Texas Pacific Land Trust (NYSE: TPL) today announced financial
results for the third quarter ended September 30, 2019.
Results for the third quarter of 2019:
- Net income of $60.0 million, or $7.74 per Sub-share
Certificate, for the third quarter ended September 30, 2019
compared with $50.8 million, or $6.52 per Sub-share Certificate,
for the third quarter ended September 30, 2018.
- Revenues of $98.5 million for the third quarter ended September
30, 2019, compared with $73.2 million for the third quarter ended
September 30, 2018.
- Increases of 53.7% in easements and other surface-related
income, 22.4% in oil and gas royalty revenue and 19.1% in water
sales and royalty revenue for the third quarter ended September 30,
2019 compared with the third quarter ended September 30, 2018.
- EBITDA(1) of $77.4 million for the third quarter ended
September 30, 2019, compared with $63.9 million for the third
quarter of 2018, an increase of 21.1%.
Results for the nine months ended September 30, 2019:
- Net income of $249.6 million, or $32.18 per Sub-share
Certificate, for the nine months ended September 30, 2019 compared
with $147.1 million, or $18.86 per Sub-share Certificate, for the
nine months ended September 30, 2018.
- Revenues of $377.2 million for the nine months ended September
30, 2019, compared with $207.0 million for the nine months ended
September 30, 2018.
- Increases of 37.2% in water sales and royalty revenue, 31.1% in
easements and other surface-related income and 26.2% in oil and gas
royalty revenue for the nine months ended September 30, 2019
compared with the nine months ended September 30, 2018.
- EBITDA(1) of $318.5 million for the nine months ended September
30, 2019, compared with $185.0 million for the nine months ended
September 30, 2018, an increase of 72.2%.
Further details for the third quarter of 2019:
Oil and gas royalty revenue was $38.3 million for the third
quarter ended September 30, 2019, compared with $31.3 million for
the third quarter ended September 30, 2018, an increase of 22.4%.
Crude oil and gas production subject to the Trust’s royalty
interests increased 50.4% and 125.9%, respectively, in the third
quarter ended September 30, 2019 compared to the third quarter
ended September 30, 2018. While crude oil and gas production
increased in the third quarter ended September 30, 2019 compared to
September 30, 2018, the prices received for crude oil and gas
production decreased 8.8% and 64.6%, respectively, over the same
time period.
Easements and other surface-related income was $33.9 million for
the third quarter ended September 30, 2019, an increase of 53.7%
compared with the third quarter ended September 30, 2018 when
easements and other surface-related income was $22.1 million. This
increase of $11.8 million resulted primarily from increases in
pipeline easement income and commercial lease royalties for the
third quarter ended September 30, 2019 compared to the same period
of 2018. Pipeline easement income increased $7.7 million for the
third quarter ended September 30, 2019 compared to the same period
of 2018. Commercial lease revenue increased $2.9 million for the
third quarter ended September 30, 2019 compared to the same period
of 2018.
Water sales and royalty revenue was $21.7 million for the third
quarter ended September 30, 2019, an increase of 19.1% compared
with the third quarter ended September 30, 2018 when water sales
and royalty revenue was $18.2 million. This increase was
principally due to a 34.0% sales increase in the number of barrels
of sourced and treated water sold in the third quarter of 2019 as
compared to the same period in 2018.
Land sales revenue was $4.6 million for the third quarter ended
September 30, 2019, when the Trust sold approximately 77 acres of
land for an average price of approximately $59,960 per acre. Land
sales revenue was $1.5 million for the third quarter ended
September 30, 2018, when the Trust sold approximately 47 acres of
land for an average price of approximately $32,953 per acre.
Further details for the nine months ended September 30,
2019:
Oil and gas royalty revenue was $111.1 million for the nine
months ended September 30, 2019, compared with $88.1 million for
the nine months ended September 30, 2018, an increase of 26.2%.
Crude oil and gas production subject to the Trust’s royalty
interests increased 49.4% and 122.3%, respectively, in the nine
months ended September 30, 2019 compared to the nine months ended
September 30, 2018. While crude oil and gas production increased in
the nine months ended September 30, 2019 compared to September 30,
2018, the prices received for crude oil and gas production
decreased 9.8% and 52.6%, respectively, over the same time
period.
Easements and other surface-related income was $87.6 million for
the nine months ended September 30, 2019, an increase of 31.1%
compared with the nine months ended September 30, 2018 when
easements and other surface-related income was $66.8 million. This
increase of $20.8 million resulted primarily from increases in
pipeline easement income and commercial lease revenue for the nine
months ended September 30, 2019 compared to the same period of
2018. Pipeline easement income increased $16.5 million for the nine
months ended September 30, 2019 compared to the same period of
2018. Commercial lease revenue increased $7.5 million for the nine
months ended September 30, 2019 compared to the same period of
2018. These increases were partially offset by a $3.0 million
decrease in temporary permit income.
Water sales and royalty revenue was $65.1 million for the nine
months ended September 30, 2019, an increase of 37.2% compared with
the nine months ended September 30, 2018 when water sales and
royalty revenue was $47.4 million. This increase was principally
due to a 41.8% sales increase in the number of barrels of sourced
and treated water sold in the nine months ended September 30, 2019
as compared to the same period in 2018.
Land sales revenue was $113.0 million for the nine months ended
September 30, 2019, when the Trust sold approximately 21,986 acres
of land for an average price of approximately $5,141 per acre. Land
sales revenue was $4.3 million for the nine months ended September
30, 2018, when the Trust sold approximately 167 acres of land for
an average price of approximately $25,734 per acre.
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.
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 authorized 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 September
30,
2019
2018
Oil and gas royalties
$
38,259
$
31,253
Easements and other surface-related
income
33,911
22,068
Water sales and royalties
21,654
18,178
Land sales
4,621
1,543
Other operating revenue
85
126
Total revenues
$
98,530
$
73,168
Income tax expense
$
14,737
$
12,433
Net income
$
60,022
$
50,762
Net income per Sub-share Certificate —
basic and diluted
$
7.74
$
6.52
Weighted average number of Sub-share
Certificates outstanding during period
7,756,156
7,786,692
Nine Months Ended September
30,
2019
2018
Oil and gas royalties
$
111,113
$
88,078
Easements and other surface-related
income
87,635
66,845
Water sales and royalties
65,067
47,428
Land sales
113,020
4,293
Other operating revenue
329
375
Total revenues
$
377,164
$
207,019
Income tax expense
$
63,578
$
36,415
Net income
$
249,606
$
147,056
Net income per Sub-share Certificate —
basic and diluted
$
32.18
$
18.86
Weighted average number of Sub-share
Certificates outstanding during period
7,756,643
7,797,262
SEGMENT OPERATING
RESULTS
(in thousands) (unaudited)
Three Months Ended September
30,
2019
2018
Revenues:
Land and resource management:
Oil and gas royalties
$
38,259
39
%
$
31,253
43
%
Easements and other surface-related
income
22,111
22
%
14,591
20
%
Land sales and other operating revenue
4,706
5
%
1,669
2
%
65,076
66
%
47,513
65
%
Water services and operations:
Water sales and royalties
21,654
22
%
18,178
25
%
Easements and other surface-related
income
11,800
12
%
7,477
10
%
33,454
34
%
25,655
35
%
Total consolidated revenues
$
98,530
100
%
$
73,168
100
%
Net income:
Land and resource management
$
43,911
73
%
$
36,385
72
%
Water services and operations
16,111
27
%
14,377
28
%
Total consolidated net income
$
60,022
100
%
$
50,762
100
%
Nine Months Ended September
30,
2019
2018
Revenues:
Land and resource management:
Oil and gas royalties
$
111,113
29
%
$
88,078
43
%
Easements and other surface-related
income
59,761
16
%
49,896
24
%
Land sales and other operating revenue
113,349
30
%
4,668
2
%
284,223
75
%
142,642
69
%
Water services and operations:
Water sales and royalties
65,067
17
%
47,428
23
%
Easements and other surface-related
income
27,874
8
%
16,949
8
%
92,941
25
%
64,377
31
%
Total consolidated revenues
$
377,164
100
%
$
207,019
100
%
Net income:
Land and resource management
$
204,222
82
%
$
109,700
75
%
Water services and operations
45,384
18
%
37,356
25
%
Total consolidated net income
$
249,606
100
%
$
147,056
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 and amortization. Its purpose is to
highlight earnings without finance, taxes, and depreciation 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, 2019 and
2018 (in thousands):
Three Months Ended
September 30,
Nine Months Ended
September 30,
2019
2018
2019
2018
Net income
$
60,022
$
50,762
$
249,606
$
147,056
Add:
Income tax expense
14,737
12,433
63,578
36,415
Depreciation and amortization
2,631
706
5,286
1,519
EBITDA
$
77,390
$
63,901
$
318,470
$
184,990
(1)
Non-GAAP performance measure. See
"Non-GAAP Performance Measures and Definitions"
View source
version on businesswire.com: https://www.businesswire.com/news/home/20191031005910/en/
Robert Packer (214) 969-5530 Robert@tpltrust.com
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