Texas Pacific Land Corporation Announces Third Quarter Results
Earnings
Third Quarter 2024 Highlights
-
Acquired mineral interests across approximately 4,106 net royalty acres located in the northern
Delaware Basin for a purchase price of$120.3 million , net of post-close adjustments, in an all-cash transaction
-
Acquired approximately 4,120 surface acres and other surface-related assets located in the core of the
Midland Basin for a purchase price of$45.0 million , in an all-cash transaction
- Royalty production of 28.3 thousand barrels of oil equivalent (“Boe”) per day
-
As of
September 30, 2024 , TPL’s royalty acreage had an estimated 6.9 net well permits, 11.8 net drilled but uncompleted wells, 3.4 net completed wells, and 79.2 net producing wells. Net producing wells added during the quarter had an average lateral length of approximately 7,659 ft.
-
Consolidated net income of
$106.6 million , or$4.63 per share (diluted)
-
Adjusted EBITDA(1) of
$144.1 million
-
Free cash flow (1) of
$106.9 million
-
Special cash dividend of
$10.00 per share was paid onJuly 15, 2024
-
Quarterly cash dividend of
$1.17 per share was paid onSeptember 17, 2024
Nine Months Ended
- The Company announced the development of a new energy-efficient method of produced water desalination and treatment. The Company has successfully conducted a technology pilot and is progressing towards the construction of a larger test facility with an initial capacity of 10,000 barrels of produced water per day.
-
Three-for-one stock split effected
March 26, 2024
- Royalty production of 26.0 thousand Boe per day
-
Consolidated net income of
$335.6 million , or$14.58 per share (diluted)
-
Adjusted EBITDA(1) of
$449.4 million
-
Free cash flow (1) of
$337.3 million
-
$310.6 million of total cash dividends paid throughSeptember 30, 2024 (composed of a$10.00 per share special dividend and$1.17 per share in regular quarterly cash dividends)
-
$22.7 million of common stock repurchases
(1) Reconciliations of Non-GAAP measures are provided in the tables below.
“Our strong results this quarter showcase the benefit of a strategy predicated on robust active management on our legacy assets combined with opportunistic growth,” said
Financial Results for the Third Quarter of 2024 - Sequential
The Company reported net income of
Total revenues for the third quarter of 2024 were
Total operating expenses were
Financial Results for the Third Quarter of 2024 - Year Over Year
Total revenues for the nine months ended
Total operating expenses were
Quarterly Dividend Declared
On
Conference
The Company will hold a conference call on
The conference call can also be accessed by dialing 1-877-407-4018 or 1-201-689-8471. The telephone replay can be accessed by dialing 1-844-512-2921 or 1-412-317-6671 and providing the conference ID# 13745174. The telephone replay will be available starting shortly after the call through
About
Visit TPL at www.TexasPacific.com.
Cautionary Statement Regarding Forward-Looking Statements
This news release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that are based on TPL’s beliefs, as well as assumptions made by, and information currently available to, TPL, and therefore involve risks and uncertainties that are difficult to predict. Generally, future or conditional verbs such as “will,” “would,” “should,” “could,” or “may” and the words “believe,” “anticipate,” “continue,” “intend,” “expect” and similar expressions identify forward-looking statements. Forward-looking statements include, but are not limited to, references to strategies, plans, objectives, expectations, intentions, assumptions, future operations and prospects and other statements that are not historical facts. You should not place undue reliance on forward-looking statements. Although TPL believes that plans, intentions and expectations reflected in or suggested by any forward-looking statements made herein are reasonable, TPL may be unable to achieve such plans, intentions or expectations and actual results, and performance or achievements may vary materially and adversely from those envisaged in this news release due to a number of factors including, but not limited to: the initiation or outcome of potential litigation; and any changes in general economic and/or industry specific conditions. These risks, as well as other risks associated with TPL are also more fully discussed in our Annual Report on Form 10-K and our Quarterly Reports on Form 10-
FINANCIAL AND OPERATIONAL RESULTS (unaudited) |
||||||||||||
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||
|
|
|
|
|
|
|
|
2023(2) |
||||
Company’s share of production volumes(1): |
|
|
|
|
|
|
|
|
||||
Oil (MBbls) |
|
|
1,046 |
|
|
967 |
|
|
3,003 |
|
|
2,642 |
Natural gas (MMcf) |
|
|
4,654 |
|
|
3,851 |
|
|
12,312 |
|
|
10,405 |
NGL (MBbls) |
|
|
779 |
|
|
661 |
|
|
2,073 |
|
|
1,784 |
Equivalents (MBoe) |
|
|
2,600 |
|
|
2,270 |
|
|
7,128 |
|
|
6,160 |
Equivalents per day (MBoe/d) |
|
|
28.3 |
|
|
24.9 |
|
|
26.0 |
|
|
22.6 |
|
|
|
|
|
|
|
|
|
||||
Oil and gas royalty revenue (in thousands): |
|
|
|
|
|
|
|
|
||||
Oil royalties |
|
$ |
75,427 |
|
$ |
74,747 |
|
$ |
222,788 |
|
$ |
193,969 |
Natural gas royalties |
|
|
4,201 |
|
|
2,367 |
|
|
13,630 |
|
|
23,210 |
NGL royalties |
|
|
14,816 |
|
|
12,699 |
|
|
39,959 |
|
|
32,800 |
Total oil and gas royalties |
|
$ |
94,444 |
|
$ |
89,813 |
|
$ |
276,377 |
|
$ |
249,979 |
|
|
|
|
|
|
|
|
|
||||
Realized prices (1): |
|
|
|
|
|
|
|
|
||||
Oil ($/Bbl) |
|
$ |
75.53 |
|
$ |
80.93 |
|
$ |
77.68 |
|
$ |
76.88 |
Natural gas ($/Mcf) |
|
$ |
0.98 |
|
$ |
0.66 |
|
$ |
1.20 |
|
$ |
2.41 |
NGL ($/Bbl) |
|
$ |
20.57 |
|
$ |
20.78 |
|
$ |
20.84 |
|
$ |
19.88 |
Equivalents ($/Boe) |
|
$ |
38.04 |
|
$ |
41.44 |
|
$ |
40.60 |
|
$ |
42.49 |
______________________________ | |||||||
(1) |
Term |
|
Definition |
||||
|
Bbl |
|
One stock tank barrel of 42 U.S. gallons liquid volume used herein in reference to crude oil, condensate or NGLs. |
||||
|
MBbls |
|
One thousand barrels of crude oil, condensate or NGLs. |
||||
|
MBoe |
|
One thousand Boe. |
||||
|
MBoe/d |
|
One thousand Boe per day. |
||||
|
Mcf |
|
One thousand cubic feet of natural gas. |
||||
|
MMcf |
|
One million cubic feet of natural gas. |
||||
|
NGL |
|
Natural gas liquids. Hydrocarbons found in natural gas that may be extracted as liquefied petroleum gas and natural gasoline. |
||||
|
|
|
|
||||
(2) |
The metrics and dollars provided for the nine months ended |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in thousands, except share and per share amounts) (unaudited) |
||||||||||||
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||
|
|
|
|
|
|
|
|
|
||||
Revenues: |
|
|
|
|
|
|
|
|
||||
Oil and gas royalties |
|
$ |
94,444 |
|
$ |
89,813 |
|
$ |
276,377 |
|
$ |
258,644 |
Water sales |
|
|
36,211 |
|
|
40,650 |
|
|
113,987 |
|
|
85,799 |
Produced water royalties |
|
|
27,727 |
|
|
25,301 |
|
|
76,034 |
|
|
61,824 |
Easements and other surface-related income |
|
|
14,280 |
|
|
16,570 |
|
|
51,496 |
|
|
51,865 |
Land sales |
|
|
901 |
|
|
— |
|
|
2,145 |
|
|
6,806 |
Total revenues |
|
|
173,563 |
|
|
172,334 |
|
|
520,039 |
|
|
464,938 |
|
|
|
|
|
|
|
|
|
||||
Expenses: |
|
|
|
|
|
|
|
|
||||
Salaries and related employee expenses |
|
|
14,030 |
|
|
12,771 |
|
|
39,262 |
|
|
32,688 |
Water service-related expenses |
|
|
11,731 |
|
|
14,824 |
|
|
36,767 |
|
|
24,496 |
General and administrative expenses |
|
|
4,029 |
|
|
3,673 |
|
|
12,626 |
|
|
10,738 |
Legal and professional fees |
|
|
8,316 |
|
|
2,307 |
|
|
14,680 |
|
|
28,471 |
Ad valorem and other taxes |
|
|
2,189 |
|
|
1,444 |
|
|
5,990 |
|
|
5,425 |
Land sales expenses |
|
|
175 |
|
|
— |
|
|
425 |
|
|
49 |
Depreciation, depletion and amortization |
|
|
5,762 |
|
|
4,093 |
|
|
13,695 |
|
|
10,881 |
Total operating expenses |
|
|
46,232 |
|
|
39,112 |
|
|
123,445 |
|
|
112,748 |
|
|
|
|
|
|
|
|
|
||||
Operating income |
|
|
127,331 |
|
|
133,222 |
|
|
396,594 |
|
|
352,190 |
|
|
|
|
|
|
|
|
|
||||
Other income, net |
|
|
8,086 |
|
|
13,220 |
|
|
31,249 |
|
|
20,239 |
Income before income taxes |
|
|
135,417 |
|
|
146,442 |
|
|
427,843 |
|
|
372,429 |
Income tax expense |
|
|
28,823 |
|
|
31,853 |
|
|
92,243 |
|
|
79,894 |
Net income |
|
$ |
106,594 |
|
$ |
114,589 |
|
$ |
335,600 |
|
$ |
292,535 |
|
|
|
|
|
|
|
|
|
||||
Net income per share of common stock (1) |
|
|
|
|
|
|
|
|
||||
Basic |
|
$ |
4.64 |
|
$ |
4.99 |
|
$ |
14.60 |
|
$ |
12.69 |
Diluted |
|
$ |
4.63 |
|
$ |
4.98 |
|
$ |
14.58 |
|
$ |
12.68 |
|
|
|
|
|
|
|
|
|
||||
Weighted average number of shares of common stock outstanding (1) |
|
|
|
|
|
|
|
|
||||
Basic |
|
|
22,979,781 |
|
|
22,987,971 |
|
|
22,990,213 |
|
|
23,054,073 |
Diluted |
|
|
23,012,169 |
|
|
23,013,793 |
|
|
23,016,733 |
|
|
23,072,955 |
__________________________ | ||
(1) |
All share and share price amounts reflect the three-for-one stock split effected on |
SEGMENT OPERATING RESULTS (dollars in thousands) (unaudited) |
||||||||||||
|
|
Three Months Ended |
||||||||||
|
|
|
|
|
||||||||
Revenues: |
|
|
|
|
|
|
|
|
||||
Land and resource management: |
|
|
|
|
|
|
|
|
||||
Oil and gas royalties |
|
$ |
94,444 |
|
54 |
% |
|
$ |
89,813 |
|
52 |
% |
Easements and other surface-related income |
|
|
11,303 |
|
7 |
% |
|
|
14,219 |
|
8 |
% |
Land sales |
|
|
901 |
|
— |
% |
|
|
— |
|
— |
% |
Total land and resource management revenue |
|
|
106,648 |
|
61 |
% |
|
|
104,032 |
|
60 |
% |
|
|
|
|
|
|
|
|
|
||||
Water services and operations: |
|
|
|
|
|
|
|
|
||||
Water sales |
|
|
36,211 |
|
21 |
% |
|
|
40,650 |
|
24 |
% |
Produced water royalties |
|
|
27,727 |
|
16 |
% |
|
|
25,301 |
|
15 |
% |
Easements and other surface-related income |
|
|
2,977 |
|
2 |
% |
|
|
2,351 |
|
1 |
% |
Total water services and operations revenue |
|
|
66,915 |
|
39 |
% |
|
|
68,302 |
|
40 |
% |
Total consolidated revenues |
|
$ |
173,563 |
|
100 |
% |
|
$ |
172,334 |
|
100 |
% |
|
|
|
|
|
|
|
|
|
||||
Net income: |
|
|
|
|
|
|
|
|
||||
Land and resource management |
|
$ |
71,870 |
|
67 |
% |
|
$ |
80,129 |
|
70 |
% |
Water services and operations |
|
|
34,724 |
|
33 |
% |
|
|
34,460 |
|
30 |
% |
Total consolidated net income |
|
$ |
106,594 |
|
100 |
% |
|
$ |
114,589 |
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended |
||||||||||
|
|
|
|
|
||||||||
Revenues: |
|
|
|
|
|
|
|
|
||||
Land and resource management: |
|
|
|
|
|
|
|
|
||||
Oil and gas royalties |
|
$ |
276,377 |
|
54 |
% |
|
$ |
258,644 |
|
56 |
% |
Easements and other surface-related income |
|
|
43,643 |
|
8 |
% |
|
|
49,826 |
|
11 |
% |
Land sales |
|
|
2,145 |
|
— |
% |
|
|
6,806 |
|
1 |
% |
Total land and resource management revenue |
|
|
322,165 |
|
62 |
% |
|
|
315,276 |
|
68 |
% |
|
|
|
|
|
|
|
|
|
||||
Water services and operations: |
|
|
|
|
|
|
|
|
||||
Water sales |
|
|
113,987 |
|
22 |
% |
|
|
85,799 |
|
19 |
% |
Produced water royalties |
|
|
76,034 |
|
15 |
% |
|
|
61,824 |
|
13 |
% |
Easements and other surface-related income |
|
|
7,853 |
|
1 |
% |
|
|
2,039 |
|
— |
% |
Total water services and operations revenue |
|
|
197,874 |
|
38 |
% |
|
|
149,662 |
|
32 |
% |
Total consolidated revenues |
|
$ |
520,039 |
|
100 |
% |
|
$ |
464,938 |
|
100 |
% |
|
|
|
|
|
|
|
|
|
||||
Net income: |
|
|
|
|
|
|
|
|
||||
Land and resource management |
|
$ |
232,970 |
|
69 |
% |
|
$ |
217,860 |
|
74 |
% |
Water services and operations |
|
|
102,630 |
|
31 |
% |
|
|
74,675 |
|
26 |
% |
Total consolidated net income |
|
$ |
335,600 |
|
100 |
% |
|
$ |
292,535 |
|
100 |
% |
|
|
|
|
|
|
|
|
|
NON-GAAP PERFORMANCE MEASURES AND DEFINITIONS
In addition to amounts presented in accordance with generally accepted accounting principles in
EBITDA, Adjusted EBITDA and Free Cash Flow
EBITDA is a non-GAAP financial measurement of earnings before interest expense, taxes, depreciation, depletion and amortization. Its purpose is to highlight earnings without finance, taxes, and depreciation, depletion and amortization expense, and its use is limited to specialized analysis. We calculate Adjusted EBITDA as EBITDA plus employee share-based compensation. Its purpose is to highlight earnings without non-cash activity such as share-based compensation and other non-recurring or unusual items, if applicable. We calculate Free Cash Flow as Adjusted EBITDA less current income tax expense and capital expenditures. Its purpose is to provide an additional measure of operating performance. We have presented EBITDA, Adjusted EBITDA and Free Cash Flow because we believe that these metrics are useful supplements to net income in analyzing the Company’s operating performance. Our definitions of EBITDA, Adjusted EBITDA and Free Cash Flow may differ from computations of similarly titled measures of other companies.
The following table presents a reconciliation of net income to EBITDA, Adjusted EBITDA and Free Cash Flow for the three months ended
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
Net income |
|
$ |
106,594 |
|
|
$ |
114,589 |
|
|
$ |
335,600 |
|
|
$ |
292,535 |
|
Add: |
|
|
|
|
|
|
|
|
||||||||
Income tax expense |
|
|
28,823 |
|
|
|
31,853 |
|
|
|
92,243 |
|
|
|
79,894 |
|
Depreciation, depletion and amortization |
|
|
5,762 |
|
|
|
4,093 |
|
|
|
13,695 |
|
|
|
10,881 |
|
EBITDA |
|
|
141,179 |
|
|
|
150,535 |
|
|
|
441,538 |
|
|
|
383,310 |
|
Add: |
|
|
|
|
|
|
|
|
||||||||
Employee share-based compensation |
|
|
2,935 |
|
|
|
2,700 |
|
|
|
7,855 |
|
|
|
7,217 |
|
Adjusted EBITDA |
|
|
144,114 |
|
|
|
153,235 |
|
|
|
449,393 |
|
|
|
390,527 |
|
Less: |
|
|
|
|
|
|
|
|
||||||||
Current income tax expense |
|
|
(27,416 |
) |
|
|
(30,766 |
) |
|
|
(90,080 |
) |
|
|
(80,928 |
) |
Capital expenditures |
|
|
(9,833 |
) |
|
|
(6,499 |
) |
|
|
(21,994 |
) |
|
|
(10,387 |
) |
Free Cash Flow |
|
$ |
106,865 |
|
|
$ |
115,970 |
|
|
$ |
337,319 |
|
|
$ |
299,212 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20241106128184/en/
Investor Relations
IR@TexasPacific.com
Source: