Month: April 2019

Trustee Letter to TPL Employees

tpltblogger

EDGAR

Easy to for me to armchair quarterback but I’m sure that this all has to be distracting to the folks that work at TPL.

We remain entirely committed to our customers, our employees, and our operations. We will continue to execute our strategy as usual, with the goal of building on the tremendous momentum already underway across our business.

We believe that a Trustee’s appointment should be weighed with careful consideration and made with the right motivations, with an eye toward maximizing long-term value. We welcome and consider the input of all our shareholders, and we are committed to making decisions that are in the best long-term interests of the Trust and its shareholders.

Thank you for remaining focused on your job and to operating safely. This situation may generate additional interest by our investors and the media, so you may read about Texas Pacific Land Trust in the news. If you are contacted by a member of the media, an investor, or anyone else outside your typical business relationships, please refer those inquiries to Robert Packer at 214.969.5530 and robert@tpltrust.com.

Thank you again for your continued and dedicated focus to operating safely.

SoftVest Appeals to Better Judgement

tpltblogger1 Comment

SoftVest, L.P., Horizon Kinetics LLC, and ART-FGT Family Partners Issue Open Letter to Trustees of Texas Pacific Land Trust

SoftVest calls for an end to the proxy battle more than a few times in this open letter.

In fact, only yesterday Robert Packer, TPL’s Chief Financial Officer, e-mailed Kline D. Oliver, Vice-President of SoftVest Advisors LLC, requesting an updated list of drilled, completed and permitted wells on TPL non-participating royalty interest property that Mr. Oliver maintains based on his dedicated ongoing research.  Mr. Oliver provided the list to Mr. Packer this morning, even after being the target of a distasteful attack letter issued by you before the open of the market.

As we trust you know, Mr. Oliver has shared similar information in the past with TPL’s management at their request and at no cost – despite TPL’s offer to pay for such work.   

We see no reason why the Trustees cannot have a collaborative relationship with Mr. Oliver, much like TPL’s management has had and continues to have with him.  Mr. Oliver is, among other things, a source of deep expertise and knowledge about TPL and the industry which in our view will immensely enrich the Board.

It is time to put this proxy contest behind us: we call on you two Trustees to nominate Mr. Oliver, and avoid disrupting what has historically been a productive working relationship between him and TPL’s management.

 

However, one of the unescapable consequences of having a charter from the 19th century that limits your governing body to only three individuals is that each of them must bring core areas of competency needed for the success of TPL

 

Ultimately, we encourage you to put an end to this unnecessary and wasteful proxy contest. We ask that you endorse the nomination of Eric Oliver at the upcoming special meeting and allow him to work collaboratively with you both of you to create a better TPL.  The three of you can bring TPL into the 21st century, and transform our joint investment into a modern corporation with an expanded Board with modern fiduciary duties to all shareholders that can include honorable men like General Cook as part of a broader mosaic of skillsets.

If you insist on continuing this unnecessary proxy contest then at a minimum let’s have a town hall meeting where both nominees will have an opportunity to present their respective ideas to TPL’s shareholders, which we think would benefit all shareholders.

It is time for all of us to start working together for the good of TPL.

Proxy Vote Posted at Fidelity.com

tpltblogger2 Comments

I’m assuming it’s up at other brokerages or will be soon.

At Fidelity.com, one has to login and then select “statements” from the All Accounts menu at the top.  From there, click “proxy materials”.  Once you vote there is an option to get a confirmation sent to your email.

Posted deadline is May 21, 2019 11:59 Eastern

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Notice the “OPPOSITION RECOMMENDATION: FOR” line.  I haven’t voted yet.  That was pre-populated by Fidelity or proxyvote.com.

My experience says to take your time when clicking.  The system takes 20+ seconds to move on to the next screen.  Click once and wait for the screen to update.

Note that there is a blue hyperlink in the top left of the voting screen that will allow you to vote in person.  If you select that option a Legal Proxy will be generated for you to carry to the meeting.

EIA 2018 Tally

tpltblogger1 Comment

EIA: U.S. crude oil production grew 17% in 2018, surpassing the previous record in 1970

eia

Texas continues to produce more crude oil than any other state or region of the United States, making up 40% of the national total in 2018. Texas has held the top position in nearly every year since 1970, with the brief exception of 1988, when Alaska produced more crude oil than Texas, and from 1999 through 2011, when production from the Federal Offshore Gulf of Mexico region was higher.

Texas crude oil production averaged 4.4 million b/d in 2018 and reached a record-high monthly production level of 4.9 million b/d in December 2018. Texas’s 2018 annual production increase of almost 950,000 b/d—driven by significant growth within the Permian region in western Texas—was nearly 60% of the total U.S. increase.

Staking Out The Middle Ground

tpltblogger9 Comments

I’ve been fortunate to talk to a large number of TPL holders over the past month.  Down to a person, the group is passionate about TPL and wants only the best (read: long term value maximization) for the Trust.  Old and new investors alike have a great deal of reverence for the history of the trust.  Another common refrain I hear from investors is that of TPL’s strong working culture and highly engaged team.  So, in light the commonalities and positive attributes above, I suggest all sides come together and steer this proxy battle away from getting any uglier.

Middle ground proposal:

  • In light of the wishes of a block that owns 25% of TPL, current Trustees Barry and Norris move to nominate and accept Eric Oliver as Trustee.
  • Trustees (working together) nominate a 5-7 person Governance Exploration Committee.  All members of the committee must be agreed upon by all three trustees.
  • Governance Exploration committee works for a period of six months to determine and recommend a long-term path for TPL oversight that 1) is respectful of the long term past values and goals of the Trust and 2) reflects 21stcentury realities of both corporate governance and the magnitude of the opportunity in West Texas.
  • New Governance form is brought to sub-unit holders for a go/no go vote
  • No vote = back to the drawing board
  • Yes vote = mandate to execute

That’s it.

It’s not perfect, but it represents a fair shake for all involved.  There are probably many other solutions like it.  The important part is that all sides come together and a solution is adopted.

The stakes are extremely high.  Mistakes can cost billions. Let’s set TPL up for high quality strategic direction and decision making via improved governance NOW.

Resistance to come to a common-sense middle ground should be looked upon by investors with contempt.  Personal ego, pride, and control should come AFTER doing the right thing for investors.

The horse is out of the barn, the cat is out of the bag, and we can never go home again.  There will never be another day in the future where governance at TPL isn’t an issue.  It must be resolved.

CVX Buys APC

tpltblogger6 Comments

TPL’s top two revenue drivers are tying up in a $33B deal.

Business Wire: Chevron Announces Agreement to Acquire Anadarko

Bloomberg Deal Summary + Occidental Wants APC Too

39% premium.

From TPL’s 10-K:

During 2018, we received $46.0 million, or approximately 15% of our total revenues (prior to deferrals), which included $22.9 million of oil and gas royalty revenue, $11.9 million of easements and sundry income (prior to deferrals), and $11.1 million of water sales and royalties, from Anadarko E&P Onshore, LLC and $49.4 million, or approximately 16% of our total revenues (prior to deferrals), which included $27.1 million of oil and gas royalty revenue and $18.9 million of revenue from sales of oil and gas royalty interests, from Chevron U.S.A., Inc.

Anadarko is water customer.  Strange that Chevron is not.

TPL did sell $19MM in royalties to CVX in 2018 so we know that communication line is open.

XOM > CXO or NBL or PXD or DVN or XEC is probably next.  This is a first big step in the majors cleaning up the Permian.

SoftVest Responds on Ad Spends

tpltblogger8 Comments

EDGAR 14A : SoftVest : Urge Trustees to Restore a Civil Discourse Around the Upcoming Election, Stop Spending Shareholders’ Money on Social Media Ads

Two benjamins…

To put things in perspective, given the limited insider share ownership, for every $1,000,000 that you spend on legal, PR, financial advisors, social media ads, etc., over $250,000 comes out of the undersigned “dissident’s” pocket.  Only $206.26 comes out of management’s pocket.  In our view, this makes no sense.

Buybacks or Ads?

tpltblogger19 Comments

EDGAR 14A

How much did these cost?

Twitter ad

On April 10, 2019, Texas Pacific Land Trust issued the following online advertisements to Facebook.com, Twitter.com and Google.com:

Advertisement 1 (Facebook.com)

For over 130 years, TPL has been there for shareholders, generating tremendous long-term value from its uniquely Texan assets. Today, the future of your investment is in jeopardy, but you have the power to save it.

Shareholders: vote FOR General Donald Cook using the BLUE proxy card.

Protect your Trust. Trust General Cook.

Advertisement 2 (Facebook.com)

There’s a storm on the horizon. Texas Pacific Land Trust and its legacy of value creation are under threat by a dissident group putting its own interests before those of other shareholders.

Retired 4-star General Donald Cook is the ONLY candidate who will advance TPL’s strategy for the benefit of ALL shareholders.

Make your voice heard. Vote FOR General Cook on the BLUE card.

Protect your Trust. Trust General Cook.

Advertisement 3 (Facebook.com)

Texas Pacific Land Trust is a vital part of Texas’ history. Through careful stewardship, TPL has delivered total shareholder returns of ~733% since 2014 that have enhanced our investors’ futures. Help us secure this growth for years to come.

Vote FOR four-star General Don Cook on the BLUE proxy card.

Protect your Trust. Trust General Cook.

Advertisement 4 (Twitter.com)

For over 130 years, TPL has been there for its shareholders. But today, the future of your investment is in jeopardy. You have the power to save it.

Vote FOR General Donald Cook using the BLUE proxy card.

Protect your Trust. Trust General Cook.

http://www.trusttpl.com

Advertisement 5 (Twitter.com)

There’s a storm on the horizon. TPL is under threat by a dissident, self-serving group. General Don Cook is the ONLY candidate who will advance TPL’s strategy for ALL shareholders.

Make your voice heard. Vote FOR Cook on the BLUE card.

Protect your Trust.

http://www.trusttpl.com

Advertisement 6 (Twitter.com) 

TPL is a vital part of Texas. Through careful stewardship, we’ve delivered total shareholder returns of ~733% since 2014. Help us secure this growth for years to come. Vote FOR General Don Cook on the BLUE proxy card.

Protect your Trust. Trust General Cook.

http://www.trusttpl.com

Advertisement 7 (Google.com) 

Texas Pacific Land Trust

Proven strategy is now at risk

Vote for Gen Cook on BLUE Card

TPL outperformed the market with returns of 733% since 2014. More than Apple or Amazon!

TPL is vital to Texas history

https://www.trusttpl.com/

Advertisement 8 (Google.com) 

Texas Pacific Land Trust

Protect your Trust

Make your voice heard!

General Don Cook is the only choice to protect shareholder value

Vote for General Cook on the BLUE proxy card by phone, internet, or mail by May 22

https://www.trusttpl.com/make-your-voice-heard

Advertisement 9 (Google.com) 

Texas Pacific Land Trust

Protect your Trust

Trust the General

The future of your investment is in your hands! Vote for General Cook on the BLUE card

You have the opportunity to make a difference and have your voice heard

https://www.trusttpl.com/make-your-voice-heard

Advertisement 10 (Google.com)

Texas Pacific Land Trust

Protect your Trust

Proven strategy is now at risk

Gen. Don Cook is the best choice to continue years of proven success and long term value

You have the power to make your voice heard! Choose General Cook on the BLUE proxy card

https://www.trusttpl.com/make-your-voice-heard

SoftVest Request Holders List

tpltblogger14 Comments

EDGAR: Request to Inspect and Copy Certain Records

Yesterday, a reader of the blog indicated that they received a call from ‘TPL’ to discuss the proxy and presumably sell BLUE.  Team WHITE is requesting the list so that they may do the same.

Anyone else get a call yet?

I am writing to formally request that you make available for inspection and copying to me and my representatives, during TPL’s usual business hours, the list of certificate holders of TPL showing the name, address, email address (if available), and number of Shares registered in the name of each such holder as of the close of business on March 28, 2019, which is the record date for the upcoming special meeting of holders of Shares currently scheduled for May 22, 2019 (the “Special Meeting”). I make this request pursuant to the express terms of Section Fourth of the Declaration of Trust of TPL and common law.
Further, on the same basis, I hereby request that you make available for inspection and copying a copy of the Depository Trust Company Omnibus Proxy, omnibus proxies from banks and brokerage firms and the list of non-objecting beneficial owners of Shares that TPL has recently requested from Broadridge Financial Solutions, Inc. As you know, such “NOBO” list includes the names of beneficial owners of Shares who hold through brokers and other custodians that have given permission to their financial intermediary to release their identity. TPL management obviously intends to use such information to solicit proxies from holders of Shares in connection with the Special Meeting. From a corporate governance perspective, we assume you recognize how important it is for TPL investors that SoftVest not be denied the same ability to make its case that management enjoys.