Dear Reader,
2025 may end up being the biggest year for domestic oil and gas production we’ve seen in decades.
Forecasts show oil production reaching 13.5 million barrels per day and natural gas production hitting 114.3 billion cubic feet per day.
This resurgence in domestic production will be driven primarily by the Permian Basin, America’s most valuable oil and gas producing asset.
Spanning across 66 counties in West Texas…
The Permian is the ONLY major oil field that is increasing its production every year.
Since 2020, its output has grown by 40%, while every other basin in America has seen a drop in production.
But the Permian is far from peaking.
Only 41% of its wells have been developed.
Which means although the Permian accounts for 44% of America’s oil production today…
By 2050, it will account for 50% of U.S. production.
For Permian drilling companies, a Trump presidency only means higher production. For landowners, it means bigger royalty checks for years, maybe decades to come.
Today, I told you about three of the best royalty companies on the market, two of which operate in the Permian:
- Royalty Collector #1: The first company collects royalties on 9,000 wells and just acquired 4,600 new royalty acres in the Delaware Basin.
- Royalty Collector #2: The second company collects royalties on the oil and gas that is produced on the 20 million acres of land it owns throughout the U.S.
- Royalty Collector #3: The third company owns royalty interest on 432 gold mines, and is trading at its cheapest level in 15 years.
During today’s presentation, I also told you about Loving County, Texas and how this desolate county of 63 people sits at the heart of the Permian with the highest number of active oil rigs and the highest concentration of wells per capita in the state.
It is also the most profitable county to drill in.
The cost of drilling a well in the Permian Basin can range from $10 to $12 million…
This means the only way a drilling company makes a profit on a new well is if oil prices are over $62 per barrel…
Otherwise it’s operating at a loss.
In Loving County, the average break even point for a new well is only $45.
That’s what makes Loving County the most desirable place to drill in all of Texas.
And why the Texas Pacific Land Corporation has been able to produce 50% gains per year, on average.
It owns 22,000 acres of land directly inside Loving County.
What you don’t know is that on November 22, 2024, the Texas Pacific Land Corporation joined the S&P 500.
Funds and ETFs will now likely pile cash into the stock, keeping its momentum alive for years.
Over the last 12 months, insiders have made 540 open market buys on TPL versus only 16 sells.
This has led to a rapid explosion in TPL’s price.
That’s why in September, I told my readers that “the current valuation presented the risk of a near-term price decline.”
And I was right.
TPL has experienced a significant pullback in recent weeks.
This means you now have the opportunity to buy what is arguably the most capital efficient company in the world, at a price you will likely never see again.
These are the kinds of situations I live for…
My full analysis on TPL is in my new report, The 100-Year Old Money Machine.
