Item 1. Financial Statements.

TEXAS PACIFIC LAND CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except shares and per share amounts)

(Unaudited)

			June 30, 2025						December 31, 2024
ASSETS
Cash and cash equivalents			$	543,930					$	369,835
Accounts receivable and accrued receivables, net			114,314						126,670
Prepaid expenses and other current assets			9,256						5,318
Tax like-kind exchange escrow			—						1,546
Total current assets			667,500						503,369
Royalty interests acquired, net			416,048						432,401
Real estate acquired			147,683						143,178
Property, plant and equipment, net			127,949						122,578
Intangible assets, net			34,017						35,188
Real estate and royalty interests assigned through the Declaration of Trust, no value assigned:
Land (surface rights)			—						—
1/16th and 1/128th nonparticipating perpetual royalty interests			—						—
Other assets			11,467						11,306
Total assets			$	1,404,664					$	1,248,020
LIABILITIES AND EQUITY
Accounts payable and accrued expenses			$	26,987					$	26,958
Ad valorem and other taxes payable			4,958						8,418
Income taxes payable			4,181						4,388
Unearned revenue			9,000						6,797
Total current liabilities			45,126						46,561
Deferred taxes payable			48,730						47,401
Unearned revenue - noncurrent			21,218						20,636
Accrued liabilities - noncurrent			646						957
Total liabilities			115,720						115,555
Commitments and contingencies (Note 12)			—						—
Equity:
Preferred stock, $0.01 par value; 1,000,000 shares authorized, none outstanding as of June 30, 2025 and December 31, 2024			—						—
Common stock, $0.01 par value; 46,536,936 shares authorized as of June 30, 2025 and December 31, 2024, 22,987,326 and 22,971,803 outstanding as of June 30, 2025 and December 31, 2024, respectively			231						231
Treasury stock, at cost; 98,750 and 114,273 shares as of June 30, 2025 and December 31, 2024, respectively			(144,727)						(168,843)
Additional paid-in capital			5,433						19,900
Accumulated other comprehensive income			3,505						3,583
Retained earnings			1,424,502						1,277,594
Total equity			1,288,944						1,132,465
Total liabilities and equity			$	1,404,664					$	1,248,020

See accompanying notes to condensed consolidated financial statements.

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,
			2025						2024						2025						2024
Revenues:
Oil and gas royalties			$	95,006					$	89,813					$	206,251					$	181,933
Water sales			25,577						40,650						64,390						77,776
Produced water royalties			30,737						25,301						58,437						48,307
Easements and other surface-related income			36,223						16,570						54,448						37,216
Land sales			—						—						—						1,244
Total revenues			187,543						172,334						383,526						346,476
Expenses:
Salaries and related employee expenses			14,072						12,771						28,644						25,232
Water service-related expenses			8,451						14,824						19,577						25,036
General and administrative expenses			5,693						5,980						11,765						15,211
Depreciation, depletion and amortization			13,699						4,093						25,640						7,933
Ad valorem and other taxes			1,877						1,444						4,076						3,801
Total operating expenses			43,792						39,112						89,702						77,213
Operating income			143,751						133,222						293,824						269,263
Other income, net			5,240						13,220						9,561						23,163
Income before income taxes			148,991						146,442						303,385						292,426
Income tax expense			32,851						31,853						66,593						63,420
Net income			$	116,140					$	114,589					$	236,792					$	229,006
Other comprehensive loss — periodic pension costs, net of income taxes for the three and six months ended June 30, 2025 and 2024 of $10, $5, $21 and $11 respectively			(39)						(21)						(78)						(42)
Total comprehensive income			$	116,101					$	114,568					$	236,714					$	228,964
Net income per share of common stock
Basic			$	5.05					$	4.99					$	10.30					$	9.96
Diluted			$	5.05					$	4.98					$	10.29					$	9.95
Weighted average number of shares of common stock outstanding
Basic			22,987,326						22,987,971						22,984,029						22,995,486
Diluted			23,013,580						23,013,793						23,008,954						23,018,313
Cash dividends per share of common stock			$	1.60					$	1.17					$	3.20					$	2.34

See accompanying notes to condensed consolidated financial statements.

TEXAS PACIFIC LAND CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(Unaudited)

			Six Months Ended June 30,
			2025						2024
Cash flows from operating activities:
Net income			$	236,792					$	229,006
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion and amortization			25,640						7,933
Share-based compensation			7,882						6,054
Deferred taxes			1,329						756
Changes in operating assets and liabilities:
Operating assets, excluding income taxes			8,154						10,016
Operating liabilities, excluding income taxes			(1,964)						(4,328)
Income taxes payable			(207)						(3,904)
Cash provided by operating activities			277,626						245,533
Cash flows from investing activities:
Purchase of fixed assets			(12,277)						(8,622)
Acquisition of real estate			(4,505)						(1,026)
Acquisition of royalty interests, net of post-close adjustments			(3,546)						—
Post-close adjustment from seller related to prior year acquisition			3,878						—
Cash used in investing activities			(16,450)						(9,648)
Cash flows from financing activities:
Dividends paid			(74,216)						(53,801)
Shares exchanged for tax withholdings			(14,311)						(1,207)
Cash settlement of common stock repurchases			(100)						(16,722)
Cash used in financing activities			(88,627)						(71,730)
Net increase in cash, cash equivalents and restricted cash			172,549						164,155
Cash, cash equivalents and restricted cash, beginning of period			371,381						730,549
Cash, cash equivalents and restricted cash, end of period			$	543,930					$	894,704
Supplemental disclosure of cash flow information:
Income taxes paid			$	65,450					$	66,557
Supplemental non-cash investing and financing information:
Increase in accounts payable related to capital expenditures			$	1,439					$	3,539
(Decrease) increase in accrued dividends on unvested stock awards			$	(411)					$	43

See accompanying notes to condensed consolidated financial statements.

`TEXAS PACIFIC LAND CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Organization and Description of Business

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 874,000 surface acres of land, principally 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 16,000 additional net royalty acres (normalized to 1/8th) (“NRA”) for a collective total of approximately 207,000 NRA, principally concentrated in the Permian Basin.

Our revenues are derived from oil and gas royalties, water sales, produced water royalties, easements and other surface-related (“SLEM”) income and land sales.

On January 11, 2021, we completed our reorganization from a business trust, Texas Pacific Land Trust (the “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, 2024 (“2024 Annual Report”). 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, 2025, the results of its operations for the three and six months ended June 30, 2025 and 2024, and its cash flows for the six months ended June 30, 2025 and 2024. 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 Quarterly Report on Form 10-Q (this “Quarterly Report”), and these interim financial statements and footnotes should be read in conjunction with the audited financial statements and footnotes included in our 2024 Annual Report. The results for the interim periods shown in this Quarterly Report are not necessarily indicative of future financial results.

Operating segments are based on components of the Company that engage in business activity that earn revenues and incur expenses and (a) whose operating results are regularly reviewed by our chief operating decision maker (“CODM”) to make decisions about resource allocation and performance and (b) for which discrete financial information is available. The Company operates two operating segments which represent our reportable segments: Land and Resource Management and Water Services and Operations. The segments enable the alignment of our strategies and objectives and provide a framework for timely and rational allocation of resources within our businesses. The measure of profit or loss that the CODM uses to assess performance and allocated resources to our reportable segments is net income. Our chief executive officer is the CODM and uses net income to evaluate income generated by each segment in his determination of allocating resources to each segment. See Note 14, “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.

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets that correspond to the same such amounts shown in the condensed consolidated statements of cash flows (in thousands):

						June 30, 2025						December 31, 2024
Cash and cash equivalents						$	543,930					$	369,835
Tax like-kind exchange escrow						—						1,546
Total cash, cash equivalents and restricted cash shown in the statement of cash flows						$	543,930					$	371,381

3. Assets Acquired in a Business Combination

On August 20, 2024, we acquired 4,120 acres of land along with other surface-related tangible and intangible assets (collectively referred to as the “Acquired Assets”) from an unaffiliated seller for total consideration of $45.0 million, in an all-cash transaction. There were no liabilities assumed by the Company in this transaction. The Acquired Assets generate revenue streams across water sales, produced water royalties, and SLEM, and provide additional commercial growth opportunities for the Company to expand water sourcing and produced water opportunities to both new and existing customers. The Acquired Assets are located in the Midland Basin.

The acquisition was accounted for as a business combination using the acquisition method and, therefore, the Acquired Assets were recorded based on their fair value on a nonrecurring basis on the date of acquisition and are subject to fair value adjustments under certain circumstances. In determining the fair values of the Acquired Assets, management made estimates, judgements and assumptions. Inputs used to determine fair values of assets included internally-developed models, risk-adjusted discount rates by asset class, publicly available data on land sales comparisons and other cost analysis. These fair values are considered Level 3 assets in the fair value hierarchy. There was no goodwill recorded in connection with this acquisition. The purchase price allocation was finalized during the year ended December 31, 2024.

The following table presents the allocation of fair value by asset class (in thousands):

Real estate acquired						$	12,100
Property, plant and equipment						17,200
Intangible assets						15,700
Total consideration and fair value						$	45,000

For the three months ended June 30, 2025, revenues and operating expenses from the acquisition were approximately $0.9 million and $1.3 million, respectively. For the six months ended June 30, 2025, revenues and operating expenses from the acquisition were approximately $1.5 million and $2.2 million, respectively. Depreciation and amortization expense, included in operating expenses, was $0.8 million and $1.5 million for the three and six months ended June 30, 2025, respectively. The revenues and expenses from the acquisition are included in our condensed consolidated statements of income.

4. Oil and Gas Royalty Interests

As of June 30, 2025 and December 31, 2024, the net book value of the oil and gas royalty interests we owned was as follows (in thousands):

						June 30, 2025						December 31, 2024
Oil and gas royalty interests:
1/16th nonparticipating perpetual royalty interests (1)						$	—					$	—
1/128th nonparticipating perpetual royalty interests (2)						—						—
Royalty interests acquired, at cost (3)						446,739						447,071
Total royalty interests						446,739						447,071
Less: accumulated depletion						(30,691)						(14,670)
Royalty interests, net						$	416,048					$	432,401

*(1)*Royalty interests assigned through the Declaration of Trust dated February 1, 1888. Nonparticipating perpetual royalty interests in 185,369 NRA as of June 30, 2025 and December 31, 2024.

*(2)*Royalty interests assigned through the Declaration of Trust dated February 1, 1888. Nonparticipating perpetual royalty interests in 5,308 NRA as of June 30, 2025 and December 31, 2024.

*(3)*Royalty interest in 16,074 and 15,897 NRA as of June 30, 2025 and December 31, 2024, respectively.

During the six months ended June 30, 2025, we acquired oil and gas royalty interests in 177 NRA for a purchase price of approximately $3.5 million, net of post-close adjustments. In addition, we received a $3.9 million post-close adjustment from the seller of oil and gas interests we acquired in 2024 related to curative title defects. There were no acquisitions of oil and gas royalty interests during the six months ended June 30, 2024. There were no sales of oil and gas royalty interests during the six months ended June 30, 2025 or 2024.

Depletion expense was $8.7 million and $0.6 million for the three months ended June 30, 2025 and 2024, respectively. Depletion expense was $16.0 million and $1.0 million for the six months ended June 30, 2025 and 2024, respectively.

5. Real Estate Activity

As of June 30, 2025 and December 31, 2024, we owned the following land and real estate (in thousands, except number of acres):

						June 30, 2025												December 31, 2024
						Number of Acres						Net Book Value						Number of Acres						Net Book Value
Land (surface rights) (1)						798,643						$	—					798,643						$	—
Real estate acquired						75,280						147,683						74,493						143,178
Total real estate						873,923						$	147,683					873,136						$	143,178

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

For the six months ended June 30, 2025, we acquired 787 acres of land for an aggregate purchase price of $4.5 million. For the six months ended June 30, 2024, we acquired 640 acres of land for an aggregate purchase price of $1.0 million. There were no land sales for the six months ended June 30, 2025. For the six months ended June 30, 2024, we sold 41 acres of land in Texas for an aggregate sales price of $1.2 million.

6. Property, Plant and Equipment

Property, plant and equipment, net consisted of the following as of June 30, 2025 and December 31, 2024 (in thousands):

						June 30, 2025						December 31, 2024
Property, plant and equipment, at cost:
Water service-related assets						$	181,379					$	167,855
Furniture, fixtures and equipment						10,123						9,932
Other						598						598
Total property, plant and equipment, at cost						192,100						178,385
Less: accumulated depreciation						(64,151)						(55,807)
Property, plant and equipment, net						$	127,949					$	122,578

Depreciation expense was $4.3 million and $3.2 million for the three months ended June 30, 2025 and 2024, respectively. Depreciation expense was $8.3 million and $6.2 million for the six months ended June 30, 2025 and 2024, respectively.

7. Intangible Assets

Intangible assets, net consisted of the following as of June 30, 2025 and December 31, 2024 (in thousands):

						June 30, 2025						December 31, 2024
Intangible assets, at cost:
Saltwater disposal easement						$	17,557					$	17,557
Contracts acquired in a business combination						15,700						15,700
Groundwater rights acquired						3,846						3,846
Total intangible assets, at cost (1)						37,103						37,103
Less: accumulated amortization						(3,086)						(1,915)
Intangible assets, net						$	34,017					$	35,188

*(1)*The remaining weighted average amortization period for total intangible assets was 10.8 years as of June 30, 2025.

Amortization of intangible assets was $0.6 million and $0.3 million for the three months ended June 30, 2025 and 2024, respectively. Amortization of intangible assets was $1.2 million and $0.6 million for the six months ended June 30, 2025 and 2024, respectively. The estimated future amortization expense of intangible assets for each of the next five years and thereafter is as follows (in thousands):

Year									Estimated Future Amortization Expense
Remainder of 2025									$	1,171
2026									2,342
2027									2,342
2028									2,342
2029									2,342
2030 and thereafter									23,478
Total expected amortization expense									$	34,017

8. 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 non-employee directors under the 2021 Non-Employee Director Stock and Deferred Compensation Plan (the “2021 Directors Plan” and, together with the 2021 Plan, the “Plans”). As of June 30, 2025, share-based compensation granted under the Plans included restricted stock awards (“RSAs”), restricted stock units (“RSUs”) and performance stock units (“PSUs”). RSUs granted under the 2021 Plan vest in one-third annual increments over three years, and PSUs granted under the 2021 Plan cliff vest at the end of three years if the applicable performance metrics are achieved (as discussed further below). RSAs granted under the 2021 Directors Plan vest in full on the date of grant.

Incentive Plan for Employees

The maximum aggregate number of shares of the Company’s common stock, par value $0.01 per share (the “Common Stock”) that may be issued under the 2021 Plan is 225,000 shares, which may consist, in whole or in part, of authorized and unissued shares, treasury shares, or shares reacquired by the Company in any manner. As of June 30, 2025, 122,070 shares of Common Stock remained available under the 2021 Plan for future grants.

The following table summarizes activity related to RSUs granted under the 2021 Plan for the six months ended June 30, 2025:

																		Six Months Ended June 30, 2025
																		Number of RSUs						Weighted-Average Grant-Date Fair Value per Share
Nonvested at beginning of period																		23,212						$	509
Granted (1)																		6,504						1,372
Vested (2)																		(10,457)						482
Cancelled and forfeited																		(32)						1,372
Nonvested at end of period																		19,227						$	814

*(1)*RSUs vest in one-third annual increments over a three-year period.

*(2)*Of the 10,457 RSUs that vested during the six months ended June 30, 2025, 4,236 RSUs were surrendered by employees to the Company upon vesting to settle tax withholding obligations.

The following table summarizes activity related to PSUs granted under the 2021 Plan for the six months ended June 30, 2025:

						Six Months Ended June 30, 2025
						Number of Target PSUs						Weighted-Average Grant-Date Fair Value per Share
Nonvested at beginning of period						21,078						$	573
Granted (1)						3,848						1,644
Vested (2)						(7,182)						452
Cancelled and forfeited						—						—
Nonvested at end of period						17,744						$	854

*(1)*The PSUs were granted on February 15, 2025 and include 1,924 RTSR PSUs (defined below) (based on target) with a grant date fair value of $1,915 per share and 1,924 FCF PSUs (defined below) (based on target) with a grant date fair value of $1,372 per share. If the maximum performance levels described in the PSU agreements are achieved, the actual number of shares that will ultimately vest under the PSU agreements will exceed target PSUs by 100% (i.e., a collective 3,848 additional shares would be issued).

*(2)*Vested PSUs are based on the original number of PSUs granted (i.e., target units). The actual number of shares delivered upon vesting of PSUs during the six months ended June 30, 2025 totaled 14,364 shares, of which 6,250 shares were surrendered by employees to the Company upon vesting to settle tax withholding obligations.

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 SPDR® S&P® Oil & Gas Exploration & Production ETF (“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. Because the RTSR PSUs are market-based awards, their 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 awards). Expected volatility in the model was estimated based on the volatility of historical stock prices over a period matching the expected term of the awards. The risk-free interest rate was based on U.S. Treasury yield constant maturities for a term matching the expected term of the awards. The inputs for the Monte Carlo simulation model are designated as Level 2 within the fair value hierarchy.

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 30,000 shares, which may consist, in whole or in part, of authorized and unissued shares, treasury shares, or shares reacquired by the Company in any manner. As of June 30, 2025, 23,031 shares of Common Stock remained available under the 2021 Directors Plan for future grants. On January 1, 2025, the Company granted 1,188 RSAs with a grant date fair value of $1,106 per share, which vested in full on the grant date.

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,
						2025						2024						2025						2024
Salaries and related employee expenses (employee awards)						$	3,485					$	2,700					$	6,568					$	4,920
General and administrative expenses (director awards)						—						—						1,314						1,134
Total share-based compensation expense (1)						$	3,485					$	2,700					$	7,882					$	6,054

*(1)*The Company recognized a tax benefit of $0.7 million and $0.6 million related to share-based compensation for the three months ended June 30, 2025 and 2024, respectively. The Company recognized a tax benefit of $1.7 million and $1.3 million related to share-based compensation for the six months ended June 30, 2025 and 2024, respectively.

As of June 30, 2025, there was $19.2 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 1.3 years.

9. Other Income, Net

Other income, net for the three and six months ended June 30, 2025 and 2024 was as follows (in thousands):

						Three Months Ended June 30,												Six Months Ended June 30,
						2025						2024						2025						2024
Other income, net:
Interest earned on cash and cash equivalents, net						$	5,021					$	10,761					$	9,124					$	20,562
Expected return on pension assets, net						219						143						437						285
Miscellaneous income (expense), net (1)						—						2,316						—						2,316
Total other income, net						$	5,240					$	13,220					$	9,561					$	23,163

*(1)*During the three months ended June 30, 2024, miscellaneous income (expense), net includes $1.9 million of proceeds from a settlement with a title company regarding a defect in title to property acquired in a prior year.

10. Income Taxes

The calculation of our effective tax rate was as follows for the three and six months ended June 30, 2025 and 2024 (in thousands, except percentages):

						Three Months Ended June 30,												Six Months Ended June 30,
						2025						2024						2025						2024
Income before income taxes						$	148,991					$	146,442					$	303,385					$	292,426
Income tax expense						$	32,851					$	31,853					$	66,593					$	63,420
Effective tax rate						22.0		%				21.8		%				21.9		%				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.

One Big Beautiful Bill Act

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law, extending key provisions of the 2017 Tax Cuts and Job Act including, but not limited to, federal bonus depreciation and deductions for domestic research and development expenditures. The Company is currently evaluating the OBBBA; however, it is not expected to have a material impact on the Company’s consolidated financial statements.

11. 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 RSAs and other nonvested 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 basic and diluted EPS for the three and six months ended June 30, 2025 and 2024 (in thousands, except number of shares and per share data):

						Three Months Ended June 30,												Six Months Ended June 30,
						2025						2024						2025						2024
Net income						$	116,140					$	114,589					$	236,792					$	229,006
Basic earnings per share:
Weighted average shares outstanding for basic earnings per share						22,987,326						22,987,971						22,984,029						22,995,486
Basic earnings per share						$	5.05					$	4.99					$	10.30					$	9.96
Diluted earnings per share:
Weighted average shares outstanding for basic earnings per share						22,987,326						22,987,971						22,984,029						22,995,486
Effect of dilutive securities:
Incentive and equity compensation plans						26,254						25,822						24,925						22,827
Weighted average shares outstanding for diluted earnings per share						23,013,580						23,013,793						23,008,954						23,018,313
Diluted earnings per share						$	5.05					$	4.98					$	10.29					$	9.95

Restricted stock, if any, is included in the number of shares of Common Stock issued and outstanding, but omitted from the basic EPS calculation until the shares of restricted stock vest. Certain stock awards granted are not included in the dilutive securities in the table above as they were anti-dilutive for the three and six months ended June 30, 2025. There were no anti-dilutive securities for the three and six months ended June 30, 2024.

12. 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, 2025, other than as described below.

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. After the completion of our Corporate Reorganization, we received notice from a third party that it no longer intended 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 party 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, 2025.

13. Changes in Equity

The following tables present changes in our equity for the six months ended June 30, 2025 and 2024 (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
For the six months ended June 30, 2025:
Balances as of December 31, 2024			22,971,803						$	231											$	(168,843)					$	19,900					$	3,583					$	1,277,594					$	1,132,465
Net income			—						—												—						—						—						120,652						120,652
Dividends paid — $1.60 per share of common stock			—						—												—						—						—						(37,434)						(37,434)
Share-based compensation, net of forfeitures			25,890						—												38,253						(17,778)						—						(15,602)						4,873
Shares exchanged for tax withholdings			(10,448)						—												(14,260)						—						—						—						(14,260)
Periodic pension costs, net of income taxes of $11			—						—												—						—						(39)						—						(39)
Balances as of March 31, 2025			22,987,245						231												(144,850)						2,122						3,544						1,345,210						1,206,257
Net income			—						—												—						—						—						116,140						116,140
Dividends paid — $1.60 per share of common stock			—						—												—						—						—						(36,782)						(36,782)
Share-based compensation, net of forfeitures			119						—												174						3,311						—						(66)						3,419
Shares exchanged for tax withholdings			(38)						—												(51)						—						—						—						(51)
Periodic pension costs, net of income taxes of $10			—						—												—						—						(39)						—						(39)
Balances as of June 30, 2025			22,987,326						$	231											$	(144,727)					$	5,433					$	3,505					$	1,424,502					$	1,288,944

			Common Stock																		Treasury Stock						Additional Paid-in Capital						Accum. Other Comp. Income (Loss)						Retained Earnings						Total Equity
			Shares						Amount
For the six months ended June 30, 2024:
Balances as of December 31, 2023			23,007,681						$	78											$	(144,998)					$	14,613					$	1,831					$	1,171,672					$	1,043,196
Net income			—						—												—						—						—						114,417						114,417
Issuance of common stock related to stock split			—						153												—						(153)						—						—						—
Dividends paid — $1.17 per share of common stock			—						—												—						—						—						(26,907)						(26,907)
Share-based compensation, net of forfeitures			8,373						—												4,698						(1,297)						—						15						3,416
Repurchases of common stock and related excise taxes			(20,106)						—												(10,445)						—						—						—						(10,445)
Shares exchanged for tax withholdings			(2,469)						—												(1,207)						—						—						—						(1,207)
Periodic pension costs, net of income taxes of $6			—						—												—						—						(21)						—						(21)
Balances as of March 31, 2024			22,993,479						231												(151,952)						13,163						1,810						1,259,197						1,122,449
Net income			—						—												—						—						—						114,589						114,589
Dividends paid — $1.17 per share of common stock			—						—												—						—						—						(26,894)						(26,894)
Share-based compensation, net of forfeitures			—						—												—						2,700						—						(58)						2,642
Repurchases of common stock and related excise taxes			(10,087)						—												(6,344)						—						—						—						(6,344)
Periodic pension costs, net of income taxes of $5			—						—												—						—						(21)						—						(21)
Balances as of June 30, 2024			22,983,392						$	231											$	(158,296)					$	15,863					$	1,789					$	1,346,834					$	1,206,421

Stock Repurchase Program

On November 1, 2022, our Board approved a stock repurchase program, which became effective January 1, 2023, to purchase up to an aggregate of $250.0 million of our outstanding Common Stock. The Company opportunistically repurchases stock under the stock repurchase program with funds generated by cash from operations. The stock repurchase program may be suspended from time to time, modified, extended or discontinued by the board of directors (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 are subject to market conditions, applicable legal requirements and other factors. As of June 30, 2025, the remaining amounts authorized under the approved stock repurchase program was $178.5 million.

We did not repurchase any shares of our Common Stock during the six months ended June 30, 2025. For the six months ended June 30, 2024, we repurchased $16.6 million shares of our Common Stock.

14. Business Segment Reporting

During the periods presented, we reported our financial performance based on the following reportable segments: Land and Resource Management and Water Services and Operations. We eliminate inter-segment revenues and expenses, if any, upon consolidation. There were no inter-segment revenues for the three and six months ended June 30, 2025 and 2024.

The Land and Resource Management segment encompasses the business of managing our approximately 874,000 surface acres of land and our approximately 207,000 NRA of oil and gas royalty interests, 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.

The following tables present segment financial results for Land and Resource Management (“LRM”) and Water Service and Operations (“WSO”) and the reconciliation to consolidated financial results for the three and six months ended June 30, 2025 and 2024 (in thousands):

						Three Months Ended June 30,
						2025																		2024
						LRM						WSO						Consolidated						LRM						WSO						Consolidated
Revenues:
Oil and gas royalties						$	95,006					$	—					$	95,006					$	89,813					$	—					$	89,813
Water sales						—						25,577						25,577						—						40,650						40,650
Produced water royalties						—						30,737						30,737						—						25,301						25,301
Easements and other surface-related income						33,491						2,732						36,223						14,219						2,351						16,570
Total revenues						128,497						59,046						187,543						104,032						68,302						172,334
Expenses:
Salaries and related employee expenses						7,025						7,047						14,072						6,480						6,291						12,771
Water service-related expenses						—						8,451						8,451						—						14,824						14,824
General and administrative expenses						3,648						2,045						5,693						3,989						1,991						5,980
Depreciation, depletion and amortization						9,137						4,562						13,699						813						3,280						4,093
Ad valorem and other taxes						1,864						13						1,877						1,443						1						1,444
Total operating expenses						21,674						22,118						43,792						12,725						26,387						39,112
Operating income						106,823						36,928						143,751						91,307						41,915						133,222
Other income, net						4,156						1,084						5,240						11,014						2,206						13,220
Income before income taxes						110,979						38,012						148,991						102,321						44,121						146,442
Income tax expense						24,410						8,441						32,851						22,192						9,661						31,853
Net income						$	86,569					$	29,571					$	116,140					$	80,129					$	34,460					$	114,589

						Six Months Ended June 30,
						2025																		2024
						LRM						WSO						Consolidated						LRM						WSO						Consolidated
Revenues:
Oil and gas royalties						$	206,251					$	—					$	206,251					$	181,933					$	—					$	181,933
Water sales						—						64,390						64,390						—						77,776						77,776
Produced water royalties						—						58,437						58,437						—						48,307						48,307
Easements and other surface-related income						48,827						5,621						54,448						32,340						4,876						37,216
Land sales						—						—						—						1,244						—						1,244
Total revenues						255,078						128,448						383,526						215,517						130,959						346,476
Expenses:
Salaries and related employee expenses						14,429						14,215						28,644						12,945						12,287						25,232
Water service-related expenses						—						19,577						19,577						—						25,036						25,036
General and administrative expenses						6,961						4,804						11,765						10,663						4,548						15,211
Depreciation, depletion and amortization						16,826						8,814						25,640						1,506						6,427						7,933
Ad valorem and other taxes						4,053						23						4,076						3,799						2						3,801
Total operating expenses						42,269						47,433						89,702						28,913						48,300						77,213
Operating income						212,809						81,015						293,824						186,604						82,659						269,263
Other income, net						7,572						1,989						9,561						18,944						4,219						23,163
Income before income taxes						220,381						83,004						303,385						205,548						86,878						292,426
Income tax expense						48,268						18,325						66,593						44,448						18,972						63,420
Net income						$	172,113					$	64,679					$	236,792					$	161,100					$	67,906					$	229,006

Interest income by segment is included in other income, net in the table above.

The following tables present capital expenditures, total assets and property, plant and equipment, net by segment for the periods presented (in thousands):

						Three Months Ended June 30,												Six Months Ended June 30,
						2025						2024						2025						2024
Capital Expenditures:
Land and resource management						$	161					$	93					$	164					$	144
Water services and operations						3,647						6,406						13,552						12,017
Total capital expenditures						$	3,808					$	6,499					$	13,716					$	12,161

						June 30, 2025						December 31, 2024
Assets:
Land and resource management						$	1,186,884					$	1,024,188
Water services and operations						217,780						223,832
Total consolidated assets						$	1,404,664					$	1,248,020
Property, plant and equipment, net:
Land and resource management						$	4,570					$	4,805
Water services and operations						123,379						117,773
Total consolidated property, plant and equipment, net						$	127,949					$	122,578

15. Oil and Gas Producing Activities

Our Share of Oil and Gas Produced

We measure our share of oil and gas produced in barrels of oil equivalent (“Boe”). One Boe equals one barrel of crude oil, condensate, natural gas liquids (“NGL”) or approximately 6,000 cubic feet of gas. For the three months ended June 30, 2025 and 2024, our share of oil and gas produced was approximately 33.2 thousand and 24.9 thousand Boe per day, respectively. For the six months ended June 30, 2025 and 2024, our share of oil and gas produced was approximately 32.2 thousand and 24.9 thousand Boe per day, respectively.

Capitalized Oil and Natural Gas Costs

Aggregate capitalized costs related to oil and natural gas production activities with applicable accumulated depletion are as follows (in thousands):

						June 30, 2025						December 31, 2024
Oil, natural gas and NGL interests
Proved						$	171,049					$	150,984
Unproved						275,690						296,087
Total oil, natural gas and NGL interests						446,739						447,071
Less: accumulated depletion						(30,691)						(14,670)
Royalty interests, net						$	416,048					$	432,401

The Company owns approximately 207,000 NRA as of June 30, 2025. Of our total NRA, approximately 191,000 was acquired in 1888 and was recorded with no value. The remaining approximately 16,000 NRA have been acquired over recent years and are included in royalty interests acquired on the consolidated balance sheet. See additional discussion in Note 4, “Oil and Gas Royalty Interests.”

16. 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 5, 2025, our Board declared a quarterly cash dividend of $1.60 per share, payable on September 16, 2025 to stockholders of record at the close of business on September 2, 2025.

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