DCF Tool

TPL

Texas Pacific Land Corporation – Crude Petroleum and Natural Gas Extraction
Texas Pacific Land Corporation is one of the largest landowners in the State of Texas with approximately 880,000 acres of land in West Texas. The Corporation is not an oil and gas producer, but its surface and royalty ownership allow revenue generation through the entire value chain of oil and gas development, including through fixed fee payments for use of the land, revenue for sales of materials (caliche) used in the construction of infrastructure, providing sourced water and treated produced water, revenue from its oil and gas royalty interests, and revenues related to saltwater disposal on the land. The Corporation also generates revenue from pipeline, power line and utility easements, commercial leases, material sales and seismic and temporary permits related to a variety of land uses including midstream infrastructure projects and hydrocarbon processing facilities.
Analysis Results
Intrinsic Value $2,074.97
Latest Price $1,526.97
Relative Value 26% undervalued
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Cash Flow (Billions)
Analysis Parameters
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Analysis Details
Growth Rate Projection

An exponential growth model was fit to the past cash flow data, giving more weight to more recent years. This model determined a growth rate estimate of 38.7%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 9.2%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 38.7%, the cash flows for the next 5 years are projected.

The present value of each year's flow is adjusted to present value using the discount rate.

Year Future flow (billion) Present value (billion)
2022 0.418 0.383
2023 0.58 0.486
2024 0.804 0.617
2025 1.12 0.783
2026 1.55 0.994
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 21.8 billion. This corresponds to a present value of 12.8 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 3.26 billion. Adding in the terminal value gives a total present value of 16.1 billion.

There are presently 7.74 million outstanding shares, so the intrinsic value per share is 2074.97.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 526,513,000
Current Cash 428,242,000
Current Liabilities 50,900,000
Current Debt 0
Non-Cash Working Capital (NCWC) 47,371,000
Change in NCWC 37,606,000
EBIT 362,393,000
Tax Provision 93,037,000
Depreciation and Amortization 16,257,000
Capital Expenditure -15,548,000
Unlevered Free Cash Flow 307,830,923
Current Assets 335,713,000
Current Cash 281,046,000
Current Liabilities 44,902,000
Current Debt 0
Non-Cash Working Capital (NCWC) 9,765,000
Change in NCWC -11,385,000
EBIT 217,251,000
Tax Provision 43,613,000
Depreciation and Amortization 14,395,000
Capital Expenditure -5,086,000
Unlevered Free Cash Flow 172,040,694
Current Assets 366,640,000
Current Cash 303,645,000
Current Liabilities 41,845,000
Current Debt 0
Non-Cash Working Capital (NCWC) 21,150,000
Change in NCWC -11,517,000
EBIT 399,573,000
Tax Provision 83,527,000
Depreciation and Amortization 8,906,000
Capital Expenditure -32,209,000
Unlevered Free Cash Flow 281,782,908
Current Assets 177,795,000
Current Cash 119,647,000
Current Liabilities 25,481,000
Current Debt 0
Non-Cash Working Capital (NCWC) 32,667,000
Change in NCWC 61,527,000
EBIT 241,959,000
Tax Provision 52,014,000
Depreciation and Amortization 2,583,000
Capital Expenditure -47,878,000
Unlevered Free Cash Flow 210,109,794
Current Assets 98,987,000
Current Cash 79,580,000
Current Liabilities 48,267,000
Current Debt 0
Non-Cash Working Capital (NCWC) -28,860,000
Change in NCWC -20,581,022
EBIT 119,776,000
Tax Provision 43,499,000
Depreciation and Amortization 376,000
Capital Expenditure -18,747,000
Unlevered Free Cash Flow 37,355,462
Current Assets 55,968,318
Current Cash 49,417,889
Current Liabilities 14,829,407
Current Debt 0
Non-Cash Working Capital (NCWC) -8,278,978
Change in NCWC -7,816,098
EBIT 55,057,850
Tax Provision 17,847,370
Depreciation and Amortization 43,290
Capital Expenditure -976,871
Unlevered Free Cash Flow 28,470,219
Current Assets 48,799,503
Current Cash 45,011,969
Current Liabilities 4,250,414
Current Debt 0
Non-Cash Working Capital (NCWC) -462,880
Change in NCWC 836,434
EBIT 75,266,040
Tax Provision 25,244,515
Depreciation and Amortization 25,374
Capital Expenditure -221,456
Unlevered Free Cash Flow 50,667,571
Current Assets 30,850,716
Current Cash 26,814,759
Current Liabilities 5,335,271
Current Debt 0
Non-Cash Working Capital (NCWC) -1,299,314
Change in NCWC -2,271,442
EBIT 51,417,031
Tax Provision 16,666,534
Depreciation and Amortization 19,730
Capital Expenditure -53,788
Unlevered Free Cash Flow 32,449,703
Current Assets 16,964,746
Current Cash 13,239,211
Current Liabilities 2,753,407
Current Debt 0
Non-Cash Working Capital (NCWC) 972,128
Change in NCWC 297,043
EBIT 40,130,573
Tax Provision 12,924,070
Depreciation and Amortization 16,286
Capital Expenditure -54,610
Unlevered Free Cash Flow 27,469,087
Current Assets 11,542,644
Current Cash 8,424,907
Current Liabilities 2,442,652
Current Debt 0
Non-Cash Working Capital (NCWC) 675,085
Change in NCWC 1,273,146
EBIT 29,303,451
Tax Provision 9,675,068
Depreciation and Amortization 16,504
Capital Expenditure -50,405
Unlevered Free Cash Flow 20,874,040

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