Information and Observations (from others):

-With the close of this meeting David Barry and John Norris are no longer on the board

-The stockholders agreement between the company and HK/SoftVest is terminated. HK/SV can vote however they want going forward

-Various board members were mingling with investors at casual events prior to the meeting

-Q&A at the meeting was quite spirited

-We learned that the board unanimously voted to sue HK/SV for their break from the board on prop 4. The legal spend is on ALL of them

-Shareholders in attendance indicated a strong preference for buybacks as opposed to M&A when informally polled during Gabi Gliksberg’s time at the microphone

If you were there, what did I miss?

I’m not in Dallas. Keep us updated on the fun!

https://x.com/310value/status/1722951166256914606?s=46&t=oboeinihvjNn__bpHMCoXQ

https://ir.stockpr.com/tpltrust/sec-filings-email/content/0001104659-23-115716/tm2330241-1_4seq1.html

Local carpetbagger tries to make good.

This alert updates the analysis published Oct. 27, 2023 with respect to the vote recommendation on director Murray Stahl (Item 1b). In the original analysis, a vote against Stahl – the only incumbent director on the ballot this year – was recommended due to the board’s failure to take action on a shareholder proposal which received majority support at the 2022 annual meeting. Upon further review, given that Stahl is a designated director of Horizon Kinetics pursuant to a shareholders’ agreement (which, among other things, requires Horizon Kinetics to vote “in accordance with the recommendation of the majority of the Board in respect of any stockholder proposal submitted pursuant to Rule 14a-8”), and that various improvements in governance have come about since the initial contested director election in 2019, and given that the company has not stated that the board’s opposition to the 2022 shareholder proposal (or to the similar proposal on this year’s ballot) was unanimous, we are not able to conclude with confidence that Stahl is accountable for the company’s failure to implement the majority-supported proposal. Accordingly, notwithstanding the board’s failure to take action on the shareholder proposal, support for Stahl’s election is considered warranted. All other vote recommendations remain unchanged.

ISS recently issued its voting recommendations (have you voted yet?) for the upcoming meeting. While I can’t share the report I can offer two highlights.

1) ISS recommends voting AGAINST all incumbent candidates. Shareholders voted in a right to act by written consent proposal last year and the board ignored it. I’m guessing they won’t ignore it next year.

“The board failed to disclose any meaningful engagements with shareholders or implementation of the majority-supported shareholder proposal providing shareholders with the right to act by written consent at the prior annual meeting.

2) ISS recommends voting FOR proposals 4 (right to call a special meeting), 6 (executive share retention), and 7 (right to act by written consent (again)).

All in, this is a win for shareholders. We are harder to ignore. Full rolling one year terms soon. Can you feel the tension in the air? I know I can.

Post below will be amended. I was doing more digging on cash and realized I was dead wrong. $8MM interest on cash in a quarter sounds nice. Though the cash shouldn’t be there, but that’s a different story.

Other income, net. Other income, net was $8.0 million and $1.9 million for the three months ended September 30, 2023 and 2022, respectively. The increase in other income, net is primarily related to increased interest income earned on our cash balances for the three months ended September 30, 2023 compared to the same period of 2022. Higher cash balances and interest yields during this period contributed to the increase in interest income.

Other income, net. Other income, net was $20.2 million and $2.6 million for the nine months ended September 30, 2023 and 2022, respectively. The increase in other income, net is primarily related to increased interest income earned on our cash balances during 2023. Higher cash balances and interest yields during this period contributed to the increase in interest income.

https://www.texaspacific.com/investors/news-events/press-releases/detail/150/texas-pacific-land-corporation-announces-third-quarter-2023

10-Q

$790MM in current assets on the balance sheet. A new high.

As an aside — I wonder what the real return has been on the cash position since it started to build? Cumulative inflation is probably 20%+ since the drama started and buybacks effectively stopped. Not efficient.

I can only interpret the lack of material buybacks as an ongoing FU to shareholders.

The intangible assets line on the balance sheet is new.

Some relief on legal expenses (finally).

Land sales of $5.4MM of royalty interest acquisitions of $1.8MM

Last Quarter – For the six months ended June 30, 2023, we sold 43 acres of land in Texas for an aggregate sales price of $1.4 million. There were no significant land sales for the six months ended June 30, 2022.

This Quarter – For the nine months ended September 30, 2023, we sold 18,061 acres of land in Texas for an aggregate sales price of $6.8 million. For the nine months ended September 30, 2022, we sold 129 acres of land in Texas for an aggregate sales price of $3.3 million. There was no carrying value in the land associated with these sales.

Last Quarter – For the six months ended June 30, 2023, we acquired oil and gas royalty interests in 61 net royalty acres (normalized to 1/8th) for an aggregate purchase price of approximately $1.8 million. For the six months ended June 30, 2022, we acquired oil and gas royalty interests in 92 net royalty acres (normalized to 1/8th) for an aggregate purchase price of approximately $1.7 million.

This quarter – For the nine months ended September 30, 2023, we acquired oil and gas royalty interests in 119 net royalty acres (normalized to 1/8th) for an aggregate purchase price of approximately $3.6 million. For the nine months ended September 30, 2022, we acquired oil and gas royalty interests in 92 net royalty acres (normalized to 1/8th) for an aggregate purchase price of approximately $1.7 million.

How much of total water expenses should we ascribe to water royalties?

Produced water royalties. Produced water royalties are royalties received from the transfer or disposal of produced water on our land. Produced water royalties are contractual and not paid as a matter of right. We do not operate any salt water disposal wells. Produced water royalties were $61.8 million for the nine months ended September 30, 2023 compared to $52.7 million compared to the same period in 2022. This increase is principally due to increased produced water volumes for the nine months ended September 30, 2023 compared to the same period of 2022.

Net income. Net income for the Water Services and Operations segment was $74.7 million for the nine months ended September 30, 2023 compared to $61.2 million for the same period in 2022. Segment operating income increased $17.1 million for the nine months ended September 30, 2023 compared to the same period of 2022. The increase is principally due to the $28.9 million increase in segment revenues and was partially offset by the $11.5 million increase in water service-related expenses and the $3.8 million increase in income tax expense. Expenses are discussed further above under “Results of Operations — Consolidated.”

What did you see?

https://www.businesswire.com/news/home/20231019337201/en/

Milestone Carbon, a subsidiary of Milestone Environmental Services and an emerging leader in permanent carbon sequestration services for industrial emitters, today announced an agreement under which Milestone Carbon will lease from Texas Pacific Land Corporation (NYSE: TPL) (“TPL”) more than 22,000 acres of land and pore space for permanent geologic sequestration of CO₂ in the Permian Basin. The acreage, located in Loving and Midland counties, would support carbon capture and storage (“CCS”) projects at industrial facilities in West Texas, including natural gas processing and power plants.

“Continued development of carbon capture projects by Milestone Carbon is promising, and we are excited that TPL’s expansive surface footprint could potentially serve as a key resource to this emerging industry,” said Tyler Glover, CEO of TPL. “This is another opportunity that reaffirms our commitment to sustainability, and we are encouraged by the potential benefits carbon capture could provide in the future for all the stakeholders involved in these projects.”

https://www.linkedin.com/feed/update/urn:li:activity:7120767341293957120/

Any guesses on what the revenue is on a lease like this? Who takes on any potential environmental liabilities?

Posting this because it is a frequently asked question.

There are no voting restrictions on proposals next year.

What is the deadline for receipt of director nominations and stockholder proposals to be presented at the next annual meeting of stockholders?

In order for any stockholder proposal submitted pursuant to Rule 14a-8 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), to be included in the Company’s Proxy Statement to be issued in connection with the 2024 Annual Meeting of Stockholders, such stockholder proposal must be received by the Company no later than June 12, 2024. Any such stockholder proposal submitted, including any accompanying supporting statement, may not exceed 500 words, as per Rule 14a-8(d) of the Exchange Act. Any director nominations or stockholder proposals submitted outside the processes of Rule 14a-8 promulgated under the Exchange Act, which a stockholder intends to bring forth at the Company’s 2024 annual meeting of stockholders, will be untimely unless it is received between July 13, 2024 and August 12, 2024 in accordance with the Company’s Amended and Restated Bylaws (the “Bylaws”). In order for stockholders to give timely notice of nominations for directors for inclusion on a universal proxy card in connection with the 2024 annual meeting of stockholders, notice must be submitted no later than September 11, 2024 and include all of the information required by Rule 14a-19 under the Exchange Act. Any changes to such dates will be disclosed in our periodic reports on Form 10-Q or Form 10-K, or current reports on Form 8-K, filed with the SEC. Any such request should be directed to the Company’s Secretary at 1700 Pacific Avenue, Suite 2900, Dallas, Texas, 75201.

https://ir.stockpr.com/tpltrust/sec-filings-email/content/0001140361-23-047453/ny20009971x1_def14a.htm

Dear Fellow Stockholders:

We invite you to attend the 2023 Annual Meeting of Stockholders of Texas Pacific Land Corporation, a Delaware corporation (the “Company”), which will be held on November 10, 2023, at 11:00 a.m. Central time (the “Annual Meeting”) at the Renaissance Dallas Hotel, 2222 North Stemmons Freeway, Dallas, Texas 75207. At the Annual Meeting, you will be asked to vote on the following proposals (as more fully described in the proxy statement accompanying this notice):

1.	To elect three (3) members of the Company’s Board of Directors (the “Board”) to serve until the 2024 annual meeting of stockholders.

2.	To approve, by non-binding advisory vote, the executive compensation paid to our named executive officers.

3.	To ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2023.

4.	To consider a non-binding stockholder proposal regarding stockholders’ ability to call for a special stockholder meeting.

5.	To consider a non-binding stockholder proposal regarding adopting a policy that requires an independent Chair of the Company’s Board of Directors.

6.	To consider a non-binding stockholder proposal regarding adopting a policy requiring executives to retain a significant portion of stock until retirement.

7.	To consider a non-binding stockholder proposal regarding stockholders’ ability to act by written consent.

8.	To consider a non-binding stockholder proposal regarding adopting a policy to request that the New York Stock Exchange not categorize any increase in the authorized number of shares as routine.

9.	To consider a non-binding stockholder proposal regarding severance pay to senior managers as a breach of fiduciary duty.

10.	To transact such other business as may properly come before the Annual Meeting or any adjournment thereof.

Only stockholders of record at the close of business on September 14, 2023 are entitled to notice of and to vote at the Annual Meeting or any adjournment thereof.

My vote after a quick skim (subject to change, of course):

For: 3, 4, 5, 6, 7, 8, 9. Against: 2

Extremely strong showing by a very engaged shareholder base. Not sure I’ve ever seen so many pro-investor proposals on a single proxy. But remember….

On July 28, 2023, the Company and the Investor Group entered into a Cooperation Agreement (the “Cooperation Agreement”) pursuant to which (i) Mr. Stahl, Ms. Woung-Chapman and Mr. Roosa would be nominated by the Company for election at the Annual Meeting, (ii) the resignation letters submitted by Messrs. Stahl and Oliver pursuant to the Stockholders’ Agreement (as described above) were considered withdrawn and no longer effective, (iii) the Investor Group agreed to vote or cause to be voted all of the shares of Common Stock over which the Investor Group has direct or indirect voting control for the election of the three nominees named above in Proposal 1, for Proposals 2 and 3, and in accordance with the recommendation of the majority of the Board in respect of Proposals 4-9. The Cooperation Agreement also provided for mutual non-disparagement covenants and certain standstill obligations for the Investor Group as long as one of Mr. Stahl or Mr. Oliver remain on the Board. In addition, the termination date of the Stockholders’ Agreement was changed to occur following the completion of the Annual Meeting, which in no event will extend beyond December 31, 2023.

Fun one on carbon capture and enhanced recovery. And share repurchases.

In trying to ignore shareholder proposals.

https://www.sec.gov/corpfin/2022-2023-shareholder-proposals-no-action?

The SEC can not concur that there is good enough reason to exclude proposals that 1) require categorizing share authorizations as something other than routine and 2) prohibit golden parachutes.

Both are good protections for shareholders. I can’t wait to vote on them.

Will a meeting ever be announced?

https://ir.stockpr.com/tpltrust/sec-filings-email/content/0001104659-23-099383/tm2325816-1_4.html

The following are excerpts from the four shareholder proposals that TPL management is petitioning the SEC to not address:

Stockholder Proposal of Gabi Gliksberg

Shareholders ask our Board of Directors to take the steps necessary to permit removal of  directors by a majority vote of shareholders, with or without cause, to the fullest extent possible and that this be called out in the bylaws and/or Articles of Incorporation.

TPL’s present bylaws provide excessive job security for the Board of Directors. The bylaws can provide job security to a director who clearly needs to be removed but the director insists with finding fault with credible evidence. In addition, the bylaws can even provide job security to a director who has been convicted of a felony by a court of competent jurisdiction so long as that conviction remains subject to direct appeal!

Shareholders should hold the power to vote on removing directors without the need for cause. This proposal represents an important step forward in director accountability.

Stockholder Proposal of Jason Hubert

Shareholders request that TPL’s Board of Directors perform a review of the
Company’s processes surrounding the preparation of its SEC-filed Proxy
Materials.

Stockholder Proposal of Lion Long Term Partners LP

Resolved, that the Board of Directors of the Company adopt a policy
whereby, in connection with any proposal to increase the authorized number of
shares of common stock of the Company, other than solely through a stock split,
the Company request the New York Stock Exchange (“NYSE”), when first
submitting the Company’s proxy materials to the NYSE for review, not to categorize
such proposal as routine under Rule 452 of the NYSE’s Guide.

Stockholder Proposal of Special Opportunities Fund

RESOLVED: The stockholders will consider it a breach of fiduciary duty for the  board of directors to authorize severance pay for any senior manager in excess of such individual’s base annual compensation unless it is unanimously approved.

SUPPORTING STATEMENT: The Company has been engaged in contentious litigation with certain directors. Given this tension in the boardroom, we believe it is possible that at some point there may be changes to the board of directors and to senior management. The purpose of this non-binding proposal is to advise the directors that the stockholders believe that, unless unanimously approved by the board, authorizing any severance pay that would constitute a lucrative golden parachute for any senior manager may be subject to a legal challenge as a breach of a director’s fiduciary duty.

Talking my book but all seem prudent and in keeping with good governance to me. We’ll probably never know (though we can suspect) who has/had the real decision rights behind many of the micro actions (such as trashed proposals) taken by the company that were so obviously contrary to the wishes of engaged investors. Perhaps the “refreshed” board (and by extension management team) will foster a culture of prioritizing shareholder interests over entrenchment, ego, and contempt.

https://www.sec.gov/corpfin/shareholder-proposals-incoming

It’s time for the annual tradition of TPL management petitioning the SEC to ignore shareholder proposals.