Letter from Eric Oliver

April 9, 2019April 11, 2019 tpltblogger5 Comments

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

The highlighting below is not mine; it is part of the original text. No punches pulled here but all points are fair. There is some drilling information in the letter that is new to me or perhaps presented in a different way; it’s exciting nonetheless.

Full text of letter:

Dear Fellow TPL Shareholder:

We are writing to seek your support for the election of Eric Oliver as trustee of Texas Pacific Land Trust (TPL) at the special meeting of shareholders to be held on May 22, 2019.

As you may know, TPL’s governing document gives shareholders the right to cast their vote on trustees only when one of the three seating trustees dies, resigns or is otherwise disqualified. In fact, TPL has only held four shareholder meetings in thirty years.

The upcoming special meeting therefore is a unique opportunity for TPL investors to participate in the future direction of TPL. We encourage all TPL shareholders to cast their vote.

The undersigned are long-term holders of TPL shares, and currently hold in the aggregate over 25% of the outstanding TPL shares. Although TPL’s management likes to refer to us as “dissidents” and “activists”, all of us are heavily vested and rooting for the success of TPL. And we strongly believe that Eric Oliver will work with the two incumbent Trustees to make TPL a more successful company.

We believe Mr. Oliver will introduce a fresh perspective from a long-term investor that has studied TPL for over ten years, and is committed and capable to roll up his sleeves and work collaboratively with his fellow Trustees.

The two incumbent Trustees will be presenting their own nominee at the special meeting. And, unfortunately, until this time the Trustees and management seem more concerned about employing scare tactics and fear-mongering to get their nominee elected, than letting him explain what perspectives he offers to bring to TPL. We hope to see in the future more substantive discourse about the future of TPL.

We also hope that the two incumbent Trustees stop taking unqualified credit for the returns experienced by TPL investors the past few years. For that, we believe proper credit is due to the numerous exploration and production companies that have spent over $10 billion since 2013 drilling on TPL’s treasured royalties and land. In fact, it is the 1,178 wells drilled between 2014-2018 (37.26 net lateral miles) that have increased the Trust’s oil production over 600% and its gas production close to 1,000%. All investors may be interested to know there have been an additional 142 wells (5.0013 nlm) drilled year-to-date with 49 wells (1.46 nlm) currently drilling for another $1.5 billion spent so far this year, so we have good reason to believe the trend will continue. Being dealt a Royal Flush does not make one a good poker player.

We invite you to read the rest of this letter and our proxy statement for additional information about Eric Oliver and his commitment to TPL investors.

MR. OLIVER IS AN EXTREMELY WELL-QUALIFIED NOMINEE

We believe that Mr. Oliver is an experienced oil and gas investor with over 22 years of experience buying and selling properties and over 35 years of experience managing investments with an emphasis in the energy market.

Among other relevant experience:

Mr. Oliver currently serves as the President of SoftVest Advisors, a registered investment adviser that acts as an investment manager for clients, including funds and managed accounts, with investments in oil and gas minerals and royalties.

Mr. Oliver was President of Midland Map Company, LLC, a Permian Basin oil and gas lease and ownership map producer since 1997, and recently sold in January 2019 to Drilling Info.

Mr. Oliver is Principal of Geologic Research Centers LLC, a log library providing geological data to the oil and gas industry with a library in Abilene, Texas.

Mr. Oliver has served on the Board of Directors of Texas Mutual Insurance Company since 2009, where he currently also serves as Chairman of the Investment Committee, with over $6,500,000,000 of total assets.

In 2007, through certain affiliated entities, Mr. Oliver led a team to successfully acquire the assets of the Santa Fe Energy Trust (formerly NYSE ticker SFF), which consisted of over 12,000 royalty and working interest properties in at least seven states.

MR. OLIVER IS COMMITTED TO FULLY EXPLORE CONVERSION OF THE TRUST INTO A DELAWARECORPORATION

Mr. Oliver believes that the Trust would benefit from converting into a Delaware corporation, and subject to his duties as trustee, Mr. Oliver is committed to fully exploring this alternative.

Among other things, we believe that, as compared to trust law, Delaware corporate law has a more well-developed legal framework around matters of governance and investor rights, which in our view provides greater comfort and predictability to investors in a publicly-traded entity.

We believe that fundamental principles of modern corporate governance demand that investors have a right to vote on their directors at least once a year. In our view, life-tenured trustee positions do not have a place in a $6 billion market cap publicly-traded company.

Investors in a public company should simply not be forced to think of a trustee’s or director’s tenure in terms of his or her life expectancy.

MR. OLIVER IS COMMITTED TO FULLY EXPLORING THE BEST OPTIONS FOR THE TRUST’S NEW WATER BUSINESS

In June 2017, TPL announced the formation of Texas Pacific Water Resources LLC (TPWR), which focuses on providing a full-service water offering to operators in the Permian Basin.

We believe that TPWR’s activities could create various risks for TPL, such as risks related to workers compensation, leaks or rupturing of pipelines. In light of those risks, Mr. Oliver is committed to actively encouraging TPL to evaluate the existing water business and, with the assistance of outside consultants and other advisors, determine if it is advisable to grow operations internally, partner with a strategic partner, or sell the water rights to a third party and retain a royalty.

In addition, Mr. Oliver believes that any proposed capital expenditures and operating expenses incurred in connection with TPWR should have their respective expected rates of return carefully compared to the compounding benefits of retiring outstanding shares.

MR. OLIVER IS COMMITTED TO ADDITIONAL TRANSPARENCY

Mr. Oliver is also committed to a higher degree of transparency and more frequent updates to holders of TPL shares.

For example, we believe investors would benefit from drilling updates, drilled and uncompleted well updates, water production, water injection volumes, and engineering reports.

We look forward to engaging with many of you in the coming weeks.

Your vote at the upcoming special meeting of TPL shareholders is very important, no matter how many or how few shares you own. Please sign, date and return the enclosed WHITE proxy card or voting instruction card today.

We thank you for your support.

Sincerely,

SOFTVEST, L.P. HORIZON KINETICS LLC ART-FGT FAMILY PARTNERS

If you have any questions regarding your WHITE proxy card please contact our proxy solicitor, D.F. King:

Holders may call toll-free: (800) 848-3416
Banks and brokers call: (212) 269-5550

E-mail: TPL@dfking.com

IMPORTANT INFORMATION

SoftVest, L.P. (“SoftVest LP”) has filed a definitive proxy statement (the “Proxy Statement”) with the United States Securities and Exchange Commission (the “SEC”) in connection with the solicitation of proxies for a special meeting of holders of the sub-share certificates of proprietary interests (the “Shares”) for the election of a new trustee of Texas Pacific Land Trust (“TPL”) to fill the vacancy created by the resignation of Maurice Meyer III (such meeting, together with any adjournments, postponements or continuations thereof, the “Special Meeting”). INVESTORS ARE STRONGLY ADVISED TO READ THE PROXY STATEMENT BECAUSE IT CONTAINS IMPORTANT INFORMATION. Investors may obtain a free copy of the proxy statement, any amendments or supplements thereto and other documents that SoftVest LP files with the SEC from the SEC’s website at www.sec.gov, or by contacting D.F. King, SoftVest LP’s proxy solicitor, by phone (212-269-5550) or e-mail (TPL@dfking.com).

SoftVest Advisors, LLC, SoftVest LP, Eric L. Oliver, ART-FGT Family Partners Limited, Tessler Family Limited Partnership, Allan R. Tessler, Horizon Kinetics LLC, Murray Stahl, Horizon Asset Management LLC, Kinetics Advisers, LLC, and Kinetics Asset Management LLC may be deemed participants in the solicitation of proxies from holders of Shares in connection with the matters to be considered at the Special Meeting. Information about such participants’ direct and indirect interests, by security holdings or otherwise, is contained in the Proxy Statement.

Investors:
Edward McCarthy / Geoffrey Weinberg / Peter Aymar
D.F. King & Co., Inc.
(212) 269-5550

SOURCE SoftVest L.P.

White Proxy Finalized

April 9, 2019April 9, 2019 tpltblogger4 Comments

SoftVest 14A

All SEC Filings

Overall very little change (that I can see) from the preliminary proxy materials filed on 4/5.

One add:

Important Notice Regarding the Availability of Proxy Materials for the Special Meeting — This Proxy Statement and our WHITE proxy card are available at: www.ViewMaterial.com/TPL

The following, to me, is the most important part of the filing:

We are soliciting your support to elect Mr. Oliver at the Special Meeting because we expect that he, as a trustee and subject to his duties as such, will encourage the other trustees and the Trust to (1) explore the Conversion, as well as any other opportunities available to maximize value for holders of Shares and (2) be more transparent and frequent on updates to holders of Shares (e.g., drilling updates, drilled and uncompleted well updates, water production, water injection volumes, and engineering reports). In that regard, we understand that if elected Mr. Oliver will be only one of three trustees, such that effecting any of the foregoing will require the agreement of one or both of the other trustees.

Early Returns

April 8, 2019 tpltblogger9 Comments

Santa Monica casts white ballot

17,892 sub-shares represented.

Santa Monica Partners L. P. is filing this 13D not merely to strongly support electing Mr. Oliver at the Special Meeting as a trustee because we believe in him and his partners and what they stand for, but we also are doing so now because this is the only chance we may ever again have to elect a trustee as trustees serve until they resign or die. Of course to be clear we support Mr. Oliver because he supports converting the Trust into a Delaware corporation subject to modern governance principles such as:

(1) Annually electing directors which is permitted by the Trust’s Declaration of Trust, dated February 1, 1888
(2) Focusing on the establishment of an experienced team around the Trust’s new water business, with clearly defined goals and objectives, or otherwise considering the separation or sale of such business to a third party with a retained royalty
(3) And of course because of Mr. Oliver’s credentials including being a substantial shareholder and his willingness to put himself out and serve as a trustee of the Trust.
In addition we would think Mr. Oliver might work with the trustees to encourage them to take steps to bring out the value of the company such as:

(4) Encourage the trustees to move with dispatch to convert to “C” Corp. form and with a board of TPL Directors to be able to consider the other steps to bring out the value in the company. It is clear to us that although TPL has many investment attractions its present legal form has kept institutional investors such as ETFs, mutual funds, investment advisors and others from investing in the company. The mere change in business form from trust to corporation could remedy this situation. Is there any reason why trustees oppose institutional ownership or seeing TPL shares appreciate which might follow conversion to corporate form?
(5) Possibility of utilizing the increasing substantial cash flows which could for example well be turned into tax free payments to shareholders by considering a reorganization in which part of the company operations were turned into a passthrough e.g. REIT, entity paying out 90% or more of its income pretax.?

(6) The water business separation is not to be taken lightly. It could mean a spin-off of a business which had triple digit revenue and net profit growth and a high double digit net profit margin in 2018.

(7) Exxon is going to develop Permian basin wells four to five fold in
next 5 years. Other major oil companies have similar plans. A proactive TPL management would share information such as this with its owners and offer its own insights we believe as opposed to its deafening 100 year long silence.

FOR ALL OF THE ABOVE REASONS WE STRONGLY SUPPORT AND RECOMMEND A VOTE FOR THE ELECTION OF MR. OLIVER

Permian’s RSG

April 8, 2019 tpltblogger1 Comment

Bloomberg: ‘Really Smart Guys’ Push to Make Biggest Oilfield Even Bigger

While the U.S. shale revolution has boosted American oil production to a record, it’s also leaving lots of crude in the ground. At best, fracked wells only recover about a 10th of what the industry calls the oil-in-place.

“We are trying to be very conservative, but certainly we believe that we can improve from 10-11 percent to 17-18 percent,” Occidental Chief Executive Officer Vicki Hollub said in an interview in Houston. “It’s a lot. When you consider the scale of the Permian basin, to do that will be amazing.”

More Proxy Materials

April 8, 2019April 9, 2019 tpltblogger1 Comment

BLUE part 2

All Filings; 5 so far today!

Sub-share holders cutting the check for fancy graphics.

Location, Location, Location

April 8, 2019April 8, 2019 tpltblogger

What happened to the Ritz? How big is room 20502?

Definitive BLUE Proxy

THE SPECIAL MEETING
Date		May 22, 2019
Time		10:00 a.m. Central Time
Place		Room 20502 of the offices of Sidley Austin LLP at 2021 McKinney Avenue, Suite 2000, Dallas, TX 75201
Record Date		March 28, 2019
Voting		Holders at the close of business on the record date will be entitled to vote at the Special Meeting. As of the record date for the Special Meeting, 7,756,156 outstanding Sub-shareCertificates, par value of $0.03-1/3 (“Sub-share Certificates”), were outstanding and entitled to vote at the Special Meeting. The Sub-share Certificates are entitled to one vote each. A majority of these Sub-share Certificates present in person or represented by proxy at the Special Meeting will constitute a quorum for the transaction of business. For more information on voting, attending the Special Meeting and other meeting information, please see “Information about the Special Meeting” on page 2 of this Proxy Statement.

12. How do I attend the Special Meeting?

Only Holders or their duly authorized proxies may attend the Special Meeting. Proof of ownership of our Sub-share Certificates must be presented in order to be admitted to the Special Meeting. If your Sub-shareCertificates are held in the name of a bank, broker or other nominee and you plan to attend the Special Meeting in person, you must bring proof of ownership, such as a legal proxy, your brokerage statement, the proxy card mailed to you by your bank, broker or other nominee as of the record date to be admitted to the Special Meeting.

Cameras, recording equipment, electronic devices or packages will not be permitted in the Special Meeting. The use of mobile phones during the Special Meeting will also be prohibited. The Trustees may adopt and disseminate additional rules of procedure for the conduct of voting at the Special Meeting. You must present a valid government-issued picture identification, such as a driver’s license or passport, to be admitted to the Special Meeting. For directions to the Special Meeting, please call (214) 969-5530.

13. Where is the Special Meeting going to be held?

The Special Meeting will be held in Room 20502 of the offices of Sidley Austin LLP at 2021 McKinney Avenue, Suite 2000, Dallas, TX 75201

Trust Who? New Proxy Statement from TPL

April 8, 2019April 27, 2019 tpltblogger7 Comments

WTF is going on in Dallas? A 4 star General at the buzzer? Tony Romo throwing one deep in the end zone with seconds on the clock I guess.

BLUE Proxy

All Filings

General Donald Cook

New campaign website from management: www.TrustTPL.com

#TrustTPL has been coined in the website.

May you live in interesting times.

Texas Pacific Land Trust Files Definitive Proxy Statement to Elect Four-Star General Donald G. Cook as Trustee

Urges Shareholders to Vote for General Cook Using the BLUE Proxy Card

Launches Campaign Website www.TrustTPL.com

Business Wire

DALLAS DALLAS — April 8, 2019

Texas Pacific Land Trust (NYSE:TPL) (the “Trust”) today filed its definitive proxy statement with the U.S. Securities and Exchange Commission (“SEC”) in support of the election of its highly-qualified nominee, retired Four-Star U.S. Air Force General Donald “Don” G. Cook, as Trustee. All votes must be received prior to the closing of polls at the Special Meeting of the shareholders scheduled for May 22, 2019. The Trust’s proxy statement will be mailed to all shareholders, along with the Trust’s BLUE proxy card.

“General Cook has the right experience, knowledge and judgment to help us continue to successfully execute the Trust’s core strategy and evaluate changes to the Trust’s corporate governance,” said Trustee David E. Barry. “We are proud and grateful that General Cook has accepted our nomination. In addition to his extensive public company board and corporate governance experience, shareholders will benefit from his decades of distinguished leadership, including service in numerous command and high-level staff assignments in the U.S. Air Force prior to his retirement in 2005 as a four-star general.”

General Cook was selected by the Trustees following a thorough review of over 15 candidates identified by outside advisors, including Spencer Stuart, one of the world’s leading global executive and board director search firms. Following the Trust’s previous nomination of another candidate with extensive commercial real estate experience to supplement the existing oil & gas expertise, the Trustees have listened to the views of shareholders who expressed a desire for a candidate with deep public company corporate governance experience. In response to shareholders’ feedback, the Trustees have decided to nominate the highly decorated General Cook. General Cook has had extensive experience on multiple public company boards in a range of committee roles, including on the board of Crane Corporation (where he chairs the nominating and governance committee) and on the board of Burlington Northern Santa Fe Railroad prior to its acquisition by Berkshire Hathaway in a $44 billion transaction. General Cook has also been the Chairman of the San Antonio chapter of the National Association of Corporate Directors (NACD), a group recognized as the authority on leading boardroom practices.

Separately, a group of dissident shareholders has nominated an alternative candidate as Trustee, Mr. Eric Oliver. Prior to nominating General Cook, the Trustees reached out to the dissident group several times and offered to find a mutually acceptable candidate to avoid a costly and distracting proxy contest. Unfortunately, the dissident group declined the Trust’s offer and responded on Saturday that “Eric [Oliver] is the only nominee that Horizon, ART-FGT and SoftVest will vote for.”

Trustee John R. Norris III said, “We appreciate the feedback of our shareholders and have taken their valued input into consideration in identifying General Cook as our nominee. While we have sought to resolve this contest, the dissident group has refused to come to the table and was not even interested in learning the names of potential compromise candidates.”

In connection with the election, the Trust today launched www.TrustTPL.com, a new website dedicated to support the election of General Cook. The site is part of the Trust’s effort to ensure investors have accurate information about why General Cook is the clear choice as Trustee. The website will be updated regularly in response to new developments. The Trust encourages all of its shareholders to review the information available on the website, which also provides information on how shareholders can vote their shares.

Shareholder will receive the Trust’s proxy statement along with a BLUE proxy card in the upcoming days. Shareholders are encouraged to discard any white proxy card distributed by the dissident group. Shareholders with any questions should contact the Trust’s proxy solicitors, MacKenzie Partners at (800) 322-2885 (toll free in the U.S.) or (212) 929-5500. You can also email questions to proxy@mackenziepartners.com.

Stifel is acting as financial advisor, Sidley Austin LLP is acting as legal counsel and MacKenzie Partners is acting as proxy solicitor to the Trust.

About General Donald G. “Don” Cook

General Don Cook, 72, is a retired four-star General of the United States Air Force. General Cook brings to TPL exemplary leadership and corporate governance skills.

General Cook currently serves on the board of Crane Corporation (since 2005), where he chairs the nominating and governance committee and is a member of the compensation and the executive committee, and of Cybernance, Inc. (since 2016). General Cook previously served on the boards of USAA Federal Savings Bank (from 2007 until 2018), U.S. Security Associates Inc., a Goldman Sachs portfolio company (from 2011 to 2018), and Hawker Beechcraft Inc. from (2007 to 2014). Moreover, General Cook served on the board of Burlington Northern Santa Fe Railroad for almost five years until it was sold to Berkshire Hathaway in 2010 in a transaction valued at $44 billion. He also consults for Lockheed Martin Corporation. In addition to his extensive corporate governance experience, General Cook has been the Chairman of the San Antonio chapter of the National Association of Corporate Directors (NACD), a group recognized as the authority on leading boardroom practices.

General Cook had numerous additional command and high-level staff assignments during his 36-year career with the Air Force and retired as a four-star General. He commanded the 20th Air Force (the nation’s nuclear Intercontinental Ballistic Missile force), two space wings, a flying training wing and Air Combat Command during Sept. 11. General Cook served as the Chief of the Senate Liaison Office and on the staff of the House Armed Services Committee in the U.S. House of Representatives. Prior to his retirement from the Air Force in August 2005, General Cook’s culminating assignment was Commander, Air Education and Training Command at Randolph Air Force Base in Texas, where he was responsible for executing the $8 billion annual budget and providing for the leadership, welfare and oversight of 90,000 military and civilian personnel in the command. He was twice awarded the Distinguished Service Medal for exceptional leadership.

General Cook holds a master of business administration (MBA) from Southern Illinois University, as well as a bachelor’s degree from Michigan State University. He is active with several civic organizations in the San Antonio, Texas, community.

About Texas Pacific Land Trust

Texas Pacific Land Trust is one of the largest landowners in the State of Texas with approximately 900,000 acres of land in West Texas. Texas Pacific was organized under a Declaration of Trust to receive and hold title to extensive tracts of land in the State of Texas, previously the property of the Texas and Pacific Railway Company, and to issue transferable Certificates of Proprietary Interest pro rata to the holders of certain debt securities of the Texas and Pacific Railway Company. Texas Pacific’s trustees are empowered under the Declaration of Trust to manage the lands with all the powers of an absolute owner.

Additional Information and Where to Find It

Texas Pacific has filed its definitive proxy statement on Schedule 14A and form of BLUE proxy card with the SEC in connection with the solicitation of proxies for the Special Meeting. Texas Pacific, its trustees and its executive officers are participants in the solicitation of proxies from holders of Texas Pacific sub-share certificates in connection with the matters to be considered at the Trust’s upcoming Special Meeting. Information regarding the names of the Trustees and executive officers and their respective interests in the Trust by security holdings or otherwise is set forth in the Texas Pacific’s definitive proxy statement. HOLDERS OF TEXAS PACIFIC SUB-SHARE CERTIFICATES ARE STRONGLY ENCOURAGED TO READ THE DEFINITIVE PROXY STATEMENT AND BLUE PROXY CARD AS THEY CONTAIN IMPORTANT INFORMATION. A free copy of the Texas Pacific’s definitive proxy statement and other relevant documents that Texas Pacific files with the SEC may be obtained through the SEC’s website at www.sec.gov or at Texas Pacific’s website at www.tpltrust.com as soon as reasonably practicable after such materials are electronically filed with, or furnished to, the SEC.

Forward-Looking Statements

This press release may contain statements that are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements contained in this press release, other than statements of historical fact, are “forward-looking statements” for purposes of these provisions, including statements regarding Texas Pacific’s future operations and prospects, the markets for real estate in the areas in which Texas Pacific owns real estate, applicable zoning regulations, the markets for oil and gas, production limits on prorated oil and gas wells authorized by the Railroad Commission of Texas, expected competitions, management’s intent, beliefs or current expectations with respect to Texas Pacific’s future financial performance and other matters. Texas Pacific cautions readers that various factors could cause its actual financial and operational results to differ materially from those indicated by forward-looking statements made from time-to-time in news releases, reports, proxy statements and other written communications, as well as oral statements made from time to time by representatives of Texas Pacific. The following factors, as well as any other cautionary language included in this press release, provide examples of risks, uncertainties and events beyond our control that may cause Texas Pacific’s actual results to differ materially from the expectations Texas Pacific describes in such forward-looking statements: global economic conditions; market prices of oil and gas; the demand for water services by operators in the Permian Basin; the impact of government regulation; the impact of competition; the continued service of key management personnel; and other risks and uncertainties disclosed in Texas Pacific’s annual reports on Form 10-K and quarterly reports on Form 10-Q. We undertake no obligation to update publicly or otherwise revise any forward-looking statements, whether as a result of new information, future events or other factors that affect the subject of these statements, except where we are expressly required to do so by law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20190408005408/en/

Contact:Media:
Abernathy MacGregor
Sydney Isaacs
(713) 343-0427
sri@abmac.com

Investor Relations:
MacKenzie Partners
Paul Schulman / David Whissel
(212) 929-5500 or (800) 322-2885
pschulman@mackenziepartners.com

-0- Apr/08/2019 11:22 GMT

Recommended Stories

Updated Again

April 7, 2019April 16, 2019 tpltblogger

PRELIMINARY PROXY STATEMENT – SUBJECT TO COMPLETION, DATED APRIL 5, 2019

Last one was updated on 4/4. This is one day later.

Some changes/updates:

We do note that if the Trust were to hold annual elections of the entire Board, a party may have the ability to effect a change in control of the Trust at an annual meeting.

On water:

Mr. Oliver is not pre-judging any such approach, and believes each such option needs to be fully evaluated with proper outside consultants, in order to maximize value for holders of Shares.

Timeline update. MLP idea is out due to new corp tax rate:

In 2016, SoftVest LP and ART-FGT suggested that the Trust actively consider converting some or all of its operations into a master limited partnership. This suggestion was driven by the belief that such structure could potentially result in increased distributions to investors due to the pass-through taxation treatment available to master limited partnerships. Written outlines of this alternative were delivered to the Trust on or about June 29, 2016 and October 25, 2016.

On or about December 15, 2016 SoftVest LP and ART-FGT submitted a further restructuring suggestion, which contemplated converting the Trust into a corporation and, thereafter, possibly into a master limited partnership.

Given various changes to US tax laws effected since 2016, including lower corporate tax rates, the Participants at this time are not suggesting that the Trust effect a conversion into a master limited partnership.

M&A possibilities:

On or about November 28, 2018, Mr. Tessler called Mr. Barry to convey that he had become aware that a certain oil and gas company (“Company A”) may be interested in discussing a possible negotiated business combination transaction with the Trust.

On or about January 22, 2019, Mr. Tessler sent an email to Mr. Barry regarding a potential business combination transaction with an oil and gas company (“Company B”), which is affiliated with Company A.

Mr. Oliver, if elected trustee, is committed to being open to any transaction that may create value for Trust investors, but he will only advocate for transactions that he believes will be in the best interest of Trust investors. At this time, Mr. Oliver and the other Participants do not have enough information to determine whether a transaction with Company A, Company B or another third party, if any of these is available, will be in the best interests of Trust investors.

Rattler Midstream LP

April 5, 2019April 5, 2019 tpltblogger1 Comment

Form S-1 Rattler Midstream

Weekend reader. Diamonback ($FANG) is spinning out Rattler to further its focus as a pure play E&P. Rattler will be the closest thing the public markets have to a pure play water business.

Proforma top line of $185MM. Net income of $56MM. Left side of balance sheet expected to be $900MM. $56MM/$900MM = 6.2% ROA.

What’s the multiple?

rattler

Updated SoftVest, L.P. Proxy Statement

April 5, 2019April 16, 2019 tpltblogger4 Comments

PRELIMINARY PROXY STATEMENT – SUBJECT TO COMPLETION, DATED APRIL 4, 2019

Proxy card image 1, 2

All SEC filings

Push for governance:

Reasons for the Solicitation

At the Special Meeting, one trustee of the Trust is to be elected to fill the vacancy created by the resignation of Mr. Maurice Meyer III. We are seeking your proxy to vote for the election of Mr. Oliver as a trustee.

Well-Qualified Nominee: Mr. Oliver is an experienced oil and gas investor with over 22 years of experience buying and selling properties and over 35 years of experience managing investments with an emphasis in the energy market. Among other relevant experience:

Mr. Oliver currently serves as the President of SoftVest Advisors, a registered investment adviser that acts as an investment manager for clients, including funds and managed accounts, with investments in oil and gas minerals and royalties;

Mr. Oliver was President of Midland Map Company, LLC, a Permian Basin oil and gas lease and ownership map producer since 1997, and recently sold in January 2019 to Drilling Info;

Mr. Oliver is Principal of Geologic Research Centers LLC, a log library providing geological data to the oil and gas industry with a library in Abilene, Texas;

Mr. Oliver has served on the Board of Directors of Texas Mutual Insurance Company since 2009, where he currently also serves as Chairman of the Investment Committee, with over $6,500,000,000 of total assets;

Mr. Oliver has served as a director on the Board of Directors of AMEN Properties, Inc. since July 2001 and was appointed Chairman of the Board in September 2002, AMEN Properties owns, directly or indirectly, certain oil and gas royalty and working interest properties; and

In 2007, through certain affiliated entities, Mr. Oliver led a team to successfully acquire the assets of the Santa Fe Energy Trust (formerly NYSE ticker SFF), which consisted of over 12,000 royalty and working interest properties in at least seven states.

For additional information about Mr. Oliver see below under the heading “MATTERS TO BE CONSIDERED AT THE SPECIAL MEETING—Biographical Information Regarding Mr. Oliver.”

Commitment to Fully Explore Conversion of the Trust into a Delaware Corporation: Mr. Oliver and the other Participants believe that the Trust would benefit from converting into a Delaware corporation, and subject to his duties as trustee, Mr. Oliver is committed to fully exploring this alternative.

Among other things, the Participants believe that, as compared to trust law, Delaware corporate law has a more well-developed legal framework around matters of governance and investor rights, which in our view provides greater comfort and predictability to investors in a publicly-traded entity. In that regard, we note by way of example:

Election of Trustees and Shareholder Meetings: Trustees of the Trust serve until their death, resignation or diqualification, which in our view makes the election of a trustee comparable to a life-tenured appointment. Meetings of holder of Shares only occur when a new trustee needs to be elected to fill a vacancy of one of the three trustee positions. Indeed, public filings show that the Trust has only held three meetings of holders of Shares since the year 2000.

In contrast, Delaware law generally requires that corporations hold an anual meeting to vote on the election of directors. Directors, in turn, can be elected for terms of one year (if the board is not staggered) or three years (if the board is staggered).

Mr. Oliver is Committed to Fully Exploring the Best Options for the Trust’s New Water Business: In June 2017, the Trust announced the formation of Texas Pacific Water Resources LLC (“TPWR”). TPWR, a single member LLC and wholly owned subsidiary of the Trust, focuses on providing a full-service water offering to operators in the Permian Basin. These services include, but are not limited to, brackish water sourcing, produced-water gathering/treatment/recycling, infrastructure development/construction, disposal, water tracking, analytics and well testing services. The Participants believe that these activities could create various risks for the Trust, such as risks related to workers compensation, leaks or rupturing of pipelines (including surface damage) and injection well casings (including potential acquifier contamination). In light of those risks, Mr. Oliver is committed to actively encouraging the Trust to evaluate the existing water business and, with the assistance of outside consultants and other advisors, determine if it is advisable to grow operations internally, partner with a strategic partner, or sell the water rights to a third party and retain a royalty. Mr. Oliver is not pre-judging any such approach, and believes each such option needs to be fully evaluated with proper outside consultants, in order to maximize value for holders of Shares. In addition, Mr. Oliver believes that any proposed capital expenditures and operating expenses incurred in connection with TPWR should have their respective expected rates of return carefully compared to the compounding benefits of retiring outstanding Shares.

One of three:

On April 2, 2019, Mr. Oliver had a telephone conversation with the trustees to discuss his qualifications and experiences, whereupon he expressed his willingness to work collaboratively with the other two trustees to create value for all holders of Shares.

We are soliciting your support to elect Mr. Oliver at the Special Meeting because we expect that he, as a trustee and subject to his duties as such, will encourage the other trustees and the Trust to (1) explore the Conversion, as well as any other opportunities available to maximize value for holders of Shares and (2) be more transparent and frequent on updates to holders of Shares (e.g., drilling updates, drilled and uncompleted well updates, water production, water injection volumes, and engineering reports). In that regard, we understand that if elected Mr. Oliver will be only one of three trustees, such that effecting any of the foregoing will require the agreement of one or both of the other trustees.

It’s not cheap:

SoftVest Advisors has retained D.F. King & Co., Inc. (“DFK”) to assist in the solicitation of proxies and for related services. SoftVest Advisors will pay DFK an estimated fee of up to $150,000 and has agreed to reimburse DFK for certain out-of-pocket fees and expenses and to indemnify DFK against certain liabilities and expenses, including reasonable legal fees and related charges. DFK will solicit proxies from individuals, brokers, banks, bank nominees and other institutional holders. Approximately 25 persons will be used by DFK in its solicitation efforts.

On Proxy Voting

April 3, 2019 tpltblogger

I’ve been getting proxy questions from readers. While I warn that I’m not an expert, I’ve been reading up on the process and will share some links below that have been helpful.

My understanding is that voting will open up after final proxy materials have been submitted by both TPL management and the SoftVest group. The SEC has a 10 day rule that puts a buffer between preliminary and final filings. If the rule holds (warning: I’m out of my element here) we could be looking at next week for finalization from both sides.

If we conservatively assume 4/10 as the finalization date, that leaves about 40 days to vote though (see Barrons article below) you might want to assume the window is shorter than that.

If voting remotely, it probably makes sense to take a belt and suspenders approach to make sure your vote was cast in your intended manner. Call your broker to make sure you are covered if you intend to vote that way.

It’s important to remember that TPL has retained legal counsel and a proxy soliciting service to help corral the votes. Remember that you as unit holders are paying for that service. Real time feedback from owners could be helpful in avoiding the costs of taking this vote down to the wire.

I’m assuming that ISS will issue a recommendation for mutual fund managers to adopt. I know little about this process and would be extremely grateful for any information on their process or ruling in the case of TPL. It is my understanding that they generally prefer more transparency to less.

Again, I warn I’m not an expert. I’m happy to amend this with better information as it appears. I’m sure it’s out there!

Links:

SEC Proxy Overview

Barrons: Proxy Voting Is Broken and Needs to Change

ISS 2019 Updates

Rutgers: Proxy Voting Analysis and Statistics

Going, Going, Ghawar