I’m not able to fully dig in right now but it looks like an unprecedented level of information sharing. Excited to read it.
Being snarky here, but if TPL is the ETF of the Permian basin can I start to expect management fees to come down?
TPL management could be in your city soon with CS on a non-deal road show. Send me your notes if you attend!
Some observations in no particular order:
- “During the nine months ended September 30, 2019, we purchased and retired 6,258 Sub-shares. During the nine months ended September 30, 2018, we purchased and retired 39,768 Sub-shares.”
- DUC wells now 424 vs 369 at the end of Q2. 15% jump. Someone has been busy.
- $250MM in cash on the balance sheet
- $87MM in PP&E. 34% growth YTD
- Water has made $65MM top line YTD. Up 37% from same period last year. Top line is generally supposed to grow faster than PP&E, right?
- $24.7MM in operating expenses during the quarter. 2.4x vs same quarter last year
- “For the nine months ended September 30, 2019, the Trust sold approximately 21,986 acres (13,180 acres in Loving County, 5,675 acres in Culberson County, 1,651 acres in Hudspeth County, 843 acres in Reeves County, 636 acres in Midland County and approximately 1 acre in Glasscock County) of land in Texas for an aggregate sales price of approximately $113.0 million, with an average of approximately $5,141 per acre.”
- “For the nine months ended September 30, 2019, the trust acquired approximately 21,671 acres (Culberson, Glasscock, Loving and Reeves Counties) of land in Texas for an aggregate purchase price of approximately $74.4 million, with an average of approximately $3,434 per acre.”
- I wish we had more details on rationale and benefits of the land swap above. Flat in acres, took out some $$ (great), but is ending acreage accretive to the grand plan? How so?
- EBITDA language from the press release did not carry over to the Q
- “Legal and professional fees were $5.6 million for the three months ended September 30, 2019 compared to $0.6 million for the comparable period of 2018. The increase in legal and professional fees for the three months ended September 30, 2019 compared to 2018 is principally due to approximately $4.9 million of legal and professional fees related to the proxy contest to elect a new Trustee, the entry into and payments made under the settlement agreement dated July 30, 2019 and the conversion exploration committee as disclosed in the Trust’s Current Report on Form 8-K filed with the SEC on July 30, 2019. We anticipate receiving a partial reimbursement of these legal and professional fees under coverage provided by our director and officer insurance policy. The amount of the reimbursement has not yet been determined.”
- I’m surprised the D&O underwriter wrote a policy given the Trust structure of the company and it’s (now abused) governance limitations. I’m guessing they regret it
- “Salaries and related employee expenses were $8.5 million for the three months ended September 30, 2019 compared to $4.1 million for the comparable period of 2018. The increase in salaries and related employee expenses is directly related to the increase in the number of employees from 58 employees as of September 30, 2018 to 89 as of September 30, 2019 and additional contract labor expenses for the three months ended September 30, 2019 compared to the same period of 2018.”
- “Texas Pacific is not involved in any material pending legal proceedings.” ??