Texas Pacific Land (US:TPL)2025-05-07 20:18Company Overview - Texas Pacific Land Corporation owns approximately 873,000 surface acres of land, primarily in the Permian Basin, and has a total of approximately 207,000 net royalty acres[71]. Financial Performance - Total revenues increased by $21.8 million to $196.0 million for the three months ended March 31, 2025, compared to $174.1 million for the same period in 2024, representing a growth of approximately 12.5%[92]. - Net income for the three months ended March 31, 2025, was $120.7 million, an increase from $114.4 million in the same period of 2024, reflecting a growth of about 5.5%[92]. - Oil and gas royalty revenue rose to $111.2 million for the three months ended March 31, 2025, up from $92.1 million in 2024, marking an increase of $19.1 million or approximately 20.7%[96]. - Water sales revenue increased by $1.7 million to $38.8 million for the three months ended March 31, 2025, driven by a 14.0% increase in water sales volumes[102]. - Produced water royalties increased to $27.7 million for the three months ended March 31, 2025, compared to $23.0 million in 2024, reflecting a growth due to increased produced water volumes[103]. - Free cash flow for the three months ended March 31, 2025, was $126.6 million, compared to $114.5 million in the same period of 2024, indicating an increase of approximately 10.6%[111]. - Adjusted EBITDA for the three months ended March 31, 2025, was $169.4 million, compared to $152.0 million in 2024, representing an increase of about 11.5%[111]. Operating Activities - Net cash provided by operating activities for Q1 2025 was $156.7 million, an increase from $147.2 million in Q1 2024, driven by higher operating income and changes in working capital[85][86]. - Total operating expenses rose by $7.8 million to $45.9 million for the three months ended March 31, 2025, compared to $38.1 million in 2024[92]. - Salaries and related employee expenses increased to $7.4 million for the three months ended March 31, 2025, up from $6.5 million in 2024, primarily due to market compensation adjustments[99]. Capital Expenditures - Capital expenditures related to water sourcing assets increased by $6.7 million in Q1 2025, totaling $12.5 million in net cash used for investing activities, compared to $2.2 million in Q1 2024[87][88]. - The company has begun construction on a facility for a patented energy-efficient desalination process with an initial capacity of 10,000 barrels of water per day, with $12.7 million spent cumulatively as of March 31, 2025[83]. Market Conditions - Average WTI oil price for Q1 2025 was $71.78 per barrel, down 7% from $77.50 in Q1 2024; however, Henry Hub natural gas prices increased by 93% to $4.14 per mmbtu compared to $2.15 in the prior year[75][77]. - Average monthly horizontal permits in the Permian Basin increased to 619 in Q1 2025 from 592 in Q1 2024, while average monthly horizontal wells drilled slightly decreased to 518 from 521[77][78]. - The Permian Basin production is currently over 6.5 million barrels per day, the highest average daily production for any year prior to 2025[76]. Liquidity and Debt - As of March 31, 2025, the company had cash and cash equivalents of $460.4 million, with a target to maintain approximately $700 million[81]. - The company had no debt or credit facilities as of March 31, 2025, indicating a strong liquidity position[80]. Accounting Policies - No material changes to critical accounting policies or estimates from the 2024 Annual Report[113]. - Recent accounting pronouncements are detailed in Note 2 of the condensed consolidated financial statements[114]. - No material changes in market risk information disclosed in the 2024 Annual Report[115].