Texas Pacific Land Corporation (TPL) Bundle
A Brief History of TPL
The Texas Pacific Land Corporation (TPL) has a rich history tied closely to land management and oil and gas royalties, particularly in the Permian Basin. As of 2024, TPL has established itself as a significant player in the energy sector while leveraging its extensive land holdings.
Company Overview
Founded in 1888, TPL originally focused on land development and management. Over the years, it transitioned to a royalty and land management company, capitalizing on the booming oil and gas industry in Texas.
Recent Financial Performance
As of September 30, 2024, TPL reported total revenues of $520.0 million for the nine months ended September 30, 2024, reflecting a 11.9% increase compared to $464.9 million for the same period in 2023. This growth was primarily driven by a $28.2 million increase in water sales and a $17.7 million increase in oil and gas royalty revenue.
| Financial Metrics | 2024 (9 months) | 2023 (9 months) |
|---|---|---|
| Total Revenues | $520.0 million | $464.9 million |
| Net Income | $335.6 million | $292.5 million |
| Oil Royalties | $222.8 million | $194.0 million |
| Water Services Revenue | $197.9 million | $149.7 million |
| Capital Expenditures | $22.0 million | $10.4 million |
Operational Segments
TPL operates primarily through two segments: Land and Resource Management and Water Services and Operations. The Land and Resource Management segment focuses on managing approximately 873,000 surface acres and 199,000 net royalty acres (NRA) of oil and gas interests.
The Water Services and Operations segment has been pivotal in supporting oil and gas operators in the Permian Basin, providing sourced and treated water essential for hydraulic fracturing operations.
Recent Acquisitions and Growth Initiatives
In August 2024, TPL completed two significant acquisitions totaling $165.3 million. The first acquisition involved oil and gas royalty interests in 4,106 NRA in Culberson County, Texas for approximately $120.3 million. The second acquisition included 4,120 acres of land along with water sourcing assets for $45.0 million.
Market Conditions and Pricing Metrics
The company’s operations are significantly influenced by market conditions in the oil and gas sector. As of September 30, 2024, the average West Texas Intermediate (WTI) price per barrel was $78.58, which has implications for the royalty revenues TPL generates from its interests.
| Market Metrics | 2024 | 2023 |
|---|---|---|
| WTI Price per Barrel | $78.58 | $77.27 |
| Henry Hub Natural Gas Price (per mmbtu) | $2.11 | $2.46 |
| Total Average US Weekly Rig Count | 560 | 642 |
Return of Capital to Shareholders
During the nine months ended September 30, 2024, TPL returned $310.6 million to shareholders through dividends, which included a special cash dividend of $10.00 per share and regular quarterly dividends of $1.17 per share. Additionally, the company repurchased $22.7 million of its common stock during this period.
Future Outlook
Looking ahead, TPL aims to leverage its land and royalty interests to benefit from the continued growth in the Permian Basin. The company's focus on strategic acquisitions and expansion of its water services segment positions it well for future growth.
As of September 30, 2024, TPL held cash and cash equivalents of $533.9 million, reflecting its strong liquidity position and ability to capitalize on future opportunities.
| Liquidity Metrics | Amount (as of Sept 30, 2024) |
|---|---|
| Cash and Cash Equivalents | $533.9 million |
| Target Cash Balance | $700 million |
A Who Owns Texas Pacific Land Corporation (TPL)
Major Shareholders
As of 2024, the ownership structure of Texas Pacific Land Corporation (TPL) is characterized by a mix of institutional and individual investors. The following table summarizes the major shareholders and their respective ownership percentages:
| Shareholder | Ownership Percentage | Type of Investor |
|---|---|---|
| BlackRock, Inc. | 9.57% | Institutional Investor |
| The Vanguard Group, Inc. | 6.78% | Institutional Investor |
| State Street Corporation | 4.25% | Institutional Investor |
| FMR LLC (Fidelity) | 3.89% | Institutional Investor |
| Charles Schwab Investment Management, Inc. | 3.45% | Institutional Investor |
| Other Institutional Investors | 25.00% | Various |
| Insider Ownership | 5.50% | Insiders |
| Public Float | 28.56% | Retail Investors |
Recent Changes in Ownership
In recent months, TPL has seen fluctuations in its institutional ownership due to market dynamics and trading activities. The following table details the recent changes in ownership percentages among major institutional investors:
| Investor | Previous Ownership % | Current Ownership % | Change % |
|---|---|---|---|
| BlackRock, Inc. | 8.90% | 9.57% | +0.67% |
| The Vanguard Group, Inc. | 6.55% | 6.78% | +0.23% |
| State Street Corporation | 4.10% | 4.25% | +0.15% |
| FMR LLC (Fidelity) | 4.00% | 3.89% | -0.11% |
| Charles Schwab Investment Management, Inc. | 3.40% | 3.45% | +0.05% |
Insider Ownership
Insider ownership is a critical component of TPL's ownership structure. As of 2024, insiders hold approximately 5.50% of the total shares. This includes executives and board members, reflecting their commitment to the company's long-term performance.
Market Capitalization
As of September 2024, TPL's market capitalization stands at approximately $6.2 billion, influenced by its operational performance and shareholder activities.
Recent Financial Performance
For the nine months ended September 30, 2024, TPL reported total revenues of $520.0 million, an increase from $464.9 million in the same period of 2023. The net income for this period was $335.6 million, reflecting a 14.7% increase year-over-year.
| Financial Metric | 2024 (9 Months) | 2023 (9 Months) |
|---|---|---|
| Total Revenues | $520.0 million | $464.9 million |
| Net Income | $335.6 million | $292.5 million |
| Oil Royalties | $276.4 million | $258.6 million |
| Water Sales | $114.0 million | $85.8 million |
Dividends and Shareholder Returns
During the nine months ended September 30, 2024, TPL returned a total of $310.6 million to shareholders, which includes regular dividends of $1.17 per share and special dividends of $10.00 per share.
Texas Pacific Land Corporation (TPL) Mission Statement
Overview
The mission of Texas Pacific Land Corporation (TPL) focuses on maximizing the value of its land and resource assets while ensuring sustainable practices in the management of its operations. The company aims to leverage its extensive land holdings in the Permian Basin to generate optimal returns through various revenue streams including oil and gas royalties, land sales, and water services.
Financial Performance
As of September 30, 2024, TPL reported total revenues of $520.0 million for the nine months ended September 30, 2024, marking an increase from $464.9 million for the same period in 2023. The company's net income for the same period was $335.6 million, compared to $292.5 million in 2023.
| Financial Metrics | 2024 | 2023 |
|---|---|---|
| Total Revenues (in millions) | $520.0 | $464.9 |
| Net Income (in millions) | $335.6 | $292.5 |
| Operating Income (in millions) | $396.6 | $352.2 |
| Oil and Gas Royalties (in millions) | $276.4 | $258.6 |
| Water Sales (in millions) | $114.0 | $85.8 |
Revenue Streams
The primary revenue streams for TPL include:
- Oil and Gas Royalties
- Water Sales
- Produced Water Royalties
- Easements and Other Surface-Related Income
- Land Sales
Operational Highlights
For the nine months ended September 30, 2024, TPL's operational performance was characterized by:
- Oil and gas royalty revenue of $276.4 million, up from $258.6 million in 2023.
- Water sales revenue increased to $114.0 million, compared to $85.8 million the previous year.
- Produced water royalties reached $76.0 million, up from $61.8 million.
- Easements and other surface-related income was $51.5 million, slightly down from $51.9 million.
- Land sales totaled $2.1 million, down from $6.8 million.
| Revenue Sources (in millions) | 2024 | 2023 |
|---|---|---|
| Oil and Gas Royalties | $276.4 | $258.6 |
| Water Sales | $114.0 | $85.8 |
| Produced Water Royalties | $76.0 | $61.8 |
| Easements and Other Surface-Related Income | $51.5 | $51.9 |
| Land Sales | $2.1 | $6.8 |
Corporate Governance and Strategic Focus
TPL emphasizes strong corporate governance and sustainable practices. The company's strategy includes:
- Acquisition of oil and gas royalty interests to enhance revenue.
- Investment in water service operations to support the needs of the oil and gas industry.
- Maintaining a target cash balance of approximately $700 million to ensure liquidity and support operational growth.
Capital Expenditures
During the nine months ended September 30, 2024, TPL incurred capital expenditures totaling $22.0 million, up from $10.4 million in 2023. This expenditure reflects the company's commitment to enhancing its operational capabilities and infrastructure.
| Capital Expenditures (in millions) | 2024 | 2023 |
|---|---|---|
| Total Capital Expenditures | $22.0 | $10.4 |
| Water Services Capital Expenditures | $21.8 | $10.2 |
Dividend and Share Repurchase Policy
In 2024, TPL paid total dividends amounting to $310.6 million, which included special cash dividends of $10.00 per share and regular quarterly cash dividends of $1.17 per share. Additionally, TPL repurchased $22.7 million of its common stock during the same period.
How Texas Pacific Land Corporation (TPL) Works
Overview of Operations
Texas Pacific Land Corporation (TPL) operates primarily in two segments: Land and Resource Management, and Water Services and Operations. The company manages approximately 873,000 acres of land and holds substantial oil and gas royalty interests in the Permian Basin.
Financial Performance
For the nine months ended September 30, 2024, TPL reported total revenues of $520.0 million, an increase from $464.9 million for the same period in 2023. The net income for the same period was $335.6 million, compared to $292.5 million in 2023, reflecting a growth of 14.7%.
| Financial Metric | 2024 (9 months) | 2023 (9 months) |
|---|---|---|
| Total Revenues | $520.0 million | $464.9 million |
| Net Income | $335.6 million | $292.5 million |
| Oil and Gas Royalties | $276.4 million | $258.6 million |
| Water Sales | $114.0 million | $85.8 million |
| Produced Water Royalties | $76.0 million | $61.8 million |
Revenue Streams
The revenue breakdown for TPL is as follows:
- Land and Resource Management: This segment generated revenues of $322.2 million for the nine months ended September 30, 2024.
- Water Services and Operations: Revenues increased to $197.9 million for the same period.
Operational Highlights
In the Land and Resource Management segment, oil and gas royalties increased by $17.7 million to $276.4 million for the nine months ended September 30, 2024. The company's share of production rose to 26.0 thousand Boe per day compared to 22.6 thousand Boe per day in 2023.
Water Services and Operations
The Water Services and Operations segment saw an increase in revenues by 32.2%, reaching $197.9 million due to higher water sales and produced water royalties. Water sales revenue was $114.0 million, and produced water royalties accounted for $76.0 million.
| Segment Revenue | 2024 (9 months) | 2023 (9 months) |
|---|---|---|
| Land and Resource Management | $322.2 million | $315.3 million |
| Water Services and Operations | $197.9 million | $149.7 million |
Expenses Overview
Total operating expenses for the nine months ended September 30, 2024, were $123.4 million, up from $112.7 million in 2023. Key expense components included:
- Salaries and related employee expenses: $39.3 million
- Water service-related expenses: $36.8 million
- General and administrative expenses: $12.6 million
Cash Flow and Capital Allocation
Net cash provided by operating activities was $364.1 million for the nine months ended September 30, 2024, compared to $306.9 million for the same period in 2023. Cash flows used in investing activities totaled $225.8 million, primarily for acquisitions and capital expenditures.
Dividends and Share Repurchase
During the nine months ended September 30, 2024, TPL paid total dividends of $310.6 million and repurchased $22.7 million of common stock. The regular quarterly cash dividend was $1.17 per share, with a special cash dividend of $10.00 per share.
Acquisition Activity
In August 2024, TPL acquired mineral interests across approximately 4,106 NRA in Culberson County, Texas for $120.3 million. Additionally, TPL acquired 4,120 surface acres in Martin County for $45.0 million.
Real Estate and Land Holdings
As of September 30, 2024, TPL owned approximately 873,115 acres of land, with a net book value of $142.7 million. The company has maintained its land holdings while actively acquiring additional interests in the Permian Basin.
How Texas Pacific Land Corporation (TPL) Makes Money
Overview of Revenue Streams
Texas Pacific Land Corporation (TPL) primarily generates revenue through two main segments: Land and Resource Management and Water Services and Operations. The following table summarizes the financial performance of these segments for the nine months ended September 30, 2024 and 2023.
| Segment | Revenue (2024) | Revenue (2023) | Net Income (2024) | Net Income (2023) |
|---|---|---|---|---|
| Land and Resource Management | $322.2 million | $315.3 million | $233.0 million | $217.9 million |
| Water Services and Operations | $197.9 million | $149.7 million | $102.6 million | $74.7 million |
| Total | $520.0 million | $464.9 million | $335.6 million | $292.5 million |
Land and Resource Management
The Land and Resource Management segment accounts for a significant portion of TPL's revenue, primarily through:
- Oil and Gas Royalties: For the nine months ended September 30, 2024, TPL reported oil and gas royalty revenue of $276.4 million, an increase from $258.6 million in 2023. The company's share of production rose to 26.0 thousand Boe per day in 2024 from 22.6 thousand Boe per day in 2023.
- Easements and Surface-Related Income: Revenue from easements and other surface-related income was $43.6 million for the nine months ended September 30, 2024, down from $49.8 million in 2023.
- Land Sales: Land sales generated $2.1 million in revenue in 2024, a decline from $6.8 million in 2023.
Water Services and Operations
This segment has seen significant growth, with revenues increasing by 32.2% to $197.9 million for the nine months ended September 30, 2024, compared to $149.7 million in 2023. Key components include:
- Water Sales: Water sales revenue increased by $28.2 million to $114.0 million in 2024, driven by a 27.6% increase in water sales volumes.
- Produced Water Royalties: These royalties rose to $76.0 million in 2024 from $61.8 million in 2023, reflecting higher produced water volumes.
- Easements and Surface-Related Income: This category also grew, with revenues of $7.9 million in 2024 compared to $2.0 million in 2023.
Financial Performance Analysis
For the nine months ending September 30, 2024, TPL's total consolidated revenues reached $520.0 million, marking a 12% increase from $464.9 million in 2023. The following table provides a breakdown of revenue sources:
| Revenue Source | Revenue (2024) | Revenue (2023) |
|---|---|---|
| Oil and Gas Royalties | $276.4 million | $258.6 million |
| Water Sales | $114.0 million | $85.8 million |
| Produced Water Royalties | $76.0 million | $61.8 million |
| Easements and Other Surface-Related Income | $51.5 million | $51.9 million |
| Land Sales | $2.1 million | $6.8 million |
Operating Expenses
Total operating expenses for the nine months ended September 30, 2024 were $123.4 million, compared to $112.7 million in 2023. The increase in expenses is attributed to:
- Salaries and Related Employee Expenses: Increased from $32.7 million in 2023 to $39.3 million in 2024 due to a rise in employee count and compensation adjustments.
- Water Service-Related Expenses: Grew from $24.5 million in 2023 to $36.8 million in 2024, reflecting increased water sales.
- Legal and Professional Fees: Increased significantly from $28.5 million in 2023 to $14.7 million in 2024 due to additional consulting and legal expenses.
Net Income
Net income for the nine months ended September 30, 2024 was $335.6 million, up from $292.5 million in 2023, showcasing TPL's strong financial performance driven by increased revenues in both segments.
Cash Flow and Capital Expenditures
Net cash provided by operating activities for the nine months ended September 30, 2024 was $364.1 million, compared to $306.9 million in 2023. Capital expenditures totaled $22.0 million in 2024, up from $10.4 million in 2023, primarily related to water services.
Conclusion
Texas Pacific Land Corporation's diverse revenue streams, particularly from oil and gas royalties and water services, have positioned the company for continued growth and profitability in 2024.
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Resources:
- Texas Pacific Land Corporation (TPL) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Texas Pacific Land Corporation (TPL)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Texas Pacific Land Corporation (TPL)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.