01—Abstract
Summary
Summary of the 10-Q filed November 6, 2024. Cited figures are marked; the original filing is the authoritative source.
Texas Pacific Land Corporation's Form 10-Q for the quarter ended September 30, 2024 reports total revenues of $173.6 milliona for the three months ended September 30, 2024, up from $158.0 million a year earlier, and net income of $106.6 million versus $105.6 million.
For the nine months, total revenues were $520.0 millionb (versus $464.9 million) and net income was $335.6 million (versus $292.5 million). Basic EPS for the nine months was $14.60. Water sales and produced water royalties drove much of the growth, while easements and other surface-related income and land sales declined.
Cash and cash equivalents were $533.9 millionc at quarter-end, with no debt or credit facilities outstanding. Capital allocation was active during the period. The company paid $310.6 million in dividends in the nine months, including special cash dividends of $10.00 per share and regular quarterly dividends of $1.17 per share, and repurchased $22.7 million of common stock.
The company acquired a 4,120-acre surface asset package in Martin County for $45.0 milliond and oil and gas royalty interests in Culberson County for $120.3 million. A further royalty acquisition of approximately 7,490 NRA for $276.4 million closed on October 2, 2024, with $43.0 million held in escrow at quarter-end. The Board declared a quarterly dividend of $1.60 per share on November 4, 2024.
Management states that the company targets cash and cash equivalents of approximately $700 million and will deploy free cash flow above that level toward dividends and share repurchases. Free Cash Flow, a non-GAAP measure, was $337.3 million for the nine months ended September 30, 2024, compared with $299.2 million a year earlier. The filing notes that revenue remains sensitive to oil and gas prices and to development decisions by Permian Basin operators.
02—Key points
Key Highlights
- Total revenues were $173.6 million for Q3 2024 versus $158.0 million in Q3 2023; nine-month revenues were $520.0 million versus $464.9 million.
- Net income was $106.6 million for Q3 2024 and $335.6 million for the nine months, compared with $105.6 million and $292.5 million a year earlier.
- Water sales rose to $114.0 million for the nine months (from $85.8 million), and produced water royalties rose to $76.0 million (from $61.8 million).
- Dividends paid totaled $310.6 million in the nine months, including $10.00 per share in special dividends and $1.17 per share in regular quarterly dividends.
- The company had no debt or credit facilities and $533.9 million of cash and cash equivalents as of September 30, 2024.
- A royalty interest acquisition of approximately 7,490 NRA for $276.4 million closed on October 2, 2024, and a $1.60 per share quarterly dividend was declared on November 4, 2024.
- Free Cash Flow was $337.3 million for the nine months ended September 30, 2024, compared with $299.2 million a year earlier.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2024filed November 6, 2024Financial Statements
Q3 FY2024 against Q3 FY2023
| Line item | Q3 FY2024Q3 FY2023 | Change |
|---|---|---|
| Revenue | $173.56M$157.97M | +9.9% |
| Operating Expenses | $46.23M$31.01M | +49.1% |
| Operating Income | $127.33M$126.96M | +0.3% |
| Net Income | $106.59M$105.57M | +1.0% |
| EPS (Basic) | $4.64$4.58 | +1.3% |
| EPS (Diluted) | $4.63$4.58 | +1.1% |
| Shares Outstanding (Basic) | 22.98M23.03M | −0.2% |
| Shares Outstanding (Diluted) | 23.01M23.05M | −0.1% |
05—Questions
Frequently Asked Questions
What drove revenue growth in the first nine months of 2024?
Total revenues increased to $520.0 million from $464.9 million, principally due to a $28.2 million increase in water sales, a $17.7 million increase in oil and gas royalty revenue, and a $14.2 million increase in produced water royalties. Land sales decreased $4.7 million. The filing notes the 2023 oil and gas royalty figure included an $8.7 million recovery from an operator.
How much did the company return to shareholders in 2024?
During the nine months ended September 30, 2024, the company paid $310.6 million in dividends, including special cash dividends of $10.00 per share and regular quarterly dividends of $1.17 per share, and repurchased $22.7 million of common stock.
What acquisitions did the company complete?
In August 2024, the company acquired oil and gas royalty interests in 4,106 NRA in Culberson County, Texas for $120.3 million net of post-close adjustments, and 4,120 surface acres in Martin County, Texas with related water and surface assets for $45.0 million. On October 2, 2024, it acquired approximately 7,490 NRA primarily in the Midland Basin for $276.4 million in cash.
Does the company carry any debt, and what is its cash target?
The company stated it had no debt, credit facilities or off-balance sheet arrangements as of September 30, 2024. It has set a target cash and cash equivalents balance of approximately $700 million, and it intends to deploy free cash flow above that level toward additional dividends and share repurchases. Cash and cash equivalents were $533.9 million at quarter-end.
What risks does the filing highlight for future results?
The filing states that revenues are subject to substantial fluctuations from quarter to quarter and year to year, driven by oil and gas prices, OPEC+ actions, and development decisions by operators in the Permian Basin. Easements and other surface-related income is described as unpredictable and may vary significantly from period to period, and Waha natural gas prices were negative for much of 2024.
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