Permian Royalty Income Hits Record in Q3 2026
Operators and water-handling firms in the Permian Basin can read the record quarter as a sign of sustained regional drilling activity.
Updated on Nov. 5, 2026 in Oil and Gas
Texas Pacific Land reported record third-quarter 2026 revenue of $273.4 million and net income of $167.4 million, with oil and gas royalty revenue of $167.3 million. The results matter to Permian Basin operators because the company's royalty income rises and falls with drilling and production activity on its West Texas and New Mexico land.
Why it matters
Texas Pacific Land collects payments when operators drill, produce, or move water across its roughly 873,000 surface acres, so its record quarter signals sustained activity in the Permian Basin. The quarter also reflects a 34.6% year-on-year revenue increase, a pace that indicates operators in the region are still committing capital to development.
Third-quarter 2026 revenue reached $273.4 million and net income reached $167.4 million, with royalty revenue of $167.3 million, a record for the company. Diluted EPS of $2.42 beat the $2.35 Zacks consensus, though the per-share figure is lower than in 2024 and 2025 because of a three-for-one stock split.
The players
Texas Pacific Land
A landowner that earns royalties, surface-use payments and water-handling fees from oil and gas operators on its roughly 873,000 acres in West Texas and New Mexico.
The details
Texas Pacific Land earns royalties and payments from operators who drill and produce on its land in West Texas and New Mexico's Permian Basin, and from operators who move water across it. Because those payments scale with activity rather than with a fixed lease rate, a rise in royalty revenue reflects higher drilling and production volumes on the company's acreage. The three-for-one split, with a record date of December 12, 2025, multiplied the share count and lowered per-share figures, which is why diluted EPS looks smaller than in earlier years.
Timeline
December 12, 2025: record date for the three-for-one stock split.
December 22, 2025: split shares distributed to holders.
September 30, 2026: end of the third-quarter reporting period.
November 5, 2026: Texas Pacific Land reported record third-quarter results.
Market Landscape
The results point to continued Permian Basin development on land owned by a non-operating mineral and royalty holder, a model that earns revenue without carrying drilling costs. The company's reincorporation from Delaware to Texas, which the source reports as proposed, places its governing structure in the state whose oil fields generate its income.
Operators active in the Permian Basin should watch how land and royalty holders report activity-linked income, since it reflects drilling and water-handling volumes in the region. Companies that sell water-handling or surface services to Permian operators may find this quarter a useful signal of near-term demand, and any decisions on contracts or capital should be reviewed with a qualified accountant or advisor.
The takeaway
Track royalty and water-handling income from Permian landholders as a leading signal of regional drilling volume. Pull the company's next quarterly filing to see whether revenue growth holds as the stock's recent decline is weighed against the record results.
Further reading
For broader context on how Permian activity shapes royalty income, explore Oil and Gas coverage across the state.
Source note: This article includes information reported by ABC Money.
