Texas Pacific Land Corporation (TPL) has just made a significant announcement, with the company's Board of Directors approving a special dividend of $10.00 per share, payable on July 15, 2024, to stockholders of record at the close of business on July 1, 2024. This special dividend represents a substantial 50% increase compared to the most recent prior split-adjusted special dividend.
Tyler Glover, Chief Executive Officer of TPL, highlighted the company’s excellent business execution, supportive fundamentals, and a fortress balance sheet as the driving forces behind this decision. Additionally, TPL has set a target cash and cash equivalents (“cash”) balance of approximately $700 million. Above this targeted level, the company plans to deploy the majority of its free cash flow towards share repurchases and dividends.
It's worth noting that even beyond the special dividend announced, TPL retains significant optionality to return additional capital to stockholders and to invest in attractive growth opportunities. The company's ability to generate substantial free cash flow while maintaining a strong balance sheet positions it well to drive shareholder value.
As of the latest announcement, TPL is one of the largest landowners in the State of Texas, with approximately 868,000 acres of land in West Texas, primarily concentrated in the Permian Basin. The company's revenue opportunities stem from its surface and royalty ownership, which provide income throughout the life cycle of a well. These opportunities include fixed fee payments for land use, revenue from sales of construction materials (caliche), providing sourced and treated produced water, oil and gas royalty interests, as well as revenues from pipeline, power line, and utility easements, among others.
Today the company's shares have moved -1.7% to a price of $764.0. For the full picture, make sure to review Texas Pacific Land's 8-K report.
