Texas Pacific Land Trust (TPL) is a publicly traded stock quite unlike most others. The trust was created in 1888 when the Texas and Pacific Railway Company went into receivership and through a subsequent reorganization where bondholders received equity in the Texas Pacific Land Trust. Holders of Texas and Pacific Railway Company bonds received 3.5 million acres of land in Texas which had been earned by the railroad and pledged as security against bonds.
The mandate of the Trust was to manage and sell the land. The Trust has followed this mandate through its inception and regularly sold off parcels of land and returned the proceeds to shareholders through dividends and share buybacks. Nonetheless, after more than 130 years of following sales, the Trust is still one of the largest landowners in Texas with around 888,333 acres located in eighteen different countries across Western Texas.
Perpetual Buybacks
Texas Pacific Land Trust does not derive revenue solely from land sales as the Trust generates revenue from all avenues of managing the land. Revenues from land management range from oil and gas royalties, grazing leases, easements, sundry and speciality leases. Thereof, the Trust has a perpetual oil and gas royalty interest in some 459,200 acres.
The trust has over the years been selling parcels of lands as well as generating revenue from the royalties and leases from their land ownership. The trust has, to a large extent used those proceeds to buy back shares and retire them.
TPL Investment Writeups
- Contrarian Research Report: Texas Pacific Land Trust. Early research from long-term holders, Horizon Kinetics. The research report was published in May 1995.
- Texas Pacific Land: The Attractive Economics. A writeup from Laurentian Research, published on Seeking Alpha in January 2018.