Texas Pacific Land Corporation Announces Special Dividend of $10 Per Share and Cash Balance Target

Rhea-AI Summary

Texas Pacific Land (TPL) announced a $10 per share special dividend, payable on July 15, 2024, to stockholders of record by July 1, 2024.

This special dividend represents the largest in TPL's history, marking a 50% increase from the most recent prior split-adjusted dividend. TPL's CEO Tyler Glover emphasized the company's strong balance sheet and strategic capital allocation, including a targeted cash balance of $700 million. Excess cash will be directed towards share repurchases and additional dividends.

TPL owns approximately 868,000 acres in West Texas, primarily in the Permian Basin, generating various revenues from land use, royalty interests, and infrastructure projects.

Positive

• Special dividend of $10 per share, the largest in TPL's history, representing a 50% increase from the last special dividend.
• Payable on July 15, 2024, to stockholders of record on July 1, 2024.
• Strong balance sheet with a target cash balance of $700 million.
• Excess cash to be used for share repurchases and additional dividends.
• TPL continues to generate substantial free cash flow.
• Strategic capital allocation with a focus on returning capital to stockholders and investing in growth opportunities.

Negative

• Potential risks related to maintaining the targeted cash balance and the impact on cash flow.
• Dependence on macroeconomic conditions that could affect capital allocation priorities.
• Possible dilution of shareholder value if share repurchases are not managed effectively.

DALLAS--(BUSINESS WIRE)-- Texas Pacific Land Corporation (NYSE: TPL) (the “Company” or “TPL”) today announced that the Company’s Board of Directors approved a $10.00 per share special dividend. The special dividend will be payable on July 15, 2024 to stockholders of record at the close of business on July 1, 2024.

“With tailwinds of excellent business execution, supportive fundamentals, and a fortress balance sheet, we’re pleased to announce a special dividend, which is the largest in TPL’s history and represents a 50% increase compared to the most recent prior split-adjusted special dividend,” said Tyler Glover, Chief Executive Officer of the Company. “As we evaluate our current capital structure, capital allocation priorities, business fundamentals, and investment opportunities, we have set a target cash and cash equivalents (“cash”) balance of approximately $700 million. Above this targeted level, TPL will seek to deploy the majority of its free cash flow towards share repurchases and dividends.

“Even beyond the special dividend announced today, the Company still retains tremendous optionality to return additional capital to stockholders and to invest in attractive growth opportunities. We, along with our Board of Directors, will evaluate on a regular basis our cash balance target and capital allocation priorities as business fundamentals and macroeconomic conditions evolve. TPL continues to generate substantial free cash flow while maintaining a strong balance sheet, and we are well-positioned to drive stockholder value.”

About Texas Pacific Land Corporation

Texas Pacific Land Corporation is one of the largest landowners in the State of Texas with approximately 868,000 acres of land in West Texas, 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 our land, revenue for sales of materials (caliche) used in the construction of infrastructure, providing sourced water and/or treated produced water, revenue from our oil and gas royalty interests, and revenues related to saltwater disposal on our land. The Company also generates revenue from pipeline, power line and utility easements, commercial leases and temporary permits related to a variety of land uses including midstream infrastructure projects and hydrocarbon processing facilities.

Visit TPL at http://www.TexasPacific.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240613283862/en/

Investor Relations

IR@TexasPacific.com

Source: Texas Pacific Land Corporation

FAQ

What is the special dividend announced by Texas Pacific Land (TPL)?

Texas Pacific Land (TPL) announced a special dividend of $10 per share payable on July 15, 2024, to stockholders of record on July 1, 2024.

How much is the special dividend compared to the last dividend by TPL?

The $10 per share special dividend is a 50% increase from the most recent prior split-adjusted special dividend.

When will the special dividend of TPL be paid?

The special dividend will be paid on July 15, 2024.

What is the target cash balance set by TPL?

TPL has set a target cash balance of approximately $700 million.

How will TPL use excess cash above their targeted balance?

TPL plans to deploy the majority of its excess cash towards share repurchases and additional dividends.

What kind of revenues does TPL generate?

TPL generates revenue from land use fees, sales of materials, water services, oil and gas royalty interests, and infrastructure projects in West Texas.