Texas Pacific Land Corporation (TPL): Business Model Canvas [11-2024 Updated]
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Texas Pacific Land Corporation (TPL) Bundle
Discover how Texas Pacific Land Corporation (TPL) leverages its unique business model canvas to thrive in the competitive energy sector. From strategic partnerships with energy companies to innovative water management solutions, TPL’s approach integrates diverse revenue streams while focusing on sustainability. Dive into the details of TPL's operations and learn how it effectively balances land management, customer relationships, and cost structures to maximize its potential.
Texas Pacific Land Corporation (TPL) - Business Model: Key Partnerships
Collaborations with energy companies
Texas Pacific Land Corporation (TPL) engages in strategic partnerships with various energy companies to leverage its land and resources for oil and gas exploration. For the nine months ended September 30, 2024, TPL generated oil and gas royalty revenue amounting to $276.4 million, an increase from $258.6 million during the same period in 2023, primarily due to higher production volumes and favorable realized prices .
The company reported its share of production volumes as follows:
| Type | Volume (Nine Months Ended September 30, 2024) | Volume (Nine Months Ended September 30, 2023) |
|---|---|---|
| Oil (MBbls) | 3,003 | 2,642 |
| Natural gas (MMcf) | 12,312 | 10,405 |
| NGL (MBbls) | 2,073 | 1,784 |
| Equivalents (MBoe) | 7,128 | 6,160 |
| Equivalents per day (MBoe/d) | 26.0 | 22.6 |
Strategic alliances for water management
TPL has established strategic alliances focused on water management to support its operations in the Permian Basin, which is critical for oil and gas extraction. The Water Services and Operations segment achieved revenues of $197.9 million for the nine months ended September 30, 2024, an increase of 32.2% compared to $149.7 million in the same period of 2023.
Water sales revenue for TPL increased significantly, reaching $114.0 million for the nine months ended September 30, 2024, up from $85.8 million in the prior year, reflecting a 32.9% rise in water sales volumes.
Produced water royalties also contributed significantly, totaling $76.0 million for the nine months ended September 30, 2024, compared to $61.8 million in the same period of 2023.
Partnerships for technology development
TPL collaborates with technology development firms to enhance its operational efficiency, particularly in water treatment and management. Research and development expenses related to innovative water treatment methods were approximately $1.9 million for the nine months ended September 30, 2024, compared to $0.8 million in the same period of 2023.
The company’s investment in technology has been pivotal as it seeks to develop energy-efficient methods for produced water desalination and treatment, which is essential for sustainable operations in the oil and gas sector.
Texas Pacific Land Corporation (TPL) - Business Model: Key Activities
Managing land and royalty interests
Texas Pacific Land Corporation manages approximately 873,000 surface acres and 199,000 net royalty acres (NRA) primarily located in the Permian Basin. For the nine months ended September 30, 2024, the Land and Resource Management segment generated revenues of $322.2 million, compared to $315.3 million for the same period in 2023. The increase was driven by a $17.7 million rise in oil and gas royalty revenue, which reached $276.4 million for the nine months ended September 30, 2024, up from $258.6 million in 2023.
| Revenue Source | 2024 (9 months) | 2023 (9 months) | Change |
|---|---|---|---|
| Oil and Gas Royalties | $276.4 million | $258.6 million | +$17.7 million |
| Easements and Other Surface-Related Income | $43.6 million | $49.8 million | - $6.2 million |
| Land Sales | $2.1 million | $6.8 million | - $4.7 million |
Water sourcing and sales operations
The Water Services and Operations segment reported revenues of $197.9 million for the nine months ended September 30, 2024, an increase of 32.2% from $149.7 million in 2023. This growth was largely attributed to a rise in water sales, which reached $114.0 million, up from $85.8 million, marking a 32.9% increase. Additionally, produced water royalties increased to $76.0 million from $61.8 million, driven by higher volumes.
| Revenue Source | 2024 (9 months) | 2023 (9 months) | Change |
|---|---|---|---|
| Water Sales | $114.0 million | $85.8 million | +$28.2 million |
| Produced Water Royalties | $76.0 million | $61.8 million | +$14.2 million |
| Easements and Other Surface-Related Income | $7.9 million | $2.0 million | +$5.9 million |
Acquiring additional mineral rights
In 2024, TPL acquired mineral rights in a significant transaction, purchasing oil and gas royalty interests in 4,106 NRA for approximately $120.3 million. This acquisition is part of TPL's strategy to enhance its portfolio of mineral rights and further capitalize on the ongoing development activities in the Permian Basin.
Additionally, during the nine months ended September 30, 2024, TPL invested approximately $18.4 million to maintain and enhance its water sourcing assets, reflecting the company's commitment to expanding its operational capabilities.
Texas Pacific Land Corporation (TPL) - Business Model: Key Resources
Extensive Land Holdings in Texas
As of September 30, 2024, Texas Pacific Land Corporation (TPL) owned approximately 798,991 acres of land in Texas. This land is primarily located in the Permian Basin, a significant area for oil and gas production.
The net book value of TPL's real estate holdings as of September 30, 2024, was approximately $142.7 million. This reflects an increase from $130.0 million as of December 31, 2023.
Oil and Gas Royalty Interests
For the nine months ended September 30, 2024, TPL reported oil and gas royalty revenue of $276.4 million, a notable increase from $258.6 million for the same period in 2023. This increase was primarily driven by higher production volumes and realized prices.
During this period, TPL's share of production volumes included:
- Oil: 3,003 MBbls
- Natural gas: 12,312 MMcf
- NGL: 2,073 MBbls
- Total equivalents: 7,128 MBoe
- Average realized price per Boe: $40.60
Additionally, TPL acquired oil and gas royalty interests in 4,106 NRA in Culberson County, Texas, for a purchase price of approximately $120.3 million during the nine months ended September 30, 2024.
Water Sourcing Infrastructure
In the nine months ended September 30, 2024, TPL's Water Services and Operations segment generated revenues of $197.9 million, an increase from $149.7 million in the same period of 2023. This growth was attributed to higher water sales and produced water royalties.
Key metrics for water sourcing include:
- Water sales revenue: $114.0 million
- Produced water royalties: $76.0 million
- Increase in water sales volume: 27.6% for the nine months ended September 30, 2024, compared to the same period in 2023.
Capital expenditures for water service-related assets amounted to $21.8 million for the nine months ended September 30, 2024, reflecting ongoing investments in infrastructure.
| Key Resource | Details | Value |
|---|---|---|
| Land Holdings | Total Acres Owned | 798,991 acres |
| Land Holdings | Net Book Value | $142.7 million |
| Oil & Gas Royalties | Total Revenue (9M 2024) | $276.4 million |
| Oil & Gas Royalties | Production Volumes | 3,003 MBbls (Oil), 12,312 MMcf (Gas), 2,073 MBbls (NGL) |
| Water Services | Water Sales Revenue | $114.0 million |
| Water Services | Produced Water Royalties | $76.0 million |
| Capital Expenditures | Water Services Infrastructure | $21.8 million |
Texas Pacific Land Corporation (TPL) - Business Model: Value Propositions
Revenue generation from oil and gas royalties
Texas Pacific Land Corporation (TPL) generates significant revenue through oil and gas royalties, which amounted to $276.4 million for the nine months ended September 30, 2024, representing a 6.8% increase from $258.6 million during the same period in 2023. This growth is attributed to higher production volumes, with TPL's share of production increasing to 26.0 thousand Boe per day compared to 22.6 thousand Boe per day in the previous year. The average realized prices for oil decreased to $40.60 per Boe from $42.49 per Boe.
The breakdown of oil and gas royalty revenue for the nine months ended September 30, 2024, is as follows:
| Royalty Stream | Revenue ($ thousands) | Volume (MBoe) | Average Realized Price ($/Boe) |
|---|---|---|---|
| Oil | $222,788 | 3,003 | $77.68 |
| Natural Gas | $13,630 | 12,312 | $1.20 |
| NGL | $39,959 | 2,073 | $20.84 |
| Total | $276,377 | 7,128 | $40.60 |
Sustainable water management solutions
In addition to oil and gas revenues, TPL has developed sustainable water management solutions that contribute to its revenue streams. For the nine months ended September 30, 2024, water sales generated $113.9 million, up from $85.8 million in the same period of 2023, marking a 32.2% increase. This increase is primarily due to a 27.6% rise in water sales volumes. Furthermore, produced water royalties reached $76.0 million, compared to $61.8 million for the previous year.
The following table summarizes TPL's water-related revenue for the nine months ended September 30, 2024:
| Water Revenue Stream | Revenue ($ thousands) |
|---|---|
| Water Sales | $113,987 |
| Produced Water Royalties | $76,034 |
| Total Water Revenue | $190,021 |
Flexible land use for various industries
Texas Pacific Land Corporation also benefits from flexible land use, which allows for diverse revenue generation across multiple sectors. For the nine months ended September 30, 2024, TPL reported $43.6 million from easements and other surface-related income. This reflects a decrease from $49.8 million in the same period of 2023, largely due to fluctuations in wellbore easements.
The following table outlines the revenue from land-related activities for the nine months ended September 30, 2024:
| Land Revenue Stream | Revenue ($ thousands) |
|---|---|
| Easements and Other Surface-Related Income | $43,643 |
| Land Sales | $2,145 |
| Total Land Revenue | $45,788 |
Texas Pacific Land Corporation (TPL) - Business Model: Customer Relationships
Long-term contracts with energy operators
Texas Pacific Land Corporation (TPL) has established strong long-term contracts with various energy operators, particularly in the Permian Basin. These contracts are crucial for ensuring a steady revenue stream from oil and gas royalties. For the nine months ended September 30, 2024, TPL reported oil and gas royalty revenue of $276.4 million, a significant increase from $258.6 million for the same period in 2023 . This revenue primarily stems from the company’s royalty interests across its extensive land holdings, which amount to approximately 873,115 acres .
Responsive customer service for water sales
The Water Services and Operations segment of TPL has seen substantial growth, with water sales revenue increasing by 32.9% to $114.0 million for the nine months ended September 30, 2024, compared to $85.8 million in 2023 . This growth is attributed to a 27.6% increase in water sales volumes, reflecting TPL's commitment to responsive customer service in meeting the water needs of operators in the region . The company's investment in maintaining and enhancing its water sourcing assets reached approximately $18.4 million in 2024 .
Regular communication with stakeholders
Regular communication with stakeholders is a pivotal aspect of TPL's customer relationships. The company engages in consistent outreach to its stakeholders, including energy operators and investors, to provide updates on operational performance and market conditions. In 2024, TPL's total revenues increased by 9.9% to $173.6 million for the three months ended September 30, compared to $158.0 million in 2023 . This increase is indicative of TPL's effective communication strategy that keeps stakeholders informed and engaged, thereby fostering trust and loyalty.
| Metric | 2024 (9 Months Ended) | 2023 (9 Months Ended) | Change (%) |
|---|---|---|---|
| Oil and Gas Royalty Revenue | $276.4 million | $258.6 million | +6.8% |
| Water Sales Revenue | $114.0 million | $85.8 million | +32.9% |
| Total Revenues | $520.0 million | $464.9 million | +11.9% |
| Investment in Water Sourcing Assets | $18.4 million | — | — |
Texas Pacific Land Corporation (TPL) - Business Model: Channels
Direct sales to energy companies
Texas Pacific Land Corporation (TPL) primarily engages in direct sales of land and associated resources to energy companies operating in the Permian Basin. For the nine months ended September 30, 2024, TPL generated $2.1 million from land sales, selling 91 acres, a significant decrease compared to $6.8 million from 18,061 acres sold in the same period of 2023. This decline reflects reduced land sales activity amid fluctuating market conditions.
Online platforms for information dissemination
TPL utilizes online platforms to disseminate crucial information regarding its land holdings, royalty interests, and operational updates. The company reported total revenues of $520.0 million for the nine months ended September 30, 2024, which included $276.4 million from oil and gas royalties and $197.9 million from water services, indicating a robust online presence that supports investor relations and client engagement.
Industry events and conferences
Participation in industry events and conferences is a key channel for TPL to connect with energy companies and stakeholders. The company capitalizes on these events to showcase its operational capabilities and forge strategic partnerships. For the nine months ended September 30, 2024, TPL's net income amounted to $335.6 million, reflecting the importance of networking and relationship-building at such events.
| Channel | Revenue (9 Months Ended September 30, 2024) | Revenue (9 Months Ended September 30, 2023) | Change (%) |
|---|---|---|---|
| Direct Sales to Energy Companies | $2.1 million | $6.8 million | -69.1% |
| Oil and Gas Royalties | $276.4 million | $258.6 million | +6.8% |
| Water Services Revenue | $197.9 million | $149.7 million | +32.2% |
Texas Pacific Land Corporation (TPL) - Business Model: Customer Segments
Oil and gas exploration firms
Texas Pacific Land Corporation (TPL) serves oil and gas exploration firms by providing access to its extensive land holdings and associated resource rights. As of September 30, 2024, TPL reported oil royalty revenues of $276.4 million for the nine months ended, reflecting an increase of $17.7 million from the previous year. The company’s share of production volumes included 3,003 MBbls of oil, 12,312 MMcf of natural gas, and 2,073 MBbls of NGL, contributing to a total oil and gas royalty revenue of $276.4 million.
Water service companies
TPL's Water Services and Operations segment is crucial for water service companies, especially in the Permian Basin. For the nine months ended September 30, 2024, water sales revenue increased by 32.9% to $114.0 million compared to the same period in 2023. The increase was driven by a 27.6% rise in water sales volumes. Produced water royalties also showed significant growth, reaching $76.0 million, up from $61.8 million in the previous year.
Industrial clients needing land access
Industrial clients requiring land access for various operations contribute to TPL's revenue through easements and surface-related income. For the nine months ended September 30, 2024, TPL generated $51.5 million from easements and other surface-related income, slightly down from $51.9 million in the same period of the previous year. This income is highly variable and depends on the activity levels and development decisions made by these industrial clients.
| Customer Segment | Key Metrics (2024) | Revenue Contribution |
|---|---|---|
| Oil and Gas Exploration Firms | Oil Royalties: $276.4 million | 54% of Land and Resource Management Revenue |
| Water Service Companies | Water Sales: $114.0 million | 22% of Total Revenues |
| Industrial Clients | Easements and Surface Income: $51.5 million | 10% of Total Revenues |
Texas Pacific Land Corporation (TPL) - Business Model: Cost Structure
Employee salaries and benefits
Salaries and related employee expenses were $39.3 million for the nine months ended September 30, 2024, compared to $32.7 million for the same period in 2023. The increase in expenses was attributed to an increase in the number of employees from 101 to 110 and adjustments in market compensation effective at the beginning of 2024.
For the three months ended September 30, 2024, salaries and related employee expenses were $14.0 million, up from $11.5 million in the same quarter of 2023.
Legal and professional services
Legal and professional fees totaled $14.7 million for the nine months ended September 30, 2024, a decrease from $28.5 million in the same period of 2023. For the three months ended September 30, 2024, these fees were $8.3 million compared to $1.7 million for the same period in 2023.
Maintenance of water infrastructure
Water service-related expenses were $36.8 million for the nine months ended September 30, 2024, an increase from $24.5 million in the same period of 2023. The increase was largely driven by a 32.9% rise in water sales volumes compared to the previous year.
Specifically, for the three months ended September 30, 2024, these expenses amounted to $11.7 million, up from $8.6 million during the same quarter in 2023.
| Cost Category | Q3 2024 (in millions) | Q3 2023 (in millions) | YTD 2024 (in millions) | YTD 2023 (in millions) |
|---|---|---|---|---|
| Employee Salaries and Benefits | 14.0 | 11.5 | 39.3 | 32.7 |
| Legal and Professional Services | 8.3 | 1.7 | 14.7 | 28.5 |
| Water Service-Related Expenses | 11.7 | 8.6 | 36.8 | 24.5 |
Texas Pacific Land Corporation (TPL) - Business Model: Revenue Streams
Oil and gas royalty income
For the nine months ended September 30, 2024, Texas Pacific Land Corporation reported oil and gas royalty revenue of $276.4 million, an increase from $258.6 million for the same period in 2023. This represents a growth of $17.7 million.
The production volumes for this period are as follows:
| Production Type | Volume (Nine Months Ended September 30, 2024) | Volume (Nine Months Ended September 30, 2023) |
|---|---|---|
| Oil (MBbls) | 3,003 | 2,642 |
| Natural Gas (MMcf) | 12,312 | 10,405 |
| NGL (MBbls) | 2,073 | 1,784 |
| Equivalents (MBoe) | 7,128 | 6,160 |
The average realized prices for oil and gas during this period were:
| Commodity | Average Price |
|---|---|
| Oil ($/Bbl) | $77.68 |
| Natural Gas ($/Mcf) | $1.20 |
| NGL ($/Bbl) | $20.84 |
| Equivalents ($/Boe) | $40.60 |
Water sales and produced water royalties
Revenue from water sales for the nine months ended September 30, 2024 was $114.0 million, reflecting a 32.9% increase from $85.8 million in the previous year. Produced water royalties for the same period amounted to $76.0 million, up from $61.8 million in 2023.
The detailed revenue from the water services and operations segment is outlined in the table below:
| Revenue Source | Revenue (Nine Months Ended September 30, 2024) | Revenue (Nine Months Ended September 30, 2023) |
|---|---|---|
| Water Sales | $114,000,000 | $85,799,000 |
| Produced Water Royalties | $76,034,000 | $61,824,000 |
Revenue from easements and land sales
Easements and other surface-related income for the nine months ended September 30, 2024 was $43.6 million, a decrease from $49.8 million in 2023. The revenue from land sales was $2.1 million for the nine months of 2024, compared to $6.8 million in the prior year.
The financial performance related to land sales and easements is summarized below:
| Revenue Source | Revenue (Nine Months Ended September 30, 2024) | Revenue (Nine Months Ended September 30, 2023) |
|---|---|---|
| Easements and Other Surface-Related Income | $43,643,000 | $49,826,000 |
| Land Sales | $2,145,000 | $6,806,000 |
Updated on 16 Nov 2024
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.