01—Abstract
Summary
Summary of the 10-K filed February 25, 2021. Cited figures are marked; the original filing is the authoritative source.
Texas Pacific Land Corporation (filed as Texas Pacific Land Trust) reported 2020 revenues of $302.6 milliona, down from $490.5 million in 2019, which included a $100 million land sale.
Net income fell to $176.0 millionb, or $22.70 per Sub-share, from $318.7 million ($41.09 per Sub-share). Land and Resource Management revenue was $195.1 million and Water Services and Operations revenue was $107.4 million. Oil and gas royalties were $137.9 million, down from $154.7 million, with oil royalty revenue declining on a 24.1% lower average price per barrel.
Water sales and royalties fell to $54.9 millionc, reflecting an 18.7% decrease in average water sales price, a 6.8% decrease in barrels sold and a $7.0 million take-or-pay deferral in the fourth quarter. The company had no debt and $281.0 million in cash and cash equivalents at December 31, 2020. Total dividends paid in 2020 were $201.7 million, consisting of a $10.00 regular dividend and $16.00 in special dividends per Sub-share.
On January 11, 2021, the Trust completed its Corporate Reorganization into Texas Pacific Land Corporation, with shares distributed one-for-one to Sub-share holders and listed on the NYSE under the symbol TPL. The Board declared a quarterly cash dividend of $2.75d per share on February 17, 2021, and stated it intends to pay dividends quarterly going forward. The filing reports that the company owns the surface estate in approximately 880,523 acres in West Texas, plus NPRI interests under about 84,934 acres (1/128th) and 370,737 acres (1/16th).
Two customers, Occidental Petroleum and Chevron, accounted for 18% and 10% of 2020 total revenues, respectively. Management reported effective internal control over financial reporting as of December 31, 2020, and the auditor, Lane Gorman Trubitt, LLC, issued an unqualified opinion dated February 25, 2021.
02—Key points
Key Highlights
- Total revenues were $302.6 million in 2020, down from $490.5 million in 2019; 2019 included a $100 million land sale.
- Net income was $176.0 million ($22.70 per Sub-share) in 2020 versus $318.7 million ($41.09 per Sub-share) in 2019.
- Oil and gas royalty revenue was $137.9 million, down from $154.7 million, driven by a 24.1% decrease in the average price per royalty barrel of crude oil.
- Water sales and royalties declined to $54.9 million from $84.9 million, with an 18.7% decrease in average sales price per barrel and a $7.0 million take-or-pay deferral in Q4 2020.
- The company had no debt and $281.0 million of cash and cash equivalents as of December 31, 2020.
- Dividends paid in 2020 totaled $201.7 million, including $10.00 regular and $16.00 special dividends per Sub-share; a $2.75 quarterly dividend was declared on February 17, 2021.
- The Corporate Reorganization into Texas Pacific Land Corporation was completed January 11, 2021, with the stock listed on the NYSE under TPL.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2020filed February 25, 2021Financial Statements
FY2020 against FY2019
| Line item | FY2020FY2019 | Change |
|---|---|---|
| Revenue | $302.56M$490.50M | −38.3% |
| Operating Expenses | $85.30M$90.92M | −6.2% |
| Operating Income | $217.26M$399.57M | −45.6% |
| Net Income | $176.05M$318.73M | −44.8% |
| EPS (Basic) | $22.70$41.09 | −44.8% |
| EPS (Diluted) | $22.70$41.09 | −44.8% |
| Shares Outstanding (Basic) | 7.76M7.76M | 0.0% |
| Shares Outstanding (Diluted) | 7.76M7.76M | 0.0% |
05—Questions
Frequently Asked Questions
What drove the decline in 2020 revenue?
Revenues fell $187.9 million, or 38.3%, to $302.6 million. The 2019 results included a $100 million land sale, and 2020 oil and gas royalties, easement income and water sales were lower, with land sales and other operating revenue falling to $17.7 million from $135.5 million.
How much cash does the company have and does it carry debt?
As of December 31, 2020, the company had cash and cash equivalents of $281.0 million and no debt or credit facilities.
What is the dividend policy after the Corporate Reorganization?
The Board determined to pay dividends quarterly in March, June, September and December, subject to Board discretion. On February 17, 2021, it declared a quarterly cash dividend of $2.75 per share payable March 15, 2021.
Who are the company's major customers?
During 2020, Occidental Petroleum Corporation accounted for $54.1 million, or approximately 18% of total revenues, and Chevron Corporation accounted for $31.6 million, or approximately 10% of total revenues.
What is the company's land and royalty position?
The company owned the surface estate in 880,523 acres in West Texas as of December 31, 2020, along with a 1/128th NPRI under 84,934 acres and a 1/16th NPRI under 370,737 acres.
06—Continue