Texas Pacific Land (TPL) Investor presentation summary

Financial performance and revenue streams

• Surface estate ownership generated $386M in FY 2025, accounting for 48% of consolidated revenue, with three main revenue streams: SLEM, water sales, and produced water royalties.

• Water segment has been profitable every year since inception, with cumulative post-tax cash flow of $811M and $190M in capital expenditures since 2017.

• Water services and operations achieved a 52% net income margin in FY 2025, outperforming industry peers and S&P 500 averages.

• Produced water royalties generated $124M in FY 2025 revenue, with volumes reaching 4.3M bbl/d and essentially 100% margin due to no direct operating expenses.

• Water sales revenue reached $170M in 2025, with gross margins consistently above 60% and capital intensity remaining modest at roughly 10% of sales.

Water sales and operational strategy

• Infrastructure provides brackish and recycled water for oil and gas activities, with sales prices per barrel ranging from $0.50–$1.00 and operating expenses of $0.10–$0.20 per barrel.

• Operated model ensures sustainable aquifer management and allows for expansion and market capture, benefiting shareholders with incremental earnings and free cash flow.

• Over 1,000 mbbl/d sourced and produced water treatment capacity, 38 mmbbl storage, and 480 miles of pipelines support operations in the Delaware and Midland Basins.

• Water demand per well and pad continues to rise due to advanced completion techniques, supporting long-term growth in water sales.

• Modest annual maintenance and growth capital expenditures ($10–$30M/year) enable system expansions and future sales growth.

Produced water royalties and disposal solutions

• Receives volumetric royalty payments for produced water disposed or transported across TPL surface, with no ownership or operation of disposal wells.

• Numerous AMI agreements with operators ensure royalty coverage over >600k acres, including off-acreage volumes from New Mexico.

• Produced water volumes and royalty revenues have shown consistent annual growth, with disposal capacity available for further expansion.

• Growth opportunities include pore space acquisitions, synthetic disposal, infrastructure investments, and desalination to address increasing produced water volumes.