Royalty revenue fell 8% as Permian drilling eased. Water services revenue rose 5% to $48.3 million. CEO sees signs of a plateau in the rig count. Alpha Score 54.
Alpha Score of 44 reflects weak overall profile with moderate momentum, poor value, moderate quality, moderate sentiment.
Texas Pacific Land Corp. posted second-quarter royalty revenue of $126.5 million, down 8% from the prior quarter, as Permian Basin drilling activity eased and natural gas prices weighed on a portion of its production. The company's total revenue reached $173.8 million, a 3% sequential decline, though net income rose 2% to $97.2 million on lower operating costs.
The Midland-based landowner and water services provider reported that average daily oil production on its royalty acreage slipped 2% to roughly 47,000 barrels, while natural gas output fell 4%. The pullback mirrors a broader slowdown in Permian completions during the spring, when operators pulled back on spending after first-quarter cash flow missed expectations at several large independents.
Water services revenue, which now accounts for roughly 28% of total sales, rose 5% to $48.3 million, driven by increased produced-water handling volumes. TPL's water business has grown into a steady earnings buffer as royalty income tracks a volatile drilling cycle. The segment's operating margin widened to 62% from 59% a year earlier, helped by new pipeline connections that reduced trucking costs.
Executives on the call pointed to a modest uptick in drilling permits during June and July as a signal that activity may stabilize. CEO Tyler Glover said the company is seeing
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