Texas Pacific Land asks shareholders to bring it home to Texas as AI money reaches its land
Texas Pacific Land reports third-quarter results on November 4 and puts its Delaware incorporation to a shareholder vote on November 5. The move tracks a business shift: the Permian Basin landowner has begun selling its land and water to the AI buildout.
Richard Tang · 3 min read
Texas Pacific Land (TPL)+1.13% — Texas Pacific Land (TPL), up 1.13 percent today reports third-quarter results after the close on Wednesday November 4 1, and at its annual meeting on Thursday November 5 shareholders vote on Proposal 4: convert the corporation from Delaware to Texas 2. The board's letter of October 23 asks stockholders to "make Texas our official home" 2. More than ceremony is at stake.
The AI buildout has begun arriving on the company's 894,000 acres of West Texas 34, and the board is moving the legal home to the state where that business is likely to be built, and where energy projects already draw fights 3.
The land already sells what data centers need
Data-center developers facing community pushback from Maine to Arizona need land, power and water in one place, and the sparsely populated Permian Basin has all three 4. Texas Pacific already sells water, easements and construction materials to oil producers, nearly half of last year's revenue, and is pointing the same machinery at compute 4.
It sold Chevron $43 million of land for a gas-fired plant feeding a Microsoft−1.38% — Microsoft, down 1.38 percent today data center, and will sell the plant brackish groundwater 4. It has also put $50 million into Bolt, a data-and-energy infrastructure firm co-founded by former Google chief executive Eric Schmidt 4. Chief executive Tyler Glover expects the new line to be "significant", and the company says one campus could be worth multiple hundreds of millions of dollars over its life 4. That figure is projection; reported revenue still comes almost entirely from oil, gas and the services around them 4.
Revenue has climbed in nine of the last eleven quarters
- Revenue
- Estimate
Data
| Revenue | |
|---|---|
| Q4 '23 | $166.66M |
| Q1 '24 | $174.14M |
| Q2 '24 | $172.33M |
| Q3 '24 | $173.56M |
| Q4 '24 | $185.78M |
| Q1 '25 | $195.98M |
| Q2 '25 | $187.54M |
| Q3 '25 | $203.09M |
| Q4 '25 | $211.58M |
| Q1 '26 | $236.82M |
| Q2 '26 | $246.06M |
| Q3 '26E (estimate) | $264M |
Wednesday's print measures the old engine
The third-quarter report tests whether royalties keep compounding while one leg softens. Second-quarter royalty production hit a record 39,700 barrels of oil equivalent a day 1. The soft leg is water sales in the Delaware Basin, a sub-region of the Permian rather than the state TPL would leave, down 19 percent from the first quarter after weak natural gas prices pushed operators toward oilier ground 1.
Analysts expect $2.35 a share on $264 million of revenue 1. A beat says the royalty engine still covers the water dip; a miss sharpens the question of how fast the data-center line must arrive.
The vote swaps the courtroom, and index money inherits the outcome
Two-thirds of the Fortune 500 is incorporated in Delaware, and shareholder fights land in its Court of Chancery, the hub of United States corporate-governance litigation 5. Texas opened its own business courts, which hear such disputes, only in September 2024 6. The letter is candid that TPL "has no meaningful connection to Delaware other than its current state of incorporation", and pledges to keep annual director elections, the majority-vote standard, special meetings and stockholder bylaw amendments 2.
The stakes are billions, and insiders have been selling
The people exposed to that choice hold a $23.25 billion royalty machine 7. Its shares trade about 18 percent below the $411.38 intrinsic value GuruFocus, a stock-analysis service, assigns them, and insiders were net sellers over the past year, $2.9 million out against $0.6 million in 7. Chevron, Tesla−0.77% — Tesla, down 0.77 percent today and Charles Schwab have already made similar moves to Texas 3.
The vote looks likely to pass, so the margin is the signal
The board backed the conversion unanimously, with Horizon Kinetics, the investment firm that is TPL's largest holder, represented on it 8. Vanguard's fund arm filed a Schedule 13G on October 30, the form for passive holders, index money that will live with either outcome 9. Shares slipped about 1 percent when the proposal landed 7.
Watch two counts next week: Wednesday's water volumes in the Delaware Basin against that 19 percent second-quarter drop, and Thursday's Proposal 4 margin, with Horizon Kinetics' representative already on the board and Vanguard's passive block holding 5.11 percent of the shares 89.
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