Texas Pacific Land Trust (NYSE: TPL) (the 'Trust') today announced financial and operating results for the third quarter ended September 30, 2020.
Results for the third quarter of 2020
Net income of $46.3 million, or $5.97 per Sub-share Certificate, for the third quarter ended September 30, 2020 compared with $60.0 million, or $7.74 per Sub-share Certificate, for the third quarter ended September 30, 2019.
Revenues of $74.4 million for the third quarter ended September 30, 2020, compared with $98.5 million for the third quarter ended September 30, 2019.
Decreases of 17.0% in oil and gas royalty revenue, 44.2% in easements and other surface-related income and 43.9% in water sales and royalty revenue for the third quarter ended September 30, 2020 compared with the third quarter ended September 30, 2019.
EBITDA of $61.8 million for the third quarter ended September 30, 2020, compared with $77.4 million for the third quarter ended September 30, 2019.
Results for the nine months ended September 30, 2020
Net income of $131.3 million, or $16.92 per Sub-share Certificate, for the nine months ended September 30, 2020 compared with $249.6 million (which included a $100 million land sale), or $32.18 per Sub-share Certificate, for the nine months ended September 30, 2019.
Revenues of $228.3 million for the nine months ended September 30, 2020, compared with $377.2 million for the nine months ended September 30, 2019 (which included a $100 million land sale).
Decreases of 14.8% in oil and gas royalty revenue, 20.2% in easements and other surface-related income and 27.0% in water sales and royalty revenue for the nine months ended September 30, 2020 compared with the nine months ended September 30, 2019.
EBITDA of $175.1 million for the nine months ended September 30, 2020, compared with $318.5 million for the nine months ended September 30, 2019 (which included a $100 million land sale).
'While our third quarter results have improved over the second quarter of 2020, uncertainty in the current environment remains and continues to present challenges for the oil and gas industry,' said Tyler Glover, Chief Executive Officer of the Trust. 'However, we remain confident that the Trust is financially and operationally well-equipped to continue navigating these challenges and are committed to maintaining our track record of capital discipline and optimal liquidity while ensuring the health and safety of our employees.'
Further details for the third quarter of 2020
The Trust reported net income of $46.3 million for the third quarter ended September 30, 2020, a decrease of 22.9% compared to net income of $60.0 million for the third quarter ended September 30, 2019.
Oil and gas royalty revenue was $31.8 million for the third quarter ended September 30, 2020, compared with $38.3 million for the third quarter ended September 30, 2019, a decrease of 17.0%. Prices received for crude oil production decreased 31.9% while crude oil production subject to the Trust's royalty interests increased 7.3% for the third quarter ended September 30, 2020 compared to the same period of 2019. Prices received for gas production increased 61.0% while gas production subject to the Trust's royalty interests decreased 2.5% for the third quarter ended September 30, 2020 compared to the same period of 2019.
Easements and other surface-related income was $18.9 million for the third quarter ended September 30, 2020, a decrease of 44.2% compared with the third quarter ended September 30, 2019 when easements and other surface-related income was $33.9 million. The decrease in easements and other surface-related income was largely driven by decreases of $10.0 million in pipeline easement income and $2.0 million in permit income for the third quarter ended September 30, 2020 compared to the same period of 2019.
Water sales and royalty revenue was $12.1 million for the third quarter ended September 30, 2020, a decrease of 43.9% compared with the third quarter ended September 30, 2019 when water sales and royalty revenue was $21.7 million. This decrease was principally due to a 27.6% decrease in the number of barrels of sourced and treated water sold and a $0.8 million decrease in water royalties in the third quarter of 2020 compared to the same period of 2019.
The Trust recognized land sales revenue of $11.5 million for the third quarter ended September 30, 2020 and $4.6 million for the comparable period of 2019.
About Texas Pacific Land Trust
Texas Pacific Land Trust is one of the largest landowners in the State of Texas with approximately 880,000 acres of land in West Texas. The Trust was organized under a Declaration of Trust to receive and hold title to extensive tracts of land in the State of Texas, previously the property of the Texas and Pacific Railway Company, and to issue transferable Certificates of Proprietary Interest pro rata to the holders of certain debt securities of the Texas and Pacific Railway Company. Texas Pacific Land Trust's trustees are empowered under the Declaration of Trust to manage the lands with all the powers of an absolute owner. Texas Pacific Land Trust is not a REIT.
Forward-Looking Statements
This news release may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements regarding the Trust's future operations and prospects, the severity and duration of the COVID-19 pandemic and related economic repercussions, the markets for real estate in the areas in which the Trust owns real estate, applicable zoning regulations, the markets for oil and gas, the proposed reorganization of the Trust into a corporation, production limits on prorated oil and gas wells authorized by the Railroad Commission of Texas, expected competition, management's intent, beliefs or current expectations with respect to the Trust's future financial performance and other matters. We assume no responsibility to update any such forward-looking statements.
NON-GAAP PERFORMANCE MEASURES AND DEFINITIONS
In addition to amounts presented in accordance with generally accepted accounting principles in the United States of America ('GAAP'), we also present certain supplemental non-GAAP measurements. These measurements are not to be considered more relevant or accurate than the measurements presented in accordance with GAAP. In compliance with requirements of the Securities and Exchange Commission ('SEC'), our non-GAAP measurements are reconciled to net income, the most directly comparable GAAP performance measure.
Contact:
Chris Steddum
Tel: (214) 969-5530
TEXAS PACIFIC LAND CORPORATION 
