Texas Pacific Land Corporation (TPL) Q1 2023 Earnings Call Transcript

For the period ending March 31, 2023

May 4, 2023 8:30 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Greetings and welcome to Texas Pacific Land Corporation First Quarter 2023 Earnings Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host Shawn Amini of Investor Relations. Thank you and you may proceed sir.

Shawn Amini

Thank you for joining us today for Texas Pacific Land Corporation's first quarter 2023 earnings conference call. Yesterday afternoon, the company released its financial results and filed its Form 10-Q with the Securities and Exchange Commission, which is available on the Investors section of the company's website at www.texaspacific.com.

As a reminder, remarks made on today's conference call may include forward-looking statements. Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those discussed today.

We do not undertake any obligation to update our forward-looking statements in light of new information or future events. For a more detailed discussion of the factors that may affect the company's results, please refer to our earnings release for this quarter and to our most recent SEC filings.

During this call, we will also be discussing certain non-GAAP financial measures. More information and reconciliations about these non-GAAP financial measures are contained in our earnings release and SEC filings. Please also note, we may at times refer to our company by its stock ticker, TPL.

This morning's conference call is hosted by TPL's Chief Executive Officer, Ty Glover; and Chief Financial Officer, Chris Steddum. Management will make some prepared comments, after which, we will open the call for questions.

Now, I will turn the call over to Ty.

Ty Glover

Good morning everyone and thank you for joining us today. TPL delivered another strong quarter as our non-oil and gas royalty businesses helped to mitigate the impact of lower oil and gas prices.

During first quarter 2023 WTI Cushing Oil and Henry Hub natural gas prices were down 19% and 43%, respectively, compared to the same time period last year, and as a result of that direct exposure to prices, our oil and gas royalty revenues were down 14%.

However, on a year-over-year basis, for first quarter 2023, our sourced water sales were up 15%. Produced water royalties were up 35%, and our easement and other surface-related income was up 63%.