Texas Pacific Land Corporation (NYSE:TPL) Q2 2023 Earnings Call Transcript

Hamed Khorsand: Good morning. So my first question was on the water side. What would the hindrance be to grow further? I mean, if you’re doing record pace now, you obviously have a greater capacity than you first thought. So why do you think Q2 was the high watermark?

Ty Glover: Well, look, I don’t know that it necessarily will be the high watermark. But when you have a quarter like this, looking at the back half of the year, our water sales usually taper off towards the end of the year just because there’s less activity in the fourth quarter. To have a quarter like this, deliver these kind of volumes is fantastic. The team continues to work hard to source additional barrels off of our footprint. We’re also seeing increased activity on our footprint. So I think sales will continue to be strong.

Hamed Khorsand: And on the easement side of the business, I saw in the Q that you had an increase related to pipeline easement. Will that be recurring, that $2.4 million?

Ty Glover: So most of our pipeline easements are on term agreements that will recur. I assume that’s what you’re asking, if those are recurring agreements. The majority of those are, yes.

Hamed Khorsand: Yes. Okay. And then what’s the appetite to do more of these land acquisitions? And what’s the attractiveness that you need to do something like this again?

Ty Glover: Well, our appetite is strong. We’re always looking. Like I said earlier, we’re looking for assets that have maybe yet to be commercialized or maybe that’s just been unrealized. Looking for something that we feel like the expertise that we have here on our team can add some additional value through commercialization, whether that’s on the water side of the business, the SLEM side of the business, just anything that we feel like the knowledge that we have in-house could create some additional value or the relationships that we have throughout the industry could create some additional value. That’s what we’re looking for.

Operator: This concludes our question-and-answer session. The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.