Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2021 | Apr. 30, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2021 | |
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 $.01 per share) | |
Trading Symbol | TPL | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 7,756,156 | |
Entity Central Index Key | 0001811074 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
ASSETS | ||
Cash and cash equivalents | $ 310,655 | $ 281,046 |
Accrued receivables, net | 61,392 | 48,216 |
Prepaid expenses and other current assets | 1,822 | 2,778 |
Tax like-kind exchange escrow | 1,978 | 1,978 |
Total current assets | 375,847 | 334,018 |
Property, plant and equipment, net | 78,395 | 79,267 |
Real estate acquired | 108,536 | 108,536 |
Royalty interests acquired, net | 45,435 | 45,646 |
Operating lease right-of-use assets | 2,314 | 2,473 |
Other assets | 3,275 | 1,695 |
Real estate and royalty interests assigned through the Declaration of Trust, no value assigned: | ||
Total assets | 613,802 | 571,635 |
LIABILITIES AND EQUITY | ||
Accounts payable and accrued expenses | 12,367 | 12,530 |
Unearned revenue | 5,298 | 3,997 |
Income taxes payable | 16,183 | 4,054 |
Total current liabilities | 33,848 | 20,581 |
Deferred taxes payable | 38,581 | 38,728 |
Unearned revenue - non-current | 21,891 | 22,171 |
Accrued liabilities | 2,893 | 2,150 |
Operating lease liabilities | 2,654 | 2,821 |
Total liabilities | 99,867 | 86,451 |
Commitments and contingencies | 0 | 0 |
Equity: | ||
Certificates of Proprietary Interest, par value $100 each; none outstanding as of December 31, 2020 | 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 | 78 | |
Accumulated other comprehensive loss | (2,665) | (2,693) |
Retained earnings and net proceeds from all sources | 516,522 | 487,877 |
Total equity | 513,935 | 485,184 |
Total liabilities and equity | 613,802 | 571,635 |
Certificates of Proprietary Interest | ||
Equity: | ||
Certificates of Proprietary Interest, par value $100 each; none outstanding as of December 31, 2020 | 0 | |
Sub-share Certificates in Certificates of Proprietary Interest | ||
Equity: | ||
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 | 0 | |
Land (surface rights) | ||
Real estate and royalty interests assigned through the 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 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 Declaration of Trust, no value assigned: | ||
1/128th nonparticipating perpetual royalty interest | $ 0 | $ 0 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Preferred stock and certificates of proprietary interest, par value (in dollars per share) | $ 0.01 | |
Preferred stock and certificates of proprietary interest, shares authorized (in shares) | 1,000,000 | |
Preferred stock and certificates of proprietary interest, shares outstanding (in shares) | 0 | |
Common stock and sub-share certificates of proprietary interest, par value (in dollars per share) | $ 0.01 | |
Common stock and sub-share certificates of proprietary interest, authorized (in shares) | 7,756,156 | |
Common stock and sub-share certificates of proprietary interest, outstanding (in shares) | 7,756,156 | |
Certificates of Proprietary Interest | ||
Preferred stock and certificates of proprietary interest, par value (in dollars per share) | $ 100 | |
Preferred stock and certificates of proprietary interest, shares outstanding (in shares) | 0 | |
Sub-share Certificates in Certificates of Proprietary Interest | ||
Common stock and sub-share certificates of proprietary interest, par value (in dollars per share) | $ 0.0333 | |
Common stock and sub-share certificates of proprietary interest, outstanding (in shares) | 7,756,156 | |
1/16th nonparticipating perpetual royalty interest | ||
Nonparticipating perpetual royalty interest rate | 6.25% | 6.25% |
1/128th nonparticipating perpetual royalty interest | ||
Nonparticipating perpetual royalty interest rate | 0.78125% | 0.78125% |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income and Total Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Revenues: | ||
Total revenues | $ 84,155 | $ 96,594 |
Expenses: | ||
Salaries and related employee expenses | 9,979 | 10,620 |
Water service-related expenses | 3,298 | 6,780 |
General and administrative expenses | 2,806 | 2,959 |
Legal and professional fees | 2,212 | 2,358 |
Depreciation, depletion and amortization | 3,838 | 3,335 |
Total operating expenses | 22,133 | 26,052 |
Operating income | 62,022 | 70,542 |
Other income, net | 5 | 826 |
Income before income taxes | 62,027 | 71,368 |
Income tax expense (benefit): | ||
Current | 12,122 | 14,022 |
Deferred | (147) | (55) |
Total income tax expense | 11,975 | 13,967 |
Net income | 50,052 | 57,401 |
Other comprehensive income — periodic pension costs, net of income taxes of $8 and $4, respectively | 28 | 13 |
Total comprehensive income | $ 50,080 | $ 57,414 |
Weighted average number of Sub-share Certificates outstanding (in shares) | 7,756,156 | 7,756,156 |
Net income per Sub-share Certificate — basic and diluted (in dollars per share) | $ 6.45 | $ 7.40 |
Cash dividends per Sub-share Certificate (in dollars per share) | $ 2.75 | $ 16 |
Oil and gas royalties | ||
Revenues: | ||
Total revenues | $ 49,533 | $ 42,360 |
Water sales | ||
Revenues: | ||
Total revenues | 12,956 | 26,967 |
Produced water royalties | ||
Revenues: | ||
Total revenues | 12,549 | 12,506 |
Easements and other surface-related income | ||
Revenues: | ||
Total revenues | 9,047 | 13,761 |
Land sales | ||
Revenues: | ||
Total revenues | 0 | 900 |
Other operating revenue | ||
Revenues: | ||
Total revenues | $ 70 | $ 100 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Income and Total Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Income Statement [Abstract] | ||
Other comprehensive income - periodic pension costs | $ 8 | $ 4 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Cash flows from operating activities: | ||
Net income | $ 50,052 | $ 57,401 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Deferred taxes | (147) | (55) |
Depreciation, depletion and amortization | 3,838 | 3,335 |
Changes in operating assets and liabilities: | ||
Operating assets, excluding income taxes | (13,657) | (5,377) |
Operating liabilities, excluding income taxes | 172 | 3,909 |
Income taxes payable | 12,129 | 9,426 |
Cash provided by operating activities | 52,387 | 68,639 |
Cash flows from investing activities: | ||
Acquisition of real estate | 0 | (3,890) |
Acquisition of royalty interests | 0 | (16,936) |
Purchase of fixed assets | (1,449) | (3,617) |
Cash used in investing activities | (1,449) | (24,443) |
Cash flows from financing activities: | ||
Dividends paid | (21,329) | (124,098) |
Cash used in financing activities | (21,329) | (124,098) |
Net increase (decrease) in cash, cash equivalents and restricted cash | 29,609 | (79,902) |
Cash, cash equivalents and restricted cash, beginning of period | 283,024 | 303,645 |
Cash, cash equivalents, and restricted cash, end of period | 312,633 | 223,743 |
Supplemental disclosure of cash flow information: | ||
Income taxes paid | 0 | 4,600 |
Capital expenditure additions | 1,289 | 0 |
Issuance of common stock | $ 78 | $ 0 |
Organization and Basis of Prese
Organization and Basis of Presentation | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Basis of Presentation | Organization and Basis of Presentation Organization Texas Pacific Land Corporation (which, together with its subsidiaries as the context requires, may be referred to as “TPL”, the “Company”, “our”, “we” or “us”) is a Delaware corporation and one of the largest landowners in the State of Texas with approximately 880,000 acres of land in West Texas, with the majority of our ownership concentrated in the Permian Basin. Additionally, we own a 1/128th nonparticipating perpetual oil and gas royalty interest (“NPRI”) under approximately 85,000 acres of land, a 1/16th NPRI under approximately 371,000 acres of land, and approximately 4,000 additional net royalty acres (normalized to 1/8th) in the western part of Texas. TPL’s income is derived primarily from oil, gas and produced water royalties, sales of water and land, easements and commercial leases of the land. On January 11, 2021, we completed our reorganization from a business trust, organized under a Declaration of Trust dated February 1, 1888 (the “Declaration of Trust”) to a corporation (the “Corporate Reorganization”) and changed our name from Texas Pacific Land Trust (the “Trust”) to Texas Pacific Land Corporation. See further discussion of the Corporate Reorganization and its impact on our equity structure in Note 7, “ Cha n ges in Equity.” Any references in these condensed consolidated financial statements and notes to the Company, TPL, our, we, or us with respect to periods prior to January 11, 2021 will be in reference to the Trust, and references to periods on that date and thereafter will be in reference to Texas Pacific Land Corporation or TPL Corporation. Basis of Presentation The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and on the same basis as the audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2020. The condensed consolidated financial statements herein include all adjustments which are, in the opinion of management, necessary to fairly state the financial position of the Company as of March 31, 2021 and the results of its operations for the three months ended March 31, 2021 and 2020, respectively, and its cash flows for the three months ended March 31, 2021 and 2020, respectively. Such adjustments are of a normal nature and all intercompany accounts and transactions have been eliminated in consolidation. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted from this report, and accordingly these interim financial statements and footnotes should be read in conjunction with the audited financial statements and footnotes included in our Form 10-K for the year ended December 31, 2020. The results for the interim periods shown in this report are not necessarily indicative of future financial results. We operate our business in two segments: Land and Resource Management and Water Services and Operations. Our segments provide management with a comprehensive financial view of our key businesses. The segments enable the alignment of strategies and objectives of TPL and provide a framework for timely and rational allocation of resources within businesses. See Note 8. “Business Segment Reporting” for further information regarding our segments. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Use of Estimates in the Preparation of Financial Statements The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent asset and liabilities at the date of the financial statements and reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. In the event estimates and/or assumptions prove to be different from actual amounts, adjustments are made in subsequent periods to reflect more current information. Cash, Cash Equivalents and Restricted Cash 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): March 31, 2021 December 31, 2020 Cash and cash equivalents $ 310,655 $ 281,046 Tax like-kind exchange escrow 1,978 1,978 Total cash, cash equivalents and restricted cash shown in the statement of cash flows $ 312,633 $ 283,024 Reclassifications Certain financial information on the condensed consolidated statements of income for the three months ended March 31, 2020 have been revised to conform to the current year presentation. These revisions include a reclassification of $12.5 million of produced water royalties revenue for the three months ended March 31, 2020 previously included in easements and other surface-related income to a separate financial statement line item within revenues. Recently Adopted Accounting Guidance 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. The Company adopted the guidance effective January 1, 2021. The adoption had minimal impact on the Company’s consolidated financial statements and disclosures. |
Property, Plant and Equipment
Property, Plant and Equipment | 3 Months Ended |
Mar. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment, net consisted of the following as of March 31, 2021 and December 31, 2020 (in thousands): March 31, 2021 December 31, 2020 Property, plant and equipment, at cost: Water service-related assets (1) $ 100,399 $ 97,699 Furniture, fixtures and equipment 6,122 6,125 Other 598 598 Property, plant and equipment at cost 107,119 104,422 Less: accumulated depreciation (28,724) (25,155) Property, plant and equipment, net $ 78,395 $ 79,267 (1) Water service-related assets reflect assets related to water sourcing and water treatment projects. Depreciation expense was $3.6 million and $3.2 million for the three months ended March 31, 2021 and 2020, respectively. |
Real Estate Activity
Real Estate Activity | 3 Months Ended |
Mar. 31, 2021 | |
Real Estate [Abstract] | |
Real Estate Activity | Real Estate ActivityAs of March 31, 2021 and December 31, 2020, the Company owned the following land and real estate (in thousands, except number of acres): March 31, December 31, Number of Acres Net Book Value Number of Acres Net Book Value Land (surface rights) (1) 823,482 $ — 823,482 $ — Real estate acquired 57,041 108,536 57,041 108,536 Total real estate situated in Texas 880,523 $ 108,536 880,523 $ 108,536 (1) Real estate originally assigned through the Declaration of Trust. Land Sales There were no land sales during the three months ended March 31, 2021. For the three months ended March 31, 2020, we sold 30 acres of land in Texas for an aggregate sales price of $0.9 million, an average of approximately $30,000 per acre. Land Acquisitions There were no land acquisitions during the three months ended March 31, 2021. For the three months ended March 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. |
Royalty Interests
Royalty Interests | 3 Months Ended |
Mar. 31, 2021 | |
Real Estate [Abstract] | |
Royalty Interests | Royalty Interests As of March 31, 2021 and December 31, 2020, we owned the following oil and gas royalty interests (in thousands): Net Book Value March 31, 2021 December 31, 2020 1/16th nonparticipating perpetual royalty interests $ — $ — 1/128th nonparticipating perpetual royalty interests — — Royalty interests acquired 46,266 46,266 Total royalty interests, gross 46,266 46,266 Less: accumulated depletion (831) (620) Total royalty interests, net $ 45,435 $ 45,646 There were no oil and gas royalty interest transactions for the three months ended March 31, 2021. For the three months ended March 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 $16,659 per net royalty acre. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The calculation of our effective tax rate is as follows for the three months ended March 31, 2021 and 2020 (in thousands, except percentages): Three Months Ended 2021 2020 Income before income taxes $ 62,027 $ 71,368 Income tax expense $ 11,975 $ 13,967 Effective tax rate 19.3 % 19.6 % The effective tax rates were lower than the U.S. federal statutory rate of 21% due primarily to statutory depletion allowed on mineral royalty income. |
Changes in Equity
Changes in Equity | 3 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
Changes in Equity | Changes in Equity The following tables present changes in our equity for the three months ended March 31, 2021 and 2020 (in thousands, except shares and per share amounts): Sub-share Certificates Common Stock Number of shares Number of shares Par Value Accum. Other Comp. Loss Retained Earnings Net Proceeds from All Sources Total Equity For the three months ended March 31, 2021: Balances as of December 31, 2020 7,756,156 — $ — $ (2,693) $ — $ 487,877 $ 485,184 Net income — — — — 50,052 — 50,052 Dividends paid ($2.75 per common share) — — — — (21,329) — (21,329) Conversion of Sub-shares into shares of common stock (7,756,156) 7,756,156 78 — 487,799 (487,877) — Other comprehensive income — — — 28 — — 28 Balances as of March 31, 2021 — 7,756,156 $ 78 $ (2,665) $ 516,522 $ — $ 513,935 Sub-share Certificates Accum. Other Comp. Loss Net Proceeds from All Sources Total Capital For the three months ended March 31, 2020: Balances as of December 31, 2019 7,756,156 $ (1,461) $ 513,598 $ 512,137 Net income — — 57,401 57,401 Dividends paid ($16.00 per Sub-share) — — (124,098) (124,098) Cumulative effect of accounting change — — (110) (110) Other comprehensive income — 13 — 13 Balances as of March 31, 2020 7,756,156 $ (1,448) $ 446,791 $ 445,343 Corporate Reorganization On January 11, 2021, TPL completed its Corporate Reorganization, officially changing its name to Texas Pacific Land 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. The Corporate Reorganization is a tax-free reorganization under Section 368(a)(1)(F) of the Internal Revenue Code of 1986, as amended. 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-share certificates (“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 only affected our equity structure in that Sub-shares were replaced with shares of Common Stock and net proceeds from all sources were replaced with retained earnings on the condensed consolidated balance sheet. |
Business Segment Reporting
Business Segment Reporting | 3 Months Ended |
Mar. 31, 2021 | |
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, principally concentrated in the Permian Basin. The revenue streams of this segment consist primarily of royalties from oil and gas, revenues from easements and commercial leases and land and material sales. The Water Services and Operations segment encompasses the business of providing a full-service water offering to operators in the Permian Basin. The revenue streams of this segment primarily consist of revenue generated from sales of sourced and treated water as well as revenue from produced water royalties. Segment financial results were as follows for the three months ended March 31, 2021 and 2020 (in thousands): Three Months Ended 2021 2020 Revenues: Land and resource management $ 57,790 $ 56,658 Water services and operations 26,365 39,936 Total consolidated revenues $ 84,155 $ 96,594 Net income: Land and resource management $ 39,513 $ 39,118 Water services and operations 10,539 18,283 Total consolidated net income $ 50,052 $ 57,401 Capital expenditures: Land and resource management $ — $ 88 Water services and operations 2,738 3,529 Total capital expenditures $ 2,738 $ 3,617 Depreciation, depletion and amortization: Land and resource management $ 494 $ 337 Water services and operations 3,344 2,998 Total depreciation, depletion and amortization $ 3,838 $ 3,335 The following table presents total assets and property, plant and equipment, net by segment as of March 31, 2021 and December 31, 2020 (in thousands): March 31, 2021 December 31, 2020 Assets: Land and resource management $ 501,516 $ 460,053 Water services and operations 112,286 111,582 Total consolidated assets $ 613,802 $ 571,635 Property, plant and equipment, net: Land and resource management $ 3,287 $ 3,527 Water services and operations 75,108 75,740 Total consolidated property, plant and equipment, net $ 78,395 $ 79,267 |
Oil and Gas Producing Activitie
Oil and Gas Producing Activities | 3 Months Ended |
Mar. 31, 2021 | |
Extractive Industries [Abstract] | |
Oil and Gas Producing Activities | Oil and Gas Producing Activities We measure 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 March 31, 2021 and March 31, 2020, our share of oil and gas produced was approximately 16.4 and 16.5 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 is determined using uniform drilling spacing units with pooled interests for all wells awaiting completion. We have identified 541 and 531 DUC wells subject to our royalty interest as of March 31, 2021 and December 31, 2020, respectively. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2021 | |
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: Dividend Declared On May 3, 2021, the board of directors declared a quarterly cash dividend of $2.75 per share payable on June 15, 2021 to stockholders of record at the close of business on June 8, 2021. Stock Repurchase Program On May 3, 2021, our board of directors approved a stock repurchase program to purchase up to an aggregate of $20.0 million of shares of our outstanding common stock. Acquisitions pursuant to the stock repurchase program may be made through a combination of open market repurchases in compliance with Rule 10b-18 promulgated under the Securities Exchange Act of 1934, as amended, privately negotiated transactions, and/or other transactions at the Company’s discretion. In connection with the stock repurchase program, the Company intends to enter into a Rule 10b5-1 trading plan that would generally permit the Company to repurchase shares at times when it might otherwise be prevented from doing so under securities laws. The stock repurchase program will expire on December 31, 2021 unless otherwise modified or earlier terminated by our board of directors at any time in its sole discretion. Repurchased shares will be held in treasury. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
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, disclosure of contingent asset and liabilities at the date of the financial statements and reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. In the event estimates and/or assumptions prove to be different from actual amounts, adjustments are made in subsequent periods to reflect more current information. |
Cash and Cash Equivalents and Restricted Cash | 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): March 31, 2021 December 31, 2020 Cash and cash equivalents $ 310,655 $ 281,046 Tax like-kind exchange escrow 1,978 1,978 Total cash, cash equivalents and restricted cash shown in the statement of cash flows $ 312,633 $ 283,024 |
Reclassifications | ReclassificationsCertain financial information on the condensed consolidated statements of income for the three months ended March 31, 2020 have been revised to conform to the current year presentation. |
Recently Adopted Accounting Guidance | Recently Adopted Accounting Guidance 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. The Company adopted the guidance effective January 1, 2021. The adoption had minimal impact on the Company’s consolidated financial statements and disclosures. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Cash and 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): March 31, 2021 December 31, 2020 Cash and cash equivalents $ 310,655 $ 281,046 Tax like-kind exchange escrow 1,978 1,978 Total cash, cash equivalents and restricted cash shown in the statement of cash flows $ 312,633 $ 283,024 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Property, plant and equipment, net consisted of the following as of March 31, 2021 and December 31, 2020 (in thousands): March 31, 2021 December 31, 2020 Property, plant and equipment, at cost: Water service-related assets (1) $ 100,399 $ 97,699 Furniture, fixtures and equipment 6,122 6,125 Other 598 598 Property, plant and equipment at cost 107,119 104,422 Less: accumulated depreciation (28,724) (25,155) Property, plant and equipment, net $ 78,395 $ 79,267 (1) Water service-related assets reflect assets related to water sourcing and water treatment projects. |
Real Estate Activity (Tables)
Real Estate Activity (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Real Estate [Abstract] | |
Schedule of Real Estate Properties | As of March 31, 2021 and December 31, 2020, the Company owned the following land and real estate (in thousands, except number of acres): March 31, December 31, Number of Acres Net Book Value Number of Acres Net Book Value Land (surface rights) (1) 823,482 $ — 823,482 $ — Real estate acquired 57,041 108,536 57,041 108,536 Total real estate situated in Texas 880,523 $ 108,536 880,523 $ 108,536 (1) Real estate originally assigned through the Declaration of Trust. |
Royalty Interests (Tables)
Royalty Interests (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Real Estate [Abstract] | |
Schedule of Royalty Interests | As of March 31, 2021 and December 31, 2020, we owned the following oil and gas royalty interests (in thousands): Net Book Value March 31, 2021 December 31, 2020 1/16th nonparticipating perpetual royalty interests $ — $ — 1/128th nonparticipating perpetual royalty interests — — Royalty interests acquired 46,266 46,266 Total royalty interests, gross 46,266 46,266 Less: accumulated depletion (831) (620) Total royalty interests, net $ 45,435 $ 45,646 |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | The calculation of our effective tax rate is as follows for the three months ended March 31, 2021 and 2020 (in thousands, except percentages): Three Months Ended 2021 2020 Income before income taxes $ 62,027 $ 71,368 Income tax expense $ 11,975 $ 13,967 Effective tax rate 19.3 % 19.6 % |
Changes in Equity (Tables)
Changes in Equity (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
Schedule of Stockholders Equity | The following tables present changes in our equity for the three months ended March 31, 2021 and 2020 (in thousands, except shares and per share amounts): Sub-share Certificates Common Stock Number of shares Number of shares Par Value Accum. Other Comp. Loss Retained Earnings Net Proceeds from All Sources Total Equity For the three months ended March 31, 2021: Balances as of December 31, 2020 7,756,156 — $ — $ (2,693) $ — $ 487,877 $ 485,184 Net income — — — — 50,052 — 50,052 Dividends paid ($2.75 per common share) — — — — (21,329) — (21,329) Conversion of Sub-shares into shares of common stock (7,756,156) 7,756,156 78 — 487,799 (487,877) — Other comprehensive income — — — 28 — — 28 Balances as of March 31, 2021 — 7,756,156 $ 78 $ (2,665) $ 516,522 $ — $ 513,935 Sub-share Certificates Accum. Other Comp. Loss Net Proceeds from All Sources Total Capital For the three months ended March 31, 2020: Balances as of December 31, 2019 7,756,156 $ (1,461) $ 513,598 $ 512,137 Net income — — 57,401 57,401 Dividends paid ($16.00 per Sub-share) — — (124,098) (124,098) Cumulative effect of accounting change — — (110) (110) Other comprehensive income — 13 — 13 Balances as of March 31, 2020 7,756,156 $ (1,448) $ 446,791 $ 445,343 |
Business Segment Reporting (Tab
Business Segment Reporting (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
Schedule of Segment Financial Results | Segment financial results were as follows for the three months ended March 31, 2021 and 2020 (in thousands): Three Months Ended 2021 2020 Revenues: Land and resource management $ 57,790 $ 56,658 Water services and operations 26,365 39,936 Total consolidated revenues $ 84,155 $ 96,594 Net income: Land and resource management $ 39,513 $ 39,118 Water services and operations 10,539 18,283 Total consolidated net income $ 50,052 $ 57,401 Capital expenditures: Land and resource management $ — $ 88 Water services and operations 2,738 3,529 Total capital expenditures $ 2,738 $ 3,617 Depreciation, depletion and amortization: Land and resource management $ 494 $ 337 Water services and operations 3,344 2,998 Total depreciation, depletion and amortization $ 3,838 $ 3,335 |
Schedule of Total Assets And Property, Plant, and Equipment | The following table presents total assets and property, plant and equipment, net by segment as of March 31, 2021 and December 31, 2020 (in thousands): March 31, 2021 December 31, 2020 Assets: Land and resource management $ 501,516 $ 460,053 Water services and operations 112,286 111,582 Total consolidated assets $ 613,802 $ 571,635 Property, plant and equipment, net: Land and resource management $ 3,287 $ 3,527 Water services and operations 75,108 75,740 Total consolidated property, plant and equipment, net $ 78,395 $ 79,267 |
Organization and Basis of Pre_2
Organization and Basis of Presentation (Details) a in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021asegment | Dec. 31, 2020 | |
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 | 6.25% | 6.25% |
1/128th nonparticipating perpetual royalty interest | ||
Organization, Consolidation and Presentation of Financial Statements [Line Items] | ||
Nonparticipating perpetual royalty interest rate | 0.78125% | 0.78125% |
1/8th Net Royalty Acres | ||
Organization, Consolidation and Presentation of Financial Statements [Line Items] | ||
Nonparticipating perpetual royalty interest rate | 12.50% | |
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 - Cash and Cash Equivalents (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2020 | Dec. 31, 2019 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 310,655 | $ 281,046 | ||
Tax like-kind exchange escrow | 1,978 | 1,978 | ||
Total cash, cash equivalents and restricted cash shown in the statement of cash flows | $ 312,633 | $ 283,024 | $ 223,743 | $ 303,645 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Revision of Prior Period, Reclassification, Adjustment | |
Reclassification [Line Items] | |
Land sales expenses | $ 12.5 |
Property, Plant and Equipment_2
Property, Plant and Equipment (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment at cost | $ 107,119 | $ 104,422 | |
Less: accumulated depreciation | (28,724) | (25,155) | |
Property, plant and equipment, net | 78,395 | 79,267 | |
Depreciation expense | 3,600 | $ 3,200 | |
Water service-related assets | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment at cost | 100,399 | 97,699 | |
Furniture, fixtures and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment at cost | 6,122 | 6,125 | |
Other | |||
Property, Plant and Equipment [Line Items] | |||
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 | Mar. 31, 2021USD ($)a | Dec. 31, 2020USD ($)a |
Number of Acres | ||
Land (surface rights) (in acres) | a | 823,482 | 823,482 |
Real estate acquired (in acres) | a | 57,041 | 57,041 |
Total real estate situated in Texas (in acres) | a | 880,523 | 880,523 |
Net Book Value | ||
Land (surface rights) | $ | $ 0 | $ 0 |
Real estate acquired | $ | 108,536 | 108,536 |
Total real estate situated in Texas | $ | $ 108,536 | $ 108,536 |
Real Estate Activity (Details)
Real Estate Activity (Details) | 3 Months Ended | |
Mar. 31, 2021USD ($) | Mar. 31, 2020USD ($)a$ / a | |
Real Estate [Abstract] | ||
Proceeds from sale of real estate | $ | $ 0 | $ 900,000 |
Area of real estate property, sold (acre) | a | 30 | |
Average sale price (in dollars per acre) | $ / a | 30,000 | |
Additions | $ | $ 0 | $ 3,900,000 |
Additions (acre) | a | 756 | |
Average purchase price (in dollars per acre) | $ / a | 5,134 |
Royalty Interests (Details)
Royalty Interests (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2021USD ($) | Mar. 31, 2020USD ($)a$ / a | Dec. 31, 2020USD ($) | |
Net Book Value | |||
Royalty interests acquired | $ 46,266 | $ 46,266 | |
Total royalty interests, gross | 46,266 | 46,266 | |
Less: accumulated depletion | (831) | (620) | |
Total royalty interests, net | 45,435 | $ 45,646 | |
Acquisition of royalty interests | $ 0 | $ 16,936 | |
Royalty interest rate | 12.50% | ||
1/16th nonparticipating perpetual royalty interests | |||
Real Estate Properties [Line Items] | |||
Nonparticipating perpetual royalty interest rate | 6.25% | 6.25% | |
Net Book Value | |||
1/16th nonparticipating perpetual royalty interest | $ 0 | $ 0 | |
1/128th nonparticipating perpetual royalty interests | |||
Real Estate Properties [Line Items] | |||
Nonparticipating perpetual royalty interest rate | 0.78125% | 0.78125% | |
Net Book Value | |||
1/128th nonparticipating perpetual royalty interest | $ 0 | $ 0 | |
Additional real estate acquisitions | |||
Net Book Value | |||
Net royalty interests (acre) | a | 1,017 | ||
Acquisition of royalty interests | $ 16,900 | ||
Average price per net royalty acre acquired (in dollars per acre) | $ / a | 16,659 |
Income Taxes - Calculation of E
Income Taxes - Calculation of Effective Tax Rate (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Income before income taxes | $ 62,027 | $ 71,368 |
Income tax expense | $ 11,975 | $ 13,967 |
Effective tax rate | 19.30% | 19.60% |
Changes in Equity - Schedule of
Changes in Equity - Schedule of Stockholders' Equity (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning balance | $ 485,184 | $ 512,137 |
Net income | 50,052 | 57,401 |
Dividends paid | (21,329) | (124,098) |
Conversion of Sub-shares into shares of common stock | 0 | |
Other comprehensive income | 28 | 13 |
Ending balance | $ 513,935 | 445,343 |
Cumulative Effect, Period of Adoption, Adjustment | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning balance | $ (110) | |
Sub-share Certificates | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning balance (in shares) | 7,756,156 | 7,756,156 |
Conversion of Sub-shares into shares of common stock (in shares) | (7,756,156) | |
Ending balance (in shares) | 0 | 7,756,156 |
Common Stock | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning balance (in shares) | 0 | |
Beginning balance | $ 0 | |
Conversion of Sub-shares into shares of common stock (in shares) | 7,756,156 | |
Conversion of Sub-shares into shares of common stock | $ 78 | |
Ending balance (in shares) | 7,756,156 | |
Ending balance | $ 78 | |
Accum. Other Comp. Loss | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning balance | (2,693) | $ (1,461) |
Other comprehensive income | 28 | 13 |
Ending balance | (2,665) | (1,448) |
Retained Earnings | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning balance | 0 | |
Net income | 50,052 | |
Dividends paid | (21,329) | |
Conversion of Sub-shares into shares of common stock | 487,799 | |
Ending balance | 516,522 | |
Net Proceeds from All Sources | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning balance | 487,877 | 513,598 |
Net income | 57,401 | |
Dividends paid | (124,098) | |
Conversion of Sub-shares into shares of common stock | (487,877) | |
Ending balance | $ 0 | 446,791 |
Net Proceeds from All Sources | Cumulative Effect, Period of Adoption, Adjustment | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning balance | $ (110) |
Changes in Equity - Additional
Changes in Equity - Additional Information (Details) - $ / shares | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Jan. 11, 2021 | |
Class of Stock [Line Items] | |||
Cash dividends per Sub-share Certificate (in dollars per share) | $ 2.75 | $ 16 | |
Common stock and sub-share certificates of proprietary interest, par value (in dollars per share) | 0.01 | $ 0.01 | |
Sub shares | |||
Class of Stock [Line Items] | |||
Common stock and sub-share certificates of proprietary interest, par value (in dollars per share) | $ 0.0333 |
Business Segment Reporting (Det
Business Segment Reporting (Details) a in Thousands | Mar. 31, 2021a |
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 | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Segment Reporting Information [Line Items] | ||
Revenues | $ 84,155 | $ 96,594 |
Net income | 50,052 | 57,401 |
Capital expenditures | 2,738 | 3,617 |
Depreciation, depletion and amortization | 3,838 | 3,335 |
Land and resource management | ||
Segment Reporting Information [Line Items] | ||
Revenues | 57,790 | 56,658 |
Net income | 39,513 | 39,118 |
Capital expenditures | 0 | 88 |
Depreciation, depletion and amortization | 494 | 337 |
Water services and operations | ||
Segment Reporting Information [Line Items] | ||
Revenues | 26,365 | 39,936 |
Net income | 10,539 | 18,283 |
Capital expenditures | 2,738 | 3,529 |
Depreciation, depletion and amortization | $ 3,344 | $ 2,998 |
Business Segment Reporting - As
Business Segment Reporting - Assets and Property, Plant, and Equipment, Net (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Segment Reporting Information [Line Items] | ||
Assets | $ 613,802 | $ 571,635 |
Property, plant and equipment, net | 78,395 | 79,267 |
Land and resource management | ||
Segment Reporting Information [Line Items] | ||
Assets | 501,516 | 460,053 |
Property, plant and equipment, net | 3,287 | 3,527 |
Water services and operations | ||
Segment Reporting Information [Line Items] | ||
Assets | 112,286 | 111,582 |
Property, plant and equipment, net | $ 75,108 | $ 75,740 |
Oil and Gas Producing Activit_2
Oil and Gas Producing Activities (Details) | Mar. 31, 2021Boewell | Dec. 31, 2020well | Mar. 31, 2020Boe |
Extractive Industries [Abstract] | |||
Share of oil and gas produced (in barrel) | Boe | 16,400 | 16,500 | |
Number of DUC wells (in wells) | well | 541 | 531 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent event $ / shares in Units, $ in Millions | May 03, 2021USD ($)$ / shares |
Subsequent Event [Line Items] | |
Value of shares authorized to be repurchased | $ | $ 20 |
Dividend declared | |
Subsequent Event [Line Items] | |
Quarterly cash dividend declared (in USD per share) | $ / shares | $ 2.75 |