Texas Pacific Land Corporation

finance, and investor relations. Please go ahead.

Good morning. Thank you for joining us today for Texas Pacific Land Corporation's first quarter 2022 earnings conference call. Yesterday afternoon, the company released its financial results and filed its Form 10-Q with the Securities and Exchange Commission, which is available on the investor section of the company's website at www.texaspecific.com. As a reminder, remarks made on today's conference call may include forward-looking statements. Forward-looking statements are subject to risk and uncertainties that may cause actual results to differ materially from those discussed today. We do not undertake any obligation to update our forward-looking statements in light of new information or future events. For a more detailed discussion of the factors that may affect the company's results, please refer to our earnings release for this quarter and to our most recent SEC filings. During this call, we'll also be discussing certain non-GAAP financial measures More information and reconciliations about these non-GAAP financial measures are contained in our earnings release and SEC filings. Please also note, we may at times refer to our company by its stock ticker, TPL. This morning's conference call is hosted by TPL's Chief Executive Officer, Ty Glover, and Chief Financial Officer, Chris Dedham. Management will make some prepared comments, after which we'll open the call for questions. Now, I will turn the call over to Ty.

Thanks, Sean. Good morning, everyone, and thank you for joining us today. Yesterday, we announced a special dividend of $20 per share, and this special dividend is incremental to the $100 million share repurchase plan that we announced in March. We're excited that our shareholders will benefit from this increased return of capital driven by strong Permian activity, commodity prices that are some of the best we've seen in a decade, and a balance sheet that is debt free. Looking forward to the rest of 2022, we're bullish that our underlying business fundamentals will remain constructive. We're seeing more rigs added onto our surface, and looking at our water sales schedule, we can see that producers are intent on maintaining and growing completions pacing throughout the year. In our surface leases, easements, and materials business, which we refer to as SLIM, we are seeing a noticeable uptick for requests for new infrastructure and well pads. especially in the Northern Delaware. All of these signs are a good leading indicator for future development activity. As we look at our well inventory, we have yet more reasons to be encouraged. Permitting activity and drilling activity have moved higher. For the first quarter of 2022, our data indicates that we had 200 gross spuds on our royalty acreage, which is the highest level since the pandemic. Although some of the increased drilling can be attributed to the fact that operators have less inventory of ducts to complete, we also continue to see strong overall completions as well. In particular, we're seeing a nice ramp in activity in Loving County. Overall, it was a solid quarter for the water segment. We did have a couple of frac jobs get deferred where we had source water sales lined up, but the deferrals mostly related to operator struggles with procuring frac sand. The outlook for water on both the sourced and produced side remains strong and we expect volumes to increase throughout the year, though maybe not without a few hiccups here and there as operators navigate various supply chain and labor constraints. We're also excited about our updated alliance with ARIS, which we announced last month. We've worked with ARIS for a long time and we consider them to be a great partner. With our expanded agreement, we believe that we'll be able to serve operators more efficiently and effectively as we can leverage our combined competencies and assets to provide operators supply assurances on the source side and also have readily available solutions on the produce water side so that we can help keep operators' oil and gas development moving along. We have a lot of exciting projects in the NextGen pipeline as well. In fact, just recently we signed an agreement with Alonquin Power and Utilities Corp. to put a behind-the-meter solar project on our surface in Culberson County. The project will support oil and gas development for a large energy multinational company operating in the region. This project does not require any capital from us and we will receive annual payments with inflation escalators. We continue to have numerous constructive conversations for similar behind-the-meter solar projects with producers that are on our surface, and we're excited to participate as the domestic oil and gas industry continues to evolve its best practices and show leadership in minimizing Scope 1 and Scope 2 emissions associated with development. We are also advancing discussions on utility-scale renewable projects, Bitcoin mining, carbon capture, and many other innovative and unique opportunities. We'll share updates and details as we get things signed up, and I'm hopeful we'll be able to cross the finish line on some of these projects in the near term. A few weeks ago, we issued a press release and an 8K with an update on our board of directors and the evaluation of the declassification process. I'm excited to welcome Reese Vest and Carl Kurtz as new board members. Both Reese and Carl are highly experienced, and they will bring a lot of skills and insights to our boardroom. They're excited about the business and what we can accomplish, and I think our shareholders are going to benefit tremendously from having them on our board. On the declassification side, our board and the Nominating and Corporate Governance Committee continue to work through that. I don't have specific timing to share at this time, but I know our committee is committed to working diligently and quickly on the matter, and the board and the committee will have more to share later this year as they make progress. Wrapping it all up, the business is in a great place today. We're thrilled to be returning a significant amount of cash back to shareholders through a regular dividend, through this most recent special dividend, and through our recent share buyback program. As many of you know, we have a high margin, low capital intensity business, which means our revenues drop to free cash flow in a very efficient manner. And as we progress through the year, our business will continue generating more free cash flow, There's certainly room for more dividends and buybacks beyond what we've announced up to today, and it's our priority to make sure our shareholders benefit from the constructive industry environment and the strong underlying business performance. With that, I'll turn the call over to Chris to discuss our quarterly results.