Texas Pacific Land Corporation · NYSE:TPL
Texas Pacific Land — Investor Presentation (June 2021)
29 slides from Texas Pacific Land's investor presentation, Jun 8, 2021
Slide 1: Investor Presentation June 2021
Investor Presentation June 2021
Slide 2: Disclaimer
| 2NYSE: TPL This presentation has been designed to provide general information about Texas Pacific Land Corporation and its subsidiaries (“TPL” or the “Company”). Any information contained or referenced herein is suitable only as an introduction to the Company. The recipient is strongly encouraged
Slide 3: The Permian Basin "ETF"
| 3NYSE: TPL The Permian Basin “ETF” NYSE: TPL $ $ $ ~21 Years Inventory Below $40/bbl Breakeven(4) Performance Through the Cycle $303 Million 2020 Revenue ~150% Production Growth since 2018(3) Balance Sheet Strength(1) No Debt Cash Balance of $311 Million $200mm+ Dividends Paid in 2020 17 Year Hist
Slide 4: An Unmatched Oil and Gas Investment
| 4NYSE: TPL An Unmatched Oil and Gas Investment Source: FactSet . (1) Based on FactSet compounded total shareholder return from April 2011 to March 2021. (Composite) WTI Oil S&P Oil & Gas E&P Index 10-year Average Annual Total Return(1) -10% -6% 14% 18% 44%
Slide 5: Unique Exposure to Full Permian Development Chain
| 5NYSE: TPL Unique Exposure to Full Permian Development Chain ✓ Ownership of right of way ✓ Ownership of groundwater and subsurface injection rights ✓ High margins with no capital Surface Provides ease of access TPL Business Overview Business Flow Overview Maximize Surface Ownership to Operate Prof
Slide 6: Royalty Interest Overview
| 6NYSE: TPL 11.9% 21.6% 9.1% 12.5% 9.7% 6.8% 6.7% 8.6% 3.7% 4.2% 2.4% 2.7% 38.8% 21.6% 19.5% 11.1% 9.0% Net Wells(3): 59.8 Royalty Interest Overview Land and Resource Management Net Royalty Position and Rigs Running on Core TPL Acreage Source: Company data and Enverus data as of 6/1/21. Note: Rigs
Slide 7: Exposed to Diverse Client Base
| 7NYSE: TPL $236.4 $202.0 $148.3 $82.7 $71.8 $42.3 $34.4 $24.8 $14.7 $13.3 $8.4 $6.8 $6.2 $6.1 $3.4 $2.7 $1.9 $1.8 $1.5 $1.2 $0.4 E x x o n C h e v ro n S h e ll B P C o n o c o E O G P io n e e r O c c id e n ta l D e v o n D ia m o n d b a c k M a ra th o n A p a c h e O v in ti v C im a re x P D
Slide 8: Free cash flow and net production
| 8NYSE: TPL $40 $75 $125 $230 $205 3.3 5.1 8.8 13.7 16.2 – 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0 $0 $50 $100 $150 $200 $250 $300 $350 $400 2016 2017 2018 2019 2020 Free Cash Flow Net Production (mboe/d) Land and Resource Management 65% Water Services and Operations 35% Land and Resource Manageme
Slide 9: History of TPL
| 9NYSE: TPL History of TPL Source: Company data. (1) A fixed 1/16 NPRI was reserved under all lands held by the primary term of an oil and gas lease and a fixed 1/128 NPRI under all lands held by production. (2) TPWR is a 100% wholly owned subsidiary of TPL. 1871 - 1888 1889 - 2010 2011 - Present T
Slide 10: Key Investment Highlights
| 10NYSE: TPL Key Investment Highlights Sustained Profitability and Pristine Balance Sheet Focus on Return On and Of Capital ETF of the Permian Basin Performance Through the Cycle ■ Largest royalty company with 100% of acreage located in Texas Permian Basin ■ Three high-margin revenue streams linked
Slide 11: Comparison of Key Statistics
| 11NYSE: TPL Comparison of Key Statistics Land and Resource Management Source: Company data, public filings and Enverus as of 6/1/21. (1) TPL NRA is based on 4.4% average royalty interest per acre. VNOM NRA reported in May 2021 Investor Presentation. MNRL NRA reported in Q1 2021 Investor Presentati
Slide 12: Surface Leases, Easements and Material Sales
| 12NYSE: TPL – 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 – $40 $80 $120 $160 $200 $240 $280 C u m u la tiv e H o rizo n ta l W e ll C o u n t S in c e 2 0 16 (3 ) C u m u la ti v e S L E M R e v e n u e si n c e 2 0 16 (2 ) SLEM Revenue Well Count ✓Extensive position allows our surface to
Slide 13: Water Resources Asset Overview
| 13NYSE: TPL Water Resources Asset Overview Water Services and Operations Source: Company data and B3 Insight data as of 6/1/2021. Note: TPL does not operate any water disposal wells. (1) Water oil ratio (“WOR”) defined as the ratio of 12-month cumulative water production to 12-month cumulative oil
Slide 14: Growth Strategy and Competitive Advantage
| 14NYSE: TPL Growth Strategy and Competitive Advantage Water Services and Operations Produced Water Royalties Stability Through the Cycle Significant Acreage Dedicated to TPL Disposal Royalties Source: Company data and FactSet data as of 3/31/21. ($ in millions) Royalty Based Business Model Capture
Slide 15: Northern Delaware volumes and capture rate
| 15NYSE: TPL 0% 5% 10% 15% 20% 25% 30% 35% 40% – 200 400 600 800 1,000 1,200 1,400 1,600 1,800 Jan-18 Jul-18 Jan-19 Aug-19 Feb-20 Sep-20 Mar-21 T P W R C a p tu re R a te C o m p le ti o n s V o lu m e s ( m b b ls / d a y ) Northern Delaware Region Volumes (Estimated) TPL Northern Delaware Volumes
Slide 16: Summary of Financials
| 16NYSE: TPL $1 $3 $2 $18 $45 $30 $5 $3 $19 $48 $32 $5 $10 - $12 2017 2018 2019 2020 2021E0.3 0.4 0.6 1.1 1.8 2.1 2015 2016 2017 2018 2019 2020 $55 $63 $145 $245 $302 $239 2015 2016 2017 2018 2019 2020 Summary of Financials Source: Company data. Note: Revenue was restated retrospectively upon adopt
Slide 17: Return of Capital to Shareholders
| 17NYSE: TPL $2.0 $2.0 $4.3 $2.2 $2.4 $2.5 $10.7 $31.6 $46.6 $10.7 $16.0 $20.2 $25.2 $23.0 $28.8 $33.1 $34.2 $38.4 $4.3 $12.7 $18.0 $24.5 $25.2 $25.2 $31.2 $35.6 $44.9 $70.0 $50.9 $201.7 $79.48 $94.88 $94.12 $97.98 $92.90 $48.69 $43.35 $50.78 $65.08 $56.99 $39.19 – $20.00 $40.00 $60.00 $80.00 $100.
Slide 18: An Unmatched Oil and Gas Investment
| 18NYSE: TPL An Unmatched Oil and Gas Investment Source: FactSet. (1) Based on FactSet compounded total shareholder return from April 2011 to March 2021. Sustained Profitability and Pristine Balance Sheet Focus on Return On and Of Capital ETF of the Permian Basin Significant Upside Synergistic Busi
Slide 19: Appendix
Appendix
Slide 20: Texas Pacific Land Corporation Team
| 20NYSE: TPL Texas Pacific Land Corporation Team Track Record of Shareholder Value Creation Texas Pacific Land Corporation Texas Pacific Water Resources Jeremy Smith VP, Business Development Tyler Glover President and CEO Chris Steddum CFO Robert A. Crain EVP Mr. Steddum came to TPL from Stifel’s o
Slide 21: TPL Revenue Streams Through the Life Cycle of a Well
| 21NYSE: TPL TPL Revenue Streams Through the Life Cycle of a Well Surface and Royalty Ownership Allow Steady Revenue Generation Through the Entire Life Cycle of Oil & Gas Development ■ Infrastructure for oil & gas development Initial Development Phase Drilling and Completion Phase Production Phase
Slide 22: Well Positioned Assets Attract Increasing Development Focus
| 22NYSE: TPL Well Positioned Assets Attract Increasing Development Focus Land and Resource Management Source: Company data and Enverus. Note: TPL production growth giving effect to our portfolio of ~23,700 net royalty acres in the Permian Basin as of 3/31/21 as if it had been owned since 1/1/14. (1
Slide 23: Significant Undeveloped Resource in Core Areas
| 23NYSE: TPL 0% 20% 40% 60% 80% 100% 120% 1 626 1,251 1,876 2,501 3,126 3,751 4,376 5,001 5,626 6,251 6,876 7,501 8,126 8,751 9,376 10,001 10,626 11,251 11,876 12,501 13,126 13,751 14,376 15,001 15,626 16,251 16,876 17,501 18,126 18,751 19,376 W e ll h e a d B T a x I R R $0 $10 $20 $30 $40 $50 $60
Slide 24: Summary of Highest-Visibility Inventory
| 24NYSE: TPL 66.8% 22.0% 10.3% 0.8% Summary of Highest-Visibility Inventory Land and Resource Management Source: Company data and Enverus data as of 3/31/21. Note: Permian Basin horizontal locations only as of 3/31/21. (1) Permitted well conversion rate based on wells permitted from 4/1/19 through
Slide 25: Summary of Full Inventory
| 25NYSE: TPL Average Additional Total PDP + Total Gross Undeveloped PDP + Total Average Lat. Sub-region NRI NRA DSUs PDP Completed DUCs Permits Undeveloped Locations Locations Resource (Mmboe) Locations / DSU Length (ft.) Northern Delaware 2.3% 9,206 510 1,340 68 247 275 10,061 10,651 11,991 17,276
Slide 26: Royalty Key Terms
| 26NYSE: TPL Gross Royalty Acres Royalty Key Terms Land and Resource Management Net Royalty Acres (Normalized to 1/8) Net Royalty Acres Drilling Space Units (“DSUs”) Implied Average Net Revenue Interest per Well Description How’s It Calculated ■ An undivided ownership of the oil, gas, and minerals
Slide 27: Historical Financial Summary
| 27NYSE: TPL Historical Financial Summary Source: Company data. Note: Numbers may not foot due to immaterial rounding. Year ended December 31, Three months ended, ($ in millions) 2019 2020 1Q20 4Q20 1Q21 Total Acres 901,787 880,523 902,513 880,523 880,523 Revenues: Oil and gas royalties $154.7 $137
Slide 28: Non-GAAP Reconciliations
| 28NYSE: TPL Non-GAAP Reconciliations Source: Company data. Note: Numbers may not foot due to immaterial rounding. (1) Land swap of ~$22 million in 4Q19, and sale to WPX in 1Q19 of ~$100 million. (2) Sale of nonparticipating perpetual oil and gas royalty interest in approximately 812 net royalty ac
Slide 29: 1700 Pacific Avenue, Suite 2900 Dallas, Texas 75201 Texas Pacific Land Corporation
1700 Pacific Avenue, Suite 2900 Dallas, Texas 75201 Texas Pacific Land Corporation
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