Founder, BWS Financial Inc

Hamed Khorsand

Founder

Independent Stock Specific Research

BWS Financial Inc

BWS provides independent stock specific research focused on companies with distinct value that are going through a special situation where there is a tangible catalyst not priced in. The catalyst can be anything from new product, restructuring, M&A, management change, change in business strategy, etc. BWS’s focus is to understand the change and evaluate the potential return for investors.

BWS utilizes a self formed proprietary approach in discovering stocks by putting great emphasis on deep research. BWS does generate short recommendations following a similar criteria.

Equity Bottom-Up

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Texas Pacific Land (TPL) benefited from a higher crude oil price resulting in increased demand for TPL’s water services and higher royalty revenue. TPL remains unhedged to the price of crude oil creating opportunity to generate greater royalty revenue as the price of crude oil advances.</li></ul> <ul type="disc"><li>While there has been increased activity in the Permian Basin, rig count and overall activity remain depressed compared to pre-COVID-19 levels. TPL stands to benefit from energy companies bringing drilled uncompleted (“DUC”) wells online.</li></ul> <ul type="disc"><li>TPL reported third quarter revenue of $123.7 million compared to $95.9 million in the second quarter. We had been projecting $100.5 million.</li></ul> <ul type="disc"><li>We are making some changes to our earnings model for the fourth quarter and all of 2022. The higher price of crude oil could entice more activity in 2022, but we do not believe it would be much of an offsetting factor in the seasonally slow fourth quarter.</li></ul>


Texas Pacific Land (TPL) benefited from a higher crude oil price resulting in increased demand for TPL’s water services and higher royalty revenue. TPL remains unhedged to the price of crude oil creating opportunity to generate greater royalty revenue as the price of crude oil advances. While there has been increased activity in the Permian Basin, rig count and overall activity remain depressed compared to pre-COVID-19 levels. TPL stands to benefit from energy companies bringing drilled uncompleted (“DUC”) wells online. TPL reported third quarter revenue of $123.7 million compared to $95.9 million in the second quarter. We had been projecting $100.5 million. We are making some changes to our earnings model for the fourth quarter and all of 2022. The higher price of crude oil could entice more activity in 2022, but we do not believe it would be much of an offsetting factor in the seasonally slow fourth quarter.

<ul type="disc"><li>Crude oil prices rising in the third quarter sets the course for Texas Pacific Land (TPL) reporting an increase in third quarter revenue. TPL is on course to benefit from the steady rise in crude oil prices.</li></ul> <ul type="disc"><li>Permits in the Permian Basin are up in the last few months and, according to the US Energy Information Administration (“EIA”), energy companies have started production from drilled uncompleted (“DUC”) wells.</li></ul> <ul type="disc"><li>TPL has built a business where there is a compounding effect from the different services the Company provides. The increase in activity should result in TPL selling more water services and generating greater number of surface easement agreements.</li></ul> <ul type="disc"><li>The current pricing environment should enable TPL to easily beat our third quarter expectations and help reverse some of the selling pressure plaguing the shares in recent months.</li></ul>

Crude oil prices rising in the third quarter sets the course for Texas Pacific Land (TPL) reporting an increase in third quarter revenue. TPL is on course to benefit from the steady rise in crude oil prices. Permits in the Permian Basin are up in the last few months and, according to the US Energy Information Administration (“EIA”), energy companies have started production from drilled uncompleted (“DUC”) wells. TPL has built a business where there is a compounding effect from the different services the Company provides. The increase in activity should result in TPL selling more water services and generating greater number of surface easement agreements. The current pricing environment should enable TPL to easily beat our third quarter expectations and help reverse some of the selling pressure plaguing the shares in recent months.

<ul type="disc"><li>The steady rise in crude oil prices resulted in Texas Pacific Land (TPL) reporting an increase in oil and gas royalties in the second quarter.</li></ul> <ul type="disc"><li>An upward move in energy prices has helped restart activity in the Permian Basin. Rig count and overall activity remain depressed compared to pre-COVID-19 levels even though crude oil prices are now higher than they were in all of 2019. The slow progression in active rigs could result in accelerated activity in 2022 as budgets are adjusted for a higher oil price.</li></ul> <ul type="disc"><li>Second quarter revenue reached $95.9 million on an increase in oil and gas royalties. TPL realized royalties on at an average of $65.30 a barrel of oil. The barrel of oil equivalent was $40.83 in the second quarter. Quarter to date, the price of crude oil has remained above TPL’s second quarter average.</li></ul> <ul type="disc"><li>TPL ended the second quarter with approximately $329.1 million in cash. Management has been patiently looking for the right assets to acquire.</li></ul>

The steady rise in crude oil prices resulted in Texas Pacific Land (TPL) reporting an increase in oil and gas royalties in the second quarter. An upward move in energy prices has helped restart activity in the Permian Basin. Rig count and overall activity remain depressed compared to pre-COVID-19 levels even though crude oil prices are now higher than they were in all of 2019. The slow progression in active rigs could result in accelerated activity in 2022 as budgets are adjusted for a higher oil price. Second quarter revenue reached $95.9 million on an increase in oil and gas royalties. TPL realized royalties on at an average of $65.30 a barrel of oil. The barrel of oil equivalent was $40.83 in the second quarter. Quarter to date, the price of crude oil has remained above TPL’s second quarter average. TPL ended the second quarter with approximately $329.1 million in cash. Management has been patiently looking for the right assets to acquire.

United States

Texas Pacific Land Corporation owns tracts of land in Texas, previously the property of the Texas and Pacific Railway Co. The Trust issues transferable certificates of proprietary interest pro rata to the holders of certain debt securities of the Texas and Pacific Railway Co. Texas's income is derived from land sales, oil and gas royalties, grazing leases, and interest.

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Texas Pacific Land (TPL US)

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