Texas Pacific Land Corporation (TPL) has announced the acquisition of oil and gas minerals and royalties in the Permian Basin for $286 million.
According to a news release, the royalty interests are primarily located in the Midland Basin, spanning approximately 7,490 net royalty acres in Martin and Midland counties, Texas, among other areas. More than 80% of these interests are adjacent to existing TPL surface holdings. The company owns roughly 873,000 acres of land in West Texas, with most situated in the Permian Basin. TPL's services provide revenue opportunities throughout the life cycle of a well; however, the company is not an oil and gas producer.
The news release further states that more than half (66%) of the land is operated by Exxon Mobil Corporation and Diamondback Energy Inc. TPL’s latest portfolio assets align with their business motto of production growth and near-term development capable of producing approximately 1,300 barrels of oil daily.
"These acquired assets simultaneously high-grade our legacy oil and gas royalty footprint, increase cash flow and earnings per share, and strengthen our growth profile," said CEO Tyler Glover. He added that this acquisition significantly expands TPL’s net royalty acreage in the Midland Basin. The acquired assets are located in some of the highest quality subregions prospective for multiple proven formations. Glover noted that the acreage is predominantly operated by premier upstream companies such as Exxon, Diamondback, Occidental, and ConocoPhillips, with 12 rigs currently running on the footprint. He anticipates next-twelve-months production to generate a double-digit cash flow yield, with additional growth potential as over half of the drilling and spacing units have seen limited development or contain numerous permits and recently drilled-but-uncompleted wells. Glover emphasized that recent acquisitions meaningfully enhance TPL’s free cash flow per share, offering incremental flexibility to sustainably increase shareholder return of capital.