Why did TPL announce a larger dividend?

CEO Tyler Glover said the 37% increase to the regular quarterly dividend is largely supported by the company's recent acquisitions, which management expects to provide a substantial uplift to near-term financial results and strengthen long-term growth outlook.

What drove the increase in revenue over the first nine months of 2024?

Total revenues rose to $520.0 million from $464.9 million, led by a $28.2 million increase in water sales, which reflected a 27.6% increase in water sales volumes. Oil and gas royalty revenue also increased $17.7 million on higher production volumes, though the 2023 comparison included an $8.7 million one-time settlement.

Why did operating expenses increase in the third quarter?

Total operating expenses rose to $46.2 million from $39.1 million in the second quarter, principally due to higher legal and professional fees, partially offset by lower water service-related expenses.

What did the acquisitions add to TPL's asset base?

TPL acquired mineral interests across approximately 4,106 net royalty acres in the northern Delaware Basin for $120.3 million, net of post-close adjustments, and about 4,120 surface acres and related surface assets in the core of the Midland Basin for $45.0 million, both all-cash transactions.

What additional information did the updated investor presentation provide?

The November 2024 investor presentation, furnished as Exhibit 99.2, includes a link to a video of CEO Tyler Glover and others discussing TPL. The presentation is furnished under Item 7.01 and is not deemed filed for purposes of Section 18 of the Exchange Act.

TPL 8-K: Earnings & Results & Regulation FD

01—Abstract

Summary

Summary of the 8-K filed November 6, 2024. Cited figures are marked; the original filing is the authoritative source.

Texas Pacific Land Corporation (NYSE: TPL) filed this Form 8-K on November 6, 2024 to furnish its press release reporting third-quarter 2024 results and an updated November 2024 investor presentation.

Third-quarter net income was $106.6 million^a, or $4.63 per diluted share, on total revenues of $173.6 million, compared with $114.6 million of net income and $172.3 million of revenues in the second quarter. Royalty production reached a record 28.3 thousand Boe per day, up from 24.9 thousand in the prior quarter, and Adjusted EBITDA was $144.1 million with free cash flow of $106.9 million. Nine-month net income was $335.6 million, or $14.58 per diluted share, on revenues of $520.0 million.

During the quarter the company completed two all-cash acquisitions: mineral interests across approximately 4,106 net royalty acres in the northern Delaware Basin for $120.3 million^b, and about 4,120 surface acres in the core of the Midland Basin for $45.0 million. The company also declared a quarterly cash dividend of $1.60 per share, payable December 16, 2024, which management described as a 37% increase over the prior regular dividend and largely supported by the recent acquisitions. Cash and cash equivalents were $533.9 million at September 30, 2024, and the company reported no debt.

Quarter-over-quarter, operating expenses rose to $46.2 million^c from $39.1 million, mainly due to higher legal and professional fees, partially offset by lower water service-related expenses. Water sales declined $4.4 million sequentially on a 9.0% decrease in water sales volumes. Nine-month water sales volumes grew 27.6% year over year, and the company also highlighted an ongoing produced water desalination technology pilot with a planned larger test facility.

02—Key points

Key Highlights

Q3 2024 net income of $106.6 million, or $4.63 per diluted share, versus $114.6 million in Q2 2024
Record royalty production of 28.3 thousand Boe per day in Q3 2024, up from 24.9 thousand in Q2 2024
Two all-cash acquisitions: northern Delaware Basin mineral interests (about 4,106 net royalty acres) for $120.3 million and Midland Basin surface acreage (about 4,120 acres) for $45.0 million
Quarterly cash dividend declared at $1.60 per share, payable December 16, 2024; management cited a 37% increase to the regular dividend
Q3 2024 Adjusted EBITDA of $144.1 million and free cash flow of $106.9 million
Nine-month 2024 total revenues of $520.0 million, with water sales up $28.2 million year over year
Cash and cash equivalents of $533.9 million at September 30, 2024, with no debt reported

03—Questions

Frequently Asked Questions

Why did TPL announce a larger dividend?
CEO Tyler Glover said the 37% increase to the regular quarterly dividend is largely supported by the company's recent acquisitions, which management expects to provide a substantial uplift to near-term financial results and strengthen long-term growth outlook.
What drove the increase in revenue over the first nine months of 2024?
Total revenues rose to $520.0 million from $464.9 million, led by a $28.2 million increase in water sales, which reflected a 27.6% increase in water sales volumes. Oil and gas royalty revenue also increased $17.7 million on higher production volumes, though the 2023 comparison included an $8.7 million one-time settlement.
Why did operating expenses increase in the third quarter?
Total operating expenses rose to $46.2 million from $39.1 million in the second quarter, principally due to higher legal and professional fees, partially offset by lower water service-related expenses.
What did the acquisitions add to TPL's asset base?
TPL acquired mineral interests across approximately 4,106 net royalty acres in the northern Delaware Basin for $120.3 million, net of post-close adjustments, and about 4,120 surface acres and related surface assets in the core of the Midland Basin for $45.0 million, both all-cash transactions.
What additional information did the updated investor presentation provide?
The November 2024 investor presentation, furnished as Exhibit 99.2, includes a link to a video of CEO Tyler Glover and others discussing TPL. The presentation is furnished under Item 7.01 and is not deemed filed for purposes of Section 18 of the Exchange Act.

04—Continue

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