acquisition of reserves 3,352 13,876 2,237 7,902 Production (4,936) (23,359) (3,784) (12,613) Revisions (2,927) (9,844) 154 (4,413) Net PDP reserves at December 31, 2025 24,191 148,012 24,256 73,116 Net PDP reserves December 31, 2022 16,233 99,996 15,329 48,228 December 31, 2023 19,479 117,328 17,988 57,022 December 31, 2024 23,326 137,054 21,013 67,181 December 31, 2025 24,191 148,012 24,256 73,116 (1) Commonly used definitions in the oil and gas industry not previously defined: MBbls represents one thousand barrels of crude oil, condensate or NGLs.
Royalty Interest Transactions For the year ended December 31, 2024, we completed two separate acquisitions of oil and gas royalty interests, acquiring a total of 11,596 NRA for an aggregate purchase price of approximately $395.5 million, net of post-closing adjustments, as further described below. • In August 2024, we acquired oil and gas royalty interests in 4,106 NRA in Culberson County, Texas for a purchase price of approximately $120.3 million, net of post-closing adjustments, in an all-cash transaction.
For the year ended December 31, 2024, we completed two separate acquisitions of oil and gas royalty interests, acquiring a total of 11,596 NRA for an aggregate purchase price of $395.5 million, net of post-closing adjustments, in all-cash transactions.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

35 edited+39 added−9 removed48 unchanged
Biggest change("Ryder Scott"), an independent third-party petroleum engineering firm, must make various assumptions with respect to many matters that may prove to be incorrect, including: • future oil, natural gas, and NGL prices; • unexpected complications from offset well development; • production rates; • reservoir pressures, decline rates, drainage areas and reservoir limits; • interpretation of subsurface conditions including geological and geophysical data; • potential for water encroachment or mechanical failures; • levels and timing of capital expenditures, lease operating expenses, production taxes and income taxes, and availability of funds for such expenditures; and • effects of government regulation. 9 Table of Contents If any of these assumptions prove to be incorrect, our estimates of PDP reserves, the classifications of reserves based on risk of recovery and our estimates of the future net cash flows from our reserves could change significantly.
Biggest change(“Ryder Scott”), an independent third-party petroleum engineering firm, must make various assumptions with respect to many matters that may prove to be incorrect, including: • future oil, gas, and NGL prices; • unexpected complications from offset well development; • production rates; • reservoir pressures, decline rates, drainage areas and reservoir limits; • interpretation of subsurface conditions including geological and geophysical data; • potential for water encroachment or mechanical failures; 10 Table of Contents • levels and timing of capital expenditures, lease operating expenses, production taxes and income taxes, and availability of funds for such expenditures; and • effects of government regulation.
We are not an oil and gas producer. Our revenues from oil and gas royalties are subject to the actions of others. We are not an oil and gas producer. Our oil and gas royalty revenue is derived primarily from perpetual non-participating oil and gas royalty interests that we have retained or acquired.
We are not an oil and gas producer. Our revenues from oil and gas royalties are subject to the actions of others. We are not an oil and gas producer. Our oil and gas royalty revenue is derived primarily from perpetual non-participating oil and gas royalty interests that we have retained or oil and gas interests that we have acquired.
Our business and financial results are therefore subject to disruption from natural or human causes beyond our control, including physical risks from severe storms, floods, droughts resulting in aquifer declines and other forms of severe weather, war, accidents, civil unrest, political events, fires, earthquakes, system failures, pipeline disruptions, environmental hazards such as oil and produced water spills, terrorist acts and epidemic or pandemic diseases, any of which could result in a material adverse effect on oil and natural gas production and, therefore, our results of operations.
Our business and financial results are therefore subject to disruption from natural or human causes beyond our control, including physical risks from severe storms, floods, droughts resulting in aquifer declines and other forms of severe weather, war, accidents, civil unrest, political events, fires, earthquakes, system failures, pipeline disruptions, environmental hazards such as oil and produced water spills, terrorist acts and epidemic or pandemic diseases, any of which could result in a material adverse effect on oil and gas production and, therefore, our results of operations.
Our business and financial results are subject to major trends in our industry, such as decarbonization, and may be adversely affected by future developments that are out of our control. Much of the value of the land we own and upon which we receive royalties is based on the oil and natural gas reserves located there.
Our business and financial results are subject to major trends in our industry, such as decarbonization, and may be adversely affected by future developments that are out of our control. Much of the value of the land we own and upon which we receive royalties is based on the oil and gas reserves located there.
For example, the obligation to pay ad valorem taxes with respect to certain of our royalty interests was assumed by a third party and is now the obligation of the successors in interest to such third party (the “obligors”), so long as such royalty interests are held by the Trustees or their successors in office under the Declaration of Trust.
For example, the obligation to pay ad valorem taxes with respect to certain of our royalty interests was assumed by a third party and is now the obligation of the successors in interest to such third party, so long as such royalty interests are held by the Trustees or their successors in office under the Declaration of Trust.
Price fluctuations for oil and gas have been particularly volatile in recent years due to supply and demand constraints, worldwide energy conservation measures, OPEC and OPEC+ actions, global conflicts in major oil producing regions, especially in Eastern Europe and the Middle East, and general economic cycles, among other factors.
Price fluctuations for oil and gas have been particularly volatile in recent years due to supply and demand factors, worldwide energy conservation measures, OPEC and OPEC+ actions, global conflicts in major oil producing regions, especially in Eastern Europe and the Middle East, and general economic cycles, among other factors.
In addition, the possibility of taxes on energy sources, including oil and gas, may affect the demand for crude oil and natural gas and the operating costs for third-party operators on our royalty properties. Our business could be negatively affected as a result of the actions of activists.
In addition, the possibility of taxes on energy sources, including oil and gas, may affect the demand for crude oil and gas and the operating costs for third-party operators on our royalty properties. Our business could be negatively affected as a result of the actions of activists.
Demand for TPWR’s products and services is substantially dependent on demand and expenditures by our customers for the exploration, development and production of oil and natural gas reserves. These expenditures are generally dependent on our customers’ overall financial position, capital allocation priorities, and views of future oil and natural gas prices.
Demand for TPWR’s products and services is substantially dependent on demand and expenditures by our customers for the exploration, development and production of oil and gas reserves. These expenditures are generally dependent on our customers’ overall financial position, capital allocation priorities, and views of future oil and gas prices.
Due to increased seismicity in the Delaware and Midland Basins, the Texas Railroad Commission recently began implementing seismic response areas (“SRAs”) limiting the permitted capacity and use of certain saltwater disposal wells (“SWDs”) for the injection of produced water.
In addition, due to increased seismicity in the Delaware and Midland Basins, the Texas Railroad Commission recently began implementing seismic response areas (“SRAs”) limiting the permitted capacity and use of certain saltwater disposal wells (“SWDs”) for the injection of produced water.
Numerous changes over time to the assumptions on which our reserve estimates are based, as described above, may result in the actual quantities of oil and natural gas that are ultimately recovered being different from our reserve estimates.
Numerous changes over time to the assumptions on which our reserve estimates are based, as described above, may result in the actual quantities of oil and gas that are ultimately recovered being different from our reserve estimates.
The completion of the Corporate Reorganization implicated conditions and covenants contained in certain agreements to which the Trust was, and now TPL Corporation is, a party and thereby may cause us to lose certain benefits that the Trust historically received.
The completion of the Corporate Reorganization implicated conditions and covenants contained in certain agreements to which the Trust was, and now TPL is, a party and thereby may cause us to lose certain benefits that the Trust historically received.
District Court for the Northern District of Texas in Dallas, Texas (or, if such court does not have jurisdiction, any district court in Dallas County in the State of Texas) will be the sole and exclusive forums for 12 Table of Contents any derivative action brought on our behalf, any action asserting a claim of breach of a fiduciary duty owed by any of our current or former directors, officers, employees or stockholders, any action or proceeding asserting a claim against us or any of our directors, officers, employees or agents arising pursuant to, or seeking to enforce any right, obligation or remedy under any provision of the DGCL, the laws of the State of Texas, the laws of the State of New York, our amended and restated certificate of incorporation or our Bylaws or any action asserting a claim against us or any of our directors, officers, employees or agents governed by the internal affairs doctrine, in each such case, subject to the applicable court having personal jurisdiction over the indispensable parties named as defendants in such action or proceeding.
District Court for the Northern District of Texas in Dallas, Texas (or, if such court does not have jurisdiction, any district court in Dallas County in the State of Texas) will be the sole and exclusive forums for any derivative action brought on our behalf, any action asserting a claim of breach of a fiduciary duty owed by any of our current or former directors, officers, employees or stockholders, any action or proceeding asserting a claim against us or any of our directors, officers, employees or agents arising pursuant to, or seeking to enforce any right, obligation or remedy under any provision of the DGCL, the laws of the State of Texas, the laws of the State of New York, our amended and restated certificate of incorporation or our Bylaws or any action asserting a claim against us or any of our directors, officers, employees or agents governed by the internal affairs doctrine, in each such case, subject to the applicable court having personal jurisdiction over the indispensable parties named as defendants in such action or proceeding.
While we intend to seek reimbursement from the third party following payment of such taxes, there can be no assurance that we will be successful in getting reimbursed, and accordingly, no loss recovery receivable has been recorded as of December 31, 2024.
While we intend to seek reimbursement from the third party following payment of such taxes, there can be no assurance that we will be successful in getting reimbursed, and accordingly, no loss recovery receivable has been recorded as of December 31, 2025.
Our desire to sell and the demand and pricing for any particular tract of our land is influenced by many factors, including but not limited to: (i) access and location, (ii) the national and local economies, (iii) the rate of oil and gas well development by operators, (iv) the rate of development in nearby areas, (v) the livestock carrying capacity, and (vi) the condition of the local industries, which itself is influenced by a range of conditions.
Our desire to sell and the demand and pricing for any particular tract of our land is influenced by many factors, including but not limited to: (i) access and location, (ii) the national and local economies, (iii) the rate of oil and gas well development by operators, (iv) the rate of development in nearby areas, (v) the livestock carrying capacity, and (vi) the condition of the local 12 Table of Contents industries, which itself is influenced by a range of conditions.
The timing, declaration, amount of, and payment of any cash dividends to our stockholders is within the discretion of our Board and will depend upon many factors, including our financial condition, earnings, capital requirements of our operating subsidiaries, covenants associated with any debt service obligations or other contractual obligations, legal requirements, regulatory constraints, industry practice, ability to access capital markets and other factors deemed relevant by the Board.
The timing, declaration, amount of, and payment of any cash dividends to our stockholders is within the discretion of our Board and will depend upon many factors, including our financial condition, earnings, capital requirements of our operating subsidiaries, covenants associated with our Credit Facility or any future debt service obligations or other contractual obligations, legal requirements, regulatory constraints, industry practice, ability to access capital markets and other factors deemed relevant by the Board.
We have encountered and may continue to encounter the challenges, uncertainties and difficulties frequently experienced in new and rapidly evolving markets with respect to the business of TPWR, including, but not limited to: • pricing pressure driven by new competition; • volatile and/or unexpected operating and maintenance costs; • lack of sufficient customers or loss of significant customers for the new line of business; • increased regulation, including with respect to environmental and geological uses and impacts on industry operations; and • uncertainty regarding outsourced third-parties providing water treatment services.
We have encountered and may continue to encounter the challenges, uncertainties and difficulties frequently experienced in a new and rapidly evolving market with respect to the business of TPWR, including, but not limited to: • pricing pressure driven by new competition; • volatile and/or unexpected operating and maintenance costs; • lack of sufficient customers or loss of significant customers for the business of TPWR; • increased regulation, including with respect to environmental and geological uses and impacts on industry operations; and • uncertainty regarding outsourced third-parties providing water treatment services.
In addition, our amended and restated certificate of incorporation authorizes us to issue, without the approval of our stockholders, one or more series of preferred stock having such designations, powers, preferences, privileges and relative, 11 Table of Contents participating, optional and special rights, and qualifications, limitations and restrictions as the Board may generally determine in its sole discretion.
In addition, our amended and restated certificate of incorporation authorizes us to issue, without the approval of our stockholders, one or more series of preferred stock having such designations, powers, preferences, privileges and relative, participating, optional and special rights, and qualifications, limitations and restrictions as the Board may generally determine in its sole discretion.
Our historical estimates of proved, developed and producing reserves and related valuations as of December 31, 2024 were prepared by Ryder Scott, which conducted a well-by-well review of all wells in which we have a mineral or royalty interest for the period covered by its reserve report using information provided by us.
Estimates of our proved, developed and producing reserves and related valuations as of December 31, 2025 were prepared by Ryder Scott, which conducted a well-by-well review of all wells in which we have a mineral or royalty interest for the period covered by its reserve report using information provided by us.
The market price of our Common Stock may fluctuate significantly due to a number of factors, some of which may be beyond our control, including: • actual or anticipated fluctuations in our results of operations due to factors related to our business; • our quarterly or annual earnings, or those of other companies in our industry; • changes to the regulatory and legal environment under which we operate; • changes in accounting standards, policies, guidance, interpretations or principles; • reports issued by securities analysts; • changes in earnings estimates by securities analysts or our ability to meet those estimates; • the operating and stock price performance of other comparable companies; • investor perception of our Company and our industry; • actual or anticipated fluctuations in commodities prices; and • domestic and worldwide economic and geopolitical conditions.
The market price of our Common Stock may fluctuate significantly due to a number of factors, some of which may be beyond our control, including, but not limited to: • actual or anticipated fluctuations in our results of operations due to factors related to our business; 14 Table of Contents • our quarterly or annual earnings, or those of other companies in our industry; • changes to the regulatory and legal environment under which we operate; • changes in accounting standards, policies, guidance, interpretations or principles; • reports issued by securities analysts; • changes in earnings estimates by securities analysts or our ability to meet those estimates; • the operating and stock price performance of other comparable companies; • investor perception of our Company and our industry; • actual or anticipated fluctuations in commodities prices; and • domestic and worldwide economic and geopolitical conditions.
Any of these impacts could materially and adversely affect our business and operating 13 Table of Contents results, and the market price of our Common Stock could be subject to significant fluctuation or otherwise be adversely affected by stockholder activism. Item 1B. Unresolved Staff Comments. Not Applicable.
Any of these impacts could materially and adversely affect our business and operating results, and the market price of our Common Stock could be subject to significant fluctuation or otherwise be adversely affected by stockholder activism. Item 1B. Unresolved Staff Comments. Not Applicable.
Item 1A. Risk Factors. An investment in our securities involves a degree of risk. The risks described below, and other risks noted throughout this Annual Report on Form 10-K, including those risks identified in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” are not the only ones facing us.
Item 1A. Risk Factors. An investment in our securities involves a degree of risk. The risks described below, and other risks noted throughout this Annual Report, including those risks identified in Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” are not the only ones facing us.
Risks Related to Our Industry Our business and financial results could be disrupted by natural or human causes beyond our control . Our revenues depend on natural and environmental conditions with respect to operations that result in royalties to us, or that use our water services.
Risks Related to Our Industry Our business and financial results could be disrupted by natural or human causes beyond our control . 16 Table of Contents Our revenues depend on natural and environmental conditions with respect to operations that result in royalties to us, or that use our water services.
Market prices for oil and gas are subject to US and global macroeconomic and geopolitical conditions and infrastructure and logistical constraints, amongst others, and, in the past, have been subject to significant price fluctuations.
Market prices for oil and gas are subject to U.S. and global macroeconomic and geopolitical conditions and infrastructure and logistical constraints, amongst others, and, in the past, have been subject to significant price fluctuations.
The results of operations for the Water Services and Operations segment have been impacted from time to time by reduced development pacing and declines in expenditures by our customers in response to varying industry or global circumstances.
The results of operations for the Water Services and Operations segment have been impacted from time to time by reduced development pacing and declines in expenditures by our customers in response to varying industry or global circumstances. Our results may continue to be impacted by producer discretion on development pacing and capital expenditures.
During the year ended December 31, 2024, the Company repurchased 30,432 outstanding shares of Common Stock for an aggregate purchase price of $29.2 million, which repurchased shares were placed in treasury. The Company opportunistically repurchases stock under the stock repurchase program with funds generated by cash from operations.
During the year ended December 31, 2025, the Company repurchased 27,000 outstanding shares of Common Stock for an aggregate purchase price of $8.4 million, which repurchased shares were placed in treasury. The Company opportunistically repurchases stock under the stock repurchase program with funds generated by cash from operations.
A third party has refused to continue to fulfill its obligations under existing arrangements to which the Trust was a party in connection with the completion of our Corporate Reorganization, and thereby may cause us to lose certain benefits that the Trust historically received.
Our ability to sell land can be, therefore, largely dependent on the actions of adjoining landowners. A third party has refused to continue to fulfill its obligations under existing arrangements to which the Trust was a party in connection with the completion of our Corporate Reorganization, and thereby may cause us to lose certain benefits that the Trust historically received.
The impact of government regulation on TPWR could adversely affect our business. The business of TPWR is subject to applicable state and federal laws and regulations, including laws and regulations on water use, environmental and safety matters.
The business of TPWR is subject to applicable state and federal laws and regulations, including laws and regulations on water use, environmental and safety matters.
The total price obtained, the average price per acre, and the number of acres sold in any one year or quarter should not be assumed to be indicative of future land sales.
Land sales are subject to many factors that are beyond our control. Our land sales vary widely from year to year and quarter to quarter. The total price obtained, the average price per acre, and the number of acres sold in any one year or quarter should not be assumed to be indicative of future land sales.
Our amended and restated certificate of incorporation, Bylaws and Delaware law contain provisions that are intended to deter coercive takeover practices and inadequate takeover bids and to encourage prospective acquirers to negotiate with our Board rather than to attempt a hostile takeover.
State law and anti-takeover provisions could enable our Board to resist a takeover attempt by a third party and limit the power of our stockholders. 15 Table of Contents Our amended and restated certificate of incorporation, Bylaws and Delaware law contain provisions that are intended to deter coercive takeover practices and inadequate takeover bids and to encourage prospective acquirers to negotiate with our Board rather than to attempt a hostile takeover.
Our results may continue to be impacted by producer discretion on development pacing and capital expenditures. 8 Table of Contents We face the risks of doing business in a new and rapidly evolving market for TPWR and may not be able to successfully address such risks and achieve acceptable levels of success or profits.
We face the risks of doing business in a new and rapidly evolving market for TPWR and may not be able to successfully address such risks and achieve acceptable levels of success or profits.
Similarly, the repurchase or redemption rights or liquidation preferences that we could assign to holders of preferred stock could affect the residual value of our Common Stock. We may not continue to pay dividends or to pay dividends at the same rate as previously paid.
Similarly, the repurchase or redemption rights or liquidation preferences that we could assign to holders of preferred stock could affect the residual value of our Common Stock.
The loss of key members of our management team could have an adverse effect on our business. If we cannot retain our experienced personnel or attract additional experienced personnel, our ability to compete within our industry could be harmed. We face direct and indirect supply chain risks that may adversely affect our business.
The loss of key members of our management team could have an adverse effect on our business. If we cannot retain our experienced personnel or attract additional experienced technical personnel, our ability to compete within our industry could be harmed. Demand for TPWR’s products and services is substantially dependent on the levels of expenditures by our customers.
We continue to actively engage with the Texas Railroad Commission and evaluate the potential effect of SRAs on our produced water royalties. Our estimated proved developed producing reserves are based on many assumptions that may prove to be inaccurate. Any inaccuracies in these estimates or underlying assumptions may materially affect the quantities and present value of our reserves.
Our estimated proved developed producing (“PDP”) reserves are based on many assumptions that may prove to be inaccurate. Any inaccuracies in these estimates or underlying assumptions may materially affect the quantities and present value of our reserves. It is not possible to measure underground accumulations of oil, gas, and NGL with precision.
It is not possible to measure underground accumulations of oil, natural gas, and NGL with precision. Oil and natural gas reserve engineering requires subjective estimates of underground accumulations of oil and natural gas and assumptions concerning future oil and natural gas prices, production levels, ultimate recoveries and operating and development costs.
Oil and gas reserve engineering requires subjective estimates of underground accumulations of oil and gas and assumptions concerning future oil and gas prices, production levels, ultimate recoveries and operating and development costs. In estimating our PDP reserves, we and Ryder Scott Company, L.P.
Taking on the cost of such payments will have an adverse impact on our business and results of operations. Risks Related to Our Common Stock The market price of our Common Stock may fluctuate significantly.
Taking on the cost of such payments will have an adverse impact on our business and results of operations. Our Credit Facility may limit our operating flexibility or otherwise adversely affect our business.
Removed
Our revenues from the sale of land are subject to substantial fluctuation. Land sales are subject to many factors that are beyond our control. Our land sales vary widely from year to year and quarter to quarter.
Added
If any of these assumptions prove to be incorrect, our estimates of PDP reserves, the classifications of reserves based on risk of recovery and our estimates of the future net cash flows from our reserves could change significantly.
Removed
Our ability to sell land can be, therefore, largely dependent on the actions of adjoining landowners. Demand for TPWR’s products and services is substantially dependent on the levels of expenditures by our customers.
Added
The market in which TPWR operates is highly competitive and includes numerous companies capable of competing effectively on a local basis. TPWR competes with landowners, water supply and transfer companies, and companies who engage in the sale or treatment of produced water.
Removed
In estimating our proved developed producing (“PDP”) reserves, we and Ryder Scott Company, L.P.
Added
Some of our larger diversified competitors have a broad geographic scope and have benefits of scale, while others focus on specific areas only and may have locally competitive cost efficiencies as a result. 11 Table of Contents Additionally, there may be new companies that enter the water solutions business, or our existing and potential customers may develop their own water management solutions.
Removed
Our business could be negatively affected by supply shortages and/or price increases driven by the increased costs of materials and logistics as a result of macroeconomic conditions, including geopolitical conflicts, general inflationary pressures, labor shortages, part or equipment availability, manufacturing capacity, tariffs, trade disputes and barriers, natural disasters or pandemics and the effects of climate change.
Added
Our ability to maintain current revenue and cash flows, and our ability to expand our operations, could be adversely affected by the activities of our competitors and our customers. The impact of government regulation on TPWR could adversely affect our business.
Removed
Supply shortages and/or price increases could lead to a reduction in revenues and an increase in our operating costs, which would have a material impact on our business segments and earnings, cash flow and financial condition.
Added
Some state and local governmental authorities have begun to monitor or restrict the use of water to ensure adequate local water supply.
Removed
Supply chain issues may disrupt the operations and development activities of operators on our land, upon whom a significant portion of our revenue relies, which could negatively affect our revenues from oil and gas royalties, easements and 10 Table of Contents our water offerings.
Added
For example, in January 2024, the Railroad Commission of Texas indefinitely suspended all deep oil and gas produced water injections in Culberson and Reeves counties.
Removed
Supply chain issues could also lead to an increase in TPWR’s operating costs and disrupt its water sourcing and treatment operations, which could further negatively affect our revenues from our water offerings.
Added
We continue to actively engage with the Texas Railroad Commission and evaluate the potential effect of SRAs on our produced water royalties. Our produced water desalination project creates risks related to invested capital, environmental exposure and our reputation. Through Transmissive, we are developing a proprietary produced water desalination technology and advancing the beneficial reuse process.
Removed
TPWR has adapted lead times for ordering parts and equipment to mitigate supply chain issues in the past and will use its best efforts to adapt to additional supply chain issues in the future, but given the uncertainty surrounding the macroeconomic factors and geopolitical situation, supply chain issues may negatively affect our business operations in the future.
Added
Development of a produced water treatment facility requires substantial capital and may result in total project costs exceeding initial estimates due to inflation, supply chain constraints, labor and equipment availability, design changes, regulatory requirements or technical challenges.
Removed
State law and anti-takeover provisions could enable our Board to resist a takeover attempt by a third party and limit the power of our stockholders.
Added
Delays in permitting, produced water sourcing, waste disposal arrangements, construction or commissioning could defer or reduce expected cash flows and impair the anticipated return on our investment. Actual throughput, pricing, operating costs and utilization may also differ from forecasts because they depend on competing treatment or disposal options, and changes in environmental or water‑handling regulations.
Added
As a result, Transmissive may fail to achieve targeted returns or require additional unplanned capital, which could lead to impairments of invested capital and have a material adverse effect on our business, financial condition, results of operations and liquidity.
Added
We are exposed to the risk that discharges of treated water and treatment‑related waste, including those made in compliance with permitted limits, may have unforeseen adverse environmental effects.
Added
Material failures to properly treat, handle or transport produced water or discharge treated water, including leaks, spills or non‑compliance with discharge permits and performance standards, could risk contaminating surface waters, groundwater or navigable waters or damage natural resources.
Added
Such material failures could also trigger enforcement actions, require remediation or corrective measures, lead to operational restrictions or permit suspension or revocation, harm our reputation or result in third‑party claims for personal injury, property damage and other losses, any of which could materially and adversely affect our business, financial condition, results of operations and liquidity.
Added
Negative public opinion or adverse perceptions of Transmissive’s operations or reputation could materially affect our business, results of operations, or prospects over time.
Added
Negative sentiment may arise from unfavorable portrayals of produced water, water treatment operations or discharge locations by the media, special interest groups, political leaders, stakeholders, or other parties, including organized opposition to specific projects or the energy industry in general.
Added
Potential impacts of such sentiment include operational delays or interruptions, legal or regulatory challenges, blockades, increased regulatory oversight, reduced public or governmental support, and the delay, challenge, or revocation of regulatory approvals, permits, or licenses, each of which may increase costs or cause cost overruns. Our revenues from the sale of land are subject to substantial fluctuation.
Added
The Credit Facility contains customary affirmative and negative covenants that, among other things, limit our ability to grant liens, incur debt, make investments, effect certain mergers, dispose of assets, make certain payments, pay dividends or distributions on our capital stock, change the nature of our business, enter into certain transactions with affiliates, enter into certain burdensome agreements, enter into swap agreements and enter into sale and leaseback transactions, in each case subject to customary exceptions.
Added
We therefore may not be able to engage in any of the foregoing transactions unless we obtain the consent of the required lenders and administrative agent under the Credit Facility or terminate the Credit Facility.
Added
Our inability to engage in such actions could limit our operating flexibility and prohibit us from taking certain actions that might be beneficial to our business.
Added
Additionally, we are required to maintain as of the end of each fiscal quarter a consolidated interest coverage ratio of not less than 3.0 to 1.0 and a consolidated total leverage ratio of not greater than 3.50 to 1.0.
Added
Borrowings under the Credit Facility are initially unsecured, with a springing senior security interest in substantially all of the equity securities of our subsidiaries in the event our consolidated total leverage ratio exceeds 2.50 to 1.0.
Added
There is no guarantee that we will be able to generate sufficient cash flow to comply with these financial covenants or pay the principal and interest on any debt we incur under the Credit Facility. Furthermore, there is no guarantee that future working capital, borrowings or equity financing will be available to repay or refinance any such debt.
Added
Any inability to make scheduled payments or comply with the covenants in our Credit Facility could result in the acceleration of the obligations thereunder and could adversely affect our business.
Added
The events of default under the Credit Facility include, among others, payment defaults, breaches of covenants, defaults under the related loan documents, material misrepresentations, cross defaults with certain other material indebtedness, bankruptcy and insolvency events, judgment defaults, certain events related to plans subject to the Employee Retirement Income Security Act of 1974, as amended, invalidity of the Credit Facility or the related loan documents and change in control events.
Added
If an event of default occurs, the lenders under the Credit Facility may be entitled to terminate the commitments and letter of credit extensions, accelerate any outstanding indebtedness under the Credit Facility, require us to post cash collateral with respect to any letters of credit and exercise any additional rights and remedies under the Credit Facility.
Added
If our indebtedness is accelerated, we may not have sufficient funds available to pay the accelerated indebtedness or that we will have the ability to refinance the accelerated indebtedness on terms favorable to us or at all.
Added
We may make minority investments, engage in joint ventures or make other strategic alliances with third parties that subject us to risks and uncertainties outside of our control.
Added
As part of our business strategy, from time to time, we may make minority investments in the equity securities of companies, engage in joint ventures or make other strategic alliances with third parties that we do not control.
Added
For example, in December 2025, we made a minority investment of $50.0 million in Bolt pursuant to a strategic agreement to develop and enable large scale data center campuses and supporting infrastructure across our land.
Added
In connection with our investment, we received an equity interest, warrants, and a right of first refusal to supply water to Bolt-affiliated projects and related infrastructure. We may contribute land and receive additional equity that may or may not increase in value or be liquid.
Added
Minority investments inherently involve a lesser degree of control over business operations, thereby potentially increasing the financial, legal, operational and/or compliance risks associated with the minority investment. 13 Table of Contents To the extent we hold only a minority equity interest in a company, we may lack affirmative control rights, which may diminish our ability to influence the company’s affairs in a manner intended to enhance the value of our investment in the company.
Added
Our investment could become impaired if the majority stakeholders or the management of the company take risks or otherwise act in a manner that does not serve our interests. In addition, we could be subject to reputational harm if the company in which the investment is made makes business, financial or management decisions with which we do not agree.
Added
These circumstances could also lead to disputes and litigation with management or employees of the company in which the investment is made, or its other stockholders. The companies in which we make investments may have indebtedness or equity securities, or may be permitted to incur indebtedness or to issue equity securities, which rank senior to our investment.
Added
We also may make investments in early-stage companies that depend on venture funding and are not profitable.
Added
In the event of insolvency, liquidation, dissolution, reorganization or bankruptcy of a company in which an investment is made, holders of debt instruments and securities ranking senior to our investment would typically be entitled to receive payment in full before distributions could be made in respect of our investment.
Added
We may also enter into separate commercial arrangements with these companies similar to our strategic agreement with Bolt, whether before, concurrently with, or after making a minority investment. In certain cases, an underlying commercial arrangement may be a driving factor behind our investment.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

8 edited+0 added−1 removed19 unchanged
Biggest changeCollaboration We have integrated cybersecurity risk management into our overall risk management framework by (i) maintaining disaster recovery, business continuity and security incident recovery plans, (ii) conducting annual enterprise and IT risk assessments, (iii) implementing periodic key risk indicator tracking, and (iv) holding regular cross-departmental meetings to address cybersecurity risks.
Biggest changeOur cybersecurity program consists of policies, procedures, systems, controls and technology designed to help prevent, identify, detect and mitigate cybersecurity risk and is based on the National Institute of Standards and Technology (“NIST”) Cybersecurity framework. 17 Table of Contents Collaboration We have integrated cybersecurity risk management into our overall risk management framework by (i) maintaining disaster recovery, business continuity and security incident recovery plans, (ii) conducting annual enterprise and IT risk assessments, (iii) implementing periodic key risk indicator tracking, and (iv) holding regular cross-departmental meetings to address cybersecurity risks.
Despite these efforts, our policies and procedures may not be properly followed in every instance and may not always be effective. Our risk factors, which can found be found in Part I, Item 1A. “Risk Factors,” include further detail about the material cybersecurity risks we face.
Despite these efforts, our policies and procedures may not be properly followed in every instance and may not always be effective. Our risk factors, which can be found in Part I, Item 1A. “Risk Factors,” include further detail about the material cybersecurity risks we face.
These include, but are not limited to, an IT acceptable use policy, a records and information management policy, change control procedures, risk and control registry, attestation report reviews, and configuration standards. Education and Awareness Our policies require each of our employees to complete annual information security training, in addition to other training requirements.
These include, but are not limited to, 18 Table of Contents an IT acceptable use policy, a records and information management policy, change control procedures, risk and control registry, attestation report reviews, and configuration standards. Education and Awareness Our policies require each of our employees to complete annual information security training, in addition to other training requirements.
The Director of Information Technology also coordinates with our internal audit department and the Audit Committee to ensure cybersecurity is represented and addressed within our enterprise risk management strategy. 16 Table of Contents
The Director of Information Technology also coordinates with our internal audit department and the Audit Committee to ensure cybersecurity is represented and addressed within our enterprise risk management strategy. 19 Table of Contents
In addition to the risk management experience of the Audit Committee members, Barbara J. Duganier, a member of the Audit Committee, holds the CERT Cybersecurity Oversight Certification from Carnegie Mellon University. 15 Table of Contents Role of Management Our cybersecurity risk is managed utilizing a multi-tiered approach by our Director of Information Technology.
In addition to the risk management experience of the Audit Committee members, Barbara J. Duganier, a member of the Audit Committee, holds the CERT Cybersecurity Oversight Certification from Carnegie Mellon University. Role of Management Our cybersecurity risk is managed utilizing a multi-tiered approach by our Director of Information Technology.
We also employ (i) network and endpoint intrusion prevention and detection 14 Table of Contents throughout our infrastructure, (ii) systems that monitor our infrastructure and alert our management of potential cybersecurity issues and vulnerabilities, and (iii) a seasoned process for managing and installing patches for third-party applications.
We also employ (i) network and endpoint intrusion prevention and detection throughout our infrastructure, (ii) systems that monitor our infrastructure and alert our management of potential cybersecurity issues and vulnerabilities, and (iii) a seasoned process for managing and installing patches for third-party applications.
The CISO, who reports to the Director of Information Technology, has 21 years of cybersecurity, IT management, and infrastructure consulting experience and is a certified CISO. The Director of Information Technology is regularly informed about the latest developments in cybersecurity, including potential threats, vulnerabilities, and innovative risk management techniques.
The CISO, who reports to the Director of Information Technology, has over 20 years of cybersecurity, IT management, and infrastructure consulting experience and is a certified CISO. The Director of Information Technology is regularly informed about the latest developments in cybersecurity, including potential threats, vulnerabilities, and innovative risk management techniques.
Our cybersecurity risk assessment program includes the following assessments and activities: • ensure program alignment with the NIST Cybersecurity framework; and, • prioritize, remediate and ensure effectiveness of critical applications, infrastructure, and information.
Our cybersecurity risk assessment program includes the following assessments and activities: • ensure program alignment with the NIST Cybersecurity framework; • prioritize, remediate, and ensure effectiveness of critical applications, infrastructure, and information; and • continually evaluate emerging threats and improved mitigation methods, including but not limited to, generative and agentic artificial intelligence and machine learning.
Removed
Our cybersecurity program consists of policies, procedures, systems, controls and technology designed to help prevent, identify, detect and mitigate cybersecurity risk and is based on the National Institute of Standards and Technology (“NIST”) Cybersecurity framework.

Item 2. Properties

Properties — owned and leased real estate

4 edited+30 added−2 removed0 unchanged
Biggest changeThe following table shows our surface ownership and NPRI ownership by county as of December 31, 2024 (1) : Number of Acres County Surface 1/128th Royalty 1/16th Royalty Andrews 12,121 — — Callahan — — 80 Coke — — 1,183 Concho 2,592 — — Crane 3,622 265 5,198 Culberson 270,853 — 111,513 Ector 19,888 33,633 11,793 El Paso 16,613 — — Fisher — — 320 Glasscock 27,227 3,600 11,111 Howard 5,156 3,099 1,840 Hudspeth 154,247 — 1,008 Jeff Davis 8,293 — 7,555 Lea (2) 640 — — Loving 63,070 6,107 48,066 Martin 3,943 — — Midland 28,365 12,945 13,120 Mitchell 3,842 1,760 586 Nolan 1,600 2,488 3,157 Palo Pinto — — 800 Pecos 43,377 320 16,895 Presidio — — 3,200 Reagan — 6,162 1,274 Reeves 187,320 3,013 116,691 Stephens — 2,817 160 Sterling 5,212 640 2,080 Taylor 690 — 966 Upton 6,661 6,903 9,101 Winkler 7,804 1,182 3,040 Total 873,136 84,934 370,737 (1) Counties are located in the State of Texas unless otherwise noted.
Biggest changeThe following table shows our surface acreage ownership by county as of December 31, 2025 (1) : County Number of Surface Acres Andrews 12,121 Concho 2,592 Crane 3,622 Culberson 270,853 Ector 19,888 El Paso 16,613 Glasscock 27,227 Howard 5,156 Hudspeth 154,247 Jeff Davis 8,293 Lea (2) 640 Loving 63,053 Martin 12,090 Midland 28,365 Mitchell 3,842 Nolan 1,600 Pecos 43,377 Reeves 188,107 Sterling 5,212 Taylor 690 Upton 6,661 Winkler 7,804 Total 882,053 (1) Counties are located in the State of Texas unless otherwise noted.
(2) County is located in the State of New Mexico. We lease office space in Dallas, Texas for our corporate headquarters and in Midland, Texas for TPWR. Item 3. Legal Proceedings. There are no material pending legal proceedings to which we are a party or of which any of our property is the subject. Item 4. Mine Safety Disclosures.
Our Facilities We lease office space in Dallas, Texas for our corporate headquarters and in Midland, Texas for TPWR. Item 3. Legal Proceedings. There are no material pending legal proceedings to which we are a party or of which any of our property is the subject. Item 4. Mine Safety Disclosures.
Item 2. Properties. As of December 31, 2024, we owned the surface estate in 873,136 acres of land, comprised of numerous separate tracts, principally located in the Permian Basin. There were no material liens or encumbrances on our title to the surface estate in those tracts.
Item 2. Properties. Surface Acreage Our ownership of the surface estate of approximately 882,000 surface acres is comprised of numerous separate tracts, principally concentrated in the Permian Basin. There were no material liens or encumbrances on our title to the surface estate of those tracts as of December 31, 2025.
Not applicable. 18 Table of Contents PART II
Not applicable. 23 Table of Contents PART II OTHER INFORMATION
Removed
Additionally, we own a 1/128th NPRI under 84,934 acres of land (5,308 NRA) and a 1/16th NPRI under 370,737 acres of land (185,369 NRA) in the Permian Basin.
Added
Of our total surface acreage, approximately 800,000 acres were assigned to the Company through the Declaration of Trust in 1888 when the Trust was formed and no value was assigned to the land at that time.
Removed
(2) County is located in the State of New Mexico. 17 Table of Contents As of December 31, 2024, we owned additional royalty interests in the following counties (1) : County Number of NRA Culberson 4,947 Ector 73 Glasscock 2,057 Howard 1,245 Lea (2) 59 Loving 215 Martin 2,779 Midland 2,513 Reagan 591 Reeves 246 Upton 974 Ward 192 Winkler 6 Total 15,897 (1) Counties are located in the State of Texas unless otherwise noted.
Added
(2) County is located in the State of New Mexico. Oil and Gas Royalty Interests Our oil and gas royalty interests are located solely in the United States in the Permian Basin. Our oil and gas royalty interests are comprised of royalty interests assigned through the Declaration of Trust (the “Assigned Royalty Interests”) and royalty interests acquired.
Added
Our Assigned Royalty Interests as of December 31, 2025 represent the remaining oil and gas royalty interests assigned to us through the Declaration of Trust in 1888 as further discussed in Item 1.
Added
“Business.” The fair market value of the Assigned Royalty Interests was not determined in 1888 when the Trust was formed and, therefore, no value is assigned to these interests on our Consolidated Balance Sheets.
Added
Royalty interests acquired represent royalty interests in proved and unproved oil and gas properties. 20 Table of Contents The following table shows NRA in the Assigned Royalty Interests and the royalty interests acquired by county as of December 31, 2025 (1) : Assigned Royalty Interests Royalty Interests Acquired Total County 1/128th NPRI Number of NRA 1/16th NPRI Number of NRA Number of NRA Number of NRA Borden — — 33 33 Callahan — 40 — 40 Coke — 591 — 591 Crane 17 2,599 — 2,616 Culberson — 55,756 5,014 60,770 Ector 2,102 5,896 79 8,077 Eddy (2) — — 54 54 Fisher — 160 — 160 Gaines — — 28 28 Glasscock 225 5,555 2,876 8,656 Howard 194 920 4,530 5,644 Hudspeth — 504 — 504 Jeff Davis — 3,778 — 3,778 Lea (2) — — 98 98 Loving 382 24,033 390 24,805 Martin — — 8,364 8,364 Midland 809 6,560 4,319 11,688 Mitchell 110 293 — 403 Nacogdoches — — 4 4 Nolan 155 1,579 — 1,734 Palo Pinto — 400 — 400 Pecos 20 8,448 487 8,955 Presidio — 1,600 — 1,600 Reagan 385 637 1,573 2,595 Reeves 188 58,346 1,897 60,431 Stephens 176 80 — 256 Sterling 40 1,040 — 1,080 Taylor — 483 — 483 Upton 431 4,551 2,451 7,433 Ward — — 1,144 1,144 Winkler 74 1,520 39 1,633 Total 5,308 185,369 33,380 224,057 (1) Counties are located in the State of Texas unless otherwise noted.
Added
(2) County is located in the State of New Mexico. Summary of Estimated Proved Reserves We define proved reserves as proved developed producing (“PDP”) reserves.
Added
PDP reserves are reserves that can be expected to be recovered through existing wells with existing equipment and operating methods, or in which the cost of the required equipment is relatively minor compared to the cost of a new well.
Added
The Company’s oil and gas properties are located in the Permian Basin. 21 Table of Contents The PDP reserve estimates and their associated future net cash flows were prepared by Ryder Scott as of December 31, 2025. The reserve report covers only PDP reserves and does not include undeveloped minerals or royalties.
Added
The oil and natural gas PDP reserve estimates represent the Company’s net ownership interest in its proved properties and were estimated in accordance with guidelines established by the SEC. Reserve studies were not prepared for periods prior to December 31, 2024.
Added
Accordingly, the comparative reserve information for those periods was derived from the December 31, 2024 reserve report by rolling volumes backwards from 2024 to 2022 to reflect historical production. Therefore, no revisions of prior estimates were recorded for these periods.
Added
The following table presents estimated PDP reserves as of December 31, 2025: December 31, 2025 Estimated PDP reserves: Crude Oil and Condensate (MBbls) (1) 24,191 Natural Gas (MMcf) (1) 148,012 Natural Gas Liquids (MBbls) (1) 24,256 Total (Mboe) (1) 73,116 (1) Commonly used definitions in the oil and gas industry: “MBbls” represents one thousand barrels of crude oil, condensate or NGLs.
Added
“MMcf” represents one million cubic feet of natural gas. “MBoe” represents one thousand Boe. PDP Reserves Evaluation and Review of Estimated PDP Reserves The estimated PDP reserves as of December 31, 2025 are based on reserve estimates prepared by Ryder Scott.
Added
The internal and external technical persons responsible for preparing or auditing our PDP reserve estimates meet the requirements with regards to qualifications, independence, objectivity and confidentiality set forth in the Standards Pertaining to the Estimating and Auditing of Oil and Gas Reserves Information promulgated by the Society of Petroleum Engineers.
Added
Ryder Scott is a third-party engineering firm and does not own an interest in any of our properties and is not employed by us on a contingent basis. The PDP reserve analysis prepared by Ryder Scott covered 100% of our total PDP reserves for 2025. No undeveloped reserves were reported.
Added
A copy of the summary report prepared by Ryder Scott is included as Exhibit 99.1 to this Annual Report.
Added
Under SEC rules, PDP reserves are those quantities of oil and natural gas, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible–from a given date forward, from known reservoirs and under existing economic conditions, operating methods and government regulations–prior to the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether deterministic or probabilistic methods are used for the estimation.
Added
If deterministic methods are used, the SEC has defined reasonable certainty for PDP reserves as a “high degree of confidence that the quantities will be recovered.” All PDP reserves as of December 31, 2025 were estimated using a deterministic method.
Added
The process of estimating the quantities of recoverable oil and natural gas reserves relies on the use of certain generally accepted analytical procedures. These analytical procedures fall into three broad categories or methods: (i) performance-based methods, (ii) volumetric-based methods, and (iii) analogy.
Added
These methods may be used singularly or in combination by the reserve evaluator in the process of estimating the quantities of reserves. In general, our PDP reserves attributable to producing wells were estimated by the performance-based method decline curve analysis, which utilized extrapolations of available historical production data.
Added
In certain cases where there was inadequate historical performance data to establish a definitive trend and where the use of production performance data as a basis for the estimates was inappropriate, the PDP reserves were estimated by analogy, or a combination of performance and analogy methods.
Added
The analogy method was used where there were inadequate historical performance data to establish a definitive trend and where the use of production performance data as a basis for the reserve estimates was considered to be inappropriate.
Added
To estimate economically recoverable PDP reserves and related future net cash flows, we considered many factors and assumptions, including the use of reservoir parameters derived from geological, geophysical and engineering data which cannot be measured directly, economic criteria based on current costs and the SEC pricing requirements and forecasts of future production rates.
Added
To establish reasonable certainty with respect to our estimated PDP reserves, the technologies and economic data used in the estimation of our PDP reserves included production data, downhole completion information, geologic data, and historical well cost and operating expense data. The process of estimating oil, natural gas and natural gas liquids reserves is complex and requires significant judgment.
Added
As a result, our petroleum engineers and geoscience professionals have an internal controls process to ensure the integrity, accuracy and timeliness of the data used to calculate PDP reserves relating to our assets primarily in the Permian Basin.
Added
Our internal technical staff met with Ryder Scott periodically during the period covered by the reserve report to discuss the assumptions and methods used in our PDP reserve estimation process.
Added
As part of the preparation of the reserve analysis, we provided historical information to Ryder Scott for our properties such as ownership interest, oil and gas production, gas processing and product recovery assumptions and commodity prices. 22 Table of Contents Our petroleum engineers are primarily responsible for overseeing the preparation of all reserve estimates, reviewing the data provided and the results for reasonableness, and overseeing communications with our independent reserve engineer.
Added
Our engineering staff have an average of approximately 20 years of industry experience per person. Our technical staff uses historical information for our properties such as ownership interest, oil and natural gas production, and commodity prices to estimate economic lives of our properties. We limited economic forecasts to 30 years.
Added
Ryder Scott prepared an estimate of the PDP reserves of the Company as of December 31, 2025.
Added
The internal control procedures utilized in the preparation of such PDP reserve estimates are intended to ensure reliability of reserve estimations, and include, but are not limited to the following: • Review and verification of historical production data, which is based on actual production as reported by our operators; • Preparation of interim quarterly reserve estimates by our internal reserve engineers and supervision of the preparation of annual reserve estimates by the primary external reserve engineers; • Review by the reserve engineers of all of our reported PDP reserves at the close of each quarter, including the review of all significant reserve changes; • Review and verification of historical realized commodity prices and differentials from index prices provided to the external reserve engineer; • Review of any differences between internal calculations and external reserves estimates by our management and internal engineering staff and confirming any differences are not more than the established audit tolerance guideline of 10 percent; • Review of the PDP reserve estimates by our Audit Committee with our executive team and Ryder Scott on an annual basis; • Verification of property ownership by our land department; and • No employee’s compensation is tied to the amount of reserves booked.
Added
Productive Wells Productive wells consist of producing wells, wells with at least one month of reported production. As of December 31, 2025, we owned mineral or royalty interests in over 11,346 gross productive wells, which consisted of 8,959 oil wells and 2,387 natural gas wells – over 62 net oil wells and over 48 net natural gas wells.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

3 edited+0 added−5 removed2 unchanged
Biggest changeWe are not a party to any agreement that would limit our ability to pay dividends in the future.
Biggest changeWe are not a party to any agreement that would limit our ability to pay dividends in the future. Issuer Purchases of Common Stock We did not repurchase any of our equity securities during the fourth quarter of the fiscal year ended December 31, 2025. Item 6. Reserved. 24 Table of Contents
Item 5. Market for Registrant’s Common Equity, Related Security Holder Matters and Issuer Purchases of Equity Securities. Market Information Our Common Stock is traded on the NYSE under the ticker symbol “TPL.” We had 186 registered holders of our Common Stock as of February 12, 2025.
Item 5. Market for Registrant’s Common Equity, Related Security Holder Matters and Issuer Purchases of Equity Securities. Market Information Our Common Stock is traded on the NYSE and NYSE Texas, Inc. under the ticker symbol “TPL.” We had 171 registered holders of our Common Stock as of February 9, 2026.
Dividends For the year ended December 31, 2024 and 2023, we paid the following regular and special cash dividends per share: Years Ended December 31, 2024 2023 Regular Special Regular Special 1st Quarter $ 1.17 $ — $ 1.08 $ — 2nd Quarter 1.17 — 1.08 — 3rd Quarter 1.17 10.00 1.08 — 4th Quarter 1.60 — 1.09 — Total $ 5.11 $ 10.00 $ 4.33 $ — We have paid a cash dividend each year for the preceding 68 years.
Dividends For the year ended December 31, 2025 and 2024, we paid the following regular and special cash dividends per share: Years Ended December 31, 2025 2024 Regular Special Regular Special 1st Quarter $ 0.53 $ — $ 0.39 $ — 2nd Quarter 0.53 — 0.39 — 3rd Quarter 0.54 — 0.39 3.33 4th Quarter 0.53 — 0.53 — Total $ 2.13 $ — $ 1.70 $ 3.33 We have paid a cash dividend each year for the preceding 69 years.
Removed
Issuer Purchases of Common Stock During the three months ended December 31, 2024, we repurchased shares of our Common Stock as follows: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs (1) October 1 through October 31, 2024 2,211 $ 1,035 2,211 $ 182,598,808 November 1 through November 30, 2024 1,418 1,403 1,418 $ 180,609,626 December 1 through December 31, 2024 1,693 1,233 1,693 $ 178,522,926 Total 5,322 $ 1,196 5,322 (1) On November 2, 2022, we announced that our Board approved a stock repurchase program to purchase up to an aggregate of $250.0 million of our outstanding Common Stock effective beginning January 1, 2023.
Removed
We intend to purchase Common Stock under the repurchase program opportunistically with funds generated by cash from operations. This repurchase program may be suspended from time to time, modified, extended or discontinued by the Board at any time.
Removed
Purchases under the stock repurchase program may be made through a combination of open market repurchases in compliance with Rule 10b-18 promulgated under the Exchange Act, privately negotiated transactions, and/or other transactions at our discretion, including under a Rule 10b5-1 trading plan implemented by us, and will be subject to market conditions, applicable legal requirements and other factors. 19 Table of Contents Performance Graph The following graph compares the cumulative total return from January 11, 2021 (the date of our Corporate Reorganization) through December 31, 2024 of our Common Stock; the SPDR ® S&P ® Oil & Gas Exploration & Production ETF (“XOP”), which includes TPL; and the Reference Group.
Removed
The graph assumes that $100 was invested at the beginning of the period and that all dividends were reinvested for each of TPL, the XOP, and the Reference Group. The Reference Group consists of the companies referenced in Part III, Item 11.
Removed
“Executive Compensation.” January 11, 2021 December 31, 2021 December 31, 2022 December 31, 2023 December 31, 2024 Texas Pacific Land Corporation $100 $145 $277 $187 $403 Reference Group $100 $189 $256 $276 $353 SPDR S&P Oil & Gas Exploration & Production ETF (“XOP”) $100 $146 $212 $220 $217 The information contained in the graph above is furnished and therefore not to be considered “filed” with the SEC or “soliciting material” under the Exchange Act and is not incorporated by reference into any document that incorporates this Annual Report on Form 10-K by reference, irrespective of any general incorporation by reference language contained in such document.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

64 edited+42 added−21 removed15 unchanged
Biggest changeResults of Operations - Consolidated The following table shows our consolidated results of operations and our results of operations by reportable segment for Land and Resource Management (“LRM”) and Water Service and Operations (“WSO”) for the years ended December 31, 2024 and 2023 (in thousands): Years Ended December 31, 2024 2023 LRM WSO Consolidated LRM WSO Consolidated Revenues: Oil and gas royalties $ 373,331 $ — $ 373,331 $ 357,394 $ — $ 357,394 Water sales — 150,724 150,724 — 112,203 112,203 Produced water royalties — 104,123 104,123 — 84,260 84,260 Easements and other surface-related income 63,074 10,183 73,257 67,905 3,027 70,932 Land sales 4,388 — 4,388 6,806 — 6,806 Total revenues 440,793 265,030 705,823 432,105 199,490 631,595 Expenses: Salaries and related employee expenses 27,493 26,128 53,621 21,945 21,439 43,384 Water service-related expenses — 46,124 46,124 — 33,566 33,566 General and administrative expenses 25,531 8,952 34,483 39,078 7,372 46,450 Depreciation, depletion and amortization 10,968 14,194 25,162 3,073 11,684 14,757 Ad valorem and other taxes 7,257 38 7,295 7,382 3 7,385 Total operating expenses 71,249 95,436 166,685 71,478 74,064 145,542 Operating income 369,544 169,594 539,138 360,627 125,426 486,053 Other income, net 31,707 7,976 39,683 30,384 1,124 31,508 Income before income taxes 401,251 177,570 578,821 391,011 126,550 517,561 Income tax expense 86,350 38,511 124,861 84,305 27,611 111,916 Net income $ 314,901 $ 139,059 $ 453,960 $ 306,706 $ 98,939 $ 405,645 Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 Consolidated Revenues and Net Income: Total revenues increased $74.2 million, or 11.8%, to $705.8 million for the year ended December 31, 2024 compared to $631.6 million for the year ended December 31, 2023.
Biggest changeResults of Operations The following table shows our consolidated results of operations and our results of operations by reportable segment for Land and Resource Management (“LRM”) and Water Service and Operations (“WSO”) for the years ended December 31, 2025 and 2024 (in thousands): Years Ended December 31, 2025 2024 LRM WSO Consolidated LRM WSO Consolidated Revenues: Oil and gas royalties $ 411,677 $ — $ 411,677 $ 373,331 $ — $ 373,331 Water sales — 169,701 169,701 — 150,724 150,724 Produced water royalties — 124,218 124,218 — 104,123 104,123 Easements and other surface-related income 78,230 13,545 91,775 63,074 10,183 73,257 Land sales 819 — 819 4,388 — 4,388 Total revenues 490,726 307,464 798,190 440,793 265,030 705,823 Expenses: Salaries and related employee expenses 29,184 28,741 57,925 27,493 26,128 53,621 Water service-related expenses — 53,528 53,528 — 46,124 46,124 General and administrative expenses 14,358 9,422 23,780 25,531 8,952 34,483 Depreciation, depletion and amortization 44,555 17,978 62,533 10,968 14,194 25,162 Ad valorem and other taxes 8,218 45 8,263 7,257 38 7,295 Total operating expenses 96,315 109,714 206,029 71,249 95,436 166,685 Operating income 394,411 197,750 592,161 369,544 169,594 539,138 Interest expense (552) (138) (690) — — — Other income, net 14,926 3,932 18,858 31,707 7,976 39,683 Income before income taxes 408,785 201,544 610,329 401,251 177,570 578,821 Income tax expense 86,370 42,583 128,953 86,350 38,511 124,861 Net income $ 322,415 $ 158,961 $ 481,376 $ 314,901 $ 139,059 $ 453,960 Interest income by segment is included in other income, net in the table above. 29 Table of Contents Consolidated Results of Operations Year Ended December 31, 2025 Compared to Year Ended December 31, 2024 Total revenues were $798.2 million for the year ended December 31, 2025 compared to $705.8 million for the year ended December 31, 2024.
Easements and other surface-related income is dependent on development decisions made by companies that operate in the areas where we own land and is, therefore, unpredictable and may vary significantly from period to period. See “Permian Basin Activity” above for additional discussion of development activity in the Permian Basin during the year ended December 31, 2024. Land sales .
Easements and other surface-related income is dependent on development decisions made by companies that operate in the areas where we own land and is, therefore, unpredictable and may vary significantly from period to period. See “Permian Basin Activity” above for additional discussion of development activity in the Permian Basin during the year ended December 31, 2025. Land sales .
Although our revenues are directly and indirectly impacted by changes in oil and natural gas prices, we believe our royalty interests (which require no capital expenditures or operating expense burden from us for well development), strong balance sheet, and liquidity position will help us navigate through potential commodity price volatility.
Although our revenues are directly and indirectly impacted by oil and natural gas prices, we believe our royalty interests (which require no capital expenditures or operating expense burden from us for well development), strong balance sheet, and liquidity position will help us navigate through potential commodity price volatility.
Our oil and gas royalty revenue, and, in turn, our results of operations for the year ended December 31, 2024 have been impacted by lower average commodity prices compared to 2023. However, our oil and gas royalty revenues increased for the year ended December 31, 2024 due to increased royalty production.
Our oil and gas royalty revenue, and, in turn, our results of operations for the year ended December 31, 2025 have been impacted by lower average commodity prices compared to 2024. However, our oil and gas royalty revenues increased for the year ended December 31, 2025 due to increased royalty production.
Our primary liquidity and capital requirements are for capital expenditures related to our Water Services and Operations segment (the extent and timing of which are under our control), working capital and general corporate needs. We continuously review our liquidity and capital resources.
Our primary liquidity and capital requirements are for acquisitions, capital expenditures related to our Water Services and Operations segment (the extent and timing of which are under our control), working capital, and general corporate needs. We continuously review our levels of liquidity and capital resources.
The pension curtailment and settlement gain is related to a buyout by a third party of defined benefit obligations under our pension plan and the subsequent freezing of our pension plan, both of which occurred in the fourth quarter of 2024.
The pension curtailment and settlement gain are related to a buyout by a third party of defined benefit obligations under our pension plan and the subsequent freezing of our pension plan, both of which occurred in the fourth quarter of 2024.
This section generally discusses the results of our operations for the year ended December 31, 2024 compared to the year ended December 31, 2023. For a discussion of the year ended December 31, 2023 compared to the year ended December 31, 2022, refer to Part II, Item 7.
This section generally discusses the results of our operations for the year ended December 31, 2025 compared to the year ended December 31, 2024. For a discussion of the year ended December 31, 2024 compared to the year ended December 31, 2023, refer to Part II, Item 7.
For all non-GAAP measurements, neither the SEC nor any other regulatory body has passed judgment on these non-GAAP measurements. 27 Table of Contents EBITDA, Adjusted EBITDA and Free Cash Flow EBITDA is a non-GAAP financial measurement of earnings before interest expense, taxes, depreciation, depletion and amortization.
For all non-GAAP measurements, neither the SEC nor any other regulatory body has passed judgment on these non-GAAP measurements. EBITDA, Adjusted EBITDA and Free Cash Flow EBITDA is a non-GAAP financial measurement of earnings before interest expense, taxes, depreciation, depletion and amortization.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2023.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2024.
US weekly horizontal rig counts per Baker Hughes United States Rotary Rig Count for horizontal rigs. Statistics for similar data are also available from other sources. The comparability between these other sources and the sources used by the Company may differ.
U.S. weekly horizontal rig counts per Baker Hughes United States Rotary Rig Count for horizontal rigs. Statistics for similar data are also available from other sources. The comparability between these other sources and the sources used by the Company may differ.
Research and development expenses related to development of a new energy-efficient method of produced water desalination and treatment were $2.5 million and $1.2 million for the years ended December 31, 2024 and 2023, respectively. For further discussion of this new treatment method, see “Liquidity and Capital Resources — Development of New Solutions for Produced Water and Capital Expenditures” above.
Research and development expenses related to development of a new energy-efficient method of produced water desalination and treatment were $2.8 million and $2.5 million for the years ended December 31, 2025 and 2024, respectively. For further discussion of this new treatment method, see “Liquidity and Capital Resources — Development of New Solutions for Produced Water and Capital Expenditures” above.
As we evaluate our current capital structure, capital allocation priorities, business fundamentals, and investment opportunities, we have set a target cash and cash equivalents balance of approximately $700 million. Above this target, we will seek to deploy the majority of our free cash flow towards dividends and share repurchases.
As we evaluate our current capital structure, capital allocation priorities, business fundamentals, and investment opportunities, we have set a target cash and cash equivalents balance of approximately $700 million. Above this target, we will seek to deploy the majority of our free cash flow towards returning capital to our stockholders in the form of special dividends and/or share repurchases.
As of December 31, 2024, we had cash and cash equivalents of $369.8 million that we expect to utilize, along with cash flow from operations, to provide capital to 22 Table of Contents support our business, to pay dividends subject to the discretion of our Board, to repurchase shares of our Common Stock subject to market conditions, for potential acquisitions and for general corporate purposes.
As of December 31, 2025, we had cash and cash equivalents of $144.8 million that we expect to utilize, along with cash flow from operations, to provide capital to support our business, to pay regular dividends, subject to the discretion of our Board, to, subject to market conditions, repurchase shares of our Common Stock, for potential acquisitions and for general corporate purposes.
Consistent with our disclosure policies, we include the following discussion related to what we believe to be our most critical accounting policies that require our most difficult, subjective or complex judgment and estimates. Accrual of Oil and Gas Royalties The Company accrues oil and gas royalties.
Consistent with our disclosure policies, we include the following discussion related to what we believe to be our most critical accounting policies that require our most difficult, subjective or complex judgment and estimates. 34 Table of Contents Accrual of Oil and Gas Royalties We accrue oil and gas royalties.
We believe that cash from operations, together with our cash and cash equivalents balances, will be sufficient to meet ongoing capital expenditures, working capital requirements and other cash needs for at least the next 12 months.
We believe that cash from operations and our cash and cash equivalents balance together with our Credit Facility, will be sufficient to meet ongoing capital expenditures, working capital requirements and other cash needs and allow for opportunistic transactions for at least the next 12 months.
The increase in easements and other surface-related income primarily related to an increase in temporary permits for sourced water lines for the year ended December 31, 2024 compared to 2023. Net income .
The increase in easements and other surface-related income primarily related to an increase in temporary permits for sourced water lines for the year ended December 31, 2025 compared to 2024. Salaries and related employee expenses.
Land sales were $4.4 million and $6.8 million for the years ended December 31, 2024 and 2023, respectively. For the year ended December 31, 2024, we sold 439 acres of land for an aggregate sales price of $4.4 million.
Land sales were $0.8 million and $4.4 million for the years ended December 31, 2025 and 2024, respectively. For the year ended December 31, 2025, we sold 17 acres of land for an aggregate sales price of $0.8 million.
Bbl represents one barrel of 42 U.S. gallons of oil. Mmbtu represents one million British thermal units, a measurement used for natural gas. DUCs represent drilled but uncompleted wells. DUC classification is based on well data and date stamps provided by Enverus.
“Bbl” represents one barrel of 42 U.S. gallons of crude oil, condensate or NGLs. “Mmbtu” represents one million British thermal units, a measurement used for natural gas. “DUCs” represent drilled but uncompleted wells. DUC classification is based on well data and date stamps provided by Enverus.
While average oil prices for the year ended December 31, 2024 were generally flat compared to the same period in 2023, Henry Hub and Waha Hub natural gas prices for the year ended December 31, 2024 declined compared to the same period last year.
While average oil prices for the year ended December 31, 2025 were lower compared to the same period in 2024, Henry Hub and Waha Hub natural gas prices for the year ended December 31, 2025 increased compared to the same period last year.
We eliminate any inter-segment revenues and expenses, if any, upon consolidation. We evaluate the performance of our operating segments separately to monitor the different factors affecting financial results. The reportable segments presented are consistent with our reportable segments discussed in Note 15, “Business Segment Reporting” in the notes to our consolidated financial statements included under Part II, Item 8.
We evaluate the performance of our operating segments separately to monitor the different factors affecting financial results. The reportable segments presented are consistent with our reportable segments discussed in Note 16, “Business Segment Reporting” in the notes to our consolidated financial statements included under Part II, Item 8.
Market Conditions Average oil prices for the year ended December 31, 2024 were relatively flat compared to average oil prices during the same period last year. Oil prices continue to be impacted by certain actions by OPEC+, geopolitics, and evolving global supply and demand trends, among other factors.
Market Conditions Average West Texas Intermediate (“WTI”) oil prices for the year ended December 31, 2025 were down approximately 15% compared to average WTI oil prices during the same period last year. Oil prices continue to be impacted by certain actions by OPEC+, geopolitics, and evolving global supply and demand trends, among other factors.
The growth in water sales was principally due to an increase of 31.0% in water sales volumes for the year ended December 31, 2024 compared to the year ended December 31, 2023. Produced water royalties. Produced water royalties are royalties received from the transfer or disposal of produced water on our land.
The growth in water sales was principally due to increases of 8.8% in water sales pricing and 3.4% in volumes for the year ended December 31, 2025 compared to the year ended December 31, 2024. Produced water royalties. Produced water royalties are royalties received from the transfer or disposal of produced water on our land.
Produced water royalties are contractual and not paid as a matter of right. We do not operate any saltwater disposal wells. Produced water royalties were $104.1 million for the year ended December 31, 2024 compared to $84.3 million in 2023. This increase was principally due to increased produced water volumes for the year ended December 31, 2024 compared to 2023.
Produced water royalties are contractual and not paid as a matter of right. We do not operate any saltwater disposal wells. Produced water royalties were $124.2 million for the year ended December 31, 2025 compared to $104.1 million in 2024.
The increase in cash flows provided by operating activities for the year ended December 31, 2024 compared to the same period of 2023 was primarily driven by an increase in operating income and changes in working capital requirements.
The increase in cash flows provided by operating activities for the year ended December 31, 2025 compared to the same period of 2024 was primarily driven by an increase in operating income, principally related to increased oil and gas production volumes and water sales volumes, and changes in working capital requirements during 2025 as compared to 2024.
The metrics below show selected benchmark oil and natural gas prices and approximate activity levels in the Permian Basin for the years ended December 31, 2024 and 2023: Years Ended December 31, 2024 2023 Oil and Gas Pricing Metrics: (1) WTI Cushing average price per bbl $ 76.63 $ 77.58 Henry Hub average price per mmbtu $ 2.19 $ 2.53 Waha Hub natural gas average price per mmbtu $ 0.14 $ 1.68 Activity Metrics specific to the Permian Basin: (1)(2) Average monthly horizontal permits 654 499 Average monthly horizontal wells drilled 504 422 Average weekly horizontal rig count 296 323 DUCs as of December 31 for each applicable year 4,536 4,656 Total Average US weekly horizontal rig count (2) 536 620 (1) Commonly used definitions in the oil and gas industry provided in the table above are defined as follows: WTI Cushing represents West Texas Intermediate.
The metrics below show selected benchmark oil and natural gas prices and approximate activity levels in the Permian Basin for the years ended December 31, 2025 and 2024: Years Ended December 31, 2025 2024 Oil and Gas Pricing Metrics: (1) WTI Cushing average price per Bbl $ 65.39 $ 76.63 Henry Hub average price per mmbtu $ 3.52 $ 2.19 Waha Hub natural gas average price per mmbtu $ 0.69 $ 0.14 Activity Metrics specific to the Permian Basin: (1)(2) Average monthly horizontal permits 581 654 Average monthly horizontal wells drilled 457 504 Average weekly horizontal rig count 257 296 DUCs as of December 31 for each applicable year 3,946 4,536 Total Average U.S. weekly horizontal rig count (2) 498 536 (1) Commonly used definitions in the oil and gas industry: “WTI Cushing” represents West Texas Intermediate.
Cash Flows Used in Investing Activities For the years ended December 31, 2024 and 2023, net cash used in investing activities was $471.7 million and $60.3 million, respectively. Our cash flows used in investing activities are primarily related to acquisitions and capital expenditures related to our water services and operations segment.
Cash Flows Used in Investing Activities For the years ended December 31, 2025 and 2024, net cash used in investing activities was $595.8 million and $471.7 million, respectively. Our cash flows used in investing activities are primarily related to royalty acquisitions, investments and purchases of fixed assets primarily related to our Water Services and Operations segment.
Additionally, revenues derived from water sales and produced water royalties for the year ended December 31, 2024 were also positively impacted by our active management of our surface and royalty interests in recent years. 25 Table of Contents Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 Land and Resource Management Land and Resource Management segment revenues increased $8.7 million, or 2.0%, to $440.8 million for the year ended December 31, 2024 as compared to 2023.
Additionally, revenues derived from water sales and produced water royalties for the year ended December 31, 2025 were also positively impacted by our active management of our surface and royalty interests in recent years. Year Ended December 31, 2025 Compared to Year Ended December 31, 2024 Land and Resource Management Oil and gas royalties .
E&P companies generally have continued to deploy capital at a measured pace as drilling and development activities across the Permian Basin have remained strong overall. Although average rig counts during the year ended December 31, 2024 were lower compared to the same period last year, increased drilling and completion efficiencies have allowed operators to maintain robust levels of well development.
E&P companies broadly have continued to deploy capital towards drilling and development activities in the Permian Basin at a measured pace. Although average rig counts during the year ended December 31, 2025 were lower compared to the same period last year, increased drilling and completion efficiencies have allowed operators, in aggregate, to grow production.
Our cash flows used in financing activities principally consist of activities that return capital to our stockholders such as payments of dividends and repurchases of our Common Stock. During the year ended December 31, 2024, we paid total dividends of $347.3 million, consisting of cumulative regular cash dividends of $5.11 per share and a special dividend of $10.00 per share.
Our cash flows used in financing activities principally consist of activities that return capital to our stockholders such as payments of dividends and repurchases of our Common Stock, and activity related to our Credit Facility. During the year ended December 31, 2025, we paid total dividends of $147.8 million, consisting of cumulative regular cash dividends of $2.13 per share.
If market conditions were to change and our revenues were to decline significantly or operating costs were to increase significantly, our cash flows and liquidity could be reduced. Should this occur, we could seek alternative sources of funding. We had no debt, credit facilities, or any off-balance sheet arrangements as of December 31, 2024.
If market conditions were to change and our revenues were to decline significantly or operating costs were to increase significantly, our cash flows and liquidity could be reduced. Should this occur, we could draw on our Credit Facility or seek alternative sources of funding.
Return of Capital to Shareholders During the year ended December 31, 2024, we paid total dividends to our stockholders of $347.3 million, consisting of cumulative regular cash dividends of $5.11 per share and a special dividend of $10.00 per share.
During the year ended December 31, 2024, we paid total dividends of $347.3 million consisting of cumulative regular cash dividends of $1.70 per share and a special dividend of $3.33 per share.
In compliance with the requirements of the SEC, our non-GAAP measurements are reconciled to net income, the most directly comparable GAAP performance measure.
These measurements are not to be considered more relevant or accurate than the measurements presented in accordance with GAAP. In compliance with the requirements of the SEC, our non-GAAP measurements are reconciled to net income, the most directly comparable GAAP performance measure.
Exploration and production (“E&P”) companies active in the Permian have generally increased their drilling and development activity in 2024 compared to recent prior year activity levels. Per the U.S. Energy Information Administration (“EIA”), Permian production averaged approximately 6.3 million barrels per day during 2024, which represents the highest annual production ever.
Exploration and production (“E&P”) companies active in the Permian generally decreased their drilling and development activity in 2025 compared to recent prior year activity levels in response to lower oil prices. Despite relatively lower activity, Permian production, per the U.S. Energy Information Administration (“EIA”), averaged approximately 6.5 million barrels of oil per day during 2025.
An accrual is necessary due to the time lag between the removal of crude oil and natural gas products from the respective mineral reserve locations and generation of the actual payment by operators.
An accrual is necessary due to the time lag between the removal of crude oil and gas products from the respective mineral reserve locations and generation of the actual payment by operators. The oil and gas royalty accrual is based upon historical production volumes, estimates of the timing of future payments and recent market prices for oil and gas.
We have excluded the pension curtailment and settlement gain from the calculation of Adjusted EBITDA as such gain is a non-recurring item and is not related to our core business. The purpose of presenting Adjusted EBITDA is to highlight earnings without non-cash activity such as share-based compensation and other non-recurring or unusual items, if applicable.
We have excluded the pension curtailment and settlement gain from the calculation of Adjusted EBITDA as such gain is a non-recurring item and is not related to our core business.
Our acquisitions may include land, royalty interests and other similar tangible and intangible assets. For further information regarding acquisitions during the year ended December 31, 2024, see “Acquisition Activity” above.
Our acquisitions may include royalty interests, land and other similar tangible and intangible assets. 28 Table of Contents For further information regarding acquisitions and investment activity during the year ended December 31, 2025, see “Acquisition and Investment Activity” above. Purchases of fixed assets for the years ended December 31, 2025 and 2024 were $59.5 million and $29.7 million, respectively.
Easements and other surface-related income . Easements and other surface-related income was $10.2 million for the year ended December 31, 2024, an increase of $7.2 million compared to $3.0 million for the year ended December 31, 2023.
(2) MBbl/d = 1 thousand barrels of water per day. Easements and other surface-related income . Easements and other surface-related income was $13.5 million for the year ended December 31, 2025, an increase of $3.4 million compared to $10.2 million for the year ended December 31, 2024.
Accordingly, these decisions made by others affect not only our share of production volumes and produced water disposal volumes, but also directly impact our surface-related income and water sales. Liquidity and Capital Resources Overview Our principal sources of liquidity are cash and cash flows generated from our operations.
Accordingly, these decisions made by others affect, both directly and indirectly, our oil and gas royalties, produced water royalties, water sales, and other surface-related income. 26 Table of Contents Liquidity and Capital Resources Overview Our principal sources of liquidity are cash and cash flows generated from operations and our Credit Facility.
The table below provides financial and operational data by royalty stream for the years ended December 31, 2024 and 2023: Years Ended December 31, 2024 2023 (2) Our share of production volumes (1) : Oil (MBbls) 4,118 3,701 Natural gas (MMcf) 17,074 14,528 NGL (MBbls) 2,841 2,453 Equivalents (MBoe) 9,804 8,575 Equivalents per day (MBoe/d) 26.8 23.5 Oil and gas royalties (in thousands): Oil royalties $ 298,074 $ 273,304 Natural gas royalties 18,512 29,915 NGL royalties 56,745 45,510 Total oil and gas royalties $ 373,331 $ 348,729 Realized prices: Oil ($/Bbl) $ 75.80 $ 77.33 Natural gas ($/Mcf) $ 1.17 $ 2.23 NGL ($/Bbl) $ 21.60 $ 20.05 Equivalents ($/Boe) $ 39.87 $ 42.58 (1) Commonly used definitions in the oil and gas industry not previously defined: MBbls represents one thousand barrels of crude oil, condensate or NGLs.
The average realized prices decreased to $34.18 per Boe for the year ended December 31, 2025 from $39.87 per Boe for 2024, a decrease of 14.3%. 30 Table of Contents The table below provides financial and operational data by oil and gas royalty stream for the years ended December 31, 2025 and 2024: Years Ended December 31, 2025 2024 Our share of production volumes (1) : Oil (MBbls) 4,936 4,118 Natural gas (MMcf) 23,359 17,074 NGL (MBbls) 3,784 2,841 Equivalents (MBoe) 12,613 9,804 Equivalents per day (MBoe/d) 34.6 26.8 Oil and gas royalties (in thousands): Oil royalties $ 304,930 $ 298,074 Natural gas royalties 37,432 18,512 NGL royalties 69,315 56,745 Total oil and gas royalties $ 411,677 $ 373,331 Realized prices: Oil ($/Bbl) $ 64.69 $ 75.80 Natural gas ($/Mcf) $ 1.73 $ 1.17 NGL ($/Bbl) $ 19.81 $ 21.60 Equivalents ($/Boe) $ 34.18 $ 39.87 (1) Commonly used definitions in the oil and gas industry: “Bbl” represents one barrel of 42 U.S. gallons of crude oil, condensate or NGLs.
Capital expenditures for the years ended December 31, 2024 and 2023 were $29.7 million and $15.0 million, respectively. 23 Table of Contents Cash Flows Used in Financing Activities For the years ended December 31, 2024 and 2023, net cash used in financing activities was $378.1 million and $144.6 million, respectively.
Cash Flows Used in Financing Activities For the years ended December 31, 2025 and 2024, net cash used in financing activities was $176.0 million and $378.1 million, respectively.
Certain types of water service-related expenses, including, but not limited to, treatment, transfer, water purchases, repairs and maintenance, equipment rental, and fuel costs vary from period to period as our customers’ needs and requirements change. Right of way and other expenses also vary from period to period depending on the location of customer delivery.
Water service-related expenses increased $7.4 million to $53.5 million for the year ended December 31, 2025 compared to 2024. Certain types of water service-related expenses, including, but not limited to, treatment, transfer, water purchases, repairs and maintenance, equipment rental, and fuel costs vary from period to period as our customers’ needs and requirements change.
The purpose of presenting EBITDA is to highlight earnings without finance, taxes, and depreciation, depletion and amortization expense, and its use is limited to specialized analysis. We calculate Adjusted EBITDA as EBITDA plus employee share-based compensation and less pension curtailment and settlement gain.
The purpose of presenting EBITDA is to highlight earnings without finance, taxes, and depreciation, depletion and amortization expense, and its use is limited to specialized analysis. The purpose of presenting Adjusted EBITDA is to highlight earnings without non-cash activity such as share-based compensation and other non-recurring or unusual items, if applicable.
The oil and gas royalty accrual is based upon historical production volumes, estimates of the timing of future payments and recent market prices for oil and gas. 28 Table of Contents Recent Accounting Pronouncements For further information regarding recently issued accounting pronouncements, see Note 2, “Summary of Significant Accounting Policies” in the notes to our consolidated financial statements included under Part II, Item 8.
Recent Accounting Pronouncements For further information regarding recently issued accounting pronouncements, see Note 2, “Summary of Significant Accounting Policies” in the notes to our consolidated financial statements included under Part II, Item 8. “Financial Statements and Supplementary Data.”
Excluding the impact of the $8.7 million recovery on 2023 revenue, oil and gas royalties for the year ended December 31, 2024 increased $24.6 million due to increased production volumes over 2023. Our share of production volumes increased to 26.8 thousand Boe per day for the year ended December 31, 2024 compared to 23.5 thousand Boe per day for 2023.
Oil and gas royalty revenue was $411.7 million for the year ended December 31, 2025 compared to $373.3 million for the year ended December 31, 2024, an increase of 10.3%. Our share of production volumes increased to 34.6 thousand Boe per day for the year ended December 31, 2025 compared to 26.8 thousand Boe per day for 2024.
Easements and other surface-related income includes revenue related to the use and crossing of our land for oil and gas 26 Table of Contents exploration and production, renewable energy, and agricultural operations.
Easements and other surface-related income was $78.2 million for the year ended December 31, 2025, an increase of 24.0% compared to $63.1 million for the year ended December 31, 2024. Easements and other surface-related income includes revenue related to the use and crossing of our land for oil and gas exploration and production, renewable energy, and agricultural operations.
Our cash flow provided by operating activities is primarily from oil, gas and produced water royalties, water and land sales, easements, and other surface-related income. Cash flow used in operations generally consists of operating expenses associated with our revenue streams, general and administrative expenses and income taxes.
Cash flow used in operations generally consists of operating expenses associated with our revenue streams, general and administrative expenses and income taxes.
The decrease in easements and other surface-related income was principally related to a decrease of $5.1 million in wellbore easements for the year ended December 31, 2024 compared to 2023.
The increase in easements and other surface-related income was principally related to increases of $10.0 million in pipeline easements, $3.8 million in wellbore easements and $2.5 million in lease bonuses on acquired royalty interests for the year ended December 31, 2025 compared to the same period of 2024.
The EIA currently estimates that Permian oil production for December 2024 was approximately 6.5 million barrels per day. 21 Table of Contents Due to our ownership concentration in the Permian Basin, our revenues are directly impacted by oil and gas pricing and drilling activity in the Permian Basin.
Due to our ownership concentration in the Permian Basin, our revenues are directly impacted by oil and gas pricing and drilling activity in the Permian Basin.
The following table presents a reconciliation of EBITDA, Adjusted EBITDA and free cash flow to net income for the years ended December 31, 2024 and 2023 (in thousands): Years Ended December 31, 2024 2023 Net income $ 453,960 $ 405,645 Add: Income tax expense 124,861 111,916 Depreciation, depletion and amortization 25,162 14,757 EBITDA 603,983 532,318 Add (deduct): Employee share-based compensation 11,364 9,124 Pension curtailment and settlement gain (4,616) — Adjusted EBITDA 610,731 541,442 Deduct: Current income tax expense (120,257) (110,517) Capital expenditures (29,423) (15,431) Free Cash Flow $ 461,051 $ 415,494 Off-Balance Sheet Arrangements The Company has not engaged in any off-balance sheet arrangements.
The following table presents a reconciliation of net income to EBITDA and Adjusted EBITDA for the years ended December 31, 2025 and 2024 (in thousands): Years Ended December 31, 2025 2024 Net income $ 481,376 $ 453,960 Add: Interest expense 690 — Income tax expense 128,953 124,861 Depreciation, depletion and amortization 62,533 25,162 EBITDA 673,552 603,983 Add (deduct): Employee share-based compensation 13,817 11,364 Pension curtailment and settlement gain — (4,616) Adjusted EBITDA $ 687,369 $ 610,731 The following table presents a reconciliation of net income to free cash flow for the years ended December 31, 2025 and 2024 (in thousands): Years Ended December 31, 2025 2024 Net income $ 481,376 $ 453,960 Add (deduct): Income tax expense 128,953 124,861 Depreciation, depletion and amortization 62,533 25,162 Employee share-based compensation 13,817 11,364 Pension curtailment and settlement gain — (4,616) Current income tax expense (122,398) (120,257) Purchase of fixed assets (59,531) (29,696) (Increase) decrease in accounts payable related to purchases of fixed assets (6,417) 273 Free cash flow $ 498,333 $ 461,051 Off-Balance Sheet Arrangements We have not entered into off-balance sheet arrangements that require us to provide funding, guarantees or any other form of financial support.
The increase is principally due to additional depletion expense associated with royalty interests acquired in August 2024 and October 2024, as well as additional amortization expense associated with intangible assets acquired in August 2023 and August 2024. Other income, net. Other income, net was $39.7 million and $31.5 million for the years ended December 31, 2024 and 2023, respectively.
The increase was principally due to depletion expense associated with royalty interests acquired during the second half of both 2025 and 2024. Other income, net. Other income, net was $14.9 million for the year ended December 31, 2025 compared to $31.7 million for the same period of 2024.
The decrease in general and administrative expenses during the year ended December 31, 2024 compared to the same period of 2023 was principally related to a reduction in legal and professional fees associated with stockholder matters that occurred during 2023. Depreciation, depletion and amortization .
The decrease was primarily due to a decrease in legal and professional fees of $11.9 million over the same period of 2024. Depreciation, depletion and amortization. Depreciation, depletion and amortization was $44.6 million for the year ended December 31, 2025 compared to $11.0 million for the same period of 2024.
Over the last few years, we have been working with a leading industrial technology and manufacturing firm to develop an energy-efficient desalination and treatment process and associated equipment that can recycle produced water into fresh water with quality standards appropriate for surface discharge and beneficial reuse.
Development of New Solutions for Produced Water and Capital Expenditures In 2024, we announced our progress towards developing a patented energy-efficient desalination and treatment process and associated equipment that can recycle produced water into fresh water with quality standards appropriate for surface discharge and beneficial reuse.
See Part I, Item 1, “Business — Recent Developments” for further discussion of our acquisition activity during 2024. Development of New Solutions for Produced Water and Capital Expenditures In May 2024, we announced our progress towards developing new solutions for produced water in the Permian Basin.
See Part I, Item 1. “Business — Recent Developments” for further discussion of our acquisition and investment activity during 2025.
The increase in water service-related expenses for the year ended December 31, 2024 was principally related to a 34.3% increase in water sales over 2023, primarily as a result of increased water volumes.
Right of way and other expenses also vary from period to period depending on the location of customer delivery. The increase in water service-related expenses for the year ended December 31, 2025 was principally related to increased water sales volumes compared to the same period of 2024.
For the year ended December 31, 2023, we sold 18,061 acres of land for an aggregate sales price of approximately $6.8 million. Net income. Net income for the Land and Resource Management segment increased to $314.9 million for the year ended December 31, 2024 compared to $306.7 million for 2023.
For the year ended December 31, 2024, we sold 439 acres of land for an aggregate sales price of approximately $4.4 million. Salaries and related employee expenses.
We calculate free cash flow as Adjusted EBITDA less current income tax expense and capital expenditures. The purpose of presenting free cash flow is to provide an additional measure of operating performance. We have presented EBITDA, Adjusted EBITDA and free cash flow because we believe that these metrics are useful supplements to net income in analyzing the Company's operating performance.
To calculate free cash flow, net income is adjusted by adding back income tax expense, depreciation, depletion and amortization and employee share-based compensation, less the cash outflows of current income tax expenses, purchases of fixed assets and pension curtailment and settlement gain. 33 Table of Contents We have presented EBITDA, Adjusted EBITDA and free cash flow because we believe that these metrics are useful supplements to net income in analyzing our operating performance, ability to fund future acquisitions, ability to return capital to our stockholders and explaining how our Named Executive Officers (as defined below) are compensated.
Easements and other surface-related income. Easements and other surface-related income was $63.1 million for the year ended December 31, 2024, a decrease of 7.1% compared to $67.9 million for the year ended December 31, 2023.
Other income, net was $3.9 million for the year ended December 31, 2025 compared to $8.0 million for the same period of 2024. Lower cash balances and investment yields during the year ended December 31, 2025 compared to the same period of 2024 resulted in a decrease in interest income.
Depreciation, depletion and amortization was $25.2 million for the year ended December 31, 2024 compared to $14.8 million for the year ended December 31, 2023.
Depreciation, depletion and amortization. Depreciation, depletion and amortization was $18.0 million for the year ended December 31, 2025 compared to $14.2 million for the comparable period of 2024. The increase was principally due to depreciation expense related to new water service-related assets placed in service. Other income, net.
Additionally, during the year ended December 31, 2024, we invested approximately $21.7 million to maintain and/or enhance our water sourcing assets. Cash Flows from Operating Activities For the years ended December 31, 2024 and 2023, net cash provided by operating activities was $490.7 million and $418.3 million, respectively.
Cash Flows from Operating Activities For the years ended December 31, 2025 and 2024, net cash provided by operating activities was $545.9 million and $490.7 million, respectively. Our cash flow provided by operating activities is primarily from oil, gas and produced water royalties, water and land sales, easements, and other surface-related income.
Additionally, during the year ended December 31, 2024, we recorded a curtailment and settlement gain of $4.6 million related to the Company’s pension plan. See further discussion at Note 8, “Pension and Other Postretirement Benefits” in the notes to our consolidated financial statements included under Part II, Item 8, “Financial Statements and Supplementary Data.” Total income tax expense.
Additionally, during the year ended December 31, 2024, we recorded a curtailment and settlement gain of $1.3 million related to our pension plan. Income tax expense. Income tax expense was $42.6 million for the year ended December 31, 2025 compared to $38.5 million for the same period of 2024.
Salaries and related employee expenses were $53.6 million for the year ended December 31, 2024 compared to $43.4 million for 2023.
Total operating expenses were $206.0 million for the year ended December 31, 2025 compared to $166.7 million for the year ended December 31, 2024. Net income was $481.4 million for the year ended December 31, 2025 compared to $454.0 million for the year ended December 31, 2024.
Acquisition Activity We completed the following asset acquisitions and business combination during 2024: • Acquired mineral interests across 7,490 NRA located primarily in the Midland Basin in Martin, Midland and other counties in Texas and New Mexico for cash consideration of $275.2 million, net of post-closing adjustments. • Acquired mineral interests across 4,106 NRA located in Culberson County, Texas for a purchase price of $120.3 million, net of post-closing adjustments. • Acquired 4,120 surface acres in Martin County, Texas along with other surface-related tangible and intangible assets in a business combination for total consideration of $45.0 million.
Acquisition and Investment Activity We completed the following asset acquisitions and investment during 2025: • In March 2025, we acquired 177 NRA located primarily in the Midland Basin for an aggregate purchase price of $3.5 million, net of post-closing adjustments, in an all-cash transaction. • In May 2025, we acquired 787 acres of land in Reeves County, Texas for an aggregate purchase price, inclusive of closing costs, of $4.5 million in an all-cash transaction. • In September 2025, we acquired 8,147 acres of land in Martin, County Texas for an aggregate purchase price, inclusive of closing costs, of $31.4 million in an all-cash transaction. • In November 2025, we acquired 17,306 NRA located primarily in the Midland Basin in Martin, Howard, Midland, and other counties for an aggregate purchase price of $450.7 million, net of post-closing adjustments, in an all-cash transaction. • In December 2025, we made a minority investment of $50.0 million in Bolt pursuant to a strategic agreement to develop and enable large scale data center campuses and supporting infrastructure across our land.
Segment operating income increased $8.9 million for the year ended December 31, 2024 compared to 2023. The increase was principally due to a $15.9 million increase in oil and gas royalty revenue and a $13.5 million decrease in general and administrative expenses, partially offset by increased depletion expense and salaries and related employee expenses.
The increase in salaries and related employee expenses was principally related to market compensation adjustments that take effect annually at the start of a given year. 31 Table of Contents General and administrative expenses. General and administrative expenses were $14.4 million for the year ended December 31, 2025 compared to $25.5 million for the same period of 2024.
In addition, we repurchased $29.2 million of our Common Stock (including share repurchases not settled at the end of the period).
In addition, we repurchased $8.4 million of our Common Stock during the year ended December 31, 2025.
Removed
Average natural gas prices during 2024 decreased compared to average prior year natural gas prices. Global and domestic natural gas markets have experienced volatility due to macroeconomic conditions, infrastructure and logistical constraints, weather, and geopolitics, among other factors.
Added
In addition, ambiguity around tariffs implemented by and towards the United States has created incremental global economic uncertainty, which, in part, contributed to relatively weaker oil prices in 2025. Average Henry Hub natural gas prices during 2025 increased approximately 61% compared to average prior year natural gas prices.
Removed
During the year ended December 31, 2024, we spent $9.9 million on this energy-efficient desalination and treatment process and equipment, of which $7.4 million was capitalized. See the discussion in Part I, Item 1, “Business — Business Segments” for additional information.
Added
Global and domestic natural gas markets benefited in 2025 from improved supply-demand balances, including tailwinds from expanded liquefied natural gas capacity and improved industrial and power demand, among other factors.
Removed
During the year ended December 31, 2023, we paid total dividends of $100.0 million consisting of cumulative regular cash dividends of $4.33 per share. We repurchased $29.2 million and $42.4 million of our Common Stock (in each case, including share repurchases not settled at the end of the period) during the years ended December 31, 2024 and 2023, respectively.
Added
As the largest oil producing shale basin in the world, the Permian depends on large-scale water solutions related to well development and produced water disposal. For oil and gas well development, often hundreds of thousands of barrels of water are required per well completion.
Removed
This increase was principally due to the $38.5 million increase in water sales, the $19.9 million increase in produced water royalties and the $15.9 million increase in oil and gas royalty revenue in 2024 over 2023.
Added
To enhance productivity and drilling economics, oil and gas operators have generally expanded the amount of water per well completion and reduced the time to complete a well. These factors have led to intensifying demands for completion water delivery and assurance, which generally benefits completion water providers with larger size and scale.
Removed
Individual revenue line items are discussed below under “Segment Results of Operations.” Net income of $454.0 million for the year ended December 31, 2024 was 11.9% higher than 2023, principally as a result of the increase in total revenues, partially offset by an increase in operating expenses, as discussed below. 24 Table of Contents Consolidated Expenses: Salaries and related employee expenses .
Added
We believe we have a competitive advantage in this market with our significant surface footprint and a large network of owned and operated water wells, storage ponds, recycling assets, and pipelines that can source and deliver water to customers throughout the Permian. 25 Table of Contents Permian produced water volumes have grown commensurately with overall Permian oil production.
Removed
The number of employees increased from 100 at December 31, 2023 to 111 as of December 31, 2024, which, when coupled with market compensation adjustments effective at the beginning of 2024, resulted in increased salary and related employee expenses for the year ended December 31, 2024 compared to 2023.
Added
Though some produced water is reused and recycled for completion activities, the majority of Permian produced water is injected into subsurface pore space via saltwater disposal wells. Saltwater disposal availability varies throughout the Permian depending on regulations, permitted injected rates, and the availability of pore space and infrastructure.
Removed
Additionally, contract labor expenses for the year ended December 31, 2024 increased over 2023, principally as a result of the 34.3% increase in water sales over the same period. Water service-related expenses . Water service-related expenses increased $12.6 million to $46.1 million for the year ended December 31, 2024 compared to 2023.
Added
Our extensive land holdings contain and are adjacent to extensive pore space, and, through various commercial agreements, we allow produced water operators to transport and dispose of produced water across our surface footprint. Furthermore, our previously mentioned desalination project could potentially provide an additional solution for produced water by reducing the amount of water required to be injected subsurface.
Removed
General and administrative expenses. General and administrative expenses decreased $12.0 million to $34.5 million for the year ended December 31, 2024 from $46.5 million for the same period of 2023.
Added
As of December 31, 2025, we had no debt, draws on our Credit Facility, and no off-balance sheet arrangements that require us to provide funding, guarantees, or other forms of financial support.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeItem 7A. Quantitative and Qualitative Disclosures About Market Risk. The Company’s financial instruments consist of cash and cash equivalents (primarily consisting of U.S. Treasury Bills and commercial paper), accounts payable and other liabilities and the carrying amounts of these instruments approximate fair value due to the short-term nature of these instruments.
Biggest changeItem 7A. Quantitative and Qualitative Disclosures About Market Risk. Our financial instruments consist of cash and cash equivalents (primarily consisting of U.S. Treasury Bills and commercial paper), accounts payable and other liabilities and the carrying amounts of these instruments approximate fair value due to the short-term nature of these instruments.

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