Texas Pacific Land Corporation (TPL) Q2 2023 Earnings Call Transcript

For the period ending June 30, 2023

August 3, 2023, 8:30 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Good day, and welcome to the Texas Pacific Land Corporation Second Quarter 2023 Earnings Call. All participants are in a listen-only mode. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference over to Shawn Amini, Vice President of Finance and Investor Relations. Please go ahead.

Shawn Amini

Thank you for joining us today for Texas Pacific Land Corporation Second 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 that we may at times refer to our company by 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. Thank you for joining us today. TPL delivered an impressive quarter, capturing opportunities underpinned by robust Permian activity. We set new company records for quarterly oil and gas royalty production, source water revenues and produced water revenues.

Easements and surface-related income, which we refer to as SLEM, had its best quarterly revenue performance since 2019. Unlike our oil and gas royalty revenues, which are predominantly derived from our perpetual royalty interest carved from a mineral state, water and SLEM revenues originate from our ownership of the surface estate. That surface ownership is unique compared to other public oil and gas, mineral royalty and lease interest companies.