T&P was created through a federal charter providing a mandate to build a transcontinental railroad from Texas to California. Texas, California and present-day Arizona and New Mexico each agreed to grant sections of land for every mile of rail built.
Although T&P did not complete the full line, by 1881, T&P had completed 972 miles of track, entitling it to 3.5 million acres of land in Texas.
Upon the bankruptcy of T&P, the 3.5 million acres of Texas land were put into a trust (now known as Texas Pacific Land Trust) for the benefit of the bondholders who invested in the railroad.
Texas and Pacific Abrams #1 in Mitchell County became the first well to produce oil from the Permian Basin, and a few years later, the first oil pipeline was built in the basin.
The certificates of the Texas Pacific Land Trust were listed in 1927 on the New York Stock Exchange and the sub-share certificates remain actively traded today.
The mineral estate under TPL’s land was spun-off to its shareholders under a new company named TXL Oil. TPL reserved an Non-participating interest (“NPRI”) under certain tracts of land.
Texaco purchased TXL Oil which at the time held over 2 million undeveloped acres in west Texas.
Chevron acquired Texaco for $36 billion, and now performs as an operator across a large portion of TPL’s Permian position.
The Permian Basin, which had been in production decline since the 1970’s, began to grow production as unconventional development unlocks tremendous additional reserves.
Rapid development across much of TPL’s acreage leads to increased royalty revenues for the Trust.
In June 2017, TPL announces the formation of Texas Pacific Water Resources, a wholly-owned subsidiary of the Trust focused on providing holistic water services to oil and gas operators in the Permian Basin.