Texas Pacific Land Corporation Announces Second Quarter 2023 Results
Earnings
Second Quarter 2023 Highlights
-
Net income of
, or$100.4 million per share (basic) and$13.06 per share (diluted)$13.05
-
Revenues of
$160.6 million
-
Adjusted EBITDA(1) of
$133.6 million
-
Free cash flow (1) of
$105.1 million
- Royalty production of 24.9 thousand barrels of oil equivalent per day
-
of common stock repurchases$19.5 million
-
Quarterly cash dividend of
per share paid on June 15, 2023$3.25
- As of June 30, 2023, TPL's royalty acreage had an estimated 4.9 net well permits, 8.2 net drilled but uncompleted wells, 2.3 net completed wells, and 62.6 net producing wells.
Six Months Ended June 30, 2023 Highlights
-
Net income of
, or$187.0 million per share (basic) and$24.31 per share (diluted)$24.30
-
Revenues of
$307.0 million
-
Adjusted EBITDA(1) of
$249.5 million
-
Free Cash Flow(1) of
$193.2 million
- Royalty production of 22.9 thousand barrels of oil equivalent per day
-
of common stock repurchases$26.2 million
-
of total cash dividends paid during 2023 (comprised of$50.0 million per share in regular dividends)$6.50
(1) Reconciliations of Non-GAAP measures are provided in the tables below.
“For the second quarter of 2023, TPL achieved new records across a number of key metrics,” said Tyler Glover, Chief Executive Officer of the Company. “Oil and gas royalty production, source water revenues and volumes, and produced water royalties all set new Company quarterly records. Easements and surface-related income continued a strong year generating its largest quarterly revenue since 2019. Although commodity prices were lower this quarter on a sequential quarter basis, our other revenue streams outside of oil and gas royalties attained impressive growth. With continued strong operator activity levels across our Permian royalty and surface acreage, TPL is well-positioned to capture these growing opportunities and to extract maximum value from our unique and expansive asset base.”
Financial Results for the Second Quarter of 2023
The Company reported net income of
Total revenues for the second quarter of 2023 were
Our total operating expenses of
Financial Results for the Six Months Ended June 30, 2023
The Company reported net income of
Our total revenues decreased
Our total operating expenses of
Quarterly Dividend Declared
On August 1, 2023, the Board declared a quarterly cash dividend of
Conference
The Company will hold a conference call on Thursday, August 3, 2023 at 7:30 a.m. Central Time to discuss second quarter 2023 results. A live webcast of the conference call will be available on the Investors section of the Company’s website at http://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 1-844-826-3035 or 1-412-317-5195. The telephone replay can be accessed by dialing 1-844-512-2921 or 1-412-317-6671 and providing the conference ID# 10180419. The telephone replay will be available starting shortly after the call through August 17, 2023.
About Texas Pacific Land Corporation
Texas Pacific Land Corporation is one of the largest landowners in the
Visit TPL at http://www.TexasPacific.com.
Cautionary Statement Regarding Forward-Looking Statements
This news release may contain 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 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 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 vary materially and adversely from those envisaged in this news release 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. These risks, as well as other risks associated with TPL are also more fully discussed in our Annual Report on Form 10-K and our Quarterly Reports on Form 10-Q. You can access TPL’s filings with the SEC through the SEC website at http://www.sec.gov and TPL strongly encourages you to do so. 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 June 30, |
|
Six Months Ended June 30, |
||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
Our share of production volumes(1) (2): |
|
|
|
|
|
|
|
|
Oil (MBbls) |
|
1,000 |
|
813 |
|
1,792 |
|
1,609 |
Natural gas (MMcf) |
|
3,782 |
|
2,912 |
|
7,088 |
|
6,191 |
NGL (MBbls) |
|
638 |
|
507 |
|
1,177 |
|
1,035 |
Equivalents (MBoe) |
|
2,269 |
|
1,805 |
|
4,151 |
|
3,676 |
Equivalents per day (MBoe/d) |
|
24.9 |
|
19.8 |
|
22.9 |
|
20.3 |
|
|
|
|
|
|
|
|
|
Oil and gas royalties (in thousands) (2): |
|
|
|
|
|
|
|
|
Oil royalties |
|
|
|
|
|
|
|
|
Natural gas royalties |
|
3,775 |
|
17,650 |
|
14,731 |
|
33,825 |
NGL royalties |
|
8,454 |
|
19,652 |
|
21,069 |
|
35,968 |
Total oil and gas royalties |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized prices (2): |
|
|
|
|
|
|
|
|
Oil ($/Bbl) |
|
|
|
|
|
|
|
|
Natural gas ($/Mcf) |
|
|
|
|
|
|
|
|
NGL ($/Bbl) |
|
|
|
|
|
|
|
|
Equivalents ($/Boe) |
|
|
|
|
|
|
|
|
(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 provided exclude the impact of the |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except share and per share amounts) (unaudited)
|
||||||||
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
Revenues: |
|
|
|
|
|
|
|
|
Oil and gas royalties |
|
|
|
|
|
|
|
|
Water sales |
|
37,648 |
|
22,272 |
|
59,377 |
|
41,092 |
Produced water royalties |
|
20,841 |
|
18,669 |
|
40,975 |
|
33,539 |
Easements and other surface-related income |
|
18,708 |
|
13,990 |
|
33,677 |
|
23,182 |
Land sales and other operating revenue |
|
1,000 |
|
71 |
|
1,400 |
|
352 |
Total revenues |
|
160,609 |
|
176,270 |
|
306,971 |
|
323,605 |
|
|
|
|
|
|
|
|
|
Expenses: |
|
|
|
|
|
|
|
|
Salaries and related employee expenses |
|
10,596 |
|
9,588 |
|
21,189 |
|
18,973 |
Water service-related expenses |
|
10,287 |
|
3,915 |
|
15,943 |
|
6,697 |
General and administrative expenses |
|
3,329 |
|
3,674 |
|
6,884 |
|
6,641 |
Legal and professional fees |
|
10,154 |
|
1,163 |
|
26,782 |
|
2,882 |
Ad valorem and other taxes |
|
2,070 |
|
2,042 |
|
3,644 |
|
4,085 |
Depreciation, depletion and amortization |
|
3,893 |
|
4,180 |
|
7,297 |
|
8,306 |
Total operating expenses |
|
40,329 |
|
24,562 |
|
81,739 |
|
47,584 |
|
|
|
|
|
|
|
|
|
Operating income |
|
120,280 |
|
151,708 |
|
225,232 |
|
276,021 |
|
|
|
|
|
|
|
|
|
Other income, net |
|
6,871 |
|
630 |
|
12,260 |
|
706 |
Income before income taxes |
|
127,151 |
|
152,338 |
|
237,492 |
|
276,727 |
Income tax expense |
|
26,758 |
|
33,444 |
|
50,531 |
|
59,933 |
Net income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share of common stock |
|
|
|
|
|
|
|
|
Basic |
|
|
|
|
|
|
|
|
Diluted |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares of common stock outstanding |
|
|
|
|
|
|
|
|
Basic |
|
7,685,662 |
|
7,733,730 |
|
7,689,352 |
|
7,737,527 |
Diluted |
|
7,690,950 |
|
7,737,112 |
|
7,694,548 |
|
7,739,859 |
SEGMENT OPERATING RESULTS (dollars in thousands) (unaudited)
|
||||||||
|
|
Three Months Ended June 30, |
||||||
|
|
2023 |
|
2022 |
||||
Revenues: |
|
|
|
|
|
|
|
|
Land and resource management: |
|
|
|
|
|
|
|
|
Oil and gas royalties |
|
|
|
51 % |
|
|
|
68 % |
Easements and other surface-related income |
|
17,908 |
|
11 % |
|
12,046 |
|
7 % |
Land sales and other operating revenue |
|
1,000 |
|
1 % |
|
71 |
|
— % |
Total land and resource management revenue |
|
101,320 |
|
63 % |
|
133,385 |
|
75 % |
|
|
|
|
|
|
|
|
|
Water services and operations: |
|
|
|
|
|
|
|
|
Water sales |
|
37,648 |
|
24 % |
|
22,272 |
|
13 % |
Produced water royalties |
|
20,841 |
|
13 % |
|
18,669 |
|
11 % |
Easements and other surface-related income |
|
800 |
|
— % |
|
1,944 |
|
1 % |
Total water services and operations revenue |
|
59,289 |
|
37 % |
|
42,885 |
|
25 % |
Total consolidated revenues |
|
|
|
100 % |
|
|
|
100 % |
|
|
|
|
|
|
|
|
|
Net income: |
|
|
|
|
|
|
|
|
Land and resource management |
|
|
|
69 % |
|
|
|
81 % |
Water services and operations |
|
30,760 |
|
31 % |
|
22,820 |
|
19 % |
Total consolidated net income |
|
|
|
100 % |
|
|
|
100 % |
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
||||||
|
|
2023 |
|
2022 |
||||
Revenues: |
|
|
|
|
|
|
|
|
Land and resource management: |
|
|
|
|
|
|
|
|
Oil and gas royalties |
|
|
|
56 % |
|
|
|
70 % |
Easements and other surface-related income |
|
32,401 |
|
11 % |
|
20,940 |
|
6 % |
Land sales and other operating revenue |
|
1,400 |
|
— % |
|
352 |
|
— % |
Total land and resource management revenue |
|
205,343 |
|
67 % |
|
246,732 |
|
76 % |
|
|
|
|
|
|
|
|
|
Water services and operations: |
|
|
|
|
|
|
|
|
Water sales |
|
59,377 |
|
20 % |
|
41,092 |
|
13 % |
Produced water royalties |
|
40,975 |
|
13 % |
|
33,539 |
|
10 % |
Easements and other surface-related income |
|
1,276 |
|
— % |
|
2,242 |
|
1 % |
Total water services and operations revenue |
|
101,628 |
|
33 % |
|
76,873 |
|
24 % |
Total consolidated revenues |
|
|
|
100 % |
|
|
|
100 % |
|
|
|
|
|
|
|
|
|
Net income: |
|
|
|
|
|
|
|
|
Land and resource management |
|
|
|
72 % |
|
|
|
82 % |
Water services and operations |
|
51,985 |
|
28 % |
|
39,564 |
|
18 % |
Total consolidated net income |
|
|
|
100 % |
|
|
|
100 % |
|
|
|
|
|
|
|
|
|
NON-GAAP PERFORMANCE MEASURES AND DEFINITIONS
In addition to amounts presented in accordance with generally accepted accounting principles in
EBITDA, Adjusted EBITDA and Free Cash Flow
EBITDA is a non-GAAP financial measurement of earnings before interest, 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 excluding employee share-based compensation. Its purpose is to highlight earnings without non-cash activity such as share-based compensation and/or other non-recurring or unusual items. We calculate Free Cash Flow as Adjusted EBITDA less current income tax expense and capital expenditures. Its purpose 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 Adjusted EBITDA and Free Cash Flow may differ from computations of similarly titled measures of other companies.
The following table presents a reconciliation of net income to EBITDA, Adjusted EBITDA and Free Cash Flow for the three and six months ended June 30, 2023 and 2022 (in thousands):
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
Net income |
|
$ 100,393 |
|
$ 118,894 |
|
$ 186,961 |
|
$ 216,794 |
Add: |
|
|
|
|
|
|
|
|
Income tax expense |
|
26,758 |
|
33,444 |
|
50,531 |
|
59,933 |
Depreciation, depletion and amortization |
|
3,893 |
|
4,180 |
|
7,297 |
|
8,306 |
EBITDA |
|
131,044 |
|
156,518 |
|
244,789 |
|
285,033 |
Add: |
|
|
|
|
|
|
|
|
Employee share-based compensation |
|
2,559 |
|
1,760 |
|
4,715 |
|
3,079 |
Adjusted EBITDA |
|
133,603 |
|
158,278 |
|
249,504 |
|
288,112 |
Less: |
|
|
|
|
|
|
|
|
Current income tax expense |
|
(27,125) |
|
(33,992) |
|
(51,204) |
|
(60,887) |
Capital expenditures |
|
(1,371) |
|
(7,342) |
|
(5,144) |
|
(10,347) |
Free Cash Flow |
|
$ 105,107 |
|
$ 116,944 |
|
$ 193,156 |
|
$ 216,878 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20230802054652/en/
Investor Relations
IR@TexasPacific.com
Source: Texas Pacific Land Corporation