Texas Pacific Land Corporation Announces Fourth Quarter and Full Year 2024 Results

Rhea-AI Summary

Texas Pacific Land (TPL) reported strong Q4 2024 and full-year results, achieving record performance across multiple segments. Q4 consolidated net income was $118.4 million ($5.14 per share), with total revenues of $185.8 million. The company reached record oil and gas royalty production of 29.1 thousand Boe per day.

Full-year 2024 highlights include record water segment performance with water sales revenue of $150.7 million and produced water royalties revenue of $104.1 million. TPL completed two mineral interest acquisitions totaling $395.5 million, adding approximately 11,600 net royalty acres. The company reported full-year consolidated net income of $454.0 million ($19.72 per share) and paid $347.3 million in total cash dividends.

The company declared a quarterly cash dividend of $1.60 per share, payable March 17, 2025. TPL also began construction of a sub-scale produced water desalination test facility with completion expected mid-2025.

Positive

• Record Q4 oil and gas royalty production of 29.1 thousand Boe per day
• Water segment achieved record revenue of $265.0 million in 2024
• Full-year net income of $454.0 million ($19.72 per share)
• Strategic acquisitions adding 11,600 net royalty acres for $395.5 million
• Free cash flow of $461.1 million for 2024
• 31% increase in water sales volumes year-over-year

Negative

• Average realized price per Boe decreased to $39.87 in 2024 from $42.58 in 2023
• Operating expenses increased to $166.7 million from $145.5 million year-over-year

Insights

Financial Analyst

TPL's Q4 and FY2024 results demonstrate the company's exceptional execution across its diversified revenue streams, with particularly notable achievements in its water segment. The record water sales revenue of $150.7M and produced water royalties of $104.1M underscore TPL's growing dominance in water infrastructure, a critical component for Permian Basin operations.

The strategic acquisitions completed in 2024, totaling $395.5M, significantly enhance TPL's royalty position in the Midland Basin. These acquisitions are particularly valuable given their location in core areas where operators are achieving superior well results, evidenced by the 10,100 ft average lateral lengths of new producing wells. The company's expansion of its royalty acreage by 11,600 net acres positions it to capture additional value from future development.

The company's innovative approach to water management, highlighted by the development of energy-efficient desalination technology and the construction of a test facility, represents a significant strategic initiative. This positions TPL to potentially capture additional value from produced water, a growing challenge in the Permian Basin where water handling costs can significantly impact operator economics.

TPL's financial performance remains robust, with free cash flow of $461.1M for the year supporting substantial shareholder returns through both regular dividends ($5.11 per share) and a special dividend ($10.00 per share). The company's low-cost business model, requiring minimal capital expenditure while generating substantial cash flow, continues to differentiate it from traditional E&P companies.

The increase in royalty production to 26.8 thousand Boe per day for the full year, up from 23.5 thousand Boe per day in 2023, demonstrates the quality of TPL's acreage position and ongoing development activity by operators. This growth occurred despite lower realized prices, highlighting the resilience of TPL's business model in varying commodity price environments.

– Achieved Record Annual Performance From Water Segment

– Earnings Call to be Held Thursday, February 20, 2025 at 7:30 am CT

DALLAS--(BUSINESS WIRE)-- Texas Pacific Land Corporation (NYSE: TPL) (the “Company,” “TPL,” “we,” “our” or “us”), one of the largest landowners in the State of Texas with surface and royalty ownership that provide revenue opportunities through the support of energy production and extraction, today announced its financial and operating results for the fourth quarter and full year of 2024.

Fourth Quarter 2024 Highlights

• Acquired mineral interests across 7,490 net royalty acres located primarily in the Midland Basin for a purchase price of $275.2 million, net of post-close adjustments, in an all-cash transaction in October 2024.
• Royalty production of 29.1 thousand barrels of oil equivalent (“Boe”) per day, a company record
• As of December 31, 2024, TPL’s royalty acreage had an estimated 6.4 net well permits, 13.2 net drilled but uncompleted wells, 3.0 net completed wells, and 86.8 net producing wells; net producing wells added during the quarter had an average lateral length of approximately 10,100 ft.
• Consolidated net income of $118.4 million, or $5.14 per share (diluted)
• Adjusted EBITDA⁽¹⁾ of $161.3 million
• Free cash flow ⁽¹⁾ of $123.7 million
• Quarterly cash dividend of $1.60 per share was paid on December 16, 2024

Full Year 2024 Highlights

• Record oil and gas royalty production of 26.8 thousand Boe per day
• Water Service and Operations segment achieved record performance in 2024 for the following:
  • Water sales revenue of $150.7 million
  • Produced water royalties revenue of $104.1 million
  • Total segment revenues of $265.0 million
  • Total segment net income of $139.1 million
• Developed an energy-efficient method of produced water desalination and treatment; the Company successfully conducted a technology pilot and has begun construction of a sub-scale produced water test facility with an initial capacity of 10,000 barrels of produced water per day
• Three-for-one stock split effected March 26, 2024
• Completed two acquisitions of mineral interests for a combined $395.5 million, both in all cash transactions, adding approximately 11,600 net royalty acres to our existing royalty acreage. The acquisitions were completed in August and October 2024.
• Acquired 4,120 surface acres and other surface-related assets located in the core of the Midland Basin for a purchase price of $45.0 million, in an all-cash transaction closed in August 2024.
• Consolidated net income of $454.0 million, or $19.72 per share (diluted)
• Adjusted EBITDA⁽¹⁾ of $610.7 million
• Free cash flow ⁽¹⁾ of $461.1 million
• $347.3 million of total cash dividends paid through December 31, 2024 (composed of a $10.00 per share special dividend and $5.11 per share in regular quarterly cash dividends)
• $29.2 million of common stock repurchases

(1)

Reconciliations of non-GAAP performance measures are provided in the tables below.

“Fourth quarter 2024 represented a strong finish to a year full of milestones and accomplishments for TPL,” said Tyler Glover, Chief Executive Officer of the Company. “In the quarter, we delivered record oil and gas royalty production and produced water royalty volumes. For the full year 2024, TPL set annual records across nearly every major performance metric, including oil and gas royalty production, water sales volumes and revenues, produced water royalty volumes and revenues, net income and free cash flow per share. Throughout 2024, we deployed over $400 million towards accretive, high-quality royalty interests and surface assets, providing an incremental growth tailwind.

“Beyond our legacy business, we are keenly pursuing various next-gen growth prospects and continue to advance commercial discussions across numerous opportunities. In addition, construction has begun on our sub-scale produced water desalination test facility, and we remain on-track for a mid-2025 completion. Furthermore, there remains a compelling opportunity to consolidate an enormous, yet fragmented market for oil and gas royalties, surface, and water assets. With our unmatched footprint overlapping premier hydrocarbon and non-hydrocarbon natural resources, TPL remains well-positioned to drive accretive growth.”

Financial Results for the Fourth Quarter of 2024 - Sequential

The Company reported net income of $118.4 million for the fourth quarter of 2024 compared to net income of $106.6 million for the third quarter of 2024.

Total revenues for the fourth quarter of 2024 were $185.8 million compared to $173.6 million for the third quarter of 2024. The increase in revenues was primarily due to a $7.5 million increase in easements and other surface-related income and a $2.5 million increase in oil and gas royalty revenue compared to the third quarter of 2024. The Company’s share of production was 29.1 thousand Boe per day for the fourth quarter of 2024 versus 28.3 thousand Boe per day for the third quarter of 2024, and the average realized price was $37.93 per Boe in the fourth quarter of 2024 compared to $38.04 per Boe in the third quarter of 2024. TPL’s revenue streams are directly impacted by commodity prices and development and operating decisions made by its customers.

Total operating expenses were $43.2 million for the fourth quarter of 2024 compared to $46.2 million for the third quarter of 2024. The decrease in operating expenses was principally related to a $5.8 million decrease in general and administrative expenses and a $2.4 million decrease in water service-related expenses, partially offset by a $5.7 million increase in depreciation, depletion and amortization during the fourth quarter of 2024 over the same period.

Financial Results for the Year Ended December 31, 2024

Total revenues for the year ended December 31, 2024 were $705.8 million compared to $631.6 million for the prior year. All revenue streams except land sales, increased for the year ended December 31, 2024 compared to the prior year, with a $38.5 million increase in water sales being the biggest contributor. The growth in water sales was principally due to an increase of 31.0% in water sales volumes for the year ended December 31, 2024 compared to the prior year. Produced water royalties increased $19.9 million, principally due to increased produced water volumes. Additionally, oil and gas royalty revenue increased $15.9 million, primarily due to higher production volumes for the year ended December 31, 2024 compared to the prior year. Oil and gas royalty revenue for the year ended December 31, 2023 included an $8.7 million settlement with an operator with respect to unpaid oil and gas royalties for older production periods. Excluding the impact of the $8.7 million settlement on oil and gas royalty revenues for the year ended December 31, 2023, oil and gas royalty revenue for the year ended December 31, 2024 increased $24.6 million compared to the prior year. The Company’s share of production was 26.8 thousand Boe per day for the year ended December 31, 2024 versus 23.5 thousand Boe per day for the prior year, and the average realized price was $39.87 per Boe for the year ended December 31, 2024 versus $42.58 per Boe for the prior year. TPL’s revenue streams are directly impacted by commodity prices and development and operating decisions made by its customers.

Total operating expenses were $166.7 million for the year ended December 31, 2024 compared to $145.5 million for the prior year. The increase in operating expenses was principally related to a $12.6 million increase in water service-related expenses, $10.4 million increase in depreciation, depletion and amortization, and a $10.2 million increase in salaries and related employee expenses, partially offset by a $12.0 million decrease in general and administrative expenses.

Quarterly Dividend Declared

On February 18, 2025, the Company’s Board of Directors declared a quarterly cash dividend of $1.60 per share, payable on March 17, 2025 to stockholders of record at the close of business on March 3, 2025.

Conference Call and Webcast Information

The Company will hold a conference call on Thursday, February 20, 2025 at 7:30 a.m. Central Time to discuss fourth quarter and year end results. A live webcast of the conference call will be available on the Investors section of the Company’s website at www.TexasPacific.com. To listen to the live broadcast, go to the site at least 15 minutes prior to the scheduled start time in order to register and install any necessary audio software.

The conference call can also be accessed by dialing 1-877-407-4018 or 1-201-689-8471. The telephone replay can be accessed by dialing 1-844-512-2921 or 1-412-317-6671 and providing the conference ID# 13745175. The telephone replay will be available starting shortly after the call through March 6, 2025.

About Texas Pacific Land Corporation

Texas Pacific Land Corporation is one of the largest landowners in the State of Texas with approximately 873,000 acres of land, with the majority of its ownership concentrated in the Permian Basin. The Company is not an oil and gas producer, but its surface and royalty ownership provide revenue opportunities throughout the life cycle of a well. These revenue opportunities include fixed fee payments for use of the Company’s land, revenue for sales of materials (caliche) used in the construction of infrastructure, providing sourced water and/or treated produced water, revenue from the Company’s oil and gas royalty interests, and revenue related to saltwater disposal on the Company’s land. The Company also generates revenue from pipeline, power line and utility easements, commercial leases and temporary permits principally related to a variety of land uses including, but not limited to, midstream infrastructure projects and hydrocarbon processing facilities.

Visit TPL at www.TexasPacific.com.

Cautionary Statement Regarding Forward-Looking Statements

Certain statements in this news release are, and certain statements made on the related conference call may be, forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that are based on TPL’s beliefs, as well as assumptions made by, and information currently available to, TPL, and therefore involve risks and uncertainties that are difficult to predict. Generally, future or conditional verbs such as “will,” “would,” “should,” “could,” or “may” and the words “believe,” “anticipate,” “continue,” “intend,” “expect” and similar expressions or the negative of such terms identify forward-looking statements. Forward-looking statements include, but are not limited to, references to strategies, plans, objectives, expectations, intentions, assumptions, future operations and prospects; statements regarding the anticipated benefits of recent acquisitions; and other statements that are not historical facts. You should not place undue reliance on forward-looking statements. Although TPL believes that plans, intentions and expectations reflected in or suggested by any forward-looking statements made herein are reasonable, TPL may be unable to achieve such plans, intentions or expectations and actual results, and performance or achievements may differ materially from those set forth in the forward-looking statements due to a number of factors, including, but not limited to: the initiation or outcome of potential litigation; and any changes in general economic and/or industry specific conditions; and the other risks discussed in TPL’s Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q. You can access TPL’s filings with the Securities and Exchange Commission (“SEC”) through the SEC’s website at www.sec.gov and TPL strongly encourages you to do so. These forward-looking statements are based only on information available to TPL and speak only as of the date hereof. Except as required by applicable law, TPL undertakes no obligation to update any forward-looking statements or other statements herein for revisions or changes after this communication is made.

FINANCIAL AND OPERATIONAL RESULTS
(unaudited)
		Three Months Ended						Years Ended
		December 31, 2024			September 30, 2024			December 31, 2024			December 31, 2023(2)
Company’s share of production volumes(1):
Oil (MBbls)			1,115			1,046			4,118			3,701
Natural gas (MMcf)			4,763			4,654			17,074			14,528
NGL (MBbls)			768			779			2,841			2,453
Equivalents (MBoe)			2,676			2,600			9,804			8,575
Equivalents per day (MBoe/d)			29.1			28.3			26.8			23.5
Oil and gas royalty revenue (in thousands):
Oil royalties		$	75,286		$	75,427		$	298,074		$	273,304
Natural gas royalties			4,882			4,201			18,512			29,915
NGL royalties			16,786			14,816			56,745			45,510
Total oil and gas royalties		$	96,954		$	94,444		$	373,331		$	348,729
Realized prices (1):
Oil ($/Bbl)		$	70.73		$	75.53		$	75.80		$	77.33
Natural gas ($/Mcf)		$	1.11		$	0.98		$	1.17		$	2.23
NGL ($/Bbl)		$	23.63		$	20.57		$	21.60		$	20.05
Equivalents ($/Boe)		$	37.93		$	38.04		$	39.87		$	42.58

____________________________
(1)		Term		Definition
		Bbl		One stock tank barrel of 42 U.S. gallons liquid volume used herein in reference to crude oil, condensate or NGLs.
		MBbls		One thousand barrels of crude oil, condensate or NGLs.
		MBoe		One thousand Boe.
		MBoe/d		One thousand Boe per day.
		Mcf		One thousand cubic feet of natural gas.
		MMcf		One million cubic feet of natural gas.
		NGL		Natural gas liquids. Hydrocarbons found in natural gas that may be extracted as liquefied petroleum gas and natural gasoline.
(2)		The metrics and dollars provided for the year ended December 31, 2023 exclude the impact of an $8.7 million settlement with an operator with respect to unpaid oil and gas royalties.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except share and per share amounts) (unaudited)
		Three Months Ended						Years Ended
		December 31, 2024			September 30, 2024			December 31, 2024			December 31, 2023
Revenues:
Oil and gas royalties		$	96,954		$	94,444		$	373,331		$	357,394
Water sales			36,737			36,211			150,724			112,203
Produced water royalties			28,089			27,727			104,123			84,260
Easements and other surface-related income			21,761			14,280			73,257			70,932
Land sales			2,243			901			4,388			6,806
Total revenues			185,784			173,563			705,823			631,595
Expenses:
Salaries and related employee expenses			14,359			14,030			53,621			43,384
Water service-related expenses			9,357			11,731			46,124			33,566
General and administrative expenses			6,752			12,520			34,483			46,450
Depreciation, depletion and amortization			11,467			5,762			25,162			14,757
Ad valorem and other taxes			1,305			2,189			7,295			7,385
Total operating expenses			43,240			46,232			166,685			145,542
Operating income			142,544			127,331			539,138			486,053
Other income, net			8,434			8,086			39,683			31,508
Income before income taxes			150,978			135,417			578,821			517,561
Income tax expense			32,618			28,823			124,861			111,916
Net income		$	118,360		$	106,594		$	453,960		$	405,645
Net income per share of common stock (1)
Basic		$	5.15		$	4.64		$	19.75		$	17.60
Diluted		$	5.14		$	4.63		$	19.72		$	17.59
Weighted average number of shares of common stock outstanding (1)
Basic			22,974,238			22,979,781			22,986,197			23,044,305
Diluted			23,015,530			23,012,169			23,019,751			23,059,845

____________________________
(1)		All share and share price amounts reflect the three-for-one stock split effected on March 26, 2024.

SEGMENT OPERATING RESULTS
(dollars in thousands) (unaudited)
		Three Months Ended
		December 31, 2024									September 30, 2024
		Land and Resource Management			Water Services and Operations			Consolidated			Land and Resource Management			Water Services and Operations			Consolidated
Revenues:
Oil and gas royalties		$	96,954		$	—		$	96,954		$	94,444		$	—		$	94,444
Water sales			—			36,737			36,737			—			36,211			36,211
Produced water royalties			—			28,089			28,089			—			27,727			27,727
Easements and other surface-related income			19,431			2,330			21,761			11,303			2,977			14,280
Land sales			2,243			—			2,243			901			—			901
Total revenues			118,628			67,156			185,784			106,648			66,915			173,563
Expenses:
Salaries and related employee expenses			7,366			6,993			14,359			7,182			6,848			14,030
Water service-related expenses			—			9,357			9,357			—			11,731			11,731
General and administrative expenses			4,509			2,243			6,752			10,359			2,161			12,520
Depreciation, depletion and amortization			7,327			4,140			11,467			2,135			3,627			5,762
Ad valorem and other taxes			1,269			36			1,305			2,189			—			2,189
Total operating expenses			20,471			22,769			43,240			21,865			24,367			46,232
Operating income			98,157			44,387			142,544			84,783			42,548			127,331
Other income, net			6,317			2,117			8,434			6,446			1,640			8,086
Income before income taxes			104,474			46,504			150,978			91,229			44,188			135,417
Income tax expense			22,543			10,075			32,618			19,359			9,464			28,823
Net income		$	81,931		$	36,429		$	118,360		$	71,870		$	34,724		$	106,594

SEGMENT OPERATING RESULTS (Continued)
(dollars in thousands) (unaudited)
		Years Ended
		December 31, 2024									December 31, 2023
		Land and Resource Management			Water Services and Operations			Consolidated			Land and Resource Management			Water Services and Operations			Consolidated
Revenues:
Oil and gas royalties		$	373,331		$	—		$	373,331		$	357,394		$	—		$	357,394
Water sales			—			150,724			150,724			—			112,203			112,203
Produced water royalties			—			104,123			104,123			—			84,260			84,260
Easements and other surface-related income			63,074			10,183			73,257			67,905			3,027			70,932
Land sales			4,388			—			4,388			6,806			—			6,806
Total revenues			440,793			265,030			705,823			432,105			199,490			631,595
Expenses:
Salaries and related employee expenses			27,493			26,128			53,621			21,945			21,439			43,384
Water service-related expenses			—			46,124			46,124			—			33,566			33,566
General and administrative expenses			25,531			8,952			34,483			39,078			7,372			46,450
Depreciation, depletion and amortization			10,968			14,194			25,162			3,073			11,684			14,757
Ad valorem and other taxes			7,257			38			7,295			7,382			3			7,385
Total operating expenses			71,249			95,436			166,685			71,478			74,064			145,542
Operating income			369,544			169,594			539,138			360,627			125,426			486,053
Other income, net			31,707			7,976			39,683			30,384			1,124			31,508
Income before income taxes			401,251			177,570			578,821			391,011			126,550			517,561
Income tax expense			86,350			38,511			124,861			84,305			27,611			111,916
Net income		$	314,901		$	139,059		$	453,960		$	306,706		$	98,939		$	405,645

NON-GAAP PERFORMANCE MEASURES AND DEFINITIONS

In addition to amounts presented in accordance with generally accepted accounting principles in the United States of America (“GAAP”), we also present certain supplemental non-GAAP performance measures. These measures are not to be considered more relevant or accurate than the measures presented in accordance with GAAP. In compliance with the requirements of the SEC, our non-GAAP measures are reconciled to net income, the most directly comparable GAAP performance measure. For all non-GAAP measures, neither the SEC nor any other regulatory body has passed judgment on these non-GAAP measures.

EBITDA, Adjusted EBITDA and Free Cash Flow

EBITDA is a non-GAAP financial measure of earnings before interest expense, taxes, depreciation, depletion and amortization. Its purpose is to highlight earnings without finance, taxes, and depreciation, depletion and amortization expense, and its use is limited to specialized analysis. We calculate Adjusted EBITDA as EBITDA plus employee share-based compensation and less pension curtailment and settlement gain. The pension curtailment and settlement gain is related to a buyout by a third party of defined benefit obligations under our pension plan and the subsequent freezing of our pension plan, both of which occurred in the fourth quarter of 2024. We have excluded the pension curtailment and settlement gain from the calculation of Adjusted EBITDA as such gain is a non-recurring item and is not related to our core business. The purpose of presenting Adjusted EBITDA is to highlight earnings without non-cash activity such as share-based compensation and other non-recurring or unusual items, if applicable. We calculate Free Cash Flow as Adjusted EBITDA less current income tax expense and capital expenditures. The purpose of presenting Free Cash Flow is to provide an additional measure of operating performance. We have presented EBITDA, Adjusted EBITDA and Free Cash Flow because we believe that these metrics are useful supplements to net income in analyzing the Company’s operating performance. Our definitions of EBITDA, Adjusted EBITDA and Free Cash Flow may differ from computations of similarly titled measures of other companies.

The following table presents a reconciliation of EBITDA, Adjusted EBITDA and Free Cash Flow to net income for the three months ended December 31, 2024 and September 30, 2024 and for the years ended December 31, 2024 and 2023 (in thousands):

		Three Months Ended								Years Ended
		December 31, 2024				September 30, 2024				December 31, 2024				December 31, 2023
Net income		$	118,360			$	106,594			$	453,960			$	405,645
Add:
Income tax expense			32,618				28,823				124,861				111,916
Depreciation, depletion and amortization			11,467				5,762				25,162				14,757
EBITDA			162,445				141,179				603,983				532,318
Add (deduct):
Employee share-based compensation			3,509				2,935				11,364				9,124
Pension curtailment and settlement gain			(4,616	)			—				(4,616	)			—
Adjusted EBITDA			161,338				144,114				610,731				541,442
Deduct:
Current income tax expense			(30,177	)			(27,416	)			(120,257	)			(110,517	)
Capital expenditures			(7,429	)			(9,833	)			(29,423	)			(15,431	)
Free Cash Flow		$	123,732			$	106,865			$	461,051			$	415,494

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20250219899731/en/

Investor Relations

IR@TexasPacific.com

Source: Texas Pacific Land Corporation

FAQ

What was TPL's Q4 2024 earnings per share?

TPL reported Q4 2024 earnings of $5.14 per share (diluted) with consolidated net income of $118.4 million.

How much did TPL spend on acquisitions in 2024?

TPL spent approximately $440.5 million on acquisitions in 2024, including $395.5 million for mineral interests and $45.0 million for surface acres.

What was TPL's total dividend payout in 2024?

TPL paid $347.3 million in total cash dividends in 2024, consisting of a $10.00 per share special dividend and $5.11 per share in regular quarterly dividends.

What was TPL's water segment revenue in 2024?

TPL's water segment achieved record revenue of $265.0 million in 2024, including $150.7 million from water sales and $104.1 million from produced water royalties.

What is TPL's latest quarterly dividend for 2025?

TPL declared a quarterly cash dividend of $1.60 per share, payable on March 17, 2025.