EX-99.1 2 exhibit991q22019earnin.htm EXHIBIT 99.1 Exhibit
Exhibit 99.1

 
 
TEXAS PACIFIC LAND TRUST
 
 
 
 
 
 
 
 
 
1700 Pacific Avenue
 
 
 
 
Suite 2900
 
 
 
 
Dallas, Texas 75201
 
 
 
 
 
 
 
 
 
 
 
 
TRUSTEES:
 
Telephone (214) 969-5530
 
OFFICERS:
DAVID E. BARRY
 
 
 
TYLER GLOVER
JOHN R. NORRIS III
 
 
 
ROBERT J. PACKER

Texas Pacific Land Trust Announces Second Quarter 2019 Financial Results
DALLAS, TX (July 31, 2019) – Texas Pacific Land Trust (NYSE: TPL) today announced financial results for the second quarter ended June 30, 2019.
Results for the second quarter of 2019:
Net income of $49.6 million, or $6.39 per Sub-share Certificate, for the second quarter ended June 30, 2019 compared with $52.5 million, or $6.73 per Sub-share Certificate, for the second quarter ended June 30, 2018.
Revenues of $87.3 million for the second quarter ended June 30, 2019, compared with $73.8 million for the second quarter ended June 30, 2018.
Increases of 30.9% in oil and gas royalty revenue and 30.6% in water sales and royalty revenue, and a decrease of 19.6% in easements and other surface-related income, for the second quarter ended June 30, 2019 compared with the second quarter ended June 30, 2018.
Results for the six months ended June 30, 2019:
Net income of $189.6 million, or $24.44 per Sub-share Certificate, for the six months ended June 30, 2019 compared with $96.3 million, or $12.33 per Sub-share Certificate, for the six months ended June 30, 2018.
Revenues of $278.6 million for the six months ended June 30, 2019, compared with $133.9 million for the six months ended June 30, 2018.
Increases of 48.4% in water sales and royalty revenue, 28.2% in oil and gas royalty revenue and 20.0% in easements and other surface-related income for the six months ended June 30, 2019 compared with the six months ended June 30, 2018.
Further details for the second quarter of 2019:
Oil and gas royalty revenue was $39.6 million for the second quarter ended June 30, 2019, compared with $30.3 million for the second quarter ended June 30, 2018, an increase of 30.9%. Crude oil and gas production subject to the Trust’s royalty interests increased 41.3% and 120.2%, respectively, in the second quarter ended June 30, 2019 compared to the second quarter ended June 30, 2018. While crude oil and gas production increased in the second quarter ended June 30, 2019 compared to June 30, 2018, the prices received for crude oil and gas production decreased 4.8% and 43.5%, respectively, over the same time period.




Easements and other surface-related income was $22.4 million for the second quarter ended June 30, 2019, a decrease of 19.6% compared with the second quarter ended June 30, 2018 when easements and other surface-related income was $27.8 million. This decrease of $5.4 million resulted primarily from decreases in pipeline easement income and temporary permits partially offset by an increase in lease rental income for the second quarter ended June 30, 2019 compared to the same period of 2018. Pipeline easement income decreased $3.8 million for the second quarter ended June 30, 2019 compared to the same period of 2018.

Water sales and royalty revenue was $20.4 million for the second quarter ended June 30, 2019, an increase of 30.6% compared with the second quarter ended June 30, 2018 when water sales and royalty revenue was $15.6 million.

Land sales revenue was $4.8 million for the second quarter ended June 30, 2019. The Trust sold approximately 658 acres of land for an average price of approximately $7,260 per acre. There was no land sales revenue for the second quarter ended June 30, 2018.

Further details for six months ended June 30, 2019:

Oil and gas royalty revenue was $72.9 million for the six months ended June 30, 2019, compared with $56.8 million for the six months ended June 30, 2018, an increase of 28.2%. Crude oil and gas production subject to the Trust’s royalty interests increased 49.0% and 119.9%, respectively, in the six months ended June 30, 2019 compared to the six months ended June 30, 2018. While crude oil and gas production increased in the six months ended June 30, 2019 compared to June 30, 2018, the prices received for crude oil and gas production decreased 10.5% and 45.2%, respectively, over the same time period.

Easements and other surface-related income was $53.7 million for the six months ended June 30, 2019, an increase of 20.0% compared with the six months ended June 30, 2018 when easements and other surface-related income was $44.8 million. The increase resulted primarily from increases in pipeline easement income for the six months ended June 30, 2019 compared to the same period of 2018. Pipeline easement income increased $8.9 million for the six months ended June 30, 2019 compared to the same period of 2018.

Water sales and royalty revenue was $43.4 million for the six months ended June 30, 2019, an increase of 48.4% compared with the six months ended June 30, 2018 when water sales and royalty revenue was $29.2 million.

Land sales revenue was $108.4 million for the six months ended June 30, 2019, when the Trust sold approximately 21,909 acres of land for an average price of approximately $4,948 per acre. Land sales revenue was $2.8 million for the six months ended June 30, 2018.





Texas Pacific Land Trust is not a REIT.

This news release may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements regarding the Trust’s future operations and prospects, the markets for real estate in the areas in which the Trust owns real estate, applicable zoning regulations, the markets for oil and gas, production limits on prorated oil and gas wells authorized by the Railroad Commission of Texas, expected competitions, management’s intent, beliefs or current expectations with respect to the Trust’s future financial performance and other matters. We assume no responsibility to update any such forward-looking statements.



TEXAS PACIFIC LAND TRUST
REPORT OF OPERATIONS – UNAUDITED
(in thousands, except share and per share amounts)
 
 
Three Months Ended June 30,
 
 
2019
 
2018
Oil and gas royalties
 
$
39,641

 
$
30,278

Easements and other surface-related income
 
22,357

 
27,799

Water sales and royalties
 
20,430

 
15,643

Land sales
 
4,774

 

Other operating revenue
 
108

 
124

Total revenues
 
$
87,310

 
$
73,844

 
 
 
 
 
Income tax expense
 
$
13,293

 
$
13,162

Net income
 
$
49,586

 
$
52,503

Net income per Sub-share Certificate — basic and diluted
 
$
6.39

 
$
6.73

Weighted average number of Sub-share Certificates outstanding during period
 
7,756,156

 
7,803,162


 
 
Six Months Ended June 30,
 
 
2019
 
2018
Oil and gas royalties
 
$
72,854

 
$
56,825

Easements and other surface-related income
 
53,724

 
44,777

Water sales and royalties
 
43,413

 
29,250

Land sales
 
108,399

 
2,750

Other operating revenue
 
244

 
249

Total revenues
 
$
278,634

 
$
133,851

 
 
 
 
 
Income tax expense
 
$
48,841

 
$
23,982

Net income
 
$
189,584

 
$
96,294

Net income per Sub-share Certificate — basic and diluted
 
$
24.44

 
$
12.33

Weighted average number of Sub-share Certificates outstanding during period
 
7,757,199

 
7,808,064







We operate our business in two segments: Land and Resource Management and Water Service and Operations. The following is an analysis of our operating results for the comparable periods by reportable segment (in thousands):

 
 
Three Months Ended June 30,
 
 
2019
 
2018
Revenues:
 
 
 
 
 
 
 
 
Land and resource management:
 
 
 
 
 
 
 
 
Oil and gas royalties
 
$
39,641

 
46
%
 
$
30,278

 
41
%
Easements and other surface-related income
 
14,165

 
16
%
 
21,974

 
30
%
Land sales and other operating revenue
 
4,882

 
6
%
 
124

 
%
 
 
58,688

 
68
%
 
52,376

 
71
%
Water service and operations:
 
 
 
 
 
 
 
 
Water sales and royalties
 
20,430

 
23
%
 
15,643

 
21
%
Easements and other surface-related income
 
8,192

 
9
%
 
5,825

 
8
%
 
 
28,622

 
32
%
 
21,468

 
29
%
Total consolidated revenues
 
$
87,310

 
100
%
 
$
73,844

 
100
%
 
 
 
 
 
 
 
 
 
Net income:
 
 
 
 
 
 
 
 
Land and resource management
 
$
37,194

 
75
%
 
$
40,505

 
77
%
Water service and operations
 
12,392

 
25
%
 
11,998

 
23
%
Total consolidated net income
 
$
49,586

 
100
%
 
$
52,503

 
100
%

 
 
Six Months Ended June 30,
 
 
2019
 
2018
Revenues:
 
 
 
 
 
 
 
 
Land and resource management:
 
 
 
 
 
 
 
 
Oil and gas royalties
 
$
72,854

 
25
%
 
$
56,825

 
43
%
Easements and other surface-related income
 
37,650

 
14
%
 
35,305

 
26
%
Land sales and other operating revenue
 
108,643

 
39
%
 
2,999

 
2
%
 
 
219,147

 
78
%
 
95,129

 
71
%
Water service and operations:
 
 
 
 
 
 
 
 
Water sales and royalties
 
43,413

 
16
%
 
29,250

 
22
%
Easements and other surface-related income
 
16,074

 
6
%
 
9,472

 
7
%
 
 
59,487

 
22
%
 
38,722

 
29
%
Total consolidated revenues
 
$
278,634

 
100
%
 
$
133,851

 
100
%
 
 
 
 
 
 
 
 
 
Net income:
 
 
 
 
 
 
 
 
Land and resource management
 
$
160,311

 
85
%
 
$
73,315

 
76
%
Water service and operations
 
29,273

 
15
%
 
22,979

 
24
%
Total consolidated net income
 
$
189,584

 
100
%
 
$
96,294

 
100
%