01—Abstract
Summary
Summary of the 8-K filed May 8, 2024. Cited figures are marked; the original filing is the authoritative source.
Texas Pacific Land Corporation reported first-quarter 2024 results on May 8, 2024, with net income of $114.4 milliona, or $4.97 per diluted share, on total revenues of $174.1 million.
Management highlighted record water segment revenues of $62.7 millionb, Adjusted EBITDA of $152.0 million and free cash flow of $114.5 million. Revenue rose sequentially, principally from a $10.7 million increase in water sales, while oil and gas royalty revenue fell $6.6 million on lower production. Year over year, revenue grew from $146.4 million, with water sales up 51.3% in volume and oil and gas royalty revenue up on higher production, partly offset by an $8.7 million settlement recorded in the first quarter of 2023.
The filing also announced progress on a produced water desalination and treatment technology, with a pilot completed and a larger facility with initial capacity of 10,000 barrels of water per day being pursued. The company filed a patent application for the process and secured exclusive use-rights for the equipment for produced water applications. Management said it is in commercial discussions with upstream operators.
The Board declared a $1.17c per share quarterly dividend payable June 17, 2024, and formalized the Strategic Acquisitions Committee as a standing committee. The filing also reflects the three-for-one stock split effective March 26, 2024, which is reflected in per-share and share figures. Investor presentations furnished with the filing describe the company's capital allocation framework, a cash balance of $837 million, and no debt as of March 31, 2024.
02—Key points
Key Highlights
- Net income of $114.4 million, or $4.97 per diluted share, for the three months ended March 31, 2024, versus $113.1 million in the fourth quarter of 2023.
- Total revenues of $174.1 million, including record water services and operations revenues of $62.7 million.
- Adjusted EBITDA of $152.0 million and free cash flow of $114.5 million for the quarter.
- Water sales rose to $37.1 million from $26.4 million sequentially, principally on a 31.3% increase in water sales volumes.
- Royalty production was 24.8 thousand Boe per day, down from 26.3 thousand Boe per day in the fourth quarter of 2023, with average realized price of $42.71 per Boe.
- Announced a produced water desalination and treatment process, with a pilot tested and a larger facility with initial capacity of 10,000 barrels of water per day in progress.
- Declared a quarterly cash dividend of $1.17 per share payable June 17, 2024, and $10.3 million of common stock repurchases in the quarter.
03—Questions
Frequently Asked Questions
How did Texas Pacific Land's revenue change compared with the prior year?
Total revenues were $174.1 million for the first quarter of 2024, compared with $146.4 million for the first quarter of 2023. The filing attributes the increase to water sales, which grew $15.4 million, and to higher oil and gas royalty volumes, which rose from 20.9 to 24.8 thousand Boe per day. The first quarter of 2023 royalty revenue included an $8.7 million settlement.
What is the new produced water technology the company announced?
The company announced a energy-efficient desalination and treatment process for produced water developed with a technology partner through its subsidiary Transmissive Water Services. The company has completed a pilot test, filed a patent application for the process, and secured exclusive use-rights for the equipment for produced water applications. It is working toward a facility with an initial capacity of 10,000 barrels of produced water per day.
Why did revenue from oil and gas royalties decline sequentially?
Oil and gas royalty revenue decreased $6.6 million from the fourth quarter of 2023, principally due to lower production volumes. Production was 24.8 thousand Boe per day in the first quarter of 2024 versus 26.3 thousand in the fourth quarter, while the average realized price was roughly flat at $42.71 per Boe versus $42.81.
What shareholder returns did the company announce?
The Board declared a quarterly cash dividend of $1.17 per share on May 6, 2024, payable June 17, 2024, to holders of record on June 3, 2024. The company repurchased $10.3 million of common stock during the quarter. The three-for-one stock split took effect March 26, 2024.
04—Continue