10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2023

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to ______

Commission File Number: 1-39804

Exact name of registrant as specified in its charter:

Texas Pacific Land Corporation

State or other jurisdiction of incorporation or organization:	IRS Employer Identification No.:
Delaware	75-0279735

Address of principal executive offices:

1700 Pacific Avenue, Suite 2900 Dallas, Texas 75201

Registrant’s telephone number, including area code:

(214) 969-5530

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock (par value $.01 per share)	TPL	New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑   No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑    No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer	☑	Accelerated filer	☐
Non-accelerated filer (Do not check if a smaller reporting company)	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☑

As of July 31, 2023, the Registrant had 7,677,756 shares of Common Stock, $0.01 par value, outstanding.

TEXAS PACIFIC LAND CORPORATION

Form 10-Q

For the Quarter Ended June 30, 2023

Table of Contents

		Page No.
PART I
FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited)	1
	Condensed Consolidated Balance Sheets as of June 30, 2023 and December 31, 2022	1
	Condensed Consolidated Statements of Income and Total Comprehensive Income for the Three and Six Months ended June 30, 2023 and 2022	2
	Condensed Consolidated Statements of Cash Flows for the Six Months ended June 30, 2023 and 2022	3
	Notes to Condensed Consolidated Financial Statements	4
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	14
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	26
Item 4.	Controls and Procedures	26
PART II
OTHER INFORMATION
Item 1.	Legal Proceedings	27
Item 1A.	Risk Factors	27
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	27
Item 3.	Defaults Upon Senior Securities	27
Item 4.	Mine Safety Disclosures	27
Item 5.	Other Information	27
Item 6.	Exhibits	28
	Signatures	29

PART I. FINANCIAL INFORMATION

Item 1.Financial Statements

TEXAS PACIFIC LAND CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except shares and per share amounts)

(Unaudited)

	June 30, 2023		December 31, 2022
ASSETS
Cash and cash equivalents	$	609,252	$	510,834
Accounts receivable and accrued receivables, net	120,771		103,983
Prepaid expenses and other current assets	5,312		7,427
Tax like-kind exchange escrow	2,195		6,348
Prepaid income taxes	—		4,809
Total current assets	737,530		633,401
Real estate acquired	130,024		109,704
Property, plant and equipment, net	84,324		85,478
Royalty interests acquired, net	45,920		45,025
Other assets	3,526		3,819
Real estate and royalty interests assigned through the 1888 Declaration of Trust, no value assigned:
Land (surface rights)	—		—
1/16th nonparticipating perpetual royalty interest	—		—
1/128th nonparticipating perpetual royalty interest	—		—
Total assets	$	1,001,324	$	877,427
LIABILITIES AND EQUITY
Accounts payable and accrued expenses	$	27,156	$	23,443
Ad valorem and other taxes payable	6,355		8,497
Income taxes payable	5,151		3,167
Unearned revenue	6,222		4,488
Total current liabilities	44,884		39,595
Deferred taxes payable	40,478		41,151
Unearned revenue - noncurrent	26,638		21,708
Accrued liabilities - noncurrent	1,774		2,086
Total liabilities	113,774		104,540
Commitments and contingencies	—		—
Equity:
Preferred stock, $0.01 par value; 1,000,000 shares authorized, none outstanding as of June 30, 2023 and December 31, 2022	—		—
Common stock, $0.01 par value; 7,756,156 shares authorized and 7,679,145 and 7,695,679 outstanding as of June 30, 2023 and December 31, 2022, respectively	78		78
Treasury stock, at cost; 77,011 and 60,477 shares as of June 30, 2023 and December 31, 2022, respectively	(128,502)		(104,139)
Additional paid-in capital	10,582		8,293
Accumulated other comprehensive income	2,465		2,516
Retained earnings	1,002,927		866,139
Total equity	887,550		772,887
Total liabilities and equity	$	1,001,324	$	877,427

See accompanying notes to condensed consolidated financial statements.

1

TEXAS PACIFIC LAND CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND TOTAL COMPREHENSIVE INCOME

(in thousands, except shares and per share amounts)

(Unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Revenues:
Oil and gas royalties	$	82,412	$	121,268	$	171,542	$	225,440
Water sales	37,648		22,272		59,377		41,092
Produced water royalties	20,841		18,669		40,975		33,539
Easements and other surface-related income	18,708		13,990		33,677		23,182
Land sales and other operating revenue	1,000		71		1,400		352
Total revenues	160,609		176,270		306,971		323,605
Expenses:
Salaries and related employee expenses	10,596		9,588		21,189		18,973
Water service-related expenses	10,287		3,915		15,943		6,697
General and administrative expenses	3,329		3,674		6,884		6,641
Legal and professional fees	10,154		1,163		26,782		2,882
Ad valorem and other taxes	2,070		2,042		3,644		4,085
Depreciation, depletion and amortization	3,893		4,180		7,297		8,306
Total operating expenses	40,329		24,562		81,739		47,584
Operating income	120,280		151,708		225,232		276,021
Other income, net	6,871		630		12,260		706
Income before income taxes	127,151		152,338		237,492		276,727
Income tax expense	26,758		33,444		50,531		59,933
Net income	$	100,393	$	118,894	$	186,961	$	216,794
Other comprehensive (loss) income — periodic pension costs, net of income taxes for the three and six months ended June 30, 2023 and 2022 of $8, $2, $14, and $4, respectively	(26)		8		(51)		16
Total comprehensive income	$	100,367	$	118,902	$	186,910	$	216,810
Net income per share of common stock
Basic	$	13.06	$	15.37	$	24.31	$	28.02
Diluted	$	13.05	$	15.37	$	24.30	$	28.01
Weighted average number of shares of common stock outstanding
Basic	7,685,662		7,733,730		7,689,352		7,737,527
Diluted	7,690,950		7,737,112		7,694,548		7,739,859
Cash dividends per share of common stock	$	3.25	$	23.00	$	6.50	$	26.00

See accompanying notes to condensed consolidated financial statements.

2

TEXAS PACIFIC LAND CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 (in thousands)

(Unaudited)

	Six Months Ended June 30,
	2023		2022
Cash flows from operating activities:
Net income	$	186,961	$	216,794
Adjustments to reconcile net income to net cash provided by operating activities:
Deferred taxes	(673)		(953)
Depreciation, depletion and amortization	7,297		8,306
Share-based compensation	5,323		3,495
Changes in operating assets and liabilities:
Operating assets, excluding income taxes	(14,477)		(35,472)
Operating liabilities, excluding income taxes	8,040		9,668
Income taxes payable	1,984		(6,433)
Prepaid income taxes	4,809		—
Cash provided by operating activities	199,264		195,405
Cash flows from investing activities:
Proceeds from sale of fixed assets	5		96
Acquisition of real estate	(20,320)		(12)
Acquisition of royalty interests	(1,803)		(1,662)
Purchase of fixed assets	(5,536)		(6,685)
Cash used in investing activities	(27,654)		(8,263)
Cash flows from financing activities:
Repurchases of common stock	(26,379)		(24,592)
Shares exchanged for tax withholdings	(939)		—
Dividends paid	(50,027)		(200,998)
Cash used in financing activities	(77,345)		(225,590)
Net increase in cash, cash equivalents and restricted cash	94,265		(38,448)
Cash, cash equivalents and restricted cash, beginning of period	517,182		428,242
Cash, cash equivalents and restricted cash, end of period	$	611,447	$	389,794
Supplemental disclosure of cash flow information:
Income taxes paid	$	44,396	$	67,324
Supplemental non-cash investing and financing information:
Nonmonetary exchange of assets	$	—	$	4,174
(Increase) decrease in accounts payable related to capital expenditures	$	(392)	$	3,662
Share repurchases and associated excise taxes not settled at the end of the period	$	432	$	1,161

See accompanying notes to condensed consolidated financial statements.

3

TEXAS PACIFIC LAND CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1.    Organization and Description of Business Segments

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 886,000 surface acres of land in West Texas, with the majority of our ownership 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 4,000 additional net royalty acres (normalized to 1/8th) in the western part of Texas.

TPL’s income is derived primarily from oil, gas and produced water royalties, sales of water and land, easements and commercial leases of the land.

On January 11, 2021, we completed our reorganization from a business trust, Texas Pacific Land Trust, organized under a Declaration of Trust dated February 1, 1888 (the “Declaration of Trust”), into Texas Pacific Land Corporation, a corporation formed and existing under the laws of the state of Delaware (the “Corporate Reorganization”).

Basis of Presentation

The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and on the same basis as the audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2022. The condensed consolidated financial statements herein include all adjustments which are, in the opinion of management, necessary to fairly state the financial position of the Company as of June 30, 2023 and the results of its operations for the three and six months ended June 30, 2023 and 2022, respectively, and its cash flows for the six months ended June 30, 2023 and 2022, respectively. Such adjustments are of a normal nature and all intercompany accounts and transactions have been eliminated in consolidation. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted from this report, and accordingly these interim financial statements and footnotes should be read in conjunction with the audited financial statements and footnotes included in our Annual Report on Form 10-K for the year ended December 31, 2022. The results for the interim periods shown in this report are not necessarily indicative of future financial results.

We operate our business in two segments: Land and Resource Management and Water Services and Operations. Our segments provide management with a comprehensive financial view of our key businesses. 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 11, “Business Segment Reporting” for further information regarding our segments.

2.    Summary of Significant Accounting Policies

Use of Estimates in the Preparation of Financial Statements

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. In the event estimates and/or assumptions prove to be different from actual amounts, adjustments are made in subsequent periods to reflect more current information.

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. Treasury bills and commercial paper, with original maturities of three months or less to be cash equivalents. Our cash equivalents are considered Level 1 assets in the fair value hierarchy.

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The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows as of June 30, 2023 and December 31, 2022 (in thousands):

	June 30, 2023		December 31, 2022
Cash and cash equivalents	$	609,252	$	510,834
Tax like-kind exchange escrow	2,195		6,348
Total cash, cash equivalents and restricted cash shown in the statement of cash flows	$	611,447	$	517,182

Reclassifications

Certain financial information on the condensed consolidated balance sheet as of December 31, 2022 and condensed consolidated statement of income and total comprehensive income for the three and six months ended June 30, 2022 has been revised to conform to the current year presentation. These revisions include a balance sheet reclassification of $454,000 of other taxes payable previously included in accounts payable and accrued expenses to ad valorem and other taxes payable and an income statement reclassification of $31,000 and $64,000 of property taxes previously included in general and administrative expenses to ad valorem and other taxes for the three and six months ended June 30, 2022, respectively.

3.    Real Estate Activity

As of June 30, 2023 and December 31, 2022, TPL owned the following land and real estate (in thousands, except number of acres):

	June 30, 2023			December 31, 2022
	Number of Acres	Net Book Value		Number of Acres	Net Book Value
Land (surface rights) (1)	817,017	$	—	817,060	$	—
Real estate acquired	69,447	130,024		57,306	109,704
Total real estate situated in Texas	886,464	$	130,024	874,366	$	109,704

(1)Real estate assigned through the Declaration of Trust.

Land Sales

For the six months ended June 30, 2023, we sold 43 acres of land in Texas for an aggregate sales price of $1.4 million. There were no significant land sales for the six months ended June 30, 2022.

Land Acquisitions

For the six months ended June 30, 2023, we acquired 12,141 acres of land in Texas for an aggregate purchase price of $20.0 million. There were no significant land acquisitions for the six months ended June 30, 2022.

4.    Property, Plant and Equipment

Property, plant and equipment, net consisted of the following as of June 30, 2023 and December 31, 2022 (in thousands):

5

	June 30, 2023		December 31, 2022
Property, plant and equipment, at cost:
Water service-related assets	$	130,106	$	125,166
Furniture, fixtures and equipment	9,852		9,718
Other	598		598
Total property, plant and equipment, at cost	140,556		135,482
Less: accumulated depreciation	(56,232)		(50,004)
Property, plant and equipment, net	$	84,324	$	85,478

Depreciation expense was $3.2 million and $3.9 million for the three months ended June 30, 2023 and 2022, respectively. Depreciation expense was $6.3 million and $7.7 million for the six months ended June 30, 2023 and 2022, respectively.

5.    Oil and Gas Royalty Interests

As of June 30, 2023 and December 31, 2022, we owned the following oil and gas royalty interests (in thousands):

	June 30, 2023		December 31, 2022
1/16th nonparticipating perpetual royalty interests	$	—	$	—
1/128th nonparticipating perpetual royalty interests	—		—
Royalty interests acquired	49,731		47,928
Total royalty interests, gross	49,731		47,928
Less: accumulated depletion	(3,811)		(2,903)
Total royalty interests, net	$	45,920	$	45,025

Acquisitions

For the six months ended June 30, 2023, we acquired oil and gas royalty interests in 61 net royalty acres (normalized to 1/8th) for an aggregate purchase price of approximately $1.8 million. For the six months ended June 30, 2022, we acquired oil and gas royalty interests in 92 net royalty acres (normalized to 1/8th) for an aggregate purchase price of approximately $1.7 million.

Depletion expense was $0.6 million and $0.2 million for the three months ended June 30, 2023 and 2022, respectively.

Depletion expense was $0.9 million and $0.5 million for the six months ended June 30, 2023 and 2022, respectively.

6.    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 directors under the 2021 Non-Employee Director Stock and Deferred Compensation Plan (the “2021 Directors Plan”). Share-based compensation granted to date under the plans has included restricted stock awards (“RSAs”), restricted stock units (“RSUs”) and performance-based units (“PSUs”). Currently, all awards granted under the plans are entitled to receive dividends (which are accrued and distributed to award recipients upon vesting) or have dividend equivalent rights. Dividends and dividend equivalent rights are subject to the same vesting conditions as the awards to which they relate and are forfeitable if the related awards are forfeited. RSUs granted under the 2021 Plan vest in one-third increments and PSUs granted under the 2021 Plan cliff vest at the end of three years if the performance metrics are achieved (as discussed further below). RSAs granted under the 2021 Directors Plan vest on the first anniversary of the award.

Incentive Plan for Employees

The maximum aggregate number of shares of the Company’s common stock, par value $0.01 per share (“Common Stock”) that may be issued under the 2021 Plan is 75,000 shares, which may consist, in whole or in part, of authorized and

6

unissued shares (if any), treasury shares, or shares reacquired by the Company in any manner. As of June 30, 2023, 54,718 shares of Common Stock remained available under the 2021 Plan for future grants.

The following table summarizes activity related to RSAs and RSUs under the 2021 Plan for the six months ended June 30, 2023 and 2022:

	Six Months Ended June 30,
	2023						2022
	Restricted Stock Awards			Restricted Stock Units			Restricted Stock Awards			Restricted Stock Units
	Number of RSAs	Weighted-Average Grant-Date Fair Value per Share		Number of RSUs	Weighted-Average Grant-Date Fair Value per Share		Number of RSAs	Weighted-Average Grant-Date Fair Value per Share		Number of RSUs	Weighted-Average Grant-Date Fair Value per Share
Nonvested at beginning of period (1)	1,337	$	1,252	5,612	$	1,323	3,330	$	1,252	—	$	—
Granted (2)	—	—		2,848	1,924		—	—		3,824	1,105
Vested (3)	—	—		(1,270)	1,105		—	—		—	—
Cancelled and forfeited	—	—		—	—		—	—		—	—
Nonvested at end of period	1,337	$	1,252	7,190	$	1,600	3,330	$	1,252	3,824	$	1,105

(1)The RSAs were granted on December 29, 2021: 1,993 shares vested on December 29, 2022 and 1,337 shares will vest on December 29, 2023.

(2)The RSUs were granted on February 10, 2023 and vest in one-third increments over a three-year period.

(3)Of the 1,270 shares that vested on February 11, 2023, 488 shares were surrendered by employees to the Company to settle tax withholdings.

The following table summarizes activity related to PSUs for the six months ended June 30, 2023 and 2022:

	Six Months Ended June 30,
	2023			2022
	Number of Target PSUs	Weighted-Average Grant-Date Fair Value per Share		Number of Target PSUs	Weighted-Average Grant-Date Fair Value per Share
Nonvested at beginning of period (1)	2,394	$	1,355	—	$	—
Granted (2)	1,852	2,342		2,394	1,355
Vested	—	—		—	—
Cancelled and forfeited	—	—		—	—
Nonvested at end of period	4,246	$	1,786	2,394	$	1,355

(1)The PSUs were granted on February 11, 2022 and include 1,197 RTSR (as defined below) PSUs (based on target) with a grant date fair value of $1,605 per share and 1,197 FCF (as defined below) PSUs (based on target) with a grant date fair value of $1,105 per share. If the maximum performance potential metrics described in the PSU agreements are achieved, the actual number of units that will ultimately be awarded under the PSU agreements will exceed target units by 100% (i.e., a collective 2,394 additional units would be issued).

(2)The PSUs were granted on February 10, 2023 and include 926 RTSR PSUs (based on target) with a grant date fair value of $2,761 per share and 926 FCF PSUs (based on target) with a grant date fair value of $1,924 per share. If the maximum performance potential metrics described in the PSU agreements are achieved, the actual number of units that will ultimately be awarded under the PSU agreements will exceed target units by 100% (i.e., a collective 1,852 additional units would be issued).

Each PSU has a value equal to one share of Common Stock. The PSUs will vest three years after grant if certain performance metrics are met, as follows: 50% of the PSUs may be earned based on the Company’s relative total stockholder return (“RTSR”) over the applicable three-year measurement period compared to the XOP Index, and 50% of the PSUs may be earned based on the cumulative free cash flow per share (“FCF”) over the three-year vesting period. As the RTSR PSU is a market-based award, its grant date fair value was determined using a Monte Carlo simulation model that uses the same input assumptions as the Black-Scholes model to determine the expected potential ranking of the Company against the XOP Index, i.e. the probability of satisfying the market condition defined in the award. Expected volatility in the model was estimated

7

based on the volatility of historical stock prices over a period matching the expected term of the award. The risk-free interest rate was based on U.S. Treasury yield constant maturities for a term matching the expected term of the award.

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 10,000 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. As of June 30, 2023, 8,815 shares of Common Stock remained available under the 2021 Directors Plan for future grants.

The following table summarizes activity related to the RSAs under the 2021 Directors Plan for the six months ended June 30, 2023 and 2022:

	Six Months Ended June 30,
	2023			2022
	Number of RSAs	Weighted-Average Grant-Date Fair Value per Share		Number of RSAs	Weighted-Average Grant-Date Fair Value per Share
Nonvested at beginning of period	699	$	1,281	—	$	—
Granted (1)	486	2,344		784	1,277
Vested	(699)	1,281		—	—
Cancelled and forfeited	—	—		(85)	1,249
Nonvested at end of period	486	$	2,344	699	$	1,281

(1)The RSAs were granted on January 1, 2023 and will vest on the first anniversary of the grant.

Share-Based Compensation Expense

The following table summarizes our share-based compensation expense by line item in the condensed consolidated statements of income (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Salaries and related employee expenses (employee awards)	$	2,559	$	1,760	$	4,715	$	3,079
General and administrative expenses (director awards)	291		230		608		416
Total share-based compensation expense (1)	$	2,850	$	1,990	$	5,323	$	3,495

(1)The Company recognized a tax benefit of $0.6 million and $0.4 million related to share-based compensation for the three months ended June 30, 2023 and 2022, respectively. The Company recognized a tax benefit of $1.1 million and $0.7 million related to share-based compensation for the six months ended June 30, 2023 and 2022, respectively.

As of June 30, 2023, there was $14.2 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 1.5 years.

7.    Income Taxes

The calculation of our effective tax rate is as follows for the three and six months ended June 30, 2023 and 2022 (in thousands, except percentages):

8

	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
Income before income taxes	$	127,151		$	152,338		$	237,492		$	276,727
Income tax expense	$	26,758		$	33,444		$	50,531		$	59,933
Effective tax rate	21.0		%	22.0		%	21.3		%	21.7		%

For interim periods, our income tax expense and resulting effective tax rate are based upon an estimated annual effective tax rate adjusted for the effects of items required to be treated as discrete to the period, including changes in tax laws, changes in estimated exposures for uncertain tax positions, and other items.

8.    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 restricted stock and other unvested awards granted pursuant to our incentive and equity compensation plans. The computation of diluted EPS reflects the potential dilution that could occur if all outstanding awards under the incentive and equity compensation plans were converted into shares of Common Stock or resulted in the issuance of shares of Common Stock that would then share in the earnings of the Company. The number of dilutive securities is computed using the treasury stock method.

The following table sets forth the computation of EPS for the three and six months ended June 30, 2023 and 2022 (in thousands, except number of shares and per share data):

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Net income	$	100,393	$	118,894	$	186,961	$	216,794
Basic earnings per share:
Weighted average shares outstanding for basic earnings per share	7,685,662		7,733,730		7,689,352		7,737,527
Basic earnings per share	$	13.06	$	15.37	$	24.31	$	28.02
Diluted earnings per share:
Weighted average shares outstanding for basic earnings per share	7,685,662		7,733,730		7,689,352		7,737,527
Effect of dilutive securities:
Incentive and equity compensation plans	5,288		3,382		5,196		2,333
Weighted average shares outstanding for diluted earnings per share	7,690,950		7,737,112		7,694,548		7,739,859
Diluted earnings per share	$	13.05	$	15.37	$	24.30	$	28.01

Restricted stock is included in the number of shares of Common Stock issued and outstanding, but omitted from the basic EPS calculation until such time as the shares of restricted stock vest. Certain stock awards granted are not included in the dilutive securities in the table above as they are anti-dilutive for the three and six months ended June 30, 2023 and June 30, 2022.

9.    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 June 30, 2023.

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Prior to January 1, 2022, ad valorem taxes with respect to our historical royalty interests were paid directly by third parties pursuant to an existing arrangement. Since the completion of our Corporate Reorganization, we have received notice from certain third parties that they no longer intend to pay the ad valorem taxes related to such historical royalty interests. In order to protect the historical royalty interests from any potential tax liens for non-payment of ad valorem taxes, we have accrued and/or paid such ad valorem taxes since January 1, 2022. While we intend to seek reimbursement from the third parties 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 June 30, 2023.

Ongoing Arbitration with an Operator.

As part of an ongoing arbitration between TPL and an operator with respect to underpayment of oil and gas royalties resulting from improper deductions of post-production costs for periods before and through April 2022, the operator has agreed to pay $8.7 million to TPL. This amount has been recorded as a receivable and included in oil and gas royalty revenue in the condensed consolidated income statement for the six months ended June 30, 2023.

10.    Changes in Equity

The following tables present changes in our equity for the six months ended June 30, 2023 and 2022 (in thousands, except shares and per share amounts):

	Common Stock			Treasury Stock			Additional Paid-in Capital		Accum. Other Comp. Income (Loss)		Retained Earnings		Total Equity
	Shares	Amount		Shares	Amount
For the six months ended June 30, 2023:
Balances as of December 31, 2022	7,695,679	$	78	60,477	$	(104,139)	$	8,293	$	2,516	$	866,139	$	772,887
Net income	—	—		—	—		—		—		86,568		86,568
Dividends paid — $3.25 per share of common stock	—	—		—	—		—		—		(25,061)		(25,061)
Share-based compensation, net of forfeitures	1,756	—		(1,756)	3,033		(560)		—		(103)		2,370
Repurchases of common stock, including excise taxes of $67	(3,627)	—		3,627	(6,749)		—		—		—		(6,749)
Shares exchanged for tax withholdings	(488)	—		488	(939)		—		—		—		(939)
Periodic pension costs, net of income taxes of $6	—	—		—	—		—		(25)		—		(25)
Balances as of March 31, 2023	7,693,320	$	78	62,836	$	(108,794)	$	7,733	$	2,491	$	927,543	$	829,051
Net income	—	—		—	—		—		—		100,393		100,393
Dividends paid — $3.25 per share of common stock	—	—		—	—		—		—		(24,966)		(24,966)
Share-based compensation, net of forfeitures	—	—		—	—		2,849		—		(43)		2,806
Repurchases of common stock, including excise taxes of $165	(14,175)	—		14,175	(19,708)		—		—		—		(19,708)
Periodic pension costs, net of income taxes of $8	—	—		—	—		—		(26)		—		(26)
Balances as of June 30, 2023	7,679,145	$	78	77,011	$	(128,502)	$	10,582	$	2,465	$	1,002,927	$	887,550

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	Common Stock			Treasury Stock			Additional Paid-in Capital		Accum. Other Comp. Income (Loss)		Retained Earnings		Total Equity
	Shares	Amount		Shares	Amount
For the six months ended June 30, 2022:
Balances as of December 31, 2021	7,744,695	$	78	11,461	$	(15,417)	$	28	$	(1,007)	$	668,029	$	651,711
Net income	—	—		—	—		—		—		97,900		97,900
Dividends paid — $3.00 per share of common stock	—	—		—	—		—		—		(23,224)		(23,224)
Share-based compensation, net of forfeitures	595	—		(595)	800		1,477		—		(796)		1,481
Periodic pension costs, net of income taxes of $2	—	—		—	—		—		8		—		8
Balances as of March 31, 2022	7,745,290	$	78	10,866	$	(14,617)	$	1,505	$	(999)	$	741,909	$	727,876
Net income	—	—		—	—		—		—		118,894		118,894
Dividends paid — $3.00 per share of common stock	—	—		—	—		—		—		(23,188)		(23,188)
Special dividends paid — $20.00 per share of common stock	—	—		—	—		—		—		(154,586)		(154,586)
Share-based compensation, net of forfeitures	104	—		(104)	140		1,851		—		(180)		1,811
Repurchases of common stock	(17,478)	—		17,478	(25,534)		—		—		—		(25,534)
Periodic pension costs, net of income taxes of $2	—	—		—	—		—		8		—		8
Balances as of June 30, 2022	7,727,916	$	78	28,240	$	(40,011)	$	3,356	$	(991)	$	682,849	$	645,281

Stock Repurchase Program

On November 1, 2022, our board of directors approved a stock repurchase program, which became effective January 1, 2023, to purchase up to an aggregate of $250 million of our outstanding Common Stock.

The Company intends to purchase 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 of directors at any time. 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 Securities Exchange Act of 1934, as amended, privately negotiated transactions, and/or other transactions at the Company’s discretion, including under a Rule 10b5-1 trading plan implemented by the Company, and will be subject to market conditions, applicable legal requirements and other factors.

11.    Business Segment Reporting

During the periods presented, we reported our financial performance based on the following segments: Land and Resource Management and Water Services and Operations. Our segments provide management with a comprehensive financial view of our key businesses. The segments enable the alignment of our strategies and objectives and provide a framework for timely and rational allocation of resources within businesses. We eliminate any inter-segment revenues and expenses upon consolidation.

The Land and Resource Management segment encompasses the business of managing our approximately 886,000 surface acres of land and our oil and gas royalty interests in West Texas, principally concentrated in the Permian Basin. The revenue streams of this segment consist primarily of royalties from oil and gas, revenues from easements and commercial leases and land and material sales.

The Water Services and Operations segment encompasses the business of providing a full-service water offering to operators in the Permian Basin. The revenue streams of this segment primarily consist of revenue generated from sales of sourced and treated water as well as revenue from produced water royalties.

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Segment financial results were as follows for the three and six months ended June 30, 2023 and 2022 (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Revenues:
Land and resource management	$	101,320	$	133,385	$	205,343	$	246,732
Water services and operations	59,289		42,885		101,628		76,873
Total consolidated revenues	$	160,609	$	176,270	$	306,971	$	323,605
Net income:
Land and resource management	$	69,633	$	96,074	$	134,976	$	177,230
Water services and operations	30,760		22,820		51,985		39,564
Total consolidated net income	$	100,393	$	118,894	$	186,961	$	216,794
Capital expenditures:
Land and resource management	$	(31)	$	103	$	144	$	225
Water services and operations	1,402		7,239		5,000		10,122
Total capital expenditures	$	1,371	$	7,342	$	5,144	$	10,347
Depreciation, depletion and amortization:
Land and resource management	$	912	$	529	$	1,530	$	1,065
Water services and operations	2,981		3,651		5,767		7,241
Total depreciation, depletion and amortization	$	3,893	$	4,180	$	7,297	$	8,306

The following table presents total assets and property, plant and equipment, net by segment as of June 30, 2023 and December 31, 2022 (in thousands):

	June 30, 2023		December 31, 2022
Assets:
Land and resource management	$	845,847	$	735,193
Water services and operations	155,477		142,234
Total consolidated assets	$	1,001,324	$	877,427
Property, plant and equipment, net:
Land and resource management	$	5,607	$	5,998
Water services and operations	78,717		79,480
Total consolidated property, plant and equipment, net	$	84,324	$	85,478

12.    Oil and Gas Producing Activities

We measure our share of oil and gas produced in barrels of oil equivalent (“Boe”). One Boe equals one barrel of crude oil, condensate, NGLs (natural gas liquids) or approximately 6,000 cubic feet of gas. For the three months ended June 30, 2023 and 2022, our share of oil and gas produced was approximately 24.9 and 19.8 thousand Boe per day, respectively. For the six months ended June 30, 2023 and 2022, our share of oil and gas produced was approximately 22.9 and 20.3 thousand Boe per day, respectively. Reserves related to our royalty interests are not presented because the information is unavailable.

There are a number of oil and gas wells that have been drilled but are not yet completed (“DUC”) where we have a royalty interest. The number of DUC wells is determined using uniform drilling spacing units with pooled interests for all wells

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awaiting completion. We have identified 593 and 584 DUC wells subject to our royalty interest as of June 30, 2023 and December 31, 2022, respectively.

13.    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 August 1, 2023, our board of directors declared a quarterly cash dividend of $3.25 per share, payable on September 15, 2023 to stockholders of record at the close of business on September 1, 2023.

*****

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Cautionary Statement Regarding Forward-Looking Statements

Statements in this Quarterly Report on Form 10-Q that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements regarding management’s expectations, hopes, intentions or strategies regarding the future. Words or phrases such as “expects” and “believes”, or similar expressions, when used in this Quarterly Report on Form 10-Q or other filings with the Securities and Exchange Commission (the “SEC”), are intended to identify “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements regarding the Company’s future operations and prospects, the markets for real estate in the areas in which the Company owns real estate, applicable zoning regulations, the markets for oil and gas including actions of other oil and gas producers or consortiums worldwide such as the Organization of the Petroleum Exporting Countries (“OPEC”) and Russia (collectively referred to as “OPEC+”), expected competition, management’s intent, beliefs or current expectations with respect to the Company’s future financial performance and other matters. All forward-looking statements in this Report are based on information available to us as of the date this Report is filed with the SEC, and we assume no responsibility to update any such forward-looking statements, except as required by law. All forward-looking statements are subject to a number of risks, uncertainties and other factors that could cause our actual results, performance, prospects or opportunities to differ materially from those expressed in, or implied by, these forward-looking statements. These risks, uncertainties and other factors include, but are not limited to, the factors discussed in Item 1A. “Risk Factors” of Part I of our Annual Report on Form 10-K for the year ended December 31, 2022, and in Part I, Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Part II, Item 1A. “Risk Factors” of this Quarterly Report on Form 10-Q.

The following discussion and analysis should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on February 22, 2023 and the condensed consolidated financial statements and accompanying notes included, in Part I, Item 1 of this Quarterly Report on Form 10-Q. Period-to-period comparisons of financial data are not necessarily indicative, and therefore should not be relied upon as indicators, of the Company’s future performance.

Overview

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 one of the largest landowners in the State of Texas with approximately 886,000 surface acres of land in West Texas, with the majority of our ownership 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 and a 1/16th NPRI under approximately 371,000 acres of land, as well as approximately 4,000 additional net royalty acres (normalized to 1/8th), all located in the western part of Texas. The Company was originally organized under a Declaration of Trust, dated February 1, 1888, to receive and hold title to extensive tracts of land in the State of Texas, previously the property of the Texas and Pacific Railway Company.

We completed our reorganization on January 11, 2021 from a business trust, Texas Pacific Land Trust, into Texas Pacific Land Corporation, a corporation formed and existing under the laws of the state of Delaware.

We are not an oil and gas producer. Our business activity is generated from surface and royalty interest ownership in West Texas, primarily in the Permian Basin. Our revenues are primarily derived from oil, gas and produced water royalties, sales of water and land, easements and commercial leases. Due to the nature of our operations and concentration of our ownership in one geographic location, our revenue and net income are subject to substantial fluctuations from quarter to quarter and year to year. In addition to fluctuations in response to changes in the market price for oil and gas, our financial results are also subject to decisions by the owners and operators of not only the oil and gas wells to which our oil and gas royalty interests relate, but also to other owners and operators in the Permian Basin as it relates to our other revenue streams, principally water sales, produced water royalties, easements and other surface-related revenue.

For a further overview of our business and business segments, see Item 1. “Business — General” in our Annual Report on Form 10-K for the year ended December 31, 2022.

Market Conditions

Average oil and gas prices during the second quarter of 2023 have declined compared to quarterly average prices during 2022. Oil prices have been impacted by certain actions by OPEC+, uneven global supply and demand trends, and

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Russia’s incursion into Ukraine, among other factors. Global and domestic natural gas markets have experienced volatility due to macroeconomic conditions, infrastructure and logistical constraints, weather, and geopolitical issues, among other factors. In 2023, domestic natural gas prices have declined in part to growing supply. Since mid-2022, the Waha Hub located in Pecos County, Texas has at times experienced significant negative price differentials relative to Henry Hub, located in Erath, Louisiana, due in part to growing local Permian natural gas production and limited natural gas pipeline takeaway capacity. Midstream infrastructure is currently under construction by operators to provide additional takeaway capacity, though the impact on future basis differentials will be dependent on future natural gas production and other factors. Industry supply chains and labor supply remain constrained, which has contributed to elevated inflation, among other factors. Changes in macro-economic conditions, including rising interest rates and lower global economic activity, could result in additional shifts in oil and gas supply and demand in future periods. 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.

Permian Basin Activity

The Permian Basin is one of the oldest and most well-known hydrocarbon-producing areas and currently accounts for a substantial portion of oil and gas production in the United States, covering approximately 86,000 square miles in 52 counties across southeastern New Mexico and western Texas. Exploration and production (“E&P”) companies active in the Permian Basin have generally increased their drilling and development activity in 2023 compared to recent prior year activity levels. Per the U.S. Energy Information Administration (“EIA”), Permian production is currently in excess of 5.7 million barrels per day, which is higher than the average daily production of any year prior to 2023.

With our ownership concentration in the Permian Basin, our revenues are directly impacted by oil and gas pricing and drilling activity in the Permian Basin. Below are metrics for the three and six months ended June 30, 2023 and 2022:

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Oil and Gas Pricing Metrics:(1)
WTI Cushing average price per bbl	$	73.54	$	108.83	$	74.73	$	102.01
Henry Hub average price per mmbtu	$	2.16	$	7.53	$	2.40	$	6.08
Activity Metrics specific to the Permian Basin:(1)(2)
Average monthly horizontal permits	576		621		633		606
Average monthly horizontal wells drilled	593		504		555		483
Average weekly horizontal rig count	338		321		338		293
DUCs as of June 30 for each applicable year	5,037		4,380		5,037		4,380
Total Average US weekly horizontal rig count (2)	650		656		674		615

(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. 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.

(2) Permian Basin specific information per Enverus analytics. 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.

The metrics above show selected domestic benchmark oil and natural gas prices and approximate activity levels in the Permian Basin for the three and six months ended June 30, 2023 and 2022. Oil and gas prices in 2023 to date have decreased compared to the same period in 2022. Although E&P companies broadly continue to deploy capital at a measured pace, drilling and development activities across the Permian Basin have remained robust through the second quarter of 2023. As we are a significant landowner in the Permian Basin and not an oil and gas producer, our revenue is affected by the development decisions made by companies that operate in the areas where we own royalty interests and land. Accordingly, these decisions

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made by others affect not only our production 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. 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. 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 have no debt or credit facilities, nor any off-balance sheet arrangements as of June 30, 2023.

As of June 30, 2023, we had cash and cash equivalents of $609.3 million that we expect to utilize, along with cash flow from operations, to provide capital to support the growth of our business, to repurchase our common stock, par value $0.01 per share (the “Common Stock”) subject to market conditions, to pay dividends subject to the discretion of our board of directors (the “Board”) and for general corporate purposes. For the six months ended June 30, 2023, we repurchased $26.2 million of our Common Stock (including share repurchases not settled at the end of the period), and we paid $50.0 million in dividends to our stockholders. 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 the foreseeable future.

During the six months ended June 30, 2023, we invested approximately $5.0 million in Texas Pacific Water Resources LLC (“TPWR”) projects to maintain and/or enhance our water sourcing assets.

Cash Flows from Operating Activities

For the six months ended June 30, 2023 and 2022, net cash provided by operating activities was $199.3 million and $195.4 million, respectively. Our cash flow provided by operating activities is primarily from oil, gas and produced water royalties, water and land sales, and 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.

The increase in cash flows provided by operating activities for the six months ended June 30, 2023 compared to the same period of 2022 primarily related to decreases in income tax payments and working capital requirements during 2023 as compared to 2022.

Cash Flows Used in Investing Activities

For the six months ended June 30, 2023 and 2022, net cash used in investing activities was $27.7 million and $8.3 million, respectively. Our cash flows used in investing activities are primarily related to land acquisitions and capital expenditures related to our water services and operations segment.

Acquisitions of land increased $20.3 million for the six months ended June 30, 2023 compared to the same period of 2022 and were partially offset by a decrease of $1.1 million in capital expenditures during the same time period.

Cash Flows Used in Financing Activities

For the six months ended June 30, 2023 and 2022, net cash used in financing activities was $77.3 million and $225.6 million, respectively. Our cash flows used in financing primarily consist of activities which return capital to our stockholders such as payment of dividends and repurchases of our Common Stock.

During the six months ended June 30, 2023, we paid total dividends of $50.0 million consisting of cumulative paid cash dividends of $6.50 per share. During the six months ended June 30, 2022, we paid total dividends of $201.0 million consisting of cumulative paid cash dividends of $6.00 per share and special dividends of $20.00 per share. During the six months ended June 30, 2023 and 2022, we repurchased $26.2 million and $25.5 million of our Common Stock, respectively (including share repurchases not settled at the end of the period).

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Results of Operations - Consolidated

The following table shows our consolidated results of operations for the three and six months ended June 30, 2023 and 2022 (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Revenues:
Oil and gas royalties	$	82,412	$	121,268	$	171,542	$	225,440
Water sales	37,648		22,272		59,377		41,092
Produced water royalties	20,841		18,669		40,975		33,539
Easements and other surface-related income	18,708		13,990		33,677		23,182
Land sales and other operating revenue	1,000		71		1,400		352
Total revenues	160,609		176,270		306,971		323,605
Expenses:
Salaries and related employee expenses	10,596		9,588		21,189		18,973
Water service-related expenses	10,287		3,915		15,943		6,697
General and administrative expenses	3,329		3,674		6,884		6,641
Legal and professional fees	10,154		1,163		26,782		2,882
Ad valorem and other taxes	2,070		2,042		3,644		4,085
Depreciation, depletion and amortization	3,893		4,180		7,297		8,306
Total operating expenses	40,329		24,562		81,739		47,584
Operating income	120,280		151,708		225,232		276,021
Other income, net	6,871		630		12,260		706
Income before income taxes	127,151		152,338		237,492		276,727
Income tax expense	26,758		33,444		50,531		59,933
Net income	$	100,393	$	118,894	$	186,961	$	216,794

For the Three Months Ended June 30, 2023 as Compared to the Three Months Ended June 30, 2022

Consolidated Revenues and Net Income:

Total revenues decreased $15.7 million, or 8.9%, to $160.6 million for the three months ended June 30, 2023 compared to $176.3 million for the three months ended June 30, 2022. This decrease was principally due to the $38.9 million decrease in oil and gas royalty revenue and was partially offset by the combined increase of $17.5 million in water sales and produced water royalties over the same period. Individual revenue line items are discussed below under “Segment Results of Operations.” Net income of $100.4 million for the three months ended June 30, 2023 was 15.6% lower than the comparable period of 2022 as a result of both the decrease in revenues discussed above and the increase in operating expenses discussed further below under “Consolidated Expenses.”

Consolidated Expenses:

Salaries and related employee expenses. Salaries and related employee expenses were $10.6 million for the three months ended June 30, 2023 compared to $9.6 million for the comparable period of 2022. The increase in salaries and related employee expenses is principally related to an increase in number of employees and market compensation adjustments.

Water service-related expenses. Water service-related expenses increased $6.4 million to $10.3 million for the three months ended June 30, 2023 compared to the same period of 2022. Certain types of water-related expenses, including, but not limited to, transfer, treatment, and electricity, will vary from period to period as our customers’ needs and requirements change. Water purchase, transfer, and treatment costs for the three months ended June 30, 2023 increased primarily due to heightened

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sales activity compared to the same period of 2022. Additionally, higher demand for water within shorter time commitments and increases in cost due to inflation resulted in an increase in equipment rental and fuel expenses over the same time period.

Legal and professional fees. Legal and professional fees were $10.2 million for the three months ended June 30, 2023 compared to $1.2 million for the comparable period of 2022. The increase is principally related to legal expenses associated with stockholder matters. See further discussion in Part II, Other Information — Item 1. Legal Proceedings.

Other income, net. Other income, net was $6.9 million and $0.6 million for the three months ended June 30, 2023 and 2022, respectively. The increase in other income, net is primarily related to increased interest income earned on our cash balances as interest yields have risen during the three months ended June 30, 2023 compared to the same period of 2022.

Total income tax expense. Total income tax expense was $26.8 million and $33.4 million for the three months ended June 30, 2023 and 2022, respectively. The decrease in income tax expense is primarily related to decreased operating income resulting from decreased oil and gas royalty revenue and increased operating expenses.

For the Six Months Ended June 30, 2023 as Compared to the Six Months Ended June 30, 2022

Consolidated Revenues and Net Income:

Total revenues decreased $16.6 million, or 5.1%, to $307.0 million for the six months ended June 30, 2023 compared to $323.6 million for the six months ended June 30, 2022. This decrease was principally due to the $53.9 million decrease in oil and gas royalty revenue and was partially offset by the combined increase of $25.7 million in water sales and produced water royalties over the same period. Individual revenue line items are discussed below under “Segment Results of Operations.” Net income of $187.0 million for the six months ended June 30, 2023 was 13.8% lower than the comparable period of 2022, principally as a result of both the decrease in revenues discussed above and the increase in operating expenses discussed further below under “Consolidated Expenses.”

Consolidated Expenses:

Salaries and related employee expenses. Salaries and related employee expenses were $21.2 million for the six months ended June 30, 2023 compared to $19.0 million for the comparable period of 2022. This increase in salaries and related employee expenses is primarily related to an increase in number of employees and market compensation adjustments.

Water service related expenses. Water service-related expenses were $15.9 million for the six months ended June 30, 2023 compared to $6.7 million for the same period of 2022. Certain types of water-related expenses, including, but not limited to, transfer, treatment, and electricity, will vary from period to period as our customers’ needs and requirements change. Water purchase, transfer, and treatment expenses increased for the six months ended June 30, 2023 compared to the same period of 2022 principally as a result of heightened sales activity in 2023. Additionally, higher demand for water within shorter time commitments and increases in cost due to inflation resulted in an increase in equipment rental and fuel expenses over the same time period.

Legal and professional fees. Legal and professional fees were $26.8 million for the six months ended June 30, 2023 compared to $2.9 million for the comparable period of 2022. The increase is principally related to legal expenses associated with stockholder matters. See further discussion in Part II, Other Information — Item 1. Legal Proceedings.

Other income, net. Other income, net was $12.3 million and $0.7 million for the six months ended June 30, 2023 and 2022, respectively. The increase in other income, net is primarily related to increased interest income earned on our cash balances as interest yields have risen during 2023.

Total income tax expense. Total income tax expense was $50.5 million and $59.9 million for the six months ended June 30, 2023 and 2022, respectively. The decrease in income tax expense is primarily related to decreased operating income resulting from decreased oil and gas royalty revenue and increased operating expenses.

Segment Results of Operations

We operate our business in two reportable segments: Land and Resource Management and Water Services and Operations. We eliminate any inter-segment revenues and expenses upon consolidation.

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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 11, “Business Segment Reporting” in the notes to the condensed consolidated financial statements in this Quarterly Report on Form 10-Q. We monitor our reporting segments based upon revenue and net income calculated in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

Our oil and gas royalty revenue, and, in turn, our results of operations for the three and six months ended June 30, 2023 have been impacted by declining commodity prices compared to 2022. The decline in oil and gas royalty revenues has been largely offset by increases in revenues derived from water sales, easements and other surface-related income, and produced water royalties which have been positively impacted by ongoing development activity in the Permian Basin.

For the Three Months Ended June 30, 2023 as Compared to the Three Months Ended June 30, 2022

The following is an analysis of our operating results for the comparable periods by reportable segment (in thousands):

	Three Months Ended June 30,
	2023				2022
Revenues:
Land and resource management:
Oil and gas royalties	$	82,412	51	%	$	121,268	68	%
Easements and other surface-related income	17,908		11	%	12,046		7	%
Land sales and other operating revenue	1,000		1	%	71		—	%
Total land and resource management revenue	101,320		63	%	133,385		75	%
Water services and operations:
Water sales	37,648		24	%	22,272		13	%
Produced water royalties	20,841		13	%	18,669		11	%
Easements and other surface-related income	800		—	%	1,944		1	%
Total water services and operations revenue	59,289		37	%	42,885		25	%
Total consolidated revenues	$	160,609	100	%	$	176,270	100	%
Net income:
Land and resource management	$	69,633	69	%	$	96,074	81	%
Water services and operations	30,760		31	%	22,820		19	%
Total consolidated net income	$	100,393	100	%	$	118,894	100	%

Land and Resource Management

Land and Resource Management segment revenues decreased $32.1 million, or 24.0%, to $101.3 million for the three months ended June 30, 2023 as compared to the same period of 2022. The decrease in Land and Resource Management segment revenues is due to a $38.9 million decrease in oil and gas royalty revenue for three months ended June 30, 2023 compared to the same period of 2022. The decrease in oil and gas royalty revenue was partially offset by an increase in easements and other surface-related income over the same time period.

Oil and gas royalties. Oil and gas royalty revenue was $82.4 million for the three months ended June 30, 2023 compared to $121.3 million for the three months ended June 30, 2022, a decrease of 32.0%. Oil and gas royalties decreased $38.9 million due to lower average commodity prices for the three months ended June 30, 2023 compared to the same period of 2022. The average realized price declined 45.9% to $38.04 per barrel of oil equivalent (“Boe”) for the three months ended June 30, 2023 from $70.36 per Boe for the three months ended June 30, 2022. The decrease in the average realized price per Boe was partially offset by an increase in production volumes. Our share of production increased to 24.9 thousand Boe per day for the three months ended June 30, 2023 compared to 19.8 thousand Boe per day for the same period of 2022.

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The financial and operational data by royalty stream is presented in the table below for the three months ended June 30, 2023 and 2022:

	Three Months Ended June 30,
	2023		2022
Our share of production volumes (1):
Oil (MBbls)	1,000		813
Natural gas (MMcf)	3,782		2,912
NGL (MBbls)	638		507
Equivalents (MBoe)	2,269		1,805
Equivalents per day (MBoe/d)	24.9		19.8
Oil and gas royalty revenue (in thousands):
Oil royalties	$	70,183	$	83,966
Natural gas royalties	3,775		17,650
NGL royalties	8,454		19,652
Total oil and gas royalties	$	82,412	$	121,268
Realized prices:
Oil ($/Bbl)	$	73.46	$	108.16
Natural gas ($/Mcf)	$	1.08	$	6.55
NGL ($/Bbl)	$	14.33	$	41.93
Equivalents ($/Boe)	$	38.04	$	70.36

(1)Commonly used definitions in the oil and gas industry not previously defined: Boe represents barrels of oil equivalent. MBbls represents one thousand barrels of crude oil, condensate or NGLs. Mcf represents one thousand cubic feet of natural gas. MMcf represents one million cubic feet of natural gas. MBoe represents one thousand Boe. MBoe/d represents one thousand Boe per day.

Easements and other surface-related income. Easements and other surface-related income was $17.9 million for the three months ended June 30, 2023, an increase of 48.7% compared to $12.0 million for the three months ended June 30, 2022. 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. The increase in easements and other surface-related income is principally related to increases of $2.4 million in pipeline easements, $1.8 million in material sales, and $0.7 million in commercial leases for the three months ended June 30, 2023 compared to the same period of 2022. The amount of income derived from pipeline easements is a function of the term of the easement, the size of the easement, and the number of easements entered into for any given period. 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 “Market Conditions” above for additional discussion of development activity in the Permian Basin during the three months ended June 30, 2023.

Land sales and other operating revenue. Land sales and other operating revenue was $1.0 million and $0.1 million for the three months ended June 30, 2023 and 2022, respectively. For the three months ended June 30, 2023, we sold 34 acres of land for an aggregate sales price of $1.0 million. We did not sell any land during the three months ended June 30, 2022.

Net income. Net income for the Land and Resource Management segment was $69.6 million for the three months ended June 30, 2023 compared to $96.1 million for the three months ended June 30, 2022. Segment operating income decreased $41.1 million for the three months ended June 30, 2023 compared to the same period of 2022, largely driven by the $38.9 million decrease in oil and gas royalty revenue and the $9.0 million increase in legal and professional fees. These changes were partially offset by an $8.5 million decrease in income tax expense and a $6.2 million increase in other income, net over the same time periods. Expenses are discussed further above under “Results of Operations.”

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Water Services and Operations

Water Services and Operations segment revenues increased 38.3% to $59.3 million for the three months ended June 30, 2023 as compared with revenues of $42.9 million for the same period of 2022. The increase in Water Services and Operations segment revenues is due to increases in water sales revenue and produced water royalties, which are discussed below. As discussed in “Market Conditions” above, our segment revenues are directly influenced by development decisions made by our customers and the overall activity level in the Permian Basin. Accordingly, our segment revenues and sales volumes, as further discussed below, will fluctuate from period to period based upon those decisions and activity levels.

Water sales. Water sales revenue increased $15.4 million to $37.6 million for the three months ended June 30, 2023, compared to the same period of 2022. The growth in water sales is principally due to an increase of approximately 38.5% in water sales volumes for the three months ended June 30, 2023, compared to the same period of 2022. This increase in volumes is partially attributable to increased activity in contracted areas of mutual interests (“AMI”).

Produced water royalties. Produced water royalties are 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 $20.8 million for the three months ended June 30, 2023 compared to $18.7 million for the same period in 2022. This increase is principally due to increased produced water volumes for the three months ended June 30, 2023 compared to the same period of 2022.

Easements and other surface-related income. Easements and other surface-related income was $0.8 million for the three months ended June 30, 2023, a decrease of $1.1 million compared to the same period in 2022. The decrease in easements and other surface-related income relates to a decrease in temporary permits for sourced water lines for the three months ended June 30, 2023, compared to the same period in 2022.

Net income. Net income for the Water Services and Operations segment was $30.8 million for the three months ended June 30, 2023 compared to $22.8 million for the three months ended June 30, 2022. Segment operating income increased $9.7 million for the three months ended June 30, 2023 compared to the same period of 2022. The increase is principally due to the $16.4 million increase in segment revenues and was partially offset by the $6.4 million increase in water service-related expenses and the $1.8 million increase in income tax expense. Expenses are discussed further above under “Results of Operations.”

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For the Six Months Ended June 30, 2023 as Compared to the Six Months Ended June 30, 2022

The following is an analysis of our operating results for the comparable periods by reportable segment (in thousands):

	Six Months Ended June 30,
	2023				2022
Revenues:
Land and resource management:
Oil and gas royalty revenue	$	171,542	56	%	$	225,440	70	%
Easements and other surface-related income	32,401		11	%	20,940		6	%
Land sales and other operating revenue	1,400		—	%	352		—	%
Total land and resource management revenue	205,343		67	%	246,732		76	%
Water services and operations:
Water sales	59,377		20	%	41,092		13	%
Produced water royalties	40,975		13	%	33,539		10	%
Easements and other surface-related income	1,276		—	%	2,242		1	%
Total water services and operations revenue	101,628		33	%	76,873		24	%
Total consolidated revenues	$	306,971	100	%	$	323,605	100	%
Net income:
Land and resource management	$	134,976	72	%	$	177,230	82	%
Water services and operations	51,985		28	%	39,564		18	%
Total consolidated net income	$	186,961	100	%	$	216,794	100	%

Land and Resource Management

Land and Resource Management segment revenues decreased 16.8% to $205.3 million for the six months ended June 30, 2023 as compared with $246.7 million for the comparable period of 2022. The decrease in Land and Resource Management segment revenues is principally due to the $53.9 million decrease in oil and gas royalty revenue, as discussed further below.

Oil and gas royalties. Oil and gas royalty revenue was $171.5 million for the six months ended June 30, 2023 compared to $225.4 million for the six months ended June 30, 2022, a decrease of $53.9 million. Oil and gas royalties for the six months ended June 30, 2023 included an $8.7 million recovery, discussed further in the following paragraph. Excluding the $8.7 million recovery, oil and gas royalties decreased $62.6 million due to lower average commodity prices in the six months ended June 30, 2023 compared to the same period of 2022. Our share of crude oil, natural gas and NGL production volumes was 22.9 thousand Boe per day for the six months ended June 30, 2023 compared to 20.3 thousand Boe per day for the same period of 2022. The average realized prices were $74.24 per barrel of oil, $2.25 per Mcf of natural gas, and $19.34 per barrel of NGL, for a total equivalent price of $41.08 per Boe for the six months ended June 30, 2023, a decrease of 36.0% over a total equivalent price of $64.22 per Boe for the same period of 2022.

As part of an ongoing arbitration between TPL and an operator with respect to underpayment of oil and gas royalties resulting from improper deductions of post-production costs for periods before and through April 2022, the operator has agreed to pay $8.7 million to TPL (the “$8.7 Million Stipulation”). This amount has been recorded as a receivable and included in oil and gas royalty revenue in the condensed consolidated income statement and in the table above for the six months ended June 30, 2023.

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The table below provides financial and operational data by royalty stream for the six months ended June 30, 2023 and 2022 and excludes the $8.7 Million Stipulation discussed above:

	Six Months Ended June 30,
	2023		2022
Our share of production volumes (1):
Oil (MBbls)	1,792		1,609
Natural gas (MMcf)	7,088		6,191
NGL (MBbls)	1,177		1,035
Equivalents (MBoe)	4,151		3,676
Equivalents per day (MBoe/d)	22.9		20.3
Oil and gas royalty revenue (in thousands)(1):
Oil royalties	$	127,077	$	155,647
Natural gas royalties	14,731		33,825
NGL royalties	21,069		35,968
Total oil and gas royalties	$	162,877	$	225,440
Realized prices(1):
Oil ($/Bbl)	$	74.24	$	101.27
Natural gas ($/Mcf)	$	2.25	$	5.91
NGL ($/Bbl)	$	19.34	$	37.59
Equivalents ($/Boe)	$	41.08	$	64.22

(1)The metrics provided exclude the impact of the $8.7 Million Stipulation discussed above.

Easements and other surface-related income. Easements and other surface-related income was $32.4 million for the six months ended June 30, 2023, an increase of 54.7% compared to $20.9 million for the six months ended June 30, 2022. 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. The increase in easements and other surface-related income is principally related to increases of $4.1 million in pipeline easement income, $4.0 million in material sales, and $1.0 million in commercial lease revenue for the six months ended June 30, 2023 compared to the six months ended June 30, 2022. The amount of income derived from pipeline easements is a function of the term of the easement, the size of the easement and the number of easements entered into for any given period. 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 “Market Conditions” above for additional discussion of development activity in the Permian Basin during the six months ended June 30, 2023 relative to the same time period of 2022.

Land sales and other operating revenue. Land sales and other operating revenue was $1.4 million and $0.4 million for the six months ended June 30, 2023 and 2022, respectively. For the six months ended June 30, 2023, we sold 43 acres of land for an aggregate sales price of approximately $1.4 million. For the six months ended June 30, 2022, there were no significant land sales.

Net income. Net income for the Land and Resource Management segment decreased 23.8% to $135.0 million for the six months ended June 30, 2023 compared to $177.2 million for the comparable period in 2022. Segment operating income decreased $66.2 million for the six months ended June 30, 2023 compared to the same period of 2022, largely driven by the $53.9 million decrease in oil and gas royalty revenue and the $23.7 million increase in legal and professional fees. These changes were partially offset by a $12.5 million decrease in income tax expense and an $11.4 million increase in other income, net over the same time periods. Expenses are discussed further above under “Results of Operations — Consolidated.”

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Water Services and Operations

Water Services and Operations segment revenues increased 32.2% to $101.6 million for the six months ended June 30, 2023 as compared with $76.9 million for the comparable period of 2022. The increase in Water Services and Operations segment revenues is principally due to increases in water sales revenue and produced water royalties, which are discussed below. As discussed in “Market Conditions” above, our segment revenues are directly influenced by development decisions made by our customers and the overall activity level in the Permian Basin. Accordingly, our segment revenues and sales volumes, as further discussed below, will fluctuate from period to period based upon those decisions and activity levels.

Water sales. Water sales revenue increased $18.3 million to $59.4 million for the six months ended June 30, 2023 compared to the same period of 2022. The growth in water sales is principally due to an increase of approximately 30.8% in water sales volumes for the six months ended June 30, 2023 compared to the six months ended June 30, 2022. This increase in volumes is partially attributable to increased activity in contracted AMI.

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 salt water disposal wells. Produced water royalties were $41.0 million for the six months ended June 30, 2023 compared to $33.5 million compared to the same period in 2022. This increase is principally due to increased produced water volumes for the six months ended June 30, 2023 compared to the same period of 2022.

Easements and other surface-related income. Easements and other surface-related income was $1.3 million and $2.2 million for the six months ended June 30, 2023 and 2022, respectively. The decrease in easements and other surface-related income relates to a decrease in temporary permits for sourced water lines for the six months ended June 30, 2023 compared to the same period in 2022.

Net income. Net income for the Water Services and Operations segment was $52.0 million for the six months ended June 30, 2023 compared to $39.6 million for the same period in 2022. Segment operating income increased $15.4 million for the six months ended June 30, 2023 compared to the same period of 2022. The increase is principally due to the $24.8 million increase in segment revenues and was partially offset by the $9.2 million increase in water service-related expenses and the $3.1 million increase in income tax expense. Expenses are discussed further above under “Results of Operations — Consolidated.”

Non-GAAP Performance Measures

In addition to amounts presented in accordance with generally accepted accounting principles in the United States of America (“GAAP”), we also present certain supplemental non-GAAP performance measurements. 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. 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, taxes, depreciation, depletion and amortization. Its purpose 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 excluding employee share-based compensation. Its purpose is to highlight earnings without non-cash activity such as share-based compensation and/or other non-recurring or unusual items. We calculate Free Cash Flow as Adjusted EBITDA less current income tax expense and capital expenditures. Its purpose 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. Our definitions of Adjusted EBITDA and Free Cash Flow may differ from computations of similarly titled measures of other companies.

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The following table presents a reconciliation of net income to EBITDA, Adjusted EBITDA and Free Cash Flow for the three and six months ended June 30, 2023 and 2022 (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Net income	$	100,393	$	118,894	$	186,961	$	216,794
Add:
Income tax expense	26,758		33,444		50,531		59,933
Depreciation, depletion and amortization	3,893		4,180		7,297		8,306
EBITDA	131,044		156,518		244,789		285,033
Add:
Employee share-based compensation	2,559		1,760		4,715		3,079
Adjusted EBITDA	133,603		158,278		249,504		288,112
Less:
Current income tax expense	(27,125)		(33,992)		(51,204)		(60,887)
Capital expenditures	(1,371)		(7,342)		(5,144)		(10,347)
Free Cash Flow	$	105,107	$	116,944	$	193,156	$	216,878

Critical Accounting Policies and Estimates

This discussion and analysis of our financial condition and results of operations is based on our condensed consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires us to make judgments, estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses and disclosures of contingent assets and liabilities. For a full discussion of our accounting policies please refer to Note 2 to the Consolidated Financial Statements included in our 2022 Annual Report on Form 10-K filed with the SEC on February 22, 2023.

There have been no material changes to our critical accounting policies or in the estimates and assumptions underlying those policies, from those provided in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our 2022 Annual Report on Form 10-K.

New Accounting Pronouncements

For further information regarding recently issued accounting pronouncements, see Note 2, “Summary of Significant Accounting Policies” in the notes to the condensed consolidated financial statements included in Item 1. “Financial Statements” in this Quarterly Report on Form 10-Q.

25

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

There have been no material changes in the information related to market risk of the Company since December 31, 2022.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our management, under the supervision and with the participation of the Company’s Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), performed an evaluation of the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15 under the Exchange Act) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based upon that evaluation, our CEO and CFO have concluded that the Company’s disclosure controls and procedures were effective as of June 30, 2023.

There have been no changes during the quarter ended June 30, 2023 in the Company’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II

OTHER INFORMATION

Item 1. Legal Proceedings.

TPL is not involved in any material pending legal proceedings other than the item disclosed below.

On November 23, 2022, TPL filed a complaint in Delaware Chancery Court (“the Court”) against Horizon Kinetics, LLC, Horizon Kinetics Asset Management LLC, SoftVest Advisors LLC, and SoftVest, L.P. (collectively, the “Stockholder Defendants”) under the caption Texas Pacific Land Corporation v. Horizon Kinetics LLC, Horizon Kinetics Asset Management LLC, SoftVest Advisors, LLC, and SoftVest L.P. (C.A. No. 2022-1066-JTL) (the “Action”). Horizon Kinetics LLC and Horizon Kinetics Asset Management LLC are affiliated with Murray Stahl, a member of the Board, and Softvest Advisors, LLC and SoftVest L.P. are affiliated with Eric Oliver, a member of the Board. TPL filed the Action to resolve a disagreement with the Stockholder Defendants over their voting commitments pursuant to the Stockholders’ Agreement with the Company. A trial was held on April 17, 2023, and post-trial oral arguments occurred on June 30, 2023. No ruling has been issued as of this date.

Item 1A. Risk Factors.

There have been no material changes in the risk factors previously disclosed in response to Part I, Item 1A. “Risk Factors” set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on February 22, 2023.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

During the three months ended June 30, 2023, the Company repurchased shares 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)
April 1 through April 30, 2023	1,142	$	1,645	1,142
May 1 through May 31, 2023	8,043	1,349		8,043
June 1 through June 30, 2023	4,990	1,365		4,990
Total	14,175	$	1,379	14,175	$	223,775,340

(1)On November 1, 2022, our Board approved a stock repurchase program to purchase up to an aggregate of $250 million of our outstanding Common Stock effective beginning January 1, 2023. The Company intends to purchase 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. 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 Securities Exchange Act of 1934, as amended, privately negotiated transactions, and/or other transactions at the Company’s discretion, including under a Rule 10b5-1 trading plan implemented by the Company, and will be subject to market conditions, applicable legal requirements and other factors.

Item 3. Defaults Upon Senior Securities

Not applicable

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None.

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Item 6. Exhibits and Financial Statement Schedules.

EXHIBIT INDEX

EXHIBIT NUMBER	DESCRIPTION
31.1*	Rule 13a-14(a) Certification of Chief Executive Officer.
31.2*	Rule 13a-14(a) Certification of Chief Financial Officer.
32.1*	Certification of Chief Executive Officer furnished pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*	Certification of Chief Financial Officer furnished pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101*	The following information from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2023 formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets; (ii) Condensed Consolidated Statements of Income and Total Comprehensive Income, (iii) Condensed Consolidated Statements of Cash Flows and (iv) Notes to Condensed Consolidated Financial Statements.
104	The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2023, formatted in iXBRL.

*    Filed or furnished herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		TEXAS PACIFIC LAND CORPORATION
		(Registrant)
Date:	August 2, 2023	By:	/s/ Tyler Glover
			Tyler Glover President, Chief Executive Officer and Director

Date:	August 2, 2023	By:	/s/ Chris Steddum
			Chris Steddum Chief Financial Officer

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EX-31.1

Exhibit No. 31.1

CERTIFICATION

I, Tyler Glover, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q for the quarter ended June 30, 2023 of Texas Pacific Land Corporation;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	August 2, 2023	By:	/s/ Tyler Glover
			Tyler Glover, President and Chief Executive Officer

EX-31.2

Exhibit No. 31.2

CERTIFICATION

I, Chris Steddum, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q for the quarter ended June 30, 2023 of Texas Pacific Land Corporation;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	August 2, 2023	By:	/s/ Chris Steddum
			Chris Steddum, Chief Financial Officer

EX-32.1

Exhibit No. 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q for the quarter ended June 30, 2023 of Texas Pacific Land Corporation (the “Company”) as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Tyler Glover, Chief Executive Officer of the Company, certifies, to the best of his knowledge, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	August 2, 2023	By:	/s/ Tyler Glover
			Tyler Glover, President and Chief Executive Officer

EX-32.2

Exhibit No. 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q for the quarter ended June 30, 2023 of Texas Pacific Land Corporation (the “Company”) as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Chris Steddum, Chief Financial Officer of the Company, certifies, to the best of his knowledge, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	August 2, 2023	By:	/s/ Chris Steddum
			Chris Steddum, Chief Financial Officer

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Cover Page - shares	6 Months Ended
	Jun. 30, 2023	Jul. 31, 2023
Cover [Abstract]
Document type	10-Q
Document Quarterly Report	true
Document period end date	Jun. 30, 2023
Document transition report	false
Entity file number	1-39804
Entity registrant name	Texas Pacific Land Corporation
Entity incorporation, state or country code	DE
Entity tax identification number	75-0279735
Entity address, address line one	1700 Pacific Avenue
Entity address, address line two	Suite 2900
Entity address, city or town	Dallas
Entity address, state or province	TX
Entity address, postal zip code	75201
City area code	(214)
Local phone number	969-5530
Title of 12(b) security	Common Stock(par value $.01 per share)
Trading symbol	TPL
Security exchange name	NYSE
Entity current reporting status	Yes
Entity interactive data current	Yes
Entity filer category	Large Accelerated Filer
Entity small business	false
Entity emerging growth company	false
Entity shell company	false
Entity common stock, shares outstanding		7,677,756
Entity central index key	0001811074
Current fiscal year end date	--12-31
Document fiscal year focus	2023
Document fiscal period focus	Q2
Amendment flag	false

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
ASSETS
Cash and cash equivalents	$ 609,252	$ 510,834
Accounts receivable and accrued receivables, net	120,771	103,983
Prepaid expenses and other current assets	5,312	7,427
Tax like-kind exchange escrow	2,195	6,348
Prepaid income taxes	0	4,809
Total current assets	737,530	633,401
Real estate acquired	130,024	109,704
Property, plant and equipment, net	84,324	85,478
Royalty interests acquired, net	45,920	45,025
Other assets	3,526	3,819
Real estate and royalty interests assigned through the 1888 Declaration of Trust, no value assigned:
Total assets	1,001,324	877,427
LIABILITIES AND EQUITY
Accounts payable and accrued expenses	27,156	23,443
Ad valorem and other taxes payable	6,355	8,497
Income taxes payable	5,151	3,167
Unearned revenue	6,222	4,488
Total current liabilities	44,884	39,595
Deferred taxes payable	40,478	41,151
Unearned revenue - noncurrent	26,638	21,708
Accrued liabilities - noncurrent	1,774	2,086
Total liabilities	113,774	104,540
Commitments and contingencies	0	0
Equity:
Preferred stock, $0.01 par value; 1,000,000 shares authorized, none outstanding as of June 30, 2023 and December 31, 2022	0	0
Common stock, $0.01 par value; 7,756,156 shares authorized and 7,679,145 and 7,695,679 outstanding as of June 30, 2023 and December 31, 2022, respectively	78	78
Treasury stock, at cost; 77,011 and 60,477 shares as of June 30, 2023 and December 31, 2022, respectively	(128,502)	(104,139)
Additional paid-in capital	10,582	8,293
Accumulated other comprehensive income	2,465	2,516
Retained earnings	1,002,927	866,139
Total equity	887,550	772,887
Total liabilities and equity	1,001,324	877,427
Land (surface rights)
Real estate and royalty interests assigned through the 1888 Declaration of Trust, no value assigned:
Land (surface rights)	0	0
1/16th nonparticipating perpetual royalty interest
Real estate and royalty interests assigned through the 1888 Declaration of Trust, no value assigned:
1/16th nonparticipating perpetual royalty interest	0	0
1/128th nonparticipating perpetual royalty interest
Real estate and royalty interests assigned through the 1888 Declaration of Trust, no value assigned:
1/128th nonparticipating perpetual royalty interest	$ 0	$ 0

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CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parentheticals) - $ / shares	6 Months Ended	12 Months Ended
	Jun. 30, 2023	Dec. 31, 2022
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock authorized (in shares)	1,000,000	1,000,000
Preferred stock, outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock authorized (in shares)	7,756,156	7,756,156
Common stock, outstanding (in shares)	7,679,145	7,695,679
Treasury stock, at cost (in shares)	77,011	60,477
1/16th nonparticipating perpetual royalty interest
Nonparticipating perpetual royalty interest rate (in percentage)	6.25%	6.25%
1/128th nonparticipating perpetual royalty interest
Nonparticipating perpetual royalty interest rate (in percentage)	0.78125%	0.78125%

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CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND TOTAL COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Revenues:
Total revenues	$ 160,609	$ 176,270	$ 306,971	$ 323,605
Expenses:
Salaries and related employee expenses	10,596	9,588	21,189	18,973
Water service-related expenses	10,287	3,915	15,943	6,697
General and administrative expenses	3,329	3,674	6,884	6,641
Legal and professional fees	10,154	1,163	26,782	2,882
Ad valorem and other taxes	2,070	2,042	3,644	4,085
Depreciation, depletion and amortization	3,893	4,180	7,297	8,306
Total operating expenses	40,329	24,562	81,739	47,584
Operating income	120,280	151,708	225,232	276,021
Other income, net	6,871	630	12,260	706
Income before income taxes	127,151	152,338	237,492	276,727
Income tax expense	26,758	33,444	50,531	59,933
Net income	100,393	118,894	186,961	216,794
Total other comprehensive income (loss)	(26)	8	(51)	16
Total comprehensive income	$ 100,367	$ 118,902	$ 186,910	$ 216,810
Net income per share of common stock
Net income per sub-share certificate - basic (in dollars per share)	$ 13.06	$ 15.37	$ 24.31	$ 28.02
Net income per sub-share certificate - diluted (in dollars per share)	$ 13.05	$ 15.37	$ 24.30	$ 28.01
Weighted average number of shares of common stock outstanding
Weighted average number of shares of common stock outstanding - basic (in shares)	7,685,662	7,733,730	7,689,352	7,737,527
Weighted average number of shares of common stock outstanding - diluted (in shares)	7,690,950	7,737,112	7,694,548	7,739,859
Cash dividends per share of common stock (in USD per share)	$ 3.25	$ 23.00	$ 6.50	$ 26.00
Oil and gas royalties
Revenues:
Total revenues	$ 82,412	$ 121,268	$ 171,542	$ 225,440
Water sales
Revenues:
Total revenues	37,648	22,272	59,377	41,092
Produced water royalties
Revenues:
Total revenues	20,841	18,669	40,975	33,539
Easements and other surface-related income
Revenues:
Total revenues	18,708	13,990	33,677	23,182
Land sales and other operating revenue
Revenues:
Total revenues	$ 1,000	$ 71	$ 1,400	$ 352

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CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND TOTAL COMPREHENSIVE INCOME (Unaudited) (Parentheticals) - USD ($) $ in Thousands	3 Months Ended				6 Months Ended
	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2022	Mar. 31, 2022	Jun. 30, 2023	Jun. 30, 2022
Income Statement [Abstract]
Periodic pension costs (benefit), net of income taxes	$ (8)	$ (6)	$ 2	$ 2	$ (14)	$ 4

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Cash flows from operating activities:
Net income	$ 186,961	$ 216,794
Adjustments to reconcile net income to net cash provided by operating activities:
Deferred taxes	(673)	(953)
Depreciation, depletion and amortization	7,297	8,306
Share-based compensation	5,323	3,495
Changes in operating assets and liabilities:
Receivables and other assets	(14,477)	(35,472)
Operating liabilities, excluding income taxes	8,040	9,668
Income taxes payable	1,984	(6,433)
Prepaid income taxes	4,809	0
Cash provided by operating activities	199,264	195,405
Cash flows from investing activities:
Proceeds from sale of fixed assets	5	96
Acquisition of real estate	(20,320)	(12)
Acquisition of royalty interests	(1,803)	(1,662)
Purchase of fixed assets	(5,536)	(6,685)
Cash used in investing activities	(27,654)	(8,263)
Cash flows from financing activities:
Repurchases of common stock	(26,379)	(24,592)
Shares exchanged for tax withholdings	(939)	0
Dividends paid	(50,027)	(200,998)
Cash used in financing activities	(77,345)	(225,590)
Net increase in cash, cash equivalents and restricted cash	94,265	(38,448)
Cash, cash equivalents and restricted cash, beginning of period	517,182	428,242
Cash, cash equivalents and restricted cash, end of period	611,447	389,794
Supplemental disclosure of cash flow information:
Income taxes paid	44,396	67,324
Supplemental non-cash investing and financing information:
Nonmonetary exchange of assets	0	4,174
(Increase) decrease in accounts payable related to capital expenditures	(392)	3,662
Share repurchases not yet settled	$ 432	$ 1,161

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Organization and Description of Business Segments

6 Months Ended

Jun. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization and Description of Business Segments

Organization and Description of Business Segments

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 886,000 surface acres of land in West Texas, with the majority of our ownership 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 4,000 additional net royalty acres (normalized to 1/8th) in the western part of Texas.

TPL’s income is derived primarily from oil, gas and produced water royalties, sales of water and land, easements and commercial leases of the land.

On January 11, 2021, we completed our reorganization from a business trust, Texas Pacific Land Trust, organized under a Declaration of Trust dated February 1, 1888 (the “Declaration of Trust”), into Texas Pacific Land Corporation, a corporation formed and existing under the laws of the state of Delaware (the “Corporate Reorganization”).

Basis of Presentation

The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and on the same basis as the audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2022. The condensed consolidated financial statements herein include all adjustments which are, in the opinion of management, necessary to fairly state the financial position of the Company as of June 30, 2023 and the results of its operations for the three and six months ended June 30, 2023 and 2022, respectively, and its cash flows for the six months ended June 30, 2023 and 2022, respectively. Such adjustments are of a normal nature and all intercompany accounts and transactions have been eliminated in consolidation. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted from this report, and accordingly these interim financial statements and footnotes should be read in conjunction with the audited financial statements and footnotes included in our Annual Report on Form 10-K for the year ended December 31, 2022. The results for the interim periods shown in this report are not necessarily indicative of future financial results.

We operate our business in two segments: Land and Resource Management and Water Services and Operations. Our segments provide management with a comprehensive financial view of our key businesses. 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 11, “Business Segment Reporting” for further information regarding our segments.

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Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2023

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Use of Estimates in the Preparation of Financial Statements

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. In the event estimates and/or assumptions prove to be different from actual amounts, adjustments are made in subsequent periods to reflect more current information.

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. Treasury bills and commercial paper, with original maturities of three months or less to be cash equivalents. Our cash equivalents are considered Level 1 assets in the fair value hierarchy.

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows as of June 30, 2023 and December 31, 2022 (in thousands):

	June 30, 2023		December 31, 2022
Cash and cash equivalents	$	609,252	$	510,834
Tax like-kind exchange escrow	2,195		6,348
Total cash, cash equivalents and restricted cash shown in the statement of cash flows	$	611,447	$	517,182

Reclassifications

Certain financial information on the condensed consolidated balance sheet as of December 31, 2022 and condensed consolidated statement of income and total comprehensive income for the three and six months ended June 30, 2022 has been revised to conform to the current year presentation. These revisions include a balance sheet reclassification of $454,000 of other taxes payable previously included in accounts payable and accrued expenses to ad valorem and other taxes payable and an income statement reclassification of $31,000 and $64,000 of property taxes previously included in general and administrative expenses to ad valorem and other taxes for the three and six months ended June 30, 2022, respectively.

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Real Estate Activity

6 Months Ended

Jun. 30, 2023

Real Estate [Abstract]

Real Estate Activity

Real Estate Activity

As of June 30, 2023 and December 31, 2022, TPL owned the following land and real estate (in thousands, except number of acres):

	June 30, 2023			December 31, 2022
	Number of Acres	Net Book Value		Number of Acres	Net Book Value
Land (surface rights) (1)	817,017	$	—	817,060	$	—
Real estate acquired	69,447	130,024		57,306	109,704
Total real estate situated in Texas	886,464	$	130,024	874,366	$	109,704

(1)Real estate assigned through the Declaration of Trust.

Land Sales

For the six months ended June 30, 2023, we sold 43 acres of land in Texas for an aggregate sales price of $1.4 million. There were no significant land sales for the six months ended June 30, 2022.

Land Acquisitions

For the six months ended June 30, 2023, we acquired 12,141 acres of land in Texas for an aggregate purchase price of $20.0 million. There were no significant land acquisitions for the six months ended June 30, 2022.

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Property, Plant and Equipment

6 Months Ended

Jun. 30, 2023

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment

Property, Plant and Equipment

Property, plant and equipment, net consisted of the following as of June 30, 2023 and December 31, 2022 (in thousands):

	June 30, 2023		December 31, 2022
Property, plant and equipment, at cost:
Water service-related assets	$	130,106	$	125,166
Furniture, fixtures and equipment	9,852		9,718
Other	598		598
Total property, plant and equipment, at cost	140,556		135,482
Less: accumulated depreciation	(56,232)		(50,004)
Property, plant and equipment, net	$	84,324	$	85,478

Depreciation expense was $3.2 million and $3.9 million for the three months ended June 30, 2023 and 2022, respectively. Depreciation expense was $6.3 million and $7.7 million for the six months ended June 30, 2023 and 2022, respectively.

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Oil and Gas Royalty Interests

6 Months Ended

Jun. 30, 2023

Real Estate [Abstract]

Oil and Gas Royalty Interests

Oil and Gas Royalty Interests

As of June 30, 2023 and December 31, 2022, we owned the following oil and gas royalty interests (in thousands):

	June 30, 2023		December 31, 2022
1/16th nonparticipating perpetual royalty interests	$	—	$	—
1/128th nonparticipating perpetual royalty interests	—		—
Royalty interests acquired	49,731		47,928
Total royalty interests, gross	49,731		47,928
Less: accumulated depletion	(3,811)		(2,903)
Total royalty interests, net	$	45,920	$	45,025

Acquisitions

For the six months ended June 30, 2023, we acquired oil and gas royalty interests in 61 net royalty acres (normalized to 1/8th) for an aggregate purchase price of approximately $1.8 million. For the six months ended June 30, 2022, we acquired oil and gas royalty interests in 92 net royalty acres (normalized to 1/8th) for an aggregate purchase price of approximately $1.7 million.

Depletion expense was $0.6 million and $0.2 million for the three months ended June 30, 2023 and 2022, respectively.

Depletion expense was $0.9 million and $0.5 million for the six months ended June 30, 2023 and 2022, respectively.

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Share-Based Compensation

6 Months Ended

Jun. 30, 2023

Share-Based Payment Arrangement [Abstract]

Share-Based Compensation

Share-Based CompensationThe Company grants share-based compensation to employees under the Texas Pacific Land Corporation 2021 Incentive Plan (the “2021 Plan”) and to its directors under the 2021 Non-Employee Director Stock and Deferred Compensation Plan (the “2021 Directors Plan”). Share-based compensation granted to date under the plans has included restricted stock awards (“RSAs”), restricted stock units (“RSUs”) and performance-based units (“PSUs”). Currently, all awards granted under the plans are entitled to receive dividends (which are accrued and distributed to award recipients upon vesting) or have dividend equivalent rights. Dividends and dividend equivalent rights are subject to the same vesting conditions as the awards to which they relate and are forfeitable if the related awards are forfeited. RSUs granted under the 2021 Plan vest in one-third increments and PSUs granted under the 2021 Plan cliff vest at the end of three years if the performance metrics are achieved (as discussed further below). RSAs granted under the 2021 Directors Plan vest on the first anniversary of the award.

Incentive Plan for Employees

The maximum aggregate number of shares of the Company’s common stock, par value $0.01 per share (“Common Stock”) that may be issued under the 2021 Plan is 75,000 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. As of June 30, 2023, 54,718 shares of Common Stock remained available under the 2021 Plan for future grants.

The following table summarizes activity related to RSAs and RSUs under the 2021 Plan for the six months ended June 30, 2023 and 2022:

	Six Months Ended June 30,
	2023						2022
	Restricted Stock Awards			Restricted Stock Units			Restricted Stock Awards			Restricted Stock Units
	Number of RSAs	Weighted-Average Grant-Date Fair Value per Share		Number of RSUs	Weighted-Average Grant-Date Fair Value per Share		Number of RSAs	Weighted-Average Grant-Date Fair Value per Share		Number of RSUs	Weighted-Average Grant-Date Fair Value per Share
Nonvested at beginning of period (1)	1,337	$	1,252	5,612	$	1,323	3,330	$	1,252	—	$	—
Granted (2)	—	—		2,848	1,924		—	—		3,824	1,105
Vested (3)	—	—		(1,270)	1,105		—	—		—	—
Cancelled and forfeited	—	—		—	—		—	—		—	—
Nonvested at end of period	1,337	$	1,252	7,190	$	1,600	3,330	$	1,252	3,824	$	1,105

(1)The RSAs were granted on December 29, 2021: 1,993 shares vested on December 29, 2022 and 1,337 shares will vest on December 29, 2023.

(2)The RSUs were granted on February 10, 2023 and vest in one-third increments over a three-year period.

(3)Of the 1,270 shares that vested on February 11, 2023, 488 shares were surrendered by employees to the Company to settle tax withholdings.

The following table summarizes activity related to PSUs for the six months ended June 30, 2023 and 2022:

	Six Months Ended June 30,
	2023			2022
	Number of Target PSUs	Weighted-Average Grant-Date Fair Value per Share		Number of Target PSUs	Weighted-Average Grant-Date Fair Value per Share
Nonvested at beginning of period (1)	2,394	$	1,355	—	$	—
Granted (2)	1,852	2,342		2,394	1,355
Vested	—	—		—	—
Cancelled and forfeited	—	—		—	—
Nonvested at end of period	4,246	$	1,786	2,394	$	1,355

(1)The PSUs were granted on February 11, 2022 and include 1,197 RTSR (as defined below) PSUs (based on target) with a grant date fair value of $1,605 per share and 1,197 FCF (as defined below) PSUs (based on target) with a grant date fair value of $1,105 per share. If the maximum performance potential metrics described in the PSU agreements are achieved, the actual number of units that will ultimately be awarded under the PSU agreements will exceed target units by 100% (i.e., a collective 2,394 additional units would be issued).

(2)The PSUs were granted on February 10, 2023 and include 926 RTSR PSUs (based on target) with a grant date fair value of $2,761 per share and 926 FCF PSUs (based on target) with a grant date fair value of $1,924 per share. If the maximum performance potential metrics described in the PSU agreements are achieved, the actual number of units that will ultimately be awarded under the PSU agreements will exceed target units by 100% (i.e., a collective 1,852 additional units would be issued).

Each PSU has a value equal to one share of Common Stock. The PSUs will vest three years after grant if certain performance metrics are met, as follows: 50% of the PSUs may be earned based on the Company’s relative total stockholder return (“RTSR”) over the applicable three-year measurement period compared to the XOP Index, and 50% of the PSUs may be earned based on the cumulative free cash flow per share (“FCF”) over the three-year vesting period. As the RTSR PSU is a market-based award, its grant date fair value was determined using a Monte Carlo simulation model that uses the same input assumptions as the Black-Scholes model to determine the expected potential ranking of the Company against the XOP Index, i.e. the probability of satisfying the market condition defined in the award. Expected volatility in the model was estimated

based on the volatility of historical stock prices over a period matching the expected term of the award. The risk-free interest rate was based on U.S. Treasury yield constant maturities for a term matching the expected term of the award.

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 10,000 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. As of June 30, 2023, 8,815 shares of Common Stock remained available under the 2021 Directors Plan for future grants.

The following table summarizes activity related to the RSAs under the 2021 Directors Plan for the six months ended June 30, 2023 and 2022:

	Six Months Ended June 30,
	2023			2022
	Number of RSAs	Weighted-Average Grant-Date Fair Value per Share		Number of RSAs	Weighted-Average Grant-Date Fair Value per Share
Nonvested at beginning of period	699	$	1,281	—	$	—
Granted (1)	486	2,344		784	1,277
Vested	(699)	1,281		—	—
Cancelled and forfeited	—	—		(85)	1,249
Nonvested at end of period	486	$	2,344	699	$	1,281

(1)The RSAs were granted on January 1, 2023 and will vest on the first anniversary of the grant.

Share-Based Compensation Expense

The following table summarizes our share-based compensation expense by line item in the condensed consolidated statements of income (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Salaries and related employee expenses (employee awards)	$	2,559	$	1,760	$	4,715	$	3,079
General and administrative expenses (director awards)	291		230		608		416
Total share-based compensation expense (1)	$	2,850	$	1,990	$	5,323	$	3,495

(1)The Company recognized a tax benefit of $0.6 million and $0.4 million related to share-based compensation for the three months ended June 30, 2023 and 2022, respectively. The Company recognized a tax benefit of $1.1 million and $0.7 million related to share-based compensation for the six months ended June 30, 2023 and 2022, respectively.

As of June 30, 2023, there was $14.2 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 1.5 years.

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Income Taxes

6 Months Ended

Jun. 30, 2023

Income Tax Disclosure [Abstract]

Income Taxes

Income TaxesThe calculation of our effective tax rate is as follows for the three and six months ended June 30, 2023 and 2022 (in thousands, except percentages):

	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
Income before income taxes	$	127,151		$	152,338		$	237,492		$	276,727
Income tax expense	$	26,758		$	33,444		$	50,531		$	59,933
Effective tax rate	21.0		%	22.0		%	21.3		%	21.7		%

For interim periods, our income tax expense and resulting effective tax rate are based upon an estimated annual effective tax rate adjusted for the effects of items required to be treated as discrete to the period, including changes in tax laws, changes in estimated exposures for uncertain tax positions, and other items.

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Earnings Per Share

6 Months Ended

Jun. 30, 2023

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per ShareBasic 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 restricted stock and other unvested awards granted pursuant to our incentive and equity compensation plans. The computation of diluted EPS reflects the potential dilution that could occur if all outstanding awards under the incentive and equity compensation plans were converted into shares of Common Stock or resulted in the issuance of shares of Common Stock that would then share in the earnings of the Company. The number of dilutive securities is computed using the treasury stock method.

The following table sets forth the computation of EPS for the three and six months ended June 30, 2023 and 2022 (in thousands, except number of shares and per share data):

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Net income	$	100,393	$	118,894	$	186,961	$	216,794
Basic earnings per share:
Weighted average shares outstanding for basic earnings per share	7,685,662		7,733,730		7,689,352		7,737,527
Basic earnings per share	$	13.06	$	15.37	$	24.31	$	28.02
Diluted earnings per share:
Weighted average shares outstanding for basic earnings per share	7,685,662		7,733,730		7,689,352		7,737,527
Effect of dilutive securities:
Incentive and equity compensation plans	5,288		3,382		5,196		2,333
Weighted average shares outstanding for diluted earnings per share	7,690,950		7,737,112		7,694,548		7,739,859
Diluted earnings per share	$	13.05	$	15.37	$	24.30	$	28.01

Restricted stock is included in the number of shares of Common Stock issued and outstanding, but omitted from the basic EPS calculation until such time as the shares of restricted stock vest. Certain stock awards granted are not included in the dilutive securities in the table above as they are anti-dilutive for the three and six months ended June 30, 2023 and June 30, 2022.

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

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 June 30, 2023.

Prior to January 1, 2022, ad valorem taxes with respect to our historical royalty interests were paid directly by third parties pursuant to an existing arrangement. Since the completion of our Corporate Reorganization, we have received notice from certain third parties that they no longer intend to pay the ad valorem taxes related to such historical royalty interests. In order to protect the historical royalty interests from any potential tax liens for non-payment of ad valorem taxes, we have accrued and/or paid such ad valorem taxes since January 1, 2022. While we intend to seek reimbursement from the third parties 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 June 30, 2023.

Ongoing Arbitration with an Operator.

As part of an ongoing arbitration between TPL and an operator with respect to underpayment of oil and gas royalties resulting from improper deductions of post-production costs for periods before and through April 2022, the operator has agreed to pay $8.7 million to TPL. This amount has been recorded as a receivable and included in oil and gas royalty revenue in the condensed consolidated income statement for the six months ended June 30, 2023.

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Changes in Equity

6 Months Ended

Jun. 30, 2023

Equity [Abstract]

Changes in Equity

Changes in Equity

The following tables present changes in our equity for the six months ended June 30, 2023 and 2022 (in thousands, except shares and per share amounts):

	Common Stock			Treasury Stock			Additional Paid-in Capital		Accum. Other Comp. Income (Loss)		Retained Earnings		Total Equity
	Shares	Amount		Shares	Amount
For the six months ended June 30, 2023:
Balances as of December 31, 2022	7,695,679	$	78	60,477	$	(104,139)	$	8,293	$	2,516	$	866,139	$	772,887
Net income	—	—		—	—		—		—		86,568		86,568
Dividends paid — $3.25 per share of common stock	—	—		—	—		—		—		(25,061)		(25,061)
Share-based compensation, net of forfeitures	1,756	—		(1,756)	3,033		(560)		—		(103)		2,370
Repurchases of common stock, including excise taxes of $67	(3,627)	—		3,627	(6,749)		—		—		—		(6,749)
Shares exchanged for tax withholdings	(488)	—		488	(939)		—		—		—		(939)
Periodic pension costs, net of income taxes of $6	—	—		—	—		—		(25)		—		(25)
Balances as of March 31, 2023	7,693,320	$	78	62,836	$	(108,794)	$	7,733	$	2,491	$	927,543	$	829,051
Net income	—	—		—	—		—		—		100,393		100,393
Dividends paid — $3.25 per share of common stock	—	—		—	—		—		—		(24,966)		(24,966)
Share-based compensation, net of forfeitures	—	—		—	—		2,849		—		(43)		2,806
Repurchases of common stock, including excise taxes of $165	(14,175)	—		14,175	(19,708)		—		—		—		(19,708)
Periodic pension costs, net of income taxes of $8	—	—		—	—		—		(26)		—		(26)
Balances as of June 30, 2023	7,679,145	$	78	77,011	$	(128,502)	$	10,582	$	2,465	$	1,002,927	$	887,550

	Common Stock			Treasury Stock			Additional Paid-in Capital		Accum. Other Comp. Income (Loss)		Retained Earnings		Total Equity
	Shares	Amount		Shares	Amount
For the six months ended June 30, 2022:
Balances as of December 31, 2021	7,744,695	$	78	11,461	$	(15,417)	$	28	$	(1,007)	$	668,029	$	651,711
Net income	—	—		—	—		—		—		97,900		97,900
Dividends paid — $3.00 per share of common stock	—	—		—	—		—		—		(23,224)		(23,224)
Share-based compensation, net of forfeitures	595	—		(595)	800		1,477		—		(796)		1,481
Periodic pension costs, net of income taxes of $2	—	—		—	—		—		8		—		8
Balances as of March 31, 2022	7,745,290	$	78	10,866	$	(14,617)	$	1,505	$	(999)	$	741,909	$	727,876
Net income	—	—		—	—		—		—		118,894		118,894
Dividends paid — $3.00 per share of common stock	—	—		—	—		—		—		(23,188)		(23,188)
Special dividends paid — $20.00 per share of common stock	—	—		—	—		—		—		(154,586)		(154,586)
Share-based compensation, net of forfeitures	104	—		(104)	140		1,851		—		(180)		1,811
Repurchases of common stock	(17,478)	—		17,478	(25,534)		—		—		—		(25,534)
Periodic pension costs, net of income taxes of $2	—	—		—	—		—		8		—		8
Balances as of June 30, 2022	7,727,916	$	78	28,240	$	(40,011)	$	3,356	$	(991)	$	682,849	$	645,281

Stock Repurchase Program

On November 1, 2022, our board of directors approved a stock repurchase program, which became effective January 1, 2023, to purchase up to an aggregate of $250 million of our outstanding Common Stock.

The Company intends to purchase 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 of directors at any time. 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 Securities Exchange Act of 1934, as amended, privately negotiated transactions, and/or other transactions at the Company’s discretion, including under a Rule 10b5-1 trading plan implemented by the Company, and will be subject to market conditions, applicable legal requirements and other factors.

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Business Segment Reporting

6 Months Ended

Jun. 30, 2023

Segment Reporting [Abstract]

Business Segment Reporting

Business Segment Reporting

During the periods presented, we reported our financial performance based on the following segments: Land and Resource Management and Water Services and Operations. Our segments provide management with a comprehensive financial view of our key businesses. The segments enable the alignment of our strategies and objectives and provide a framework for timely and rational allocation of resources within businesses. We eliminate any inter-segment revenues and expenses upon consolidation.

The Land and Resource Management segment encompasses the business of managing our approximately 886,000 surface acres of land and our oil and gas royalty interests in West Texas, principally concentrated in the Permian Basin. The revenue streams of this segment consist primarily of royalties from oil and gas, revenues from easements and commercial leases and land and material sales.

The Water Services and Operations segment encompasses the business of providing a full-service water offering to operators in the Permian Basin. The revenue streams of this segment primarily consist of revenue generated from sales of sourced and treated water as well as revenue from produced water royalties.

Segment financial results were as follows for the three and six months ended June 30, 2023 and 2022 (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Revenues:
Land and resource management	$	101,320	$	133,385	$	205,343	$	246,732
Water services and operations	59,289		42,885		101,628		76,873
Total consolidated revenues	$	160,609	$	176,270	$	306,971	$	323,605
Net income:
Land and resource management	$	69,633	$	96,074	$	134,976	$	177,230
Water services and operations	30,760		22,820		51,985		39,564
Total consolidated net income	$	100,393	$	118,894	$	186,961	$	216,794
Capital expenditures:
Land and resource management	$	(31)	$	103	$	144	$	225
Water services and operations	1,402		7,239		5,000		10,122
Total capital expenditures	$	1,371	$	7,342	$	5,144	$	10,347
Depreciation, depletion and amortization:
Land and resource management	$	912	$	529	$	1,530	$	1,065
Water services and operations	2,981		3,651		5,767		7,241
Total depreciation, depletion and amortization	$	3,893	$	4,180	$	7,297	$	8,306

The following table presents total assets and property, plant and equipment, net by segment as of June 30, 2023 and December 31, 2022 (in thousands):

	June 30, 2023		December 31, 2022
Assets:
Land and resource management	$	845,847	$	735,193
Water services and operations	155,477		142,234
Total consolidated assets	$	1,001,324	$	877,427
Property, plant and equipment, net:
Land and resource management	$	5,607	$	5,998
Water services and operations	78,717		79,480
Total consolidated property, plant and equipment, net	$	84,324	$	85,478

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Oil and Gas Producing Activities

6 Months Ended

Jun. 30, 2023

Extractive Industries [Abstract]

Oil and Gas Producing Activities

Oil and Gas Producing Activities 

We measure our share of oil and gas produced in barrels of oil equivalent (“Boe”). One Boe equals one barrel of crude oil, condensate, NGLs (natural gas liquids) or approximately 6,000 cubic feet of gas. For the three months ended June 30, 2023 and 2022, our share of oil and gas produced was approximately 24.9 and 19.8 thousand Boe per day, respectively. For the six months ended June 30, 2023 and 2022, our share of oil and gas produced was approximately 22.9 and 20.3 thousand Boe per day, respectively. Reserves related to our royalty interests are not presented because the information is unavailable.

There are a number of oil and gas wells that have been drilled but are not yet completed (“DUC”) where we have a royalty interest. The number of DUC wells is determined using uniform drilling spacing units with pooled interests for all wells

awaiting completion. We have identified 593 and 584 DUC wells subject to our royalty interest as of June 30, 2023 and December 31, 2022, respectively.

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Subsequent Events

6 Months Ended

Jun. 30, 2023

Subsequent Events [Abstract]

Subsequent Events

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 August 1, 2023, our board of directors declared a quarterly cash dividend of $3.25 per share, payable on September 15, 2023 to stockholders of record at the close of business on September 1, 2023.

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Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended				6 Months Ended
	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2022	Mar. 31, 2022	Jun. 30, 2023	Jun. 30, 2022
Pay vs Performance Disclosure
Net income	$ 100,393	$ 86,568	$ 118,894	$ 97,900	$ 186,961	$ 216,794

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Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2023

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and on the same basis as the audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2022. The condensed consolidated financial statements herein include all adjustments which are, in the opinion of management, necessary to fairly state the financial position of the Company as of June 30, 2023 and the results of its operations for the three and six months ended June 30, 2023 and 2022, respectively, and its cash flows for the six months ended June 30, 2023 and 2022, respectively. Such adjustments are of a normal nature and all intercompany accounts and transactions have been eliminated in consolidation. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted from this report, and accordingly these interim financial statements and footnotes should be read in conjunction with the audited financial statements and footnotes included in our Annual Report on Form 10-K for the year ended December 31, 2022. The results for the interim periods shown in this report are not necessarily indicative of future financial results.

Segment Reporting

We operate our business in two segments: Land and Resource Management and Water Services and Operations. Our segments provide management with a comprehensive financial view of our key businesses. The segments enable the alignment of strategies and objectives of TPL and provide a framework for timely and rational allocation of resources within businesses.

Use of Estimates in the Preparation of Financial Statements

Use of Estimates in the Preparation of Financial Statements

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. In the event estimates and/or assumptions prove to be different from actual amounts, adjustments are made in subsequent periods to reflect more current information.

Cash, Cash Equivalents and Restricted Cash

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. Treasury bills and commercial paper, with original maturities of three months or less to be cash equivalents. Our cash equivalents are considered Level 1 assets in the fair value hierarchy.

Reclassifications

Reclassifications

Certain financial information on the condensed consolidated balance sheet as of December 31, 2022 and condensed consolidated statement of income and total comprehensive income for the three and six months ended June 30, 2022 has been revised to conform to the current year presentation. These revisions include a balance sheet reclassification of $454,000 of other taxes payable previously included in accounts payable and accrued expenses to ad valorem and other taxes payable and an income statement reclassification of $31,000 and $64,000 of property taxes previously included in general and administrative expenses to ad valorem and other taxes for the three and six months ended June 30, 2022, respectively.

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Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2023

Accounting Policies [Abstract]

Schedule of Cash, Cash Equivalents and Restricted Cash

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows as of June 30, 2023 and December 31, 2022 (in thousands):

	June 30, 2023		December 31, 2022
Cash and cash equivalents	$	609,252	$	510,834
Tax like-kind exchange escrow	2,195		6,348
Total cash, cash equivalents and restricted cash shown in the statement of cash flows	$	611,447	$	517,182

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Real Estate Activity (Tables)

6 Months Ended

Jun. 30, 2023

Real Estate [Abstract]

Schedule of Real Estate Activity

As of June 30, 2023 and December 31, 2022, TPL owned the following land and real estate (in thousands, except number of acres):

	June 30, 2023			December 31, 2022
	Number of Acres	Net Book Value		Number of Acres	Net Book Value
Land (surface rights) (1)	817,017	$	—	817,060	$	—
Real estate acquired	69,447	130,024		57,306	109,704
Total real estate situated in Texas	886,464	$	130,024	874,366	$	109,704

(1)Real estate assigned through the Declaration of Trust.

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Property, Plant and Equipment (Tables)

6 Months Ended

Jun. 30, 2023

Property, Plant and Equipment [Abstract]

Schedule of Property, Plant and Equipment

Property, plant and equipment, net consisted of the following as of June 30, 2023 and December 31, 2022 (in thousands):

	June 30, 2023		December 31, 2022
Property, plant and equipment, at cost:
Water service-related assets	$	130,106	$	125,166
Furniture, fixtures and equipment	9,852		9,718
Other	598		598
Total property, plant and equipment, at cost	140,556		135,482
Less: accumulated depreciation	(56,232)		(50,004)
Property, plant and equipment, net	$	84,324	$	85,478

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Oil and Gas Royalty Interests (Tables)

6 Months Ended

Jun. 30, 2023

Real Estate [Abstract]

Schedule of Royalty Interests

As of June 30, 2023 and December 31, 2022, we owned the following oil and gas royalty interests (in thousands):

	June 30, 2023		December 31, 2022
1/16th nonparticipating perpetual royalty interests	$	—	$	—
1/128th nonparticipating perpetual royalty interests	—		—
Royalty interests acquired	49,731		47,928
Total royalty interests, gross	49,731		47,928
Less: accumulated depletion	(3,811)		(2,903)
Total royalty interests, net	$	45,920	$	45,025

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Share-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2023

Share-Based Payment Arrangement [Abstract]

Schedule of Restricted Stock Awards and Units Activity

The following table summarizes activity related to RSAs and RSUs under the 2021 Plan for the six months ended June 30, 2023 and 2022:

	Six Months Ended June 30,
	2023						2022
	Restricted Stock Awards			Restricted Stock Units			Restricted Stock Awards			Restricted Stock Units
	Number of RSAs	Weighted-Average Grant-Date Fair Value per Share		Number of RSUs	Weighted-Average Grant-Date Fair Value per Share		Number of RSAs	Weighted-Average Grant-Date Fair Value per Share		Number of RSUs	Weighted-Average Grant-Date Fair Value per Share
Nonvested at beginning of period (1)	1,337	$	1,252	5,612	$	1,323	3,330	$	1,252	—	$	—
Granted (2)	—	—		2,848	1,924		—	—		3,824	1,105
Vested (3)	—	—		(1,270)	1,105		—	—		—	—
Cancelled and forfeited	—	—		—	—		—	—		—	—
Nonvested at end of period	1,337	$	1,252	7,190	$	1,600	3,330	$	1,252	3,824	$	1,105

(1)The RSAs were granted on December 29, 2021: 1,993 shares vested on December 29, 2022 and 1,337 shares will vest on December 29, 2023.

(2)The RSUs were granted on February 10, 2023 and vest in one-third increments over a three-year period.

(3)Of the 1,270 shares that vested on February 11, 2023, 488 shares were surrendered by employees to the Company to settle tax withholdings.

The following table summarizes activity related to the RSAs under the 2021 Directors Plan for the six months ended June 30, 2023 and 2022:

	Six Months Ended June 30,
	2023			2022
	Number of RSAs	Weighted-Average Grant-Date Fair Value per Share		Number of RSAs	Weighted-Average Grant-Date Fair Value per Share
Nonvested at beginning of period	699	$	1,281	—	$	—
Granted (1)	486	2,344		784	1,277
Vested	(699)	1,281		—	—
Cancelled and forfeited	—	—		(85)	1,249
Nonvested at end of period	486	$	2,344	699	$	1,281

(1)The RSAs were granted on January 1, 2023 and will vest on the first anniversary of the grant.

Schedule of Performance Share Units Activity

The following table summarizes activity related to PSUs for the six months ended June 30, 2023 and 2022:

	Six Months Ended June 30,
	2023			2022
	Number of Target PSUs	Weighted-Average Grant-Date Fair Value per Share		Number of Target PSUs	Weighted-Average Grant-Date Fair Value per Share
Nonvested at beginning of period (1)	2,394	$	1,355	—	$	—
Granted (2)	1,852	2,342		2,394	1,355
Vested	—	—		—	—
Cancelled and forfeited	—	—		—	—
Nonvested at end of period	4,246	$	1,786	2,394	$	1,355

(1)The PSUs were granted on February 11, 2022 and include 1,197 RTSR (as defined below) PSUs (based on target) with a grant date fair value of $1,605 per share and 1,197 FCF (as defined below) PSUs (based on target) with a grant date fair value of $1,105 per share. If the maximum performance potential metrics described in the PSU agreements are achieved, the actual number of units that will ultimately be awarded under the PSU agreements will exceed target units by 100% (i.e., a collective 2,394 additional units would be issued).

(2)The PSUs were granted on February 10, 2023 and include 926 RTSR PSUs (based on target) with a grant date fair value of $2,761 per share and 926 FCF PSUs (based on target) with a grant date fair value of $1,924 per share. If the maximum performance potential metrics described in the PSU agreements are achieved, the actual number of units that will ultimately be awarded under the PSU agreements will exceed target units by 100% (i.e., a collective 1,852 additional units would be issued).

Schedule of Share-Based Compensation Expense

The following table summarizes our share-based compensation expense by line item in the condensed consolidated statements of income (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Salaries and related employee expenses (employee awards)	$	2,559	$	1,760	$	4,715	$	3,079
General and administrative expenses (director awards)	291		230		608		416
Total share-based compensation expense (1)	$	2,850	$	1,990	$	5,323	$	3,495

(1)The Company recognized a tax benefit of $0.6 million and $0.4 million related to share-based compensation for the three months ended June 30, 2023 and 2022, respectively. The Company recognized a tax benefit of $1.1 million and $0.7 million related to share-based compensation for the six months ended June 30, 2023 and 2022, respectively.

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Income Taxes (Tables)

6 Months Ended

Jun. 30, 2023

Income Tax Disclosure [Abstract]

Schedule of Components of Income Tax Expense (Benefit)

The calculation of our effective tax rate is as follows for the three and six months ended June 30, 2023 and 2022 (in thousands, except percentages):

	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
Income before income taxes	$	127,151		$	152,338		$	237,492		$	276,727
Income tax expense	$	26,758		$	33,444		$	50,531		$	59,933
Effective tax rate	21.0		%	22.0		%	21.3		%	21.7		%

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Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2023

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

The following table sets forth the computation of EPS for the three and six months ended June 30, 2023 and 2022 (in thousands, except number of shares and per share data):

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Net income	$	100,393	$	118,894	$	186,961	$	216,794
Basic earnings per share:
Weighted average shares outstanding for basic earnings per share	7,685,662		7,733,730		7,689,352		7,737,527
Basic earnings per share	$	13.06	$	15.37	$	24.31	$	28.02
Diluted earnings per share:
Weighted average shares outstanding for basic earnings per share	7,685,662		7,733,730		7,689,352		7,737,527
Effect of dilutive securities:
Incentive and equity compensation plans	5,288		3,382		5,196		2,333
Weighted average shares outstanding for diluted earnings per share	7,690,950		7,737,112		7,694,548		7,739,859
Diluted earnings per share	$	13.05	$	15.37	$	24.30	$	28.01

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Changes in Equity (Tables)

6 Months Ended

Jun. 30, 2023

Equity [Abstract]

Schedule of Stockholders Equity

The following tables present changes in our equity for the six months ended June 30, 2023 and 2022 (in thousands, except shares and per share amounts):

	Common Stock			Treasury Stock			Additional Paid-in Capital		Accum. Other Comp. Income (Loss)		Retained Earnings		Total Equity
	Shares	Amount		Shares	Amount
For the six months ended June 30, 2023:
Balances as of December 31, 2022	7,695,679	$	78	60,477	$	(104,139)	$	8,293	$	2,516	$	866,139	$	772,887
Net income	—	—		—	—		—		—		86,568		86,568
Dividends paid — $3.25 per share of common stock	—	—		—	—		—		—		(25,061)		(25,061)
Share-based compensation, net of forfeitures	1,756	—		(1,756)	3,033		(560)		—		(103)		2,370
Repurchases of common stock, including excise taxes of $67	(3,627)	—		3,627	(6,749)		—		—		—		(6,749)
Shares exchanged for tax withholdings	(488)	—		488	(939)		—		—		—		(939)
Periodic pension costs, net of income taxes of $6	—	—		—	—		—		(25)		—		(25)
Balances as of March 31, 2023	7,693,320	$	78	62,836	$	(108,794)	$	7,733	$	2,491	$	927,543	$	829,051
Net income	—	—		—	—		—		—		100,393		100,393
Dividends paid — $3.25 per share of common stock	—	—		—	—		—		—		(24,966)		(24,966)
Share-based compensation, net of forfeitures	—	—		—	—		2,849		—		(43)		2,806
Repurchases of common stock, including excise taxes of $165	(14,175)	—		14,175	(19,708)		—		—		—		(19,708)
Periodic pension costs, net of income taxes of $8	—	—		—	—		—		(26)		—		(26)
Balances as of June 30, 2023	7,679,145	$	78	77,011	$	(128,502)	$	10,582	$	2,465	$	1,002,927	$	887,550

	Common Stock			Treasury Stock			Additional Paid-in Capital		Accum. Other Comp. Income (Loss)		Retained Earnings		Total Equity
	Shares	Amount		Shares	Amount
For the six months ended June 30, 2022:
Balances as of December 31, 2021	7,744,695	$	78	11,461	$	(15,417)	$	28	$	(1,007)	$	668,029	$	651,711
Net income	—	—		—	—		—		—		97,900		97,900
Dividends paid — $3.00 per share of common stock	—	—		—	—		—		—		(23,224)		(23,224)
Share-based compensation, net of forfeitures	595	—		(595)	800		1,477		—		(796)		1,481
Periodic pension costs, net of income taxes of $2	—	—		—	—		—		8		—		8
Balances as of March 31, 2022	7,745,290	$	78	10,866	$	(14,617)	$	1,505	$	(999)	$	741,909	$	727,876
Net income	—	—		—	—		—		—		118,894		118,894
Dividends paid — $3.00 per share of common stock	—	—		—	—		—		—		(23,188)		(23,188)
Special dividends paid — $20.00 per share of common stock	—	—		—	—		—		—		(154,586)		(154,586)
Share-based compensation, net of forfeitures	104	—		(104)	140		1,851		—		(180)		1,811
Repurchases of common stock	(17,478)	—		17,478	(25,534)		—		—		—		(25,534)
Periodic pension costs, net of income taxes of $2	—	—		—	—		—		8		—		8
Balances as of June 30, 2022	7,727,916	$	78	28,240	$	(40,011)	$	3,356	$	(991)	$	682,849	$	645,281

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Business Segment Reporting (Tables)

6 Months Ended

Jun. 30, 2023

Segment Reporting [Abstract]

Schedule of Segment Financial Results

Segment financial results were as follows for the three and six months ended June 30, 2023 and 2022 (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Revenues:
Land and resource management	$	101,320	$	133,385	$	205,343	$	246,732
Water services and operations	59,289		42,885		101,628		76,873
Total consolidated revenues	$	160,609	$	176,270	$	306,971	$	323,605
Net income:
Land and resource management	$	69,633	$	96,074	$	134,976	$	177,230
Water services and operations	30,760		22,820		51,985		39,564
Total consolidated net income	$	100,393	$	118,894	$	186,961	$	216,794
Capital expenditures:
Land and resource management	$	(31)	$	103	$	144	$	225
Water services and operations	1,402		7,239		5,000		10,122
Total capital expenditures	$	1,371	$	7,342	$	5,144	$	10,347
Depreciation, depletion and amortization:
Land and resource management	$	912	$	529	$	1,530	$	1,065
Water services and operations	2,981		3,651		5,767		7,241
Total depreciation, depletion and amortization	$	3,893	$	4,180	$	7,297	$	8,306

Schedule of Total Assets And Property, Plant and Equipment

The following table presents total assets and property, plant and equipment, net by segment as of June 30, 2023 and December 31, 2022 (in thousands):

	June 30, 2023		December 31, 2022
Assets:
Land and resource management	$	845,847	$	735,193
Water services and operations	155,477		142,234
Total consolidated assets	$	1,001,324	$	877,427
Property, plant and equipment, net:
Land and resource management	$	5,607	$	5,998
Water services and operations	78,717		79,480
Total consolidated property, plant and equipment, net	$	84,324	$	85,478

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Organization and Description of Business Segments (Details) a in Thousands	6 Months Ended		12 Months Ended
	Jun. 30, 2023 a segment	Jun. 30, 2022	Dec. 31, 2022
Organization, Consolidation and Presentation of Financial Statements [Line Items]
Number of operating segments | segment	2
1/16th nonparticipating perpetual royalty interest
Organization, Consolidation and Presentation of Financial Statements [Line Items]
Nonparticipating perpetual royalty interest rate (in percentage)	6.25%	6.25%	6.25%
1/128th nonparticipating perpetual royalty interest
Organization, Consolidation and Presentation of Financial Statements [Line Items]
Nonparticipating perpetual royalty interest rate (in percentage)	0.78125%		0.78125%
1/8th Net royalty acres
Organization, Consolidation and Presentation of Financial Statements [Line Items]
Nonparticipating perpetual royalty interest rate (in percentage)	12.50%
West Texas
Organization, Consolidation and Presentation of Financial Statements [Line Items]
Area of land (in acres)	886
West Texas | 1/128th Nonparticipating perpetual oil and gas royalty interest
Organization, Consolidation and Presentation of Financial Statements [Line Items]
Area of land (in acres)	85
West Texas | 1/16th Nonparticipating perpetual oil and gas royalty interest
Organization, Consolidation and Presentation of Financial Statements [Line Items]
Area of land (in acres)	371
West Texas | 1/8th Net royalty acres
Organization, Consolidation and Presentation of Financial Statements [Line Items]
Area of land (in acres)	4

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Summary of Significant Accounting Policies - Reclassifications (Details) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2022 USD ($)	Jun. 30, 2022 USD ($)
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Ad valorem taxes payable	$ 31	$ 64
Revision of prior period, reclassification, adjustment
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Accrual for ad valorem taxes	$ 454	$ 454

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Summary of Significant Accounting Policies - Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022	Jun. 30, 2022	Dec. 31, 2021
Accounting Policies [Abstract]
Cash and cash equivalents	$ 609,252	$ 510,834
Tax like-kind exchange escrow	2,195	6,348
Total cash, cash equivalents and restricted cash shown in the statement of cash flows	$ 611,447	$ 517,182	$ 389,794	$ 428,242

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Real Estate Activity - Schedule of Land and Real Estate Ownership (Details) $ in Thousands	Jun. 30, 2023 USD ($) a	Dec. 31, 2022 USD ($) a
Number of Acres
Land (surface rights) (acre) | a	817,017	817,060
Real estate acquired (acre) | a	69,447	57,306
Total Real Estate Situated in Texas (acre) | a	886,464	874,366
Net Book Value
Land (surface rights) | $	$ 0	$ 0
Real estate acquired | $	130,024	109,704
Total real estate situated in Texas (in USD) | $	$ 130,024	$ 109,704

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Real Estate - Narrative (Details) - Texas $ in Millions	6 Months Ended
	Jun. 30, 2023 USD ($) a
Land acquisitions
Real Estate Properties [Line Items]
Additions (acres) | a	12,141
Additions | $	$ 20.0
Land sales and other operating revenue
Real Estate Properties [Line Items]
Area of real estate property, sold (in acres) | a	43
Proceeds from sale of real estate (in USD) | $	$ 1.4

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Property, Plant and Equipment (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Property, Plant and Equipment [Line Items]
Total property, plant and equipment, at cost	$ 140,556		$ 140,556		$ 135,482
Less: accumulated depreciation	(56,232)		(56,232)		(50,004)
Property, plant and equipment, net	84,324		84,324		85,478
Depreciation expense	3,200	$ 3,900	6,300	$ 7,700
Water service-related assets
Property, Plant and Equipment [Line Items]
Total property, plant and equipment, at cost	130,106		130,106		125,166
Furniture, fixtures and equipment
Property, Plant and Equipment [Line Items]
Total property, plant and equipment, at cost	9,852		9,852		9,718
Other
Property, Plant and Equipment [Line Items]
Total property, plant and equipment, at cost	$ 598		$ 598		$ 598

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Oil and Gas Royalty Interests (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Net Book Value of Royalty Interests [Abstract]
Royalty interests acquired	$ 49,731	$ 47,928
Total royalty interests, gross	49,731	47,928
Less: accumulated depletion	(3,811)	(2,903)
Total royalty interests, net	45,920	45,025
1/16th nonparticipating perpetual royalty interest
Net Book Value of Royalty Interests [Abstract]
1/16th nonparticipating perpetual royalty interest	0	0
1/128th nonparticipating perpetual royalty interest
Net Book Value of Royalty Interests [Abstract]
1/128th nonparticipating perpetual royalty interest	$ 0	$ 0

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Oil and Gas Royalty Interests - Narrative (Details) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2023 USD ($) a	Jun. 30, 2022 USD ($) a	Jun. 30, 2023 USD ($) a	Jun. 30, 2022 USD ($) a	Dec. 31, 2022
Real Estate Properties [Line Items]
Acquisition of royalty interests			$ 1,803	$ 1,662
Depletion expense	$ 600	$ 200	$ 900	$ 500
Additional real estate acquisitions
Real Estate Properties [Line Items]
Net royalty interests (in acres) | a	61	92	61	92
Acquisition of royalty interests			$ 1,800	$ 1,700
1/16th nonparticipating perpetual royalty interest
Real Estate Properties [Line Items]
Nonparticipating perpetual royalty interest rate (in percentage)			6.25%	6.25%	6.25%
1/128th nonparticipating perpetual royalty interest
Real Estate Properties [Line Items]
Nonparticipating perpetual royalty interest rate (in percentage)			0.78125%		0.78125%

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Share-Based Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions			6 Months Ended
	Feb. 10, 2023	Feb. 11, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock, par value (in dollars per share)			$ 0.01		$ 0.01
Total unrecognized compensation cost			$ 14.2
Total unrecognized compensation cost, period for recognition			1 year 6 months
Common Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares available for future grants (in shares)			54,718
Common Stock | 2021 Plan | Maximum | Employee
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized (in shares)			75,000
Common Stock | 2021 Directors Plan | Director
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares available for future grants (in shares)			8,815
Common Stock | 2021 Directors Plan | Maximum | Director
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized (in shares)			10,000
Performance Shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
PSU conversion ration (in shares)		1
Award vesting period		3 years
Award vesting rights, percentage		100.00%
Granted (in shares)	1,852	2,394	1,852	2,394
Cancelled and forfeited (in shares)			0	0
Performance Shares | Shares vesting December 29, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting rights, percentage		50.00%
Performance Shares | Shares vesting December 29, 2023
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting rights, percentage		50.00%
Restricted Stock Awards | Shares vesting December 29, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting rights, percentage			33.00%
Restricted Stock Awards | Shares vesting December 29, 2023
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting rights, percentage			33.00%
Restricted Stock Awards | Tranche Three
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting rights, percentage			33.00%
Restricted Stock Awards | 2021 Plan | Employee
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)			0	0
Cancelled and forfeited (in shares)			0	0
Restricted Stock Awards | 2021 Directors Plan | Director
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)			486	784
Cancelled and forfeited (in shares)			0	(85)

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Share-Based Compensation - Restricted Stock Transactions (Details) - $ / shares			6 Months Ended
	Dec. 29, 2022	Dec. 29, 2021	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022	Dec. 31, 2021
Restricted Stock Awards | Shares vesting December 29, 2022
Weighted-Average Grant-Date Fair Value per Share
Awards granted (in shares)		1,993
Restricted Stock Awards | Shares vesting December 29, 2023
Weighted-Average Grant-Date Fair Value per Share
Awards granted (in shares)		1,337
Restricted Stock Awards | Employee | 2021 Plan
Number of RSAs
Non-vested, beginning of period (in shares)			1,337	3,330
Granted (in shares)			0	0
Vested (in shares)			0	0
Cancelled and forfeited (in shares)			0	0
Non-vested, at end of period (in shares)			1,337	3,330
Weighted-Average Grant-Date Fair Value per Share
Non-vested, beginning of period (in dollars per share)			$ 1,252	$ 1,252	$ 1,252	$ 1,252
Granted (in dollars per share)			0	0
Vested (in dollars per share)			0	0
Cancelled and forfeited (in dollars per share)			0	0
Non-vested, at end of period (in dollars per share)			$ 1,252	$ 1,252
Surrendered (in shares)	488
Restricted Stock Awards | Director | 2021 Directors Plan
Number of RSAs
Non-vested, beginning of period (in shares)			699	0
Granted (in shares)			486	784
Vested (in shares)			(699)	0
Cancelled and forfeited (in shares)			0	(85)
Non-vested, at end of period (in shares)			486	699
Weighted-Average Grant-Date Fair Value per Share
Non-vested, beginning of period (in dollars per share)			$ 2,344	$ 1,281	1,281	0
Granted (in dollars per share)			2,344	1,277
Vested (in dollars per share)			1,281	0
Cancelled and forfeited (in dollars per share)			0	1,249
Non-vested, at end of period (in dollars per share)			$ 2,344	$ 1,281
Restricted Stock Units (RSUs) | Employee | 2021 Plan
Number of RSAs
Non-vested, beginning of period (in shares)			5,612	0
Granted (in shares)			2,848	3,824
Vested (in shares)			(1,270)	0
Cancelled and forfeited (in shares)			0	0
Non-vested, at end of period (in shares)			7,190	3,824
Weighted-Average Grant-Date Fair Value per Share
Non-vested, beginning of period (in dollars per share)			$ 1,600	$ 1,105	$ 1,323	$ 0
Granted (in dollars per share)			1,924	1,105
Vested (in dollars per share)			1,105	0
Cancelled and forfeited (in dollars per share)			0	0
Non-vested, at end of period (in dollars per share)			$ 1,600	$ 1,105

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Share-Based Compensation - Performance Share Units (Details) - Performance Shares - $ / shares			6 Months Ended
	Feb. 10, 2023	Feb. 11, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022	Dec. 31, 2021
Number of RSAs
Non-vested, beginning of period (in shares)			2,394	0
Granted (in shares)	1,852	2,394	1,852	2,394
Vested (in shares)			0	0
Cancelled and forfeited (in shares)			0	0
Non-vested, at end of period (in shares)			4,246	2,394
Weighted-Average Grant-Date Fair Value per Share
Non-vested, beginning of period (in dollars per share)			$ 1,786	$ 1,355	$ 1,355	$ 0
Granted (in dollars per share)			2,342	1,355
Vested (in dollars per share)			0	0
Cancelled and forfeited (in dollars per share)			0	0
Non-vested, at end of period (in dollars per share)			$ 1,786	$ 1,355
Relative total stockholder return
Number of RSAs
Granted (in shares)	926	1,197
Weighted-Average Grant-Date Fair Value per Share
Non-vested, beginning of period (in dollars per share)	$ 2,761	$ 1,605
Non-vested, at end of period (in dollars per share)	$ 2,761	$ 1,605
Free cash flow
Number of RSAs
Granted (in shares)	926	1,197
Weighted-Average Grant-Date Fair Value per Share
Non-vested, beginning of period (in dollars per share)	$ 1,924	$ 1,105
Non-vested, at end of period (in dollars per share)	$ 1,924	$ 1,105

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Share-Based Compensation - Share-Based Compensation - (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total share-based compensation expense	$ 2,850	$ 1,990	$ 5,323	$ 3,495
Tax benefit related to share-based compensation	600	400	1,100	700
Salaries and related employee expenses (employee awards)
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total share-based compensation expense	2,559	1,760	4,715	3,079
General and administrative expenses (director awards)
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total share-based compensation expense	$ 291	$ 230	$ 608	$ 416

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Income Taxes - Calculation of Effective Tax Rate (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Income Tax Disclosure [Abstract]
Income before income taxes	$ 127,151	$ 152,338	$ 237,492	$ 276,727
Income tax expense	$ 26,758	$ 33,444	$ 50,531	$ 59,933
Effective tax rate (in percent)	21.00%	22.00%	21.30%	21.70%

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Earnings Per Share - Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended				6 Months Ended
	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2022	Mar. 31, 2022	Jun. 30, 2023	Jun. 30, 2022
Earnings Per Share [Abstract]
Net income	$ 100,393	$ 86,568	$ 118,894	$ 97,900	$ 186,961	$ 216,794
Basic earnings per share:
Weighted average shares outstanding for basic EPS (in shares)	7,685,662		7,733,730		7,689,352	7,737,527
Basic earnings per share (in dollars per share)	$ 13.06		$ 15.37		$ 24.31	$ 28.02
Diluted earnings per share:
Weighted average shares outstanding for basic EPS (in shares)	7,685,662		7,733,730		7,689,352	7,737,527
Stock-based incentive plan (in shares)	5,288		3,382		5,196	2,333
Weighted average shares outstanding for diluted EPS (in shares)	7,690,950		7,737,112		7,694,548	7,739,859
Diluted earnings per share (in dollars per share)	$ 13.05		$ 15.37		$ 24.30	$ 28.01

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Commitments and Contingencies - Additional Information (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		6 Months Ended
	Apr. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Other Commitments [Line Items]
Total consolidated revenues		$ 160,609	$ 176,270	$ 306,971	$ 323,605
Oil and gas royalties
Other Commitments [Line Items]
Total consolidated revenues	$ 8,700	$ 82,412	$ 121,268	$ 171,542	$ 225,440

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Changes in Equity (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended				6 Months Ended
	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2022	Mar. 31, 2022	Jun. 30, 2023	Jun. 30, 2022
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance	$ 829,051	$ 772,887	$ 727,876	$ 651,711	$ 772,887	$ 651,711
Beginning balance, treasury stock (in shares)		60,477			60,477
Net income	100,393	$ 86,568	118,894	97,900	$ 186,961	216,794
Share-based compensation, net of forfeitures	2,806	2,370	1,811	1,481
Repurchases of common stock	(19,708)	(6,749)	(25,534)
Shares exchanged for tax withholdings		(939)
Periodic pension costs, net of income taxes	(26)	(25)	8	8	(51)	16
Ending balance	$ 887,550	829,051	$ 645,281	727,876	$ 887,550	$ 645,281
Ending balance, treasury stock (in shares)	77,011				77,011
Cash dividends per share of common stock (in USD per share)	$ 3.25		$ 23.00		$ 6.50	$ 26.00
Excise taxes collected	$ 165	67
Periodic pension costs (benefit), net of income taxes	$ (8)	$ (6)	$ 2	$ 2	$ (14)	$ 4
Common Stock
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance (in shares)	7,693,320	7,695,679	7,745,290	7,744,695	7,695,679	7,744,695
Beginning balance	$ 78	$ 78	$ 78	$ 78	$ 78	$ 78
Share-based compensation, net of forfeitures (in shares)		1,756	104	595
Repurchases of common stock (in shares)	(14,175)	(3,627)	(17,478)
Shares exchanged for tax withholdings (in shares)		(488)
Ending balance (in shares)	7,679,145	7,693,320	7,727,916	7,745,290	7,679,145	7,727,916
Ending balance	$ 78	$ 78	$ 78	$ 78	$ 78	$ 78
Treasury Stock
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance	$ (108,794)	$ (104,139)	$ (14,617)	$ (15,417)	$ (104,139)	$ (15,417)
Beginning balance, treasury stock (in shares)	62,836	60,477	10,866	11,461	60,477	11,461
Share-based compensation, forfeitures (in shares)		(1,756)	(104)	(595)
Share-based compensation, net of forfeitures		$ 3,033	$ 140	$ 800
Repurchases of common stock (in shares)	14,175	3,627	17,478
Repurchases of common stock	$ (19,708)	$ (6,749)	$ (25,534)
Shares exchanged for tax withholdings (in shares)		488
Shares exchanged for tax withholdings		$ (939)
Ending balance	$ (128,502)	$ (108,794)	$ (40,011)	$ (14,617)	$ (128,502)	$ (40,011)
Ending balance, treasury stock (in shares)	77,011	62,836	28,240	10,866	77,011	28,240
Additional Paid-in Capital
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance	$ 7,733	$ 8,293	$ 1,505	$ 28	$ 8,293	$ 28
Share-based compensation, net of forfeitures	2,849	(560)	1,851	1,477
Ending balance	10,582	7,733	3,356	1,505	10,582	3,356
Accum. Other Comp. Income (Loss)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance	2,491	2,516	(999)	(1,007)	2,516	(1,007)
Periodic pension costs, net of income taxes	(26)	(25)	8	8
Ending balance	2,465	2,491	(991)	(999)	2,465	(991)
Retained Earnings
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance	927,543	866,139	741,909	668,029	866,139	668,029
Net income	100,393	86,568	118,894	97,900
Share-based compensation, net of forfeitures	(43)	(103)	(180)	(796)
Ending balance	1,002,927	927,543	682,849	741,909	$ 1,002,927	$ 682,849
Dividend Paid
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Dividends paid	$ (24,966)	$ (25,061)	$ (23,188)	$ (23,224)
Cash dividends per share of common stock (in USD per share)	$ 3.25	$ 3.25	$ 3.00	$ 3.00
Dividend Paid | Retained Earnings
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Dividends paid	$ (24,966)	$ (25,061)	$ (23,188)	$ (23,224)
Special Dividend Paid
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Special dividends paid			$ (154,586)
Cash dividends per share of common stock (in USD per share)			$ 20.00
Special Dividend Paid | Retained Earnings
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Special dividends paid			$ (154,586)

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Changes in Equity - Narrative (Details) $ in Millions	Nov. 01, 2022 USD ($)
Equity [Abstract]
Stock repurchase program, authorized amount	$ 250

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Business Segment Reporting - Narrative (Details) a in Thousands	Jun. 30, 2023 a
West Texas
Segment Reporting Information [Line Items]
Area of land (in acres)	886

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Business Segment Reporting - Financial Results (Details) - USD ($) $ in Thousands	3 Months Ended				6 Months Ended
	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2022	Mar. 31, 2022	Jun. 30, 2023	Jun. 30, 2022
Segment Reporting Information [Line Items]
Total consolidated revenues	$ 160,609		$ 176,270		$ 306,971	$ 323,605
Net income	100,393	$ 86,568	118,894	$ 97,900	186,961	216,794
Total capital expenditures	1,371		7,342		5,144	10,347
Depreciation, depletion and amortization	3,893		4,180		7,297	8,306
Land and resource management
Segment Reporting Information [Line Items]
Total consolidated revenues	101,320		133,385		205,343	246,732
Net income	69,633		96,074		134,976	177,230
Total capital expenditures	(31)		103		144	225
Depreciation, depletion and amortization	912		529		1,530	1,065
Water services and operations
Segment Reporting Information [Line Items]
Total consolidated revenues	59,289		42,885		101,628	76,873
Net income	30,760		22,820		51,985	39,564
Total capital expenditures	1,402		7,239		5,000	10,122
Depreciation, depletion and amortization	$ 2,981		$ 3,651		$ 5,767	$ 7,241

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Business Segment Reporting - Assets and Property, Plant and Equipment, Net (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Segment Reporting Information [Line Items]
Total consolidated assets	$ 1,001,324	$ 877,427
Total consolidated property, plant and equipment, net	84,324	85,478
Land and resource management
Segment Reporting Information [Line Items]
Total consolidated assets	845,847	735,193
Total consolidated property, plant and equipment, net	5,607	5,998
Water services and operations
Segment Reporting Information [Line Items]
Total consolidated assets	155,477	142,234
Total consolidated property, plant and equipment, net	$ 78,717	$ 79,480

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Oil and Gas Producing Activities (Unaudited) (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2023 Boe well	Jun. 30, 2022 Boe	Jun. 30, 2023 Boe well	Jun. 30, 2022 Boe	Dec. 31, 2022 well
Extractive Industries [Abstract]
Share of oil and gas produced in thousands per day | Boe	24,900	19,800	22,900	20,300
Number of oil and gas wells | well	593		593		584

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Subsequent Events (Details)	Aug. 01, 2023 $ / shares
Dividend declared | Subsequent event
Subsequent Event [Line Items]
Annual cash dividend (in dollars per share)	$ 3.25