SoftVest Appeals to Better Judgement

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

SoftVest calls for an end to the proxy battle more than a few times in this open letter.

In fact, only yesterday Robert Packer, TPL’s Chief Financial Officer, e-mailed Kline D. Oliver, Vice-President of SoftVest Advisors LLC, requesting an updated list of drilled, completed and permitted wells on TPL non-participating royalty interest property that Mr. Oliver maintains based on his dedicated ongoing research.  Mr. Oliver provided the list to Mr. Packer this morning, even after being the target of a distasteful attack letter issued by you before the open of the market.

As we trust you know, Mr. Oliver has shared similar information in the past with TPL’s management at their request and at no cost – despite TPL’s offer to pay for such work.   

We see no reason why the Trustees cannot have a collaborative relationship with Mr. Oliver, much like TPL’s management has had and continues to have with him.  Mr. Oliver is, among other things, a source of deep expertise and knowledge about TPL and the industry which in our view will immensely enrich the Board.

It is time to put this proxy contest behind us: we call on you two Trustees to nominate Mr. Oliver, and avoid disrupting what has historically been a productive working relationship between him and TPL’s management.

 

However, one of the unescapable consequences of having a charter from the 19th century that limits your governing body to only three individuals is that each of them must bring core areas of competency needed for the success of TPL

 

Ultimately, we encourage you to put an end to this unnecessary and wasteful proxy contest. We ask that you endorse the nomination of Eric Oliver at the upcoming special meeting and allow him to work collaboratively with you both of you to create a better TPL.  The three of you can bring TPL into the 21st century, and transform our joint investment into a modern corporation with an expanded Board with modern fiduciary duties to all shareholders that can include honorable men like General Cook as part of a broader mosaic of skillsets.

If you insist on continuing this unnecessary proxy contest then at a minimum let’s have a town hall meeting where both nominees will have an opportunity to present their respective ideas to TPL’s shareholders, which we think would benefit all shareholders.

It is time for all of us to start working together for the good of TPL.

SoftVest Responds on Ad Spends

EDGAR 14A : SoftVest : Urge Trustees to Restore a Civil Discourse Around the Upcoming Election, Stop Spending Shareholders’ Money on Social Media Ads

Two benjamins…

To put things in perspective, given the limited insider share ownership, for every $1,000,000 that you spend on legal, PR, financial advisors, social media ads, etc., over $250,000 comes out of the undersigned “dissident’s” pocket.  Only $206.26 comes out of management’s pocket.  In our view, this makes no sense.

Buybacks or Ads?

EDGAR 14A

How much did these cost?

Twitter ad

On April 10, 2019, Texas Pacific Land Trust issued the following online advertisements to Facebook.com, Twitter.com and Google.com:

Advertisement 1 (Facebook.com)

For over 130 years, TPL has been there for shareholders, generating tremendous long-term value from its uniquely Texan assets. Today, the future of your investment is in jeopardy, but you have the power to save it.

Shareholders: vote FOR General Donald Cook using the BLUE proxy card.

Protect your Trust. Trust General Cook.

Advertisement 2 (Facebook.com)

There’s a storm on the horizon. Texas Pacific Land Trust and its legacy of value creation are under threat by a dissident group putting its own interests before those of other shareholders.

Retired 4-star General Donald Cook is the ONLY candidate who will advance TPL’s strategy for the benefit of ALL shareholders.

Make your voice heard. Vote FOR General Cook on the BLUE card.

Protect your Trust. Trust General Cook.

Advertisement 3 (Facebook.com)

Texas Pacific Land Trust is a vital part of Texas’ history. Through careful stewardship, TPL has delivered total shareholder returns of ~733% since 2014 that have enhanced our investors’ futures. Help us secure this growth for years to come.

Vote FOR four-star General Don Cook on the BLUE proxy card.

Protect your Trust. Trust General Cook.

Advertisement 4 (Twitter.com)

For over 130 years, TPL has been there for its shareholders. But today, the future of your investment is in jeopardy. You have the power to save it.

Vote FOR General Donald Cook using the BLUE proxy card.

Protect your Trust. Trust General Cook.

http://www.trusttpl.com

Advertisement 5 (Twitter.com)

There’s a storm on the horizon. TPL is under threat by a dissident, self-serving group. General Don Cook is the ONLY candidate who will advance TPL’s strategy for ALL shareholders.

Make your voice heard. Vote FOR Cook on the BLUE card.

Protect your Trust.

http://www.trusttpl.com

Advertisement 6 (Twitter.com) 

TPL is a vital part of Texas. Through careful stewardship, we’ve delivered total shareholder returns of ~733% since 2014. Help us secure this growth for years to come. Vote FOR General Don Cook on the BLUE proxy card.

Protect your Trust. Trust General Cook.

http://www.trusttpl.com

Advertisement 7 (Google.com) 

Texas Pacific Land Trust

Proven strategy is now at risk

Vote for Gen Cook on BLUE Card

TPL outperformed the market with returns of 733% since 2014. More than Apple or Amazon!

TPL is vital to Texas history

https://www.trusttpl.com/

Advertisement 8 (Google.com) 

Texas Pacific Land Trust

Protect your Trust

Make your voice heard!

General Don Cook is the only choice to protect shareholder value

Vote for General Cook on the BLUE proxy card by phone, internet, or mail by May 22

https://www.trusttpl.com/make-your-voice-heard

Advertisement 9 (Google.com) 

Texas Pacific Land Trust

Protect your Trust

Trust the General

The future of your investment is in your hands! Vote for General Cook on the BLUE card

You have the opportunity to make a difference and have your voice heard

https://www.trusttpl.com/make-your-voice-heard

Advertisement 10 (Google.com)

Texas Pacific Land Trust

Protect your Trust

Proven strategy is now at risk

Gen. Don Cook is the best choice to continue years of proven success and long term value

You have the power to make your voice heard! Choose General Cook on the BLUE proxy card

https://www.trusttpl.com/make-your-voice-heard

SoftVest Request Holders List

EDGAR: Request to Inspect and Copy Certain Records

Yesterday, a reader of the blog indicated that they received a call from ‘TPL’ to discuss the proxy and presumably sell BLUE.  Team WHITE is requesting the list so that they may do the same.

Anyone else get a call yet?

I am writing to formally request that you make available for inspection and copying to me and my representatives, during TPL’s usual business hours, the list of certificate holders of TPL showing the name, address, email address (if available), and number of Shares registered in the name of each such holder as of the close of business on March 28, 2019, which is the record date for the upcoming special meeting of holders of Shares currently scheduled for May 22, 2019 (the “Special Meeting”). I make this request pursuant to the express terms of Section Fourth of the Declaration of Trust of TPL and common law.
Further, on the same basis, I hereby request that you make available for inspection and copying a copy of the Depository Trust Company Omnibus Proxy, omnibus proxies from banks and brokerage firms and the list of non-objecting beneficial owners of Shares that TPL has recently requested from Broadridge Financial Solutions, Inc. As you know, such “NOBO” list includes the names of beneficial owners of Shares who hold through brokers and other custodians that have given permission to their financial intermediary to release their identity. TPL management obviously intends to use such information to solicit proxies from holders of Shares in connection with the Special Meeting. From a corporate governance perspective, we assume you recognize how important it is for TPL investors that SoftVest not be denied the same ability to make its case that management enjoys.

Letter from Eric Oliver

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

Same Letter on EDGAR

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

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.