DALLAS - Texas Pacific Land Corporation (NYSE:TPL), a prominent landholder in Texas, recently emerged victorious in a legal dispute with a group of investors, as confirmed by the Delaware Supreme Court. The court upheld a previous ruling that sided with the company regarding stockholder voting on a proposal to increase the number of authorized shares of common stock.
The litigation, involving Horizon Kinetics LLC, Horizon Kinetics Asset Management LLC, SoftVest Advisors, LLC, and SoftVest, L.P., collectively known as the Investor Group, centered around the June 2020 Stockholders' Agreement. According to the agreement, the Investor Group was obligated to vote in alignment with the Board's recommendation at the company's 2022 annual meeting concerning Proposal 4.
On December 1, 2023, the Delaware Court of Chancery ruled in favor of Texas Pacific Land Corporation, stating that the Investor Group should have adhered to the Board's guidance during the voting process. This decision was affirmed by the Supreme Court on Monday, solidifying the company's stance and the stockholders' approval of the increase in authorized shares.
Texas Pacific Land Corporation, with approximately 868,000 acres of land primarily in the Permian Basin, is not directly involved in oil and gas production. However, it profits from various stages of oil and gas development through its land ownership.
The company earns revenue from fixed fee payments for land use, sales of materials for infrastructure construction, water sourcing and treatment services, oil and gas royalty interests, and saltwater disposal operations. Additionally, it generates income from pipeline, power line, and utility easements, as well as commercial leases and temporary permits for midstream projects and hydrocarbon processing facilities.
The confirmation of the court's ruling is a significant legal victory for Texas Pacific Land Corporation, ensuring the company's ability to manage its stock issuance as per the agreement with its stockholders.
This information is based on a press release statement from Texas Pacific Land Corporation.
InvestingPro Insights
Following the legal affirmation allowing Texas Pacific Land Corporation (NYSE:TPL) to manage stock issuance, the company's financial health and market performance remain a keen interest to investors. With a strong presence in the Permian Basin and a diverse revenue stream, TPL's financial metrics and market valuation provide a deeper understanding of its current position.
InvestingPro data indicates a robust market capitalization of 11.96 billion USD, reflecting investor confidence in the company's value. TPL's impressive gross profit margin, standing at 94.69% for the last twelve months as of Q1 2023, showcases its ability to efficiently manage costs relative to its revenue. Furthermore, the company has maintained a steady dividend payment streak for 11 consecutive years, which could be appealing to income-focused investors, with a dividend yield of 0.9% as of the last recorded date.
An InvestingPro Tip highlights that Texas Pacific Land Corporation holds more cash than debt on its balance sheet, suggesting a strong liquidity position which is critical for sustaining operations and seizing growth opportunities. Additionally, analysts predict the company will remain profitable this year, a sentiment supported by a positive return on assets of 39.89% for the same twelve-month period.
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