[Texas Pacific Land Corporation Fourth Quarter and Full Year 2023 Results](index=1&type=section&id=Texas%20Pacific%20Land%20Corporation%20Fourth%20Quarter%20and%20Full%20Year%202023%20Results) [Financial & Operational Highlights](index=1&type=section&id=Financial%20%26%20Operational%20Highlights) The company achieved record quarterly royalty production in Q4 2023, driving the year's strongest revenue and free cash flow Q4 2023 Key Metrics | Metric | Value | | :--- | :--- | | Net Income | $113.1 million | | Revenues | $166.7 million | | Adjusted EBITDA | $150.9 million | | Free Cash Flow | $116.3 million | | Royalty Production | 26.3k Boe/day (Record High) | | Stock Repurchases | $10.2 million | Full Year 2023 Key Metrics | Metric | Value | | :--- | :--- | | Net Income | $405.6 million | | Revenues | $631.6 million | | Adjusted EBITDA | $541.4 million | | Free Cash Flow | $415.5 million | | Royalty Production | 23.5k Boe/day | | Stock Repurchases | $42.4 million | | Total Cash Dividends | $100.0 million | [Management Commentary](index=1&type=section&id=Management%20Commentary) Management highlighted Q4's record performance and noted that full-year business diversification offset lower commodity prices - Q4 2023 was the strongest quarter of the year, with the **highest consolidated revenues and free cash flow**, driven by robust oil and gas royalty production[5](index=5&type=chunk) - For the full year 2023, **record revenues from the Water segment** and nearly **50% year-over-year growth in easements** substantially offset lower commodity prices[5](index=5&type=chunk) - The company is well-positioned for 2024 to capitalize on growth opportunities, supported by its Permian footprint and **large net cash balance**[7](index=7&type=chunk) [Financial Results](index=3&type=section&id=Financial%20Results) Financial results reflect a contrast between higher production volumes and the negative impact of lower commodity prices [Fourth Quarter 2023 Financial Results](index=3&type=section&id=Fourth%20Quarter%202023%20Financial%20Results) Q4 net income and revenue grew year-over-year, driven by increased water income, easements, and production volumes Q4 2023 vs Q4 2022 Financials | Metric | Q4 2023 | Q4 2022 | | :--- | :--- | :--- | | Net Income | $113.1 million | $99.7 million | | Total Revenues | $166.7 million | $152.7 million | | Operating Expenses | $32.8 million | $28.5 million | - The increase in revenue was principally due to a combined **$10.1 million increase in water sales and royalties** and an **$8.3 million increase in easements**[8](index=8&type=chunk) - Royalty production increased to **26.3k Boe/d** from 21.3k Boe/d YoY, while the average realized price per Boe fell from **$51.57 to $42.81**[8](index=8&type=chunk) [Full Year 2023 Financial Results](index=3&type=section&id=Full%20Year%202023%20Financial%20Results) Full-year net income and revenue declined due to a significant drop in oil and gas royalty revenue from lower prices Full Year 2023 vs 2022 Financials | Metric | FY 2023 | FY 2022 | | :--- | :--- | :--- | | Net Income | $405.6 million | $446.4 million | | Total Revenues | $631.6 million | $667.4 million | | Operating Expenses | $145.5 million | $105.1 million | - Excluding an $8.7 million settlement, oil and gas royalty revenue **decreased by $103.7 million** compared to 2022, as the average realized price per Boe fell to **$42.58**[11](index=11&type=chunk) - The revenue decline was partially offset by a combined **$39.5 million increase in water-related income** and a **$22.9 million increase in easements**[11](index=11&type=chunk) - The **$40.4 million increase in total operating expenses** was principally related to increases in legal and water service-related expenses[12](index=12&type=chunk) [Shareholder Returns and Corporate Governance](index=3&type=section&id=Shareholder%20Returns%20and%20Corporate%20Governance) The company declared a quarterly dividend and is actively considering a stockholder proposal regarding special meetings - On February 13, 2024, the Board declared a quarterly cash dividend of **$3.50 per share**[13](index=13&type=chunk) - The Board is evaluating a stockholder proposal to grant stockholders the right to call a special meeting, with a final recommendation pending[14](index=14&type=chunk) - During the full year 2023, TPL returned capital to shareholders via **$100.0 million in total cash dividends** and **$42.4 million in stock repurchases**[5](index=5&type=chunk) [Segment Operating Results](index=8&type=section&id=Segment%20Operating%20Results) The Water Services segment grew significantly in 2023, increasing its contribution to total revenue and net income Full Year Segment Revenue (in thousands) | Segment | FY 2023 | FY 2022 | | :--- | :--- | :--- | | Land and Resource Management | $432,105 | $506,975 | | Water Services and Operations | $199,490 | $160,447 | | **Total Consolidated Revenues** | **$631,595** | **$667,422** | Full Year Segment Net Income (in thousands) | Segment | FY 2023 | FY 2022 | | :--- | :--- | :--- | | Land and Resource Management | $306,706 | $365,041 | | Water Services and Operations | $98,939 | $81,321 | | **Total Consolidated Net Income** | **$405,645** | **$446,362** | - The Water Services and Operations segment's share of total revenue grew from **24% in 2022 to 31% in 2023**, while its share of total net income grew from **18% to 24%**[28](index=28&type=chunk) [Financial Statements and Reconciliations](index=6&type=section&id=Financial%20Statements%20and%20Reconciliations) Detailed statements show increased production volumes offset by lower commodity prices, impacting full-year profitability [Financial and Operational Results (Detailed Tables)](index=6&type=section&id=Financial%20and%20Operational%20Results%20(Detailed%20Tables)) Higher production volumes in 2023 were insufficient to overcome a sharp decline in realized prices for oil and gas Production and Price Comparison (Full Year) | Metric | FY 2023 | FY 2022 | | :--- | :--- | :--- | | Equivalents per day (MBoe/d) | 23.5 | 21.3 | | Realized Oil Price ($/Bbl) | $77.33 | $94.69 | | Realized Gas Price ($/Mcf) | $2.23 | $6.19 | | Realized Equivalents ($/Boe) | $42.58 | $60.81 | [Condensed Consolidated Statements of Income](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Full-year revenues and net income decreased, driven by lower oil and gas royalties and higher operating expenses Income Statement Summary (Full Year, in thousands) | Line Item | FY 2023 | FY 2022 | | :--- | :--- | :--- | | Total Revenues | $631,595 | $667,422 | | Total Operating Expenses | $145,542 | $105,115 | | Operating Income | $486,053 | $562,307 | | Net Income | $405,645 | $446,362 | | Diluted EPS | $52.77 | $57.77 | [Non-GAAP Performance Measures](index=9&type=section&id=Non-GAAP%20Performance%20Measures) Non-GAAP metrics like Adjusted EBITDA and Free Cash Flow declined in 2023, consistent with lower net income - The company defines Free Cash Flow as Adjusted EBITDA less current income tax expense and capital expenditures[31](index=31&type=chunk) Non-GAAP Reconciliation Summary (Full Year, in thousands) | Metric | FY 2023 | FY 2022 | | :--- | :--- | :--- | | Net Income | $405,645 | $446,362 | | Adjusted EBITDA | $541,442 | $591,814 | | Free Cash Flow | $415,494 | $451,617 | [Company Overview](index=5&type=section&id=About%20Texas%20Pacific%20Land%20Corporation) TPL is a major Texas landowner that monetizes its Permian-focused surface and royalty assets without producing oil and gas - TPL is a major landowner in Texas with approximately **868,000 acres**, primarily in the Permian Basin[17](index=17&type=chunk) - The company is not an oil and gas producer but generates revenue from its **surface and royalty ownership**[17](index=17&type=chunk) - Key revenue streams include land use payments, material sales, water services, oil and gas royalties, and infrastructure easements[17](index=17&type=chunk)

Financial Data and Key Metrics Changes - Total consolidated revenue for Q3 2023 was $158 million, with net income at $106 million, and adjusted EBITDA of $141 million, reflecting a 6% increase compared to the prior sequential quarter [35] - Free cash flow was approximately $106 million, and the company exited the quarter with approximately $660 million in cash on the balance sheet [20] - Royalty production decreased by 12% sequentially to approximately 21,800 barrels of oil equivalent per day, while the realized price per barrel of oil equivalent increased by 19% to approximately $45 [20] Business Line Data and Key Metrics Changes - Revenues from the produced water segment increased by 9% year-over-year, with third quarter 2023 source water sales volumes at approximately 545,000 barrels per day, indicating high utilization across the system [6][16] - The surface leases, easements, and materials segment (SLEM) benefited from robust pipeline easements driven by expanding infrastructure development in the Permian [5] - Sand royalties reached just under $1 million in the last quarter, with expanded caliche sales into New Mexico contributing positively [30] Market Data and Key Metrics Changes - Benchmark prices for oil, gas, and NGLs rose over the prior sequential quarter, leading to improved realizations relative to benchmark prices [10] - Rig counts in the overall Permian have declined by approximately 10% compared to last year, but more than 50 rigs are currently operating on TPL acreage, up from approximately 42 rigs last year [18] Company Strategy and Development Direction - The company is well-positioned to succeed through various market environments, supported by a strong backlog of completed wells and high levels of ongoing new permits [8] - The management emphasized the importance of infrastructure and logistics, which are expected to improve with additional natural gas takeaway capacity coming online [15] - The company is expanding its footprint in water sales and treatment, indicating a strategic focus on increasing water revenue as completions activity ramps up [28] Management's Comments on Operating Environment and Future Outlook - Management noted that elevated temperatures and brownouts had previously impacted production, but these issues have subsided, allowing for improved development activities [15] - The company expects production growth in the coming year, driven by a high number of permits and quicker turnaround times for permits to production [39] - Management highlighted that the timing of permit to spud and spud to completion has compressed considerably in 2023 compared to prior years, indicating operational efficiency [33] Other Important Information - The company maintained its $3.25 per share dividend and repurchased approximately 3,600 shares of common stock for about $6 million [10] - The company will host its 2023 Annual Meeting in Dallas, encouraging shareholders to review proxy materials [34] Q&A Session Summary Question: Production impact split between elevated temperatures and brownouts versus delayed TILs - Management indicated that the production was likely more heavily impacted by delays in TILs due to larger pad developments, which caused lumpier near-term production [22][23] Question: Future water sales outlook - Management stated that water sales typically parallel completions activity, and with a high number of permits and spud activity, there is an expectation for increased water sales in the coming quarters [28][45] Question: Contributors to easement revenue - The primary contributors to easement revenue have been pipeline easements and material sales, driven by significant infrastructure build-out [46]

Company Overview - Texas Pacific Land Corporation owns approximately 868,000 surface acres of land in West Texas, primarily concentrated in the Permian Basin[75]. Market Prices - Average WTI Cushing price per barrel decreased from $93.06 in Q3 2022 to $82.25 in Q3 2023, a decline of 11.7%[81]. - Average Henry Hub price per mmbtu dropped from $8.03 in Q3 2022 to $2.59 in Q3 2023, a decrease of 67.7%[81]. Financial Performance - Total revenues decreased by $33.1 million, or 17.3%, to $158.0 million for the three months ended September 30, 2023, compared to $191.1 million for the same period in 2022[98]. - Net income for the three months ended September 30, 2023, was $105.6 million, an 18.7% decrease from $129.8 million in the same period of 2022[98]. - For the nine months ended September 30, 2023, total revenues decreased by $49.8 million, or 9.7%, to $464.9 million compared to $514.7 million in the same period of 2022[105]. - Net income for the nine months ended September 30, 2023, was $292.5 million, a 15.6% decrease from $346.6 million in the same period of 2022[105]. - EBITDA for the nine months ended September 30, 2023, was $383.3 million, down from $452.9 million in the same period of 2022[145]. - Adjusted EBITDA for the nine months ended September 30, 2023, was $390.5 million, compared to $457.9 million for the same period in 2022[145]. - Free Cash Flow for the nine months ended September 30, 2023, was $299.2 million, down from $350.8 million in the same period of 2022[145]. Revenue Breakdown - Oil and gas royalty revenue decreased by $43.2 million, contributing significantly to the overall revenue decline[98]. - Land and Resource Management segment revenues decreased by $37.3 million, or 25.3%, to $109.9 million for the three months ended September 30, 2023, compared to the same period in 2022[119]. - Oil and gas royalty revenue was $87.1 million for the three months ended September 30, 2023, a decrease of 33.2% from $130.3 million for the same period in 2022, primarily due to lower average commodity prices and production volume[120]. - Water Services and Operations segment revenues increased by 9.4% to $48.0 million for the three months ended September 30, 2023, compared to $43.9 million for the same period in 2022[126]. - Water sales revenue increased by $2.0 million to $26.4 million for the three months ended September 30, 2023, driven by an increase in treated water sales volumes[127]. - Water Services and Operations segment revenues increased 23.9% to $149.7 million for the nine months ended September 30, 2023, compared to $120.8 million for the same period in 2022[138]. - Water sales revenue rose by $20.3 million to $85.8 million for the nine months ended September 30, 2023, driven by a 22.9% increase in water sales volumes[139]. - Produced water royalties increased to $20.8 million for the three months ended September 30, 2023, compared to $19.1 million for the same period in 2022[128]. - Produced water royalties increased to $61.8 million for the nine months ended September 30, 2023, up from $52.7 million in the same period of 2022, due to higher produced water volumes[140]. Expenses - Total operating expenses for the three months ended September 30, 2023, were $31.0 million, up from $29.1 million in the same period of 2022[99]. - Salaries and related employee expenses increased to $11.5 million for the three months ended September 30, 2023, from $10.7 million in 2022, due to a rise in employee numbers and market compensation adjustments[99]. - Legal and professional fees surged to $28.5 million for the nine months ended September 30, 2023, compared to $5.0 million in the same period of 2022, primarily due to legal expenses related to stockholder matters[110]. - The increase in expenses included an $11.5 million rise in water service-related expenses and a $3.8 million increase in income tax expense[141]. Cash Flow and Investments - Net cash provided by operating activities for the nine months ended September 30, 2023 was $306.9 million, down from $314.6 million in the same period of 2022[89]. - Total cash used in investing activities increased to $55.9 million for the nine months ended September 30, 2023, compared to $14.6 million in 2022[91]. - The company invested approximately $10.2 million in water sourcing assets and acquired intangible assets worth $21.4 million during the nine months ended September 30, 2023[87]. - As of September 30, 2023, Texas Pacific Land Corporation had cash and cash equivalents of $654.2 million[86]. - Common Stock repurchases amounted to $32.2 million for the nine months ended September 30, 2023, down from $58.4 million in the same period of 2022[96]. Production and Market Conditions - The Permian Basin currently produces over 5.8 million barrels of oil per day, the highest average daily production recorded prior to 2023[80]. - The average realized price for oil equivalent declined by 28.4% to $45.41 per Boe for the three months ended September 30, 2023, from $63.42 per Boe for the same period in 2022[120]. - There have been no material changes in market risk information since December 31, 2022[150].

Financial Data and Key Metrics Changes - Total revenues for Q2 2023 were $161 million, a 10% increase from Q1 2023, driven by higher royalty production and water sales despite lower oil and gas prices [45][40] - Adjusted EBITDA and free cash flow for the quarter were $134 million and $105 million, respectively, with consolidated CapEx at $1.4 million [10][40] - Royalty production averaged approximately 24,900 barrels of oil equivalent per day, representing a 19% increase on a sequential quarter basis [10] Business Line Data and Key Metrics Changes - Source water revenues increased by 69%, produced water revenues rose by 12%, and SLEM revenues were up 34% year-over-year [26] - Produced water volumes for Q2 2023 were up 15% year-over-year, contributing nearly $60 million in high-margin revenue [42][40] - Over 60% of water sales were from outside TPL acreage, indicating successful expansion efforts [14] Market Data and Key Metrics Changes - Oil and gas royalty production increased by 26% year-over-year, but revenues decreased by 32% due to a decline in WTI crude oil and Henry Hub natural gas prices [40] - Average realized oil price for Q2 2023 was $73 per barrel, representing approximately 100% realization relative to WTI Cushing price [61] Company Strategy and Development Direction - The company focuses on maintaining a capital-light, high-margin business philosophy while expanding its water and surface-related income streams [4][25] - TPL is actively seeking land acquisitions that can be commercialized, particularly in underutilized areas [57][58] - The competitive landscape for royalty opportunities is described as very competitive, with ongoing opportunities for surface-related assets [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the sustainability of strong water sales, despite potential tapering off in the fourth quarter due to seasonal activity [55] - The company anticipates continued growth in production for the remainder of the year, supported by high activity levels in key areas [51][31] Other Important Information - The company announced the nomination of two independent director candidates for the upcoming annual meeting, with current directors retiring [29] - TPL's recent acquisition of 12,000 surface acres in Andrews County is expected to provide incremental opportunities for commercialization [58] Q&A Session Summary Question: What are the drivers behind the strength in water resources this quarter? - Management highlighted increased activity in contracted areas of mutual interest as a key driver for the record water sales [50] Question: How should the production trajectory be viewed given the strength of Q2? - Management indicated that the trajectory for the rest of the year should include continued growth based on current activity levels [51] Question: What are the strategic implications of the recent surface acquisition? - The acquisition is seen as a good option due to the activity crossing the state line, providing potential for future commercialization [53] Question: What could hinder further growth in water sales? - Management noted that while Q2 was strong, water sales typically taper off in the fourth quarter due to reduced activity [55] Question: Are pipeline easement revenues expected to recur? - Most pipeline easements are on term agreements that will recur, indicating a stable revenue stream [69]

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, 2023 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 e ...

Financial Data and Key Metrics Changes - Total revenues for Q1 2023 were $146 million, representing a 4% decline sequentially from Q4 2022 due to lower oil and gas prices and royalty production, offset by higher sourced water sales and other income [7] - Oil and gas royalty revenues were down 14% year-over-year, while sourced water sales increased by 15%, produced water royalties rose by 35%, and easement and other surface-related income surged by 63% [4][5] - Adjusted EBITDA for the quarter was $116 million, and free cash flow was $88 million, with a cash balance of $591 million at the end of the quarter [7] Business Line Data and Key Metrics Changes - The non-oil and gas royalty businesses contributed nearly 40% of total revenues, providing a hedge against commodity price fluctuations [5] - The sourced water sales and produced water royalties showed significant growth, indicating diversification in revenue streams [4] Market Data and Key Metrics Changes - WTI Cushing Oil and Henry Hub natural gas prices decreased by 19% and 43% respectively compared to the same period last year, impacting oil and gas royalty revenues [4] - The company reported strong leading indicators such as new permitting and drilling activity, which remain at historically high levels [6] Company Strategy and Development Direction - The company maintains a debt-free balance sheet and focuses on maximizing shareholder value through capital allocation strategies, including a $250 million buyback authorization [8] - The long-term outlook remains strong, particularly in the Permian Basin, which is considered a premier resource play in North America [5] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism based on customer conversations and internal data, indicating a positive production outlook for the remainder of the year despite short-term volatility [6][11] - The company is positioned well with a strong inventory of permits and DUCs, suggesting potential for increased production [7][11] Other Important Information - The company is involved in a legal dispute with Horizon Kinetics regarding voting commitments, with a court decision anticipated following a trial held on April 17, 2023 [6] - A one-time revenue adjustment related to Chevron's over-deduction of expenses was disclosed, which could have impacted oil revenue by an estimated $8 million on a normalized basis [18][19] Q&A Session Summary Question: Growth outlook of oil and gas royalty segment - Management expects TPL to outperform the basin in the near and medium term, with strong near-term inventory supporting a positive production outlook [11] Question: Impact of Chevron's issues on operations - The company has limited exposure to Chevron's operations, as most of the minerals have been leased out [12] Question: Drivers behind strong SLEM business performance - Increased pipeline easements and successful rock sales have contributed to the strong performance in the SLEM business [13] Question: Legal expenses and future expectations - Legal expenses are accrued, and future spending cannot be commented on at this time [17] Question: One-time revenue from arbitration - The one-time revenue was related to past overcharges by Chevron, and it is not expected to recur [18][19] Question: Capital expenditure in Water Resource business - The capital expenditure is aligned with maintenance needs and electrification processes, with the Water Resource business generating positive free cash flow [21]

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 March 31, 2023 ☐ 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 ...

Financial Data and Key Metrics Changes - Full year 2022 revenue reached $667 million, a 48% year-over-year increase, exceeding the previous record by over $170 million [4][15] - Net income for fiscal year 2022 was $446 million, representing a 65% increase compared to the prior year [15] - Consolidated adjusted EBITDA margin for the full year was 89%, indicating efficient conversion of revenue into cash flow [4] - The company returned $335 million to shareholders through dividends and buybacks, and exited the year with zero debt and over $500 million in cash [4] Business Line Data and Key Metrics Changes - Revenue from oil and gas royalties contributed to record revenues, while combined water sales, produced water royalties, and easements generated over $200 million [4] - Source water revenue increased by 25%, produced water royalties rose by 24%, and easements and other surface-related income grew by 28% year-over-year [15] - Royalty production for the full year was approximately 21,300 barrels of oil equivalent per day, with a 15% year-over-year growth [16] Market Data and Key Metrics Changes - The company observed a trend of declining well productivity among operators, with many moving towards co-development of multiple zones [8] - Natural gas pricing realizations weakened, particularly among smaller independent producers, due to tight pipeline capacity out of the Permian [10][17] - The company noted that insufficient takeaway capacity presents opportunities for pipeline easement development [10] Company Strategy and Development Direction - The company is expanding revenue opportunities beyond its legacy business, including contracts for carbon capture, battery storage, and bitcoin mining facilities [5] - The company has executed contracts for in-basin wet sand mines, which are expected to generate revenue and reduce truck congestion and emissions [6][27] - A new agreement with bpx, a subsidiary of BP, was announced to provide comprehensive source water and produced water offtake across approximately 270,000 acres [7][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining positive momentum despite commodity price volatility, emphasizing the quality of their resource base [13] - The company is focused on sustainability and safety, achieving zero spills and reportable safety incidents in 2022 [13] - Management highlighted the importance of their robust cash position, which allows for flexibility in capital allocation [20] Other Important Information - The company plans to repurchase shares under a newly expanded $250 million share repurchase plan [19] - The company has a strong focus on next-generation opportunities while maintaining its legacy business [30] Q&A Session Summary Question: Growth outlook for business segments - Management acknowledged quarterly volatility but expressed confidence in outperforming the Permian as a whole due to a strong normalized DUC count [21] Question: Details on the bpx agreement - The agreement provides both parties with rights within the AMI, facilitating bpx's operations and increasing TPL's water offtake [28] Question: Potential of wet sand opportunity - Management expects to see revenue from contracted sand mines this year, potentially adding around $20 million in revenue within a couple of years [26][27] Question: Methodology for stock buyback program - The buyback program will be opportunistic, with capital deployment based on various market factors [32] Question: Preferred cash level - Management emphasized the importance of maintaining a robust cash balance to capitalize on future opportunities [33]

Financial Performance - In 2022, Texas Pacific Land Corporation reported revenues of $667.4 million, a 48% increase from $451.0 million in 2021[20]. - The net income for 2022 was $446.4 million, representing a 65% increase compared to $270.0 million in 2021[20]. - Total revenues increased by $216.5 million, or 48.0%, to $667.4 million for the year ended December 31, 2022, compared to $451.0 million for 2021[137]. - Net income for the year ended December 31, 2022, was $446.4 million, up from $270.0 million in 2021, representing a 65.4% increase[166]. - Operating income for 2022 was $562.3 million, a 55.2% increase from $362.4 million in 2021[137]. - Adjusted EBITDA for the year ended December 31, 2022, was $591.8 million, compared to $388.0 million in 2021, indicating a significant increase in operational performance[166]. Revenue Sources - The company’s oil and gas royalties accounted for 68% of the total revenue in the Land and Resource Management segment, generating $452.4 million in 2022, up from $286.5 million in 2021[27]. - Water sales in the Water Services and Operations segment reached $84.7 million in 2022, a 25% increase from $67.8 million in 2021, driven by a 10.3% increase in the number of sourced and treated barrels sold[34]. - The company’s revenues are primarily derived from oil, gas, and produced water royalties, as well as sales of water and land, easements, and commercial leases[118]. - Oil and gas royalties rose by $166.0 million, contributing significantly to the revenue increase[137]. - Water Services and Operations segment revenues increased by 22.9% to $160.4 million in 2022, attributed to higher water sales and produced water royalties[159]. Market Conditions - The total equivalent price for crude oil, natural gas, and NGL production was $60.81 per barrel of oil equivalent (Boe) in 2022, a 37.8% increase from $44.14 per Boe in 2021[28]. - Average WTI Cushing price per barrel increased to $94.90 in 2022 from $68.14 in 2021, while Henry Hub average price per mmbtu rose to $6.45 from $3.89[123]. - Average realized prices for oil increased to $94.69 per barrel in 2022 from $66.62 in 2021, while natural gas prices rose to $6.19 per Mcf from $3.67[155]. Customer Base - Major customers included Occidental Petroleum Corporation, contributing $115.3 million (17.3% of total revenues), and Chevron Corporation, contributing $94.8 million (14.2% of total revenues) in 2022[37][38]. - 51.8% of the company's revenue comes from four major customers, all of which are among the top 25 energy companies globally, with two in the top 10[39]. Capital Expenditures and Investments - The company generated $13.3 million in capital expenditures in 2022 and 2021 for electric infrastructure to reduce costs and emissions[54]. - The company invested approximately $18.6 million in Texas Pacific Water Resources LLC (TPWR) projects in 2022, with $6.9 million allocated to electrifying water sourcing infrastructure[35]. Shareholder Returns - The company paid a total cash dividend of $12.00 per share for the year ended December 31, 2022, compared to $11.00 per share in 2021[107]. - Total cash dividends paid in 2022 amounted to $247.3 million, compared to $85.3 million in 2021, reflecting a significant increase in shareholder returns[135]. - The company repurchased $87.9 million of its Common Stock in 2022, up from $19.9 million in 2021[135]. - During the year ended December 31, 2022, the company repurchased 48,959 shares of Common Stock, which were placed in treasury[88]. Corporate Governance - The board of directors includes members with extensive experience in the energy sector and corporate governance, enhancing strategic oversight[190][191][193]. - The company has a robust governance structure with committees focused on Nominating and Corporate Governance, Compensation, and Audit[194][198]. - TPL is focused on expanding its market presence and enhancing its investment strategies through experienced leadership[208]. - The company is committed to maintaining strong governance practices with a well-structured Board[207]. Risks and Challenges - The company’s oil and gas royalties are highly dependent on market prices, which are subject to significant fluctuations due to various macroeconomic factors[57]. - The company faces risks from natural and human causes that could disrupt its operations and financial results[63]. - Global health threats, such as COVID-19, may lead to reduced demand for oil and gas, impacting the company's earnings and cash flow[68]. - Supply chain risks, including material shortages and price increases, could negatively affect revenues and operating costs[69]. - Supply chain issues may disrupt operations and development activities, impacting revenues from oil and gas royalties and water offerings[70]. ESG Initiatives - The company has developed a tailored ESG program addressing the ethical management of water resources and sustainability goals[45]. - The company’s ESG strategy includes annual reviews and assessments to ensure continuous improvement[48]. - The company has initiated energy tracking since 2020 to monitor energy consumption trends[54]. Management and Leadership - Tyler Glover serves as TPL's President and Chief Executive Officer, with over 10 years of experience in energy services and land management[208]. - Chris Steddum has been TPL's Chief Financial Officer since June 1, 2021, previously working in oil and gas investment banking for 10 years[210]. - TPL's leadership team has a combined experience of over 30 years in the energy and investment sectors, positioning the company for future growth[210].

Texas Pacific Land Corporation (NYSE:TPL) Q3 2022 Earnings Conference Call November 3, 2022 8:30 AM ET Company Participants Shawn Amini - VP, Finance and IR Ty Glover - CEO Chris Steddum - CFO Conference Call Participants Derrick Whitfield - Stifel Hamed Khorsand - BWS Financial Operator Good morning, and welcome to Texas Pacific Land Corporation's Third Quarter 2022 Earnings Conference Call. This conference call is being recorded. I would now like to introduce your host for today's call, Shawn Amini, Vice ...