Texas Pacific Land Corporation (NYSE:TPL) Q1 2023 Earnings Call Transcript

Chris Steddum: Yes. So the capital is basically in line with the capital we probably spend each quarter. Usually, it’s been about a $12 million capital spend for most years. The right way to think about that is some of it is the continued electrification of our operations. So, we are approaching the end of that electrification process. Some of that is purchasing different like lay-flat hoses and operating equipment that we need day-to-day. And you could think of that type of stuff is more like a maintenance capital, right? So, those would be dollars that we would probably continue to spend in the future to maintain the business and our equipment. And then some of it is, I think we’ve probably said in the past, the supply chains have slowed down for some of the key items that you need to operate.

And so we have also gone out and probably purchased in advance or at least further in advance than we normally would some of the key infrastructure items, tanks and hoses that we know we’re going to need in the future to fulfill customer orders. And so that’s kind of what that number is and the right way to think about it. And if you look at the financials, that business had $20 million of positive net income this quarter. And also free cash flow — positive free cash flow.

Hamed Khorsand: I appreciate it. Thank you.

Ty Glover: Thanks Hamed.

Chris Steddum: Thanks Hamed.

Operator: Thank you very much. That was our final question and that concludes the Q&A session as well as the teleconference for today. Ladies and gentlemen, thank you very much for your participation, and you may now disconnect your lines.