Texas Pacific Land Corporation (TPL) Q4 2022 Earnings Call Transcript

For the period ending December 31, 2022

February 23, 2023 8:30 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Good morning, and welcome to Texas Pacific Land Corporation's Fourth Quarter and Full Year 2022 Earnings Conference Call. This conference call is being recorded.

I would now like to introduce your host for today's call, Shawn Amini, Vice President, Finance and Investor Relations. Please go ahead.

Shawn Amini

Thank you for joining us today for Texas Pacific Land Corporation's fourth quarter and full year 2022 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.texapacific.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. 2022 was a consecutive record year for TPL. Full year 2022 revenue of $667 million exceeded the previous record by over $170 million. We not only generated record revenues from our oil and gas royalties, but our combined water sales, produced water royalties and easements and service-related income also had its best year ever, generating over $200 million of revenue.

We achieved a full year consolidated adjusted EBITDA margin of 89% as we continue to efficiently convert revenue into cash flow. We returned $335 million of capital back to shareholders through dividends and buybacks, and we exited the year with zero debt and over $500 million of cash on the balance sheet.