01—Abstract
Summary
Summary of the 10-Q filed May 8, 2024. Cited figures are marked; the original filing is the authoritative source.
Texas Pacific Land Corporation reported first-quarter 2024 total revenues of $174.1 milliona, up 19.0% from $146.4 million in the prior-year quarter, and net income of $114.4 million, up 32.2% from $86.6 million.
Growth came mainly from water sales, which rose 70.9% to $37.1 millionb on a 51.3% increase in volumes, and from easements and other surface-related income, which rose $5.7 million. Oil and gas royalties increased 3.4% to $92.1 million, supported by higher production of 24.8 thousand Boe per day versus 20.9 thousand a year earlier, though the average realized price fell 4.6%. Prior-year legal and professional fees of $16.6 million dropped to $4.1 million, which also lifted profitability.
Operating cash flow was $147.2 millionc, and cash and cash equivalents were $837.1 million at March 31, 2024. The company reported no debt or credit facilities. During the quarter, the company effected a three-for-one stock split on March 26, 2024, and increased its authorized common stock to 46,536,936 shares.
The Board declared a quarterly cash dividend of $1.17d per share on May 6, 2024, payable June 17, 2024. Share repurchases totaled $10.3 million in the quarter.
The Delaware Supreme Court affirmed, on February 27, 2024, a December 2023 ruling in the company's favor in its litigation against Horizon Kinetics and SoftVest entities over stockholder voting commitments. The filing states that management is unable to estimate the amount or likelihood of reimbursement from a third party for ad valorem taxes the company has accrued or paid on historical royalty interests, and no receivable has been recorded.
02—Key points
Key Highlights
- Total revenues rose 19.0% to $174.1 million, led by water sales (up 70.9% to $37.1 million) and easements and other surface-related income (up $5.7 million).
- Net income increased 32.2% to $114.4 million, helped by legal and professional fees falling to $4.1 million from $16.6 million.
- Oil and gas royalties rose 3.4% to $92.1 million; production reached 24.8 thousand Boe per day versus 20.9 thousand, while the realized price declined 4.6% to $42.71 per Boe.
- Cash from operations was $147.2 million; cash and cash equivalents totaled $837.1 million, and the company had no debt or credit facilities.
- Diluted EPS was $4.97 versus $3.75, reflecting figures restated for the three-for-one stock split effected March 26, 2024.
- The Board declared a quarterly dividend of $1.17 per share on May 6, 2024, payable June 17, 2024.
- Water service-related expenses increased 80.5% as water demand and sales volumes grew, with the company noting that the higher demand increased revenue and operating income.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2024filed May 8, 2024Financial Statements
Q1 FY2024 against Q1 FY2023
| Line item | Q1 FY2024Q1 FY2023 | Change |
|---|---|---|
| Revenue | $174.14M$146.36M | +19.0% |
| Operating Expenses | $38.10M$41.41M | −8.0% |
| Operating Income | $136.04M$104.95M | +29.6% |
| Net Income | $114.42M$86.57M | +32.2% |
| EPS (Basic) | $4.97$3.75 | +32.5% |
| EPS (Diluted) | $4.97$3.75 | +32.5% |
| Shares Outstanding (Basic) | 23.00M23.08M | −0.3% |
| Shares Outstanding (Diluted) | 23.02M23.10M | −0.3% |
05—Questions
Frequently Asked Questions
What drove the increase in total revenue this quarter?
Total revenues rose 19.0% to $174.1 million. The increase was principally driven by a $15.4 million rise in water sales, a $5.7 million increase in easements and other surface-related income, a $3.0 million increase in oil and gas royalty revenue, and a $2.9 million increase in produced water royalties.
Did oil and gas royalties grow, and what affected them?
Oil and gas royalties increased 3.4% to $92.1 million. The prior-year period included an $8.7 million settlement with an operator. Excluding that settlement, royalties rose $11.7 million on higher production volumes, which reached 24.8 thousand Boe per day. The average realized price declined 4.6% to $42.71 per Boe.
How is the company's balance sheet positioned?
As of March 31, 2024, the company had cash and cash equivalents of $837.1 million, total assets of $1.26 billion, and total liabilities of $136.7 million. It had no debt or credit facilities and stated that cash from operations and existing cash balances will be sufficient to meet ongoing needs for the foreseeable future.
How much did the company return to stockholders?
The company paid $26.9 million in dividends and repurchased $10.3 million of common stock, including repurchases not settled at period end. The Board declared a $1.17 per share quarterly dividend on May 6, 2024. The stock repurchase program has a $250 million authorization.
Are there any significant legal or tax uncertainties?
The company reported no material pending legal proceedings beyond its Horizon Kinetics and SoftVest litigation, which the Delaware Supreme Court resolved in its favor on February 27, 2024. The company also accrued or paid ad valorem taxes on historical royalty interests, intends to seek reimbursement from a third party, but has not recorded a receivable because it cannot estimate the amount or likelihood of recovery.
06—Continue