Texas Pacific Land Trust 10-Q 7 Nov 19 2019 Q3 Quarterly report Financial data

Cover Page

Cover Page - shares	9 Months Ended
	Sep. 30, 2019	Oct. 31, 2019
Cover page.
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2019
Document Transition Report	false
Entity File Number	1-737
Entity Registrant Name	Texas Pacific Land Trust
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
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
Title of 12(b) Security	Sub-shares in Certificates of Proprietary Interest (par value $0.03-1/3 per share)
Trading Symbol	TPL
Security Exchange Name	NYSE
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		7,756,156
Entity Central Index Key	0000097517
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q3
Amendment Flag	false

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
ASSETS
Cash and cash equivalents	$ 249,881	$ 119,647
Accrued receivables	62,803	48,750
Tax like-kind exchange escrow	0	3,799
Other assets	4,766	3,884
Prepaid income taxes	0	9,398
Property, plant and equipment, net of accumulated depreciation of $8,006 and $3,012 as of September 30, 2019 and December 31, 2018, respectively	87,072	64,802
Real estate acquired	84,902	10,492
Royalty interests acquired	29,320	24,303
Operating lease right-of-use assets	3,250
Real estate and royalty interests assigned through the 1888 Declaration of Trust, no value assigned:
Total assets	521,994	285,075
LIABILITIES AND CAPITAL
Accounts payable and accrued expenses	19,553	10,505
Income taxes payable	4,364	1,607
Deferred taxes payable	34,996	14,903
Unearned revenue	16,184	13,369
Operating lease liabilities	3,471
Total liabilities	78,568	40,384
Commitments and contingencies	0	0
Capital:
Certificates of Proprietary Interest, par value $100 each; none outstanding	0	0
Sub-share Certificates in Certificates of Proprietary Interest, par value $0.0333 each; outstanding 7,756,156 and 7,762,414 Sub-share Certificates as of September 30, 2019 and December 31, 2018, respectively	0	0
Accumulated other comprehensive loss	(1,051)	(1,078)
Net proceeds from all sources	444,477	245,769
Total capital	443,426	244,691
Total liabilities and capital	521,994	285,075
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

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2019	Dec. 31, 2018
Property, plant and equipment, accumulated depreciation	$ 8,006	$ 3,012
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	7,762,414
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		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Revenues:
Total revenues	$ 98,530	$ 73,168	$ 377,164	$ 207,019
Expenses:
Salaries and related employee expenses	8,537	4,050	22,742	10,449
Water service-related expenses	5,122	3,707	15,423	7,601
General and administrative expenses	2,864	1,190	7,102	2,882
Legal and professional fees	5,558	556	15,198	1,623
Depreciation and amortization	2,631	706	5,286	1,519
Total operating expenses	24,712	10,209	65,751	24,074
Operating income	73,818	62,959	311,413	182,945
Other income	941	236	1,771	526
Income before income taxes	74,759	63,195	313,184	183,471
Income tax expense (benefit):
Current	9,918	12,433	43,485	36,415
Deferred	4,819	0	20,093	0
Total income tax expense	14,737	12,433	63,578	36,415
Net income	60,022	50,762	249,606	147,056
Other comprehensive income — periodic pension costs, net of income taxes of $2, $3, $7 and $10, respectively	9	13	27	39
Total comprehensive income	$ 60,031	$ 50,775	$ 249,633	$ 147,095
Weighted average number of Sub-share Certificates outstanding	7,756,156	7,786,692	7,756,643	7,797,262
Net income per Sub-share Certificate — basic and diluted	$ 7.74	$ 6.52	$ 32.18	$ 18.86
Cash dividends per Sub-share Certificate (in dollars per share)	$ 0	$ 0	$ 6	$ 4.05
Oil and gas royalties
Revenues:
Total revenues	$ 38,259	$ 31,253	$ 111,113	$ 88,078
Easements and other surface-related income
Revenues:
Total revenues	33,911	22,068	87,635	66,845
Water sales and royalties
Revenues:
Total revenues	21,654	18,178	65,067	47,428
Land sales
Revenues:
Total revenues	4,621	1,543	113,020	4,293
Other operating revenue
Revenues:
Total revenues	$ 85	$ 126	$ 329	$ 375

Condensed Consolidated Statem_2

Condensed Consolidated Statements of Income and Total Comprehensive Income (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Income Statement [Abstract]
Other Comprehensive Income, Tax	$ 2	$ 3	$ 7	$ 10

Condensed Consolidated Statem_3

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Cash flows from operating activities:
Net income	$ 249,606	$ 147,056
Adjustments to reconcile net income to net cash provided by operating activities:
Deferred taxes	20,093	0
Depreciation and amortization	5,286	1,519
Changes in operating assets and liabilities:
Operating assets, excluding income taxes	(18,278)	(28,706)
Prepaid income taxes	9,398	1,202
Operating liabilities, excluding income taxes	15,361	7,555
Income taxes payable	2,757	2,208
Cash provided by operating activities	284,223	130,834
Cash flows from investing activities:
Proceeds from sale of fixed assets	117	25
Acquisition of land	(74,410)	(2,663)
Acquisition of royalty interests	(5,017)	0
Purchase of fixed assets	(27,579)	(40,006)
Cash used in investing activities	(106,889)	(42,644)
Cash flows from financing activities:
Purchase of Sub-share Certificates in Certificates of Proprietary Interest	(4,353)	(25,501)
Dividends paid	(46,546)	(31,652)
Cash used in financing activities	(50,899)	(57,153)
Net increase in cash, cash equivalents, and restricted cash	126,435	31,037
Cash, cash equivalents and restricted cash, beginning of period	123,446	79,580
Cash, cash equivalents, and restricted cash, end of period	249,881	110,617
Supplemental disclosure of cash flow information:
Income taxes paid	$ 31,337	$ 34,251

Organization and Description of

Organization and Description of Business Segments	9 Months Ended
	Sep. 30, 2019
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 “Texas Pacific”, the “Trust”, “our”, “we” or “us”) is one of the largest landowners in the State of Texas with approximately 900,000 acres of land in West Texas. Texas Pacific was organized under a Declaration of Trust, dated February 1, 1888, to receive and hold title to extensive tracts of land in the State of Texas, previously the property of the Texas and Pacific Railway Company, and to issue transferable Certificates of Proprietary Interest pro rata to the original holders of certain debt securities of the Texas and Pacific Railway Company. The Trust is organized to manage land, including royalty interests, for the benefit of its owners. The Trust’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 the Trust and provide a framework for timely and rational allocation of resources within businesses. See Note 9, “Business Segment Reporting” for further information regarding our segments.

Summary of Significant Accounti

Summary of Significant Accounting Policies	9 Months Ended
	Sep. 30, 2019
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	Summary of Significant Accounting Policies Interim Unaudited Financial Information The results for the interim periods shown in this report are not necessarily indicative of future financial results. The accompanying condensed consolidated financial statements include all adjustments necessary to present fairly the financial position of the Trust as of September 30, 2019 and the results of its operations for the three and nine months ended September 30, 2019 and 2018, respectively, and its cash flows for the nine months ended September 30, 2019 and 2018, respectively. Such adjustments are of a normal recurring nature. Principles of Consolidation and 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 include our accounts and the accounts of our wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The accompanying condensed consolidated financial statements should be read in conjunction with the annual financial statements and notes thereto included in the Trust’s Annual Report on Form 10-K for the year ended December 31, 2018, which was filed with the SEC on February 28, 2019. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted from this report. 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 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. Change in Accounting Estimate Management evaluates its estimates on a routine basis. Effective July 1, 2019, the Trust revised the estimated useful lives of certain water service-related assets after its disaggregation of water service-related projects into sub classifications. The Trust 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 four 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 to depreciation expense, net income and earnings per share for the three and nine months ended September 30, 2019 is presented in the table below (in thousands, except earnings per share): Effect on income statement line items due to change in estimated useful lives Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019 Increase in depreciation and amortization expense $ 916 $ 916 Decrease in net income $ (723) $ (723) Decrease in net income per Sub-share Certificate — basic and diluted $ (0.09) $ (0.09) Reclassifications Certain financial information on the condensed consolidated balance sheets as of December 31, 2018 and condensed consolidated statements of income for the three and nine months ended September 30, 2018 has been revised to conform to the current year presentation. These revisions include, but are not limited to, the classification of the tax like-kind exchange escrow from other assets to a separate balance sheet line item and certain expense items from one expense line item to another expense line item. Total assets and expenses were not affected by these reclassifications. 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): September 30, 2019 December 31, 2018 Cash and cash equivalents $ 249,881 $ 119,647 Tax like-kind exchange escrow — 3,799 Total cash, cash equivalents and restricted cash shown in the statement of cash flows $ 249,881 $ 123,446 Recently Adopted Accounting Guidance Leases In February 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, “ Leases (Topic 842) ” which amended the existing lease accounting guidance to require lessees to recognize a right of use asset and lease liability on the balance sheet for all leases with terms greater than twelve months. We adopted the new leasing standard and all related amendments on January 1, 2019. We elected the optional transition method provided by ASU No. 2018-11, “ Leases (Topic 842): Targeted Improvements ” and as a result, have not restated our condensed consolidated financial statements for prior periods presented. We also elected the practical expedients permitted under the transition guidance that retain the lease classification and initial direct costs for any leases that existed prior to adoption of the standard. In addition, we have not reassessed the accounting treatment of contracts entered into prior to adoption of the new lease guidance. As of September 30, 2019, we have recorded right-of-use assets of $3.3 million and lease liabilities for $3.5 million 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 three and nine months ended September 30, 2019 was $0.2 million and $0.4 million, respectively. Future minimum lease payments under these operating leases are as follows as of September 30, 2019 (in thousands): 2019 (excluding the nine months ended September 30) $ 144 2020 696 2021 796 2022 697 2023 537 Thereafter 1,067 Total lease payments 3,937 Less: imputed interest (466) Total operating lease liabilities $ 3,471 Implementation Costs Incurred in Cloud Computing Arrangements In August 2018, the FASB issued ASU 2018-15, “Intangibles — Goodwill and Other — Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract.”

Recent Accounting Pronouncement

Recent Accounting Pronouncements	9 Months Ended
	Sep. 30, 2019
Accounting Changes and Error Corrections [Abstract]
Recent Accounting Pronouncements	Recent Accounting Pronouncements 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 ASU is effective for fiscal years ending after December 15, 2020. Early adoption is permitted. The Trust is currently evaluating the impact that ASU 2018-14 will have on our consolidated financial statements and disclosures.

Property, Plant and Equipment

Property, Plant and Equipment	9 Months Ended
	Sep. 30, 2019
Property, Plant and Equipment [Abstract]
Property, Plant and Equipment	Property, Plant and Equipment Property, plant and equipment, net consisted of the following as of September 30, 2019 and December 31, 2018 (in thousands): September 30, 2019 December 31, 2018 Property, plant and equipment: Water service-related assets (1) $ 88,625 $ 62,919 Furniture, fixtures and equipment 5,855 4,297 Other 598 598 Property, plant and equipment at cost 95,078 67,814 Less: accumulated depreciation (8,006) (3,012) Property, plant and equipment, net $ 87,072 $ 64,802 (1) Water service-related assets reflect assets related to water sourcing and water treatment projects. Depreciation expense was $2.6 million and $0.7 million for the three months ended September 30, 2019 and 2018, respectively. Depreciation expense was $5.2 million and $1.5 million for the nine months ended September 30, 2019 and 2018, respectively.

Real Estate Activity

Real Estate Activity	9 Months Ended
	Sep. 30, 2019
Real Estate [Abstract]
Real Estate Activity	Real Estate Activity As of September 30, 2019 and December 31, 2018, the Trust owned the following land and real estate (in thousands, except number of acres): September 30, 2019 December 31, 2018 Number of Acres Net Book Value Number of Acres Net Book Value Land (surface rights) 855,476 $ — 877,462 $ — Real estate acquired 46,386 84,902 24,715 10,492 Total real estate situated in 19 counties in Texas 901,862 $ 84,902 902,177 $ 10,492 No valuation allowance was necessary at September 30, 2019 and December 31, 2018. Land Sales For the nine months ended September 30, 2019, the Trust sold approximately 21,986 acres (13,180 acres in Loving County, 5,675 acres in Culberson County, 1,651 acres in Hudspeth County, 843 acres in Reeves County, 636 acres in Midland County and approximately 1 acre in Glasscock County) of land in Texas for an aggregate sales price of approximately $113.0 million, with an average of approximately $5,141 per acre. For the nine months ended September 30, 2018, the Trust sold approximately 167 acres (80 acres in Culberson County, 40 acres in Loving County, 32 in Reeves County and 15 in El Paso County) of land in Texas for an aggregate sales price of approximately $4.3 million, with an average of approximately $25,734 per acre. Land Acquisitions For the nine months ended September 30, 2019, the Trust acquired approximately 21,671 acres (Culberson, Glasscock, Loving and Reeves Counties) of land in Texas for an aggregate purchase price of approximately $74.4 million, with an average of approximately $3,434 per acre. For the nine months ended September 30, 2018, the Trust acquired approximately 2,884 acres (Mitchell and Upton Counties) of land in Texas for an aggregate purchase price of approximately $2.7 million, with an average of approximately $924 per acre.

Royalty Interests

Royalty Interests	9 Months Ended
	Sep. 30, 2019
Real Estate [Abstract]
Royalty Interests	Royalty Interests As of September 30, 2019 and December 31, 2018, the Trust owned the following oil and gas royalty interests (in thousands, except number of interests): Net Book Value September 30, 2019 December 31, 2018 1/16th nonparticipating perpetual royalty interests $ — $ — 1/128th nonparticipating perpetual royalty interests — — Royalty interests acquired 29,320 24,303 Total royalty interests $ 29,320 $ 24,303 No valuation allowance was necessary at September 30, 2019 and December 31, 2018. For the nine months ended September 30, 2019, the Trust acquired oil and gas royalty interests in approximately 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. There were no oil and gas royalty interest transactions for the nine months ended September 30, 2018.

Income Taxes

Income Taxes	9 Months Ended
	Sep. 30, 2019
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes Effective January 1, 2018, the statutory Federal income tax rate for the Trust decreased from 35% to 21%. The Trust’s effective Federal income tax rate is less than the 21% statutory rate because taxable income is reduced by statutory percentage depletion allowed on mineral royalty income. The Trust structured the $100.0 million land sale consummated in January 2019 as a §1031 exchange for federal income tax purposes and recognized temporary tax basis differences related to acquisition of property, plant and equipment for the three and nine months ended September 30, 2019. As a result, the current federal income tax liability and expense were each reduced by approximately $20.1 million during the nine months ended September 30, 2019, while the deferred federal income tax liability and expense increased by the same amount.

Capital

Capital	9 Months Ended
	Sep. 30, 2019
Equity [Abstract]
Capital	Capital The Sub-share Certificates (“Sub-shares”) and the Certificates of Proprietary Interest are freely interchangeable in the ratio of one Certificate of Proprietary Interest for 3,000 Sub-shares or 3,000 Sub-shares for one Certificate of Proprietary Interest. Dividends On March 15, 2019, we paid $46.5 million in dividends representing a regular cash dividend of $1.75 per Sub-share and a special dividend of $4.25 per Sub-share for sub-shareholders of record at the close of business on March 8, 2019. On March 16, 2018, we paid $31.7 million in dividends representing a regular cash dividend of $1.05 per Sub-share and a special dividend of $3.00 per Sub-share for sub-shareholders of record at the close of business on March 9, 2018. Repurchases of Sub-shares During the nine months ended September 30, 2019, we purchased and retired 6,258 Sub-shares. During the nine months ended September 30, 2018, we purchased and retired 39,768 Sub-shares.

Business Segment Reporting

Business Segment Reporting	9 Months Ended
	Sep. 30, 2019
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 strategies and objectives of the Trust 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 approximately 900,000 acres of land and related resources in West Texas owned by the Trust. 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 consist of revenue generated from direct sales of sourced and treated water as well as revenues from royalties on water service-related activity. Segment financial results were as follows for the three and nine months ended September 30, 2019 and 2018 (in thousands): Three Months Ended Nine Months Ended 2019 2018 2019 2018 Revenues: Land and resource management $ 65,076 $ 47,513 $ 284,223 $ 142,642 Water services and operations 33,454 25,655 92,941 64,377 Total consolidated revenues $ 98,530 $ 73,168 $ 377,164 $ 207,019 Net income: Land and resource management $ 43,911 $ 36,385 $ 204,222 $ 109,700 Water services and operations 16,111 14,377 45,384 37,356 Total consolidated net income $ 60,022 $ 50,762 $ 249,606 $ 147,056 Capital expenditures: Land and resource management $ 29 $ 909 $ 1,445 $ 2,464 Water services and operations 4,949 7,533 26,134 37,542 Total capital expenditures $ 4,978 $ 8,442 $ 27,579 $ 40,006 Depreciation and amortization: Land and resource management $ 257 $ 160 $ 695 $ 330 Water services and operations 2,374 546 4,591 1,189 Total depreciation and amortization $ 2,631 $ 706 $ 5,286 $ 1,519 The following table presents total assets and property, plant and equipment, net by segment as of September 30, 2019 and December 31, 2018 (in thousands): September 30, 2019 December 31, 2018 Assets: Land and resource management $ 398,120 $ 198,922 Water services and operations 123,874 86,153 Total consolidated assets $ 521,994 $ 285,075 Property, plant and equipment, net: Land and resource management $ 4,470 $ 3,720 Water services and operations 82,602 61,082 Total consolidated property, plant and equipment, net $ 87,072 $ 64,802

Oil and Gas Producing Activitie

Oil and Gas Producing Activities	9 Months Ended
	Sep. 30, 2019
Extractive Industries [Abstract]
Oil and Gas Producing Activities	Oil and Gas Producing ActivitiesThere are a number of oil and gas wells that have been drilled but are not yet completed (“DUC”) where the Trust has a royalty interest. As of September 30, 2019, the Trust has identified 424 DUC wells subject to our royalty interest. Beginning in the third quarter of 2019, we implemented a new methodology to quantify the number of DUC wells. We changed the measurement period for determining a DUC well from waiting a minimum of 120 days to all wells awaiting completion. Additionally, we began using uniform drilling spacing units with pooled interests which yields a higher number of DUC wells at a lower net royalty interest. For comparative purposes, the table below presents the number of DUC wells by quarter for current and prior periods utilizing the new methodology discussed above: Number of DUC wells September 30, 2019 424 June 30, 2019 369 March 31, 2019 376 December 31, 2018 362 September 30, 2018 341 June 30, 2018 364 March 31, 2018 347 December 31, 2017 319

Subsequent Events

Subsequent Events	9 Months Ended
	Sep. 30, 2019
Subsequent Events [Abstract]
Subsequent Events	Subsequent EventsWe evaluate events that occur after the balance sheet date but before consolidated financial statements are, or are available to be issued to determine if a material event requires our amending the consolidated financial statements or disclosing the event. We evaluated subsequent events through the filing date we issued these consolidated financial statements and did not identify any subsequent events requiring disclosure.

Summary of Significant Accoun_2

Summary of Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 30, 2019
Accounting Policies [Abstract]
Principals of Consolidation and Basis of Presentation	Principles of Consolidation and 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 include our accounts and the accounts of our wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The accompanying condensed consolidated financial statements should be read in conjunction with the annual financial statements and notes thereto included in the Trust’s Annual Report on Form 10-K for the year ended December 31, 2018, which was filed with the SEC on February 28, 2019. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted from this report.
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 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. Change in Accounting Estimate
Reclassifications	Reclassifications Certain financial information on the condensed consolidated balance sheets as of December 31, 2018 and condensed consolidated statements of income for the three and nine months ended September 30, 2018 has been revised to conform to the current year presentation. These revisions include, but are not limited to, the classification of the tax like-kind exchange escrow from other assets to a separate balance sheet line item and certain expense items from one expense line item to another expense line item. Total assets and expenses were not affected by these reclassifications.
Leases	Leases In February 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, “ Leases (Topic 842) ” which amended the existing lease accounting guidance to require lessees to recognize a right of use asset and lease liability on the balance sheet for all leases with terms greater than twelve months. We adopted the new leasing standard and all related amendments on January 1, 2019. We elected the optional transition method provided by ASU No. 2018-11, “ Leases (Topic 842): Targeted Improvements ” and as a result, have not restated our condensed consolidated financial statements for prior periods presented. We also elected the practical expedients permitted under the transition guidance that retain the lease classification and initial direct costs for any leases that existed prior to adoption of the standard. In addition, we have not reassessed the accounting treatment of contracts entered into prior to adoption of the new lease guidance.
Recently Accounting Pronouncements	Recent Accounting Pronouncements 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
Implementation Costs Incurred In Cloud Computing Arrangements	Implementation Costs Incurred in Cloud Computing Arrangements In August 2018, the FASB issued ASU 2018-15, “Intangibles — Goodwill and Other — Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract.”

Summary of Significant Accoun_3

Summary of Significant Accounting Policies (Tables)	9 Months Ended
	Sep. 30, 2019
Accounting Policies [Abstract]
Change in Accounting Estimate	The effect of the change in estimated useful lives to depreciation expense, net income and earnings per share for the three and nine months ended September 30, 2019 is presented in the table below (in thousands, except earnings per share): Effect on income statement line items due to change in estimated useful lives Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019 Increase in depreciation and amortization expense $ 916 $ 916 Decrease in net income $ (723) $ (723) Decrease in net income per Sub-share Certificate — basic and diluted $ (0.09) $ (0.09)
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): September 30, 2019 December 31, 2018 Cash and cash equivalents $ 249,881 $ 119,647 Tax like-kind exchange escrow — 3,799 Total cash, cash equivalents and restricted cash shown in the statement of cash flows $ 249,881 $ 123,446
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): September 30, 2019 December 31, 2018 Cash and cash equivalents $ 249,881 $ 119,647 Tax like-kind exchange escrow — 3,799 Total cash, cash equivalents and restricted cash shown in the statement of cash flows $ 249,881 $ 123,446
Future Minimum Lease Payments	Future minimum lease payments under these operating leases are as follows as of September 30, 2019 (in thousands): 2019 (excluding the nine months ended September 30) $ 144 2020 696 2021 796 2022 697 2023 537 Thereafter 1,067 Total lease payments 3,937 Less: imputed interest (466) Total operating lease liabilities $ 3,471

Property, Plant and Equipment (

Property, Plant and Equipment (Tables)	9 Months Ended
	Sep. 30, 2019
Property, Plant and Equipment [Abstract]
Property, Plant and Equipment	Property, plant and equipment, net consisted of the following as of September 30, 2019 and December 31, 2018 (in thousands): September 30, 2019 December 31, 2018 Property, plant and equipment: Water service-related assets (1) $ 88,625 $ 62,919 Furniture, fixtures and equipment 5,855 4,297 Other 598 598 Property, plant and equipment at cost 95,078 67,814 Less: accumulated depreciation (8,006) (3,012) Property, plant and equipment, net $ 87,072 $ 64,802 (1) Water service-related assets reflect assets related to water sourcing and water treatment projects.

Real Estate Activity (Tables)

Real Estate Activity (Tables)	9 Months Ended
	Sep. 30, 2019
Real Estate [Abstract]
Schedule of Real Estate Properties	As of September 30, 2019 and December 31, 2018, the Trust owned the following land and real estate (in thousands, except number of acres): September 30, 2019 December 31, 2018 Number of Acres Net Book Value Number of Acres Net Book Value Land (surface rights) 855,476 $ — 877,462 $ — Real estate acquired 46,386 84,902 24,715 10,492 Total real estate situated in 19 counties in Texas 901,862 $ 84,902 902,177 $ 10,492

Royalty Interests (Tables)

Royalty Interests (Tables)	9 Months Ended
	Sep. 30, 2019
Real Estate [Abstract]
Schedule of Royalty Interests	As of September 30, 2019 and December 31, 2018, the Trust owned the following oil and gas royalty interests (in thousands, except number of interests): Net Book Value September 30, 2019 December 31, 2018 1/16th nonparticipating perpetual royalty interests $ — $ — 1/128th nonparticipating perpetual royalty interests — — Royalty interests acquired 29,320 24,303 Total royalty interests $ 29,320 $ 24,303

Business Segment Reporting (Tab

Business Segment Reporting (Tables)	9 Months Ended
	Sep. 30, 2019
Segment Reporting [Abstract]
Schedule of Segment Financial Results	Segment financial results were as follows for the three and nine months ended September 30, 2019 and 2018 (in thousands): Three Months Ended Nine Months Ended 2019 2018 2019 2018 Revenues: Land and resource management $ 65,076 $ 47,513 $ 284,223 $ 142,642 Water services and operations 33,454 25,655 92,941 64,377 Total consolidated revenues $ 98,530 $ 73,168 $ 377,164 $ 207,019 Net income: Land and resource management $ 43,911 $ 36,385 $ 204,222 $ 109,700 Water services and operations 16,111 14,377 45,384 37,356 Total consolidated net income $ 60,022 $ 50,762 $ 249,606 $ 147,056 Capital expenditures: Land and resource management $ 29 $ 909 $ 1,445 $ 2,464 Water services and operations 4,949 7,533 26,134 37,542 Total capital expenditures $ 4,978 $ 8,442 $ 27,579 $ 40,006 Depreciation and amortization: Land and resource management $ 257 $ 160 $ 695 $ 330 Water services and operations 2,374 546 4,591 1,189 Total depreciation and amortization $ 2,631 $ 706 $ 5,286 $ 1,519
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 September 30, 2019 and December 31, 2018 (in thousands): September 30, 2019 December 31, 2018 Assets: Land and resource management $ 398,120 $ 198,922 Water services and operations 123,874 86,153 Total consolidated assets $ 521,994 $ 285,075 Property, plant and equipment, net: Land and resource management $ 4,470 $ 3,720 Water services and operations 82,602 61,082 Total consolidated property, plant and equipment, net $ 87,072 $ 64,802

Oil and Gas Producing Activit_2

Oil and Gas Producing Activities (Tables)	9 Months Ended
	Sep. 30, 2019
Extractive Industries [Abstract]
Schedule Of Number of DUC Wells	For comparative purposes, the table below presents the number of DUC wells by quarter for current and prior periods utilizing the new methodology discussed above: Number of DUC wells September 30, 2019 424 June 30, 2019 369 March 31, 2019 376 December 31, 2018 362 September 30, 2018 341 June 30, 2018 364 March 31, 2018 347 December 31, 2017 319

Organization and Description _2

Organization and Description of Business Segments (Details)	9 Months Ended
	Sep. 30, 2019asegment
Organization, Consolidation and Presentation of Financial Statements [Line Items]
Number of operating segments | segment	2
West Texas
Organization, Consolidation and Presentation of Financial Statements [Line Items]
Area of land (in acres) | a	900,000

Summary of Significant Accoun_4

Summary of Significant Accounting Policies- Summary Of Changes in Accounting Estimates (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Finite-Lived Intangible Assets [Line Items]
Depreciation and amortization	$ 2,631	$ 706	$ 5,286	$ 1,519
Net income	$ 60,022	$ 50,762	$ 249,606	$ 147,056
Net income per Sub-share Certificate — basic and diluted	$ 7.74	$ 6.52	$ 32.18	$ 18.86
Minimum | Water service-related assets
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible asset, useful life	4 years
Maximum | Water service-related assets
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible asset, useful life	15 years
Service Life
Finite-Lived Intangible Assets [Line Items]
Depreciation and amortization	$ 916		$ 916
Net income	$ (723)		$ (723)
Net income per Sub-share Certificate — basic and diluted	$ (0.09)		$ (0.09)

Summary of Significant Accoun_5

Summary of Significant Accounting Policies - Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018	Sep. 30, 2018	Dec. 31, 2017
Accounting Policies [Abstract]
Cash and cash equivalents	$ 249,881	$ 119,647
Tax like-kind exchange escrow	0	3,799
Total cash, cash equivalents and restricted cash shown in the statement of cash flows	$ 249,881	$ 123,446	$ 110,617	$ 79,580

Summary of Significant Accoun_6

Summary of Significant Accounting Policies - Narrative (Details) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2019USD ($)	Sep. 30, 2019USD ($)
Accounting Policies [Abstract]
Operating lease right-of-use assets	$ 3,250	$ 3,250
Operating lease liabilities	3,471	3,471
Operating lease expense	$ 200	$ 400

Summary of Significant Accoun_7

Summary of Significant Accounting Policies - Future Minimum Lease Payments (Details) $ in Thousands	Sep. 30, 2019USD ($)
Accounting Policies [Abstract]
2019 (excluding the nine months ended September 30)	$ 144
2020	696
2021	796
2022	697
2023	537
Thereafter	1,067
Total lease payments	3,937
Less: imputed interest	(466)
Total operating lease liabilities	$ 3,471

Property, Plant and Equipment_2

Property, Plant and Equipment (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Property, Plant and Equipment [Line Items]
Property, plant and equipment at cost	$ 95,078		$ 95,078		$ 67,814
Less: accumulated depreciation	(8,006)		(8,006)		(3,012)
Property, plant and equipment, net	87,072		87,072		64,802
Depreciation expense	2,600	$ 700	5,200	$ 1,500
Water service-related assets
Property, Plant and Equipment [Line Items]
Property, plant and equipment at cost	88,625		88,625		62,919
Furniture, fixtures and equipment
Property, Plant and Equipment [Line Items]
Property, plant and equipment at cost	5,855		5,855		4,297
Other
Property, Plant and Equipment [Line Items]
Property, plant and equipment at cost	$ 598		$ 598		$ 598

Real Estate Activity - Schedule

Real Estate Activity - Schedule of Land and Real Estate Ownership (Details) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2019USD ($)acounty	Dec. 31, 2018USD ($)acounty
Number of Acres
Land (surface rights) (in acres) | a	855,476	877,462
Real estate acquired (in acres) | a	46,386	24,715
Total real estate situated in 19 counties in Texas (in acres) | a	901,862	902,177
Net Book Value
Land (surface rights) | $	$ 0	$ 0
Real estate acquired | $	84,902	10,492
Total real estate situated in 19 counties in Texas | $	$ 84,902	$ 10,492
Number of counties with real estate in Texas | county	19	19

Real Estate Activity (Details)

Real Estate Activity (Details) $ in Millions	1 Months Ended	9 Months Ended
	Jan. 31, 2019USD ($)	Sep. 30, 2019USD ($)a$ / a	Sep. 30, 2018USD ($)a$ / a
Real Estate Properties [Line Items]
Area of real estate property, sold (acre)		21,986	167
Proceeds from sale of real estate | $	$ 100	$ 113	$ 4.3
Average sale price (in dollars per acre) | $ / a		5,141	25,734
Additions | $		$ 74.4	$ 2.7
Average purchase price (in dollars per acre) | $ / a		3,434	924
Loving county
Real Estate Properties [Line Items]
Area of real estate property, sold (acre)		13,180	40
Culberson county
Real Estate Properties [Line Items]
Area of real estate property, sold (acre)		5,675	80
Hudspeth county
Real Estate Properties [Line Items]
Area of real estate property, sold (acre)		1,651
Reeves county
Real Estate Properties [Line Items]
Area of real estate property, sold (acre)		843	32
El paso county
Real Estate Properties [Line Items]
Area of real estate property, sold (acre)			15
Midland County
Real Estate Properties [Line Items]
Area of real estate property, sold (acre)		636
Glasscock County
Real Estate Properties [Line Items]
Area of real estate property, sold (acre)		1
Culberson, Glasscock, Loving and Reeves Counties
Real Estate Properties [Line Items]
Additions (acre)		21,671
Mitchell and Uptown County
Real Estate Properties [Line Items]
Additions (acre)			2,884

Royalty Interests (Details)

Royalty Interests (Details) $ in Thousands	9 Months Ended		12 Months Ended
	Sep. 30, 2019USD ($)a$ / a	Sep. 30, 2018USD ($)	Dec. 31, 2018USD ($)
Net Book Value
Royalty interests acquired	$ 29,320		$ 24,303
Total royalty interests	29,320		$ 24,303
Acquisition of royalty interests	$ 5,017	$ 0
1/16th Nonparticipating Perpetual Royalty Interest
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 Interest
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	1,247
Acquisition of royalty interests	$ 4,700
Average price per net royalty acre acquired (in dollars per acre) | $ / a	3,800

Income Taxes - Narrative (Detai

Income Taxes - Narrative (Details) - USD ($) $ in Millions	1 Months Ended	9 Months Ended
	Jan. 31, 2019	Sep. 30, 2019	Sep. 30, 2018
Income Tax Disclosure [Abstract]
Land sale	$ 100	$ 113	$ 4.3
Current federal income tax liability reduction		20.1
Current federal income tax expense reduction		20.1
Deferred federal income tax liability increase		20.1
Deferred federal income tax expense increase		$ 20.1

Capital (Details)

Capital (Details) $ / shares in Units, $ in Millions	Mar. 15, 2019USD ($)$ / shares	Mar. 16, 2018USD ($)$ / shares	Sep. 30, 2019$ / shares	Sep. 30, 2018$ / shares	Sep. 30, 2019$ / sharesshares	Sep. 30, 2018$ / sharesshares
Class of Stock [Line Items]
Payments of dividends | $	$ 46.5	$ 31.7
Dividend paid per sub-share (in dollars per share)			$ 0	$ 0	$ 6	$ 4.05
Sub Shares
Class of Stock [Line Items]
Ratio of certificates to sub-shares					0.00033333
Number of shares repurchased and retired (in shares) | shares					6,258	39,768
Cash Dividend | Sub Shares
Class of Stock [Line Items]
Dividend paid per sub-share (in dollars per share)	$ 1.75	$ 1.05
Special Dividend | Sub Shares
Class of Stock [Line Items]
Dividend paid per sub-share (in dollars per share)	$ 4.25	$ 3

Business Segment Reporting (Det

Business Segment Reporting (Details)	Sep. 30, 2019a
West Texas
Segment Reporting Information [Line Items]
Area of land (in acres)	900,000

Business Segment Reporting - Fi

Business Segment Reporting - Financial Results (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Segment Reporting Information [Line Items]
Revenues	$ 98,530	$ 73,168	$ 377,164	$ 207,019
Net income	60,022	50,762	249,606	147,056
Capital expenditures	4,978	8,442	27,579	40,006
Depreciation and amortization	2,631	706	5,286	1,519
Land and resource management
Segment Reporting Information [Line Items]
Revenues	65,076	47,513	284,223	142,642
Net income	43,911	36,385	204,222	109,700
Capital expenditures	29	909	1,445	2,464
Depreciation and amortization	257	160	695	330
Water services and operations
Segment Reporting Information [Line Items]
Revenues	33,454	25,655	92,941	64,377
Net income	16,111	14,377	45,384	37,356
Capital expenditures	4,949	7,533	26,134	37,542
Depreciation and amortization	$ 2,374	$ 546	$ 4,591	$ 1,189

Business Segment Reporting - As

Business Segment Reporting - Assets and Property, Plant, and Equipment, Net (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Segment Reporting Information [Line Items]
Assets	$ 521,994	$ 285,075
Property, plant and equipment, net	87,072	64,802
Land and resource management
Segment Reporting Information [Line Items]
Assets	398,120	198,922
Property, plant and equipment, net	4,470	3,720
Water services and operations
Segment Reporting Information [Line Items]
Assets	123,874	86,153
Property, plant and equipment, net	$ 82,602	$ 61,082

Oil and Gas Producing Activit_3

Oil and Gas Producing Activities (Details) - well	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017
Extractive Industries [Abstract]
Number of DUC wells	424	369	376	362	341	364	347	319