| Business: |
We acquire oil property in the Delaware Basin. (Incorporated in Delaware)
Land is critical to energy development and production. We own approximately 220,000 surface acres in and around the Delaware sub-basin in the prolific Permian Basin, which is the most active region for oil and natural gas exploration and development in the United States. Access to expansive surface acreage is necessary for oil and natural gas development, solar power generation, power storage, data centers and non-hazardous oilfield reclamation and solid waste facilities. Further, the significant industrial economy that exists to service and support energy development requires access to surface acreage to support those activities. Our strategy is to actively manage our land and resources to support and encourage oil and natural gas development and other land uses that will generate long-term revenue and Free Cash Flow for us and returns to our shareholders.
The Delaware Basin is the most active oil and natural gas development and production region of the prolific Permian Basin due to the abundant remaining oil and natural gas resources and low break-even cost of development. Activity in the Delaware Basin is dominated by large, generally publicly listed, well-capitalized producers. Our land is located predominantly in the heart of the Delaware Basin, along and near the regulatory divide of the Texas-New Mexico state border, which represents some of the most productive acreage in the Delaware Basin with a high concentration of hydrocarbons and growing drilling and completion activity. We believe that our strategic location positions us to capture additional revenues from the growth in infrastructure required to facilitate the development of these resources.
We share a financial sponsor, Five Point, and our management team with WaterBridge, one of the largest water midstream companies in the United States. WaterBridge operates a large-scale network of pipelines and other infrastructure in the Delaware Basin that, as of May 25, 2024, handled more than 2.0 million bpd of water associated with oil and natural gas production, consisting of 139 produced water handling facilities and approximately 3.4 million bpd of total handling capacity. WaterBridge operates primarily under long-term agreements with E&P companies to provide critical produced water handling throughout the full life cycle of its customers’ oil and natural gas wells. These relationships provide our shared management team visibility into key areas of oil and natural gas production and long-term trends, which we leverage to encourage and support the development of critical infrastructure on our land and generate additional revenue for us.
Five Point and our management team formed LandBridge to acquire, manage and expand a strategic land position in the heart of the Delaware Basin to support the development of WaterBridge’s large-scale produced water handling infrastructure and to actively manage our land and resources to support and encourage broader industrial and commercial development. Since our formation, our management and Five Point have successfully started and expanded businesses that generate new and growing revenues for us by capturing and monetizing commercial activity both on and near our land. Examples of the benefits of these relationships include WaterBridge’s strategic partnership with Devon Energy, which supports the development of significant additional infrastructure on and around our land. We believe that WaterBridge’s future growth will continue to underpin increased revenues for us, into which we have significant visibility and that requires minimal investment by us. Additionally, Five Point formed Desert Environmental to develop non-hazardous oilfield reclamation and solid waste facilities on our land. We believe Desert Environmental will provide a responsible waste disposal solution to those operating on or near our surface and generate additional revenues for us that otherwise would have gone to other landowners.
In addition to our relationships with WaterBridge and Desert Environmental, we have actively grown third-party revenues. We utilize a collaborative commercial approach with a diversified customer base to provide availability, timing and consistent terms for our customer’s development activities on our land. As a landowner, we benefit from these activities by charging fees and royalties based on our customers’ usage of our land and resources. Furthermore, the cost of development on our land is primarily borne by our customers, allowing us to benefit from their growth on our land while deploying minimal capital of our own. In furtherance of our strategy, we and WaterBridge entered into agreements with Texas Pacific Land Company (“TPL”), one of the largest landowners in Texas, to provide reciprocal crossing rights and produced water royalty and revenue sharing across an area of mutual interest that provides our customers (including WaterBridge) with greater development efficiency and enables them to increase their operations on our land. Please see “Business—Our Assets—Our Stateline Position” for more information related to our agreements with TPL.
We generate multiple revenue streams from the use of our surface acreage, the sale of resources from our land, and oil and gas royalties.
Note: Net income and revenue are for the 12 months that ended March 31, 2024, and include pro forma figures that give effect to the East Stateline Acquisition and the Credit Amendment Agreement – see prospectus for further details.
(Note: LandBridge Co LLC priced its IPO at $17.00 – $2.00 below the low end of its $19.00-to-$22.00 range – and sold the full 14.5 million shares – the number of shares in the prospectus – to raise $246.5 million on Thursday night, June 27, 2024. LandBridge also announced that it agreed to sell 750,000 shares of common stock at the IPO price of $17.00 per share in a concurrent private placement to an accredited investor to raise $12.75 million.)
(Background: LandBridge Co LLC disclosed the terms for its IPO in an S-1/A filing dated June 17, 2024: The company is offering 14.5 million shares at a price range of $19.00 to $22.00 to raise $297.25 million – if the IPO is priced at the $20.50 mid-point of its range. Background: LandBridge filed its S-1 to go public on May 31, 2024.)
|
