01—Abstract
Summary
Summary of the 10-K filed February 19, 2025. Cited figures are marked; the original filing is the authoritative source.
Texas Pacific Land Corporation (TPL) reported record 2024 results, led by its Water Services and Operations segment.
Total revenues were $705.8 milliona, up from $631.6 million in 2023, and net income was $454.0 million, or $19.75 per basic share, compared with $405.6 million in 2023. Water Services and Operations revenue rose to $265.0 million from $199.5 million, with water sales of $150.7 million and produced water royalties of $104.1 million. Land and Resource Management revenue was $440.8 million, driven by oil and gas royalties of $373.3 million, which were supported by a 26.8 thousand Boe per day share of production even though the average realized price fell to $39.87 per Boe from $42.58.
TPL spent $471.7 millionb in investing activities in 2024, mainly on acquisitions of royalty interests totaling $395.6 million and a $45.0 million business combination in Martin County, Texas. Operating cash flow was $490.7 million, and free cash flow was $461.1 million. The company ended the year with no debt and $369.8 million in cash and cash equivalents.
It paid $347.3 millionc in dividends, including a $10.00 special dividend, and repurchased $29.2 million of stock. The filing identifies concentration and commodity exposure as key risks. Three customers accounted for 40.9% of 2024 total revenues.
Royalty revenue depends on oil and gas prices and on operator decisions, and the company disclosed that one obligor has indicated it will stop paying ad valorem taxes on certain historical royalty interests, which TPL has been paying itself since January 1, 2022 while pursuing reimbursement. The filing reports no material pending legal proceedings.
02—Key points
Key Highlights
- Total revenues of $705.8 million in 2024, up from $631.6 million, and net income of $454.0 million, or $19.72 per diluted share.
- Water Services and Operations segment revenue rose to $265.0 million from $199.5 million, with water sales up 34.3% to $150.7 million and produced water royalties of $104.1 million.
- Oil and gas royalties were $373.3 million on 26.8 thousand Boe per day of production, versus 23.5 thousand in 2023, while the average realized price fell to $39.87 per Boe from $42.58.
- Acquired royalty interests and assets for about $440.5 million in 2024, including 7,490 NRA in the Midland Basin for $275.2 million, 4,106 NRA in Culberson County for $120.3 million, and a 4,120-acre Martin County surface acquisition for $45.0 million.
- Free cash flow of $461.1 million and cash from operations of $490.7 million; the company has no debt and $369.8 million in cash and cash equivalents at year-end.
- Returned $347.3 million to stockholders in dividends, including regular dividends of $5.11 per share and a $10.00 special dividend, and repurchased $29.2 million of common stock.
- Three customers represented 40.9% of 2024 total revenues, and an obligor has indicated it will stop paying ad valorem taxes on certain historical royalty interests, which TPL has been paying since January 1, 2022.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2024filed February 19, 2025Financial Statements
FY2024 against FY2023
| Line item | FY2024FY2023 | Change |
|---|---|---|
| Revenue | $705.82M$631.60M | +11.8% |
| Operating Expenses | $166.69M$145.54M | +14.5% |
| Operating Income | $539.14M$486.05M | +10.9% |
| Net Income | $453.96M$405.64M | +11.9% |
| EPS (Basic) | $6.58$5.87 | +12.1% |
| EPS (Diluted) | $6.57$5.86 | +12.1% |
| Shares Outstanding (Basic) | 68.96M69.13M | −0.3% |
| Shares Outstanding (Diluted) | 69.06M69.18M | −0.2% |
05—Questions
Frequently Asked Questions
What drove revenue growth in 2024?
Total revenues rose $74.2 million to $705.8 million. The filing attributes the increase principally to a $38.5 million increase in water sales, a $19.9 million increase in produced water royalties and a $15.9 million increase in oil and gas royalty revenue. Water sales volumes increased 31.0%.
How did lower commodity prices affect the company?
The average realized price for oil and gas royalties fell to $39.87 per Boe from $42.58. Natural gas realized prices dropped to $1.17 per Mcf from $2.23. Royalty revenue still increased because production rose to 26.8 thousand Boe per day from 23.5 thousand.
How is TPL funding its growth and shareholder returns?
Operations generated $490.7 million of cash, and the company had $369.8 million in cash at year-end with no debt. The filing states it targets a cash balance of about $700 million and will deploy most free cash flow above that level toward dividends and share repurchases. Capital expenditures were $29.7 million, mainly for the Water Services and Operations segment.
What are the main concentration and tax risks disclosed?
Three customers accounted for 40.9% of 2024 total revenues, and the filing says the concentration is expected given their Permian Basin presence. One obligor has indicated it will not continue paying ad valorem taxes on certain historical royalty interests; TPL has accrued or paid those taxes since January 1, 2022 and has recorded no loss recovery receivable.
What were the notable 2024 changes to the share structure?
TPL completed a three-for-one stock split effective March 26, 2024, and per-share data was restated. Year-end shares outstanding were 22,971,803. The company also declared a quarterly dividend of $1.60 per share on February 18, 2025.
06—Continue