01—Abstract
Summary
Summary of the 10-Q filed August 7, 2024. Cited figures are marked; the original filing is the authoritative source.
Texas Pacific Land Corporation (TPL) reported total revenues of $172.3 milliona for the three months ended June 30, 2024, up from $160.6 million in the prior-year period, and net income of $114.6 million versus $100.4 million.
For the six months ended June 30, 2024, total revenues were $346.5 millionb and net income was $229.0 million, compared with $307.0 million and $187.0 million in 2023. Growth was driven mainly by higher oil and gas royalty revenue, water sales, and produced water royalties, while legal and professional fees fell sharply from the prior year's stockholder-related matters. Other income, net rose to $23.2 million for the six months, largely from interest earned on higher cash balances.
The balance sheet shows cash and cash equivalents of $894.7 millionc as of June 30, 2024, and the company reports no debt or credit facilities. Management states a target cash balance of approximately $700 million, with cash above that level to be deployed mainly toward share repurchases and dividends. During the six months, TPL paid $53.8 million in dividends and repurchased $16.6 million of common stock.
The Board declared a $10.00d per share special cash dividend in June 2024, paid July 15, 2024, and declared a quarterly dividend of $1.17 per share on August 6, 2024. The filing also notes a three-for-one stock split effected March 26, 2024, and an increase in authorized common shares to 46,536,936.
The company is developing an energy-efficient produced water desalination and treatment process, with cumulative spending of $7.1 million through June 30, 2024, and is pursuing a facility with an initial capacity of 10,000 barrels of water per day. Management reports that disclosure controls were effective as of June 30, 2024.
02—Key points
Key Highlights
- Total revenues rose to $172.3 million in Q2 2024 from $160.6 million in Q2 2023; six-month revenues reached $346.5 million versus $307.0 million.
- Net income was $114.6 million for the quarter and $229.0 million for the six months, compared with $100.4 million and $187.0 million in the prior-year periods.
- Water sales were $77.8 million for the six months ended June 30, 2024, up 31.0% from the prior-year period, with water sales volumes up 25.5%.
- Legal and professional fees declined to $6.4 million for the six months from $26.8 million, mainly due to lower stockholder-related legal expenses.
- Cash and cash equivalents were $894.7 million at June 30, 2024, and the company has no debt or credit facilities.
- Shareholder returns included $53.8 million in dividends and $16.6 million in repurchases for the six months, plus a $10.00 per share special dividend paid July 15, 2024.
- Net cash provided by operating activities was $245.5 million for the six months, compared with $199.3 million a year earlier.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2024filed August 7, 2024Financial Statements
Q2 FY2024 against Q2 FY2023
| Line item | Q2 FY2024Q2 FY2023 | Change |
|---|---|---|
| Revenue | $172.33M$160.61M | +7.3% |
| Operating Expenses | $39.11M$40.33M | −3.0% |
| Operating Income | $133.22M$120.28M | +10.8% |
| Net Income | $114.59M$100.39M | +14.1% |
| EPS (Basic) | $4.99$4.35 | +14.7% |
| EPS (Diluted) | $4.98$4.35 | +14.5% |
| Shares Outstanding (Basic) | 22.99M23.06M | −0.3% |
| Shares Outstanding (Diluted) | 23.01M23.07M | −0.3% |
05—Questions
Frequently Asked Questions
What drove the increase in revenue and net income?
The filing attributes the revenue increase mainly to higher oil and gas royalty revenue, water sales, and produced water royalties. For the six months, oil and gas royalties rose $10.4 million, though the prior year included an $8.7 million operator recovery; excluding that recovery, royalties increased $19.1 million on higher production volumes and realized prices. Net income also benefited from $23.2 million of other income, net, largely interest on cash balances.
How much cash does TPL have, and how will it be used?
TPL had $894.7 million of cash and cash equivalents as of June 30, 2024, against a stated target balance of approximately $700 million. Cash above that target is to be deployed mainly toward share repurchases and dividends, with funds also available for potential acquisitions and general corporate purposes.
What dividends has TPL declared or paid?
The company paid $53.8 million in dividends during the six months ended June 30, 2024. The Board declared a $10.00 per share special cash dividend on June 13, 2024, paid July 15, 2024. On August 6, 2024, it declared a quarterly cash dividend of $1.17 per share, payable September 17, 2024.
Does TPL have debt or other significant obligations?
The filing states that TPL had no debt or credit facilities and no off-balance sheet arrangements as of June 30, 2024. Total liabilities were $109.4 million. Management believes operating cash flow and existing cash balances will be sufficient for ongoing capital expenditures, working capital, and other cash needs.
What is the status of the produced water desalination project?
TPL has tested a pilot program in its research and development lab and is working toward constructing a facility with an initial capacity of 10,000 barrels of water per day. Cumulative spending through June 30, 2024 was $7.1 million, of which $4.2 million was capitalized. The company has filed a patent application and secured exclusive use-rights for the equipment for produced water applications.
06—Continue