Texas Pacific Land (TPL)2022-05-05 16:29Financial Data and Key Metrics Changes - Total revenue for Q1 2022 was 130 million and 507 million in cash before the special dividend [18] Business Line Data and Key Metrics Changes - The surface leases, easements, and materials business (SLEM) saw an uptick in requests for new infrastructure and well pads, particularly in the Northern Delaware region, indicating future development activity [8] - The water segment performed solidly, although some frac jobs were deferred due to operators struggling to procure frac sand, with expectations for increased volumes throughout the year [9] Market Data and Key Metrics Changes - The company reported 200 gross spuds on its royalty acreage in Q1 2022, the highest level since the pandemic, indicating strong overall completions [9] - Crude oil price realizations remained strong, generally 2 less than WTI Midland, while gas realizations improved over the last six months [17] Company Strategy and Development Direction - The company announced a special dividend of 100 million share repurchase plan, reflecting a strong return of capital to shareholders [7] - The company is exploring innovative projects, including behind-the-meter solar projects and discussions on utility-scale renewable projects, Bitcoin mining, and carbon capture [11] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the underlying business fundamentals remaining constructive, with expectations for continued growth in completions and water sales [7] - The management acknowledged challenges in the supply chain, particularly regarding frac sand, but remains confident in the long-term performance of the water business [24] Other Important Information - The company is advancing discussions on various innovative opportunities and has welcomed new board members to enhance its governance [13] - The company is committed to maintaining flexibility in capital allocation, balancing growth opportunities with shareholder returns [25] Q&A Session Summary Question: Can you offer color on Q1 oil production and overall production trends for the year? - Management noted that Q1 saw high levels of permitting and DUCs, indicating a positive outlook for production activity for the rest of the year [21] Question: What are the best opportunities for balancing growth versus return of capital? - Management indicated that while there are still deals available, the current high commodity prices have made them more cautious about acquisitions, focusing instead on buybacks and dividends [25] Question: Is the drilling activity driven by low inventory or price? - Management confirmed that there has been a drawdown of DUCs, and Q1 marked a quarter where operators began to replenish their inventory [28] Question: How does the sand-sourcing issue affect your customers? - Management stated that the sand-sourcing issue is widespread across the basin, affecting many operators, particularly smaller ones [29] Question: Can you elaborate on the $20 special dividend decision? - Management explained that the decision was influenced by strong cash flow generation and a desire to return excess capital in a high-price environment [36]