Texas Pacific Land Trust (TPL) News https:///rss The latest news released by Texas Pacific Land Trust (TPL) en-us Equisolve Investor Relations Suite Texas Pacific Land Trust Announces Anticipated Distribution Date in Connection with Corporate Reorganization /investors/news-events/press-releases/detail/110/texas-pacific-land-trust-announces-anticipated-distribution Thu, 31 Dec 2020 16:19:00 -0500 /investors/news-events/press-releases/detail/110/texas-pacific-land-trust-announces-anticipated-distribution DALLAS--(BUSINESS WIRE)-- The Trustees of Texas Pacific Land Trust (NYSE: TPL) (the “Trust”) announced today that, in connection with the Trust’s previously announced plan to reorganize the Trust from its current structure to a corporation formed under Delaware law named Texas Pacific Land Corporation (“TPL Corporation”), the Trust expects to distribute all of the common stock of TPL Corporation to holders of sub-share certificates in certificates of proprietary interest of the Trust (“sub-share certificates”) on January 11, 2021 (such date, the “effective date”).

Prior to the market opening on the effective date, the Trust will distribute all of the shares of TPL Corporation common stock to holders of sub-share certificates as of such date on a pro rata, one-for-one basis in accordance with their interests in the Trust. The trading of sub-share certificates on the New York Stock Exchange (“NYSE”) will cease prior to the market opening and TPL Corporation common stock will begin trading on the NYSE on the same date under the symbol “TPL,” and the sub-share certificates will be cancelled.

The distribution of TPL Corporation common stock will be made in book-entry form only. No action is required by holders of sub-share certificates in order to receive shares of TPL Corporation common stock. Immediately after the distribution becomes effective, TPL Corporation will be an independent, publicly traded company and successor to all of the Trust’s assets, employees, liabilities and obligations.

TPL Corporation previously filed a registration statement on Form 10 with the U.S. Securities and Exchange Commission (the “SEC”) on December 14, 2020 (as amended, the “Registration Statement”), relating to the corporate reorganization. On December 31, 2020, the Registration Statement was declared effective.

The Registration Statement included a preliminary information statement that describes the corporate reorganization and provides information regarding the Trust and TPL Corporation. A final information statement describing the corporate reorganization and the anticipated distribution in more detail (the “Final Information Statement”) has been filed with the SEC as an exhibit to TPL Corporation’s Current Report on Form 8-K and will be furnished as an exhibit to a Current Report on Form 8-K of the Trust. Investors and holders of sub-share certificates are urged to read documents filed with the SEC carefully and in their entirety as these materials contain important information about the Trust, TPL Corporation and the corporate reorganization.

The completion of the corporate reorganization and distribution is subject to the satisfaction or waiver of a number of conditions, including the absence of unforeseen events or developments that would make it inadvisable to effect the corporate reorganization.

About Texas Pacific Land Trust

Texas Pacific Land Trust is one of the largest landowners in the State of Texas with approximately 880,000 acres of land in West Texas. The Trust was organized under a Declaration of Trust to receive and hold title to extensive tracts of land in the State of Texas, previously the property of the Texas and Pacific Railway Company, and to issue transferable Certificates of Proprietary Interest pro rata to the holders of certain debt securities of the Texas and Pacific Railway Company. Texas Pacific Land Trust’s trustees are empowered under the Declaration of Trust to manage the lands with all the powers of an absolute owner. Texas Pacific Land Trust is not a REIT.

No Offer or Solicitation

This communication shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.

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 the Trust’s beliefs, as well as assumptions made by, and information currently available to, the Trust, 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, statements regarding the corporate reorganization and other 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 the Trust believes that plans, intentions and expectations, including those regarding the corporate reorganization, reflected in or suggested by any forward-looking statements made herein are reasonable, the Trust 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: a determination of the Trustees of the Trust not to provide final approval of all actions and transactions necessary to effect the corporate reorganization; a determination that the corporate reorganization will not be tax-free to the Trust and holders of the Trust’s sub-share certificates; the occurrence of any event, change or other circumstances that could give rise to the abandonment of the corporate reorganization; changes or uncertainties in the expected timing, likelihood or completion of the corporate reorganization; potential adverse reactions or changes to business relationships resulting from the announcement or completion of the corporate reorganization; the potential impacts of COVID-19 on the global and U.S. economies as well as on the Trust’s financial condition and business operations; risks related to disruption of management time from ongoing business operations due to the corporate reorganization; the initiation or outcome of potential litigation; and any changes in general economic and/or industry specific conditions. Except as required by law, the Trust undertakes no obligation to publicly update or revise any such forward-looking statements. For more information concerning factors that could cause actual results to differ from those expressed or referred to herein, see the Trust’s annual report on Form 10-K and quarterly reports on Form 10-Q filed with the SEC. These risks, as well as other risks associated with the Trust, TPL Corporation and the corporate reorganization are also more fully discussed in the Registration Statement, which includes a preliminary information statement, filed by TPL Corporation with the SEC on December 14, 2020 and declared effective by the SEC on December 31, 2020; a Current Report on Form 8-K filed by TPL Corporation with the SEC on December 31, 2020, which includes a final information statement describing the corporate reorganization and the anticipated distribution in more detail (the “Final Information Statement”); and a Current Report on Form 8-K, which is expected to be filed by the Trust on or about December 31, 2020 and to include the Final Information Statement. You can access the Trust’s and TPL Corporation’s filings with the SEC through the SEC website at www.sec.gov and the Trust and TPL Corporation strongly encourage you to do so. Except as required by applicable law, the Trust and TPL Corporation undertake no obligation to update any statements herein for revisions or changes after this communication is made.

(214) 969-5530
Chris Steddum
Vice President, Finance and Investor Relations

Source: Texas Pacific Land Trust

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Texas Pacific Land Trust Declares Special Dividend of $10.00 Per Share /investors/news-events/press-releases/detail/109/texas-pacific-land-trust-declares-special-dividend-of Mon, 23 Nov 2020 16:20:00 -0500 /investors/news-events/press-releases/detail/109/texas-pacific-land-trust-declares-special-dividend-of Provides Update on Corporate Reorganization

DALLAS--(BUSINESS WIRE)-- Texas Pacific Land Trust (NYSE: TPL) (“the Trust”) announced today that its Trustees have declared a special cash dividend of $10.00 per sub-share certificate. The special cash dividend, which will be payable on December 17, 2020 to sub-shareholders of record as of the close of business on December 11, 2020, increases the Trust’s cumulative 2020 regular and special dividend offerings to $26.00 per share and represents $201.7 million returned to shareholders this year.

Additionally, the Trust today provided an update on its previously announced corporate reorganization efforts. On March 23, 2020, following a comprehensive review led by a Conversion Exploration Committee that included shareholder representation, the Trustees approved a plan to reorganize the Trust from its current structure to a corporation formed under Delaware law. On June 15, 2020, the Trust announced the name of the new corporation, Texas Pacific Land Corporation (“TPL Corp”), as well as the prospective members of its Board of Directors. A draft registration statement on Form 10 has also been submitted to the Securities and Exchange Commission (the “SEC”) for review on a non-public basis. The Trust continues to make significant progress toward effecting its planned corporate reorganization and now anticipates that it will occur during the first half of January 2021.

About Texas Pacific Land Trust

Texas Pacific Land Trust is one of the largest landowners in the State of Texas with approximately 880,000 acres of land in West Texas. The Trust was organized under a Declaration of Trust to receive and hold title to extensive tracts of land in the State of Texas, previously the property of the Texas and Pacific Railway Company, and to issue transferable Certificates of Proprietary Interest pro rata to the holders of certain debt securities of the Texas and Pacific Railway Company. Texas Pacific Land Trust’s Trustees are empowered under the Declaration of Trust to manage the lands with all the powers of an absolute owner. Texas Pacific Land Trust is not a REIT.

Visit the Trust at www.shpxtqd.com.

Chris Steddum
214-969-5530
Vice President, Finance and Investor Relations

Source: Texas Pacific Land Trust

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Texas Pacific Land Trust Announces Third Quarter 2020 Results /investors/news-events/press-releases/detail/108/texas-pacific-land-trust-announces-third-quarter-2020 Mon, 02 Nov 2020 16:25:00 -0500 /investors/news-events/press-releases/detail/108/texas-pacific-land-trust-announces-third-quarter-2020 DALLAS--(BUSINESS WIRE)-- Texas Pacific Land Trust (NYSE: TPL) (the “Trust”) today announced financial and operating results for the third quarter ended September 30, 2020.

Results for the third quarter of 2020:

  • Net income of $46.3 million, or $5.97 per Sub-share Certificate, for the third quarter ended September 30, 2020 compared with $60.0 million, or $7.74 per Sub-share Certificate, for the third quarter ended September 30, 2019.
  • Revenues of $74.4 million for the third quarter ended September 30, 2020, compared with $98.5 million for the third quarter ended September 30, 2019.
  • Decreases of 17.0% in oil and gas royalty revenue, 44.2% in easements and other surface-related income and 43.9% in water sales and royalty revenue for the third quarter ended September 30, 2020 compared with the third quarter ended September 30, 2019.
  • EBITDA of $61.8 million for the third quarter ended September 30, 2020, compared with $77.4 million for the third quarter ended September 30, 2019.

Results for the nine months ended September 30, 2020:

  • Net income of $131.3 million, or $16.92 per Sub-share Certificate, for the nine months ended September 30, 2020 compared with $249.6 million (which included a $100 million land sale), or $32.18 per Sub-share Certificate, for the nine months ended September 30, 2019.
  • Revenues of $228.3 million for the nine months ended September 30, 2020, compared with $377.2 million for the nine months ended September 30, 2019 (which included a $100 million land sale).
  • Decreases of 14.8% in oil and gas royalty revenue, 20.2% in easements and other surface-related income and 27.0% in water sales and royalty revenue for the nine months ended September 30, 2020 compared with the nine months ended September 30, 2019.
  • EBITDA of $175.1 million for the nine months ended September 30, 2020, compared with $318.5 million for the nine months ended September 30, 2019 (which included a $100 million land sale).

“While our third quarter results have improved over the second quarter of 2020, uncertainty in the current environment remains and continues to present challenges for the oil and gas industry,” said Tyler Glover, Chief Executive Officer of the Trust. “However, we remain confident that the Trust is financially and operationally well-equipped to continue navigating these challenges and are committed to maintaining our track record of capital discipline and optimal liquidity while ensuring the health and safety of our employees.”

Further details for the third quarter of 2020:

The Trust reported net income of $46.3 million for the third quarter ended September 30, 2020, a decrease of 22.9% compared to net income of $60.0 million for the third quarter ended September 30, 2019.

Oil and gas royalty revenue was $31.8 million for the third quarter ended September 30, 2020, compared with $38.3 million for the third quarter ended September 30, 2019, a decrease of 17.0%. Prices received for crude oil production decreased 31.9% while crude oil production subject to the Trust’s royalty interests increased 7.3% for the third quarter ended September 30, 2020 compared to the same period of 2019. Prices received for gas production increased 61.0% while gas production subject to the Trust’s royalty interests decreased 2.5% for the third quarter ended September 30, 2020 compared to the same period of 2019.

Easements and other surface-related income was $18.9 million for the third quarter ended September 30, 2020, a decrease of 44.2% compared with the third quarter ended September 30, 2019 when easements and other surface-related income was $33.9 million. The decrease in easements and other surface-related income was largely driven by decreases of $10.0 million in pipeline easement income and $2.0 million in permit income for the third quarter ended September 30, 2020 compared to the same period of 2019.

Water sales and royalty revenue was $12.1 million for the third quarter ended September 30, 2020, a decrease of 43.9% compared with the third quarter ended September 30, 2019 when water sales and royalty revenue was $21.7 million. This decrease was principally due to a 27.6% decrease in the number of barrels of sourced and treated water sold and a $0.8 million decrease in water royalties in the third quarter of 2020 compared to the same period of 2019.

The Trust recognized land sales revenue of $11.5 million for the third quarter ended September 30, 2020 and $4.6 million for the comparable period of 2019.

Further details for the nine months ended September 30, 2020:

The Trust reported net income of $131.3 million for the nine months ended September 30, 2020, a decrease of 47.4% compared to net income of $249.6 million for the nine months ended September 30, 2019, which included a $100 million land sale. Excluding the impact of the 2019 land sale (net of income tax), net income for the nine months ended September 30, 2019 was $170.6 million.

Oil and gas royalty revenue was $94.6 million for the nine months ended September 30, 2020, compared with $111.1 million for the nine months ended September 30, 2019, a decrease of 14.8%. Prices received for crude oil and gas production decreased 23.8% and 9.0%, respectively, in the nine months ended September 30, 2020 compared to the same period of 2019. The decrease in prices received was partially offset by increased crude oil and gas production subject to the Trust’s royalty interests, which increased 9.3% and 16.4%, respectively, in the nine months ended September 30, 2020 compared to the same period of 2019.

Easements and other surface-related income was $70.0 million for the nine months ended September 30, 2020, a decrease of 20.2% compared with the nine months ended September 30, 2019 when easements and other surface-related income was $87.6 million. The decrease in easements and other surface-related income was largely driven by a decrease of $19.6 million in pipeline easement income partially offset by an increase of $5.7 million in commercial lease revenue (largely due to an increase in saltwater disposal royalties) for the nine months ended September 30, 2020 compared to the same period of 2019.

Water sales and royalty revenue was $47.5 million for the nine months ended September 30, 2020, a decrease of 27.0% compared with the nine months ended September 30, 2019 when water sales and royalty revenue was $65.1 million. This decrease was principally due to a 10.5% decrease in the number of barrels of sourced and treated water sold and a $5.8 million decrease in water royalties for the nine months ended September 30, 2020 compared to the same period in 2019.

The Trust recognized land sales revenue of $15.9 million for the nine months ended September 30, 2020 and $113.0 million for the comparable period of 2019. Land sales revenue for the nine months ended September 30, 2019, included a $100 million land sale consummated in January 2019.

COVID-19 Pandemic and Market Conditions Update

The uncertainty surrounding the severity and duration of the COVID-19 pandemic, as well as dramatic declines in crude oil prices due in part to the global spread of COVID-19, has caused volatility in the global financial markets including the oil and gas industry. Significant mitigation measures, such as shelter-in place orders, travel bans and business restrictions, among other things, established to reduce the global, national and local spread of COVID-19, have further affected the supply and demand for crude oil. While uncertainty remains around COVID-19 mitigation measures and re-opening efforts, we believe demand is beginning to recover.

These events have negatively affected, and are expected to continue to negatively affect, the Trust’s business and results of operations. Should additional oil and gas wells be shut in, production continue to be curtailed or the owners and operators of the oil and gas wells to which the Trust’s royalty interests relate continue to decrease investment in response to lower commodity prices and conservation of capital, we would expect the Trust’s royalty income and demand for our water services to remain at the reduced levels that the Trust has experienced during the second and third quarters of 2020 and may decline further.

Given the dynamic nature of these events, we cannot reasonably estimate the period of time that the COVID-19 pandemic and related market conditions will persist, or the extent of the impact they will have on the Trust’s business or results of operations and financial condition.

Conversion of the Trust

As previously announced on March 23, 2020, our Trustees approved a plan to reorganize the Trust from its current structure to a corporation formed under the laws of the State of Delaware. We continue to progress towards the conversion. On June 15, 2020, the Trust announced the new corporation will be named Texas Pacific Land Corporation (“TPL Corp”) and the persons selected to serve as directors on the Board of Directors of TPL Corp. Additionally, a draft registration statement on Form 10 has been submitted to the Securities and Exchange Commission for review, on a non-public basis. The Trust continues to make progress toward effecting its planned corporate reorganization into a Delaware corporation and, currently anticipates to be in a position to move forward with the reorganization by the end of the fourth quarter of 2020.

About Texas Pacific Land Trust

Texas Pacific Land Trust is one of the largest landowners in the State of Texas with approximately 880,000 acres of land in West Texas. The Trust was organized under a Declaration of Trust to receive and hold title to extensive tracts of land in the State of Texas, previously the property of the Texas and Pacific Railway Company, and to issue transferable Certificates of Proprietary Interest pro rata to the holders of certain debt securities of the Texas and Pacific Railway Company. Texas Pacific Land Trust’s trustees are empowered under the Declaration of Trust to manage the lands with all the powers of an absolute owner. Texas Pacific Land Trust is not a REIT.

Forward-Looking Statements

This news release may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements regarding the Trust’s future operations and prospects, the severity and duration of the COVID-19 pandemic and related economic repercussions, the markets for real estate in the areas in which the Trust owns real estate, applicable zoning regulations, the markets for oil and gas, the proposed reorganization of the Trust into a corporation, production limits on prorated oil and gas wells ized by the Railroad Commission of Texas, expected competition, management’s intent, beliefs or current expectations with respect to the Trust’s future financial performance and other matters. We assume no responsibility to update any such forward-looking statements.

REPORT OF OPERATIONS

(in thousands, except share and per share amounts) (unaudited)

 

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

 

2020

 

2019

 

2020

 

2019

Revenues:

 

 

 

 

 

 

 

 

Oil and gas royalties

 

$

31,758

 

 

$

38,259

 

 

$

94,631

 

 

 

$

111,113

 

Easements and other surface-related income

 

18,936

 

 

33,911

 

 

69,970

 

 

 

87,635

 

Water sales and royalties

 

12,139

 

 

21,654

 

 

47,525

 

 

 

65,067

 

Land sales

 

11,463

 

 

4,621

 

 

15,855

 

 

 

113,020

 

Other operating revenue

 

87

 

 

85

 

 

269

 

 

 

329

 

Total revenues

 

74,383

 

 

98,530

 

 

228,250

 

 

 

377,164

 

 

 

 

 

 

 

 

 

 

Expenses:

 

 

 

 

 

 

 

 

Salaries and related employee expenses

 

7,678

 

 

8,537

 

 

27,235

 

 

 

22,742

 

Water service-related expenses

 

2,260

 

 

5,122

 

 

11,205

 

 

 

15,423

 

General and administrative expenses

 

1,883

 

 

2,864

 

 

7,290

 

 

 

6,877

 

Legal and professional fees

 

1,987

 

 

5,558

 

 

6,955

 

 

 

15,198

 

Land sales expenses

 

67

 

 

 

 

2,773

 

 

 

225

 

Depreciation, depletion and amortization

 

3,760

 

 

2,631

 

 

10,773

 

 

 

5,286

 

Total operating expenses

 

17,635

 

 

24,712

 

 

66,231

 

 

 

65,751

 

 

 

 

 

 

 

 

 

 

Operating income

 

56,748

 

 

73,818

 

 

162,019

 

 

 

311,413

 

 

 

 

 

 

 

 

 

 

Other income, net

 

1,287

 

 

941

 

 

2,306

 

 

 

1,771

 

Income before income taxes

 

58,035

 

 

74,759

 

 

164,325

 

 

 

313,184

 

Income tax expense (benefit):

 

 

 

 

 

 

 

 

Current

 

11,146

 

 

9,918

 

 

33,153

 

 

 

43,485

 

Deferred

 

614

 

 

4,819

 

 

(86

)

 

 

20,093

 

Total income tax expense

 

11,760

 

 

14,737

 

 

33,067

 

 

 

63,578

 

Net income

 

$

46,275

 

 

$

60,022

 

 

$

131,258

 

 

 

$

249,606

 

 

 

 

 

 

 

 

 

 

Net income per Sub-share Certificate - basic and diluted

 

$

5.97

 

 

$

7.74

 

 

$

16.92

 

 

 

$

32.18

 

 

 

 

 

 

 

 

 

 

Weighted average number of Sub-share Certificates outstanding

 

7,756,156

 

 

7,756,156

 

 

7,756,156

 

 

 

7,756,643

 

SEGMENT OPERATING RESULTS

(in thousands) (unaudited)

 

 

 

Three Months Ended
September 30,

 

 

2020

 

2019

Revenues:

 

 

 

 

 

 

 

 

Land and resource management:

 

 

 

 

 

 

 

 

Oil and gas royalties

 

$

31,758

 

 

43

%

 

$

38,259

 

 

39

%

Easements and other surface-related income

 

6,588

 

 

9

%

 

22,111

 

 

22

%

Land sales and other operating revenue

 

11,550

 

 

15

%

 

4,706

 

 

5

%

 

 

49,896

 

 

67

%

 

65,076

 

 

66

%

Water services and operations:

 

 

 

 

 

 

 

 

Water sales and royalties

 

12,139

 

 

16

%

 

21,654

 

 

22

%

Easements and other surface-related income

 

12,348

 

 

17

%

 

11,800

 

 

12

%

 

 

24,487

 

 

33

%

 

33,454

 

 

34

%

Total consolidated revenues

 

$

74,383

 

 

100

%

 

$

98,530

 

 

100

%

 

 

 

 

 

 

 

 

 

Net income:

 

 

 

 

 

 

 

 

Land and resource management

 

$

34,359

 

 

74

%

 

$

43,911

 

 

73

%

Water services and operations

 

11,916

 

 

26

%

 

16,111

 

 

27

%

Total consolidated net income

 

$

46,275

 

 

100

%

 

$

60,022

 

 

100

%

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended
September 30,

 

 

2020

 

2019

Revenues:

 

 

 

 

 

 

 

 

Land and resource management:

 

 

 

 

 

 

 

 

Oil and gas royalties

 

$

94,631

 

 

41

%

 

$

111,113

 

 

29

%

Easements and other surface-related income

 

31,385

 

 

14

%

 

59,761

 

 

16

%

Land sales and other operating revenue

 

16,124

 

 

7

%

 

113,349

 

 

30

%

 

 

142,140

 

 

62

%

 

284,223

 

 

75

%

Water services and operations:

 

 

 

 

 

 

 

 

Water sales and royalties

 

47,525

 

 

21

%

 

65,067

 

 

17

%

Easements and other surface-related income

 

38,585

 

 

17

%

 

27,874

 

 

8

%

 

 

86,110

 

 

38

%

 

92,941

 

 

25

%

Total consolidated revenues

 

$

228,250

 

 

100

%

 

$

377,164

 

 

100

%

 

 

 

 

 

 

 

 

 

Net income:

 

 

 

 

 

 

 

 

Land and resource management

 

$

92,197

 

 

70

%

 

$

204,222

 

 

82

%

Water services and operations

 

39,061

 

 

30

%

 

45,384

 

 

18

%

Total consolidated net income

 

$

131,258

 

 

100

%

 

$

249,606

 

 

100

%

 

 

 

 

 

 

 

 

 

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 measurements. These measurements are not to be considered more relevant or accurate than the measurements presented in accordance with GAAP. In compliance with requirements of the Securities and Exchange Commission (“SEC”), our non-GAAP measurements are reconciled to net income, the most directly comparable GAAP performance measure. For all non-GAAP measurements, neither the SEC nor any other regulatory body has passed judgment on these non-GAAP measurements.

EBITDA

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 have presented EBITDA because we believe that it is a useful supplement to net income as an indicator of operating performance.

The following table presents a reconciliation of net income to EBITDA for the three and nine months ended September 30, 2020 and 2019 (in thousands):

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

 

2020

 

2019

 

2020

 

2019

Net income

 

$

46,275

 

 

$

60,022

 

 

$

131,258

 

 

$

249,606

 

Add:

 

 

 

 

 

 

 

 

Income tax expense

 

11,760

 

 

14,737

 

 

33,067

 

 

63,578

 

Depreciation, depletion and amortization

 

3,760

 

 

2,631

 

 

10,773

 

 

5,286

 

EBITDA

 

$

61,795

 

 

$

77,390

 

 

$

175,098

 

 

$

318,470

 

 

 

 

 

 

 

 

 

 

 

Chris Steddum
Vice President, Finance and Investor Relations
(214) 969-5530

Source: Texas Pacific Land Trust

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Texas Pacific Land Trust Updates Timeline for Corporate Reorganization /investors/news-events/press-releases/detail/107/texas-pacific-land-trust-updates-timeline-for-corporate Mon, 14 Sep 2020 17:00:00 -0400 /investors/news-events/press-releases/detail/107/texas-pacific-land-trust-updates-timeline-for-corporate DALLAS--(BUSINESS WIRE)-- The Trustees of Texas Pacific Land Trust (NYSE:TPL) (the “Trust”) announced today that, while the Trust continues to make progress toward effecting its planned corporate reorganization into a Delaware corporation, the Trust now aims to be in a position to move forward with the reorganization by the end of the fourth quarter of 2020.

The decision to extend the timeline was related in part to the large number of assets impacted by the reorganization and unanticipated effects of COVID-19 on working with governmental offices to obtain necessary information and update official records. This decision was also made following consultation with the members of the Conversion Exploration Committee. The Trust will continue to work toward completing the corporate reorganization but recognizes that ongoing impacts of COVID-19 and other unanticipated disruptions could continue to extend the intended timeframe despite the Trust’s efforts.

Further information regarding the corporate reorganization will be included in a registration statement on Form 10 for Texas Pacific Land Corporation when publicly filed with the Securities and Exchange Commission.

About Texas Pacific Land Trust

Texas Pacific Land Trust is one of the largest landowners in the State of Texas with approximately 900,000 acres of land in West Texas. The Trust was organized under a Declaration of Trust to receive and hold title to extensive tracts of land in the State of Texas, previously the property of the Texas and Pacific Railway Company, and to issue transferable Certificates of Proprietary Interest pro rata to the holders of certain debt securities of the Texas and Pacific Railway Company. Texas Pacific Land Trust’s Trustees are empowered under the Declaration of Trust to manage the lands with all the powers of an absolute owner. Texas Pacific Land Trust is not a REIT.

Visit the Trust at www.shpxtqd.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 the Trust’s beliefs, as well as assumptions made by, and information currently available to, the Trust, 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, statements regarding the corporate reorganization and other 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 the Trust believes that plans, intentions and expectations, including those regarding the corporate reorganization, reflected in or suggested by any forward-looking statements made herein are reasonable, the Trust may be unable to achieve such plans, intentions or expectations and actual results, 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: a determination of the Trustees of the Trust not to provide final approval of all actions and transactions necessary to effect the corporate reorganization; a determination that the corporate reorganization will not be tax-free to the Trust and holders of the Trust’s sub-share certificates; the SEC declining to declare effectiveness of filings necessary to effect the corporate reorganization; the NYSE declining to approve the listing of common stock of the new corporation on the NYSE; the occurrence of any event, change or other circumstances that could give rise to the abandonment of the corporate reorganization; changes or uncertainties in the expected timing, likelihood or completion of the corporate reorganization; potential adverse reactions or changes to business relationships resulting from the announcement or completion of the corporate reorganization; the potential impacts of COVID-19 on the global and U.S. economies as well as on the Trust’s financial condition and business operations; risks related to disruption of management time from ongoing business operations due to the corporate reorganization; the initiation or outcome of potential litigation; and any changes in general economic and/or industry specific conditions. Except as required by law, the Trust undertakes no obligation to publicly update or revise any such forward-looking statements. For more information concerning factors that could cause actual results to differ from those expressed or referred to herein, see the Trust’s annual report on Form 10-K and quarterly reports on Form 10-Q filed with the SEC.

(214) 969-5530
Chris Steddum
Vice President, Finance and Investor Relations

Source: Texas Pacific Land Trust

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Texas Pacific Land Trust Announces Second Quarter 2020 Results /investors/news-events/press-releases/detail/106/texas-pacific-land-trust-announces-second-quarter-2020 Thu, 30 Jul 2020 16:15:00 -0400 /investors/news-events/press-releases/detail/106/texas-pacific-land-trust-announces-second-quarter-2020 DALLAS--(BUSINESS WIRE)-- Texas Pacific Land Trust (NYSE: TPL) today announced financial and operating results for the second quarter ended June 30, 2020.

Results for the second quarter of 2020:

  • Net income of $27.6 million, or $3.56 per Sub-share Certificate, for the second quarter ended June 30, 2020 compared with $49.6 million, or $6.39 per Sub-share Certificate, for the second quarter ended June 30, 2019.
  • Revenues of $54.6 million for the second quarter ended June 30, 2020, compared with $87.3 million for the second quarter ended June 30, 2019.
  • Decreases of 48.3% in oil and gas royalty revenue and 58.8% in water sales and royalty revenue, partially offset by an increase of 10.8% in easements and other surface-related income for the second quarter ended June 30, 2020 compared with the second quarter ended June 30, 2019.
  • EBITDA of $38.6 million for the second quarter ended June 30, 2020, compared with $64.3 million for the second quarter ended June 30, 2019.

Results for the six months ended June 30, 2020:

  • Net income of $85.0 million, or $10.96 per Sub-share Certificate, for the six months ended June 30, 2020 compared with $189.6 million (which included a $100 million land sale), or $24.44 per Sub-share Certificate, for the six months ended June 30, 2019.
  • Revenues of $151.2 million for the six months ended June 30, 2020, compared with $278.6 million for the six months ended June 30, 2019 (which included a $100 million land sale).
  • Decreases of 13.7% in oil and gas royalty revenue, 18.5% in water sales and royalty revenue and 5.0% in easements and other surface-related income for the six months ended June 30, 2020 compared with the six months ended June 30, 2019.
  • EBITDA of $113.3 million for the six months ended June 30, 2020, compared with $241.1 million for the six months ended June 30, 2019 (which included a $100 million land sale).

“Despite continued record low oil prices and COVID-19’s persistent effects on the oil & gas industry, the Trust continues to generate positive operating results and believes it is well positioned to navigate continued challenges in the industry driven by COVID-19 in the second half of 2020,” said Tyler Glover, Chief Executive Officer of the Trust. “While uncertainties stemming from the pandemic are expected to remain, our top priorities continue to be the health and safety of our employees and maintaining our capital resource allocation discipline through this downturn while focusing on liquidity and cash preservation.”

Further details for the second quarter of 2020:

The Trust reported net income of $27.6 million for the second quarter ended June 30, 2020, a decrease of 44.4% compared to net income of $49.6 million for the second quarter ended June 30, 2019.

Oil and gas royalty revenue was $20.5 million for the second quarter ended June 30, 2020, compared with $39.6 million for the second quarter ended June 30, 2019, a decrease of 48.3%. Prices received for crude oil and gas production decreased 54.0% and 53.7%, respectively, in the second quarter ended June 30, 2020 compared to the same period of 2019. The decrease in prices received was partially offset by increased crude oil and gas production subject to the Trust’s royalty interests, which increased 10.6% and 49.6%, respectively, in the second quarter ended June 30, 2020 compared to the second quarter ended June 30, 2019.

Easements and other surface-related income was $24.8 million for the second quarter ended June 30, 2020, an increase of 10.8% compared with the second quarter ended June 30, 2019 when easements and other surface-related income was $22.4 million. The increase in easements and other surface-related income was largely driven by an increase of $3.6 million in commercial lease revenue (largely due to an increase in saltwater disposal royalties) partially offset by a decrease of $1.2 million in pipeline easement income for the second quarter ended June 30, 2020 compared to the same period of 2019.

Water sales and royalty revenue was $8.4 million for the second quarter ended June 30, 2020, a decrease of 58.8% compared with the second quarter ended June 30, 2019 when water sales and royalty revenue was $20.4 million. This decrease was principally due to a 48.0% decrease in the number of barrels of sourced and treated water sold and a $2.9 million decrease in water royalties in the second quarter of 2020 compared to the same period in 2019.

Further details for the six months ended June 30, 2020:

The Trust reported net income of $85.0 million for the six months ended June 30, 2020, a decrease of 55.2% compared to net income of $189.6 million for the six months ended June 30, 2019, which included a $100 million land sale. Excluding the impact of the 2019 land sale (net of income tax), net income for the six months ended June 30, 2019 was $110.6 million.

Oil and gas royalty revenue was $62.9 million for the six months ended June 30, 2020, compared with $72.9 million for the six months ended June 30, 2019, a decrease of 13.7%. Prices received for crude oil and gas production decreased 19.9% and 34.2%, respectively, in the six months ended June 30, 2020 compared to the same period of 2019. The decrease in prices received was partially offset by increased crude oil and gas production subject to the Trust’s royalty interests, which increased 10.9% and 30.1%, respectively, in the six months ended June 30, 2020 compared to the same period of 2019.

Easements and other surface-related income was $51.0 million for the six months ended June 30, 2020, a decrease of 5.0% compared with the six months ended June 30, 2019 when easements and other surface-related income was $53.7 million. The decrease in easements and other surface-related income was largely driven by a decrease of $9.6 million in pipeline easement income partially offset by an increase of $6.1 million in commercial lease revenue (largely due to an increase in saltwater disposal royalties) for the six months ended June 30, 2020 compared to the same period of 2019.

Water sales and royalty revenue was $35.4 million for the six months ended June 30, 2020, a decrease of 18.5% compared with the six months ended June 30, 2019 when water sales and royalty revenue was $43.4 million. This decrease was principally due to a $5.1 million decrease in water royalties for the six months ended June 30, 2020 compared to the same period in 2019.

The Trust recognized land sales revenue of $1.7 million for the six months ended June 30, 2020 and $108.4 million for the comparable period of 2019. Land sales revenue for the six months ended June 30, 2019, included a $100 million land sale consummated in January 2019.

COVID-19 Pandemic and Market Conditions Update

The uncertainty surrounding the severity and duration of the COVID-19 pandemic, as well as dramatic declines in crude oil prices due in part to the global spread of COVID-19, continued to cause volatility in the global financial markets during the second quarter of 2020. Significant mitigation measures, such as shelter-in place orders, travel bans and restrictions, among other things, established to reduce the global, state and local spread of COVID-19, have further affected the supply and demand for crude oil.

These events have negatively affected, and are expected to continue to negatively affect, the Trust’s business and results of operations. Should oil and gas wells be shut in, production be curtailed or the owners and operators of the oil and gas wells to which the Trust’s royalty interests relate decrease investment in response to lower commodity prices and conservation of capital, we would expect the Trust’s royalty income and demand for our water services to decline.

Given the dynamic nature of these events, we cannot reasonably estimate the period of time that the COVID-19 pandemic and related market conditions will persist, or the extent of the impact they will have on the Trust’s business or results of operations and financial condition.

Conversion of the Trust

As previously announced on March 23, 2020, our Trustees approved a plan to reorganize the Trust from its current structure to a corporation formed under the laws of the State of Delaware. We continue to progress towards the conversion. On June 15, 2020, the Trust announced the new corporation will be named Texas Pacific Land Corporation (“TPL Corp”) and the persons selected to serve as directors on the Board of Directors of TPL Corp. Additionally, a draft registration statement on Form 10 has been submitted to the Securities and Exchange Commission for review, on a non-public basis. It is currently anticipated that the corporate reorganization will be effective by the end of the third quarter of 2020, barring any unforeseen impacts of the COVID-19 pandemic or other developments, which could potentially extend this timeframe.

About Texas Pacific Land Trust

Texas Pacific Land Trust is one of the largest landowners in the State of Texas with approximately 900,000 acres of land in West Texas. The Trust was organized under a Declaration of Trust to receive and hold title to extensive tracts of land in the State of Texas, previously the property of the Texas and Pacific Railway Company, and to issue transferable Certificates of Proprietary Interest pro rata to the holders of certain debt securities of the Texas and Pacific Railway Company. Texas Pacific Land Trust’s trustees are empowered under the Declaration of Trust to manage the lands with all the powers of an absolute owner. Texas Pacific Land Trust is not a REIT.

Forward-Looking Statements

This news release may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements regarding the Trust’s future operations and prospects, the severity and duration of the COVID-19 pandemic and related economic repercussions, the markets for real estate in the areas in which the Trust owns real estate, applicable zoning regulations, the markets for oil and gas, the proposed reorganization of the Trust into a corporation, production limits on prorated oil and gas wells ized by the Railroad Commission of Texas, expected competition, management’s intent, beliefs or current expectations with respect to the Trust’s future financial performance and other matters. We assume no responsibility to update any such forward-looking statements.

 

REPORT OF OPERATIONS
(in thousands, except share and per share amounts) (unaudited)

 

 

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 

 

2020

 

2019

 

2020

 

2019

Revenues:

 

 

 

 

 

 

 

 

Oil and gas royalties

 

$

20,513

 

 

 

$

39,641

 

 

 

$

62,873

 

 

 

$

72,854

 

Easements and other surface-related income

 

24,767

 

 

 

22,357

 

 

 

51,034

 

 

 

53,724

 

Water sales and royalties

 

8,419

 

 

 

20,430

 

 

 

35,386

 

 

 

43,413

 

Land sales

 

787

 

 

 

4,774

 

 

 

1,687

 

 

 

108,399

 

Other operating revenue

 

82

 

 

 

108

 

 

 

182

 

 

 

244

 

Total revenues

 

54,568

 

 

 

87,310

 

 

 

151,162

 

 

 

278,634

 

 

 

 

 

 

 

 

 

 

Expenses:

 

 

 

 

 

 

 

 

Salaries and related employee expenses

 

8,937

 

 

 

7,741

 

 

 

19,557

 

 

 

14,205

 

Water service-related expenses

 

2,165

 

 

 

5,723

 

 

 

8,945

 

 

 

10,301

 

General and administrative expenses

 

2,448

 

 

 

2,095

 

 

 

5,407

 

 

 

4,237

 

Legal and professional fees

 

2,610

 

 

 

7,858

 

 

 

4,968

 

 

 

9,641

 

Depreciation, depletion and amortization

 

3,678

 

 

 

1,451

 

 

 

7,013

 

 

 

2,655

 

Total operating expenses

 

19,838

 

 

 

24,868

 

 

 

45,890

 

 

 

41,039

 

 

 

 

 

 

 

 

 

 

Operating income

 

34,730

 

 

 

62,442

 

 

 

105,272

 

 

 

237,595

 

 

 

 

 

 

 

 

 

 

Other income

 

193

 

 

 

437

 

 

 

1,019

 

 

 

830

 

Income before income taxes

 

34,923

 

 

 

62,879

 

 

 

106,291

 

 

 

238,425

 

Income tax expense (benefit):

 

 

 

 

 

 

 

 

Current

 

7,985

 

 

 

19,018

 

 

 

22,007

 

 

 

33,566

 

Deferred

 

(645

)

 

 

(5,725

)

 

 

(700

)

 

 

15,275

 

Total income tax expense

 

7,340

 

 

 

13,293

 

 

 

21,307

 

 

 

48,841

 

Net income

 

$

27,583

 

 

 

$

49,586

 

 

 

$

84,984

 

 

 

$

189,584

 

 

 

 

 

 

 

 

 

 

Net income per Sub-share Certificate - basic and diluted

 

$

3.56

 

 

 

$

6.39

 

 

 

$

10.96

 

 

 

$

24.44

 

 

 

 

 

 

 

 

 

 

Weighted average number of Sub-share Certificates outstanding

 

7,756,156

 

 

 

7,756,156

 

 

 

7,756,156

 

 

 

7,757,199

 

 

SEGMENT OPERATING RESULTS
(in thousands) (unaudited)

 

 

 

Three Months Ended
June 30,

 

 

2020

 

2019

Revenues:

 

 

 

 

 

 

 

 

Land and resource management:

 

 

 

 

 

 

 

 

Oil and gas royalties

 

$

20,513

 

 

37

%

 

$

39,641

 

 

46

%

Easements and other surface-related income

 

11,499

 

 

21

%

 

14,165

 

 

16

%

Land sales and other operating revenue

 

869

 

 

2

%

 

4,882

 

 

6

%

 

 

32,881

 

 

60

%

 

58,688

 

 

68

%

Water services and operations:

 

 

 

 

 

 

 

 

Water sales and royalties

 

8,419

 

 

16

%

 

20,430

 

 

23

%

Easements and other surface-related income

 

13,268

 

 

24

%

 

8,192

 

 

9

%

 

 

21,687

 

 

40

%

 

28,622

 

 

32

%

Total consolidated revenues

 

$

54,568

 

 

100

%

 

$

87,310

 

 

100

%

 

 

 

 

 

 

 

 

 

Net income:

 

 

 

 

 

 

 

 

Land and resource management

 

$

18,721

 

 

68

%

 

$

37,194

 

 

75

%

Water services and operations

 

8,862

 

 

32

%

 

12,392

 

 

25

%

Total consolidated net income

 

$

27,583

 

 

100

%

 

$

49,586

 

 

100

%

 

 

 

Six Months Ended
June 30,

 

 

2020

 

2019

Revenues:

 

 

 

 

 

 

 

 

Land and resource management:

 

 

 

 

 

 

 

 

Oil and gas royalties

 

$

62,873

 

 

42

%

 

$

72,854

 

 

25

%

Easements and other surface-related income

 

24,797

 

 

16

%

 

37,650

 

 

14

%

Land sales and other operating revenue

 

1,869

 

 

1

%

 

108,643

 

 

39

%

 

 

89,539

 

 

59

%

 

219,147

 

 

78

%

Water services and operations:

 

 

 

 

 

 

 

 

Water sales and royalties

 

35,386

 

 

24

%

 

43,413

 

 

16

%

Easements and other surface-related income

 

26,237

 

 

17

%

 

16,074

 

 

6

%

 

 

61,623

 

 

41

%

 

59,487

 

 

22

%

Total consolidated revenues

 

$

151,162

 

 

100

%

 

$

278,634

 

 

100

%

 

 

 

 

 

 

 

 

 

Net income:

 

 

 

 

 

 

 

 

Land and resource management

 

$

57,839

 

 

68

%

 

$

160,311

 

 

85

%

Water services and operations

 

27,145

 

 

32

%

 

29,273

 

 

15

%

Total consolidated net income

 

$

84,984

 

 

100

%

 

$

189,584

 

 

100

%

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 measurements. These measurements are not to be considered more relevant or accurate than the measurements presented in accordance with GAAP. In compliance with requirements of the Securities and Exchange Commission (“SEC”), our non-GAAP measurements are reconciled to net income, the most directly comparable GAAP performance measure. For all non-GAAP measurements, neither the SEC nor any other regulatory body has passed judgment on these non-GAAP measurements.

EBITDA

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 have presented EBITDA because we believe that it is a useful supplement to net income as an indicator of operating performance.

The following table presents a reconciliation of net income to EBITDA for the three and six months ended June 30, 2020 and 2019 (in thousands):

 

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 

 

2020

 

2019

 

2020

 

2019

Net income

 

$

27,583

 

 

$

49,586

 

 

$

84,984

 

 

$

189,584

 

Add:

 

 

 

 

 

 

 

 

Income tax expense

 

7,340

 

 

13,293

 

 

21,307

 

 

48,841

 

Depreciation, depletion and amortization

 

3,678

 

 

1,451

 

 

7,013

 

 

2,655

 

EBITDA

 

$

38,601

 

 

$

64,330

 

 

$

113,304

 

 

$

241,080

 

 

 

 

 

 

 

 

 

 

 

Chris Steddum
Vice President, Finance and Investor Relations
(214) 969-5530

Source: Texas Pacific Land Trust

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Texas Pacific Land Trust Provides Update on Corporate Reorganization /investors/news-events/press-releases/detail/105/texas-pacific-land-trust-provides-update-on-corporate Mon, 15 Jun 2020 07:30:00 -0400 /investors/news-events/press-releases/detail/105/texas-pacific-land-trust-provides-update-on-corporate Initial Draft Registration Statement Submitted to the SEC for Review

New Corporation to Be Named “Texas Pacific Land Corporation”

All Directors Selected for a Nine-Member Board

DALLAS--(BUSINESS WIRE)-- The Trustees of Texas Pacific Land Trust (NYSE:TPL) (the “Trust”) announced today that, in connection with the Trust’s previously announced plan to reorganize from its current structure to a corporation formed under Delaware law, the new corporation has submitted an initial draft registration statement on Form 10 to the Securities and Exchange Commission (SEC), on a non-public basis, for review by the staff of the SEC.

The new corporation is to be named Texas Pacific Land Corporation.

The Trust continues to make progress toward effecting the corporate reorganization by the end of the third quarter of 2020 but recognizes that unforeseen impacts of COVID-19 could extend this timeframe despite the Trust’s efforts. Barring any such disruptions, further information regarding the corporate reorganization, including details about the transaction and management of the new corporation, will be included in the registration statement when it is publicly filed with the SEC.

The Trustees also announced today the selection of all members of the new corporation’s nine-member board of directors. Immediately following the effectiveness of the corporate reorganization, the board will consist of the following members (in alphabetical order): David E. Barry; General Donald G. Cook, USAF (Ret.); Barbara J. Duganier; Donna E. Epps; Tyler Glover; Dana F. McGinnis; John R. Norris III; Eric L. Oliver; and Murray Stahl.

Mr. Glover, who has been the Chief Executive Officer of the Trust since November 2016, has been selected to serve as Chief Executive Officer as well as a director of the new corporation.

In selecting the board of directors, the Trust considered recommendations and input of the Conversion Exploration Committee that was formed in June 2019 to assist the Trustees and to provide shareholder perspectives in their evaluation of the proposed corporate reorganization. General Cook and Messrs. McGinnis, Oliver and Stahl were members of the Conversion Exploration Committee, as were the Trustees, Messrs. Barry and Norris. Ms. Duganier and Ms. Epps were selected following a thorough search for qualified directors with the assistance of a nationally-recognized director search firm. Both are certified public accountants with public company board and audit committee experience.

In connection with the planned reorganization, the Trust entered into a stockholders’ agreement with Horizon Kinetics LLC, SoftVest, L.P. and Mission Advisors L.P. Details relating to the stockholders’ agreement will be included in a Current Report on Form 8-K to be filed by the Trust with the SEC.

Further information about the board of directors and management of the new corporation, including details about their qualifications and experience, will be included in an information statement, which will be part of the registration statement, to be made available to the Trust’s sub-share certificate holders.

Sidley Austin LLP is acting as legal advisor to the Trust.

Additional Information about the Directors

David E. Barry has served as a Trustee of the Trust since 2017. Mr. Barry has served as President of Tarka Resources, Inc., which is engaged in oil and gas exploration in Texas, Oklahoma and Louisiana, since 2012. Mr. Barry also serves as President of Sidra Real Estate, Inc., which is engaged in the ownership of commercial real estate interests in Texas, California, Illinois and the District of Columbia. Mr. Barry practiced real estate, employee benefits and compensation law at the law firm of Kelley Drye & Warren LLP from 1969 until 2014.

General Donald G. Cook is a retired Four-Star U.S. Air Force General. He currently serves on the board of Crane Co. (NYSE:CR), where he chairs the nominating and governance committee and is a member of the compensation and the executive committee, and on the board of Cybernance, Inc. General Cook previously served on the boards of USAA Federal Savings Bank, U.S. Security Associates Inc., Burlington and Northern Santa Fe Railroad. In addition to his extensive corporate governance experience, General Cook has been the Chairman of the San Antonio chapter of the National Association of Corporate Directors.

Barbara J. Duganier is a certified public accountant and currently serves on the boards of MRC Global Inc. (NYSE:MRC), where she chairs the audit committee and is a member of the governance committee; Noble Energy, Inc. (Nasdaq:NBL), where she is a member of the audit and governance committees; and West Monroe Partners, where she is the lead independent director and chairs the nominating and governance committee. Ms. Duganier previously served on the boards of the general partner of Buckeye Partners, L.P. and HCC Insurance Holdings. Ms. Duganier held various leadership and management positions during her tenures at Accenture, from 2004 to 2013, including as Global Chief Strategy Officer and as Global Growth and Offering Development Lead of the outsourcing business, and Arthur Andersen LLP, from 1979 to 2002, including as Global Chief Financial Officer of Andersen Worldwide.

Donna E. Epps is a certified public accountant and was with Deloitte LLP for over 31 years. Throughout her career, Ms. Epps provided attest services as well as financial advisory services in governance, risk and compliance matters to private and public companies across multiple industries. Ms. Epps currently serves on the board of Saia, Inc. (Nasdaq:SAIA), where she is a member of the audit and nominating and governance committees.

Dana F. McGinnis is the Founder and Chief Investment Officer of Mission Advisors. Mr. McGinnis has owned and operated Mission Advisors, which manages pure energy investments as well as several institutional and high net-worth accounts, since 1990. Mr. McGinnis formerly managed San Antonio Capital Management and launched a suite of global macroeconomic hedge funds.

John R. Norris III has served as a Trustee of the Trust since 2000. Mr. Norris has been a member of the law firm Norris & Weber, PLLC (including its predecessor firm) in Dallas, Texas, since 1979. He has been certified as a legal specialist in estate planning and probate law by the Texas Board of Legal Specialization since 1989.

Eric. L Oliver is the President of SoftVest Advisors, LLC, a registered investment adviser that acts as an investment manager for private fund clients. Mr. Oliver additionally serves as the President of HeartsBluff Music Partners, LLC and Carrizo Springs Music Partners, LLC, both of which are registered investment advisers pursuant to an umbrella registration filed by SoftVest Advisors, LLC.

Murray Stahl is the Chief Executive Officer, Chairman of the Board and co-founder of Horizon Kinetics LLC and serves as Chief Investment Officer of Horizon Kinetics Asset Management LLC, a wholly owned subsidiary of Horizon Kinetics LLC. Mr. Stahl has over 30 years of investing experience and is responsible for overseeing Horizon Kinetics LLC’s proprietary research and chairs the firm’s Investment Committee, which is responsible for portfolio management decisions across the entire firm.

Tyler Glover has served as Chief Executive Officer, Co-General Agent and Secretary of the Trust since November 2016 and also currently serves as President and Chief Executive Officer of Texas Pacific Water Resources LLC, a wholly owned subsidiary of the Trust, since its formation in June 2017. Mr. Glover previously served as Assistant General Agent of the Trust from December 2014 to November 2016 and has over 10 years of energy services and land management experience.

About Texas Pacific Land Trust

Texas Pacific Land Trust is one of the largest landowners in the State of Texas with approximately 900,000 acres of land in West Texas. The Trust was organized under a Declaration of Trust to receive and hold title to extensive tracts of land in the State of Texas, previously the property of the Texas and Pacific Railway Company, and to issue transferable Certificates of Proprietary Interest pro rata to the holders of certain debt securities of the Texas and Pacific Railway Company. Texas Pacific Land Trust’s Trustees are empowered under the Declaration of Trust to manage the lands with all the powers of an absolute owner.

Visit the Trust at www.shpxtqd.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 the Trust’s beliefs, as well as assumptions made by, and information currently available to, the Trust, 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, statements regarding the corporate reorganization and other 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 the Trust believes that plans, intentions and expectations, including those regarding the corporate reorganization, reflected in or suggested by any forward-looking statements made herein are reasonable, the Trust may be unable to achieve such plans, intentions or expectations and actual results, performance or achievements may vary materially and adversely from those envisaged in this news release due a number of factors including, but not limited to: a determination of the Trustees of the Trust not to provide final approval of all actions and transactions necessary to effect the corporate reorganization; a determination that the corporate reorganization will not be tax-free to the Trust and holders of the Trust’s sub-share certificates; the SEC declining to declare effectiveness of filings necessary to effect the corporate reorganization; the NYSE declining to approve the listing of common stock of the new corporation on the NYSE; the occurrence of any event, change or other circumstances that could give rise to the abandonment of the corporate reorganization; changes in the expected timing and likelihood of completion of the corporate reorganization; uncertainties as to the timing of the corporate reorganization; potential adverse reactions or changes to business relationships resulting from the announcement or completion of the corporate reorganization; the potential impacts of COVID-19 on the global and U.S. economies as well as on the Trust’s financial condition and business operations; estimates regarding the markets for real estate in the areas in which the unexpected costs, charges or expenses resulting from the corporate reorganization; risks related to disruption of management time from ongoing business operations due to the corporate reorganization; the initiation or outcome of potential litigation; and any changes in general economic and/or industry specific conditions. Except as required by law, the Trust undertakes no obligation to publicly update or revise any such forward-looking statements. For more information concerning factors that could cause actual results to differ from those expressed or referred to herein, see the Trust’s annual report on Form 10-K and quarterly reports on Form 10-Q filed with the SEC.

(214) 969-5530
Chris Steddum
Vice President, Finance and Investor Relations

Source: Texas Pacific Land Trust

]]>
Texas Pacific Land Trust Announces First Quarter 2020 Results /investors/news-events/press-releases/detail/104/texas-pacific-land-trust-announces-first-quarter-2020 Thu, 30 Apr 2020 16:30:00 -0400 /investors/news-events/press-releases/detail/104/texas-pacific-land-trust-announces-first-quarter-2020 DALLAS--(BUSINESS WIRE)-- Texas Pacific Land Trust (NYSE: TPL) today announced financial and operating results for the first quarter ended March 31, 2020.

Results for the first quarter of 2020:

  • Net income of $57.4 million, or $7.40 per Sub-share Certificate, for the first quarter ended March 31, 2020 compared with $140.0 million (which included a $100 million land sale), or $18.04 per Sub-share Certificate, for the first quarter ended March 31, 2019.
  • Revenues of $96.6 million for the first quarter ended March 31, 2020, compared with $191.3 million for the first quarter ended March 31, 2019.
  • Increases of 27.5% in oil and gas royalty revenue and 17.3% in water sales and royalty revenue and a decrease of 16.3% in easements and other surface-related income for the first quarter ended March 31, 2020 compared with the first quarter ended March 31, 2019.
  • EBITDA of $74.7 million for the first quarter ended March 31, 2020, compared with $176.8 million for the first quarter ended March 31, 2019.

“While the full extent of the impact of COVID-19 and the effect of record low oil prices on the global and U.S. economies, the oil & gas industry, and more specifically our business operations, is unknown at this time, we believe the Trust is well positioned both financially and operationally to weather the current uncertainties,” said Tyler Glover, the Trust’s chief executive officer. “We are focused on continuing to meet the operational needs of our customers and ensuring ongoing employee health and safety during these unprecedented times.”

Further details for the first quarter of 2020:

The Trust reported net income of $57.4 million for the first quarter ended March 31, 2020, a decrease of 59.0% compared to net income of $140.0 million for the first quarter ended March 31, 2019, which included a $100 million land sale. Excluding the impact of the 2019 land sale (net of income tax), net income for the first quarter ended March 31, 2019 was $61.0 million.

Oil and gas royalty revenue was $42.4 million for the first quarter ended March 31, 2020, compared with $33.2 million for the first quarter ended March 31, 2019, an increase of 27.5%. Crude oil and gas production subject to the Trust’s royalty interests increased 11.9% and 31.4%, respectively, in the first quarter ended March 31, 2020 compared to the first quarter ended March 31, 2019. Additionally, prices received for crude oil production increased 21.9% in the first quarter ended March 31, 2020 compared to the same period of 2019, while prices received for gas production decreased 23.1% over the same time period.

Easements and other surface-related income was $26.3 million for the first quarter ended March 31, 2020, a decrease of 16.3% compared with the first quarter ended March 31, 2019 when easements and other surface-related income was $31.4 million. The decrease in easements and other surface-related income was largely driven by a decrease of $8.4 million in pipeline easement income partially offset by an increase of $2.6 million in commercial lease revenue (largely due to an increase in saltwater disposal royalties) for the first quarter ended March 31, 2020 compared to the same period of 2019.

Water sales and royalty revenue was $27.0 million for the first quarter ended March 31, 2020, an increase of 17.3% compared with the first quarter ended March 31, 2019 when water sales and royalty revenue was $23.0 million. This increase was principally due to a 50.5% increase in the number of barrels of sourced and treated water sold in the first quarter of 2020 over the same period in 2019, partially offset by decreased water royalties.

The Trust recognized land sales revenue of $0.9 million for the first quarter ended March 31, 2020 and $103.6 million for the comparable period of 2019. Land sales revenue for the first quarter ended March 31, 2019, included a $100 million land sale closed in January 2019.

COVID-19 Pandemic and Market Conditions Update

The COVID-19 pandemic and related economic repercussions have created significant volatility, uncertainty, and turmoil in the oil and gas industry. Oil demand has significantly deteriorated as a result of the virus outbreak and corresponding preventative measures taken around the world to mitigate the spread of the virus. In the midst of the ongoing COVID-19 pandemic, the Organization of Petroleum Exporting Countries and other oil producing nations (OPEC+) were unable to reach an agreement on production levels for crude oil, at which point Saudi Arabia and Russia initiated efforts to aggressively increase their production. Although certain OPEC+ nations have reached a tentative agreement on production cuts since such time, there is an excess supply of oil on the market and constraints on storage capacity. The convergence of these events is expected to result in the downward pressure on certain commodity prices continuing for the foreseeable future. Furthermore, in April 2020, some states, including Texas, announced that they are considering proration of oil production in response to market conditions, which could limit the amount of oil and natural gas produced from the wells to which the Trust’s royalty interests relate.

These events have negatively affected, and are expected to continue to negatively affect, the Trust’s business and results of operations. Should oil and gas wells be shut in, production curtailed or the owners and operators of the oil and gas wells to which the Trust’s royalty interests relate decrease investment in response to lower commodity prices and conservation of capital, we would expect the Trust’s royalty income and demand for our water services to decline.

Given the dynamic nature of these events, we cannot reasonably estimate the period of time that the COVID-19 pandemic and related market conditions will persist, or the extent of the impact they will have on the Trust’s business or results of operations and financial condition.

Conversion of the Trust

As previously announced on March 23, 2020, our Trustees approved a plan to reorganize the Trust from its current structure to a corporation formed under the laws of the State of Delaware. It is currently anticipated that the corporate reorganization will be effective by the end of the third quarter of 2020, barring any unforeseen impacts of COVID-19 or other developments which, despite our best efforts, could potentially extend this timeframe.

About Texas Pacific Land Trust

Texas Pacific Land Trust is one of the largest landowners in the State of Texas with approximately 900,000 acres of land in West Texas. The Trust was organized under a Declaration of Trust to receive and hold title to extensive tracts of land in the State of Texas, previously the property of the Texas and Pacific Railway Company, and to issue transferable Certificates of Proprietary Interest pro rata to the holders of certain debt securities of the Texas and Pacific Railway Company. Texas Pacific Land Trust’s trustees are empowered under the Declaration of Trust to manage the lands with all the powers of an absolute owner. Texas Pacific Land Trust is not a REIT.

Forward-Looking Statements

This news release may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements regarding the Trust’s future operations and prospects, the severity and duration of the COVID-19 pandemic and related economic repercussions, the markets for real estate in the areas in which the Trust owns real estate, applicable zoning regulations, the markets for oil and gas, the proposed reorganization of the Trust into a corporation, production limits on prorated oil and gas wells ized by the Railroad Commission of Texas, expected competition, management’s intent, beliefs or current expectations with respect to the Trust’s future financial performance and other matters. We assume no responsibility to update any such forward-looking statements.

REPORT OF OPERATIONS

(in thousands, except share and per share amounts) (unaudited)

 

 

Three Months Ended
March 31,

 

2020

 

2019

Revenues:

 

 

 

Oil and gas royalties

$

42,360

 

 

$

33,213

 

Easements and other surface-related income

26,267

 

 

31,367

 

Water sales and royalties

26,967

 

 

22,983

 

Land sales

900

 

 

103,625

 

Other operating revenue

100

 

 

136

 

Total revenues

96,594

 

 

191,324

 

 

 

 

 

Expenses:

 

 

 

Salaries and related employee expenses

10,620

 

 

6,464

 

Water service-related expenses

6,780

 

 

4,578

 

General and administrative expenses

2,959

 

 

2,142

 

Legal and professional fees

2,358

 

 

1,783

 

Depreciation, depletion and amortization

3,335

 

 

1,204

 

Total operating expenses

26,052

 

 

16,171

 

 

 

 

 

Operating income

70,542

 

 

175,153

 

 

 

 

 

Other income

826

 

 

393

 

Income before income taxes

71,368

 

 

175,546

 

Income tax expense (benefit):

 

 

 

Current

14,022

 

 

14,548

 

Deferred

(55)

 

 

21,000

 

Total income tax expense

13,967

 

 

35,548

 

Net income

$

57,401

 

 

$

139,998

 

 

 

 

 

Net income per Sub-share Certificate - basic and diluted

$

7.40

 

 

$

18.04

 

 

 

 

 

Weighted average number of Sub-share Certificates outstanding

7,756,156

 

 

7,759,808

 

SEGMENT OPERATING RESULTS

(in thousands) (unaudited)

 

 

 

Three Months Ended
March 31,

 

 

2020

 

2019

Revenues:

 

 

 

 

 

 

 

 

Land and resource management:

 

 

 

 

 

 

 

 

Oil and gas royalties

 

$

42,360

 

 

44

%

 

$

33,213

 

 

18

%

Easements and other surface-related income

 

13,298

 

 

14

%

 

23,485

 

 

12

%

Land sales and other operating revenue

 

1,000

 

 

1

%

 

103,761

 

 

54

%

 

 

56,658

 

 

59

%

 

160,459

 

 

84

%

Water services and operations:

 

 

 

 

 

 

 

 

Water sales and royalties

 

26,967

 

 

28

%

 

22,983

 

 

12

%

Easements and other surface-related income

 

12,969

 

 

13

%

 

7,882

 

 

4

%

 

 

39,936

 

 

41

%

 

30,865

 

 

16

%

Total consolidated revenues

 

$

96,594

 

 

100

%

 

$

191,324

 

 

100

%

 

 

 

 

 

 

 

 

 

Net income:

 

 

 

 

 

 

 

 

Land and resource management

 

$

39,118

 

 

68

%

 

$

123,117

 

 

88

%

Water services and operations

 

18,283

 

 

32

%

 

16,881

 

 

12

%

Total consolidated net income

 

$

57,401

 

 

100

%

 

$

139,998

 

 

100

%

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 measurements. These measurements are not to be considered more relevant or accurate than the measurements presented in accordance with GAAP. In compliance with requirements of the Securities and Exchange Commission (“SEC”), our non-GAAP measurements are reconciled to net income, the most directly comparable GAAP performance measure. For all non-GAAP measurements, neither the SEC nor any other regulatory body has passed judgment on these non-GAAP measurements.

EBITDA

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 have presented EBITDA because we believe that it is a useful supplement to net income as an indicator of operating performance.

The following table presents a reconciliation of net income to EBITDA for the three months ended March 31, 2020 and 2019 (in thousands):

 

 

Three Months Ended
March 31,

 

 

2020

 

2019

Net income

 

$

57,401

 

 

$

139,998

 

Add:

 

 

 

 

Income tax expense

 

13,967

 

 

35,548

 

Depreciation, depletion and amortization

 

3,335

 

 

1,204

 

EBITDA

 

$

74,703

 

 

$

176,750

 

 

 

 

 

 

 

Chris Steddum
Vice President, Finance and Investor Relations
(214) 969-5530

Source: Texas Pacific Land Trust

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Texas Pacific Land Trust Approves Plan to Reorganize into a Delaware Corporation /investors/news-events/press-releases/detail/103/texas-pacific-land-trust-approves-plan-to-reorganize-into-a Mon, 23 Mar 2020 07:30:00 -0400 /investors/news-events/press-releases/detail/103/texas-pacific-land-trust-approves-plan-to-reorganize-into-a  Corporate Reorganization Is Anticipated to Enhance Governance and Facilitate Business Objectives

DALLAS--(BUSINESS WIRE)-- The Trustees of Texas Pacific Land Trust (NYSE: TPL) (the “Trust”) announced today that the Trust has approved a plan to reorganize from its current structure to a corporation formed under Delaware law. The Trustees made their determination following careful consideration of the recommendation of the Conversion Exploration Committee of the Trust.

“The Trust’s present structure has suited the Trust’s needs and those of its shareholders for more than a century, but a Delaware corporate structure is more aligned with the expectations of today’s investors. A new corporate structure would better allow us to execute on business goals and capitalize on our enviable assets, resources and business potential,” said David E. Barry, a Trustee of the Trust. “With an enhanced governance framework in step with practices of publicly traded peer corporations, we expect a new corporate structure would enable value creation over time and drive value for stockholders.” John R. Norris III, Trustee of the Trust, added, “We are grateful to the members of the Committee for dedicating their time and attention to providing a thoughtful recommendation that informed this decision.”

Under the corporate reorganization plan, common stock of the new corporation would be distributed upon the consummation of the reorganization process to holders of sub-share certificates of proprietary interest of the Trust and traded on the New York Stock Exchange (NYSE). At or about such time, the sub-share certificates would be cancelled. The corporate reorganization is intended to be tax-free in the United States, and the corporation will be deemed a c-corporation for U.S. taxation purposes.

The Trust is presently aiming for the corporate reorganization to be effective by the end of the third quarter of 2020, but the Trust recognizes that unforeseen impacts of COVID-19 could extend this timeframe despite the Trust’s efforts. Barring any such unforeseen disruptions, further information regarding the corporate reorganization will be included in a registration statement on Form 10 to be filed by the corporation with the SEC as well as in other communications and disclosures anticipated to be made by the Trust and the corporation.

Advisors

Credit Suisse is acting as financial advisor and Sidley Austin LLP as legal advisor to the Trust.

About Texas Pacific Land Trust

Texas Pacific Land Trust is one of the largest landowners in the State of Texas with approximately 900,000 acres of land in West Texas. The Trust was organized under a Declaration of Trust to receive and hold title to extensive tracts of land in the State of Texas, previously the property of the Texas and Pacific Railway Company, and to issue transferable Certificates of Proprietary Interest pro rata to the holders of certain debt securities of the Texas and Pacific Railway Company. Texas Pacific Land Trust’s trustees are empowered under the Declaration of Trust to manage the lands with all the powers of an absolute owner.

Visit the Trust at www.shpxtqd.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 the Trust’s beliefs, as well as assumptions made by, and information currently available to, the Trust, 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, statements regarding the proposed reorganization of the Trust into a corporation (the “proposed reorganization”) and other 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 the Trust believes that plans, intentions and expectations, including those regarding the proposed reorganization, reflected in or suggested by any forward-looking statements made herein are reasonable, the Trust may be unable to achieve such plans, intentions or expectations and actual results, performance or achievements may vary materially and adversely from those envisaged in this news release due a number of factors including, but not limited to: a determination of the Trustees not to provide final approval of all actions and transactions necessary to effect the proposed reorganization; a determination that the proposed reorganization will not be tax-free to the Trust and holders of the Trust’s sub-share certificates; the SEC declining to declare effectiveness of filings necessary to effect the proposed reorganization; the NYSE declining to approve the listing of TPL common stock on the NYSE; the occurrence of any event, change or other circumstances that could give rise to the abandonment of the proposed reorganization; changes in the expected timing and likelihood of completion of the proposed reorganization; uncertainties as to the timing of the proposed reorganization; potential adverse reactions or changes to business relationships resulting from the announcement or completion of the proposed reorganization; unexpected costs, charges or expenses resulting from the proposed reorganization; risks related to disruption of management time from ongoing business operations due to the proposed reorganization; the initiation or outcome of potential litigation; any changes in general economic and/or industry specific conditions; and the potential impacts of COVID-19 on the global and U.S. economies as well as on the Trust’s financial condition and business operations. Except as required by law, the Trust undertakes no obligation to publicly update or revise any such forward-looking statements. For more information concerning factors that could cause actual results to differ from those expressed or referred to herein, see the Trust’s annual report on Form 10-K and quarterly reports on Form 10-Q filed with the SEC.

(214) 969-5530
Chris Steddum
Vice President, Finance and Investor Relations

Source: Texas Pacific Land Trust

]]>
Texas Pacific Land Trust Declares Regular and Special Dividends /investors/news-events/press-releases/detail/102/texas-pacific-land-trust-declares-regular-and-special Mon, 24 Feb 2020 07:30:00 -0500 /investors/news-events/press-releases/detail/102/texas-pacific-land-trust-declares-regular-and-special DALLAS--(BUSINESS WIRE)-- Texas Pacific Land Trust (NYSE: TPL) announced today that its Trustees have declared a cash dividend of $10.00 per sub-share, an increase of $8.25 over the cash dividend paid in 2019, payable March 16, 2020 to sub-shareholders of record at the close of business on March 9, 2020. This is the 17th consecutive year that the regular dividend has increased. Additionally, the Trustees declared a special dividend of $6.00 per sub-share, an increase of $1.75 over the special dividend paid in 2019, payable March 16, 2020 to sub-shareholders of record at the close of business on March 9, 2020.

Texas Pacific Land Trust is not a REIT.

This news release may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements regarding the Trust's future operations and prospects, the markets for real estate in the areas in which the Trust owns real estate, applicable zoning regulations, the markets for oil and gas, production limits on prorated oil and gas wells ized by the Railroad Commission of Texas, expected competitions, management's intent, beliefs or current expectations with respect to the Trust's future financial performance and other matters. We assume no responsibility to update any such forward-looking statements.

214-969-5530
Chris Steddum
Vice President, Finance and Investor Relations

Source: Texas Pacific Land Trust

]]>
Texas Pacific Land Trust Announces Fourth Quarter and Full Year 2019 Results /investors/news-events/press-releases/detail/101/texas-pacific-land-trust-announces-fourth-quarter-and-full Thu, 30 Jan 2020 16:30:00 -0500 /investors/news-events/press-releases/detail/101/texas-pacific-land-trust-announces-fourth-quarter-and-full DALLAS--(BUSINESS WIRE)-- Texas Pacific Land Trust (NYSE:TPL) today announced financial and operating results for the fourth quarter and year ended December 31, 2019.

Results for the fourth quarter of 2019:

  • Net income of $71.3 million, or $9.20 per Sub-share Certificate, for the fourth quarter ended December 31, 2019 compared with $62.7 million, or $8.06 per Sub-share Certificate, for the fourth quarter ended December 31, 2018.
  • Revenues of $113.3 million for the fourth quarter ended December 31, 2019, compared with $93.2 million for the fourth quarter ended December 31, 2018.
  • Increases of 26.6% in easements and other surface-related income, 22.0% in oil and gas royalty revenue and 20.6% in water sales and royalty revenue for the fourth quarter ended December 31, 2019 compared with the fourth quarter ended December 31, 2018.
  • EBITDA of $94.9 million for the fourth quarter ended December 31, 2019, compared with $79.3 million for the fourth quarter of 2018, an increase of 19.6%.

Results for the year ended December 31, 2019:

  • Net income of $320.9 million, or $41.38 per Sub-share Certificate, for the year ended December 31, 2019 compared with $209.7 million, or $26.93 per Sub-share Certificate, for the year ended December 31, 2018.
  • Revenues of $490.5 million for the year ended December 31, 2019, compared with $300.2 million for the year ended December 31, 2018.
  • Increases of 32.9% in water sales and royalty revenue, 30.0% in easements and other surface-related income and 24.9% in oil and gas royalty revenue for the year ended December 31, 2019 compared with the year ended December 31, 2018.
  • EBITDA of $413.4 million for the year ended December 31, 2019, compared with $264.3 million for the year ended December 31, 2018, an increase of 56.4%.

Further details for the fourth quarter of 2019:

The Trust reported net income of $71.3 million for the fourth quarter ended December 31, 2019, an increase of 13.8% over net income of $62.7 million for the fourth quarter ended December 31, 2018. The increase was principally related to increased oil and gas royalties, easements and other surface-related income and water sales.

Oil and gas royalty revenue was $43.6 million for the fourth quarter ended December 31, 2019, compared with $35.8 million for the fourth quarter ended December 31, 2018, an increase of 22.0%. Crude oil and gas production subject to the Trust’s royalty interests increased 45.6% and 33.4%, respectively, in the fourth quarter ended December 31, 2019 compared to the fourth quarter ended December 31, 2018. While crude oil and gas production increased in the fourth quarter ended December 31, 2019 compared to the same period of 2018, the prices received for crude oil and gas production decreased 3.6% and 41.1%, respectively, over the same time period.

Easements and other surface-related income was $27.7 million for the fourth quarter ended December 31, 2019, an increase of 26.6% compared with the fourth quarter ended December 31, 2018 when easements and other surface-related income was $21.9 million. The increase in easements and other surface-related income was largely driven by increases of $3.1 million in commercial lease revenue (largely due to an increase in saltwater disposal royalties) and $2.0 million in pipeline easement income for the fourth quarter ended December 31, 2019 compared to the same period of 2018.

Water sales and royalty revenue was $19.9 million for the fourth quarter ended December 31, 2019, an increase of 20.6% compared with the fourth quarter ended December 31, 2018 when water sales and royalty revenue was $16.5 million. This increase was principally due to a 50.4% increase in the number of barrels of sourced and treated water sold in the fourth quarter of 2019 over the same period in 2018, partially offset by decreased water royalties.

In an exchange transaction, the Trust conveyed approximately 5,620 acres of land in exchange for approximately 5,545 acres of land, all in Culberson County. As the Trust had no cost basis in the land conveyed, the Trust recognized land sales revenue of $22.0 million for the fourth quarter ended December 31, 2019.

Further details for the year ended December 31, 2019:

The Trust reported net income of $320.9 million for the year ended December 31, 2019, an increase of 53.0% over net income of $209.7 million for the year ended December 31, 2018. Net income for the year ended December 31, 2019 included a $100 million land sale. Excluding the impact of the land sale, net of income tax, for the year ended December 31, 2019, net income was $241.9 million, a 15.3% increase over net income for the year ended December 31, 2018. The 15.3% increase was principally related to increased oil and gas royalties, easements and other surface-related income and water sales.

Oil and gas royalty revenue was $154.7 million for the year ended December 31, 2019, compared with $123.8 million for the year ended December 31, 2018, an increase of 24.9%. Crude oil and gas production subject to the Trust’s royalty interests increased 48.3% and 89.3%, respectively, in the year ended December 31, 2019 compared to the year ended December 31, 2018. While crude oil and gas production increased in the year ended December 31, 2019 compared to December 31, 2018, the prices received for crude oil and gas production decreased 8.0% and 49.3%, respectively, over the same time period.

Easements and other surface-related income was $115.4 million for the year ended December 31, 2019, an increase of 30.0% compared with the year ended December 31, 2018 when easements and other surface-related income was $88.7 million. The increase in easements and other surface-related income was principally related to increases of $19.0 million in pipeline easement income and $10.6 million in commercial lease revenue (largely due to an increase in saltwater disposal royalties), for the year ended December 31, 2019 compared to the same period of 2018. These increases were partially offset by a $3.7 million decrease in temporary permit income over the same time period.

Water sales and royalty revenue was $84.9 million for the year ended December 31, 2019, an increase of 32.9% compared with the year ended December 31, 2018 when water sales and royalty revenue was $63.9 million. This increase was principally due to a 44.0% increase in the number of barrels of sourced and treated water sold during the year ended December 31, 2019 over the same period in 2018, partially offset by decreased water royalties.

The Trust recognized land sales revenue of $135.0 million for the year ended December 31, 2019 and $4.4 million for the comparable period of 2018. The increase in land sales revenue is principally related to a $100 million land sale in January 2019 and land sales revenue of $22.0 million related to a land exchange transaction in December 2019.

About Texas Pacific Land Trust

Texas Pacific Land Trust is one of the largest landowners in the State of Texas with approximately 900,000 acres of land in West Texas. The Trust was organized under a Declaration of Trust to receive and hold title to extensive tracts of land in the State of Texas, previously the property of the Texas and Pacific Railway Company, and to issue transferable Certificates of Proprietary Interest pro rata to the holders of certain debt securities of the Texas and Pacific Railway Company. Texas Pacific Land Trust’s trustees are empowered under the Declaration of Trust to manage the lands with all the powers of an absolute owner. Texas Pacific Land Trust is not a REIT.

Forward-Looking Statements

This news release may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements regarding the Trust’s future operations and prospects, the markets for real estate in the areas in which the Trust owns real estate, applicable zoning regulations, the markets for oil and gas, production limits on prorated oil and gas wells ized by the Railroad Commission of Texas, expected competitions, management’s intent, beliefs or current expectations with respect to the Trust’s future financial performance and other matters. We assume no responsibility to update any such forward-looking statements.

 

REPORT OF OPERATIONS

(in thousands, except share and per share amounts) (unaudited)

 

 

Three Months Ended
December 31,

 

Years Ended
December 31,

 

2019

 

2018

 

2019

 

2018

Revenues:

 

 

 

 

 

 

 

Oil and gas royalties

$

43,616

 

 

$

35,756

 

 

$

154,729

 

 

$

123,834

 

Easements and other surface-related income

27,727

 

 

21,894

 

 

115,362

 

 

88,739

 

Water sales and royalties

19,882

 

 

16,485

 

 

84,949

 

 

63,913

 

Sale of oil and gas royalty interests

 

 

18,875

 

 

 

 

18,875

 

Land sales

22,000

 

 

74

 

 

135,020

 

 

4,367

 

Other operating revenue

107

 

 

117

 

 

436

 

 

492

 

Total revenues

113,332

 

 

93,201

 

 

490,496

 

 

300,220

 

 

 

 

 

 

 

 

 

Expenses:

 

 

 

 

 

 

 

Salaries and related employee expenses

10,099

 

 

7,984

 

 

32,841

 

 

18,433

 

Water service-related expenses

5,385

 

 

3,567

 

 

20,808

 

 

11,168

 

General and administrative expenses

2,663

 

 

1,822

 

 

9,765

 

 

4,704

 

Legal and professional fees

1,205

 

 

875

 

 

16,403

 

 

2,498

 

Depreciation, depletion and amortization

3,620

 

 

1,064

 

 

8,906

 

 

2,583

 

Total operating expenses

22,972

 

 

15,312

 

 

88,723

 

 

39,386

 

 

 

 

 

 

 

 

 

Operating income

90,360

 

 

77,889

 

 

401,773

 

 

260,834

 

 

 

 

 

 

 

 

 

Other income

911

 

 

390

 

 

2,682

 

 

916

 

Income before income taxes

91,271

 

 

78,279

 

 

404,455

 

 

261,750

 

Income tax expense (benefit):

 

 

 

 

 

 

 

Current

14,007

 

 

15,599

 

 

57,492

 

 

37,200

 

Deferred

5,942

 

 

 

 

26,035

 

 

14,814

 

Total income tax expense

19,949

 

 

15,599

 

 

83,527

 

 

52,014

 

Net income

$

71,322

 

 

$

62,680

 

 

$

320,928

 

 

$

209,736

 

 

 

 

 

 

 

 

 

Net income per Sub-share Certificate - basic and diluted

$

9.20

 

 

$

8.06

 

 

$

41.38

 

 

$

26.93

 

 

 

 

 

 

 

 

 

Weighted average number of Sub-share Certificates outstanding

7,756,156

 

 

7,771,950

 

 

7,756,437

 

 

7,787,407

 

SEGMENT OPERATING RESULTS

(in thousands) (unaudited)

 

 

Three Months Ended
December 31,

 

 

2019

 

2018

Revenues:

 

 

 

 

 

 

 

 

Land and resource management:

 

 

 

 

 

 

 

 

Oil and gas royalties

 

$

43,616

 

 

38

%

 

$

35,756

 

 

39

%

Easements and other surface-related income

 

13,382

 

 

12

%

 

14,012

 

 

15

%

Sale of oil and gas royalty interests

 

 

 

%

 

18,875

 

 

20

%

Land sales and other operating revenue

 

22,107

 

 

19

%

 

191

 

 

%

 

 

79,105

 

 

69

%

 

68,834

 

 

74

%

Water services and operations:

 

 

 

 

 

 

 

 

Water sales and royalties

 

19,882

 

 

18

%

 

16,485

 

 

18

%

Easements and other surface-related income

 

14,345

 

 

13

%

 

7,882

 

 

8

%

 

 

34,227

 

 

31

%

 

24,367

 

 

26

%

Total consolidated revenues

 

$

113,332

 

 

100

%

 

$

93,201

 

 

100

%

 

 

 

 

 

 

 

 

 

Net income:

 

 

 

 

 

 

 

 

Land and resource management

 

$

56,344

 

 

79

%

 

$

49,911

 

 

80

%

Water services and operations

 

14,978

 

 

21

%

 

12,769

 

 

20

%

Total consolidated net income

 

$

71,322

 

 

100

%

 

$

62,680

 

 

100

%

 

 

Years Ended
December 31,

 

 

2019

 

2018

Revenues:

 

 

 

 

 

 

 

 

Land and resource management:

 

 

 

 

 

 

 

 

Oil and gas royalties

 

$

154,729

 

 

31

%

 

$

123,834

 

 

41

%

Easements and other surface-related income

 

73,143

 

 

15

%

 

63,908

 

 

21

%

Sale of oil and gas royalty interests

 

 

 

%

 

18,875

 

 

6

%

Land sales and other operating revenue

 

135,456

 

 

28

%

 

4,859

 

 

2

%

 

 

363,328

 

 

74

%

 

211,476

 

 

70

%

Water services and operations:

 

 

 

 

 

 

 

 

Water sales and royalties

 

84,949

 

 

17

%

 

63,913

 

 

21

%

Easements and other surface-related income

 

42,219

 

 

9

%

 

24,831

 

 

9

%

 

 

127,168

 

 

26

%

 

88,744

 

 

30

%

Total consolidated revenues

 

$

490,496

 

 

100

%

 

$

300,220

 

 

100

%

 

 

 

 

 

 

 

 

 

Net income:

 

 

 

 

 

 

 

 

Land and resource management

 

$

260,566

 

 

81

%

 

$

159,611

 

 

76

%

Water services and operations

 

60,362

 

 

19

%

 

50,125

 

 

24

%

Total consolidated net income

 

$

320,928

 

 

100

%

 

$

209,736

 

 

100

%

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 measurements. These measurements are not to be considered more relevant or accurate than the measurements presented in accordance with GAAP. In compliance with requirements of the Securities and Exchange Commission (“SEC”), our non-GAAP measurements are reconciled to net income, the most directly comparable GAAP performance measure. For all non-GAAP measurements, neither the SEC nor any other regulatory body has passed judgment on these non-GAAP measurements.

EBITDA

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 have presented EBITDA because we believe that it is a useful supplement to net income as an indicator of operating performance.

The following table presents a reconciliation of net income to EBITDA for the three months and years ended December 31, 2019 and 2018 (in thousands):

 

 

Three Months Ended
December 31,

 

Years Ended
December 31,

 

 

2019

 

2018

 

2019

 

2018

Net income

 

$

71,322

 

 

$

62,680

 

 

$

320,928

 

 

$

209,736

 

Add:

 

 

 

 

 

 

 

 

Income tax expense

 

19,949

 

 

15,599

 

 

83,527

 

 

52,014

 

Depreciation, depletion and amortization

 

3,620

 

 

1,064

 

 

8,906

 

 

2,583

 

EBITDA

 

$

94,891

 

 

$

79,343

 

 

$

413,361

 

 

$

264,333

 

 

 

 

 

 

 

 

 

 

 

Robert Packer
(214) 969-5530
Robert@shpxtqd.com

Source: Texas Pacific Land Trust

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