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Texas Pacific Land 8-K Report, Financial Results (Aug 7, 2024)

Reports
Earnings & Results·Regulation FD·Exhibits & Filings
Filing Date
Filed August 7, 2024
Period End
August 7, 2024
Security
TPL
In the record · 2020–202610-K610-Q178-K72

TPL filed 6 annual reports (10-K), 17 quarterly reports (10-Q) and 72 current reports (8-K) between 2020 and 2026.

  1. Change in control8-K · Jan ’21Jan ’21
  2. Leadership change8-K · Oct ’23Oct ’23
  3. Leadership change8-K · Sep ’26Sep ’26

01—Abstract

Summary

Summary of the 8-K filed August 7, 2024. Cited figures are marked; the original filing is the authoritative source.

Texas Pacific Land Corporation (NYSE: TPL) filed this Form 8-K on August 7, 2024 to furnish its second-quarter 2024 results press release (Exhibit 99.1) and an updated August 2024 investor presentation (Exhibit 99.2).

For Q2 2024, the company reported consolidated net income of $114.6 milliona, or $4.98 per diluted share, on total revenues of $172.3 million, with Adjusted EBITDA of $153.2 million and free cash flow of $116.0 million. Royalty production was 24.9 thousand Boe per day. Revenue was roughly flat sequentially versus Q1 2024 ($174.1 million), with lower easements and oil and gas royalty revenue offset by higher water sales and produced water royalties.

The Water Services and Operations segment set records, with water sales revenue of $40.7 millionb, produced water royalties of $25.3 million, and segment net income of $34.5 million. Capital allocation was a key announcement. TPL stated it targets cash and cash equivalents of approximately $700 million, and that above this level it will seek to deploy most of its free cash flow toward share repurchases and dividends.

A $10.00c per share special cash dividend, declared June 13, 2024, was paid July 15, 2024. The Board also declared a regular quarterly dividend of $1.17 per share, payable September 17, 2024. The six-month figures show net income of $229.0 million ($9.95 per diluted share), reflecting a three-for-one stock split effective March 26, 2024.

Share repurchases totaled $16.6 milliond for the six months. The presentation notes cash and cash equivalents of $894.7 million at June 30, 2024 and no debt. It also describes TPL's four revenue streams (oil and gas royalties, surface leases, easements and materials, water sales, and produced water royalties) and reports about 6.3 net permits, 9.5 net drilled but uncompleted wells, and 4.0 net completed wells as of June 30, 2024.

02—Key points

Key Highlights

  1. Q2 2024 consolidated net income of $114.6 million, or $4.98 per diluted share, on revenues of $172.3 million
  2. Adjusted EBITDA of $153.2 million and free cash flow of $116.0 million for the quarter
  3. Water Services and Operations segment reported record results: water sales revenue of $40.7 million, produced water royalties of $25.3 million, and segment net income of $34.5 million
  4. Announced a target cash balance of approximately $700 million, with excess free cash flow to be directed mainly to share repurchases and dividends
  5. Paid a $10.00 per share special cash dividend on July 15, 2024, and declared a regular quarterly dividend of $1.17 per share
  6. Royalty production of 24.9 thousand Boe per day in Q2 2024, flat versus Q1 2024
  7. Cash and cash equivalents of $894.7 million at June 30, 2024, with no debt

03—Questions

Frequently Asked Questions

  1. How did TPL perform in the second quarter of 2024?

    TPL reported net income of $114.6 million, or $4.98 per diluted share, on total revenues of $172.3 million. Adjusted EBITDA was $153.2 million and free cash flow was $116.0 million. Revenues were slightly lower than the $174.1 million reported in Q1 2024, mainly due to lower easements and oil and gas royalty revenue, partly offset by higher water sales and produced water royalties.

  2. What is TPL's new capital return policy?

    TPL announced a target cash and cash equivalents balance of approximately $700 million. Above that level, the company will seek to deploy the majority of its free cash flow toward share repurchases and dividends. The announcement was accompanied by a $10.00 per share special cash dividend, paid July 15, 2024.

  3. What dividends were declared?

    The Board declared a special cash dividend of $10.00 per share on June 13, 2024, paid July 15, 2024, to holders of record on July 1, 2024. On August 6, 2024, it declared a quarterly cash dividend of $1.17 per share, payable September 17, 2024, to holders of record on September 3, 2024.

  4. How is the water business performing?

    The Water Services and Operations segment reported record results for the quarter, with water sales revenue of $40.7 million, produced water royalties of $25.3 million, total segment revenues of $68.3 million, and segment net income of $34.5 million. The company stated that water sales volumes rose 16.5% sequentially versus Q1 2024.

  5. What does the filing say about the company's balance sheet?

    Cash and cash equivalents were $894.7 million as of June 30, 2024, and the company reported no debt. The company also furnished an investor presentation that includes a link to a video of CEO Tyler Glover discussing TPL.

04—Continue

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