One of the biggest landowners in Texas oil country doubled returns to investors in 2022, yet it’s starting the new year by suing some of them as a dispute over the future direction of the company spills into a Delaware court, rigzone.com reported. Texas Pacific Land Corp., a land bank created out of a 19th century railroad bankruptcy, shelved plans to issue new stock last month after shareholders balked at the implicit dilution of their holdings and the prospect of executives inexperienced in dealmaking looking for acquisitions. Texas Pacific management has been vague about what it intends to do with the new shares but has taken its biggest holders to court so it can push through the issuance in February. That puts a company in the odd position of suing investors — including entities run by two of its own directors — who’ve seen the stock swell more than 4,000% in the past decade and dividends almost triple in the past year to $32 a share. “Going on an acquisition spree funded with the equity of TPL is something that has never happened in the history of the trust going back to when it was formed in the 1880s,” said Chadd Garcia, portfolio manager with Schwartz Investment Counsel, a top-10 Texas Pacific shareholder. As a result of the dispute, the company “has the most disliked board and management.” Texas Pacific’s unusual business model revolves around charging oil explorers access fees to its land, selling them raw materials needed to drill wells, and taking a cut of the proceeds from crude and natural gas production.
