Data-Center Backlash Leads to a New Land Rush in the Texas Oil Patch

I can't wait to see the next season of Landman. Billy Bob Thornton becomes a Data Center Developer.

https://www.youtube.com/watch?v=7zxh49-bsIk

Data-Center Backlash Leads to a New Land Rush in the Texas Oil Patch

Big landowners in the Permian Basin aim to capitalize on Nimby rebellion against AI projects around the U.S.

By Benoît Morenne, WSJ

Aug. 9, 2026 8:00 pm ET

Permian Basin landowners including Texas Pacific Land, LandBridge and EagleRock plan to lease land and sell resources to AI data centers.

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Energy companies in the country’s largest oil field have a plan to turn shrub-covered dirt into gold. It has nothing to do with oil—and everything to do with the data-center boom.

Firms including Texas Pacific Land , and EagleRock E sit on land empires nestled in the Permian Basin, which spans West Texas and New Mexico. Their customers are oil-and-gas producers that pay for the right to build roads, drill wells and dump toxic water that is produced alongside the oil they bring to the surface.

Now, these landowners want a piece of the AI action. The companies’ ambition is to lease land to data centers and sell them everything from water to construction materials. They are betting that developers facing community pushback from Maine to Arizona will be drawn to the Permian’s abundant land, cheap energy and business friendly climate.

“A lot of places you see all over the country they’re worried about water, they’re worried about power, they’re worried about transmission, and the Permian has all of those things in spades,” said EagleRock Chief Executive Greg Pipkin Jr.

The companies’ business model has been like catnip to investors because unlike drilling for oil, which requires huge upfront investments, leasing land is capital light.

Texas Pacific’s stock is trading around 37 times its projected earnings over the next four quarters; LandBridge, about 39 times, which analysts say reflect investors’ growth expectations driven in part by data centers. Their respective stocks are up 14% and 56% so far this year. EagleRock, another firm that sits on a vast land domain, raised $320 million from an initial public offering earlier this year.

“There’s so much money,” said Bryan Loocke, an energy partner at law firm Vinson & Elkins. “Everybody’s chasing that white whale.”

Chevron recently signed a 20-year agreement to sell electricity to a Microsoft data center and is working to build a gas-fired power plant in the Permian to feed electricity to the facility. Texas Pacific sold land to Chevron for the project. Artificial-intelligence startup Poolside and cloud-infrastructure company CoreWeave have said they would build a massive data-center complex on a sprawling ranch in West Texas.

The region isn’t turning into a new data-center alley just yet, but it has undeniable advantages. If it were a state, it would be the least populated in the nation with roughly 500,000 residents, making it unlikely that giant, windowless rectangles that guzzle oodles of water and electricity would spark local opposition.

Permian producers have suffered from a lack of pipelines to ship and sell natural gas, and they are eager to provide the fuel to electrify tech companies. They also have water galore—a toxic, salty marinade that comes up alongside oil and which they plan to treat so it can be used to cool data centers and power plants. The water disposal issue has become a major headache for companies.

Texas Pacific, LandBridge and EagleRock are all banking that these features will turn the region into a sought-after locale to store tens of thousands of chips. The three firms together sit on 1.4 million acres of land—more than seven times the size of New York City—and are busy acquiring more.

The companies currently earn most of their cash through their business with oil-and-gas clients. For instance, Texas Pacific derived nearly half of its revenue last year, about $386 million, from activities such as selling sand, caliche and water to operators, and pocketing royalties from allowing producers to dispose of saltwater on its land. Royalties on oil-and-gas production made up the rest.

But the company has been gearing up to host data centers and power plants. It has invested $50 million in Bolt, a data and energy infrastructure company co-founded by former Google Chief Executive Eric Schmidt, to pursue data center development in West Texas. Texas Pacific said it is inking deals, such as the $43 million agreement to sell land to Chevron. Texas Pacific also said it would sell brackish groundwater to Chevron to use at the plant.

Tyler Glover, chief executive of Texas Pacific, said he expected revenue from data center-related services would be “significant”—particularly sales of water to the electricity plants that power them. The company said each data-center project could represent multiple hundreds of millions of dollars over its life when adding up the sale of water and construction materials, on top of land leases and sales.

“There are a lot of traditional oil-and-gas people that are starting to refocus on, you know, how do we attract this industry,” Glover said.

LandBridge is going one step further. It has said it is actively working to host several data-center campuses on its land, complete with fiber-optic cables and electrical substations; affiliates will spend the capital to build the power and utility infrastructure. It has said that a typical 1-gigawatt data-center campus on its land could generate tens of millions in annual free cash flow, including from royalties on the power plants and from the water used by the facilities.

It recently told analysts that it was in various stages of discussions and negotiations with seven power and digital infrastructure counterparties but didn’t offer more details. Its stock jumped about 9% on the news.

The Permian’s potential as a hub for data centers is whetting the appetite of some energy heavyweights, including oilmen Cody Campbell and John Sellers, the co-founders of energy firm Double Eagle. Their company has been prolific at cobbling together oil-rich acreage and flipping it to other energy producers in multibillion-dollar deals. Double Eagle contributed a sprawling water system and associated royalties to the venture that birthed EagleRock and is involved in its growth plans.

“If hyperscalers want to hyperscale,” Sellers said, “they need land and a lot of it in the Permian Basin.”