Texas Pacific Land Corporation
TypePublic company
Industry
  • Forestry
  • Real estate
FoundedFebruary 1, 1888 (1888-02-01) as Texas Pacific Land Trust
HeadquartersDallas, Texas, U.S.
Key people
Tyler Glover
(CEO & President)
Chris Steddum (CFO)
ProductsOil/Gas Land Royalties
RevenueIncrease US$450 million (2021)
Increase US$551 million (2021)
Increase US$269 million (2021)
Total assetsIncrease US$764 million (2021)
Total equityIncrease US$1.526 billion (2021)
Number of employees
92 (2021)
Websitewww.texaspacific.com
Footnotes / references
[1]

The Texas Pacific Land Corporation is a publicly traded real estate operating company with its administrative office in Dallas, Texas. Owning well over 880,000 acres (3,600 km2) in 20 West Texas counties, TPL is among the largest private landowners in the state of Texas. It was previously organized as an unusual legal entity, a publicly traded trust taxed as a corporation, and operated under the name Texas Pacific Land Trust.[2]

TPL has two business lines: royalties from oil and gas, its main business segment, and selling water.[3]

History

TPL was created in February 1888 in the wake of the Texas and Pacific Railway bankruptcy, as a means to dispose of the T&P's vast land holdings. TPL received over 3,500,000 acres (14,000 km2), and certain T&P bondholders were allowed to exchange their (now worthless) bonds for trust certificates. The certificates were later divided into "sub-share" certificates (3,000 sub-share certificates is the equivalent of one trust certificate), and the sub-share certificates have been traded on the NYSE since January 1927.

The company slowly declined from the 1970s to the 2010s, as it gradually exhausted the oil and gas reserves that were accessible with current technology.[4] TPL's performance changed dramatically around 2010, when the introduction of hydraulic fracturing caused oil production in its land and profits to increase many times over.[5] Most of the company's land is located in the Permian Basin.[6]

Starting in the mid-2010s, TPL became known for low quality management, poor management-investor relations, and high litigation expense.[7][8][9] As a publicly traded trust, unlike a corporation, TPL was managed by trustees who governed for life, and investors could not easily change management.[10]

On March 23, 2020 the trust announced plans to convert the land trust to a C Corporation under Delaware law. This was completed January 11, 2021. However, even under the C Corp structure investors struggled to replace management and litigation continued into 2023.[11]

Current operations

Despite having sold 75 percent of its original landholdings since inception, TPL is still among the largest private landowners in the State of Texas. As of December 31, 2021, TPL owned 880,501 acres (3,563.26 km2) of land in 20 West Texas counties, of which the largest amount is located in Culberson (288,912 acres), Reeves (188,681 acres), and Hudspeth (154,247 acres) counties. In addition, TPL owns a 1/128th nonparticipating perpetual royalty interest in 84,934 acres, and a 1/16th nonparticipating perpetual royalty interest in 370,737 acres.[1]

Trust income is derived from land sales, oil and gas royalties, grazing and sundry leases, interest on notes receivable, and interest on investments.[12] The trust does not actively seek to sell its landholdings, and on rare occasions actually purchases land. (It last did so in 2008, acquiring 640 acres (2.6 km2) from the State of Texas in a parcel adjacent to existing holdings.) In June 2017, TPL established the formation of Texas Pacific Water Resources, LLC, a wholly owned subsidiary of the Trust.[13] TPWR is a full service water business that offers brackish water sourcing, water disposal, water recycling, and other hydrocarbon extraction related water services.

Sub-share Buy Back Policy

TPL has a long-standing policy to repurchase sub-shares with excess cash. As noted in the 2015 annual report, "As provided in Article Seventh of the Declaration of Trust, dated February 1, 1888, establishing the Trust, it will continue to be the practice of the Trustees to purchase and cancel outstanding certificates and sub-shares. These purchases are generally made in the open market and there is no arrangement, contractual or otherwise, with any person for any such purchase."[14]

In 2015, the Trust purchased and retired 204,335 sub-shares at a cost of $28,771,073, representing an average cost of $140.80 per sub-share. The number of sub-shares purchased and retired in 2015 amounted to 2.5% of the total number of sub-shares outstanding as of December 31, 2014.[14]

The policy of buy backs has reduced the sub-share count by 26% between 2004 and 2015 (from 10,971,375 at the end of 2004[15] to 8,118,064[16] at the end of 2015). According to the most recent 10-Q filed for 2020, as required by the Securities and Exchange Commission, the stock has since shot up to an average of $1,600-$1,800 a share.[17][18]

References

  1. 1 2 "Texas Pacific Land Corp 2021 Annual Report 10-K". 2022.
  2. ↑ "Archived copy" (PDF). www.tpltrust.com. Archived from the original (PDF) on 31 May 2016. Retrieved 30 June 2022.{{cite web}}: CS1 maint: archived copy as title (link)
  3. ↑ https://www.sec.gov/Archives/edgar/data/1811074/000181107423000014/tpl-20221231.htm
  4. ↑ Riba, Tomas (22 September 2023). "Texas Pacific Land's Management Issues Coming To An End". SeekingAlpha. Retrieved 6 December 2023.
  5. ↑ Matt Levine https://archive.today/20220413015058/https://www.bloomberg.com/opinion/articles/2019-06-03/was-the-shareholder-meeting-real
  6. ↑ https://www.sec.gov/Archives/edgar/data/1811074/000181107423000014/tpl-20221231.htm
  7. ↑ Riba, Tomas (22 September 2023). "Texas Pacific Land's Management Issues Coming To An End". SeekingAlpha. Retrieved 6 December 2023.
  8. ↑ See generally https://tpltblog.com/
  9. ↑ https://www.sec.gov/Archives/edgar/data/97517/000114036119007464/s002762x15_dfan14a.htm
  10. ↑ Matt Levine https://archive.today/20220413015058/https://www.bloomberg.com/opinion/articles/2019-06-03/was-the-shareholder-meeting-real
  11. ↑ Ferman, Mitchell (27 December 2022). "Shale Oil Powerhouse Sues Its Own Investors After 4,000% Stock Surge". Bloomberg. Archived from the original on 6 December 2023. Retrieved 6 December 2023.}}
  12. ↑ http://www.tpltrust.com/uploads/2008_Annual_Report.pdf TPL 2008 Annual Report, p. 19.
  13. ↑ "Texas Pacific Land Trust Announces Formation of Water Resources Company". Retrieved 2018-11-27.
  14. 1 2 http://www.tpltrust.com/uploads/2015_Annual_Report.pdf TPL 2015 Annual Report, p. 2.
  15. ↑ http://www.tpltrust.com/uploads/2007_Annual_Report.pdf TPL 2007 Annual Report, p. 16.
  16. ↑ http://www.tpltrust.com/uploads/2015_Annual_Report.pdf TPL 2015 Annual Report, p. 16.
  17. ↑ https://www.tpltrust.com/investors/sec-filings/all-sec-filings/content/0000097517-20-000056/0000097517-20-000056.pdf
  18. ↑ "TPL: Texas Pacific Land Corp Stock Price Quote - New York - Bloomberg". Bloomberg News.
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