Texas Pacific Land Trust 10-Q 7 May 20 2020 Q1 Quarterly report Financial data

Cover Page

Cover Page - shares	3 Months Ended
	Mar. 31, 2020	Apr. 30, 2020
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2020
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	2020
Document Fiscal Period Focus	Q1
Amendment Flag	false

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
ASSETS
Cash and cash equivalents	$ 223,743	$ 303,645
Accrued receivables, net	68,679	62,995
Other assets	3,676	3,980
Property, plant and equipment, net of accumulated depreciation of $14,544 and $11,313 as of March 31, 2020 and December 31, 2019, respectively	88,709	88,323
Real estate acquired	110,965	107,075
Royalty interests acquired, net of accumulated depletion of $318 and $260 as of March 31, 2020 and December 31, 2019, respectively	45,938	29,060
Operating lease right-of-use assets	2,939	3,098
Real estate and royalty interests assigned through the 1888 Declaration of Trust, no value assigned:
Total assets	544,649	598,176
LIABILITIES AND CAPITAL
Accounts payable and accrued expenses	21,139	19,193
Income taxes payable	14,697	5,271
Deferred taxes payable	40,772	40,827
Unearned revenue	19,448	17,381
Operating lease liabilities	3,250	3,367
Total liabilities	99,306	86,039
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 Sub-share Certificates as of March 31, 2020 and December 31, 2019	0	0
Accumulated other comprehensive loss	(1,447)	(1,461)
Net proceeds from all sources	446,790	513,598
Total capital	445,343	512,137
Total liabilities and capital	544,649	598,176
Land (surface rights)
Real estate and royalty interests assigned through the 1888 Declaration of Trust, no value assigned:
Land (surface rights)	0	0
1/16th nonparticipating perpetual royalty interest
Real estate and royalty interests assigned through the 1888 Declaration of Trust, no value assigned:
1/16th nonparticipating perpetual royalty interest	0	0
1/128th nonparticipating perpetual royalty interest
Real estate and royalty interests assigned through the 1888 Declaration of Trust, no value assigned:
1/128th nonparticipating perpetual royalty interest	$ 0	$ 0

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2020	Dec. 31, 2019
Property, plant and equipment, accumulated depreciation	$ 14,544	$ 11,313
Less: accumulated depletion	$ 318	$ 260
Certificates of proprietary interest, par value (in dollars per share)	$ 100	$ 100
Certificates of proprietary interest, outstanding (in shares)	0	0
Sub-share certificates of proprietary interest, par value (in dollars per share)	$ 0.0333	$ 0.0333
Sub-share certificates of proprietary interest, outstanding (in shares)	7,756,156	7,756,156
1/16th nonparticipating perpetual royalty interest
Nonparticipating perpetual royalty interest rate	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, 2020	Mar. 31, 2019
Revenues:
Total revenues	$ 96,594	$ 191,324
Expenses:
Salaries and related employee expenses	10,620	6,464
Water service-related expenses	6,780	4,578
General and administrative expenses	2,959	2,142
Legal and professional fees	2,358	1,783
Depreciation, depletion and amortization	3,335	1,204
Total operating expenses	26,052	16,171
Operating income	70,542	175,153
Other income	826	393
Income before income taxes	71,368	175,546
Income tax expense (benefit):
Current	14,022	14,548
Deferred	(55)	21,000
Total income tax expense	13,967	35,548
Net income	57,401	139,998
Other comprehensive income — periodic pension costs, net of income taxes of $4 and $2, respectively	13	9
Total comprehensive income	$ 57,414	$ 140,007
Weighted average number of Sub-share Certificates outstanding (in shares)	7,756,156	7,759,808
Net income per Sub-share Certificate — basic and diluted (in dollars per share)	$ 7.40	$ 18.04
Cash dividends per Sub-share Certificate (in dollars per share)	$ 16	$ 6
Oil and gas royalties
Revenues:
Total revenues	$ 42,360	$ 33,213
Easements and other surface-related income
Revenues:
Total revenues	26,267	31,367
Water sales and royalties
Revenues:
Total revenues	26,967	22,983
Land sales
Revenues:
Total revenues	900	103,625
Other operating revenue
Revenues:
Total revenues	$ 100	$ 136

Condensed Consolidated Statem_2

Condensed Consolidated Statements of Income and Total Comprehensive Income (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Income Statement [Abstract]
Other comprehensive income - periodic pension costs	$ (4)	$ (2)

Condensed Consolidated Statem_3

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Cash flows from operating activities:
Net income	$ 57,401	$ 139,998
Adjustments to reconcile net income to net cash provided by operating activities:
Deferred taxes	(55)	21,000
Depreciation, depletion and amortization	3,335	1,204
Changes in operating assets and liabilities:
Operating assets, excluding income taxes	(5,377)	(19,331)
Prepaid income taxes	0	9,398
Operating liabilities, excluding income taxes	3,909	4,579
Income taxes payable	9,426	5,153
Cash provided by operating activities	68,639	162,001
Cash flows from investing activities:
Proceeds from sale of fixed assets	0	30
Acquisition of land	(3,890)	(47,189)
Acquisition of royalty interests	(16,936)	(3,418)
Purchase of fixed assets	(3,617)	(9,247)
Cash used in investing activities	(24,443)	(59,824)
Cash flows from financing activities:
Purchase of Sub-share Certificates in Certificates of Proprietary Interest	0	(4,353)
Dividends paid	(124,098)	(46,546)
Cash used in financing activities	(124,098)	(50,899)
Net (decrease) increase in cash, cash equivalents and restricted cash	(79,902)	51,278
Cash, cash equivalents and restricted cash, beginning of period	303,645	123,446
Cash, cash equivalents, and restricted cash, end of period	223,743	174,724
Supplemental disclosure of cash flow information:
Income taxes paid	4,600	0
Supplemental non-cash investing information:
Operating lease right-of-use assets	$ 0	$ 3,712

Organization and Description of

Organization and Description of Business Segments	3 Months Ended
	Mar. 31, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Organization and Description of Business Segments	Organization and Description of Business Segments Texas Pacific Land Trust (which, together with its subsidiaries as the context requires, may be referred to as “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. Corporate Reorganization On March 23, 2020, we announced that our Trustees approved a plan for reorganizing the Trust from its current structure to a corporation formed under the laws of the State of Delaware. The Trustees made their determination following careful consideration of the recommendation of the Conversion Exploration Committee of the Trust. The Trust presently intends that the corporate reorganization will be effected by the end of the third quarter of 2020, but the Trust recognizes that unforeseen impacts of COVID-19 or other developments could extend this timeframe despite the Trust’s efforts. Barring any unforeseen disruptions, further information regarding the corporate reorganization will be included in a registration statement on Form 10 to be filed by the corporation with the SEC as well as in other communications and disclosures anticipated to be made by the Trust and the corporation.

Summary of Significant Accounti

Summary of Significant Accounting Policies	3 Months Ended
	Mar. 31, 2020
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 March 31, 2020 and the results of its operations for the three months ended March 31, 2020 and 2019, respectively, and its cash flows for the three months ended March 31, 2020 and 2019, 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 consolidated 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, 2019, which was filed with the SEC on February 27, 2020. 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. Recently Adopted Accounting Guidance In June 2016, the FASB issued ASU 2016-13, “ Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” The ASU amends the impairment model by requiring entities to use a forward-looking approach based on expected losses to estimate credit losses on certain types of financial instruments, including trade receivables. The Trust adopted the guidance effective January 1, 2020. Due to the short-term nature of our trade accounts receivable, the adoption of this guidance had a minimal impact on our consolidated financial statements.

Recent Accounting Pronouncement

Recent Accounting Pronouncements	3 Months Ended
	Mar. 31, 2020
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. In December 2019, the FASB issued ASU 2019-12, “ Income Taxes (Topic 740) — Simplifying the Accounting for Income Taxes.” The ASU simplifies the accounting for income taxes by eliminating certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period, hybrid taxes and the recognition of deferred tax liabilities for outside basis differences. It also clarifies and simplifies other aspects of the accounting for income taxes. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. Early adoption is permitted in interim or annual periods with any adjustments reflected as of the beginning of the annual period that includes that interim period. The Trust is currently evaluating the impact that this guidance will have on our consolidated financial statements and disclosures.

Property, Plant and Equipment

Property, Plant and Equipment	3 Months Ended
	Mar. 31, 2020
Property, Plant and Equipment [Abstract]
Property, Plant and Equipment	Property, Plant and Equipment Property, plant and equipment, net consisted of the following as of March 31, 2020 and December 31, 2019 (in thousands): March 31, 2020 December 31, 2019 Property, plant and equipment: Water service-related assets (1) $ 96,600 $ 93,097 Furniture, fixtures and equipment 6,055 5,941 Other 598 598 Property, plant and equipment at cost 103,253 99,636 Less: accumulated depreciation (14,544) (11,313) Property, plant and equipment, net $ 88,709 $ 88,323 (1) Water service-related assets reflect assets related to water sourcing and water treatment projects. Depreciation expense was $3.2 million and $1.2 million for the three months ended March 31, 2020 and 2019, respectively.

Real Estate Activity

Real Estate Activity	3 Months Ended
	Mar. 31, 2020
Real Estate [Abstract]
Real Estate Activity	Real Estate Activity As of March 31, 2020 and December 31, 2019, the Trust 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) 849,826 $ — 849,856 $ — Real estate acquired 52,687 110,965 51,931 107,075 Total real estate situated in 19 counties in Texas 902,513 $ 110,965 901,787 $ 107,075 No valuation allowance was necessary at March 31, 2020 and December 31, 2019. Land Sales For the three months ended March 31, 2020, the Trust sold approximately 30 acres (Pecos County) of land in Texas for an aggregate sales price of approximately $0.9 million, an average of approximately $30,000 per acre. For the three months ended March 31, 2019, the Trust sold approximately 21,251 acres (Loving, Culberson, Hudspeth and Reeves Counties) of land in Texas for an aggregate sales price of approximately $103.6 million, an average of approximately $4,876 per acre. Land Acquisitions For the three months ended March 31, 2020, the Trust acquired approximately 756 acres (Culberson and Reeves Counties) of land in Texas for an aggregate purchase price of approximately $3.9 million, an average of approximately $5,134 per acre. For the three months ended March 31, 2019, the Trust acquired approximately 11,702 acres (Culberson and Reeves Counties) of land in Texas for an aggregate purchase price of approximately $47.2 million, an average of approximately $4,033 per acre.

Royalty Interests

Royalty Interests	3 Months Ended
	Mar. 31, 2020
Real Estate [Abstract]
Royalty Interests	Royalty Interests As of March 31, 2020 and December 31, 2019, the Trust owned the following oil and gas royalty interests (in thousands, except number of interests): Net Book Value March 31, 2020 December 31, 2019 1/16th nonparticipating perpetual royalty interests $ — $ — 1/128th nonparticipating perpetual royalty interests — — Royalty interests acquired 46,256 29,320 Total royalty interests, gross 46,256 29,320 Less: accumulated depletion (318) (260) Total royalty interests, net $ 45,938 $ 29,060 No valuation allowance was necessary at March 31, 2020 and December 31, 2019. For the three months ended March 31, 2020, the Trust acquired oil and gas royalty interests in approximately 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, 2020
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes For the three months ended March 31, 2020 and 2019, income tax expense was $14.0 million and $35.5 million, respectively. The difference between the U.S. statutory tax rate of 21% and the current effective tax rate is primarily related to statutory depletion allowed on mineral royalty income. In response to the COVID-19 pandemic, many governments have enacted or are contemplating measures to provide aid and economic stimulus. These measures may include deferring the due dates of tax payments or other changes to their income and non-income-based tax laws. The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), which was enacted on March 27, 2020 in the U.S., includes measures to assist companies, including temporary changes to income and non-income-based tax laws. For the three months ended March 31, 2020, there were no material tax impacts to our condensed consolidated financial statements as it relates to COVID-19 measures. We continue to monitor additional guidance issued by the U.S. Treasury Department, the Internal Revenue Service and others.

Capital

Capital	3 Months Ended
	Mar. 31, 2020
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 16, 2020, we paid $124.1 million in dividends representing a regular cash dividend of $10.00 per Sub-share and a special dividend of $6.00 per Sub-share for sub-shareholders of record at the close of business on March 9, 2020. 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. Repurchases of Sub-shares

Business Segment Reporting

Business Segment Reporting	3 Months Ended
	Mar. 31, 2020
Segment Reporting [Abstract]
Business Segment Reporting	Business Segment Reporting During the periods presented, we reported our financial performance based on the following segments: Land and Resource Management and Water Services and Operations. Our segments provide management with a comprehensive financial view of our key businesses. The segments enable the alignment of 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 full-service water offering to operators in the Permian Basin. The revenue streams of this segment consist of revenue generated from sales of sourced and treated water as well as revenue from royalties on water service-related activity. Segment financial results were as follows for the three months ended March 31, 2020 and 2019 (in thousands): Three Months Ended 2020 2019 Revenues: Land and resource management $ 56,658 $ 160,459 Water services and operations 39,936 30,865 Total consolidated revenues $ 96,594 $ 191,324 Net income: Land and resource management $ 39,118 $ 123,117 Water services and operations 18,283 16,881 Total consolidated net income $ 57,401 $ 139,998 Capital expenditures: Land and resource management $ 88 $ 534 Water services and operations 3,529 8,713 Total capital expenditures $ 3,617 $ 9,247 Depreciation, depletion and amortization: Land and resource management $ 337 $ 177 Water services and operations 2,998 1,027 Total depreciation, depletion and amortization $ 3,335 $ 1,204 The following table presents total assets and property, plant and equipment, net by segment as of March 31, 2020 and December 31, 2019 (in thousands): March 31, 2020 December 31, 2019 Assets: Land and resource management $ 396,004 $ 467,758 Water services and operations 148,645 130,418 Total consolidated assets $ 544,649 $ 598,176 Property, plant and equipment, net: Land and resource management $ 4,211 $ 4,359 Water services and operations 84,498 83,964 Total consolidated property, plant and equipment, net $ 88,709 $ 88,323

Oil and Gas Producing Activitie

Oil and Gas Producing Activities	3 Months Ended
	Mar. 31, 2020
Extractive Industries [Abstract]
Oil and Gas Producing Activities	Oil and Gas Producing ActivitiesWe measure the Trust’s 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, 2020 and December 31, 2019, the Trust’s share of oil and gas produced was approximately 16.5 and 13.7 thousand BOEs per day, respectively. Reserves related to the Trust’s 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 the Trust has a royalty interest. The number of DUC wells are determined using uniform drilling spacing units with pooled interests for all wells awaiting completion. The Trust has identified 597 and 486 DUC wells subject to our royalty interest as of March 31, 2020 and December 31, 2019, respectively.

Subsequent Events

Subsequent Events	3 Months Ended
	Mar. 31, 2020
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)	3 Months Ended
	Mar. 31, 2020
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 consolidated 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, 2019, which was filed with the SEC on February 27, 2020. 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 StatementsThe 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.
Recently Accounting Pronouncements	Recently Adopted Accounting Guidance In June 2016, the FASB issued ASU 2016-13, “ Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” The ASU amends the impairment model by requiring entities to use a forward-looking approach based on expected losses to estimate credit losses on certain types of financial instruments, including trade receivables. The Trust adopted the guidance effective January 1, 2020. Due to the short-term nature of our trade accounts receivable, the adoption of this guidance had a minimal impact on our consolidated financial statements. 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. In December 2019, the FASB issued ASU 2019-12, “ Income Taxes (Topic 740) — Simplifying the Accounting for Income Taxes.” The ASU simplifies the accounting for income taxes by eliminating certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period, hybrid taxes and the recognition of deferred tax liabilities for outside basis differences. It also clarifies and simplifies other aspects of the accounting for income taxes. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. Early adoption is permitted in interim or annual periods with any adjustments reflected as of the beginning of the annual period that includes that interim period. The Trust is currently evaluating the impact that this guidance will have on our consolidated financial statements and disclosures.

Property, Plant and Equipment (

Property, Plant and Equipment (Tables)	3 Months Ended
	Mar. 31, 2020
Property, Plant and Equipment [Abstract]
Property, Plant and Equipment	Property, plant and equipment, net consisted of the following as of March 31, 2020 and December 31, 2019 (in thousands): March 31, 2020 December 31, 2019 Property, plant and equipment: Water service-related assets (1) $ 96,600 $ 93,097 Furniture, fixtures and equipment 6,055 5,941 Other 598 598 Property, plant and equipment at cost 103,253 99,636 Less: accumulated depreciation (14,544) (11,313) Property, plant and equipment, net $ 88,709 $ 88,323 (1) Water service-related assets reflect assets related to water sourcing and water treatment projects.

Real Estate Activity (Tables)

Real Estate Activity (Tables)	3 Months Ended
	Mar. 31, 2020
Real Estate [Abstract]
Schedule of Real Estate Properties	As of March 31, 2020 and December 31, 2019, the Trust 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) 849,826 $ — 849,856 $ — Real estate acquired 52,687 110,965 51,931 107,075 Total real estate situated in 19 counties in Texas 902,513 $ 110,965 901,787 $ 107,075

Royalty Interests (Tables)

Royalty Interests (Tables)	3 Months Ended
	Mar. 31, 2020
Real Estate [Abstract]
Schedule of Royalty Interests	As of March 31, 2020 and December 31, 2019, the Trust owned the following oil and gas royalty interests (in thousands, except number of interests): Net Book Value March 31, 2020 December 31, 2019 1/16th nonparticipating perpetual royalty interests $ — $ — 1/128th nonparticipating perpetual royalty interests — — Royalty interests acquired 46,256 29,320 Total royalty interests, gross 46,256 29,320 Less: accumulated depletion (318) (260) Total royalty interests, net $ 45,938 $ 29,060

Business Segment Reporting (Tab

Business Segment Reporting (Tables)	3 Months Ended
	Mar. 31, 2020
Segment Reporting [Abstract]
Schedule of Segment Financial Results	Segment financial results were as follows for the three months ended March 31, 2020 and 2019 (in thousands): Three Months Ended 2020 2019 Revenues: Land and resource management $ 56,658 $ 160,459 Water services and operations 39,936 30,865 Total consolidated revenues $ 96,594 $ 191,324 Net income: Land and resource management $ 39,118 $ 123,117 Water services and operations 18,283 16,881 Total consolidated net income $ 57,401 $ 139,998 Capital expenditures: Land and resource management $ 88 $ 534 Water services and operations 3,529 8,713 Total capital expenditures $ 3,617 $ 9,247 Depreciation, depletion and amortization: Land and resource management $ 337 $ 177 Water services and operations 2,998 1,027 Total depreciation, depletion and amortization $ 3,335 $ 1,204
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, 2020 and December 31, 2019 (in thousands): March 31, 2020 December 31, 2019 Assets: Land and resource management $ 396,004 $ 467,758 Water services and operations 148,645 130,418 Total consolidated assets $ 544,649 $ 598,176 Property, plant and equipment, net: Land and resource management $ 4,211 $ 4,359 Water services and operations 84,498 83,964 Total consolidated property, plant and equipment, net $ 88,709 $ 88,323

Organization and Description _2

Organization and Description of Business Segments (Details)	3 Months Ended
	Mar. 31, 2020asegment
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_3

Summary of Significant Accounting Policies - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Concentration Risk [Line Items]
Depreciation expense	$ 3.2	$ 1.2

Property, Plant and Equipment_2

Property, Plant and Equipment (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019
Property, Plant and Equipment [Line Items]
Property, plant and equipment at cost	$ 103,253		$ 99,636
Less: accumulated depreciation	(14,544)		(11,313)
Property, plant and equipment, net	88,709		88,323
Depreciation expense	3,200	$ 1,200
Water service-related assets
Property, Plant and Equipment [Line Items]
Property, plant and equipment at cost	96,600		93,097
Furniture, fixtures and equipment
Property, Plant and Equipment [Line Items]
Property, plant and equipment at cost	6,055		5,941
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	3 Months Ended	12 Months Ended
	Mar. 31, 2020USD ($)anumberOfCounty	Dec. 31, 2019USD ($)anumberOfCounty
Number of Acres
Land (surface rights) (in acres) | a	849,826	849,856
Real estate acquired (in acres) | a	52,687	51,931
Total real estate situated in 19 counties in Texas (in acres) | a	902,513	901,787
Net Book Value
Land (surface rights) | $	$ 0	$ 0
Real estate acquired | $	110,965	107,075
Total real estate situated in 19 counties in Texas | $	$ 110,965	$ 107,075
Number of counties with real estate in Texas | numberOfCounty	19	19

Real Estate Activity (Details)

Real Estate Activity (Details) $ in Millions	3 Months Ended
	Mar. 31, 2020USD ($)a$ / a	Mar. 31, 2019USD ($)a$ / a
Real Estate Properties [Line Items]
Area of real estate property, sold (acre) | a	30	21,251
Proceeds from sale of real estate | $	$ 0.9	$ 103.6
Average sale price (in dollars per acre) | $ / a	30,000	4,876
Additions | $	$ 3.9	$ 47.2
Average purchase price (in dollars per acre) | $ / a	5,134	4,033
Culberson and Reeves counties
Real Estate Properties [Line Items]
Additions (acre) | a	756	11,702

Royalty Interests (Details)

Royalty Interests (Details) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2020USD ($)a$ / a	Mar. 31, 2019USD ($)a$ / a	Dec. 31, 2019USD ($)
Net Book Value
Royalty interests acquired, net of accumulated depletion of $318 and $260 as of March 31, 2020 and December 31, 2019, respectively	$ 46,256		$ 29,320
Total royalty interests, gross	46,256		29,320
Less: accumulated depletion	(318)		(260)
Total royalty interests, net	45,938		$ 29,060
Acquisition of royalty interests	$ 16,936	$ 3,418
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	301
Acquisition of royalty interests	$ 16,900	$ 3,200
Average price per net royalty acre acquired (in dollars per acre) | $ / a	16,659	10,500

Income Taxes - Narrative (Detai

Income Taxes - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Income Tax Disclosure [Abstract]
Income tax expense (benefit)	$ 13,967	$ 35,548

Capital (Details)

Capital (Details) $ / shares in Units, $ in Millions	Mar. 16, 2020USD ($)$ / shares	Mar. 15, 2019USD ($)$ / shares	Mar. 31, 2020$ / sharesshares	Mar. 31, 2019$ / sharesshares
Class of Stock [Line Items]
Payments of dividends | $	$ 124.1	$ 46.5
Dividend paid per sub-share (in dollars per share)			$ 16	$ 6
Sub Shares
Class of Stock [Line Items]
Ratio of certificates to sub-shares			0.000333333333333333
Number of shares repurchased and retired (in shares) | shares			0	6,258
Cash Dividend | Sub Shares
Class of Stock [Line Items]
Dividend paid per sub-share (in dollars per share)	$ 10	$ 1.75
Special Dividend | Sub Shares
Class of Stock [Line Items]
Dividend paid per sub-share (in dollars per share)	$ 6	$ 4.25

Business Segment Reporting (Det

Business Segment Reporting (Details)	Mar. 31, 2020a
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
	Mar. 31, 2020	Mar. 31, 2019
Segment Reporting Information [Line Items]
Revenues	$ 96,594	$ 191,324
Net income	57,401	139,998
Capital expenditures	3,617	9,247
Depreciation, depletion and amortization	3,335	1,204
Land and resource management
Segment Reporting Information [Line Items]
Revenues	56,658	160,459
Net income	39,118	123,117
Capital expenditures	88	534
Depreciation, depletion and amortization	337	177
Water services and operations
Segment Reporting Information [Line Items]
Revenues	39,936	30,865
Net income	18,283	16,881
Capital expenditures	3,529	8,713
Depreciation, depletion and amortization	$ 2,998	$ 1,027

Business Segment Reporting - As

Business Segment Reporting - Assets and Property, Plant, and Equipment, Net (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Segment Reporting Information [Line Items]
Assets	$ 544,649	$ 598,176
Property, plant and equipment, net	88,709	88,323
Land and resource management
Segment Reporting Information [Line Items]
Assets	396,004	467,758
Property, plant and equipment, net	4,211	4,359
Water services and operations
Segment Reporting Information [Line Items]
Assets	148,645	130,418
Property, plant and equipment, net	$ 84,498	$ 83,964

Oil and Gas Producing Activit_2

Oil and Gas Producing Activities (Details)	Mar. 31, 2020wellMBbls	Dec. 31, 2019wellMBbls
Extractive Industries [Abstract]
Share of oil and gas produced (in barrel) | MBbls	16,500	13,700
Number of DUC wells (in wells) | well	597	486