Texas Pacific Land (TPL) Q4 2024 earnings summary

Executive summary

• Achieved record performance in 2024 with all-time highs in oil and gas royalty production, water sales, and produced water royalty volumes, alongside record annual performance in the Water Services and Operations segment.

• Strategic investments in people, technology, and infrastructure drove a 23% year-over-year increase in surface and water revenues.

• Completed two major mineral interest acquisitions totaling $395.5 million, adding 11,600 net royalty acres in the Midland Basin.

• Over $400 million deployed in acquisitions of Permian mineral royalty, water, and surface assets, enhancing growth potential.

• Returned $376 million to shareholders via dividends and buybacks, including a $10.00 per share special dividend and a three-for-one stock split.

Financial highlights

• Generated record free cash flow of $461.1 million in 2024, up 11% year-over-year.

• Full year 2024 net income was $454.0 million ($19.72 per diluted share), with total revenues of $705.8 million, a 12% increase year-over-year.

• Q4 2024 consolidated revenues were $186 million; Adjusted EBITDA was $161 million with an 87% margin.

• Oil and gas royalty production rose 14% year-over-year; water sales volumes up 31%; produced water royalty volumes up 37%.

• Realized oil prices declined 2% and natural gas prices fell 48% year-over-year; average realized price per Boe was $39.87 in 2024.

Outlook and guidance

• Permian outlook for 2025 is constructive, with new permits up 20% year-over-year and total lateral feet up 24%.

• Capital expenditures for 2025 expected to be $65–$75 million, including $28 million for desalination and gas generation projects.

• Announced a regular dividend of $1.60 per share, a 37% increase year-over-year.

• Construction of the produced water desalination test facility is on track for mid-2025 completion.

• Management anticipates continued growth from recent acquisitions and sees opportunities for further consolidation in oil, gas, and water assets.