Texas Pacific Land Posts Record Revenue as Royalties Climb
Adjusted EBITDA rose to a record $215.6 million in the second quarter.
Texas Pacific Land Corp. (TPL), a Permian Basin land and resource manager, posted record quarterly revenue of $246.1 million as oil-and-gas royalty production and realized commodity prices increased. Revenue rose 3.9% from the first quarter, a slower sequential pace than the prior quarter’s 11.9% increase.
The results extended the company’s growth streak while shifting its mix toward royalties and away from water sales. Oil-and-gas royalty revenue increased $27.4 million from the first quarter to $145.6 million, reflecting higher production and a higher realized price per barrel of oil equivalent.
Net income reached a record $153.9 million, or $2.23 a diluted share, up 7.7% from $142.9 million, or $2.07 a share, in the first quarter. Free cash flow rose to a record $155.5 million from $136.4 million.
Royalty production increased to a record 39.7 thousand barrels of oil equivalent a day from 37.1 thousand, reversing the prior quarter’s decline. The average realized commodity price climbed to $42.17 per Boe from $37.06, as higher oil pricing outweighed weaker natural-gas pricing.
Land and Resource Management revenue set a record at $163.9 million despite the absence of the first quarter’s $20.9 million land sale. Water Services and Operations revenue fell for a second consecutive quarter to $82.2 million as daily water-sales volume declined to 663 thousand barrels. Produced-water royalty revenue, however, rose to a record $37.1 million on record volume.
Operating expenses were nearly flat at $54.2 million, while operating income increased to $191.8 million and the operating margin expanded to about 78.0%. For the first half, revenue rose 25.9% to $482.9 million and net income increased 25.3% to $296.8 million.
Texas Pacific Land also completed construction and began commissioning a produced-water desalination project with anticipated capacity of 10,000 inlet barrels a day. The company completed $110.2 million of land acquisitions supporting data-center and power-generation initiatives and added Project Kilby, a planned multi-gigawatt development with Chevron in Reeves County, to its quarterly growth projects.