LandBridge IPO

tpltblogger13 Comments

LandBridge filed an S-1 on May 31st announcing its IPO. The filing has had a couple updates with the latest having taken place on Monday 6/17).

If you’re completely new to the story, this Reuters article provides a good start.

I’d recommend giving the S-1 a good skim at the very least if you are a TPL owner. Yes, they are trying to sell an IPO some consideration is needed BUT it does help illustrate the longevity and optionality inherent in West Texas surface acreage.

Equity IPO analysis isn’t my specialty but it looks like the sponsor is selling 20% of the company. 20% @ $320MM implies a market cap of $1.6B. The docs say proforma net income of $50MM which implies a P/E of 32x.

I’d love your thought on this. I’m on a plane and working though my phone. Not ideal. Missing a bunch, I’m sure.

I’ll leave you with this to ponder…

For the year ended December 31, 2022, we generated $33.5 million of non-oil and gas royalty revenue on our initial approximately 72,000 owned surface acres, or $465 in revenue per owned surface acre. As a result of our active management strategy, we have increased non-oil and gas royalty revenue on such 72,000 owned surface acres by 56% to $52.1 million for the year ended December 31, 2023, or $724 in revenue per owned surface acre. We measure our revenue divided by our total acreage as a performance metric, which we refer to as “surface use economic efficiency.” We believe that the Acquired Lands present an attractive opportunity to apply our active land management strategy in a similar fashion and generate attractive returns for our investors. 

13 thoughts on “LandBridge IPO”

      • I didn’t see any links in your posting so I searched for Landbridge and found their press release on the first site I provided the link too. It had a Link to the SEC.gov website and provided a search term which was not accepted by the SEC website. I then found the Yahoo posting which had links that worked so I posted them.

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  2. I haven’t looked at the filing yet. But I’m curious to see if it shows up in HK’s portfolio in the coming weeks. Probably the easiest way to check is to look at the holdings of their inflation beneficiary ETF (INFL), which is on their website.

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    • Luke – they are “on the cover” as an investor….from page 1 of prospectus. Very interesting.

      “Certain funds and accounts managed by Horizon Kinetics Asset Management LLC (the “cornerstone investor”), have indicated an interest in purchasing up to an aggregate of $80 million of the Class A shares offered hereby at the public offering price and on the same terms as the other Class A shares being offered hereby. The shares to be purchased by the cornerstone investor will not be subject to a lock-up agreement with the underwriters. However, because indications of interest are not binding agreements or commitments to purchase, the cornerstone investor may determine to purchase more, less or no shares in this offering or the underwriters may determine to sell more, less or no shares to the cornerstone investor. The underwriters will receive the same discount on any of our Class A shares purchased by the cornerstone investor as they will from any other shares sold to the public.”

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  3. Interesting that Landbridge has agreements with TPL to provide reciprocal crossing rights and produced water royalty and revenue sharing.

    Also shares a management team and financial sponsor with WaterBridge, one of the largest water midstream companies in the United States.

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  4. Seems like LB and WB are a smaller more dynamic version of TPL… like if you could restart TPL today, how would you restructure it for Day 1.

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  5. It just listed today. I’m putting in a limit order for $10 a share, might have to adjust it to $13-$14 a share. Think their estimate is about $15-$20 a share so I might be setting my price too low. IPOs have a tendency to spike and drop. So hoping I can get a really good discount.

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    • It looks like the IPO share price dropped to $17 a share below what they wanted of $19-$22. I wonder if that was Horizon Kinetics that set the price. Well I guess I will put in an order for $17 just to start a position and see what happens. Hopefully I can get some shares. Think the IPO closes on July 1st. Then it will be interesting to see how the market values the company after the IPO closes.

      Someone bought 750,000 shares I think at $17 so about $12,750,000.

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  6. Is this bullish or bearish for TPL? Haven’t looked at S-1 yet, but could it be bullish because it brings more focus/attention to this business model strategy? Or could this be bearish in the sense that this unique TPL asset now faces more serious competition?

    Separately, I noticed MS/HK stopped buying daily shares of TPL…Anyone have insight on this? Looks like per the last Form 4, the daily buying stopped on 6/7/24.

    Thanks to all!

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    • Looking back, that was the last day prior to the S&P 400 Midcap Index inclusion and the 24% pop in share price…..

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