Exhibit 99.1
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TEXAS PACIFIC LAND TRUST ANNOUNCES FOURTH QUARTER AND FULL YEAR 2019 RESULTS
DALLAS, TX (January 30, 2020) – Texas Pacific Land Trust (NYSE: TPL) today announced financial and operating results for the fourth quarter and year ended December 31, 2019.
Results for the fourth quarter of 2019:
Net income of $71.3 million, or $9.20 per Sub-share Certificate, for the fourth quarter ended December 31, 2019 compared with $62.7 million, or $8.06 per Sub-share Certificate, for the fourth quarter ended December 31, 2018.
Revenues of $113.3 million for the fourth quarter ended December 31, 2019, compared with $93.2 million for the fourth quarter ended December 31, 2018.
Increases of 26.6% in easements and other surface-related income, 22.0% in oil and gas royalty revenue and 20.6% in water sales and royalty revenue for the fourth quarter ended December 31, 2019 compared with the fourth quarter ended December 31, 2018.
EBITDA of $94.9 million for the fourth quarter ended December 31, 2019, compared with $79.3 million for the fourth quarter of 2018, an increase of 19.6%.
Results for the year ended December 31, 2019:

Net income of $320.9 million, or $41.38 per Sub-share Certificate, for the year ended December 31, 2019 compared with $209.7 million, or $26.93 per Sub-share Certificate, for the year ended December 31, 2018.
Revenues of $490.5 million for the year ended December 31, 2019, compared with $300.2 million for the year ended December 31, 2018.
Increases of 32.9% in water sales and royalty revenue, 30.0% in easements and other surface-related income and 24.9% in oil and gas royalty revenue for the year ended December 31, 2019 compared with the year ended December 31, 2018.
EBITDA of $413.4 million for the year ended December 31, 2019, compared with $264.3 million for the year ended December 31, 2018, an increase of 56.4%.

Further details for the fourth quarter of 2019:
The Trust reported net income of $71.3 million for the fourth quarter ended December 31, 2019, an increase of 13.8% over net income of $62.7 million for the fourth quarter ended December 31, 2018. The increase was principally related to increased oil and gas royalties, easements and other surface-related income and water sales.

Oil and gas royalty revenue was $43.6 million for the fourth quarter ended December 31, 2019, compared with $35.8 million for the fourth quarter ended December 31, 2018, an increase of 22.0%. Crude oil and gas production subject to the Trust’s royalty interests increased 45.6% and 33.4%, respectively, in the fourth quarter ended December 31, 2019 compared to the fourth quarter ended December 31, 2018. While crude oil and gas production increased in the fourth quarter ended December 31, 2019 compared to the same period of 2018, the prices received for crude oil and gas production decreased 3.6% and 41.1%, respectively, over the same time period.

Easements and other surface-related income was $27.7 million for the fourth quarter ended December 31, 2019, an increase of 26.6% compared with the fourth quarter ended December 31, 2018 when easements and other surface-related income was $21.9 million. The increase in easements and other surface-related income was largely driven by increases of $3.1 million in commercial lease revenue



(largely due to an increase in saltwater disposal royalties) and $2.0 million in pipeline easement income for the fourth quarter ended December 31, 2019 compared to the same period of 2018.

Water sales and royalty revenue was $19.9 million for the fourth quarter ended December 31, 2019, an increase of 20.6% compared with the fourth quarter ended December 31, 2018 when water sales and royalty revenue was $16.5 million. This increase was principally due to a 50.4% increase in the number of barrels of sourced and treated water sold in the fourth quarter of 2019 over the same period in 2018, partially offset by decreased water royalties.

In an exchange transaction, the Trust conveyed approximately 5,620 acres of land in exchange for approximately 5,545 acres of land, all in Culberson County. As the Trust had no cost basis in the land conveyed, the Trust recognized land sales revenue of $22.0 million for the fourth quarter ended December 31, 2019.

Further details for the year ended December 31, 2019:

The Trust reported net income of $320.9 million for the year ended December 31, 2019, an increase of 53.0% over net income of $209.7 million for the year ended December 31, 2018. Net income for the year ended December 31, 2019 included a $100 million land sale. Excluding the impact of the land sale, net of income tax, for the year ended December 31, 2019, net income was $241.9 million, a 15.3% increase over net income for the year ended December 31, 2018. The 15.3% increase was principally related to increased oil and gas royalties, easements and other surface-related income and water sales.

Oil and gas royalty revenue was $154.7 million for the year ended December 31, 2019, compared with $123.8 million for the year ended December 31, 2018, an increase of 24.9%. Crude oil and gas production subject to the Trust’s royalty interests increased 48.3% and 89.3%, respectively, in the year ended December 31, 2019 compared to the year ended December 31, 2018. While crude oil and gas production increased in the year ended December 31, 2019 compared to December 31, 2018, the prices received for crude oil and gas production decreased 8.0% and 49.3%, respectively, over the same time period.

Easements and other surface-related income was $115.4 million for the year ended December 31, 2019, an increase of 30.0% compared with the year ended December 31, 2018 when easements and other surface-related income was $88.7 million. The increase in easements and other surface-related income was principally related to increases of $19.0 million in pipeline easement income and $10.6 million in commercial lease revenue (largely due to an increase in saltwater disposal royalties), for the year ended December 31, 2019 compared to the same period of 2018. These increases were partially offset by a $3.7 million decrease in temporary permit income over the same time period.

Water sales and royalty revenue was $84.9 million for the year ended December 31, 2019, an increase of 32.9% compared with the year ended December 31, 2018 when water sales and royalty revenue was $63.9 million. This increase was principally due to a 44.0% increase in the number of barrels of sourced and treated water sold during the year ended December 31, 2019 over the same period in 2018, partially offset by decreased water royalties.

The Trust recognized land sales revenue of $135.0 million for the year ended December 31, 2019 and $4.4 million for the comparable period of 2018. The increase in land sales revenue is principally related to a $100 million land sale in January 2019 and land sales revenue of $22.0 million related to a land exchange transaction in December 2019.

About Texas Pacific Land Trust

Texas Pacific Land Trust is one of the largest landowners in the State of Texas with approximately 900,000 acres of land in West Texas. The Trust was organized under a Declaration of Trust to receive and hold title to extensive tracts of land in the State of Texas, previously the property of the Texas and Pacific Railway Company, and to issue transferable Certificates of Proprietary Interest pro rata to the holders of certain debt securities of the Texas and Pacific Railway Company. Texas Pacific Land Trust’s trustees are empowered under the Declaration of Trust to manage the lands with all the powers of an absolute owner. Texas Pacific Land Trust is not a REIT.

Forward-Looking Statements

This news release may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements regarding the Trust’s future operations and prospects, the markets for real estate in the areas in which the Trust owns real estate, applicable zoning regulations, the markets for oil and gas, production limits on prorated oil and gas wells authorized by the Railroad Commission of Texas, expected competitions, management’s intent, beliefs or current expectations with respect to the Trust’s future financial performance and other matters. We assume no responsibility to update any such forward-looking statements.



REPORT OF OPERATIONS
(in thousands, except share and per share amounts) (unaudited)


 Three Months Ended
December 31,
Years Ended
December 31,
 2019201820192018
Revenues:  
Oil and gas royalties$43,616  $35,756  $154,729  $123,834  
Easements and other surface-related income27,727  21,894  115,362  88,739  
Water sales and royalties19,882  16,485  84,949  63,913  
Sale of oil and gas royalty interests—  18,875  —  18,875  
Land sales22,000  74  135,020  4,367  
Other operating revenue107  117  436  492  
Total revenues113,332  93,201  490,496  300,220  
Expenses:  
Salaries and related employee expenses10,099  7,984  32,841  18,433  
Water service-related expenses5,385  3,567  20,808  11,168  
General and administrative expenses
2,663  1,822  9,765  4,704  
Legal and professional fees1,205  875  16,403  2,498  
Depreciation, depletion and amortization3,620  1,064  8,906  2,583  
Total operating expenses22,972  15,312  88,723  39,386  
Operating income90,360  77,889  401,773  260,834  
Other income911  390  2,682  916  
Income before income taxes91,271  78,279  404,455  261,750  
Income tax expense (benefit):  
Current14,007  15,599  57,492  37,200  
Deferred5,942  —  26,035  14,814  
Total income tax expense19,949  15,599  83,527  52,014  
Net income$71,322  $62,680  $320,928  $209,736  
Net income per Sub-share Certificate - basic and diluted$9.20  $8.06  $41.38  $26.93  
Weighted average number of Sub-share Certificates outstanding7,756,156  7,771,950  7,756,437  7,787,407  




SEGMENT OPERATING RESULTS
(in thousands) (unaudited)

Three Months Ended
December 31,
20192018  
Revenues:
Land and resource management:
Oil and gas royalties
$43,616  38 %$35,756  39 %
Easements and other surface-related income13,382  12 %14,012  15 %
Sale of oil and gas royalty interests—  — %18,875  20 %
Land sales and other operating revenue22,107  19 %191  — %
79,105  69 %68,834  74 %
Water services and operations:
Water sales and royalties
19,882  18 %16,485  18 %
Easements and other surface-related income14,345  13 %7,882  %
34,227  31 %24,367  26 %
Total consolidated revenues$113,332  100 %$93,201  100 %
Net income:
Land and resource management
$56,344  79 %$49,911  80 %
Water services and operations
14,978  21 %12,769  20 %
Total consolidated net income$71,322  100 %$62,680  100 %


Years Ended
December 31,
20192018  
Revenues:
Land and resource management:
Oil and gas royalties
$154,729  31 %$123,834  41 %
Easements and other surface-related income73,143  15 %63,908  21 %
Sale of oil and gas royalty interests—  — %18,875  %
Land sales and other operating revenue
135,456  28 %4,859  %
363,328  74 %211,476  70 %
Water services and operations:
Water sales and royalties
84,949  17 %63,913  21 %
Easements and other surface-related income42,219  %24,831  %
127,168  26 %88,744  30 %
Total consolidated revenues$490,496  100 %$300,220  100 %
Net income:
Land and resource management
$260,566  81 %$159,611  76 %
Water services and operations
60,362  19 %50,125  24 %
Total consolidated net income$320,928  100 %$209,736  100 %




NON-GAAP PERFORMANCE MEASURES AND DEFINITIONS

In addition to amounts presented in accordance with generally accepted accounting principles in the United States of America (“GAAP”), we also present certain supplemental non-GAAP measurements. These measurements are not to be considered more relevant or accurate than the measurements presented in accordance with GAAP. In compliance with requirements of the Securities and Exchange Commission (“SEC”), our non-GAAP measurements are reconciled to net income, the most directly comparable GAAP performance measure. For all non-GAAP measurements, neither the SEC nor any other regulatory body has passed judgment on these non-GAAP measurements.

EBITDA

EBITDA is a non-GAAP financial measurement of earnings before interest, taxes, depreciation, depletion and amortization. Its purpose is to highlight earnings without finance, taxes, and depreciation, depletion and amortization expense, and its use is limited to specialized analysis. We have presented EBITDA because we believe that it is a useful supplement to net income as an indicator of operating performance.

The following table presents a reconciliation of net income to EBITDA for the three months and years ended December 31, 2019 and 2018 (in thousands):

Three Months Ended
December 31,
Years Ended
December 31,
2019201820192018
 Net income $71,322  $62,680  $320,928  $209,736  
 Add:
Income tax expense 19,949  15,599  83,527  52,014  
Depreciation, depletion and amortization3,620  1,064  8,906  2,583  
 EBITDA $94,891  $79,343  $413,361  $264,333  





Contact:

Robert Packer
(214) 969-5530
Robert@tpltrust.com