tpl-20240630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to ______

Commission File Number: 1-39804

Exact name of registrant as specified in its charter:

Texas Pacific Land Corporation


State or other jurisdiction of incorporation or organization:						IRS Employer Identification No.:
Delaware						75-0279735

Address of principal executive offices:

1700 Pacific Avenue, Suite 2900 Dallas, Texas 75201

Registrant’s telephone number, including area code:

(214) 969-5530

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock
(par value $.01 per share)

TPL

New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☑	Accelerated filer	☐
Non-accelerated filer (Do not check if a smaller reporting company)	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☑

As of July 31, 2024, the Registrant had 22,980,620 shares of Common Stock, $0.01 par value, outstanding.

TEXAS PACIFIC LAND CORPORATION

Form 10-Q

For the Quarter Ended June 30, 2024

Table of Contents

Page No.

PART I

FINANCIAL INFORMATION

Item 1.

Financial Statements (unaudited)

Condensed Consolidated Balance Sheets as of June 30, 2024 and December 31, 2023

Condensed Consolidated Statements of Income and Total Comprehensive Income for the Three and Six Months ended June 30, 2024 and 2023

Condensed Consolidated Statements of Cash Flows for the Six Months ended June 30, 2024 and 2023

Notes to Condensed Consolidated Financial Statements

Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Item 4.

Controls and Procedures

Unregistered Sales of Equity Securities and Use of Proceeds

Item 3.

Defaults Upon Senior Securities

Item 4.

Mine Safety Disclosures

PART I. FINANCIAL INFORMATION

Item 1.Financial Statements

TEXAS PACIFIC LAND CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except shares and per share amounts)

(Unaudited)


	June 30, 2024		December 31, 2023
ASSETS
Cash and cash equivalents	$	894,704	$	725,169
Accounts receivable and accrued receivables, net	119,102		128,971
Prepaid expenses and other current assets	3,878		2,944
Tax like-kind exchange escrow	—		5,380

Total current assets	1,017,684		862,464
Real estate acquired	130,800		130,024
Property, plant and equipment, net	95,511		89,587
Royalty interests acquired, net	45,583		46,609
Intangible assets, net	20,457		21,025
Real estate and royalty interests assigned through the Declaration of Trust, no value assigned:
Land (surface rights)	—		—
1/16th nonparticipating perpetual royalty interest	—		—
1/128th nonparticipating perpetual royalty interest	—		—

Other assets	5,756		6,689
Total assets	$	1,315,791	$	1,156,398
LIABILITIES AND EQUITY
Accounts payable and accrued expenses	$	31,656	$	22,501
Ad valorem and other taxes payable	5,661		10,761
Income taxes payable	891		4,795
Unearned revenue	6,060		6,330
Total current liabilities	44,268		44,387
Deferred taxes payable	43,121		42,365
Unearned revenue - noncurrent	21,094		25,006

Accrued liabilities - noncurrent	887		1,444
Total liabilities	109,370		113,202

Commitments and contingencies	—		—
Equity:
Preferred stock, $0.01 par value; 1,000,000 shares authorized, none outstanding as of June 30, 2024 and December 31, 2023	—		—
Common stock, $0.01 par value; 46,536,936 and 7,756,156 shares authorized as of June 30, 2024 and December 31, 2023, respectively, and 22,983,392 and 23,007,681 (as adjusted for stock split) outstanding as of June 30, 2024 and December 31, 2023, respectively	231		78
Treasury stock, at cost; 102,684 and 86,929 shares as of June 30, 2024 and December 31, 2023, respectively	(158,296)		(144,998)
Additional paid-in capital	15,863		14,613
Accumulated other comprehensive income	1,789		1,831
Retained earnings	1,346,834		1,171,672
Total equity	1,206,421		1,043,196
Total liabilities and equity	$	1,315,791	$	1,156,398

See accompanying notes to condensed consolidated financial statements.

Table of Contents

TEXAS PACIFIC LAND CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND TOTAL COMPREHENSIVE INCOME

(in thousands, except shares and per share amounts)

(Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Revenues:
Oil and gas royalties	$	89,813	$	82,412	$	181,933	$	171,542
Water sales	40,650		37,648		77,776		59,377
Produced water royalties	25,301		20,841		48,307		40,975
Easements and other surface-related income	16,570		18,708		37,216		33,677
Land sales	—		1,000		1,244		1,400
Total revenues	172,334		160,609		346,476		306,971

Expenses:
Salaries and related employee expenses	12,771		10,596		25,232		21,189
Water service-related expenses	14,824		10,287		25,036		15,943
General and administrative expenses	3,673		3,327		8,597		6,879
Legal and professional fees	2,307		10,154		6,364		26,782
Ad valorem and other taxes	1,444		2,070		3,801		3,644
Land sales expenses	—		2		250		5
Depreciation, depletion and amortization	4,093		3,893		7,933		7,297
Total operating expenses	39,112		40,329		77,213		81,739

Operating income	133,222		120,280		269,263		225,232

Other income, net	13,220		6,871		23,163		12,260
Income before income taxes	146,442		127,151		292,426		237,492



Income tax expense	31,853		26,758		63,420		50,531
Net income	$	114,589	$	100,393	$	229,006	$	186,961




Other comprehensive loss — periodic pension costs, net of income taxes for the three and six months ended June 30, 2024 and 2023 of $5, $8, $11, and $14, respectively	(21)		(26)		(42)		(51)
Total comprehensive income	$	114,568	$	100,367	$	228,964	$	186,910

Net income per share of common stock
Basic	$	4.99	$	4.35	$	9.96	$	8.10
Diluted	$	4.98	$	4.35	$	9.95	$	8.10

Weighted average number of shares of common stock outstanding
Basic	22,987,971		23,056,986		22,995,486		23,068,056
Diluted	23,013,793		23,072,851		23,018,313		23,083,643

Cash dividends per share of common stock	$	1.17	$	1.08	$	2.34	$	2.16

See accompanying notes to condensed consolidated financial statements.

Table of Contents

TEXAS PACIFIC LAND CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(Unaudited)


	Six Months Ended June 30,
	2024		2023
Cash flows from operating activities:
Net income	$	229,006	$	186,961
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion and amortization	7,933		7,297
Share-based compensation	6,054		5,323

Deferred taxes	756		(673)
Changes in operating assets and liabilities:
Operating assets, excluding income taxes	10,016		(14,477)
Operating liabilities, excluding income taxes	(4,328)		8,040
Income taxes payable	(3,904)		1,984
Prepaid income taxes	—		4,809

Cash provided by operating activities	245,533		199,264

Cash flows from investing activities:

SEC Form 10-Q filed by Texas Pacific Land Corporation