Summary of TEXAS PACIFIC LAND TRUST

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read together with (i) the factors discussed in Item 1A "Risk Factors" of Part I of our Annual Report to the Securities and Exchange Commission on Form 10-K for the year ended December 31, 2011, (ii) the factors discussed in Part II, Item 1A "Risk Factors," if any, of this Quarterly Report on Form 10-Q and (iii) the Financial Statements, including the Notes thereto, and the other financial information appearing elsewhere in this Report. Period-to-period comparisons of financial data are not necessarily indicative, and therefore should not be relied upon as indicators, of the Trust's future performance. Words or phrases such as "does not believe" and "believes", or similar expressions, when used in this Form 10-Q or other filings with the Securities and Exchange Commission, are intended to identify "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995.

Results of Operations for the Quarter Ended June 30, 2012 Compared to the Quarter Ended June 30, 2011

Earnings per Sub-share certificate were $.59 for the second quarter of 2012, compared to $.58 for the second quarter of 2011. Total operating and investing revenues were $8,706,738 for the second quarter of 2012 compared to $8,798,987 for the second quarter of 2011, a decrease of 1.0%. This decrease in revenue was due primarily to decreases in land sales, oil and gas royalty revenue, and interest income from notes receivable, which were largely offset by an increase in easement and sundry income.

In the second quarter of 2012 the Trust sold approximately 1,792 acres for a total of $2,242,747, or approximately $1,252 per acre. In the second quarter of 2011 the Trust sold approximately 6,682 acres for a total of $3,680,500, or approximately $551 per acre.

Rentals, royalties and sundry income were $6,278,498 during the second quarter of 2012, compared to $4,885,782 for the second quarter of 2011, an increase of 28.5%. This increase resulted from an increase in easement and sundry income, partially offset by a decrease in oil and gas royalty revenue.

Oil and gas royalty revenue was $3,328,254 for the second quarter of 2012, compared to $3,591,193 for the second quarter of 2011, a decrease of 7.3%. Oil royalty revenue was $2,762,049 for the second quarter of 2012, a decrease of 3.5% from the second quarter of 2011 when oil royalty revenue was $2,862,705. This decrease was due to decreases in both price and volume. The average price per royalty barrel of crude oil during the second quarter of 2012 was 2.4% lower than the average price prevailing during the second quarter of 2011. In addition, crude oil production subject to the Trust's royalty interest decreased 1.1% in the second quarter of 2012 compared to the second quarter of 2011. Gas royalty revenue was $566,205 for the second quarter of 2012, a decrease of 22.3% from the second quarter of 2011 when gas royalty revenue was $728,488. This decrease in gas royalty revenue resulted from a price decrease of 39.4% in the second quarter of 2012 compared to the second quarter of 2011, which more than offset a volume increase of 28.2% over the same period.

Easement and sundry income was $2,776,197 for the second quarter of 2012, an increase of 150.0% compared to the second quarter of 2011 when easement and sundry income was $1,110,719. This increase resulted primarily from increases in pipeline easement income, sundry income, and sundry lease rental income caused by an increase in drilling and exploration activity on land owned by the Trust. This category of income is unpredictable and may vary significantly from quarter to quarter.

Interest income, including interest on investments, was $185,493 for the second quarter of 2012 compared to $232,705 for the second quarter of 2011, a decrease of 20.3%. Interest on notes receivable for the second quarter of 2012 was $180,489, a decrease of 20.9% compared to the second quarter of 2011 when interest on notes receivable was $228,314. As of June 30, 2012, notes receivable for land sales were $10,182,840 compared to $12,534,550 at June 30, 2011, a decrease of 18.8%. Interest income earned from investments was $5,004 for the second quarter of 2012, an increase of 14.0% from the second quarter of 2011. Interest on investments is affected by such variables as cash on hand for investment and the rate of interest on short-term investments.

Taxes, other than income taxes, decreased 6.2% for the second quarter of 2012 compared to the second quarter of 2011. This decrease is mainly attributable to a decrease in oil and gas production taxes which resulted from the decrease in oil and gas royalty revenue discussed above.

General and administrative expenses for the second quarter of 2012 were down 3.8%, compared to the second quarter of 2011. This was primarily due to a decrease in legal expenses.

Results of Operations for the Six Months Ended June 30, 2012 Compared to the Six Months Ended June 30, 2011

Earnings per Sub-share certificate were $1.24 for the first six months of 2012, compared to $.93 for the first six months of 2011. Total operating and investing revenues were $18,286,817 for the first six months of 2012 compared to $14,519,095 for the first six months of 2011, an increase of 26.0%. This increase in revenue and earnings was primarily due to increases in easement and sundry income and land sales, which were partially offset by decreases in gas royalty revenue and interest income from notes receivable.

During the first six months of 2012 the Trust sold approximately 7,252 acres for a total of $5,809,747, or approximately $801 per acre. In the first six months of 2011 the Trust sold approximately 6,750 acres for a total of $4,192,000, or approximately $621 per acre.

Rentals, royalties, and sundry income were $12,104,019 for the first six months of 2012 compared to $9,841,038 for the first six months of 2011, an increase of 23.0%. This increase resulted primarily from an increase in easement and sundry income, partially offset by a decrease in gas royalty revenue.

Oil and gas royalty revenue was $6,762,080 for the first six months of 2012 compared to $7,067,415 for the first six months of 2011, a decrease of 4.3%. Oil royalty revenue was $5,608,621 for the first six months of 2012, an increase of 0.5% from the first six months of 2011 when oil royalty revenue was $5,578,871. The average price per royalty barrel of crude oil during the first six months of 2012 was 5.6% higher than the average price prevailing during the first six months of 2011. This price increase more than offset a decrease of 4.8% in the volume of crude oil production subject to the Trust's royalty interest in the first six months of 2012 compared to the first six months of 2011. Gas royalty revenue was $1,153,459 for the first six months of 2012, a decrease of 22.5% from the first six months of 2011 when gas royalty revenue was $1,488,544. This decrease in gas royalty revenue resulted from a price decrease of 31.8% in the first six months of 2012 compared to the first six months of 2011, partially offset by a volume increase of 13.4% over the same period.

Easement and sundry income was $5,072,105 for the first six months of 2012, an increase of 103.4% compared to the first six months of 2011 when easement and sundry income was $2,494,235. This increase resulted primarily from increases in sundry income, pipeline easement income, and sundry lease rental income caused by an increase in drilling and exploration activity on land owned by the Trust. This category of income is unpredictable and may vary significantly from quarter to quarter.

Interest income, including interest on investments, was $373,051 for the first six months of 2012 compared to $486,057 for the first six months of 2011, a decrease of 23.2%. Interest on notes receivable for the first six months of 2012 was $362,850, a decrease of 24.0% compared to the first six months of 2011 when interest on notes receivable was $477,326. As of June 30, 2012, notes receivable for land sales were $10,182,840 compared to $12,534,550 at June 30, 2011, a decrease of 18.8%. Interest income earned from investments was $10,201 for the first six months of 2012, an increase of 16.8% from the first six months of 2011. Interest on investments is affected by such variables as cash on hand for investment and the rate of interest on short-term investments.

Taxes, other than income taxes, were essentially flat for the first six months of 2012 compared to the first six months of 2011.

General and administrative expenses for the first six months of 2012 were down 5.9% compared to the first six months of 2011. This decrease was primarily due to a decrease in legal expenses.

Liquidity and Capital Resources

The Trust's principal sources of liquidity are revenues from oil and gas royalties, lease rentals and receipts of interest and principal payments on the notes receivable arising from land sales. In the past, those sources have generated more than adequate amounts of cash to meet the Trust's needs and, in the opinion of management, should continue to do so in the foreseeable future.