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Texas Pacific Land Corporation Acquires Permian Mineral Interests and Surface Acreage in Cash Transactions

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Texas Pacific Land (NYSE: TPL) has announced the closing of two acquisitions in the Permian Basin for $169 million in cash. The acquisitions include:

1. Mineral interests across 4,106 net royalty acres in Culberson County, Texas, overlapping existing TPL royalty acreage and surface acreage.

2. Surface asset spanning 4,120 acres in Martin County, Texas, generating revenue from water supply, produced water disposal, and other surface-related activities.

The combined asset purchase price implies a >13% 2025 free cash flow yield at current strip prices. TPL expects these high-quality assets to immediately contribute to free cash flow and provide substantial incremental value to their legacy asset base.

Texas Pacific Land (NYSE: TPL) ha annunciato la chiusura di due acquisizioni nel Permian Basin per 169 milioni di dollari in contante. Le acquisizioni includono:

1. Interessi minerari su 4.106 acri netti di royalties nella Contea di Culberson, Texas, che si sovrappongono agli attuali terreni royalties e ai terreni superficiali di TPL.

2. Attività superficiali che coprono 4.120 acri nella Contea di Martin, Texas, generando entrate da fornitura d'acqua, smaltimento di acqua prodotta e altre attività legate alla superficie.

Il prezzo totale d'acquisto degli asset implica un rendimento del >13% sul flusso di cassa libero del 2025 ai prezzi attuali. TPL si aspetta che questi asset di alta qualità contribuiscano immediatamente al flusso di cassa libero e forniscano un valore incrementale sostanziale alla loro base di asset storici.

Texas Pacific Land (NYSE: TPL) ha anunciado el cierre de dos adquisiciones en la Cuenca Pérmica por 169 millones de dólares en efectivo. Las adquisiciones incluyen:

1. Intereses minerales en 4,106 acres netos de regalías en el Condado de Culberson, Texas, que se superponen con los actuales terrenos de regalías y de superficie de TPL.

2. Activo de superficie que abarca 4,120 acres en el Condado de Martin, Texas, generando ingresos por suministro de agua, eliminación de agua producida y otras actividades relacionadas con la superficie.

El precio de compra combinado implica un rendimiento de >13% en el flujo de caja libre 2025 a los precios actuales. TPL espera que estos activos de alta calidad contribuyan inmediatamente al flujo de caja libre y proporcionen un valor incremental sustancial a su base de activos heredados.

텍사스 퍼시픽 랜드(Texas Pacific Land, NYSE: TPL)는 169백만 달러에 퍼미안 분지 내 두 건의 인수 거래를 성사시켰다고 발표했습니다. 인수 내용은 다음과 같습니다:

1. 텍사스 컬버슨 카운티에 있는 4,106 에이커의 광물 권리로, 기존 TPL의 로열티 면적과 표면 면적과 겹칩니다.

2. 텍사스 마틴 카운티의 4,120 에이커에 걸친 표면 자산으로, 물 공급, 생산된 물 처리 및 기타 표면 관련 활동을 통해 수익을 생성합니다.

결합된 자산 구매 가격은 현재 가격 기준으로 2025년 자유 현금 흐름 수익률이 >13%를 시사합니다. TPL은 이러한 고품질 자산이 즉시 자유 현금 흐름에 기여하고 기존 자산 기반에 상당한 추가 가치를 제공할 것으로 기대하고 있습니다.

Texas Pacific Land (NYSE: TPL) a annoncé la clôture de deux acquisitions dans le Bassin de Permien pour 169 millions de dollars en espèces. Les acquisitions comprennent :

1. Des intérêts miniers sur 4 106 acres nets de redevances dans le comté de Culberson, au Texas, qui chevauchent les acres de redevances et de surface existants de TPL.

2. Un actif de surface s'étendant sur 4 120 acres dans le comté de Martin, au Texas, générant des revenus provenant de l'approvisionnement en eau, de l'évacuation de l'eau produite et d'autres activités liées à la surface.

Le prix d'achat total des actifs implique un rendement de >13 % sur le flux de trésorerie libre 2025 aux prix actuels. TPL prévoit que ces actifs de haute qualité contribueront immédiatement au flux de trésorerie libre et fourniront une valeur incrémentielle substantielle à leur base d'actifs hérités.

Texas Pacific Land (NYSE: TPL) hat den Abschluss von zwei Akquisitionen im Permian Basin für 169 Millionen US-Dollar in bar bekannt gegeben. Die Akquisitionen umfassen:

1. Mineralrechte über 4.106 netto Royalty-Acres im Culberson County, Texas, die mit bestehenden TPL-Royalty- und Flächen-Acres überlappen.

2. Flächenvermögen, das sich über 4.120 Acres im Martin County, Texas, erstreckt und Einnahmen aus Wasserversorgung, Entsorgung von produzierte Wasser und anderen flächenbezogenen Aktivitäten generiert.

Der kombinierte Kaufpreis der Vermögenswerte impliziert eine Rendite von >13 % auf den freien Cashflow 2025 zu den aktuellen Strippreisen. TPL erwartet, dass diese hochwertigen Vermögenswerte sofort zum freien Cashflow beitragen und einen erheblichen zusätzlichen Wert für ihre historischen Vermögenswerte bieten.

Positive
  • Acquisition of 4,106 net royalty acres in Culberson County, enhancing net revenue interests in existing and future oil and gas wells
  • Purchase of 4,120 surface acres in Martin County, generating multiple revenue streams
  • Combined asset purchase price implies >13% 2025 free cash flow yield at current strip prices
  • Acquisitions expected to immediately contribute to TPL's free cash flow
  • Assets sourced through industry networks, not part of a broad marketed process
Negative
  • Significant cash outlay of $169 million for the acquisitions

Insights

This acquisition is a strategic move by TPL, enhancing its position in the lucrative Permian Basin. The $169 million cash deal for mineral interests and surface acreage is expected to yield a 13% free cash flow yield by 2025 at current strip prices. This is an impressive return, especially considering it's based on existing production and near-term opportunities only. The overlap of the acquired mineral interests with TPL's existing royalty acreage should boost net revenue interests in both current and future wells, potentially leading to increased royalty income. The surface asset acquisition in Martin County also diversifies TPL's revenue streams, including water supply, waste disposal and other surface-related activities. This multi-faceted approach to land utilization could provide stable, long-term cash flows and hedge against oil price volatility.

TPL's acquisition strategically targets the core areas of the Permian Basin, specifically the northern Delaware and Midland Basins. These regions are known for their high-quality oil reserves and favorable economics. The partnership with Coterra Energy as the operator is noteworthy, as Coterra is a well-respected player in the industry. The overlap of mineral and surface rights is a key advantage, potentially allowing TPL to optimize resource extraction and maximize value from each acre. The inclusion of a solids waste landfill royalty agreement with Waste Connections adds an interesting diversification element, tapping into the growing need for waste management services in the booming Permian region. This multi-faceted approach to land utilization showcases TPL's savvy in extracting value beyond traditional oil and gas royalties.

TPL's acquisition aligns with the broader trend of consolidation and strategic positioning in the Permian Basin. The company's focus on high-quality assets in core areas reflects a prudent approach in a competitive market. The projected 13% free cash flow yield is particularly attractive in the current low-yield environment, potentially making TPL an appealing option for yield-seeking investors. The company's unique business model as a land owner rather than an operator provides exposure to oil and gas upside with lower operational risk. The diversification into water and waste management services is forward-thinking, addressing critical infrastructure needs in the region. However, investors should note that while these acquisitions strengthen TPL's position, the company remains heavily exposed to Permian Basin dynamics and oil price fluctuations.

Acquisitions Add High-Quality Assets that are Expected to Generate Attractive Returns

DALLAS--(BUSINESS WIRE)-- Texas Pacific Land Corporation (NYSE: TPL) (the “Company” or “TPL”) today announced the closing of two acquisitions for oil and gas mineral interests and surface acreage located in the Permian Basin for an aggregate $169 million in cash.

Delaware Basin mineral interests (Graphic: Business Wire)

Delaware Basin mineral interests (Graphic: Business Wire)

TPL acquired mineral interests across approximately 4,106 net royalty acres located in Culberson County, Texas. The acquired mineral interests overlap existing TPL royalty acreage in current and anticipated Drilling and Spacing Units (“DSU”), enhancing TPL’s net revenue interests in existing and future oil and gas wells. The acreage is leased to and operated by Coterra Energy (NYSE: CTRA). In addition, the acquired mineral interests overlap with TPL surface acreage.

The acquired surface asset spans approximately 4,120 acres in Martin County, Texas and is strategically located in the core of the Midland Basin. The asset generates numerous revenue streams across water supply, produced water disposal, and multiple other surface-related activities, including royalties from a solids waste landfill owned and operated by Waste Connections, Inc. (NYSE: WCN), and possesses significant additional commercial growth opportunities.

“Acquiring high-quality mineral interests in the northern Delaware Basin and strategic surface acreage in the Midland Basin will immediately contribute to TPL’s free cash flow,” said Tyler Glover, Chief Executive Officer of the Company. “The combined asset purchase price implies a greater than 13% 2025 free cash flow yield at current strip prices giving credit to only existing production and line-of-sight wells and opportunities. These bolt-on transactions, in addition to the cash flow currently generated, have excellent growth qualities commensurate with TPL’s legacy portfolio. By owning overlapping and nearby surface and water assets, we believe we can accelerate development and generate incremental value. Both assets were sourced through our industry and professional networks and were not part of a broad marketed process. These type of premium assets located within the core subregions of the Permian Basin represent the growth opportunities available to TPL that can provide a substantial incremental value driver to our legacy asset base.”

About Texas Pacific Land Corporation

Texas Pacific Land Corporation is one of the largest landowners in the State of Texas with approximately 873,000 acres of land in West Texas, with the majority of its ownership concentrated in the Permian Basin. The Company is not an oil and gas producer, but its surface and royalty ownership provide revenue opportunities throughout the life cycle of a well. These revenue opportunities include fixed fee payments for use of our land, revenue for sales of materials (caliche) used in the construction of infrastructure, providing sourced water and/or treated produced water, revenue from our oil and gas royalty interests, and revenues related to saltwater disposal on our land. The Company also generates revenue from pipeline, power line and utility easements, commercial leases and temporary permits related to a variety of land uses including midstream infrastructure projects and hydrocarbon processing facilities.

Visit TPL at http://www.TexasPacific.com.

Investor Relations

IR@TexasPacific.com

Source: Texas Pacific Land Corporation

FAQ

What acquisitions did Texas Pacific Land (TPL) recently make?

TPL acquired mineral interests across 4,106 net royalty acres in Culberson County, Texas, and a surface asset spanning 4,120 acres in Martin County, Texas, for a total of $169 million in cash.

How much did TPL pay for its recent Permian Basin acquisitions?

Texas Pacific Land paid an aggregate of $169 million in cash for the two acquisitions in the Permian Basin.

What is the expected free cash flow yield from TPL's recent acquisitions?

The combined asset purchase price implies a greater than 13% 2025 free cash flow yield at current strip prices, considering only existing production and line-of-sight wells and opportunities.

How will the recent acquisitions impact TPL's business?

The acquisitions are expected to immediately contribute to TPL's free cash flow and provide substantial incremental value to the company's legacy asset base, with excellent growth qualities.

Texas Pacific Land Corporation

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