Texas Pacific Land Corporation (NYSE:TPL) Q4 2023 Earnings Conference Call February 22, 2024 8:30 AM ET

Company Participants

Shawn Amini - Finance and Investor Relations

Ty Glover - Chief Executive Officer

Chris Steddum - Chief Financial Officer

Conference Call Participants

Hamed Khorsand - BWS Financial

Nate Pendleton - Stifel

Operator

Ladies and gentlemen, good morning, and welcome to the Texas Pacific Land Corporation Fourth Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Shawn Amini, Finance and Investor Relations. Please go ahead.

Shawn Amini

Thank you for joining us today for Texas Pacific Land Corporation's fourth quarter 2023 earnings conference call.

Yesterday afternoon, the company released its financial results and filed its Form 10-K 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'll open the call for questions.

Now, I'll turn the call over to Ty.

Ty Glover

Good morning, everyone, and thank you for joining us today.

TPL ended 2023 with the best quarter we had all year. Performance was led by oil and gas royalty production of approximately 26,300 barrels of oil equivalent per day, which represents 20% sequential quarter-over-quarter growth and a new company record. We also received excellent contributions from our surface and water related businesses, as they accounted for over 40% of quarterly consolidated revenues. For produced water, we generated a royalty fee on 2.7 million barrels per day during the quarter, also a record. On sourced water, we recorded 517,000 barrels per day of sales volumes, of which 62% were off of our footprint, as demand for both brackish and treated water remain elevated. Our surface leases, easements and materials segment, which we refer to by its acronym SLEM, generated $19 million of revenues, representing 5% growth sequential quarter-over-quarter.