The following is a summary of the Texas Pacific Land Corporation (TPL) Q4 2023 Earnings Call Transcript:

Financial Performance:

• Texas Pacific Land Corporation reported Q4 oil and gas royalty production of approximately 26,300 barrels of oil equivalent per day, a 20% sequential quarter-over-quarter growth.

• The company achieved consolidated revenues of around $167 million in Q4 2023, indicating a sequential quarter-over-quarter growth of 6%.

• The company reported an Adjusted EBITDA of $151 million, and free cash flow of $116 million, marking a 15% YoY growth thanks to higher royalty production, sourced water sales, produced water royalties, and SLEM revenues.

• Despite falling oil and natural gas prices, water and SLEM businesses collectively grew revenues by 30% in 2023.

• The fiscal year 2023 ended with adjusted EBITDA and free cash flow margins of 86% and 66%, respectively, and a cash balance of $725 million.

Business Progress:

• Customers have indicated intentions to maintain strong activity levels, particularly the supermajor operators.

• TPL's oil and gas assets are expected to remain economically viable even if commodity prices decline, indicating resilience.

• TPL is planning strategic moves like investing in organic growth, stock buyback, acquiring external assets, and paying dividends to maximize shareholder value.

• The company is exploring potential M&A opportunities and has mentioned they are in a prime position to consolidate high-quality Permian surface and royalty assets.

• Over 50% of current drilled but uncompleted wells (DUCs) are held by large entities such as Chevron, Exxon, Conoco, BP, and Occidental.

• New spud activity in Q4 has hit a company record as rig counts remain stable and permit to production timings reduce due to operator efficiencies.

More details: Texas Pacific Land IR

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