State or other jurisdiction of incorporation or organization: | IRS Employer Identification No.: | |||||||
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
(par value $.01 per share) |
☑ | Accelerated filer | ☐ | |||||||||
Non-accelerated filer (Do not check if a smaller reporting company) | ☐ | Smaller reporting company | |||||||||
Emerging growth company |
Page No. | ||||||||||||||
Condensed Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022 | ||||||||||||||
Condensed Consolidated Statements of Income and Total Comprehensive Income for the Three and Nine Months ended September 30, 2023 and 2022 | ||||||||||||||
Condensed Consolidated Statements of Cash Flows for the Nine Months ended September 30, 2023 and 2022 | ||||||||||||||
September 30, 2023 | December 31, 2022 | ||||||||||
ASSETS | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Accounts receivable and accrued receivables, net | |||||||||||
Prepaid expenses and other current assets | |||||||||||
Tax like-kind exchange escrow | |||||||||||
Prepaid income taxes | |||||||||||
Total current assets | |||||||||||
Real estate acquired | |||||||||||
Property, plant and equipment, net | |||||||||||
Royalty interests acquired, net | |||||||||||
Intangible assets, net | |||||||||||
Real estate and royalty interests assigned through the 1888 Declaration of Trust, no value assigned: | |||||||||||
Land (surface rights) | |||||||||||
1/16th nonparticipating perpetual royalty interest | |||||||||||
1/128th nonparticipating perpetual royalty interest | |||||||||||
Other assets | |||||||||||
Total assets | $ | $ | |||||||||
LIABILITIES AND EQUITY | |||||||||||
Accounts payable and accrued expenses | $ | $ | |||||||||
Ad valorem and other taxes payable | |||||||||||
Income taxes payable | |||||||||||
Unearned revenue | |||||||||||
Total current liabilities | |||||||||||
Deferred taxes payable | |||||||||||
Unearned revenue - noncurrent | |||||||||||
Accrued liabilities - noncurrent | |||||||||||
Total liabilities | |||||||||||
Commitments and contingencies | |||||||||||
Equity: | |||||||||||
Preferred stock, $ | |||||||||||
Common stock, $ | |||||||||||
Treasury stock, at cost; | ( | ( | |||||||||
Additional paid-in capital | |||||||||||
Accumulated other comprehensive income | |||||||||||
Retained earnings | |||||||||||
Total equity | |||||||||||
Total liabilities and equity | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Revenues: | |||||||||||||||||||||||
Oil and gas royalties | $ | $ | $ | $ | |||||||||||||||||||
Water sales | |||||||||||||||||||||||
Produced water royalties | |||||||||||||||||||||||
Easements and other surface-related income | |||||||||||||||||||||||
Land sales and other operating revenue | |||||||||||||||||||||||
Total revenues | |||||||||||||||||||||||
Expenses: | |||||||||||||||||||||||
Salaries and related employee expenses | |||||||||||||||||||||||
Water service-related expenses | |||||||||||||||||||||||
General and administrative expenses | |||||||||||||||||||||||
Legal and professional fees | |||||||||||||||||||||||
Ad valorem and other taxes | |||||||||||||||||||||||
Depreciation, depletion and amortization | |||||||||||||||||||||||
Total operating expenses | |||||||||||||||||||||||
Operating income | |||||||||||||||||||||||
Other income, net | |||||||||||||||||||||||
Income before income taxes | |||||||||||||||||||||||
Income tax expense | |||||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Other comprehensive (loss) income — periodic pension costs, net of income taxes for the three and nine months ended September 30, 2023 and 2022 of $ | ( | ( | |||||||||||||||||||||
Total comprehensive income | $ | $ | $ | $ | |||||||||||||||||||
Net income per share of common stock | |||||||||||||||||||||||
Basic | $ | $ | $ | $ | |||||||||||||||||||
Diluted | $ | $ | $ | $ | |||||||||||||||||||
Weighted average number of shares of common stock outstanding | |||||||||||||||||||||||
Basic | |||||||||||||||||||||||
Diluted | |||||||||||||||||||||||
Cash dividends per share of common stock | $ | $ | $ | $ |
Nine Months Ended September 30, | |||||||||||
2023 | 2022 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | $ | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Deferred taxes | ( | ( | |||||||||
Depreciation, depletion and amortization | |||||||||||
Share-based compensation | |||||||||||
Changes in operating assets and liabilities: | |||||||||||
Operating assets, excluding income taxes | ( | ( | |||||||||
Operating liabilities, excluding income taxes | |||||||||||
Income taxes payable | ( | ||||||||||
Prepaid income taxes | |||||||||||
Cash provided by operating activities | |||||||||||
Cash flows from investing activities: | |||||||||||
Acquisition of intangible assets | ( | ||||||||||
Acquisition of real estate | ( | ( | |||||||||
Acquisition of royalty interests | ( | ( | |||||||||
Purchase of fixed assets | ( | ( | |||||||||
Proceeds from sale of fixed assets | |||||||||||
Cash used in investing activities | ( | ( | |||||||||
Cash flows from financing activities: | |||||||||||
Dividends paid | ( | ( | |||||||||
Repurchases of common stock | ( | ( | |||||||||
Shares exchanged for tax withholdings | ( | ||||||||||
Cash used in financing activities | ( | ( | |||||||||
Net increase in cash, cash equivalents and restricted cash | |||||||||||
Cash, cash equivalents and restricted cash, beginning of period | |||||||||||
Cash, cash equivalents and restricted cash, end of period | $ | $ | |||||||||
Supplemental disclosure of cash flow information: | |||||||||||
Income taxes paid | $ | $ | |||||||||
Supplemental non-cash investing and financing information: | |||||||||||
Nonmonetary exchange of assets | $ | $ | |||||||||
Increase in accounts payable related to capital expenditures | $ | ( | $ | ( | |||||||
Share repurchases and associated excise taxes not settled at the end of the period | $ | $ | |||||||||
Operating lease right-of-use assets | $ | $ |
September 30, 2023 | December 31, 2022 | |||||||||||||
Cash and cash equivalents | $ | $ | ||||||||||||
Tax like-kind exchange escrow | ||||||||||||||
Total cash, cash equivalents and restricted cash shown in the statement of cash flows | $ | $ |
September 30, 2023 | December 31, 2022 | |||||||||||||||||||||||||
Number of Acres | Net Book Value | Number of Acres | Net Book Value | |||||||||||||||||||||||
Land (surface rights) (1) | $ | $ | ||||||||||||||||||||||||
Real estate acquired | ||||||||||||||||||||||||||
Total real estate situated in Texas | $ | $ |
September 30, 2023 | December 31, 2022 | ||||||||||
Property, plant and equipment, at cost: | |||||||||||
Water service-related assets | $ | $ | |||||||||
Furniture, fixtures and equipment | |||||||||||
Other | |||||||||||
Total property, plant and equipment, at cost | |||||||||||
Less: accumulated depreciation | ( | ( | |||||||||
Property, plant and equipment, net | $ | $ |
September 30, 2023 | December 31, 2022 | |||||||||||||
Oil and gas royalty interests: | ||||||||||||||
1/16th nonparticipating perpetual royalty interests (1) | $ | $ | ||||||||||||
1/128th nonparticipating perpetual royalty interests (1) | ||||||||||||||
Royalty interests acquired, at cost | ||||||||||||||
Total royalty interests | ||||||||||||||
Less: accumulated depletion | ( | ( | ||||||||||||
Royalty interests, net | $ | $ | ||||||||||||
September 30, 2023 | December 31, 2022 | ||||||||||
Intangible assets, at cost: | |||||||||||
Saltwater disposal easement | $ | $ | |||||||||
Groundwater rights acquired | |||||||||||
Total intangible assets, at cost (1) | |||||||||||
Less: accumulated amortization | ( | ||||||||||
Intangible assets, net | $ | $ |
Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||||||
2023 | 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||
Restricted Stock Awards | Restricted Stock Units | Restricted Stock Awards | Restricted Stock Units | |||||||||||||||||||||||||||||||||||||||||||||||
Number of RSAs | Weighted-Average Grant-Date Fair Value per Share | Number of RSUs | Weighted-Average Grant-Date Fair Value per Share | Number of RSAs | Weighted-Average Grant-Date Fair Value per Share | Number of RSUs | Weighted-Average Grant-Date Fair Value per Share | |||||||||||||||||||||||||||||||||||||||||||
Nonvested at beginning of period (1) | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||
Granted (2) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Vested (3) | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
Cancelled and forfeited | ||||||||||||||||||||||||||||||||||||||||||||||||||
Nonvested at end of period | $ | $ | $ | $ |
Nine Months Ended September 30, | ||||||||||||||||||||||||||
2023 | 2022 | |||||||||||||||||||||||||
Number of Target PSUs | Weighted-Average Grant-Date Fair Value per Share | Number of Target PSUs | Weighted-Average Grant-Date Fair Value per Share | |||||||||||||||||||||||
Nonvested at beginning of period (1) | $ | $ | ||||||||||||||||||||||||
Granted (2) | ||||||||||||||||||||||||||
Vested | ||||||||||||||||||||||||||
Cancelled and forfeited | ||||||||||||||||||||||||||
Nonvested at end of period | $ | $ |
Nine Months Ended September 30, | ||||||||||||||||||||||||||
2023 | 2022 | |||||||||||||||||||||||||
Number of RSAs | Weighted-Average Grant-Date Fair Value per Share | Number of RSAs | Weighted-Average Grant-Date Fair Value per Share | |||||||||||||||||||||||
Nonvested at beginning of period | $ | $ | ||||||||||||||||||||||||
Granted (1) | ||||||||||||||||||||||||||
Vested | ( | |||||||||||||||||||||||||
Cancelled and forfeited | ( | |||||||||||||||||||||||||
Nonvested at end of period | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Salaries and related employee expenses (employee awards) | $ | $ | $ | $ | |||||||||||||||||||
General and administrative expenses (director awards) | |||||||||||||||||||||||
Total share-based compensation expense (1) | $ | $ | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Income before income taxes | $ | $ | $ | $ | |||||||||||||||||||
Income tax expense | $ | $ | $ | $ | |||||||||||||||||||
Effective tax rate | % | % | % | % |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Basic earnings per share: | |||||||||||||||||||||||
Weighted average shares outstanding for basic earnings per share | |||||||||||||||||||||||
Basic earnings per share | $ | $ | $ | $ | |||||||||||||||||||
Diluted earnings per share: | |||||||||||||||||||||||
Weighted average shares outstanding for basic earnings per share | |||||||||||||||||||||||
Effect of dilutive securities: | |||||||||||||||||||||||
Incentive and equity compensation plans | |||||||||||||||||||||||
Weighted average shares outstanding for diluted earnings per share | |||||||||||||||||||||||
Diluted earnings per share | $ | $ | $ | $ |
Common Stock | Treasury Stock | Additional Paid-in Capital | Accum. Other Comp. Income (Loss) | Retained Earnings | Total Equity | ||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||
For the nine months ended September 30, 2023: | |||||||||||||||||||||||||||||||||||||||||||||||
Balances as of December 31, 2022 | $ | $ | ( | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Dividends paid — $ | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||
Share-based compensation, net of forfeitures | — | ( | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||
Repurchases of common stock, including excise taxes of $ | ( | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||
Shares exchanged for tax withholdings | ( | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||
Periodic pension costs, net of income taxes of $ | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
Balances as of March 31, 2023 | ( | ||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Dividends paid — $ | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||
Share-based compensation, net of forfeitures | — | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||
Repurchases of common stock, including excise taxes of $ | ( | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||
Periodic pension costs, net of income taxes of $ | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
Balances as of June 30, 2023 | ( | ||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Dividends paid — $ | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||
Share-based compensation, net of forfeitures | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||
Repurchases of common stock, including excise taxes of $ | ( | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||
Shares exchanged for tax withholdings | ( | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||
Periodic pension costs, net of income taxes of $ | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
Balances as of September 30, 2023 | $ | $ | ( | $ | $ | $ | $ |
Common Stock | Treasury Stock | Additional Paid-in Capital | Accum. Other Comp. Income (Loss) | Retained Earnings | Total Equity | ||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||
For the nine months ended September 30, 2022: | |||||||||||||||||||||||||||||||||||||||||||||||
Balances as of December 31, 2021 | $ | $ | ( | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Dividends paid — $ | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||
Share-based compensation, net of forfeitures | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||
Periodic pension costs, net of income taxes of $ | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Balances as of March 31, 2022 | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Dividends paid — $ | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||
Special dividends paid — $ | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||
Share-based compensation, net of forfeitures | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||
Repurchases of common stock | ( | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||
Periodic pension costs, net of income taxes of $ | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Balances as of June 30, 2022 | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Dividends paid — $ | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||
Share-based compensation, net of forfeitures | — | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||
Repurchases of common stock | ( | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||
Periodic pension costs, net of income taxes of $ | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Balances as of September 30, 2022 | $ | $ | ( | $ | $ | ( | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||
Land and resource management | $ | $ | $ | $ | ||||||||||||||||||||||
Water services and operations | ||||||||||||||||||||||||||
Total consolidated revenues | $ | $ | $ | $ | ||||||||||||||||||||||
Net income: | ||||||||||||||||||||||||||
Land and resource management | $ | $ | $ | $ | ||||||||||||||||||||||
Water services and operations | ||||||||||||||||||||||||||
Total consolidated net income | $ | $ | $ | $ | ||||||||||||||||||||||
Capital expenditures: | ||||||||||||||||||||||||||
Land and resource management | $ | $ | $ | $ | ||||||||||||||||||||||
Water services and operations | ||||||||||||||||||||||||||
Total capital expenditures | $ | $ | $ | $ | ||||||||||||||||||||||
Depreciation, depletion and amortization: | ||||||||||||||||||||||||||
Land and resource management | $ | $ | $ | $ | ||||||||||||||||||||||
Water services and operations | ||||||||||||||||||||||||||
Total depreciation, depletion and amortization | $ | $ | $ | $ |
September 30, 2023 | December 31, 2022 | ||||||||||
Assets: | |||||||||||
Land and resource management | $ | $ | |||||||||
Water services and operations | |||||||||||
Total consolidated assets | $ | $ | |||||||||
Property, plant and equipment, net: | |||||||||||
Land and resource management | $ | $ | |||||||||
Water services and operations | |||||||||||
Total consolidated property, plant and equipment, net | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
Oil and Gas Pricing Metrics:(1) | ||||||||||||||||||||||||||
WTI Cushing average price per bbl | $ | 82.25 | $ | 93.06 | $ | 77.27 | $ | 98.96 | ||||||||||||||||||
Henry Hub average price per mmbtu | $ | 2.59 | $ | 8.03 | $ | 2.46 | $ | 6.74 | ||||||||||||||||||
Activity Metrics specific to the Permian Basin:(1)(2) | ||||||||||||||||||||||||||
Average monthly horizontal permits | 640 | 634 | 641 | 627 | ||||||||||||||||||||||
Average monthly horizontal wells drilled | 514 | 524 | 536 | 498 | ||||||||||||||||||||||
Average weekly horizontal rig count | 314 | 353 | 330 | 313 | ||||||||||||||||||||||
DUCs as of September 30 for each applicable year | 4,857 | 4,651 | 4,857 | 4,651 | ||||||||||||||||||||||
Total Average US weekly horizontal rig count (2) | 578 | 692 | 642 | 643 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Revenues: | |||||||||||||||||||||||
Oil and gas royalties | $ | 87,102 | $ | 130,298 | $ | 258,644 | $ | 355,738 | |||||||||||||||
Water sales | 26,422 | 24,426 | 85,799 | 65,518 | |||||||||||||||||||
Produced water royalties | 20,849 | 19,129 | 61,824 | 52,668 | |||||||||||||||||||
Easements and other surface-related income | 18,188 | 14,129 | 51,865 | 37,311 | |||||||||||||||||||
Land sales and other operating revenue | 5,406 | 3,129 | 6,806 | 3,481 | |||||||||||||||||||
Total revenues | 157,967 | 191,111 | 464,938 | 514,716 | |||||||||||||||||||
Expenses: | |||||||||||||||||||||||
Salaries and related employee expenses | 11,499 | 10,697 | 32,688 | 29,670 | |||||||||||||||||||
Water service-related expenses | 8,553 | 6,348 | 24,496 | 13,045 | |||||||||||||||||||
General and administrative expenses | 3,903 | 3,120 | 10,787 | 9,761 | |||||||||||||||||||
Legal and professional fees | 1,689 | 2,106 | 28,471 | 4,988 | |||||||||||||||||||
Ad valorem and other taxes | 1,781 | 2,868 | 5,425 | 6,953 | |||||||||||||||||||
Depreciation, depletion and amortization | 3,584 | 3,917 | 10,881 | 12,223 | |||||||||||||||||||
Total operating expenses | 31,009 | 29,056 | 112,748 | 76,640 | |||||||||||||||||||
Operating income | 126,958 | 162,055 | 352,190 | 438,076 | |||||||||||||||||||
Other income, net | 7,979 | 1,920 | 20,239 | 2,626 | |||||||||||||||||||
Income before income taxes | 134,937 | 163,975 | 372,429 | 440,702 | |||||||||||||||||||
Income tax expense | 29,363 | 34,138 | 79,894 | 94,071 | |||||||||||||||||||
Net income | $ | 105,574 | $ | 129,837 | $ | 292,535 | $ | 346,631 |
Three Months Ended September 30, | ||||||||||||||||||||||||||
2023 | 2022 | |||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||
Land and resource management: | ||||||||||||||||||||||||||
Oil and gas royalties | $ | 87,102 | 56 | % | $ | 130,298 | 68 | % | ||||||||||||||||||
Easements and other surface-related income | 17,425 | 11 | % | 13,788 | 7 | % | ||||||||||||||||||||
Land sales and other operating revenue | 5,406 | 3 | % | 3,129 | 2 | % | ||||||||||||||||||||
Total land and resource management revenue | 109,933 | 70 | % | 147,215 | 77 | % | ||||||||||||||||||||
Water services and operations: | ||||||||||||||||||||||||||
Water sales | 26,422 | 17 | % | 24,426 | 13 | % | ||||||||||||||||||||
Produced water royalties | 20,849 | 13 | % | 19,129 | 10 | % | ||||||||||||||||||||
Easements and other surface-related income | 763 | — | % | 341 | — | % | ||||||||||||||||||||
Total water services and operations revenue | 48,034 | 30 | % | 43,896 | 23 | % | ||||||||||||||||||||
Total consolidated revenues | $ | 157,967 | 100 | % | $ | 191,111 | 100 | % | ||||||||||||||||||
Net income: | ||||||||||||||||||||||||||
Land and resource management | $ | 82,884 | 79 | % | $ | 108,188 | 83 | % | ||||||||||||||||||
Water services and operations | 22,690 | 21 | % | 21,649 | 17 | % | ||||||||||||||||||||
Total consolidated net income | $ | 105,574 | 100 | % | $ | 129,837 | 100 | % |
Three Months Ended September 30, | ||||||||||||||
2023 | 2022 | |||||||||||||
Our share of production volumes (1): | ||||||||||||||
Oil (MBbls) | 850 | 928 | ||||||||||||
Natural gas (MMcf) | 3,316 | 3,582 | ||||||||||||
NGL (MBbls) | 606 | 626 | ||||||||||||
Equivalents (MBoe) | 2,009 | 2,151 | ||||||||||||
Equivalents per day (MBoe/d) | 21.8 | 23.4 | ||||||||||||
Oil and gas royalty revenue (in thousands): | ||||||||||||||
Oil royalties | $ | 66,892 | $ | 83,374 | ||||||||||
Natural gas royalties | 8,479 | 26,362 | ||||||||||||
NGL royalties | 11,731 | 20,562 | ||||||||||||
Total oil and gas royalties | $ | 87,102 | $ | 130,298 | ||||||||||
Realized prices: | ||||||||||||||
Oil ($/Bbl) | $ | 82.45 | $ | 94.03 | ||||||||||
Natural gas ($/Mcf) | $ | 2.76 | $ | 7.96 | ||||||||||
NGL ($/Bbl) | $ | 20.91 | $ | 35.51 | ||||||||||
Equivalents ($/Boe) | $ | 45.41 | $ | 63.42 |
Nine Months Ended September 30, | ||||||||||||||||||||||||||
2023 | 2022 | |||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||
Land and resource management: | ||||||||||||||||||||||||||
Oil and gas royalties | $ | 258,644 | 56 | % | $ | 355,738 | 69 | % | ||||||||||||||||||
Easements and other surface-related income | 49,826 | 11 | % | 34,728 | 7 | % | ||||||||||||||||||||
Land sales and other operating revenue | 6,806 | 1 | % | 3,481 | 1 | % | ||||||||||||||||||||
Total land and resource management revenue | 315,276 | 68 | % | 393,947 | 77 | % | ||||||||||||||||||||
Water services and operations: | ||||||||||||||||||||||||||
Water sales | 85,799 | 19 | % | 65,518 | 13 | % | ||||||||||||||||||||
Produced water royalties | 61,824 | 13 | % | 52,668 | 10 | % | ||||||||||||||||||||
Easements and other surface-related income | 2,039 | — | % | 2,583 | — | % | ||||||||||||||||||||
Total water services and operations revenue | 149,662 | 32 | % | 120,769 | 23 | % | ||||||||||||||||||||
Total consolidated revenues | $ | 464,938 | 100 | % | $ | 514,716 | 100 | % | ||||||||||||||||||
Net income: | ||||||||||||||||||||||||||
Land and resource management | $ | 217,860 | 74 | % | $ | 285,418 | 82 | % | ||||||||||||||||||
Water services and operations | 74,675 | 26 | % | 61,213 | 18 | % | ||||||||||||||||||||
Total consolidated net income | $ | 292,535 | 100 | % | $ | 346,631 | 100 | % |
Nine Months Ended September 30, | ||||||||||||||
2023 | 2022 | |||||||||||||
Our share of production volumes (1): | ||||||||||||||
Oil (MBbls) | 2,642 | 2,538 | ||||||||||||
Natural gas (MMcf) | 10,405 | 9,773 | ||||||||||||
NGL (MBbls) | 1,784 | 1,660 | ||||||||||||
Equivalents (MBoe) | 6,160 | 5,827 | ||||||||||||
Equivalents per day (MBoe/d) | 22.6 | 21.3 | ||||||||||||
Oil and gas royalty revenue (in thousands)(1): | ||||||||||||||
Oil royalties | $ | 193,969 | $ | 239,021 | ||||||||||
Natural gas royalties | 23,210 | 60,187 | ||||||||||||
NGL royalties | 32,800 | 56,530 | ||||||||||||
Total oil and gas royalties | $ | 249,979 | $ | 355,738 | ||||||||||
Realized prices(1): | ||||||||||||||
Oil ($/Bbl) | $ | 76.88 | $ | 98.62 | ||||||||||
Natural gas ($/Mcf) | $ | 2.41 | $ | 6.66 | ||||||||||
NGL ($/Bbl) | $ | 19.88 | $ | 36.81 | ||||||||||
Equivalents ($/Boe) | $ | 42.49 | $ | 63.93 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
Net income | $ | 105,574 | $ | 129,837 | $ | 292,535 | $ | 346,631 | ||||||||||||||||||
Add: | ||||||||||||||||||||||||||
Income tax expense | 29,363 | 34,138 | 79,894 | 94,071 | ||||||||||||||||||||||
Depreciation, depletion and amortization | 3,584 | 3,917 | 10,881 | 12,223 | ||||||||||||||||||||||
EBITDA | 138,521 | 167,892 | 383,310 | 452,925 | ||||||||||||||||||||||
Add: | ||||||||||||||||||||||||||
Employee share-based compensation | 2,502 | 1,910 | 7,217 | 4,989 | ||||||||||||||||||||||
Adjusted EBITDA | 141,023 | 169,802 | 390,527 | 457,914 | ||||||||||||||||||||||
Less: | ||||||||||||||||||||||||||
Current income tax expense | (29,724) | (34,024) | (80,928) | (94,911) | ||||||||||||||||||||||
Capital expenditures | (5,243) | (1,808) | (10,387) | (12,155) | ||||||||||||||||||||||
Free Cash Flow | $ | 106,056 | $ | 133,970 | $ | 299,212 | $ | 350,848 |
Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs(1) | ||||||||||||||||||||||
July 1 through July 31, 2023 | 1,389 | $ | 1,428 | 1,389 | ||||||||||||||||||||||
August 1 through August 31, 2023 | 1,266 | 1,800 | 1,266 | |||||||||||||||||||||||
September 1 through September 30, 2023 | 909 | 1,852 | 909 | |||||||||||||||||||||||
Total | 3,564 | $ | 1,668 | 3,564 | $ | 217,829,414 |
EXHIBIT NUMBER | DESCRIPTION | |||||||
101* | The following information from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2023 formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets; (ii) Condensed Consolidated Statements of Income and Total Comprehensive Income, (iii) Condensed Consolidated Statements of Cash Flows and (iv) Notes to Condensed Consolidated Financial Statements. | |||||||
104 | The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2023, formatted in iXBRL. |
TEXAS PACIFIC LAND CORPORATION | |||||||||||
(Registrant) | |||||||||||
Date: | November 1, 2023 | By: | /s/ Tyler Glover | ||||||||
Tyler Glover President, Chief Executive Officer and Director |
Date: | November 1, 2023 | By: | /s/ Chris Steddum | ||||||||
Chris Steddum Chief Financial Officer |
TEXAS PACIFIC LAND CORPORATION | |||||||||||
By: | /s/ Micheal Dobbs | ||||||||||
Micheal Dobbs, Senior Vice President, Secretary and General Counsel |
Date of Vesting | Number of Restricted Stock Units that will Vest |
RTSR Relative to Reference Group | RTSR % of Target Units | |||||||
__ percentile or higher | ___% of Target Units | |||||||
__th percentile | ____% of Target Units | |||||||
___th percentile | ___% of Target Units | |||||||
__th percentile less than __th percentile | ___% of Target Units 0% of Target Units |
3 -Year FCF/Share Achieved in Measurement Period | Percentage of Target Units Earned* | ||||
Less than Threshold-- | 0% | ||||
Threshold--- | ___% | ||||
Target--- $ | % | ||||
Maximum---$ | ___% |
TEXAS PACIFIC LAND CORPORATION | |||||||||||
By: | /s/ Micheal Dobbs | ||||||||||
Micheal Dobbs, Administrator |
Date: | November 1, 2023 | By: | /s/ Tyler Glover | ||||||||
Tyler Glover, President and Chief Executive Officer |
Date: | November 1, 2023 | By: | /s/ Chris Steddum | ||||||||
Chris Steddum, Chief Financial Officer |
Date: | November 1, 2023 | By: | /s/ Tyler Glover | ||||||||
Tyler Glover, President and Chief Executive Officer |
Date: | November 1, 2023 | By: | /s/ Chris Steddum | ||||||||
Chris Steddum, Chief Financial Officer |
CONDENSED CONSOLIDATED BALANCE SHEETS (Parentheticals) - $ / shares |
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2023 |
Dec. 31, 2022 |
|
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred stock, outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock authorized (in shares) | 7,756,156 | 7,756,156 |
Common stock, outstanding (in shares) | 7,675,994 | 7,695,679 |
Treasury stock, at cost (in shares) | 80,162 | 60,477 |
1/16th nonparticipating perpetual royalty interest | ||
Nonparticipating perpetual royalty interest rate (in percentage) | 6.25% | 6.25% |
1/128th nonparticipating perpetual royalty interest | ||
Nonparticipating perpetual royalty interest rate (in percentage) | 0.78125% | 0.78125% |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND TOTAL COMPREHENSIVE INCOME (Parentheticals) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Sep. 30, 2023 |
Jun. 30, 2023 |
Mar. 31, 2023 |
Sep. 30, 2022 |
Jun. 30, 2022 |
Mar. 31, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Income Statement [Abstract] | ||||||||
Periodic pension costs (benefit), net of income taxes | $ (7) | $ (8) | $ (6) | $ 3 | $ 2 | $ 2 | $ (21) | $ 8 |
Organization and Description of Business Segments |
9 Months Ended |
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Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business Segments | Organization and Description of Business Segments Organization Texas Pacific Land Corporation (which, together with its subsidiaries as the context requires, may be referred to as “TPL”, the “Company”, “our”, “we” or “us”) is a Delaware corporation and one of the largest landowners in the State of Texas with approximately 868,000 surface acres of land in West Texas, with the majority of our ownership concentrated in the Permian Basin. Additionally, we own a 1/128th nonparticipating perpetual oil and gas royalty interest (“NPRI”) under approximately 85,000 acres of land, a 1/16th NPRI under approximately 371,000 acres of land, and approximately 4,000 additional net royalty acres (normalized to 1/8th) in the western part of Texas. TPL’s income is derived primarily from oil, gas and produced water royalties, sales of water and land, easements, and commercial leases of the Company’s land. On January 11, 2021, we completed our reorganization from a business trust, Texas Pacific Land Trust, organized under a Declaration of Trust dated February 1, 1888 (the “Declaration of Trust”), into Texas Pacific Land Corporation, a corporation formed and existing under the laws of the state of Delaware (the “Corporate Reorganization”). Basis of Presentation The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and on the same basis as the audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2022. The condensed consolidated financial statements herein include all adjustments which are, in the opinion of management, necessary to fairly state the financial position of the Company as of September 30, 2023 and the results of its operations for the three and nine months ended September 30, 2023 and 2022, respectively, and its cash flows for the nine months ended September 30, 2023 and 2022, respectively. Such adjustments are of a normal nature and all intercompany accounts and transactions have been eliminated in consolidation. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted from this report, and accordingly these interim financial statements and footnotes should be read in conjunction with the audited financial statements and footnotes included in our Annual Report on Form 10-K for the year ended December 31, 2022. The results for the interim periods shown in this report are not necessarily indicative of future financial results. We operate our business in two segments: Land and Resource Management and Water Services and Operations. Our segments provide management with a comprehensive financial view of our key businesses. The segments enable the alignment of strategies and objectives of TPL and provide a framework for timely and rational allocation of resources within businesses. See Note 12, “Business Segment Reporting” for further information regarding our segments.
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Summary of Significant Accounting Policies |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Use of Estimates in the Preparation of Financial Statements The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. In the event estimates and/or assumptions prove to be different from actual amounts, adjustments are made in subsequent periods to reflect more current information. Cash, Cash Equivalents and Restricted Cash We consider investments in bank deposits, money market funds, and other highly-liquid cash investments, such as U.S. Treasury bills and commercial paper, with original maturities of three months or less to be cash equivalents. Our cash equivalents are considered Level 1 assets in the fair value hierarchy. The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows as of September 30, 2023 and December 31, 2022 (in thousands):
Intangible Assets, Net Intangible assets include a saltwater disposal easement and acquired groundwater rights. When the Company acquires intangible assets that are attached to real estate and/or other tangible assets, an allocation of the total purchase price, including any direct costs of the acquisition, is made at the date of acquisition based on the estimated relative fair values of the assets acquired. Intangible assets are amortized on a straight-line basis over their estimated useful lives, with remaining useful lives from 15 to 20 years. Intangible assets are tested for recoverability whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. In such event, the fair value of the asset is determined using an undiscounted cash flow analysis of the asset at the lowest level for which identifiable cash flows exist. If an impairment has occurred, a loss for the difference between the carrying value and the estimated fair value of the intangible asset is recognized in the statement of income. Reclassifications Certain financial information on the condensed consolidated balance sheet as of December 31, 2022 and condensed consolidated statement of income and total comprehensive income for the three and nine months ended September 30, 2022 has been revised to conform to the current year presentation. These revisions include a balance sheet reclassification of $454,000 of other taxes payable previously included in accounts payable and accrued expenses to ad valorem and other taxes payable and an income statement reclassification of $33,000 and $97,000 of property taxes previously included in general and administrative expenses to ad valorem and other taxes for the three and nine months ended September 30, 2022, respectively.
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Real Estate Activity |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Real Estate [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Real Estate Activity | Real Estate Activity As of September 30, 2023 and December 31, 2022, TPL owned the following land and real estate (in thousands, except number of acres):
(1)Real estate assigned through the Declaration of Trust. Land Sales For the nine months ended September 30, 2023, we sold 18,061 acres of land in Texas for an aggregate sales price of $6.8 million. For the nine months ended September 30, 2022, we sold 129 acres of land in Texas for an aggregate sales price of $3.3 million. There was no carrying value in the land associated with these sales. Land Acquisitions For the nine months ended September 30, 2023, we acquired 12,141 acres of land in Texas for an aggregate purchase price of $20.0 million. There were no significant land acquisitions for the nine months ended September 30, 2022.
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Property, Plant and Equipment |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment, net consisted of the following as of September 30, 2023 and December 31, 2022 (in thousands):
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Oil and Gas Royalty Interests |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Real Estate [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Oil and Gas Royalty Interests | Oil and Gas Royalty Interests As of September 30, 2023 and December 31, 2022, we owned the following oil and gas royalty interests (in thousands):
(1)Royalty interests assigned through the Declaration of Trust. Acquisitions For the nine months ended September 30, 2023, we acquired oil and gas royalty interests in 119 net royalty acres (normalized to 1/8th) for an aggregate purchase price of approximately $3.6 million. For the nine months ended September 30, 2022, we acquired oil and gas royalty interests in 92 net royalty acres (normalized to 1/8th) for an aggregate purchase price of approximately $1.7 million. Depletion expense was $0.5 million and $0.3 million for the three months ended September 30, 2023 and 2022, respectively. Depletion expense was $1.4 million and $0.7 million for the nine months ended September 30, 2023 and 2022, respectively.
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Intangible Assets |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intangible Assets | Intangible Assets Intangible assets, net consisted of the following as of September 30, 2023 and December 31, 2022 (in thousands):
(1)The remaining weighted average amortization period for total intangible assets was 19.0 years as of September 30, 2023. Acquisitions For the nine months ended September 30, 2023, we acquired a saltwater disposal easement and groundwater rights in separate transactions for an aggregate cost of approximately $21.4 million. We had no intangible assets as of December 31, 2022. Amortization of intangible assets was $0.1 million for the three and nine months ended September 30, 2023. The estimated future annual amortization expense of intangible assets is $0.4 million for the remainder of 2023, $1.1 million for 2024, $1.1 million for 2025, $1.1 million for 2026, $1.1 million for 2027, $1.1 million for 2028 and $15.4 million thereafter.
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Share-Based Compensation |
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Share-Based Compensation | Share-Based Compensation The Company grants share-based compensation to employees under the Texas Pacific Land Corporation 2021 Incentive Plan (the “2021 Plan”) and to its directors under the 2021 Non-Employee Director Stock and Deferred Compensation Plan (the “2021 Directors Plan”). Share-based compensation granted to date under the plans has included restricted stock awards (“RSAs”), restricted stock units (“RSUs”) and performance-based units (“PSUs”). Currently, all awards granted under the plans are entitled to receive dividends (which are accrued and distributed to award recipients upon vesting) or have dividend equivalent rights. Dividends and dividend equivalent rights are subject to the same vesting conditions as the awards to which they relate and are forfeitable if the related awards are forfeited. RSUs granted under the 2021 Plan vest in one-third increments and PSUs granted under the 2021 Plan cliff vest at the end of three years if the performance metrics are achieved (as discussed further below). RSAs granted under the 2021 Directors Plan vest on the first anniversary of the award. On October 31, 2023,the 2021 Plan was amended to revise the definitions of Cause, Change in Control, and Good Reason to align these definitions with the definitions provided in an employee’s employment agreement and any severance plan maintained by the Company. In addition, the related forms of Restricted Stock Unit Award Agreement, RTSR performance Unit Award Agreement and FCF/Share Performance Unit Award Agreement were adjusted. On October 31, 2023, the 2021 Directors Plan was amended to (i) eliminate the one year vesting provision for annual grants and (ii) provide that certain plan administrative functions will be responsibility of the Compensation Committee of the Company’s board of directors, including determining grant recipients, establishing grant terms and conditions, and adopting certain amendments to the plan. Incentive Plan for Employees The maximum aggregate number of shares of the Company’s common stock, par value $0.01 per share (“Common Stock”) that may be issued under the 2021 Plan is 75,000 shares, which may consist, in whole or in part, of authorized and unissued shares (if any), treasury shares, or shares reacquired by the Company in any manner. As of September 30, 2023, 54,718 shares of Common Stock remained available under the 2021 Plan for future grants. The following table summarizes activity related to RSAs and RSUs under the 2021 Plan for the nine months ended September 30, 2023 and 2022:
(1)RSAs were granted on December 29, 2021: 1,993 shares vested on December 29, 2022 and 1,337 shares will vest on December 29, 2023. (2)RSUs vest in one-third increments over a three-year period. (3)Of the 1,864 shares that vested during the nine months ended September 30, 2023, 669 shares were surrendered upon vesting by employees to the Company to settle tax withholdings. The following table summarizes activity related to PSUs for the nine months ended September 30, 2023 and 2022:
(1)The PSUs were granted on February 11, 2022 and include 1,197 RTSR (as defined below) PSUs (based on target) with a grant date fair value of $1,605 per share and 1,197 FCF (as defined below) PSUs (based on target) with a grant date fair value of $1,105 per share. If the maximum performance potential metrics described in the PSU agreements are achieved, the actual number of units that will ultimately be awarded under the PSU agreements will exceed target units by 100% (i.e., a collective 2,394 additional units would be issued). (2)The PSUs were granted on February 10, 2023 and include 926 RTSR PSUs (based on target) with a grant date fair value of $2,761 per share and 926 FCF PSUs (based on target) with a grant date fair value of $1,924 per share. If the maximum performance potential metrics described in the PSU agreements are achieved, the actual number of units that will ultimately be awarded under the PSU agreements will exceed target units by 100% (i.e., a collective 1,852 additional units would be issued). Each PSU has a value equal to one share of Common Stock. The PSUs will vest three years after grant if certain performance metrics are met, as follows: 50% of the PSUs may be earned based on the Company’s relative total stockholder return (“RTSR”) over the applicable three-year measurement period compared to the XOP Index, and 50% of the PSUs may be earned based on the cumulative free cash flow per share (“FCF”) over the three-year vesting period. As the RTSR PSU is a market-based award, its grant date fair value was determined using a Monte Carlo simulation model that uses the same input assumptions as the Black-Scholes model to determine the expected potential ranking of the Company against the XOP Index, i.e., the probability of satisfying the market condition defined in the award. Expected volatility in the model was estimated based on the volatility of historical stock prices over a period matching the expected term of the award. The risk-free interest rate was based on U.S. Treasury yield constant maturities for a term matching the expected term of the award. Equity Plan for Non-Employee Directors The maximum aggregate number of shares of Common Stock that may be issued under the 2021 Directors Plan is 10,000 shares, which may consist, in whole or in part, of authorized and unissued shares (if any), treasury shares, or shares reacquired by the Company in any manner. As of September 30, 2023, 8,815 shares of Common Stock remained available under the 2021 Directors Plan for future grants. The following table summarizes activity related to the RSAs under the 2021 Directors Plan for the nine months ended September 30, 2023 and 2022:
(1)RSAs vest on the first anniversary of the grant date. Share-Based Compensation Expense The following table summarizes our share-based compensation expense by line item in the condensed consolidated statements of income (in thousands):
(1)The Company recognized a tax benefit of $0.6 million and $0.4 million related to share-based compensation for the three months ended September 30, 2023 and 2022, respectively. The Company recognized a tax benefit of $1.7 million and $1.2 million related to share-based compensation for the nine months ended September 30, 2023 and 2022, respectively. As of September 30, 2023, there was $11.4 million of total unrecognized compensation cost related to unvested share-based compensation arrangements granted under existing share-based plans expected to be recognized over a weighted average period of 1.3 years.
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Income Taxes |
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Income Taxes | Income Taxes The calculation of our effective tax rate is as follows for the three and nine months ended September 30, 2023 and 2022 (in thousands, except percentages):
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Earnings Per Share |
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Earnings Per Share | Earnings Per ShareBasic earnings per share (“EPS”) is computed based on the weighted average number of shares outstanding during the period. Diluted EPS is computed based upon the weighted average number of shares outstanding during the period plus unvested restricted stock and other unvested awards granted pursuant to our incentive and equity compensation plans. The computation of diluted EPS reflects the potential dilution that could occur if all outstanding awards under the incentive and equity compensation plans were converted into shares of Common Stock or resulted in the issuance of shares of Common Stock that would then share in the earnings of the Company. The number of dilutive securities is computed using the treasury stock method. The following table sets forth the computation of EPS for the three and nine months ended September 30, 2023 and 2022 (in thousands, except number of shares and per share data):
Restricted stock is included in the number of shares of Common Stock issued and outstanding, but omitted from the basic EPS calculation until such time as the shares of restricted stock vest. Certain stock awards granted are not included in the dilutive securities in the table above as they are anti-dilutive for the three and nine months ended September 30, 2023.
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Commitments and Contingencies |
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Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Litigation Management is not aware of any legal, environmental or other commitments or contingencies that would have a material effect on the Company’s financial condition, results of operations or liquidity as of September 30, 2023. Prior to January 1, 2022, ad valorem taxes with respect to our historical royalty interests were paid directly by third parties pursuant to an existing arrangement. Since the completion of our Corporate Reorganization, we have received notice from a third party that they no longer intend to pay the ad valorem taxes related to such historical royalty interests. In order to protect the historical royalty interests from any potential tax liens for non-payment of ad valorem taxes, we have accrued and/or paid such ad valorem taxes since January 1, 2022. While we intend to seek reimbursement from the third party for such taxes, we are unable to estimate the amount and/or likelihood of such reimbursement, and accordingly, no loss recovery receivable has been recorded as of September 30, 2023. Ongoing Arbitration with an OperatorAs part of an ongoing arbitration between TPL and an operator with respect to underpayment of oil and gas royalties resulting from improper deductions of post-production costs for periods before and through April 2022, the operator has agreed to pay $8.7 million to TPL. This amount has been recorded as a receivable and included in oil and gas royalty revenue in the condensed consolidated income statement for the nine months ended September 30, 2023.
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Changes in Equity |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in Equity | Changes in Equity The following tables present changes in our equity for the nine months ended September 30, 2023 and 2022 (in thousands, except shares and per share amounts):
Stock Repurchase Program On November 1, 2022, our board of directors approved a stock repurchase program, which became effective January 1, 2023, to purchase up to an aggregate of $250 million of our outstanding Common Stock. The Company intends to purchase stock under the repurchase program opportunistically with funds generated by cash from operations. This repurchase program may be suspended from time to time, modified, extended or discontinued by the board of directors at any time. Purchases under the stock repurchase program may be made through a combination of open market repurchases in compliance with Rule 10b-18 promulgated under the Securities Exchange Act of 1934, as amended, privately negotiated transactions, and/or other transactions at the Company’s discretion, including under a Rule 10b5-1 trading plan implemented by the Company, and will be subject to market conditions, applicable legal requirements and other factors.
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Business Segment Reporting |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Segment Reporting | Business Segment Reporting During the periods presented, we reported our financial performance based on the following segments: Land and Resource Management and Water Services and Operations. Our segments provide management with a comprehensive financial view of our key businesses. The segments enable the alignment of our strategies and objectives and provide a framework for timely and rational allocation of resources within businesses. We eliminate any inter-segment revenues and expenses upon consolidation. The Land and Resource Management segment encompasses the business of managing our approximately 868,000 surface acres of land and our oil and gas royalty interests in West Texas, principally concentrated in the Permian Basin. The revenue streams of this segment consist primarily of royalties from oil and gas, revenues from easements and commercial leases, and land and material sales. The Water Services and Operations segment encompasses the business of providing a full-service water offering to operators in the Permian Basin. The revenue streams of this segment primarily consist of revenue generated from sales of sourced and treated water as well as revenue from produced water royalties. egment financial results for the three and nine months ended September 30, 2023 and 2022 (in thousands):
The following table presents total assets and property, plant and equipment, net by segment as of September 30, 2023 and December 31, 2022 (in thousands):
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Oil and Gas Producing Activities |
9 Months Ended |
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Sep. 30, 2023 | |
Extractive Industries [Abstract] | |
Oil and Gas Producing Activities | Oil and Gas Producing ActivitiesWe measure our share of oil and gas produced in barrels of oil equivalent (“Boe”). One Boe equals one barrel of crude oil, condensate, NGLs (natural gas liquids) or approximately 6,000 cubic feet of gas. For the three months ended September 30, 2023 and 2022, our share of oil and gas produced was approximately 21.8 and 23.4 thousand Boe per day, respectively. For the nine months ended September 30, 2023 and 2022, our share of oil and gas produced was approximately 22.6 and 21.3 thousand Boe per day, respectively. Reserves related to our royalty interests are not presented because the information is unavailable.There are a number of oil and gas wells that have been drilled but are not yet completed (“DUC”) where we have a royalty interest. The number of DUC wells is determined using uniform drilling spacing units with pooled interests for all wells awaiting completion. We have identified 596 and 584 DUC wells subject to our royalty interest as of September 30, 2023 and December 31, 2022, respectively. |
Subsequent Events |
9 Months Ended |
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Sep. 30, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events We evaluated events that occurred after the balance sheet date through the date these financial statements were issued, and the following events that met recognition or disclosure criteria were identified: Dividends Declared On October 31, 2023, our board of directors declared a quarterly cash dividend of $3.25 per share, payable on December 15, 2023 to stockholders of record at the close of business on December 1, 2023.
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Pay vs Performance Disclosure - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||||||
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Sep. 30, 2023 |
Jun. 30, 2023 |
Mar. 31, 2023 |
Sep. 30, 2022 |
Jun. 30, 2022 |
Mar. 31, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
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Pay vs Performance Disclosure | ||||||||
Net income | $ 105,574 | $ 100,393 | $ 86,568 | $ 129,837 | $ 118,894 | $ 97,900 | $ 292,535 | $ 346,631 |
Insider Trading Arrangements - Murray Stahl [Member] |
3 Months Ended | 9 Months Ended |
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Sep. 30, 2023
shares
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Sep. 30, 2023
shares
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Trading Arrangements, by Individual | ||
Material Terms of Trading Arrangement | On September 14, 2023, Murray Stahl, a member of our Board of Directors, on behalf of himself and accounts managed by Horizon Kinetics Asset Management LLC over which Mr. Stahl has a controlling interest, adopted a “10b5-1 trading arrangement,” as defined in Item 408 of Regulation S-K that is intended to satisfy the affirmative defense of Rule 10b5-1(c) promulgated under the Exchange Act, for the purchase of up to 738 shares of Common Stock. This 10b5-1 trading arrangement is scheduled to expire on the earlier of (i) April 15, 2024 and (ii) the acquisition of 738 shares of Common Stock. | |
Name | Murray Stahl | |
Title | member of our Board of Directors | |
Rule 10b5-1 Arrangement Adopted | true | |
Adoption Date | September 14, 2023 | |
Rule 10b5-1 Arrangement Terminated | false | |
Termination Date | April 15, 2024 | |
Arrangement Duration | 214 days | |
Aggregate Available | 738 | 738 |
Summary of Significant Accounting Policies (Policies) |
9 Months Ended |
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Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and on the same basis as the audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2022. The condensed consolidated financial statements herein include all adjustments which are, in the opinion of management, necessary to fairly state the financial position of the Company as of September 30, 2023 and the results of its operations for the three and nine months ended September 30, 2023 and 2022, respectively, and its cash flows for the nine months ended September 30, 2023 and 2022, respectively. Such adjustments are of a normal nature and all intercompany accounts and transactions have been eliminated in consolidation. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted from this report, and accordingly these interim financial statements and footnotes should be read in conjunction with the audited financial statements and footnotes included in our Annual Report on Form 10-K for the year ended December 31, 2022. The results for the interim periods shown in this report are not necessarily indicative of future financial results.
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Segment Reporting | We operate our business in two segments: Land and Resource Management and Water Services and Operations. Our segments provide management with a comprehensive financial view of our key businesses. The segments enable the alignment of strategies and objectives of TPL and provide a framework for timely and rational allocation of resources within businesses. |
Use of Estimates in the Preparation of Financial Statements | Use of Estimates in the Preparation of Financial Statements The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. In the event estimates and/or assumptions prove to be different from actual amounts, adjustments are made in subsequent periods to reflect more current information.
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Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash |
Intangible Assets Net | Intangible Assets, Net Intangible assets include a saltwater disposal easement and acquired groundwater rights. When the Company acquires intangible assets that are attached to real estate and/or other tangible assets, an allocation of the total purchase price, including any direct costs of the acquisition, is made at the date of acquisition based on the estimated relative fair values of the assets acquired. Intangible assets are amortized on a straight-line basis over their estimated useful lives, with remaining useful lives from 15 to 20 years. Intangible assets are tested for recoverability whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. In such event, the fair value of the asset is determined using an undiscounted cash flow analysis of the asset at the lowest level for which identifiable cash flows exist. If an impairment has occurred, a loss for the difference between the carrying value and the estimated fair value of the intangible asset is recognized in the statement of income.
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Reclassifications | Reclassifications Certain financial information on the condensed consolidated balance sheet as of December 31, 2022 and condensed consolidated statement of income and total comprehensive income for the three and nine months ended September 30, 2022 has been revised to conform to the current year presentation. These revisions include a balance sheet reclassification of $454,000 of other taxes payable previously included in accounts payable and accrued expenses to ad valorem and other taxes payable and an income statement reclassification of $33,000 and $97,000 of property taxes previously included in general and administrative expenses to ad valorem and other taxes for the three and nine months ended September 30, 2022, respectively.
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Summary of Significant Accounting Policies (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Cash, Cash Equivalents and Restricted Cash | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows as of September 30, 2023 and December 31, 2022 (in thousands):
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Real Estate Activity (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Real Estate [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Real Estate Activity | As of September 30, 2023 and December 31, 2022, TPL owned the following land and real estate (in thousands, except number of acres):
(1)Real estate assigned through the Declaration of Trust.
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Property, Plant and Equipment (Tables) |
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Property, Plant and Equipment | Property, plant and equipment, net consisted of the following as of September 30, 2023 and December 31, 2022 (in thousands):
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Oil and Gas Royalty Interests (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Real Estate [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Royalty Interests | As of September 30, 2023 and December 31, 2022, we owned the following oil and gas royalty interests (in thousands):
(1)Royalty interests assigned through the Declaration of Trust.
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Intangible Assets (Tables) |
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Intangible Assets Net | Intangible assets, net consisted of the following as of September 30, 2023 and December 31, 2022 (in thousands):
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Share-Based Compensation (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Restricted Stock Awards and Units Activity | The following table summarizes activity related to RSAs and RSUs under the 2021 Plan for the nine months ended September 30, 2023 and 2022:
(1)RSAs were granted on December 29, 2021: 1,993 shares vested on December 29, 2022 and 1,337 shares will vest on December 29, 2023. (2)RSUs vest in one-third increments over a three-year period. (3)Of the 1,864 shares that vested during the nine months ended September 30, 2023, 669 shares were surrendered upon vesting by employees to the Company to settle tax withholdings. The following table summarizes activity related to the RSAs under the 2021 Directors Plan for the nine months ended September 30, 2023 and 2022:
(1)RSAs vest on the first anniversary of the grant date.
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Schedule of Performance Share Units Activity | The following table summarizes activity related to PSUs for the nine months ended September 30, 2023 and 2022:
(1)The PSUs were granted on February 11, 2022 and include 1,197 RTSR (as defined below) PSUs (based on target) with a grant date fair value of $1,605 per share and 1,197 FCF (as defined below) PSUs (based on target) with a grant date fair value of $1,105 per share. If the maximum performance potential metrics described in the PSU agreements are achieved, the actual number of units that will ultimately be awarded under the PSU agreements will exceed target units by 100% (i.e., a collective 2,394 additional units would be issued). (2)The PSUs were granted on February 10, 2023 and include 926 RTSR PSUs (based on target) with a grant date fair value of $2,761 per share and 926 FCF PSUs (based on target) with a grant date fair value of $1,924 per share. If the maximum performance potential metrics described in the PSU agreements are achieved, the actual number of units that will ultimately be awarded under the PSU agreements will exceed target units by 100% (i.e., a collective 1,852 additional units would be issued).
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Schedule of Share-Based Compensation Expense | The following table summarizes our share-based compensation expense by line item in the condensed consolidated statements of income (in thousands):
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Income Taxes (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Income Tax Expense (Benefit) | The calculation of our effective tax rate is as follows for the three and nine months ended September 30, 2023 and 2022 (in thousands, except percentages):
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Earnings Per Share (Tables) |
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted | The following table sets forth the computation of EPS for the three and nine months ended September 30, 2023 and 2022 (in thousands, except number of shares and per share data):
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Changes in Equity (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Stockholders Equity | The following tables present changes in our equity for the nine months ended September 30, 2023 and 2022 (in thousands, except shares and per share amounts):
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Business Segment Reporting (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Financial Results | The following table presents segment financial results for the three and nine months ended September 30, 2023 and 2022 (in thousands):
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Schedule of Total Assets And Property, Plant and Equipment | The following table presents total assets and property, plant and equipment, net by segment as of September 30, 2023 and December 31, 2022 (in thousands):
|
Summary of Significant Accounting Policies - Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|---|---|
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 654,158 | $ 510,834 | ||
Tax like-kind exchange escrow | 5,380 | 6,348 | ||
Total cash, cash equivalents and restricted cash shown in the statement of cash flows | $ 659,538 | $ 517,182 | $ 446,588 | $ 428,242 |
Summary of Significant Accounting Policies - Reclassifications (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |
---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2022 |
Sep. 30, 2023 |
|
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Finite-lived intangible asset, useful life | 19 years | ||
Ad valorem taxes payable | $ 33 | $ 97 | |
Minimum | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Finite-lived intangible asset, useful life | 15 years | ||
Maximum | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Finite-lived intangible asset, useful life | 20 years | ||
Revision of prior period, reclassification, adjustment | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Accrual for ad valorem taxes | $ 454 | $ 454 |
Real Estate Activity - Schedule of Land and Real Estate Ownership (Details) $ in Thousands |
Sep. 30, 2023
USD ($)
a
|
Dec. 31, 2022
USD ($)
a
|
---|---|---|
Number of Acres | ||
Land (surface rights) (acre) | a | 798,999 | 817,060 |
Real estate acquired (acre) | a | 69,447 | 57,306 |
Total Real Estate Situated in Texas (acre) | a | 868,446 | 874,366 |
Net Book Value | ||
Land (surface rights) | $ | $ 0 | $ 0 |
Real estate acquired | $ | 130,024 | 109,704 |
Total real estate situated in Texas (in USD) | $ | $ 130,024 | $ 109,704 |
Real Estate Activity - Narrative (Details) - Texas $ in Millions |
9 Months Ended | |
---|---|---|
Sep. 30, 2023
USD ($)
a
|
Sep. 30, 2022
USD ($)
a
|
|
Land sales and other operating revenue | ||
Real Estate Properties [Line Items] | ||
Area of real estate property, sold (in acres) | a | 18,061 | 129 |
Proceeds from sale of real estate (in USD) | $ | $ 6.8 | $ 3.3 |
Land acquisitions | ||
Real Estate Properties [Line Items] | ||
Additions (acres) | a | 12,141 | |
Additions | $ | $ 20.0 |
Property, Plant and Equipment (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
Dec. 31, 2022 |
|
Property, Plant and Equipment [Line Items] | |||||
Total property, plant and equipment, at cost | $ 145,798 | $ 145,798 | $ 135,482 | ||
Less: accumulated depreciation | (59,198) | (59,198) | (50,004) | ||
Property, plant and equipment, net | 86,600 | 86,600 | 85,478 | ||
Depreciation expense | 3,000 | $ 3,600 | 9,300 | $ 11,400 | |
Water service-related assets | |||||
Property, Plant and Equipment [Line Items] | |||||
Total property, plant and equipment, at cost | 135,293 | 135,293 | 125,166 | ||
Furniture, fixtures and equipment | |||||
Property, Plant and Equipment [Line Items] | |||||
Total property, plant and equipment, at cost | 9,907 | 9,907 | 9,718 | ||
Other | |||||
Property, Plant and Equipment [Line Items] | |||||
Total property, plant and equipment, at cost | $ 598 | $ 598 | $ 598 |
Oil and Gas Royalty Interests (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Oil and gas royalty interests: | ||
Royalty interests acquired, at cost | $ 51,494 | $ 47,928 |
Total royalty interests | 51,494 | 47,928 |
Less: accumulated depletion | (4,281) | (2,903) |
Royalty interests, net | 47,213 | 45,025 |
1/16th nonparticipating perpetual royalty interest | ||
Oil and gas royalty interests: | ||
1/16th nonparticipating perpetual royalty interest | 0 | 0 |
1/128th nonparticipating perpetual royalty interest | ||
Oil and gas royalty interests: | ||
1/128th nonparticipating perpetual royalty interest | $ 0 | $ 0 |
Oil and Gas Royalty Interests - Narrative (Details) $ in Thousands |
3 Months Ended | 9 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Sep. 30, 2023
USD ($)
a
|
Sep. 30, 2022
USD ($)
a
|
Sep. 30, 2023
USD ($)
a
|
Sep. 30, 2022
USD ($)
a
|
Dec. 31, 2022 |
|
Real Estate Properties [Line Items] | |||||
Acquisition of royalty interests | $ 3,566 | $ 1,662 | |||
Depletion expense | $ 500 | $ 300 | $ 1,400 | $ 700 | |
Additional real estate acquisitions | |||||
Real Estate Properties [Line Items] | |||||
Net royalty interests (in acres) | a | 119 | 92 | 119 | 92 | |
Acquisition of royalty interests | $ 3,600 | $ 1,700 | |||
1/16th nonparticipating perpetual royalty interest | |||||
Real Estate Properties [Line Items] | |||||
Nonparticipating perpetual royalty interest rate (in percentage) | 6.25% | 6.25% | 6.25% | ||
1/128th nonparticipating perpetual royalty interest | |||||
Real Estate Properties [Line Items] | |||||
Nonparticipating perpetual royalty interest rate (in percentage) | 0.78125% | 0.78125% |
Intangible Assets - Schedule of Intangible Assets Net (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets, at cost (1) | $ 21,403 | $ 0 |
Less: accumulated amortization | (95) | 0 |
Intangible assets, net | $ 21,308 | 0 |
Finite-lived intangible asset, useful life | 19 years | |
Saltwater disposal easement | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets, at cost (1) | $ 17,557 | 0 |
Groundwater rights acquired | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets, at cost (1) | $ 3,846 | $ 0 |
Intangible Assets - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |
---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Payments to acquire intangible assets | $ 21,403 | $ 0 | |
Amortization expense | $ 100 | 100 | |
Estimated future annual amortization expense of intangible assets remainder of 2023 | 400 | 400 | |
Estimated future annual amortization expense of intangible assets for 2024 | 1,100 | 1,100 | |
Estimated future annual amortization expense of intangible assets for 2025 | 1,100 | 1,100 | |
Estimated future annual amortization expense of intangible assets for 2026 | 1,100 | 1,100 | |
Estimated future annual amortization expense of intangible assets for 2027 | 1,100 | 1,100 | |
Estimated future annual amortization expense of intangible assets for 2028 | 1,100 | 1,100 | |
Estimated future annual amortization expense of intangible assets thereafter | $ 15,400 | $ 15,400 |
Share-Based Compensation - Share-Based Compensation - (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total share-based compensation expense | $ 2,789 | $ 2,121 | $ 8,112 | $ 5,616 |
Tax benefit related to share-based compensation | 600 | 400 | 1,700 | 1,200 |
Salaries and related employee expenses (employee awards) | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total share-based compensation expense | 2,502 | 1,910 | 7,217 | 4,989 |
General and administrative expenses (director awards) | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total share-based compensation expense | $ 287 | $ 211 | $ 895 | $ 627 |
Income Taxes - Calculation of Effective Tax Rate (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Income Tax Disclosure [Abstract] | ||||
Income before income taxes | $ 134,937 | $ 163,975 | $ 372,429 | $ 440,702 |
Income tax expense | $ 29,363 | $ 34,138 | $ 79,894 | $ 94,071 |
Effective tax rate (in percent) | 21.80% | 20.80% | 21.50% | 21.30% |
Earnings Per Share - Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 9 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Sep. 30, 2023 |
Jun. 30, 2023 |
Mar. 31, 2023 |
Sep. 30, 2022 |
Jun. 30, 2022 |
Mar. 31, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Earnings Per Share [Abstract] | ||||||||
Net income | $ 105,574 | $ 100,393 | $ 86,568 | $ 129,837 | $ 118,894 | $ 97,900 | $ 292,535 | $ 346,631 |
Basic earnings per share: | ||||||||
Weighted average shares outstanding for basic EPS (in shares) | 7,675,521 | 7,714,796 | 7,684,691 | 7,729,866 | ||||
Basic earnings per share (in dollars per share) | $ 13.75 | $ 16.83 | $ 38.07 | $ 44.84 | ||||
Diluted earnings per share: | ||||||||
Weighted average shares outstanding for basic EPS (in shares) | 7,675,521 | 7,714,796 | 7,684,691 | 7,729,866 | ||||
Incentive and equity compensation plans (in shares) | 6,253 | 5,425 | 6,294 | 3,639 | ||||
Weighted average shares outstanding for diluted EPS (in shares) | 7,681,774 | 7,720,221 | 7,690,985 | 7,733,505 | ||||
Diluted earnings per share (in dollars per share) | $ 13.74 | $ 16.82 | $ 38.04 | $ 44.82 |
Commitments and Contingencies - Additional Information (Details) - USD ($) $ in Thousands |
1 Months Ended | 3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|---|
Apr. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Other Commitments [Line Items] | |||||
Total consolidated revenues | $ 157,967 | $ 191,111 | $ 464,938 | $ 514,716 | |
Oil and gas royalties | |||||
Other Commitments [Line Items] | |||||
Total consolidated revenues | $ 8,700 | $ 87,102 | $ 130,298 | $ 258,644 | $ 355,738 |
Changes in Equity - Narrative (Details) $ in Millions |
Nov. 01, 2022
USD ($)
|
---|---|
Equity [Abstract] | |
Stock repurchase program, authorized amount | $ 250 |
Business Segment Reporting - Narrative (Details) a in Thousands |
Sep. 30, 2023
a
|
---|---|
West Texas | |
Segment Reporting Information [Line Items] | |
Area of land (in acres) | 868 |
Business Segment Reporting - Financial Results (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Sep. 30, 2023 |
Jun. 30, 2023 |
Mar. 31, 2023 |
Sep. 30, 2022 |
Jun. 30, 2022 |
Mar. 31, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Segment Reporting Information [Line Items] | ||||||||
Total consolidated revenues | $ 157,967 | $ 191,111 | $ 464,938 | $ 514,716 | ||||
Net income | 105,574 | $ 100,393 | $ 86,568 | 129,837 | $ 118,894 | $ 97,900 | 292,535 | 346,631 |
Total capital expenditures | 5,243 | 1,808 | 10,387 | 12,155 | ||||
Depreciation, depletion and amortization | 3,584 | 3,917 | 10,881 | 12,223 | ||||
Land and resource management | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Total consolidated revenues | 109,933 | 147,215 | 315,276 | 393,947 | ||||
Net income | 82,884 | 108,188 | 217,860 | 285,418 | ||||
Total capital expenditures | 47 | 114 | 191 | 339 | ||||
Depreciation, depletion and amortization | 703 | 567 | 2,233 | 1,632 | ||||
Water services and operations | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Total consolidated revenues | 48,034 | 43,896 | 149,662 | 120,769 | ||||
Net income | 22,690 | 21,649 | 74,675 | 61,213 | ||||
Total capital expenditures | 5,196 | 1,694 | 10,196 | 11,816 | ||||
Depreciation, depletion and amortization | $ 2,881 | $ 3,350 | $ 8,648 | $ 10,591 |
Business Segment Reporting - Assets and Property, Plant and Equipment, Net (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Segment Reporting Information [Line Items] | ||
Total consolidated assets | $ 1,079,318 | $ 877,427 |
Total consolidated property, plant and equipment, net | 86,600 | 85,478 |
Land and resource management | ||
Segment Reporting Information [Line Items] | ||
Total consolidated assets | 900,508 | 735,193 |
Total consolidated property, plant and equipment, net | 5,464 | 5,998 |
Water services and operations | ||
Segment Reporting Information [Line Items] | ||
Total consolidated assets | 178,810 | 142,234 |
Total consolidated property, plant and equipment, net | $ 81,136 | $ 79,480 |
Oil and Gas Producing Activities (Details) |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2023
Boe
well
|
Sep. 30, 2022
Boe
|
Sep. 30, 2023
Boe
well
|
Sep. 30, 2022
Boe
|
Dec. 31, 2022
well
|
|
Extractive Industries [Abstract] | |||||
Share of oil and gas produced in thousands per day | Boe | 21,800 | 23,400 | 22,600 | 21,300 | |
Number of oil and gas wells | well | 596 | 596 | 584 |
Subsequent Events (Details) |
Oct. 31, 2023
$ / shares
|
---|---|
Dividend declared | Subsequent event | |
Subsequent Event [Line Items] | |
Annual cash dividend (in dollars per share) | $ 3.25 |
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