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“TPL continues to reap the rewards of strong oil and gas prices and supportive Permian Basin activity, with record quarter revenues from oil and gas royalties,” said Tyler Glover, Chief Executive Officer of the Company. “Beyond just oil and gas royalties, the Company’s other major surface-related revenue streams – easements and other surface-related income, water sales, and produced water royalties – all generated significant sequential quarterly revenue growth and contributed meaningful incremental cash flow. In addition, TPL continues to have numerous constructive conversations on a wide array of next-generation opportunities, and we were pleased to share updates on some of that progress during the quarter. We announced new ventures for TPL surface with a new alliance with Mawson and JAI to develop bitcoin mining and an agreement with Milestone Carbon to evaluate potential carbon sequestration.

Our total revenues increased $80.3 million for the second quarter of 2022 compared to the same period of 2021, largely driven by the $63.1 million increase in oil and gas royalty revenue and the $13.0 million combined increase in water sales and produced water royalties. Our share of production was approximately 19.8 thousand barrels of oil equivalent ("Boe") per day for the second quarter of 2022 compared to 16.4 thousand Boe per day for the same period of 2021. The average realized price was $70.36 per Boe for the second quarter of 2022, compared to $40.83 per Boe for the comparable period of 2021. Water sales increased $9.8 million for the second quarter of 2022 compared to the second quarter of 2021 principally due to a 55.0% increase in the number of barrels of sourced and treated water sold. Our revenue streams are directly impacted by development and operating decisions in the Permian Basin made by our customers and by commodity prices, among other factors.

Our total operating expenses of $24.6 million for the second quarter of 2022 decreased slightly compared to the same period of 2021. Salaries and related employee expenses for the second quarter of 2022 compared to the same period of 2021 decreased approximately $3.7 million as expenses for 2021 included severance costs. Additionally, we are beginning to recognize the benefits of our ongoing investment in electrifying our water sourcing infrastructure through the reduction of certain expenses, principally fuel and equipment rental. Partially offsetting this decrease, the accrual for ad valorem taxes increased $2.0 million for the second quarter of 2022 compared to the same period of 2021.

Our total revenues increased $143.5 million for the six months ended June 30, 2022 compared to the same period of 2021, largely driven by the $117.7 million increase in oil and gas royalty revenue and the $21.2 million combined increase in water sales and produced water royalties. Our share of production was approximately 20.3 thousand Boe per day for the six months ended June 30, 2022 compared to 16.4 thousand Boe per day for the same period of 2021. The average realized price was $64.22 per Boe for the six months ended June 30, 2022 compared to $37.94 per Boe for the comparable period of 2021. Our revenue streams are directly impacted by commodity prices and development and operating decisions made by our customers and vary as the pace of development and oil demand varies.

Our total operating expenses of $47.6 million for the six months ended June 30, 2022 increased $0.8 million compared to the same period of 2021. Operating expenses for 2022 increased principally as a result of the Company recording a $4.0 million accrual for ad valorem taxes and contributing $250,000 to the Permian Basin Area Foundation in support of the initiative to renovate Hogan Park in Midland, Texas. Partially offsetting these increases, salaries and related employee expenses decreased due to the absence of severance costs in 2022. Additionally, we are beginning to recognize the benefits of our ongoing investment in electrifying our water sourcing infrastructure through the reduction of certain expenses, principally fuel and equipment rental.

The Company will hold a conference call on Thursday, August 4, 2022 at 7:30 a.m. Central Time to discuss second quarter results. A live webcast of the conference call will be available on the Investors section of the Company’s website at http://www.TexasPacific.com. To listen to the live broadcast, go to the site at least 15 minutes prior to the scheduled start time in order to register and install any necessary audio software.

Texas Pacific Land Corporation is one of the largest landowners in the State of Texas with approximately 880,000 acres of land in West Texas, with the majority of its ownership concentrated in the Permian Basin. The Company is not an oil and gas producer, but its surface and royalty ownership provide revenue opportunities throughout the life cycle of a well. These revenue opportunities include fixed fee payments for use of our land, revenue for sales of materials (caliche) used in the construction of infrastructure, providing sourced water and/or treated produced water, revenue from our oil and gas royalty interests, and revenues related to saltwater disposal on our land. The Company also generates revenue from pipeline, power line and utility easements, commercial leases and temporary permits related to a variety of land uses including midstream infrastructure projects and hydrocarbon processing facilities.

This news release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that are based on TPL’s beliefs, as well as assumptions made by, and information currently available to, TPL, and therefore involve risks and uncertainties that are difficult to predict. Generally, future or conditional verbs such as “will,” “would,” “should,” “could,” or “may” and the words “believe,” “anticipate,” “continue,” “intend,” “expect” and similar expressions identify forward-looking statements. Forward-looking statements include, but are not limited to, references to strategies, plans, objectives, expectations, intentions, assumptions, future operations and prospects and other statements that are not historical facts. You should not place undue reliance on forward-looking statements. Although TPL believes that plans, intentions and expectations reflected in or suggested by any forward-looking statements made herein are reasonable, TPL may be unable to achieve such plans, intentions or expectations and actual results, and performance or achievements may vary materially and adversely from those envisaged in this news release due to a number of factors including, but not limited to: the potential future impact of COVID-19 on the global and U.S. economies as well as on TPL’s financial condition and business operations; the initiation or outcome of potential litigation; and any changes in general economic and/or industry specific conditions. These risks, as well as other risks associated with TPL are also more fully discussed in our Annual Report on Form 10-K and our Quarterly Reports on Form 10-Q. You can access TPL’s filings with the SEC through the SEC website at http://www.sec.gov and TPL strongly encourages you to do so. Except as required by applicable law, TPL undertakes no obligation to update any forward-looking statements or other statements herein for revisions or changes after this communication is made.


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Our share of production volumes(1):
Oil (MBbls)	813		683		1,609		1,328
Natural gas (MMcf)	2,912		2,807		6,191		5,516
NGL (MBbls)	507		342		1,035		725
Equivalents (MBoe)	1,805		1,493		3,676		2,973
Equivalents per day (MBoe/d)	19.8		16.4		20.3		16.4

Oil and gas royalty revenue:
Oil royalties	$	83,966	$	42,577	$	155,647	$	76,826
Natural gas royalties	17,650		7,512		33,825		14,872
NGL royalties	19,652		8,115		35,968		16,039
Total oil and gas royalties	$	121,268	$	58,204	$	225,440	$	107,737

Realized prices:
Oil ($/Bbl)	$	108.16	$	65.30	$	101.27	$	60.55
Natural gas ($/Mcf)	$	6.55	$	2.89	$	5.91	$	2.91
NGL ($/Bbl)	$	41.93	$	25.64	$	37.59	$	23.91
Equivalents ($/Boe)	$	70.36	$	40.83	$	64.22	$	37.94


(1)	Term	Definition
	Bbl	One stock tank barrel of 42 U.S. gallons liquid volume used herein in reference to crude oil, condensate or NGLs.

	MBbls	One thousand barrels of crude oil, condensate or NGLs.
	MBoe	One thousand Boe.
	MBoe/d	One thousand Boe per day.
	Mcf	One thousand cubic feet of natural gas.
	MMcf	One million cubic feet of natural gas.
	NGL	Natural gas liquids. Hydrocarbons found in natural gas that may be extracted as liquefied petroleum gas and natural gasoline.


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Revenues:
Oil and gas royalties	$	121,268	$	58,204	$	225,440	$	107,737
Water sales	22,272		12,473		41,092		25,429
Produced water royalties	18,669		15,458		33,539		28,007
Easements and other surface-related income	13,990		8,977		23,182		18,024
Land sales and other operating revenue	71		820		352		890
Total revenues	176,270		95,932		323,605		180,087

Expenses:
Salaries and related employee expenses	9,588		13,271		18,973		23,250
Water service-related expenses	3,915		3,551		6,697		6,849
General and administrative expenses	3,705		2,841		6,705		5,647
Legal and professional fees	1,163		1,141		2,882		3,353
Ad valorem taxes	2,011		—		4,021		—

Depreciation, depletion and amortization	4,180		3,858		8,306		7,696
Total operating expenses	24,562		24,662		47,584		46,795

Operating income	151,708		71,270		276,021		133,292

Other income, net	630		406		706		411
Income before income taxes	152,338		71,676		276,727		133,703


Income tax expense	33,444		14,630		59,933		26,605
Net income	$	118,894	$	57,046	$	216,794	$	107,098

Net income per share of common stock
Basic	$	15.37	$	7.36	$	28.02	$	13.81
Diluted	$	15.37	$	7.36	$	28.01	$	13.81

Weighted average number of shares of common stock outstanding
Basic	7,733,730		7,755,886		7,737,527		7,756,020
Diluted	7,737,112		7,755,886		7,739,859		7,756,020


	Three Months Ended June 30,
	2022				2021
Revenues:
Land and resource management:




Oil and gas royalty revenue	$	121,268	68	%	$	58,204	60	%
Easements and other surface-related income	12,046		7	%	8,217		9	%
Land sales and other operating revenue	71		—	%	820		1	%
Total land and resource management revenue	133,385		75	%	67,241		70	%

Water services and operations:
Water sales	22,272		13	%	12,473		13	%
Produced water royalties	18,669		11	%	15,458		16	%
Easements and other surface-related income	1,944		1	%	760		1	%
Total water services and operations revenue	42,885		25	%	28,691		30	%
Total consolidated revenues	$	176,270	100	%	$	95,932	100	%

Net income:
Land and resource management	$	96,074	81	%	$	45,443	80	%
Water services and operations	22,820		19	%	11,603		20	%
Total consolidated net income	$	118,894	100	%	$	57,046	100	%


	Six Months Ended June 30,
	2022				2021
Revenues:
Land and resource management:




Oil and gas royalty revenue	$	225,440	70	%	$	107,737	60	%
Easements and other surface-related income	20,940		6	%	16,404		9	%
Land sales and other operating revenue	352		—	%	890		—	%
Total land and resource management revenue	246,732		76	%	125,031		69	%

Water services and operations:
Water sales	41,092		13	%	25,429		14	%
Produced water royalties	33,539		10	%	28,007		16	%
Easements and other surface-related income	2,242		1	%	1,620		1	%
Total water services and operations revenue	76,873		24	%	55,056		31	%
Total consolidated revenues	$	323,605	100	%	$	180,087	100	%

Net income:
Land and resource management	$	177,230	82	%	$	84,956	79	%
Water services and operations	39,564		18	%	22,142		21	%
Total consolidated net income	$	216,794	100	%	$	107,098	100	%

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 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 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 the impact of certain non-cash, non-recurring and/or unusual, non-operating items, including, but not limited to: employee share-based compensation, conversion costs related to our Corporate Reorganization, and severance costs. We have presented EBITDA and Adjusted EBITDA because we believe that both are useful supplements to net income in analyzing operating performance.


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Net income	$	118,894	$	57,046	$	216,794	$	107,098
Add:
Income tax expense	33,444		14,630		59,933		26,605
Depreciation, depletion and amortization	4,180		3,858		8,306		7,696
EBITDA	156,518		75,534		285,033		141,399
Add:
Employee share-based compensation	1,760		—		3,079		—
Conversion costs related to our corporate reorganization	—		53		—		2,026
Severance costs	—		4,680		—		6,680

Adjusted EBITDA	$	158,278	$	80,267	$	288,112	$	150,105