LandBridge's Q1 2025 Earnings Call: Unraveling Contradictions on Water Production, Data Centers, and Capital Returns

Water production growth expectations, macro outlook and data center opportunities, Permian activity levels and strategic adjustments, growth strategy and market positioning, capital returns and shareholder value are the key contradictions discussed in LandBridge's latest 2025Q1 earnings call.



Strong Revenue and EBITDA Growth:
- LandBridge Company LLC reported revenue of $44 million for Q1 2025, up 20% sequentially and 131% year-over-year.
- The growth was driven by increased resource sales and royalties, surface use royalties, and contributions from newly acquired acreage.

Diversified Revenue Streams:
- Approximately 92% of overall revenue during the first quarter came from non-oil and gas royalty revenue streams, including surface use royalties and resource sales and royalties.
- This diversification insulates LandBridge from periodic market and macroeconomic volatility.

Water Handling Infrastructure Expansion:
- WaterBridge, an affiliate company, announced an open season process for the Speedway Pipeline, which will add approximately 500,000 barrels a day of incremental water handling capacity.
- The pipeline is expected to generate $30-plus million a year in cash flow once fully operational, with initial payments expected in the latter half of 2025.

Strong Demand for Services:
- LandBridge's affiliate, WaterBridge, continues to see strong demand for services in the near to medium term, supported by major customers along the state line.
- This demand is driven by the need for water handling infrastructure in the Delaware Basin and great potential for growth in water handling royalty volumes.