Texas Pacific Land (TPL) Q3 2024 earnings summary

Executive summary

• Achieved record oil and gas royalty production of 28,300 BOE/d in Q3 2024, driven by Midland and Delaware Basin activity and major acquisitions.

• Q3 2024 revenues increased 9.9% year-over-year to $173.6 million, with net income of $106.6 million and strong growth in water sales and produced water royalties.

• Closed three acquisitions totaling nearly $500 million, adding high-quality surface and royalty acreage, including 7,490 net royalty acres for $276.4 million in October.

• Announced a 37% increase in the regular quarterly dividend to $1.60 per share, with $310.6 million in total cash dividends paid through September 30, 2024.

• Effected a three-for-one stock split in March 2024.

Financial highlights

• Q3 2024 consolidated revenues were $173.6 million; net income was $106.6 million; adjusted EBITDA was $144.1 million with an 83% margin.

• Diluted EPS was $4.63 for Q3 2024; nine-month diluted EPS was $14.58.

• Oil and gas royalty production increased 29% year-over-year; water sales volumes up 32%.

• Cash and cash equivalents at September 30, 2024: $533.9 million; no debt outstanding.

• Paid $310.6 million in total cash dividends through September 30, 2024, including a $10.00 per share special dividend.

Outlook and guidance

• Recent acquisitions expected to add over 3,000 BOE/d in the near term, a 10% increase to current production.

• Board declared a quarterly cash dividend of $1.60 per share, payable December 16, 2024.

• Desalination test facility (phase II-B) expected to complete mid-2025, with $25 million total cost.

• Target cash balance set at $700 million, with excess to be used for dividends and share repurchases.

• Management expects strong liquidity and cash flow to support ongoing capital needs and shareholder returns.