Cover Page
Cover Page - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Jan. 31, 2021 | Jun. 30, 2020 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2020 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 1-39804 | ||
Entity Registrant Name | Texas Pacific Land Corporation | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 75-0279735 | ||
Entity Address, Address Line One | 1700 Pacific Avenue | ||
Entity Address, Address Line Two | Suite 2900 | ||
Entity Address, City or Town | Dallas | ||
Entity Address, State or Province | TX | ||
Entity Address, Postal Zip Code | 75201 | ||
City Area Code | (214) | ||
Local Phone Number | 969-5530 | ||
Title of 12(b) Security | Common Stock(par value $.01 per share) | ||
Trading Symbol | TPL | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 4,508,900 | ||
Entity Common Stock, Shares Outstanding | 7,756,156 | ||
Documents Incorporated by Reference | None | ||
Entity Central Index Key | 0001811074 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
ASSETS | ||
Cash and cash equivalents | $ 281,046 | $ 303,645 |
Accrued receivables, net | 48,216 | 62,995 |
Tax like-kind exchange escrow | 1,978 | 0 |
Other assets | 4,473 | 3,980 |
Property, plant and equipment, net of accumulated depreciation of $25,155 and $11,313 as of December 31, 2020 and 2019, respectively | 79,267 | 88,323 |
Real estate acquired | 108,536 | 107,075 |
Royalty interests acquired, net of accumulated depletion of $620 and $260 as of December 31, 2020 and 2019, respectively | 45,646 | 29,060 |
Operating lease right-of-use assets | 2,473 | 3,098 |
Real estate and royalty interests assigned through the 1888 Declaration of Trust, no value assigned: | ||
Total assets | 571,635 | 598,176 |
LIABILITIES AND CAPITAL | ||
Accounts payable and accrued expenses | 14,680 | 19,193 |
Income taxes payable | 4,054 | 5,271 |
Deferred taxes payable | 38,728 | 40,827 |
Unearned revenue | 26,168 | 17,381 |
Operating lease liabilities | 2,821 | 3,367 |
Total liabilities | 86,451 | 86,039 |
Commitments and contingencies | 0 | 0 |
Capital: | ||
Certificates of Proprietary Interest, par value $100 each; none outstanding as of December 31, 2020 and 2019, respectively | 0 | 0 |
Sub-share Certificates in Certificates of Proprietary Interest, par value $0.0333 each; outstanding 7,756,156 Sub-share Certificates as of December 31, 2020 and 2019, respectively | 0 | 0 |
Accumulated other comprehensive loss | (2,693) | (1,461) |
Net proceeds from all sources | 487,877 | 513,598 |
Total capital | 485,184 | 512,137 |
Total liabilities and capital | 571,635 | 598,176 |
Land (surface rights) | ||
Real estate and royalty interests assigned through the 1888 Declaration of Trust, no value assigned: | ||
Land (surface rights) | 0 | 0 |
1/16th nonparticipating perpetual royalty interest | ||
Real estate and royalty interests assigned through the 1888 Declaration of Trust, no value assigned: | ||
1/16th nonparticipating perpetual royalty interest | 0 | 0 |
1/128th nonparticipating perpetual royalty interest | ||
Real estate and royalty interests assigned through the 1888 Declaration of Trust, no value assigned: | ||
1/128th nonparticipating perpetual royalty interest | $ 0 | $ 0 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Property, plant and equipment, accumulated depreciation | $ 25,155 | $ 11,313 |
Accumulated depreciation, royalty interests | $ 620 | $ 260 |
Certificates of proprietary interest, par value (in dollars per share) | $ 100 | $ 100 |
Certificates of proprietary interest, outstanding (in shares) | 0 | 0 |
Sub-share certificates of proprietary interest, par value (in dollars per share) | $ 0.0333 | $ 0.0333 |
Sub-share certificates of proprietary interest, outstanding (in shares) | 7,756,156 | 7,756,156 |
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% |
Consolidated Statements of Inco
Consolidated Statements of Income and Total Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Revenues: | |||
Total revenues | $ 302,554 | $ 490,496 | $ 300,220 |
Expenses: | |||
Salaries and related employee expenses | 32,173 | 35,041 | 18,433 |
Water service-related expenses | 14,233 | 20,808 | 11,168 |
General and administrative expenses | 9,751 | 9,540 | 4,685 |
Legal and professional fees | 10,778 | 16,403 | 2,498 |
Land sales expenses | 3,973 | 225 | 19 |
Depreciation, depletion and amortization | 14,395 | 8,906 | 2,583 |
Total operating expenses | 85,303 | 90,923 | 39,386 |
Operating income | 217,251 | 399,573 | 260,834 |
Other income, net | 2,411 | 2,682 | 916 |
Income before income taxes | 219,662 | 402,255 | 261,750 |
Income tax expense (benefit): | |||
Current | 46,002 | 57,492 | 37,200 |
Deferred | (2,389) | 26,035 | 14,814 |
Total income tax expense | 43,613 | 83,527 | 52,014 |
Net income | 176,049 | 318,728 | 209,736 |
Amortization of net actuarial costs, net of income taxes of $14, $10, and $14 for the years ended December 31, 2020, 2019 and 2018, respectively | 53 | 36 | 50 |
Net actuarial loss on pension plan, net of income taxes of $(342), $(111), and $(38) as of December 31, 2020, 2019 and 2018, respectively | (1,285) | (419) | (144) |
Total other comprehensive loss | (1,232) | (383) | (94) |
Total comprehensive income | $ 174,817 | $ 318,345 | $ 209,642 |
Net income per sub-share certificate - basic and diluted (in USD per share) | $ 22.70 | $ 41.09 | $ 26.93 |
Weighted average number of Sub-share Certificates outstanding (in shares) | 7,756,156 | 7,756,437 | 7,787,407 |
Oil and gas royalties | |||
Revenues: | |||
Total revenues | $ 137,948 | $ 154,729 | $ 123,834 |
Easements and other surface-related income | |||
Revenues: | |||
Total revenues | 92,038 | 115,362 | 88,739 |
Water sales and royalties | |||
Revenues: | |||
Total revenues | 54,862 | 84,949 | 63,913 |
Sale of oil and gas royalty interests | |||
Revenues: | |||
Total revenues | 0 | 0 | 18,875 |
Land sales | |||
Revenues: | |||
Total revenues | 17,383 | 135,020 | 4,367 |
Other operating revenue | |||
Revenues: | |||
Total revenues | $ 323 | $ 436 | $ 492 |
Consolidated Statements of In_2
Consolidated Statements of Income and Total Comprehensive Income (Parentheticals) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Statement [Abstract] | |||
Amortization of net actuarial costs and prior service costs, income taxes | $ (14) | $ (10) | $ (14) |
Net actuarial (loss) gain on pension plan, income taxes | $ (342) | $ 111 | $ (38) |
Consolidated Statements of Net
Consolidated Statements of Net Proceeds From All Sources - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||
Dec. 31, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Balances | $ 512,137 | $ 244,691 | $ 512,137 | $ 244,691 | $ 105,098 | ||
Net income | $ 44,791 | $ 57,401 | $ 69,122 | $ 139,998 | 176,049 | 318,728 | 209,736 |
Periodic pension costs, net of income taxes | (1,232) | (383) | (94) | ||||
Repurchase and retirement of Sub-share Certificates of Proprietary Interest | (110) | (4,353) | (38,397) | ||||
Regular dividends paid | (77,561) | (13,576) | (8,206) | ||||
Special dividends paid | (124,099) | (32,970) | (23,446) | ||||
Balances | $ 485,184 | $ 512,137 | $ 485,184 | $ 512,137 | $ 244,691 | ||
Sub-share Certificates of Proprietary Interest | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Balances (in shares) | 7,756,156 | 7,762,414 | 7,756,156 | 7,762,414 | 7,821,599 | ||
Repurchase and retirement of Sub-share Certificates in Certificates of Proprietary Interest (in shares) | (6,258) | (59,185) | |||||
Balances (in shares) | 7,756,156 | 7,756,156 | 7,756,156 | 7,756,156 | 7,762,414 | ||
Accumulated Other Comprehensive Income (Loss) | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Balances | $ (1,461) | $ (1,078) | $ (1,461) | $ (1,078) | $ (804) | ||
Periodic pension costs, net of income taxes | (1,232) | (383) | (274) | ||||
Balances | $ (2,693) | $ (1,461) | (2,693) | (1,461) | (1,078) | ||
Net Proceeds From All Sources | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Balances | $ 513,598 | $ 245,769 | 513,598 | 245,769 | 105,902 | ||
Net income | 176,049 | 318,728 | 209,736 | ||||
Periodic pension costs, net of income taxes | 180 | ||||||
Repurchase and retirement of Sub-share Certificates of Proprietary Interest | (110) | (4,353) | (38,397) | ||||
Regular dividends paid | (77,561) | (13,576) | (8,206) | ||||
Special dividends paid | (124,099) | (32,970) | (23,446) | ||||
Balances | $ 487,877 | $ 513,598 | $ 487,877 | $ 513,598 | $ 245,769 |
Consolidated Statements of Ne_2
Consolidated Statements of Net Proceeds From All Sources (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Statement of Stockholders' Equity [Abstract] | |||
Other comprehensive income (loss), defined benefit plan, transition asset (obligation), reclassification adjustment from AOCI, tax | $ (328) | $ (101) | $ (24) |
Dividends paid - per Sub-share (in dollars per share) | $ 10 | $ 1.75 | $ 1.05 |
Special dividends paid per sub-share certificate (in dollars per share) | $ 16 | $ 4.25 | $ 3 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Cash flows from operating activities: | |||
Net income | $ 176,049 | $ 318,728 | $ 209,736 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Deferred taxes | (2,099) | 25,924 | 14,789 |
Depreciation, depletion and amortization | 14,395 | 8,906 | 2,583 |
Land sale revenue recognized on land exchange | (1,415) | (22,000) | 0 |
Changes in operating assets and liabilities: | |||
Accrued receivables and other assets | 18,828 | (13,802) | (34,027) |
Income taxes payable | (1,217) | 3,664 | 756 |
Prepaid income taxes | 0 | 9,398 | (8,196) |
Unearned revenue | 8,787 | 4,012 | 5,024 |
Accounts payable, accrued expenses and other liabilities | (6,291) | 7,960 | 4,783 |
Cash provided by operating activities | 207,037 | 342,790 | 195,448 |
Cash flows from investing activities: | |||
Proceeds from sale of fixed assets | 0 | 117 | 25 |
Acquisition of real estate | (3,966) | (74,583) | (9,377) |
Acquisition of royalty interests | (16,946) | (5,017) | (24,303) |
Purchase of fixed assets | (5,086) | (32,209) | (47,878) |
Cash used in investing activities | (25,998) | (111,692) | (81,533) |
Cash flows from financing activities: | |||
Purchase of Sub-share Certificates in Certificates of Proprietary Interest | 0 | (4,353) | (38,397) |
Dividends paid | (201,660) | (46,546) | (31,652) |
Cash used in financing activities | (201,660) | (50,899) | (70,049) |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Period Increase (Decrease), Including Exchange Rate Effect, Total | (20,621) | 180,199 | 43,866 |
Cash, cash equivalents and restricted cash, beginning of period | 303,645 | 123,446 | 79,580 |
Cash, cash equivalents and restricted cash, end of period | 283,024 | 303,645 | 123,446 |
Supplemental disclosure of cash flow information: | |||
Income taxes paid | 46,619 | 44,439 | 45,876 |
Supplemental non-cash investing information: | |||
Land exchange | 1,415 | 22,000 | 0 |
Operating lease right-of-use assets | $ 0 | $ 3,712 | $ 0 |
Organization and Description of
Organization and Description of Business Segments | 12 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business Segments | Organization and Description of Business Segments Texas Pacific Land Trust (which, together with its subsidiaries as the context requires, may be referred to as “TPL”, the “Trust”, “our”, “we” or “us”) is one of the largest landowners in the State of Texas with approximately 880,000 acres of land in West Texas. 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 was organized to manage land, including royalty interests, for the benefit of its owners. TPL’s income is derived primarily from oil and gas royalties, sales of water and land, easements and commercial leases of the land. 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 10, “Business Segment Reporting” for further information regarding our segments. On January 11, 2021, we completed our reorganization from a business trust to a corporation (the “Corporate Reorganization”) and changed our name from Texas Pacific Land Trust to Texas Pacific Land Corporation. See further discussion in Note 11, “Subsequent Events” regarding the Corporate Reorganization. The financial statements to which these notes relate are for Texas Pacific Land Trust, prior to the Corporate Reorganization. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Principles of Consolidation and Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include our consolidated accounts and the accounts of our wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Use of Estimates in the Preparation of Financial Statements The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and 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. Change in Accounting Estimate Management evaluates its estimates on a routine basis. Effective July 1, 2019, TPL revised the estimated useful lives of certain water service-related assets after its disaggregation of water service-related projects into sub classifications. TPL purchased these water service-related assets from July 1, 2017 through June 30, 2019. Based on information gained from operations over this time period, management believes that these water service-related assets will benefit periods ranging from three The net book value of these water service-related assets at June 30, 2019, was not modified and is depreciated over the revised estimated useful lives of these assets. The effect of the change in estimated useful lives resulted in an additional $2.4 million of depreciation expense for the year ended December 31, 2019. Revenue Recognition Oil and Gas Royalties Oil and gas royalties are received in connection with royalty interests owned by TPL. Oil and gas royalties are reported net of production taxes and are recognized as revenue when crude oil and gas products are removed from the respective mineral reserve locations. Oil and gas royalty payments are generally received one are removed. An accrual is included in accrued receivables for amounts not received during the month removed based on historical trends. The oil and gas royalties which we receive are dependent upon the market prices for oil and gas. The market prices for oil and gas are subject to national and international economic and political conditions and subject to significant price fluctuations. TPL has analyzed public reports of drilling activities by the oil companies operating where we have an oil and gas royalty interest in an effort to identify unpaid royalties associated with royalty interests we own. Rights to certain oil and gas royalties we believe to be due and payable may be subject to dispute with the oil company involved as a result of disagreements with respect to drilling and related engineering information. Disputed oil and gas royalties are recorded when these contingencies are resolved. Easements and Other Surface-Related Income Easement contracts represent contracts which permit companies to install pipe lines, electric lines and other equipment on land owned by TPL. When TPL receives a signed contract and payment, we make available the respective parcel of land to the grantee. Easement income is recognized upon the execution of the easement agreement, or in the event of a renewal upon receipt of the renewal payment, as at that point in time, we have satisfied its performance obligation and the customer has right of use. Other surface-related income includes commercial lease income related to leasing arrangements to companies in a wide array of industries, including: agricultural, oil and gas, construction, wind power, solar farms and other industries. Commercial lease income is recognized when earned. These leases generally require fixed annual payments or royalties and lease terms are typically ten years. Lease cancellations are allowed under certain circumstances, but initial lease payments are generally nonrefundable. Advance lease payments are deferred and amortized over the appropriate accounting period. Lease payments not received are included in accrued receivables. Additionally, other surface-related income includes permit income and material sales. Revenue from these sources is recognized when earned. Water Sales and Royalties Water sales and royalty revenue encompasses sales of water to operators and other customers and royalties received pursuant to legacy agreements with operators. The earnings cycle for both revenue streams is complete upon delivery of water. Water sales and royalty revenue is recognized as earned. Land Sales and Exchanges We consider purchasers of land to be our customers as land management, leasing and sales are normal operating activities for TPL. Revenue is recognized on land sales when the performance obligation to the purchaser (customer) is complete. Revenue from land exchanges is recognized based upon the estimated fair value of the consideration exchanged. Sales of Oil and Gas Royalty Interests Income is recognized on sales of oil and gas royalty interests when earned. Cash, Cash Equivalents and Restricted Cash We consider investments in bank deposits, money market funds and highly-liquid cash investments with original maturities of three months or less to be cash equivalents. The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same such amounts shown in the condensed consolidated statements of cash flows (in thousands): December 31, 2020 December 31, 2019 Cash and cash equivalents $ 281,046 $ 303,645 Tax like-kind exchange escrow 1,978 — Total cash, cash equivalents and restricted cash shown in the statement of cash flows $ 283,024 $ 303,645 Accrued Receivables Accrued receivables consist primarily of amounts due under oil and gas royalty leases, water sales or royalty agreements and commercial leases. An allowance is recorded for expected credit losses and is based upon our historical write-off experience, aging of trade accounts receivable and collectability patterns of our customers. As of December 31, 2020, the allowance for expected credit losses was less than $0.1 million. No allowance was considered necessary as of December 31, 2019. Property, Plant and Equipment Property, plant and equipment is carried at cost less accumulated depreciation. Maintenance and repair costs are expensed as incurred. Costs associated with our development of infrastructure for sourcing and treating water are capitalized. We account for depreciation of property, plant and equipment on the straight-line method over the estimated useful lives of the assets. Depreciable lives by category are as follows: Range of Estimated Useful Lives (in years) Water wells and other water-related assets 3 to 30 Furniture, fixtures and equipment 5 to 7 Real Estate Acquired Real estate acquired is recorded at cost and carried at the lower of cost or market. Valuations are periodically performed or obtained by management whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Impairments, if any, are recorded by a charge to net income and a valuation allowance if the carrying value of the property exceeds its estimated fair value. Minimal real estate improvements are made to land. No impairments were recorded for the years ended December 31, 2020, 2019 and 2018. Royalty Interests Acquired We follow the successful efforts method of accounting for our royalty interests acquired, which are carried at the lower of cost or market. Valuations are periodically performed or obtained by management whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Impairments, if any, are recorded by a charge to net income and a reduction in the carrying value of our royalty interests if the carrying value exceeds the estimated fair value. No impairments were recorded for the years ended December 31, 2020, 2019 and 2018. Depletion is recorded based upon a units of production basis. Depletion expense was approximately $0.4 million and $0.3 million for the years ended December 31, 2020 and 2019, respectively. There was no depletion expense for the year ended December 31, 2018. Real Estate and Royalty Interests Assigned Through the 1888 Declaration of Trust The fair market value of the Trust’s land and royalty interests that were assigned through the 1888 Declaration of Trust, (referred to as “Assigned”) land and royalty interests, was not determined in 1888 when the Trust was formed; therefore, no value is assigned in the accompanying consolidated balance sheets to the Assigned land and royalty interests, Certificates of Proprietary Interest, and Sub-share Certificates of Proprietary Interest (“Sub-shares”). Consequently, in the consolidated statements of income and total comprehensive income, no allowance is made for depletion and no cost is deducted from the proceeds of sales of the Assigned land and royalty interests. Even though the 1888 value of real properties cannot be precisely determined, it has been concluded that the effect of this matter can no longer be significant to the Trust’s financial position or results of operations. For Federal income tax purposes, however, deductions are made for depletion, computed on the statutory percentage basis of income received from royalties. Minimal real estate improvements are made to land. Income Taxes Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50% likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination. The liability for unrecognized tax benefits is zero as of December 31, 2020 and 2019. Concentrations of Credit Risk We invest our cash and cash equivalents (which include U.S. Treasury bills and commercial paper with maturities of three months or less) among three major financial institutions in an attempt to minimize exposure to risk from any one of these entities. As of December 31, 2020 and 2019, we had cash and cash equivalents deposited in our financial institutions in excess of federally-insured levels. We regularly monitor the financial condition of these financial institutions and believe that we are not exposed to any significant credit risk in cash and cash equivalents. Net Income per Sub-share Net income per Sub-share is based on the weighted average number of Sub-shares and equivalent Sub-shares outstanding during each period. Purchases and Retirements of Sub-shares The costs of Sub-shares purchased and retired are charged to net proceeds from all sources. Comprehensive Income (Loss) Comprehensive income (loss) consists of net income and other gains and losses affecting capital that, under GAAP, are excluded from net income. Significant Customers Two customers represented, in the aggregate, 28.3%, 36.5% and 31.3% of the TPL’s total revenues for the years ended December 31, 2020, December 31, 2019 and 2018, respectively. Reclassifications Certain financial information on the consolidated statements of income as of and for the years ended December 31, 2019 and 2018 have been revised to conform to the current year presentation. These revisions include a reclassification of $0.2 million of land sales expenses for the year ended December 31, 2019 and less than $0.1 million for the same period of 2018 previously included in general and administrative expenses to a separate financial statement line item within operating expenses. Land sales expenses include cost basis and closing costs associated with land sales. T otal assets and expenses were not affected by these reclassifications. Recently Adopted Accounting Guidance Credit Losses In June 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2016-13, “ Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” The ASU amends the impairment model by requiring entities to use a forward-looking approach based on expected losses to estimate credit losses on certain types of financial instruments, including trade receivables. The Trust adopted the guidance effective January 1, 2020. Due to the short-term nature of our trade accounts receivable, the adoption of this guidance had a minimal impact on our consolidated financial statements. Defined Benefit Plans In August 2018, the FASB issued ASU 2018-14, “ Compensation — Retirement Benefits — Defined Benefit Plans — General (Subtopic 715-20): Disclosure Framework — Changes to Disclosure Requirements for Defined Benefit Plans .” The ASU eliminates requirements for certain disclosures and requires additional disclosures under defined benefit pension plans and other post-retirement plans. The Trust adopted the guidance as of December 31, 2020. The impacts to the Trust’s footnote disclosures were limited to adding a narrative description of reasons for any significant gains and losses affecting the benefit obligation and omitting any disclosure regarding amounts expected to be recognized in accumulated other comprehensive income over the next year. Recent Accounting Pronouncements In December 2019, the FASB issued ASU 2019-12, “ Income Taxes (Topic 740) — Simplifying the Accounting for Income Taxes.” The ASU simplifies the accounting for income taxes by eliminating certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period, hybrid taxes and the recognition of deferred tax liabilities for outside basis differences. It also clarifies and simplifies other aspects of the accounting for income taxes. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. Early adoption is permitted in interim or annual periods with any adjustments reflected as of the beginning of the annual period that includes that interim period. The adoption of this guidance effective January 1, 2021, had a minimal impact on the Trust’s consolidated financial statements and disclosures. |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment, net consisted of the following as of December 31, 2020 and 2019 (in thousands): December 31, 2020 December 31, 2019 Property, plant and equipment, at cost: Water service-related assets (1) $ 97,699 $ 93,097 Furniture, fixtures and equipment 6,125 5,941 Other 598 598 Total property, plant and equipment, at cost 104,422 99,636 Less: accumulated depreciation (25,155) (11,313) Property, plant and equipment, net $ 79,267 $ 88,323 (1) Water service-related assets reflect assets related to water sourcing and water treatment projects. Depreciation expense was $13.8 million, $8.5 million and $2.6 million for the years ended December 31, 2020, 2019 and 2018, respectively. |
Real Estate Activity
Real Estate Activity | 12 Months Ended |
Dec. 31, 2020 | |
Real Estate [Abstract] | |
Real Estate Activity | Real Estate Activity As of December 31, 2020 and 2019, TPL owned the following land and real estate (in thousands, except number of acres): December 31, December 31, 2020 2019 Number of Acres Net Book Value Number of Acres Net Book Value Land (surface rights) (1) 823,482 $ — 849,856 $ — Real estate acquired 57,041 108,536 51,931 107,075 Total real estate situated in Texas 880,523 $ 108,536 901,787 $ 107,075 (1) Real estate assigned through the 1888 Declaration of Trust. No valuation allowance was necessary as of December 31, 2020 and 2019. Land Sales The Assigned land held by TPL was recorded with no value at the time of acquisition. See Note 2, “Summary of Significant Accounting Policies — Real Estate and Royalty Interests Assigned Through the 1888 Declaration of Trust” for further information regarding the Assigned land. Real estate acquired includes land parcels which have either been acquired through foreclosure or transactions with third parties. For the year ended December 31, 2020, we sold 22,160 acres of land in Texas for an aggregate sales price of approximately $16.0 million, an average of approximately $721 per acre. Additionally, we recognized land sales revenue of $1.4 million for the year ended December 31, 2020 related to land exchanges where we had no cost basis in the land conveyed. For the year ended December 31, 2019, we sold 21,986 acres of land in Texas for an aggregate sales price of approximately $113.0 million, an average of approximately $5,141 per acre. Additionally, we conveyed 5,620 acres of land in exchange for 5,545 acres of land. As we had no cost basis in the land conveyed, we recognized land sales revenue of $22.0 million for the fourth quarter ended December 31, 2019. For the year ended December 31, 2018, we sold 171 acres of land in Texas for an aggregate sales price of approximately $4.4 million, an average of approximately $25,464 per acre. Land Acquisitions For the year ended December 31, 2020, we acquired 756 acres of land in Texas for an aggregate purchase price of approximately $3.9 million, an average of approximately $5,134 per acre (excludes land acquired through the land exchange as discussed above). For the year ended December 31, 2019, we acquired 21,671 acres of land in Texas for an aggregate purchase price of approximately $74.4 million, an average of approximately $3,434 per acre (excludes land acquired through the land exchange as discussed above). For the year ended December 31, 2018, we acquired 14,650 acres of land in Texas for an aggregate purchase price of approximately $9.4 million, an average of approximately $640 per acre. |
Royalty Interests
Royalty Interests | 12 Months Ended |
Dec. 31, 2020 | |
Real Estate [Abstract] | |
Royalty Interests | Royalty Interests As of December 31, 2020 and 2019, we owned the following oil and gas royalty interests (in thousands, except number of acres): Net Book Value December 31, 2020 December 31, 2019 1/16th nonparticipating perpetual royalty interests (1) $ — $ — 1/128th nonparticipating perpetual royalty interests (2) — — Royalty interests acquired (3) 46,266 29,320 Total royalty interests, gross $ 46,266 $ 29,320 Less: accumulated depletion (620) (260) Total royalty interests, net $ 45,646 $ 29,060 (1) Nonparticipating perpetual royalty interests in 370,737 gross royalty acres as of December 31, 2020 and 2019, respectively. (2) Nonparticipating perpetual royalty interests in 84,934 gross royalty acres as of December 31, 2020 and 2019, respectively. (3) Royalty interest in 4,090 net royalty acres and 3,074 net royalty acres as of December 31, 2020 and 2019, respectively. Royalty Interests Assigned Through the 1888 Declaration of Trust The fair market value of the Trust’s Assigned royalty interests was not determined in 1888 when the Trust was formed, and accordingly, these Assigned royalty interests were recorded with no value. See Note 2, “Summary of Significant Accounting Policies — Real Estate and Royalty Interests Assigned Through the 1888 Declaration of Trust” for further information regarding the Assigned royalty interests. The Assigned royalty interests include 1/16th and 1/128th royalty interests. Royalty Interests Transactions For the year ended December 31, 2020, we acquired oil and gas royalty interests in 1,017 net royalty acres (normalized to 1/8th) for an aggregate purchase price of $16.9 million, an average price of approximately $16,668 per net royalty acre. For the year ended December 31, 2019, we acquired oil and gas royalty interests in 1,247 net royalty acres (normalized to 1/8th) for an aggregate purchase price of $4.7 million, an average price of approximately $3,800 per net royalty acre. For the year ended December 31, 2018, we sold nonparticipating perpetual oil and gas royalty interests in 812 net royalty acres (1/8th interest) for approximately $18.9 million, an average price of approximately $23,234 per net royalty acre. In conjunction with this sale, we acquired oil and gas royalty interests in 1,480 net royalty acres for an aggregate purchase price of $20.6 million, an average of approximately $13,949 per net royalty acre. Additionally, for the year ended December 31, 2018, we acquired oil and gas royalty interests in 346 net royalty acres for an aggregate purchase price of $3.7 million, an average price of approximately $10,555 per net royalty acre. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans TPL has a defined contribution plan available to all eligible employees who have completed one year of continuous service with TPL during which they completed at least 1,000 hours of service. Qualifying participants may receive a matching contribution based on the amount participants contribute to the plan up to 6% of their qualifying compensation. TPL contributed approximately $0.5 million, $0.3 million and $0.1 million for the years ended December 31, 2020, 2019 and 2018, respectively. TPL has a noncontributory pension plan (the “Pension Plan”) available to all eligible employees who have completed one year of continuous service with TPL during which they completed at least 1,000 hours of service. The Pension Plan provides for a normal retirement benefit at age 65. Contributions to the Pension Plan reflect benefits accrued with respect to participants’ services to date, as well as the amount actuarially determined to pay lifetime benefits to participants and their beneficiaries upon retirement. The following table sets forth the Pension Plan’s changes in benefit obligation, changes in fair value of assets, and funded status as of December 31, 2020 and 2019 using a measurement date of December 31 (in thousands): December 31, 2020 December 31, 2019 Change in projected benefits obligation: Projected benefit obligation at beginning of year $ 6,577 $ 4,745 Service cost 1,835 666 Interest cost 210 197 Actuarial loss 1,333 1,208 Benefits paid (238) (239) Projected benefit obligation at end of year $ 9,717 $ 6,577 Change in Pension Plan assets: Fair value of Pension Plan assets at beginning of year $ 6,615 $ 5,313 Actual return on Pension Plan assets 161 1,041 Contributions by employer 1,029 500 Benefits paid (238) (239) Fair value of Pension Plan assets at end of year 7,567 6,615 Funded (unfunded) status at end of year $ (2,150) $ 38 The projected Pension Plan benefit obligation as of December 31, 2020 was impacted by changes in assumptions used as of that date compared to assumptions used as of December 31, 2019. These changes included a decrease in the discount rate from 3.25% as of December 31, 2019 to 2.75% as of December 31, 2020 and a change in the mortality improvement scale from the MP-2019 Table to the MP-2020 Table. The effect of the assumption changes was an increase in the projected benefit obligation of $1.0 million. Amounts recognized in the balance sheets as of December 31, 2020 and 2019 consist of (in thousands): December 31, 2020 December 31, 2019 Assets $ — $ 38 Liabilities 2,150 — $ 2,150 $ 38 Amounts recognized in accumulated other comprehensive loss consist of the following as of December 31, 2020 and 2019 (in thousands): December 31, 2020 December 31, 2019 Net actuarial loss $ (3,409) $ (1,849) Amounts recognized in accumulated other comprehensive loss, before taxes (3,409) (1,849) Income tax benefit 716 388 Amounts recognized in accumulated other comprehensive loss, after taxes $ (2,693) $ (1,461) Net periodic benefit cost for the years ended December 31, 2020, 2019 and 2018 include the following components (in thousands): Years Ended December 31, 2020 2019 2018 Components of net periodic benefit cost: Service cost $ 1,835 $ 666 $ 157 Interest cost 210 197 183 Expected return on Pension Plan assets (454) (364) (367) Amortization of net loss 66 46 64 Net periodic benefit cost $ 1,657 $ 545 $ 37 Service cost, a component of net periodic benefit cost, is reflected in our consolidated statements of income within salaries and related employee expenses. The other components of net periodic benefit cost are included in other income, net on the consolidated statements of income. Other changes in Pension Plan assets and benefit obligations recognized in other comprehensive income for the years ended December 31, 2020, 2019 and 2018 (in thousands): Years Ended December 31, 2020 2019 2018 Net actuarial loss $ 1,626 $ 530 $ 183 Recognized actuarial loss (66) (46) (64) Total recognized in other comprehensive loss, before taxes $ 1,560 $ 484 $ 119 Total recognized in net benefit cost and other comprehensive loss, before taxes $ 3,217 $ 1,029 $ 156 TPL reclassified less than $0.2 million (net of income tax benefit of less than $0.1 million) out of accumulated other comprehensive loss for net periodic benefit cost to other income, net for each of the years ended December 31, 2020, 2019 and 2018. The following table summarizes the projected benefit obligation in excess of Pension Plan assets and Pension Plan assets in excess of accumulated benefit obligation as of December 31, 2020 and 2019 (in thousands): December 31, 2020 December 31, 2019 Projected benefit obligation in excess of Pension Plan assets: Projected benefit obligation $ 9,717 $ 6,577 Fair value of Pension Plan assets $ 7,567 $ 6,615 Plan assets in excess of accumulated benefit obligation: Accumulated benefit obligation $ 6,348 $ 5,056 Fair value of Pension Plan assets $ 7,567 $ 6,615 The following are weighted-average assumptions used to determine benefit obligations and costs as of December 31, 2020, 2019 and 2018: Years Ended December 31, 2020 2019 2018 Weighted average assumptions used to determine benefit obligations as of December 31: Discount rate 2.75 % 3.25 % 4.25 % Rate of compensation increase 7.29 % 7.29 % 7.29 % Weighted average assumptions used to determine benefit costs for the years ended December 31: Discount rate 3.25 % 4.25 % 3.75 % Expected return on Pension Plan assets 7.00 % 7.00 % 7.00 % Rate of compensation increase 7.29 % 7.29 % 7.29 % The expected return on Pension Plan assets assumption of 7.0% was selected by TPL based on historical real rates of return for the current asset mix and an assumption with respect to future inflation. The rate was determined based on a long-term allocation of about two-thirds fixed income and one-third equity securities; historical real rates of return of about 2.5% and 8.5% for fixed income and equity securities, respectively; and assuming a long-term inflation rate of 2.5%. The Pension Plan has a formal investment policy statement. The Pension Plan’s investment objective is balanced income, with a moderate risk tolerance. This objective emphasizes current income through a 30% to 80% allocation to fixed income securities, complemented by a secondary consideration for capital appreciation through an equity allocation in the range of 20% to 60%. Diversification is achieved through investment in mutual funds and bonds. The asset allocation is reviewed annually with respect to the target allocations and rebalancing adjustments and/or target allocation changes are made as appropriate. Our current funding policy is to maintain the Pension Plan’s fully funded status on an ERISA minimum funding basis. Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (exit price) in an orderly transaction between market participants at the measurement date. The fair value accounting standards establish a fair value hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are those that market participants would use in pricing the asset or liability based on market data obtained from independent sources. Unobservable inputs reflect our assumptions about the inputs market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The fair value hierarchy is categorized into three levels based on the inputs used in measuring fair value, as follows: Level 1 – Inputs are based on unadjusted quoted prices in active markets for identical assets or liabilities that we have the ability to access. Since inputs are based on quoted prices that are readily and regularly available in an active market, Level 1 inputs require the least judgment. Level 2 – Inputs are based on quoted prices for similar instruments in active markets, or are observable either directly or indirectly. Inputs are obtained from various sources including financial institutions and brokers. Level 3 – Inputs that are unobservable and significant to the overall fair value measurement. The degree of judgment exercised by us in determining fair value is greatest for fair value measurements categorized in Level 3. The fair values of the Pension Plan assets by major asset category as of December 31, 2020 and 2019, respectively, are as follows (in thousands): Total Quoted Prices in Significant Other Significant As of December 31, 2020: Cash and cash equivalents — money markets $ 1,277 $ 1,277 $ — $ — Equities 1,567 1,567 — — Equity funds 1,503 1,503 — — Fixed income funds 797 797 — — Taxable bonds 2,423 2,423 — — Total $ 7,567 $ 7,567 $ — $ — As of December 31, 2019: Cash and cash equivalents — money markets $ 528 $ 528 $ — $ — Equities 1,133 1,133 — — Equity funds 1,939 1,939 — — Fixed income funds 465 465 — — Taxable bonds 2,550 2,550 — — Total $ 6,615 $ 6,615 $ — $ — Management intends to at least fund the minimum ERISA amount for 2021 and may make some discretionary contributions to the Pension Plan, the amounts of which have not yet been determined. The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid for the following ten-year period (in thousands): Year ending December 31, Amount 2021 $ 260 2022 256 2023 254 2024 249 2025 244 2026 to 2030 1,430 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The income tax provision charged to operations for the years ended December 31, 2020, 2019 and 2018 was as follows (in thousands): Years Ended December 31, 2020 2019 2018 Current: U.S. Federal $ 44,395 $ 55,562 $ 35,593 State and local 1,607 1,930 1,607 Current income tax expense 46,002 57,492 37,200 Deferred (benefit) expense (2,389) 26,035 14,814 Total income tax expense $ 43,613 $ 83,527 $ 52,014 While TPL was a trust, it was taxed as if it were a corporation. Total income tax expense differed from the amounts computed by applying the U.S. Federal income tax rate of 21% for the years ended December 31, 2020, 2019 and 2018 to income before Federal income taxes as a result of the following (in thousands): Years Ended December 31, 2020 2019 2018 Computed tax expense at the statutory rate of 21% $ 46,129 $ 84,473 $ 54,968 Reduction in income taxes resulting from: Statutory depletion (4,577) (5,163) (4,185) State taxes 1,234 1,657 1,243 Executive compensation 789 1,302 — Prior year tax adjustments 7 755 — Other, net 31 503 (12) Total income tax expense $ 43,613 $ 83,527 $ 52,014 The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities as of December 31, 2020 and 2019 are as follows (in thousands): December 31, 2020 December 31, 2019 Unearned revenue $ 5,633 $ 3,741 Basis difference in pension plan liability 452 — Total deferred tax assets 6,085 3,741 Property, plant and equipment 16,314 17,030 §1031 tax exchanges 26,499 26,638 Deferred credits 1,853 748 Real estate acquired through foreclosure 142 142 Other 5 10 Total deferred tax liabilities 44,813 44,568 Deferred taxes payable $ (38,728) $ (40,827) |
Lease Commitments
Lease Commitments | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Lease Commitments | Lease CommitmentsAs of December 31, 2020 and 2019, we have recorded right-of-use assets of $2.5 million and $3.1 million, respectively, and lease liabilities for $2.8 million and $3.4 million, respectively, primarily related to operating leases in connection with our administrative offices located in Dallas and Midland, Texas. The office lease agreements require monthly rent payments and expire in December 2025 and August 2022, respectively. Operating lease expense is recognized on a straight-line basis over the lease term. Operating lease cost for the years ended December 31, 2020 and 2019 was $0.7 million. Future minimum lease payments were as follows as of December 31, 2020 (in thousands): Year ending December 31, Amount 2021 $ 796 2022 697 2023 537 2024 551 2025 516 Total lease payments 3,097 Less: imputed interest (276) Total operating lease liabilities $ 2,821 Rent expense for these lease agreements amounted to approximately $0.8 million, $0.7 million and $0.2 million for the years ended December 31, 2020, 2019 and 2018, respectively. |
Capital
Capital | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Capital | Capital Prior to the Corporate Reorganization, Certificates of Proprietary Interest (“Certificates”) and Sub-shares were exchangeable in the ratio of one Certificate to 3,000 Sub-shares. No Certificates were exchanged for Sub-shares for the years ended December 31, 2020 and 2019. On January 11, 2021, the Sub-shares were converted into shares of common stock on a pro rata, one-for-one basis. See further discussion in Note 11, “Subsequent Events — Corporate Reorganization.” The number of Certificates authorized for issuance at a given date is the number then outstanding plus one/three-thousandth of the number of Sub-shares then outstanding. The number of Sub-shares authorized for issuance at a given date is the number then outstanding plus three thousand times the number of Certificates then outstanding. Dividends During 2020, we paid a cash dividend of $10.00 per Sub-share in March 2020 and special dividends of $16.00 per Sub-Share, consisting of $6.00 per Sub-share in March 2020 and $10.00 per Sub-share in December 2020. During March 2019, we paid a cash dividend of $1.75 per Sub-share and a special dividend of $4.25 per Sub-share. Repurchases of Sub-shares For the year ended December 31, 2020, there were no Sub-shares repurchased. During the years ended December 31, 2019 and 2018, we purchased and retired 6,258 and 59,185 Sub-shares, respectively. |
Business Segment Reporting
Business Segment Reporting | 12 Months Ended |
Dec. 31, 2020 | |
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 880,000 acres of land and our oil and gas royalty interests in West Texas. 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 full-service water offerings to operators in the Permian Basin. The revenue streams of this segment consist of revenue generated from sales of sourced and treated water as well as revenue from royalties on water service-related activity. Segment financial results were as follows (in thousands): Years Ended December 31, 2020 2019 2018 Revenues: Land and resource management $ 195,132 $ 363,328 $ 211,476 Water services and operations 107,422 127,168 88,744 Total consolidated revenues $ 302,554 $ 490,496 $ 300,220 Net income: Land and resource management $ 127,977 $ 258,366 $ 159,611 Water services and operations 48,072 60,362 50,125 Total consolidated net income $ 176,049 $ 318,728 $ 209,736 Capital Expenditures: Land and resource management $ 152 $ 1,603 $ 2,790 Water services and operations 4,934 30,606 45,088 Total capital expenditures $ 5,086 $ 32,209 $ 47,878 Depreciation, depletion and amortization: Land and resource management $ 1,514 $ 1,201 $ 506 Water services and operations 12,881 7,705 2,077 Total depreciation, depletion and amortization $ 14,395 $ 8,906 $ 2,583 The following table presents total assets and property, plant and equipment, net by segment (in thousands): December 31, 2020 December 31, 2019 Assets: Land and resource management $ 460,053 $ 467,758 Water services and operations 111,582 130,418 Total consolidated assets $ 571,635 $ 598,176 Property, plant and equipment, net: Land and resource management $ 3,527 $ 4,359 Water services and operations 75,740 83,964 Total consolidated property, plant and equipment, net $ 79,267 $ 88,323 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2020 | |
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: Corporate Reorganization As previously announced on March 23, 2020, our Trustees approved a plan to reorganize the Trust from its current structure to a corporation formed under the laws of the State of Delaware. On January 11, 2021, TPL completed its Corporate Reorganization, officially changing its name from Texas Pacific Land Trust to Texas Pacific Land Corporation (“TPL Corporation”). To implement the Corporate Reorganization, the Trust and TPL Corporation entered into agreements and undertook and caused to be undertaken a series of transactions to effect the transfer to TPL Corporation of all of the Trust’s assets, employees, liabilities and obligations (including investments, property and employee benefits and tax-related assets and liabilities) attributable to periods prior to, at and after the Corporate Reorganization. The agreements entered into include a contribution agreement between the Trust and TPL Corporation. Prior to the market opening on January 11, 2021, the Trust distributed all of the shares of common stock, par value $0.01, of TPL Corporation (the “Common Stock”) to holders of Sub-shares, par value of $0.03-1/3, of the Trust, on a pro rata, one-for-one, basis in accordance with their interests in the Trust (the “Distribution”). As a result of the Distribution, TPL Corporation is now an independent public company and its Common Stock is listed under the symbol “TPL” on the New York Stock Exchange. The Corporate Reorganization would have had the following effect on our consolidated financial statements had the Corporate Reorganization occurred as of December 31, 2020: Consolidated Balance Sheet Had the Corporate Reorganization occurred as of December 31, 2020, the pro forma balance sheet would have reflected pro forma adjustments as follows: • Capital would be eliminated and replaced with Stockholders’ equity; • Certificates of Proprietary Interest, par value $100 each, would be eliminated as none were outstanding as of December 31, 2020; • 7,756,156 outstanding Sub-share Certificates of Proprietary Interest, par value $0.03-1/3, would be converted to 7,756,156 outstanding shares of Common Stock, $0.01 par value; and • Net proceeds from all sources would be replaced with Retained Earnings. Statements of Income and Total Comprehensive Income Had the Corporate Reorganization occurred on January 1, 2020, the pro forma statements of income and total comprehensive income for the year ended December 31, 2020 would have reflected pro forma adjustments as follows: • Any costs associated with Corporate Reorganization are direct costs and would be expensed. As such, there would be no related adjustment to the Statement of Income and Total Comprehensive Income; and • Net income per Sub-share Certificate - basic and diluted would be eliminated and replaced with Net income per share - basic and diluted. The per share amount would not have been impacted. Dividend Declared |
Oil and Gas Producing Activitie
Oil and Gas Producing Activities (Unaudited) | 12 Months Ended |
Dec. 31, 2020 | |
Extractive Industries [Abstract] | |
Oil and Gas Producing Activities (Unaudited) | Oil and Gas Producing Activities (Unaudited) We measure the our share of oil and gas produced in barrels of equivalency (“BOEs”). One BOE equals one barrel of crude oil, condensate, NGLs (natural gas liquids) or approximately 6,000 cubic feet of gas. As of December 31, 2020, December 31, 2019 and December 31, 2018, our share of oil and gas produced was approximately 16.2, 13.7 and 8.8 thousand BOEs 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 are determined using uniform drilling spacing units with pooled interests for all |
Selected Quarterly Financial Da
Selected Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2020 | |
Selected Quarterly Financial Information [Abstract] | |
Selected Quarterly Financial Data (Unaudited) | Selected Quarterly Financial Data (Unaudited) The following tables present unaudited financial data of TPL for each quarter of December 31, 2020 and 2019 (in thousands, except per share amounts): Quarters ended December 31, 2020 September 30, 2020 June 30, March 31, 2020 Revenues $ 74,304 $ 74,383 $ 57,273 $ 96,594 Income before income taxes $ 55,337 $ 58,035 $ 34,923 $ 71,368 Net income $ 44,791 $ 46,275 $ 27,583 $ 57,401 Net income per Sub-share Certificate - basic and diluted $ 5.77 $ 5.97 $ 3.56 $ 7.40 Quarters ended December 31, 2019 September 30, 2019 June 30, March 31, 2019 Revenues $ 113,332 $ 98,530 $ 87,310 $ 191,324 Income before income taxes $ 89,071 $ 74,759 $ 62,879 $ 175,546 Net income $ 69,122 $ 60,022 $ 49,586 $ 139,998 Net income per Sub-share Certificate - basic and diluted $ 8.91 $ 7.74 $ 6.39 $ 18.04 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Principles of Consolidation and Basis of Presentation | Principles of Consolidation and Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include our consolidated accounts and the accounts of our wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. |
Use of Estimates in the Preparation of Financial Statements | Use of Estimates in the Preparation of Financial Statements The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and 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. |
Change in Accounting Estimate | Change in Accounting Estimate Management evaluates its estimates on a routine basis. Effective July 1, 2019, TPL revised the estimated useful lives of certain water service-related assets after its disaggregation of water service-related projects into sub classifications. TPL purchased these water service-related assets from July 1, 2017 through June 30, 2019. Based on information gained from operations over this time period, management believes that these water service-related assets will benefit periods ranging from three |
Revenue Recognition | Revenue Recognition Oil and Gas Royalties Oil and gas royalties are received in connection with royalty interests owned by TPL. Oil and gas royalties are reported net of production taxes and are recognized as revenue when crude oil and gas products are removed from the respective mineral reserve locations. Oil and gas royalty payments are generally received one are removed. An accrual is included in accrued receivables for amounts not received during the month removed based on historical trends. The oil and gas royalties which we receive are dependent upon the market prices for oil and gas. The market prices for oil and gas are subject to national and international economic and political conditions and subject to significant price fluctuations. TPL has analyzed public reports of drilling activities by the oil companies operating where we have an oil and gas royalty interest in an effort to identify unpaid royalties associated with royalty interests we own. Rights to certain oil and gas royalties we believe to be due and payable may be subject to dispute with the oil company involved as a result of disagreements with respect to drilling and related engineering information. Disputed oil and gas royalties are recorded when these contingencies are resolved. Easements and Other Surface-Related Income Easement contracts represent contracts which permit companies to install pipe lines, electric lines and other equipment on land owned by TPL. When TPL receives a signed contract and payment, we make available the respective parcel of land to the grantee. Easement income is recognized upon the execution of the easement agreement, or in the event of a renewal upon receipt of the renewal payment, as at that point in time, we have satisfied its performance obligation and the customer has right of use. Other surface-related income includes commercial lease income related to leasing arrangements to companies in a wide array of industries, including: agricultural, oil and gas, construction, wind power, solar farms and other industries. Commercial lease income is recognized when earned. These leases generally require fixed annual payments or royalties and lease terms are typically ten years. Lease cancellations are allowed under certain circumstances, but initial lease payments are generally nonrefundable. Advance lease payments are deferred and amortized over the appropriate accounting period. Lease payments not received are included in accrued receivables. Additionally, other surface-related income includes permit income and material sales. Revenue from these sources is recognized when earned. Water Sales and Royalties Water sales and royalty revenue encompasses sales of water to operators and other customers and royalties received pursuant to legacy agreements with operators. The earnings cycle for both revenue streams is complete upon delivery of water. Water sales and royalty revenue is recognized as earned. Land Sales and Exchanges We consider purchasers of land to be our customers as land management, leasing and sales are normal operating activities for TPL. Revenue is recognized on land sales when the performance obligation to the purchaser (customer) is complete. Revenue from land exchanges is recognized based upon the estimated fair value of the consideration exchanged. Sales of Oil and Gas Royalty Interests |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash We consider investments in bank deposits, money market funds and highly-liquid cash investments with original maturities of three months or less to be cash equivalents. The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same such amounts shown in the condensed consolidated statements of cash flows (in thousands): December 31, 2020 December 31, 2019 Cash and cash equivalents $ 281,046 $ 303,645 Tax like-kind exchange escrow 1,978 — Total cash, cash equivalents and restricted cash shown in the statement of cash flows $ 283,024 $ 303,645 |
Accrued Receivables | Accrued Receivables Accrued receivables consist primarily of amounts due under oil and gas royalty leases, water sales or royalty agreements and commercial leases. An allowance is recorded for expected credit losses and is based upon our historical write-off experience, aging of trade accounts receivable and collectability patterns of our customers. As of December 31, 2020, the allowance for expected credit losses was less than $0.1 million. No allowance was considered necessary as of December 31, 2019. |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment is carried at cost less accumulated depreciation. Maintenance and repair costs are expensed as incurred. Costs associated with our development of infrastructure for sourcing and treating water are capitalized. We account for depreciation of property, plant and equipment on the straight-line method over the estimated useful lives of the assets. Depreciable lives by category are as follows: Range of Estimated Useful Lives (in years) Water wells and other water-related assets 3 to 30 Furniture, fixtures and equipment 5 to 7 |
Real Estate Acquired | Real Estate Acquired Real estate acquired is recorded at cost and carried at the lower of cost or market. Valuations are periodically performed or obtained by management whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Impairments, if any, are recorded by a charge to net income and a valuation allowance if the carrying value of the property exceeds its estimated fair value. Minimal real estate improvements are made to land. No impairments were recorded for the years ended December 31, 2020, 2019 and 2018. |
Royalty Interests Acquired | Royalty Interests Acquired We follow the successful efforts method of accounting for our royalty interests acquired, which are carried at the lower of cost or market. Valuations are periodically performed or obtained by management whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Impairments, if any, are recorded by a charge to net income and a reduction in the carrying value of our royalty interests if the carrying value exceeds the estimated fair value. No impairments were recorded for the years ended December 31, 2020, 2019 and 2018. |
Real Estate and Royalty Interests Assigned Through the 1888 Declaration of Trust | Real Estate and Royalty Interests Assigned Through the 1888 Declaration of Trust The fair market value of the Trust’s land and royalty interests that were assigned through the 1888 Declaration of Trust, (referred to as “Assigned”) land and royalty interests, was not determined in 1888 when the Trust was formed; therefore, no value is assigned in the accompanying consolidated balance sheets to the Assigned land and royalty interests, Certificates of Proprietary Interest, and Sub-share Certificates of Proprietary Interest (“Sub-shares”). Consequently, in the consolidated statements of income and total comprehensive income, no allowance is made for depletion and no cost is deducted from the proceeds of sales of the Assigned land and royalty interests. Even though the 1888 value of real properties cannot be precisely determined, it has been concluded that the effect of this matter can no longer be significant to the Trust’s financial position or results of operations. For Federal income tax purposes, however, deductions are made for depletion, computed on the statutory percentage basis of income received from royalties. Minimal real estate improvements are made to land. |
Income Taxes | Income Taxes Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50% likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination. The liability for unrecognized tax benefits is zero as of December 31, 2020 and 2019. |
Concentrations of Credit Risk | Concentrations of Credit Risk We invest our cash and cash equivalents (which include U.S. Treasury bills and commercial paper with maturities of three months or less) among three major financial institutions in an attempt to minimize exposure to risk from any one of these entities. As of December 31, 2020 and 2019, we had cash and cash equivalents deposited in our financial institutions in excess of federally-insured levels. We regularly monitor the financial condition of these financial institutions and believe that we are not exposed to any significant credit risk in cash and cash equivalents. |
Net Income per Sub-share Certificate / Purchases and Retirements of Sub-Share Certificates | Net Income per Sub-share Net income per Sub-share is based on the weighted average number of Sub-shares and equivalent Sub-shares outstanding during each period. Purchases and Retirements of Sub-shares The costs of Sub-shares purchased and retired are charged to net proceeds from all sources. |
Comprehensive Income (Loss) | Comprehensive Income (Loss) Comprehensive income (loss) consists of net income and other gains and losses affecting capital that, under GAAP, are excluded from net income. |
Significant Customers | Significant Customers Two customers represented, in the aggregate, 28.3%, 36.5% and 31.3% of the TPL’s total revenues for the years ended December 31, 2020, December 31, 2019 and 2018, respectively. |
Reclassifications | Reclassifications Certain financial information on the consolidated statements of income as of and for the years ended December 31, 2019 and 2018 have been revised to conform to the current year presentation. These revisions include a reclassification of $0.2 million of land sales expenses for the year ended December 31, 2019 and less than $0.1 million for the same period of 2018 previously included in general and administrative expenses to a separate financial statement line item within operating expenses. Land sales expenses include cost basis and closing costs associated with land sales. T otal assets and expenses were not affected by these reclassifications. |
Recently Adopted Accounting Guidance and Recent Accounting Pronouncements | Recently Adopted Accounting Guidance Credit Losses In June 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2016-13, “ Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” The ASU amends the impairment model by requiring entities to use a forward-looking approach based on expected losses to estimate credit losses on certain types of financial instruments, including trade receivables. The Trust adopted the guidance effective January 1, 2020. Due to the short-term nature of our trade accounts receivable, the adoption of this guidance had a minimal impact on our consolidated financial statements. Defined Benefit Plans In August 2018, the FASB issued ASU 2018-14, “ Compensation — Retirement Benefits — Defined Benefit Plans — General (Subtopic 715-20): Disclosure Framework — Changes to Disclosure Requirements for Defined Benefit Plans .” The ASU eliminates requirements for certain disclosures and requires additional disclosures under defined benefit pension plans and other post-retirement plans. The Trust adopted the guidance as of December 31, 2020. The impacts to the Trust’s footnote disclosures were limited to adding a narrative description of reasons for any significant gains and losses affecting the benefit obligation and omitting any disclosure regarding amounts expected to be recognized in accumulated other comprehensive income over the next year. Recent Accounting Pronouncements In December 2019, the FASB issued ASU 2019-12, “ Income Taxes (Topic 740) — Simplifying the Accounting for Income Taxes.” The ASU simplifies the accounting for income taxes by eliminating certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period, hybrid taxes and the recognition of deferred tax liabilities for outside basis differences. It also clarifies and simplifies other aspects of the accounting for income taxes. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. Early adoption is permitted in interim or annual periods with any adjustments reflected as of the beginning of the annual period that includes that interim period. The adoption of this guidance effective January 1, 2021, had a minimal impact on the Trust’s consolidated financial statements and disclosures. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
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 condensed consolidated balance sheets that sum to the total of the same such amounts shown in the condensed consolidated statements of cash flows (in thousands): December 31, 2020 December 31, 2019 Cash and cash equivalents $ 281,046 $ 303,645 Tax like-kind exchange escrow 1,978 — Total cash, cash equivalents and restricted cash shown in the statement of cash flows $ 283,024 $ 303,645 |
Schedule of Property, Plant and Equipment | Depreciable lives by category are as follows: Range of Estimated Useful Lives (in years) Water wells and other water-related assets 3 to 30 Furniture, fixtures and equipment 5 to 7 Property, plant and equipment, net consisted of the following as of December 31, 2020 and 2019 (in thousands): December 31, 2020 December 31, 2019 Property, plant and equipment, at cost: Water service-related assets (1) $ 97,699 $ 93,097 Furniture, fixtures and equipment 6,125 5,941 Other 598 598 Total property, plant and equipment, at cost 104,422 99,636 Less: accumulated depreciation (25,155) (11,313) Property, plant and equipment, net $ 79,267 $ 88,323 (1) Water service-related assets reflect assets related to water sourcing and water treatment projects. |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | Depreciable lives by category are as follows: Range of Estimated Useful Lives (in years) Water wells and other water-related assets 3 to 30 Furniture, fixtures and equipment 5 to 7 Property, plant and equipment, net consisted of the following as of December 31, 2020 and 2019 (in thousands): December 31, 2020 December 31, 2019 Property, plant and equipment, at cost: Water service-related assets (1) $ 97,699 $ 93,097 Furniture, fixtures and equipment 6,125 5,941 Other 598 598 Total property, plant and equipment, at cost 104,422 99,636 Less: accumulated depreciation (25,155) (11,313) Property, plant and equipment, net $ 79,267 $ 88,323 (1) Water service-related assets reflect assets related to water sourcing and water treatment projects. |
Real Estate Activity (Tables)
Real Estate Activity (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Real Estate [Abstract] | |
Schedule of Real Estate Activity | As of December 31, 2020 and 2019, TPL owned the following land and real estate (in thousands, except number of acres): December 31, December 31, 2020 2019 Number of Acres Net Book Value Number of Acres Net Book Value Land (surface rights) (1) 823,482 $ — 849,856 $ — Real estate acquired 57,041 108,536 51,931 107,075 Total real estate situated in Texas 880,523 $ 108,536 901,787 $ 107,075 (1) Real estate assigned through the 1888 Declaration of Trust. |
Royalty Interests (Tables)
Royalty Interests (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Real Estate [Abstract] | |
Schedule of Royalty Interests | As of December 31, 2020 and 2019, we owned the following oil and gas royalty interests (in thousands, except number of acres): Net Book Value December 31, 2020 December 31, 2019 1/16th nonparticipating perpetual royalty interests (1) $ — $ — 1/128th nonparticipating perpetual royalty interests (2) — — Royalty interests acquired (3) 46,266 29,320 Total royalty interests, gross $ 46,266 $ 29,320 Less: accumulated depletion (620) (260) Total royalty interests, net $ 45,646 $ 29,060 (1) Nonparticipating perpetual royalty interests in 370,737 gross royalty acres as of December 31, 2020 and 2019, respectively. (2) Nonparticipating perpetual royalty interests in 84,934 gross royalty acres as of December 31, 2020 and 2019, respectively. (3) Royalty interest in 4,090 net royalty acres and 3,074 net royalty acres as of December 31, 2020 and 2019, respectively. |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Net Funded Status | The following table sets forth the Pension Plan’s changes in benefit obligation, changes in fair value of assets, and funded status as of December 31, 2020 and 2019 using a measurement date of December 31 (in thousands): December 31, 2020 December 31, 2019 Change in projected benefits obligation: Projected benefit obligation at beginning of year $ 6,577 $ 4,745 Service cost 1,835 666 Interest cost 210 197 Actuarial loss 1,333 1,208 Benefits paid (238) (239) Projected benefit obligation at end of year $ 9,717 $ 6,577 Change in Pension Plan assets: Fair value of Pension Plan assets at beginning of year $ 6,615 $ 5,313 Actual return on Pension Plan assets 161 1,041 Contributions by employer 1,029 500 Benefits paid (238) (239) Fair value of Pension Plan assets at end of year 7,567 6,615 Funded (unfunded) status at end of year $ (2,150) $ 38 |
Schedule of Defined Benefit Plans Disclosures | Amounts recognized in the balance sheets as of December 31, 2020 and 2019 consist of (in thousands): December 31, 2020 December 31, 2019 Assets $ — $ 38 Liabilities 2,150 — $ 2,150 $ 38 |
Schedule of Amounts Recognized in Other Comprehensive Income (Loss) | Amounts recognized in accumulated other comprehensive loss consist of the following as of December 31, 2020 and 2019 (in thousands): December 31, 2020 December 31, 2019 Net actuarial loss $ (3,409) $ (1,849) Amounts recognized in accumulated other comprehensive loss, before taxes (3,409) (1,849) Income tax benefit 716 388 Amounts recognized in accumulated other comprehensive loss, after taxes $ (2,693) $ (1,461) |
Schedule of Net Benefit Costs | Net periodic benefit cost for the years ended December 31, 2020, 2019 and 2018 include the following components (in thousands): Years Ended December 31, 2020 2019 2018 Components of net periodic benefit cost: Service cost $ 1,835 $ 666 $ 157 Interest cost 210 197 183 Expected return on Pension Plan assets (454) (364) (367) Amortization of net loss 66 46 64 Net periodic benefit cost $ 1,657 $ 545 $ 37 |
Schedule of Other Changes in Plan Assets and Benefit Obligations | Other changes in Pension Plan assets and benefit obligations recognized in other comprehensive income for the years ended December 31, 2020, 2019 and 2018 (in thousands): Years Ended December 31, 2020 2019 2018 Net actuarial loss $ 1,626 $ 530 $ 183 Recognized actuarial loss (66) (46) (64) Total recognized in other comprehensive loss, before taxes $ 1,560 $ 484 $ 119 Total recognized in net benefit cost and other comprehensive loss, before taxes $ 3,217 $ 1,029 $ 156 |
Schedule of Benefit Obligations in Excess of Fair Value of Plan Assets | The following table summarizes the projected benefit obligation in excess of Pension Plan assets and Pension Plan assets in excess of accumulated benefit obligation as of December 31, 2020 and 2019 (in thousands): December 31, 2020 December 31, 2019 Projected benefit obligation in excess of Pension Plan assets: Projected benefit obligation $ 9,717 $ 6,577 Fair value of Pension Plan assets $ 7,567 $ 6,615 Plan assets in excess of accumulated benefit obligation: Accumulated benefit obligation $ 6,348 $ 5,056 Fair value of Pension Plan assets $ 7,567 $ 6,615 |
Schedule of Assumptions Used | The following are weighted-average assumptions used to determine benefit obligations and costs as of December 31, 2020, 2019 and 2018: Years Ended December 31, 2020 2019 2018 Weighted average assumptions used to determine benefit obligations as of December 31: Discount rate 2.75 % 3.25 % 4.25 % Rate of compensation increase 7.29 % 7.29 % 7.29 % Weighted average assumptions used to determine benefit costs for the years ended December 31: Discount rate 3.25 % 4.25 % 3.75 % Expected return on Pension Plan assets 7.00 % 7.00 % 7.00 % Rate of compensation increase 7.29 % 7.29 % 7.29 % |
Schedule of Plan Assets by Major Asset Category | The fair values of the Pension Plan assets by major asset category as of December 31, 2020 and 2019, respectively, are as follows (in thousands): Total Quoted Prices in Significant Other Significant As of December 31, 2020: Cash and cash equivalents — money markets $ 1,277 $ 1,277 $ — $ — Equities 1,567 1,567 — — Equity funds 1,503 1,503 — — Fixed income funds 797 797 — — Taxable bonds 2,423 2,423 — — Total $ 7,567 $ 7,567 $ — $ — As of December 31, 2019: Cash and cash equivalents — money markets $ 528 $ 528 $ — $ — Equities 1,133 1,133 — — Equity funds 1,939 1,939 — — Fixed income funds 465 465 — — Taxable bonds 2,550 2,550 — — Total $ 6,615 $ 6,615 $ — $ — |
Schedule of Expected Benefit Payments | The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid for the following ten-year period (in thousands): Year ending December 31, Amount 2021 $ 260 2022 256 2023 254 2024 249 2025 244 2026 to 2030 1,430 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | The income tax provision charged to operations for the years ended December 31, 2020, 2019 and 2018 was as follows (in thousands): Years Ended December 31, 2020 2019 2018 Current: U.S. Federal $ 44,395 $ 55,562 $ 35,593 State and local 1,607 1,930 1,607 Current income tax expense 46,002 57,492 37,200 Deferred (benefit) expense (2,389) 26,035 14,814 Total income tax expense $ 43,613 $ 83,527 $ 52,014 |
Schedule of Effective Income Tax Rate Reconciliation | Total income tax expense differed from the amounts computed by applying the U.S. Federal income tax rate of 21% for the years ended December 31, 2020, 2019 and 2018 to income before Federal income taxes as a result of the following (in thousands): Years Ended December 31, 2020 2019 2018 Computed tax expense at the statutory rate of 21% $ 46,129 $ 84,473 $ 54,968 Reduction in income taxes resulting from: Statutory depletion (4,577) (5,163) (4,185) State taxes 1,234 1,657 1,243 Executive compensation 789 1,302 — Prior year tax adjustments 7 755 — Other, net 31 503 (12) Total income tax expense $ 43,613 $ 83,527 $ 52,014 |
Schedule of Deferred Tax Assets and Liabilities | The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities as of December 31, 2020 and 2019 are as follows (in thousands): December 31, 2020 December 31, 2019 Unearned revenue $ 5,633 $ 3,741 Basis difference in pension plan liability 452 — Total deferred tax assets 6,085 3,741 Property, plant and equipment 16,314 17,030 §1031 tax exchanges 26,499 26,638 Deferred credits 1,853 748 Real estate acquired through foreclosure 142 142 Other 5 10 Total deferred tax liabilities 44,813 44,568 Deferred taxes payable $ (38,728) $ (40,827) |
Lease Commitments (Tables)
Lease Commitments (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Schedule of Future Minimum Lease Payments | Future minimum lease payments were as follows as of December 31, 2020 (in thousands): Year ending December 31, Amount 2021 $ 796 2022 697 2023 537 2024 551 2025 516 Total lease payments 3,097 Less: imputed interest (276) Total operating lease liabilities $ 2,821 |
Business Segment Reporting (Tab
Business Segment Reporting (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Segment Financial Results | Segment financial results were as follows (in thousands): Years Ended December 31, 2020 2019 2018 Revenues: Land and resource management $ 195,132 $ 363,328 $ 211,476 Water services and operations 107,422 127,168 88,744 Total consolidated revenues $ 302,554 $ 490,496 $ 300,220 Net income: Land and resource management $ 127,977 $ 258,366 $ 159,611 Water services and operations 48,072 60,362 50,125 Total consolidated net income $ 176,049 $ 318,728 $ 209,736 Capital Expenditures: Land and resource management $ 152 $ 1,603 $ 2,790 Water services and operations 4,934 30,606 45,088 Total capital expenditures $ 5,086 $ 32,209 $ 47,878 Depreciation, depletion and amortization: Land and resource management $ 1,514 $ 1,201 $ 506 Water services and operations 12,881 7,705 2,077 Total depreciation, depletion and amortization $ 14,395 $ 8,906 $ 2,583 |
Schedule of Total Assets And Property, Plant and Equipment | The following table presents total assets and property, plant and equipment, net by segment (in thousands): December 31, 2020 December 31, 2019 Assets: Land and resource management $ 460,053 $ 467,758 Water services and operations 111,582 130,418 Total consolidated assets $ 571,635 $ 598,176 Property, plant and equipment, net: Land and resource management $ 3,527 $ 4,359 Water services and operations 75,740 83,964 Total consolidated property, plant and equipment, net $ 79,267 $ 88,323 |
Selected Quarterly Financial _2
Selected Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Selected Quarterly Financial Information [Abstract] | |
Schedule of Selected Quarterly Financial Data (Unaudited) | The following tables present unaudited financial data of TPL for each quarter of December 31, 2020 and 2019 (in thousands, except per share amounts): Quarters ended December 31, 2020 September 30, 2020 June 30, March 31, 2020 Revenues $ 74,304 $ 74,383 $ 57,273 $ 96,594 Income before income taxes $ 55,337 $ 58,035 $ 34,923 $ 71,368 Net income $ 44,791 $ 46,275 $ 27,583 $ 57,401 Net income per Sub-share Certificate - basic and diluted $ 5.77 $ 5.97 $ 3.56 $ 7.40 Quarters ended December 31, 2019 September 30, 2019 June 30, March 31, 2019 Revenues $ 113,332 $ 98,530 $ 87,310 $ 191,324 Income before income taxes $ 89,071 $ 74,759 $ 62,879 $ 175,546 Net income $ 69,122 $ 60,022 $ 49,586 $ 139,998 Net income per Sub-share Certificate - basic and diluted $ 8.91 $ 7.74 $ 6.39 $ 18.04 |
Organization and Description _2
Organization and Description of Business Segments (Details) a in Thousands | 12 Months Ended | |
Dec. 31, 2020asegment | Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Line Items] | ||
Number of operating segments | segment | 2 | |
1/16th nonparticipating perpetual royalty interest | ||
Organization, Consolidation and Presentation of Financial Statements [Line Items] | ||
Nonparticipating perpetual royalty interest rate (in percentage) | 6.25% | 6.25% |
1/128th nonparticipating perpetual royalty interest | ||
Organization, Consolidation and Presentation of Financial Statements [Line Items] | ||
Nonparticipating perpetual royalty interest rate (in percentage) | 0.78125% | 0.78125% |
West Texas | ||
Organization, Consolidation and Presentation of Financial Statements [Line Items] | ||
Area of land (in acres) | 880 | |
West Texas | 1/128th Nonparticipating perpetual oil and gas royalty interest | ||
Organization, Consolidation and Presentation of Financial Statements [Line Items] | ||
Area of land (in acres) | 85 | |
West Texas | 1/16th Nonparticipating perpetual oil and gas royalty interest | ||
Organization, Consolidation and Presentation of Financial Statements [Line Items] | ||
Area of land (in acres) | 371 | |
West Texas | 1/8th Net royalty acres | ||
Organization, Consolidation and Presentation of Financial Statements [Line Items] | ||
Area of land (in acres) | 4 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Narrative (Details) | 12 Months Ended | ||
Dec. 31, 2020USD ($)financialInstitution | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
Concentration Risk [Line Items] | |||
Depreciation expense | $ 13,800,000 | $ 8,500,000 | $ 2,600,000 |
Valuation allowance | 0 | ||
Impairments | 0 | 0 | 0 |
Depletion expense | 400,000 | 300,000 | 0 |
Unrecognized tax benefits | 0 | 0 | |
Land sales expenses | $ 3,973,000 | 225,000 | $ 19,000 |
Revision of prior period, reclassification, adjustment | |||
Concentration Risk [Line Items] | |||
Land sales expenses | 200,000 | ||
Service life | |||
Concentration Risk [Line Items] | |||
Depreciation expense | $ 2,400,000 | ||
Cash and cash equivalents | Customer concentration risk | |||
Concentration Risk [Line Items] | |||
Number of customers | financialInstitution | 3 | ||
Sales revenue, net | Customer concentration risk | |||
Concentration Risk [Line Items] | |||
Concentration risk (in percentage) | 28.30% | 36.50% | 31.30% |
Maximum | |||
Concentration Risk [Line Items] | |||
Royalty payment arrangement, term | 2 months | ||
Lease terms of payment arrangements | 10 years | ||
Valuation allowance | $ 100,000 | ||
Maximum | Revision of prior period, reclassification, adjustment | |||
Concentration Risk [Line Items] | |||
Land sales expenses | $ 100,000 | ||
Maximum | Water service-related assets | |||
Concentration Risk [Line Items] | |||
Finite-lived intangible asset, useful life | 30 years | ||
Minimum | |||
Concentration Risk [Line Items] | |||
Royalty payment arrangement, term | 1 month | ||
Minimum | Water service-related assets | |||
Concentration Risk [Line Items] | |||
Finite-lived intangible asset, useful life | 3 years |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 281,046 | $ 303,645 | ||
Tax like-kind exchange escrow | 1,978 | 0 | ||
Total cash, cash equivalents and restricted cash shown in the statement of cash flows | $ 283,024 | $ 303,645 | $ 123,446 | $ 79,580 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Property, Plant and Equipment Estimated Useful Lives (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Minimum | Water wells and other water-related assets | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, estimated useful life | 3 years |
Minimum | Furniture, fixtures and equipment | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, estimated useful life | 5 years |
Maximum | Water wells and other water-related assets | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, estimated useful life | 30 years |
Maximum | Furniture, fixtures and equipment | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, estimated useful life | 7 years |
Property, Plant and Equipment_2
Property, Plant and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Line Items] | |||
Total property, plant and equipment, at cost | $ 104,422 | $ 99,636 | |
Less: accumulated depreciation | (25,155) | (11,313) | |
Property, plant and equipment, net | 79,267 | 88,323 | |
Depreciation expense | 13,800 | 8,500 | $ 2,600 |
Water service-related assets | |||
Property, Plant and Equipment [Line Items] | |||
Total property, plant and equipment, at cost | 97,699 | 93,097 | |
Furniture, fixtures and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Total property, plant and equipment, at cost | 6,125 | 5,941 | |
Other | |||
Property, Plant and Equipment [Line Items] | |||
Total property, plant and equipment, at cost | $ 598 | $ 598 |
Real Estate Activity - Schedule
Real Estate Activity - Schedule of Land and Real Estate Ownership (Details) $ in Thousands | Dec. 31, 2020USD ($)a | Dec. 31, 2019USD ($)a |
Number of Acres | ||
Land (surface rights) (acre) | a | 823,482 | 849,856 |
Real estate acquired (acre) | a | 57,041 | 51,931 |
Total real estate situated in 19 counties in Texas (acres) | a | 880,523 | 901,787 |
Net Book Value | ||
Land (surface rights) | $ | $ 0 | $ 0 |
Real estate acquired | $ | 108,536 | 107,075 |
Total real estate situated in Texas | $ | $ 108,536 | $ 107,075 |
Real Estate - Narrative (Detail
Real Estate - Narrative (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020USD ($) | Sep. 30, 2020USD ($) | Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2020USD ($)a$ / a | Dec. 31, 2019USD ($)a$ / a | Dec. 31, 2018USD ($)a$ / a | |
Real Estate Properties [Line Items] | |||||||||||
Revenue | $ 74,304 | $ 74,383 | $ 57,273 | $ 96,594 | $ 113,332 | $ 98,530 | $ 87,310 | $ 191,324 | $ 302,554 | $ 490,496 | $ 300,220 |
Texas | |||||||||||
Real Estate Properties [Line Items] | |||||||||||
Area of real estate property, sold (in acres) | a | 22,160 | 21,986 | 171 | ||||||||
Acres of land exchanged from trust (in acres) | a | 5,620 | ||||||||||
Acres of land received from exchange (in acres) | a | 5,545 | ||||||||||
Additions (acres) | a | 756 | 21,671 | 14,650 | ||||||||
Land sales | |||||||||||
Real Estate Properties [Line Items] | |||||||||||
Revenue | $ 17,383 | $ 135,020 | $ 4,367 | ||||||||
Land sales | Texas | |||||||||||
Real Estate Properties [Line Items] | |||||||||||
Proceeds from sale of real estate | $ 16,000 | $ 113,000 | $ 4,400 | ||||||||
Average sales price (in USD per acre) | $ / a | 721 | 5,141 | 25,464 | ||||||||
Revenue | $ 1,400 | $ 22,000 | |||||||||
Land acquisitions | Texas | |||||||||||
Real Estate Properties [Line Items] | |||||||||||
Additions | $ 3,900 | $ 74,400 | $ 9,400 | ||||||||
Average purchase price (in USD per acre) | $ / a | 5,134 | 3,434 | 640 |
Royalty Interests (Details)
Royalty Interests (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020USD ($)a | Dec. 31, 2019USD ($)a | |
Net Book Value | ||
Royalty interest acquired | $ 46,266 | $ 29,320 |
Total royalty interests, gross | 46,266 | 29,320 |
Less: accumulated depletion | (620) | (260) |
Total royalty interests, net | 45,646 | 29,060 |
1/16th nonparticipating perpetual royalty interest | ||
Net Book Value | ||
1/16th nonparticipating perpetual royalty interest | $ 0 | $ 0 |
Nonparticipating perpetual royalty interest rate (in percentage) | 6.25% | 6.25% |
Gross royalty interests (in acres) | a | 370,737 | 370,737 |
1/128th nonparticipating perpetual royalty interest | ||
Net Book Value | ||
1/128th nonparticipating perpetual royalty interest | $ 0 | $ 0 |
Nonparticipating perpetual royalty interest rate (in percentage) | 0.78125% | 0.78125% |
Gross royalty interests (in acres) | a | 84,934 | 84,934 |
Royalty interests in acres | ||
Net Book Value | ||
Net royalty interest acquired (in acres) | a | 4,090 | 3,074 |
Royalty Interests - Narrative (
Royalty Interests - Narrative (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020USD ($)a | Sep. 30, 2020USD ($) | Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($)a | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2020USD ($)a$ / shares | Dec. 31, 2019USD ($)a$ / shares | Dec. 31, 2018USD ($)a$ / a$ / shares | |
Real Estate Properties [Line Items] | |||||||||||
Acquisition of royalty interests | $ 16,946 | $ 5,017 | $ 24,303 | ||||||||
Royalty interests sold (in acres) | a | 812 | ||||||||||
Revenue | $ 74,304 | $ 74,383 | $ 57,273 | $ 96,594 | $ 113,332 | $ 98,530 | $ 87,310 | $ 191,324 | $ 302,554 | $ 490,496 | $ 300,220 |
Average price per net royalty acre sold (in USD per acre) | $ / a | 23,234 | ||||||||||
Additional real estate acquisitions | |||||||||||
Real Estate Properties [Line Items] | |||||||||||
Net royalty interests (in acres) | a | 1,017 | 1,247 | 1,017 | 1,247 | 346 | ||||||
Acquisition of royalty interests | $ 3,700 | ||||||||||
Average price per net royalty acre acquired (in USD per acre) | $ / a | 10,555 | ||||||||||
Acquisition in conjunction with sale of 1/8th interest royalty acres | |||||||||||
Real Estate Properties [Line Items] | |||||||||||
Net royalty interests (in acres) | a | 1,480 | ||||||||||
Acquisition of royalty interests | $ 16,900 | $ 4,700 | $ 20,600 | ||||||||
Average price per net royalty acre acquired (in USD per acre) | $ / shares | 16,668 | 3,800 | 13,949 | ||||||||
Sale of oil and gas royalty interests | |||||||||||
Real Estate Properties [Line Items] | |||||||||||
Revenue | $ 0 | $ 0 | $ 18,875 |
Employee Benefit Plans - Narrat
Employee Benefit Plans - Narrative (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020USD ($)h | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Requisite service years | 1 year | ||
Hours of service (in hours) | h | 1,000 | ||
Matched contribution | 6.00% | ||
Employer contribution amount | $ 0.5 | $ 0.3 | $ 0.1 |
Requisite service period | 1 year | ||
Discount rate | 2.75% | 3.25% | 4.25% |
Projected benefit obligation | $ 1 | ||
Reclassification adjustment from AOCI, net of tax | 0.2 | $ 0.2 | $ 0.2 |
Reclassification adjustment from AOCI, tax | $ 0.1 | $ 0.1 | $ 0.1 |
Expected return on Pension Plan assets | 7.00% | 7.00% | 7.00% |
Inflation rate | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Expected return on Pension Plan assets | 2.50% | ||
Fixed income securities | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Expected return on Pension Plan assets | 2.50% | ||
Allocation of expected return on plan assets (in percentage) | 66.66667% | ||
Fixed income securities | Minimum | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Target allocation (in percentage) | 30.00% | ||
Fixed income securities | Maximum | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Target allocation (in percentage) | 80.00% | ||
Equity securities | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Expected return on Pension Plan assets | 8.50% | ||
Allocation of expected return on plan assets (in percentage) | 33.33333% | ||
Equity securities | Minimum | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Target allocation (in percentage) | 20.00% | ||
Equity securities | Maximum | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Target allocation (in percentage) | 60.00% |
Employee Benefit Plans - Plan C
Employee Benefit Plans - Plan Changes in Fair Value of Plan Assets and Funded Status (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Change in projected benefits obligation: | |||
Projected benefit obligation at beginning of year | $ 6,577 | $ 4,745 | |
Service cost | 1,835 | 666 | $ 157 |
Interest cost | 210 | 197 | 183 |
Actuarial loss | 1,333 | 1,208 | |
Benefits paid | (238) | (239) | |
Projected benefit obligation at end of year | 9,717 | 6,577 | 4,745 |
Change in Pension Plan assets: | |||
Fair value of Pension Plan assets at beginning of year | 6,615 | 5,313 | |
Actual return on Pension Plan assets | 161 | 1,041 | |
Contributions by employer | 1,029 | 500 | |
Benefits paid | (238) | (239) | |
Fair value of Pension Plan assets at end of year | 7,567 | 6,615 | $ 5,313 |
Funded (unfunded) status at end of year | $ (2,150) | $ 38 |
Employee Benefit Plans - Amount
Employee Benefit Plans - Amounts Recognized in the Balance Sheets (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Share-based Payment Arrangement [Abstract] | ||
Assets | $ 0 | $ 38 |
Liabilities | 2,150 | 0 |
Total assets and liabilities recognized in balance sheets | $ 2,150 | $ (38) |
Employee Benefit Plans - Amou_2
Employee Benefit Plans - Amounts Recognized in Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | ||
Net actuarial loss | $ (3,409) | $ (1,849) |
Amounts recognized in accumulated other comprehensive loss, before taxes | (3,409) | (1,849) |
Income tax benefit | 716 | 388 |
Amounts recognized in accumulated other comprehensive loss, after taxes | $ (2,693) | $ (1,461) |
Employee Benefit Plans - Summar
Employee Benefit Plans - Summary of Net Periodic Benefits Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Components of net periodic benefit cost: | |||
Service cost | $ 1,835 | $ 666 | $ 157 |
Interest cost | 210 | 197 | 183 |
Expected return on Pension Plan assets | (454) | (364) | (367) |
Amortization of net loss | 66 | 46 | 64 |
Net periodic benefit cost | $ 1,657 | $ 545 | $ 37 |
Employee Benefit Plans - Other
Employee Benefit Plans - Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Payment Arrangement [Abstract] | |||
Net actuarial loss | $ 1,626 | $ 530 | $ 183 |
Recognized actuarial loss | (66) | (46) | (64) |
Total recognized in other comprehensive loss, before taxes | 1,560 | 484 | 119 |
Total recognized in net benefit cost and other comprehensive loss, before taxes | $ 3,217 | $ 1,029 | $ 156 |
Employee Benefit Plans - Projec
Employee Benefit Plans - Projected Benefit Obligation and Accumulated Benefit Obligation in Excess of Plan Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Projected benefit obligation in excess of Pension Plan assets: | |||
Projected benefit obligation | $ 9,717 | $ 6,577 | |
Fair value of Pension Plan assets | 7,567 | 6,615 | $ 5,313 |
Plan assets in excess of accumulated benefit obligation: | |||
Accumulated benefit obligation | 6,348 | 5,056 | |
Fair value of Pension Plan assets | $ 7,567 | $ 6,615 |
Employee Benefit Plans - Summ_2
Employee Benefit Plans - Summary of Weighted-average Assumptions Used to Determine Benefit Obligations and Costs (Details) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Weighted average assumptions used to determine benefit obligations as of December 31: | |||
Discount rate | 2.75% | 3.25% | 4.25% |
Rate of compensation increase | 7.29% | 7.29% | 7.29% |
Weighted average assumptions used to determine benefit costs for the years ended December 31: | |||
Discount rate | 3.25% | 4.25% | 3.75% |
Expected return on Pension Plan assets | 7.00% | 7.00% | 7.00% |
Rate of compensation increase | 7.29% | 7.29% | 7.29% |
Employee Benefit Plans - Fair V
Employee Benefit Plans - Fair Values of Plan Assets by Major Asset Category (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of Pension Plan assets | $ 7,567 | $ 6,615 | $ 5,313 |
Cash and cash equivalents — money markets | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of Pension Plan assets | 1,277 | 528 | |
Equities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of Pension Plan assets | 1,567 | 1,133 | |
Equity funds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of Pension Plan assets | 1,503 | 1,939 | |
Fixed income funds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of Pension Plan assets | 797 | 465 | |
Taxable bonds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of Pension Plan assets | 2,423 | 2,550 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of Pension Plan assets | 7,567 | 6,615 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Cash and cash equivalents — money markets | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of Pension Plan assets | 1,277 | 528 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Equities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of Pension Plan assets | 1,567 | 1,133 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Equity funds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of Pension Plan assets | 1,503 | 1,939 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Fixed income funds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of Pension Plan assets | 797 | 465 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Taxable bonds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of Pension Plan assets | 2,423 | 2,550 | |
Significant Other Observable Inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of Pension Plan assets | 0 | 0 | |
Significant Other Observable Inputs (Level 2) | Cash and cash equivalents — money markets | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of Pension Plan assets | 0 | 0 | |
Significant Other Observable Inputs (Level 2) | Equities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of Pension Plan assets | 0 | 0 | |
Significant Other Observable Inputs (Level 2) | Equity funds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of Pension Plan assets | 0 | 0 | |
Significant Other Observable Inputs (Level 2) | Fixed income funds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of Pension Plan assets | 0 | 0 | |
Significant Other Observable Inputs (Level 2) | Taxable bonds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of Pension Plan assets | 0 | 0 | |
Significant Unobservable Inputs (Level 3) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of Pension Plan assets | 0 | 0 | |
Significant Unobservable Inputs (Level 3) | Cash and cash equivalents — money markets | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of Pension Plan assets | 0 | 0 | |
Significant Unobservable Inputs (Level 3) | Equities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of Pension Plan assets | 0 | 0 | |
Significant Unobservable Inputs (Level 3) | Equity funds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of Pension Plan assets | 0 | 0 | |
Significant Unobservable Inputs (Level 3) | Fixed income funds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of Pension Plan assets | 0 | 0 | |
Significant Unobservable Inputs (Level 3) | Taxable bonds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of Pension Plan assets | $ 0 | $ 0 |
Employee Benefit Plans - Summ_3
Employee Benefit Plans - Summary of Benefit Payments Over Ten Years (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Share-based Payment Arrangement [Abstract] | |
2021 | $ 260 |
2022 | 256 |
2023 | 254 |
2024 | 249 |
2025 | 244 |
2026 to 2030 | $ 1,430 |
Income Taxes - Income Tax Provi
Income Taxes - Income Tax Provision Charged to Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Expense (Benefit), Continuing Operations [Abstract] | |||
U.S. Federal | $ 44,395 | $ 55,562 | $ 35,593 |
State and local | 1,607 | 1,930 | 1,607 |
Current income tax expense (benefit) | 46,002 | 57,492 | 37,200 |
Deferred (benefit) expense | (2,389) | 26,035 | 14,814 |
Total income tax expense | $ 43,613 | $ 83,527 | $ 52,014 |
Income Taxes - Summary of Incom
Income Taxes - Summary of Income Tax Expense at Federal Rate (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||
Computed tax expense at the statutory rate of 21% | $ 46,129 | $ 84,473 | $ 54,968 |
Reduction in income taxes resulting from: | |||
Statutory depletion | (4,577) | (5,163) | (4,185) |
State taxes | 1,234 | 1,657 | 1,243 |
Executive compensation | 789 | 1,302 | 0 |
Prior year tax adjustments | 7 | 755 | 0 |
Other, net | 31 | 503 | (12) |
Total income tax expense | $ 43,613 | $ 83,527 | $ 52,014 |
Income Taxes - Summary of Tempo
Income Taxes - Summary of Temporary Differences in Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Income Tax Disclosure [Abstract] | ||
Unearned revenue | $ 5,633 | $ 3,741 |
Basis difference in pension plan liability | 452 | 0 |
Total deferred tax assets | 6,085 | 3,741 |
Property, plant and equipment | 16,314 | 17,030 |
§1031 tax exchanges | 26,499 | 26,638 |
Deferred credits | 1,853 | 748 |
Real estate acquired through foreclosure | 142 | 142 |
Other | 5 | 10 |
Total deferred tax liabilities | 44,813 | 44,568 |
Deferred taxes payable | $ (38,728) | $ (40,827) |
Lease Commitments - Narrative (
Lease Commitments - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Leases [Abstract] | |||
Operating lease right-of-use assets | $ 2,473 | $ 3,098 | |
Total operating lease liabilities | 2,821 | 3,367 | |
Operating lease cost | 700 | ||
Rent expense | $ 800 | $ 700 | |
Rent expense | $ 200 |
Lease Commitments - Future Mini
Lease Commitments - Future Minimum Lease Payments (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
2021 | $ 796 | |
2022 | 697 | |
2023 | 537 | |
2024 | 551 | |
2025 | 516 | |
Total lease payments | 3,097 | |
Less: imputed interest | 276 | |
Total operating lease liabilities | $ 2,821 | $ 3,367 |
Capital (Details)
Capital (Details) | 1 Months Ended | 12 Months Ended | |||||
Dec. 31, 2020$ / shares | Mar. 31, 2020$ / shares | Mar. 31, 2019$ / shares | Dec. 31, 2020$ / sharesshares | Dec. 31, 2019$ / sharesshares | Dec. 31, 2018$ / sharesshares | Jan. 11, 2021 | |
Class of Stock [Line Items] | |||||||
Special dividends paid per sub-share certificate (in dollars per share) | $ 16 | $ 16 | $ 4.25 | $ 3 | |||
Sub shares | |||||||
Class of Stock [Line Items] | |||||||
Ratio of certificates to sub-shares | 0.0003 | ||||||
Number of shares repurchased and retired (in shares) | shares | 0 | 6,258 | 59,185 | ||||
Sub shares | Subsequent event | |||||||
Class of Stock [Line Items] | |||||||
Ratio of sub-shares to common stock | 1 | ||||||
Cash dividend | Sub shares | |||||||
Class of Stock [Line Items] | |||||||
Dividend paid per sub-share (in USD per share) | 10 | $ 1.75 | |||||
Special dividend | Sub shares | |||||||
Class of Stock [Line Items] | |||||||
Dividend paid per sub-share (in USD per share) | $ 10 | $ 6 | $ 4.25 |
Business Segment Reporting - Na
Business Segment Reporting - Narrative (Details) a in Thousands | Dec. 31, 2020a |
West Texas | |
Segment Reporting Information [Line Items] | |
Area of land (in acres) | 880 |
Business Segment Reporting - Fi
Business Segment Reporting - Financial Results (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Segment Reporting Information [Line Items] | |||||||||||
Revenue | $ 74,304 | $ 74,383 | $ 57,273 | $ 96,594 | $ 113,332 | $ 98,530 | $ 87,310 | $ 191,324 | $ 302,554 | $ 490,496 | $ 300,220 |
Net income | $ 44,791 | $ 46,275 | $ 27,583 | $ 57,401 | $ 69,122 | $ 60,022 | $ 49,586 | $ 139,998 | 176,049 | 318,728 | 209,736 |
Capital expenditures | 5,086 | 32,209 | 47,878 | ||||||||
Depreciation, depletion and amortization | 14,395 | 8,906 | 2,583 | ||||||||
Land and resource management | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenue | 195,132 | 363,328 | 211,476 | ||||||||
Net income | 127,977 | 258,366 | 159,611 | ||||||||
Capital expenditures | 152 | 1,603 | 2,790 | ||||||||
Depreciation, depletion and amortization | 1,514 | 1,201 | 506 | ||||||||
Water services and operations | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenue | 107,422 | 127,168 | 88,744 | ||||||||
Net income | 48,072 | 60,362 | 50,125 | ||||||||
Capital expenditures | 4,934 | 30,606 | 45,088 | ||||||||
Depreciation, depletion and amortization | $ 12,881 | $ 7,705 | $ 2,077 |
Business Segment Reporting - As
Business Segment Reporting - Assets and Property, Plant and Equipment, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Segment Reporting Information [Line Items] | ||
Total assets | $ 571,635 | $ 598,176 |
Property, plant and equipment, net | 79,267 | 88,323 |
Land and resource management | ||
Segment Reporting Information [Line Items] | ||
Total assets | 460,053 | 467,758 |
Property, plant and equipment, net | 3,527 | 4,359 |
Water services and operations | ||
Segment Reporting Information [Line Items] | ||
Total assets | 111,582 | 130,418 |
Property, plant and equipment, net | $ 75,740 | $ 83,964 |
Subsequent Events (Details)
Subsequent Events (Details) - $ / shares | Feb. 17, 2021 | Jan. 11, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Subsequent Event [Line Items] | ||||
Sub-share certificates of proprietary interest, par value (in dollars per share) | $ 0.0333 | $ 0.0333 | ||
Certificates of proprietary interest, par value (in dollars per share) | $ 100 | $ 100 | ||
Certificates of proprietary interest, outstanding (in shares) | 0 | 0 | ||
Sub-share certificates of proprietary interest, outstanding (in shares) | 7,756,156 | 7,756,156 | ||
Subsequent event | ||||
Subsequent Event [Line Items] | ||||
Sub-share certificates of proprietary interest, par value (in dollars per share) | $ 0.01 | |||
Sub-share certificates of proprietary interest, outstanding (in shares) | 7,756,156 | |||
Subsequent event | Dividend declared | ||||
Subsequent Event [Line Items] | ||||
Annual cash dividend | $ 2.75 |
Oil and Gas Producing Activit_2
Oil and Gas Producing Activities (Unaudited) (Details) | Dec. 31, 2020wellbbl | Dec. 31, 2019wellbbl | Dec. 31, 2018wellbbl |
Extractive Industries [Abstract] | |||
Share of oil and gas produced in thousands per day | bbl | 16,200 | 13,700 | 8,800 |
Number of oil and gas wells | well | 531 | 486 | 362 |
Selected Quarterly Financial _3
Selected Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Selected Quarterly Financial Information [Abstract] | |||||||||||
Total revenues | $ 74,304 | $ 74,383 | $ 57,273 | $ 96,594 | $ 113,332 | $ 98,530 | $ 87,310 | $ 191,324 | $ 302,554 | $ 490,496 | $ 300,220 |
Income before income taxes | 55,337 | 58,035 | 34,923 | 71,368 | 89,071 | 74,759 | 62,879 | 175,546 | 219,662 | 402,255 | 261,750 |
Net income | $ 44,791 | $ 46,275 | $ 27,583 | $ 57,401 | $ 69,122 | $ 60,022 | $ 49,586 | $ 139,998 | $ 176,049 | $ 318,728 | $ 209,736 |
Decrease in net income per sub-share certificate — basic and diluted (in USD per share) | $ 5.77 | $ 5.97 | $ 3.56 | $ 7.40 | $ 8.91 | $ 7.74 | $ 6.39 | $ 18.04 | $ 22.70 | $ 41.09 | $ 26.93 |