Texas Pacific Land Corporation (TPL) reported record-breaking financial results for the third quarter of 2026, driven by higher oil and gas production, elevated commodity prices, and increased revenue from water and infrastructure services. Revenue surged 35% year-over-year to $273 million, while net income rose 38% to $167 million, or $2.42 per diluted share. Free cash flow climbed 39% to $170 million, and adjusted EBITDA increased 37% to $238 million. This marks the third consecutive quarter of record revenue, net income, and free cash flow for the company.
The company's oil production on royalty acreage reached a quarterly record of 17,100 barrels per day, with total production hitting 42,300 barrels of oil equivalent per day. CEO Ty Glover attributed the strong results to robust development across TPL's royalty acreage, increased pipeline easement revenue, and record produced water royalty volumes. Glover noted that the company remained unhedged, allowing it to capitalize on elevated oil prices due to the ongoing Middle East conflict.
Revenue from surface leases, easements, and materials rose 53% from the previous quarter to $36 million, driven by growth in natural gas, natural gas liquids, electric, and utility infrastructure. The company also reported progress on its Orla phase II-B produced water desalination facility, with plans to begin processing field-produced water by year-end. However, data center projects face permitting uncertainty due to recent regulatory actions and a change in Texas gubernatorial leadership.
After the quarter ended, TPL acquired approximately 9,700 surface acres and 238 net royalty acres in Midland and Glasscock counties, expanding its Midland Basin footprint. At quarter-end, the company had $370 million in cash and cash equivalents, no debt, and an undrawn $500 million credit facility, providing financial flexibility for investments, acquisitions, or shareholder returns.