Texas Pacific Land Corporation · NYSE:TPL
Texas Pacific Land — Investor Presentation (February 2023)
26 slides from Texas Pacific Land's investor presentation, Feb 24, 2023
Slide 1: Investor Presentation February 2023
Investor Presentation February 2023
Slide 2: Disclaimer
| 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 $592 Million 2022 Adjusted EBITDA (1) Balance Sheet Strength (2) No Debt Cash Balance of $511 Million ~23,700 Core Permian Net Royalty Acres (3) ~874,000 Surface Acres Diversified Revenue Streams: Royalties, Water, an
Slide 4: TPL Business Overview
| 4 NYSE: TPL 68% 8% 24% 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 5: Royalty Interest Overview
| 5 NYSE: TPL 19% 11% 8% 11% 9% 3% 9% 7% 3% 2% 4% 14% 38.8% 21.6% 19.5% 11.1% 9.0% Net Wells (2) : 72.4 Royalty Interest Overview Land and Resource Management Net Royalty Position and Rigs Running on Core TPL Acreage Source: Company data and Enverus as of 12/31/22. Note: Rigs on TPL based on interse
Slide 6: Exposed to Diverse Client Base
| 6 NYSE: TPL x High Margin, Fixed - fee Revenue Streams x Strong Performance Through Commodity Price Fluctuations Exposed to Diverse Client Base Required to Utilize TPL Surface / Water Source: Company data and Bloomberg as of 12/31/22. (1) Relationships established through surface operations and/or
Slide 7: Business Segments Overview
| 7 NYSE: TPL 80% 20% 83% 17% $40 $80 $160 $234 $188 $278 $452 3.3 5.1 8.8 13.7 16.2 18.6 21.3 0 100 200 300 400 500 600 700 2016 2017 2018 2019 2020 2021 2022 Free Cash Flow Net Production (mboe/d) Business Segments Overview Adjusted EBITDA FY 2022 $452mm Free Cash Flow $592mm Production and Free C
Slide 8: History of TPL
| 8 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 9: Key Investment Highlights
| 9 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 linke
Slide 10: Surface, Land and Resource Management revenue
| 10 NYSE: TPL – 1,000 2,000 3,000 4,000 5,000 6,000 7,000 – $100 $200 $300 $400 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 Cumulative Horizontal Well Count Since 2016 (3) Cumulative SLEM Revenue since 2
Slide 11: Water Resources Asset Overview
| 11 NYSE: TPL Water Resources Asset Overview Water Services and Operations Source: Company data and Enverus. 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) R
Slide 12: Growth Strategy and Competitive Advantage
| 12 NYSE: TPL $- $20 $40 $60 $80 $100 $120 $- $2 $4 $6 $8 $10 $12 $14 $16 $18 $20 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 Bloomberg.
Slide 13: Water capture rate in Northern Delaware
| 13 NYSE: TPL Source: Company data and Enverus as of 12/31/22. Note: Northern Delaware Region is defined as approximately 1,400,000 acres surrounding TPL’s Northern Delaware Surface position including ~900,000 acres in Texas and ~500,000 acres in Southern New Mexico. Capture rate defined as TPL vol
Slide 14: Summary of Financials
| 14 NYSE: TPL 0.4 0.6 1.1 1.8 2.1 2.4 2.8 2016 2017 2018 2019 2020 2021 2022 $63 $145 $245 $302 $239 $388 $592 2016 2017 2018 2019 2020 2021 2022 Summary of Financials Source: Company data. Note: Revenue was restated retrospectively upon adoption of new revenue recognition guidance on 1/1/18. CAGR
Slide 15: Return of Capital to Shareholders
| 15 NYSE: TPL Return of Capital to Shareholders Source: Company data and Bloomberg. Cumulative Return of Capital ($ in millions, except average WTI prices) $10.7 $31.6 $46.6 $201.7 $85.3 $247.3 $34.2 $38.4 $4.3 $19.9 $87.8 $12.7 $18.0 $24.5 $25.2 $25.2 $31.2 $35.6 $44.9 $70.0 $50.9 $201.7 $105.2 $3
Slide 16: An Unmatched Oil and Gas Investment
| 16 NYSE: TPL An Unmatched Oil and Gas Investment Source: Bloomberg. (1) Based on compounded total shareholder return from January 2013 to December 2022. Sustained Profitability and Pristine Balance Sheet Focus on Return On and Of Capital ETF of the Permian Basin Significant Upside Synergistic Busi
Slide 17: Appendix
Appendix
Slide 18: TPL Revenue Streams Through the Life Cycle of a Well
| 18 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 19: Well-Positioned Assets Attract Increasing Development Focus
| 19 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 12/31/22 as i f it had been owned since 1/1/1
Slide 20: Significant Undeveloped Resource in Core Areas
| 20 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 21: Summary of Highest-Visibility Inventory
| 21 NYSE: TPL 59% 30% 9% 5% 1% 4% 18% 10% 11% 7% 7% 42% 61% 30% 7% 1% 1% 11% 7% 11% 3% 8% 12% 15% 33% 73% 20% 7% 3% 5% 37% 7% 6% 6% 8% 28% Summary of Highest - Visibility Inventory Land and Resource Management Source: Company data and Enverus. Note: Permian Basin horizontal locations as of 12/31/22
Slide 22: Summary of Full Inventory
| 22 NYSE: TPL Summary of Full Inventory Land and Resource Management Undeveloped Gross Locations Source: Company data and Enverus. Note: Permian Basin horizontal locations only, shown on a gross location basis. 1,943 vertical wells excluded. Other areas inclu de Eastern Shelf, Western Delaware, and
Slide 23: Royalty Key Terms
| 23 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 24: Historical Financial Summary
| 24 NYSE: TPL | 24 NYSE: TPL Historical Financial Summary Source: Company data. Note: Numbers may not foot due to immaterial rounding.
Slide 25: Non-GAAP Reconciliations
| 25 NYSE: TPL | 25 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 26: Texas Pacific Land Corporation
1700 Pacific Avenue, Suite 2900 Dallas, Texas 75201 www.texaspacific.com Texas Pacific Land Corporation
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