3Q 10-Q

tpltblogger14 Comments

Filing

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.”  ??

 

14 thoughts on “3Q 10-Q”

  2. “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 wonder which part of the legal mess their policy covers? Is it covering the costs of Oliver’s crew in the settlement?

    Liked by 1 person

      • I figure we need 100k to get it started. I will contribute the first 10k who is with me. I am done with this crap. We will sue in New York court. Let’s crowdsource this lawsuit. We will get our fee give back at the end. I am serious as a heart attack it is time for minority shareholders to fight back. I will be creating a website next week to find minority shareholders. David Barry and John Norris we are coming after you guys. I hope minority shareholders feel the same way.

        Liked by 1 person

  5. Important to note that DUC methodology for counting has changed – but even with the changed way to identify, still a big growth in the number of DUC. Q over Q with new counting method went from 369 in Q2 to 424 in Q3. Good stuff. I found interesting a new risk factor: “any governance or structural changes to the Trust could adversely affect the trading price and/or form to our Certificate of Proprietary Interest and Sub-shares.” This company is still undervalued IMO. Patience will be rewarded here. We are negatively impacted by the macro view from the Street on the Permian Basin and O&G and the pending proxy/legal/committee. I could only hope that know that Warren Buffet is involved with Oxy, he will see the awesome water provider that Anadarko has had, and want to buy up all of it! Sorry, Barry is the weakest link and he must go – can we please just pay him ahead 100k for the next 30 years and be done with him? Please?

    Liked by 1 person

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