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

<ul>
<li>TPL reported a decrease in daily production in the first quarter as energy producers had difficulty sourcing adequate amounts of sand</li>
<li>The lower daily production resulted in TPL reporting lower than expected revenue and earnings in the first quarter than we were expecting</li>
<li>The delay in production rates should not alter TPL’s stock trajectory as earnings should bounce with daily production ramping again.</li>
</ul>


TPL reported a decrease in daily production in the first quarter as energy producers had difficulty sourcing adequate amounts of sand
The lower daily production resulted in TPL reporting lower than expected revenue and earnings in the first quarter than we were expecting
The delay in production rates should not alter TPL’s stock trajectory as earnings should bounce with daily production ramping again.


TPL: Special Dividend While Production Re-Ramps

<ul>
<li>TPL utilizing an unhedged strategy for its oil and gas royalties is set to announce first quarter results that should exceed expectations</li>
<li>Higher energy prices and more production should result in TPL reporting oil and gas royalties materially higher than the fourth quarter.</li>
<li>The increase in production benefits TPL’s water business. Oil producers need water during the fracking process. TPL’s water source is closer to producing oil wells</li>
</ul>


TPL utilizing an unhedged strategy for its oil and gas royalties is set to announce first quarter results that should exceed expectations
Higher energy prices and more production should result in TPL reporting oil and gas royalties materially higher than the fourth quarter.
The increase in production benefits TPL’s water business. Oil producers need water during the fracking process. TPL’s water source is closer to producing oil wells


<ul>
<li>TPL remains unhedged to the price of crude oil with Permian Basin output rising. Total output in the Permian Basin is projected to surpass 5 million barrels per day </li>
<li>The increase in output would have an immediate benefit to TPL in the form of royalties and could generate incremental water and surface land easement revenue</li>
<li>TPL’s stock has been selling off with the broader market in what we speculate could have to do with no action from TPL’s Board after the annual shareholder meeting</li>
</ul>


TPL remains unhedged to the price of crude oil with Permian Basin output rising. Total output in the Permian Basin is projected to surpass 5 million barrels per day 
The increase in output would have an immediate benefit to TPL in the form of royalties and could generate incremental water and surface land easement revenue
TPL’s stock has been selling off with the broader market in what we speculate could have to do with no action from TPL’s Board after the annual shareholder meeting


TPL: Rising Production, Raising Estimates

<ul type="disc"><li>
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.

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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TPL: Rising Production, Raising Estimates

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