Texas Pacific Land (US:TPL)2023-02-22 21:27Financial 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].