Earnings Call


My favorite part:

At March 31, 2021, Texas Pacific at a robust inventory of 541 drill but uncompleted wells wells or DUCs and 488 permits providing clear visibility in the future royalty earnings. New DUCs grew from 91 in the fourth quarter to a 152 new ducks in the first quarter providing line of sight into future production. New permits grew from a 139 in the fourth quarter to a 176 in the first quarter. As of March 31, 17% of all Permian rigs were located on TPL drilling spacing units or DSU’s up from 11% of Permian rigs as of December 31. In terms of spuds, TPL DSU’s accounted for 18% of total spuds across the Permian during the first quarter. 14% of all permits approved by the Texas Railroad Commission in the first quarter intersect TPL DSU’s Importantly, most of our net royalty acres are concentrated within the Northern Delaware region and core of the – Basin. This diverse exposure represents a significant competitive advantage for TPL Overall, our oil and gas royalties are only 10% developed with the Delaware Basin being less developed than the Midland Basin. Within the Texas portion of the Delaware, TPL accounted for 49% of all spuds during the first quarter.We believe this gives us more runway to grow our royalties over time compared to our peers, as the Delaware should continue to support a high pace of growth in production. In addition to our oil and gas royalties, we also have surface ownership of our land. Over the past decade, technological advances in exploration and development have unlocked a tremendous amount of additional reserves contributing to a rapid build out of oil and gas infrastructure across the basin. These activities and others provide TPL enormous optionality to generate additional cash flows utilizing our surface assets.

I could have used more Q&A but overall I’d call this first call a win. Presenters were impressive and well prepared. Confidence building. I get the sense that cash is being kept on the balance sheet for opportunistic lifts. The little engine that was in the business of going out of business appears to be going the other way.

6 thoughts on “Earnings Call

  1. Agree that Q&A was a disappointment. The analysts tone and questions gave the impression that they were somewhat bored and just going through the motions. Management seemed to be happy to stick to the script, but, then again, they had a good story to tell.


  2. Thanks for the recap Mr. Blogger!!!
    I listened to the call and I was impressed with management. Granted they were reading a script, they did the Q&A well.

    Having attended the meeting in May 2019, I expected there to be MANY more questions asked by individual investors. Frankly, I was shocked.

    Did mgmt limited the questions or were there just none? That is my $64k question.

    Liked by 2 people

    • Yes. only after accepting Q&A from 2 analysts, the conference call ended saying that is all the time they have.

      Liked by 1 person

  3. Conference Call Playback:

    Domestic: 1-844-512-2921
    International: 1-412-317-6671
    Pass code: 13718997
    The playback can be accessed through May 21, 2021.

    Liked by 1 person

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