Texas Pacific Land Corporation · NYSE:TPL
Texas Pacific Land — Investor Presentation (February 2022)
27 slides from Texas Pacific Land's investor presentation, Feb 28, 2022
Slide 1: Investor Presentation February 2022
Investor Presentation February 2022
Slide 2: | This presentation has been designed to provide general information about Texas Pacific Land
| 2 NYSE: TPL This presentation has been designed to provide general information about Texas Pacific Land Corporation and its subsidiaries (“T PL” or the “Company”). Any information contained or referenced herein is suitable only as an introduction to the Company. The recipient is strongly encourage
Slide 3: The Permian Basin "ETF"
| 3 NYSE: TPL The Permian Basin “ETF” NYSE: TPL $ $ $ Positioned to capture upside $388 Million 2021 Adjusted EBITDA (1) Balance Sheet Strength (2) No Debt Cash Balance of $428 Million ~23,700 Core Permian Net Royalty Acres (3) ~880,000 Surface Acres Diversified Revenue Streams: Royalties, Water, an
Slide 4: An Unmatched Oil and Gas Investment
| 4 NYSE: TPL An Unmatched Oil and Gas Investment Source: FactSet . (1) Based on Bloomberg compounded total shareholder return from January 2012 to December 2021. (Composite) WTI Oil S&P Oil & Gas E&P Index 10 - year Average Annual Total Return (1) - 6% - 2% 17% 21% 42%
Slide 5: TPL Business Overview
| 5 NYSE: TPL 63% 9% 28% Unique Exposure to Full Permian Development Chain x Ownership of right of way x Ownership of groundwater and subsurface injection rights x High margins with no capital Surface Provides ease of access TPL Business Overview Business Flow Overview Maximize Surface Ownership to
Slide 6: Royalty Interest Overview
| 6 NYSE: TPL 20% 11% 8% 12% 8% 3% 10% 7% 3% 2% 4% 12% 38.8% 21.6% 19.5% 11.1% 9.0% Net Wells (3) : 64.4 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 12/31/21. Note: Rigs on TPL based on
Slide 7: Existing Relationships with Top E&P and Midstream Companies
| 7 NYSE: TPL $259 $226 $95 $87 $52 $44 $30 $27 $20 $15 $13 $10 $9 $5 $4 $4 $3 $2 $1 Exxon Chevron Conoco BP EOG Pioneer Devon Occidental Diamondback Coterra Marathon Apache Ovintiv PDC Matador SM Energy Callon Centennial Laredo BTA Crownquest DE3 Discovery Endeavor Fasken Four Corners Hunt Legacy M
Slide 8: Business Segments Overview
| 8 NYSE: TPL 76% 24% 77% 23% $40 $80 $160 $234 $188 $278 3.3 5.1 8.8 13.7 16.2 18.6 (4.0) 1.0 6.0 11.0 16.0 $0 $50 $100 $150 $200 $250 $300 $350 $400 2016 2017 2018 2019 2020 2021 Free Cash Flow Net Production (mboe/d) Source: Company data. Note: Free Cash Flow and Adjusted EBITDA are non - GAAP me
Slide 9: History of TPL
| 9 NYSE: 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
Slide 10: Key Investment Highlights
| 10 NYSE: TPL Key Investment Highlights Sustained Profitability and Pristine Balance Sheet Focus on Return On and Of Capital ETF of the Permian Basin Positioned to capture upside ■ Largest royalty company with 100% of acreage located in Texas Permian Basin ■ Three high - margin revenue streams link
Slide 11: Surface, Land and Resource Management revenue
| 11 NYSE: TPL 0 1,000 2,000 3,000 4,000 5,000 6,000 $0 $50 $100 $150 $200 $250 $300 $350 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 Cumulative Horizontal Well Count Since 2016 (3) Cumulative SLEM Revenue since 2016 (2) SLE
Slide 12: Water Resources Asset Overview
| 12 NYSE: TPL Water Resources Asset Overview Water Services and Operations Source: Company data and RSEG. 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 production. (2) Reve
Slide 13: Growth Strategy and Competitive Advantage: Water Services
| 13 NYSE: TPL $0 $10 $20 $30 $40 $50 $60 $70 $80 $90 $0.0 $2.0 $4.0 $6.0 $8.0 $10.0 $12.0 $14.0 $16.0 $18.0 WTI Cushing oil price ($/bbl) Produced water royalties ($MM) Produced water royalties ($mm) WTI Cushing ($/bbl) Growth Strategy and Competitive Advantage Water Services and Operations Produce
Slide 14: TPWR Capture Rate and Northern Delaware Volumes
| 14 NYSE: TPL 0% 5% 10% 15% 20% 25% 30% 35% 40% – 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 Jan-18 Jul-18 Jan-19 Aug-19 Feb-20 Sep-20 Mar-21 Sep-21 TPWR Capture Rate Completions Volumes (mbbls / day) Northern Delaware Region Volumes (Estimated) TPL Nothern Delaware Volumes (Actuals) 0% 10
Slide 15: Summary of Financials
| 15 NYSE: TPL 0.4 0.6 1.1 1.8 2.1 2.4 2016 2017 2018 2019 2020 2021 $63 $145 $245 $302 $239 $388 2016 2017 2018 2019 2020 2021 Summary of Financials Source: Company data. Note: Revenue was restated retrospectively upon adoption of new revenue recognition guidance on 1/1/18. CAGR defined as the comp
Slide 16: Return of Capital to Shareholders
| 16 NYSE: TPL $2.0 $2.0 $4.3 $2.2 $2.4 $2.5 $10.7 $31.6 $46.6 $85.3 $10.7 $16.0 $20.2 $25.2 $23.0 $28.8 $33.1 $34.2 $38.4 $4.3 $19.9 $12.7 $18.0 $24.5 $25.2 $25.2 $31.2 $35.6 $44.9 $70.0 $50.9 $201.7 $105.2 $79 $95 $94 $98 $93 $49 $43 $51 $65 $57 $39 $68 – $10.00 $20.00 $30.00 $40.00 $50.00 $60.00
Slide 17: An Unmatched Oil and Gas Investment
| 17 NYSE: TPL An Unmatched Oil and Gas Investment Source: Bloomberg. (1) Based on Bloomberg compounded total shareholder return from January 2012 to December 2021. Sustained Profitability and Pristine Balance Sheet Focus on Return On and Of Capital ETF of the Permian Basin Significant Upside Synerg
Slide 18: Appendix
Appendix
Slide 19: TPL Revenue Streams Through the Life Cycle of a Well
| 19 NYSE: 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 20: Well Positioned Assets Attract Increasing Development Focus
| 20 NYSE: 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 12/31/21 as i f it had been owned since 1/1/14.
Slide 21: Significant Undeveloped Resource in Core Areas
| 21 NYSE: TPL $0 $10 $20 $30 $40 $50 $60 $70 1 626 1,251 1,876 2,501 3,126 3,751 4,376 5,001 5,626 6,251 6,876 7,501 8,126 8,751 9,376 10,001 10,626 11,251 11,876 12,501 13,126 13,751 14,376 15,001 15,626 16,251 16,876 17,501 18,126 18,751 19,376 Wellhead PV - 10 Breakeven ($/bbl) 0% 20% 40% 60% 80
Slide 22: Summary of Highest-Visibility Inventory
| 22 NYSE: TPL 62% 30% 8% 4% 14% 12% 15% 1% 9% 24% 21% 62% 23% 11% 4% 10% 7% 18% 9% 12% 5% 11% 28% 78% 17% 5% 0% 1% 17% 29% 6% 8% 4% 6% 29% Summary of Highest - Visibility Inventory Land and Resource Management Source: Company data and Enverus. Note: Permian Basin horizontal locations only as of 12/
Slide 23: Summary of Full Inventory
| 23 NYSE: 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 1,519 78 221 248 9,925 10,472 11,991 16,985
Slide 24: Royalty Key Terms
| 24 NYSE: TPL Gross Royalty Acres Royalty Key Terms Land and Resource Management Net Royalty Acres (Normalized to 1/8) Net Royalty Acres Drilling Spacing Units (“DSUs”) Implied Average Net Revenue Interest per Well Description How’s It Calculated ■ An undivided ownership of the oil, gas, and minera
Slide 25: Historical Financial Summary
| 25 NYSE: TPL | 25 NYSE: 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) 2020 2021 Q4 2020 Q3 2021 Q4 2021 Total Acres 880,523 880,581 880,523 880,501 880,581 Revenues : Oil and
Slide 26: Non-GAAP Reconciliations
| 26 NYSE: TPL | 26 NYSE: 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
Slide 27: Texas Pacific Land Corporation
1700 Pacific Avenue, Suite 2900 Dallas, Texas 75201 www.texaspacific.com Texas Pacific Land Corporation
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