Why was the decision made to return almost 50% of capital in the form of dividends last year? This is a big break from policy in prior years. Individual marginal tax rates were lowered a couple/few percent but could that have been the driver of such a large shift? Was further increasing the concentration (or the desire not to) of major holders a factor? Who’s call is that? What are their motivations? Was this fight anticipated? I’ve got so many questions.
Yes, Saudi Arabia (via Aramco) has lifting costs of $2.x/barrel. They also have significant government budgetary expenses. Here is a good Bloomberg article that features IMF breakeven data by country.
International Monetary Fund data released on Monday show the world’s biggest oil exporter needs prices at about $85 a barrel to balance its budget this year, up from a forecast of $73 in September.
The estimates highlight the tricky task facing Crown Prince Mohammed bin Salman as he tries to forge closer ties with Trump and, at the same time, finance a plan to revive economic growth and create jobs at home. The kingdom, which reiterated last week its commitment to balance its books by 2023, plans to increase spending by 7 percent this year.
We’ve seen material price deviations from these “desired” prices before. Nonetheless they might be a good long term reference point.
Ugly just got uglier. Trustees leaves no stone unturned in what looks to be another deep ball to the end zone.
Again, this is all to keep a representative of a group that holds 25% of equity outstanding from becoming ONE OF THREE trustees.
As motives become more clear and desperation becomes more obvious, this is starting to look more like a hostage situation than a proxy battle.
In the proxy statement he makes one of his old nonsensical ideas yet again. He wants to fully explore converting the Trust into a Delaware Corporation. He fails to outline even one reason why the corporation would make more sense than the current structure. Not one.
Your responsibility is to the corporation and not to outside interests.
When did TPL incorporate? Did I miss a filing?
Texas Pacific Land Trust, a major – sometimes the major – holding in a number of our strategies, is now the subject of a proxy contest between the two trustees who control its activities and an investment group. A shareholder voting period will end with the Special Meeting that is scheduled to be held on May 22, 2019. The trustees have put forth a candidate to replace the late Maurice Meyer III, who retired in February due to ill health. The investment group has proposed a different person to be the third trustee. Both assert that their candidate would best serve the interests of the Trust.
Central to the proxy contest is that the Trust is as unique in its governance structure as it is in its asset inheritance. The assets are probably unmatched in the scope of their royalty interests, surface acreage and water rights in the oil and gas rich Permian basin of west Texas. The Permian Basin is unmatched in the U.S. for the extent of its reserves, now second in the world only to Saudi Arabia. It is no exaggeration to say that the Permian Basin has enhanced the global geo-political economic position of the U.S.
As to governance, there is probably no other SEC-registered, publicly traded company with trustees or directors who are tenured for life. One can see why it is especially strongly felt by both parties that the choice of this third trustee is most important.
In almost all such cases, the contesting parties are referred to as an outside investor group, and I have here chosen to exclude that term. This is because this particular group holds over 25% of the shares, is TPL’s largest shareholder group by far, and has held the shares for many, many years. In this sense, they might be said to embody the ideal of a long-term equity stake holder, which is, in its essence, the counterpoint to an outsider. The trustees, in contrast, hold a negligible amount of shares.