Texas Pacific Land Corporation (TPL)

[couldbebetter]

Aitkenresearch, Actually, based on the deferred revenue number as reported
in the 3 qtr, if the 20% corporate tax rate holds for 2018, the after tax
deferred revenue would add around $4.00 per share. More deferred revenue may come about by then as well as some used up in 4 qtr so my estimate is
tentative at best.

When I put together my 2018 EPS estimate for TPL I get a range of $20-$24 a share which would include deferred revenue. Put a PE of 40 to that and you
get $800-$1000 a share. Maybe we will get lucky and the stock price will
stay under $400 for some of 2018. That would allow for a 5% stock buyback.
Personally, I do not think we will be that "lucky."

TPL will have many tailwinds hit for 2018 and beyond. The 20% tax rate
should end up being 17.5% because of depletion allowance. Oil prices are
at a recent high and that may continue with the OPEC/Russia agreement to
keep production cuts in 2018. The major producers in TPL's lands all are
ramping up production and expanding operations. Water sales are increasing
and TPL has not yet started its "full service water operations." What the
potential there is I do not know. In a way I do not understand TPL's water
rights are grandfathered in because they owned the land prior to 1895.
This gives them some sort of an advantage. If anyone on this board can
explain it please do.