A letter from Ben R. Weber:
After 40 years in the oil and gas industry, I consider myself a seasoned oilman. I have been involved in every facet of the oil and gas industry, from leasing mineral owners to drilling and production, as well as upstream and downstream operations. In 2020, I formed Texas Republic Minerals because of my view that the most profitable and least risk-weighted sector of the industry is the acquisition and ownership of fee mineral interests. Over the years, I have accumulated a wealth of knowledge within the oil and gas industry. As the general partner of my new venture, TRM, I believe today’s social and economic environment presents an opportunity to acquire, hold, and profit from oil and gas investments in fee mineral ownership, while eliminating the risks and costs associated with exploration.
Why fee mineral ownership?
“The meek may inherit the earth, but not its mineral rights.” — J. Paul Getty
Much like real estate ownership, fee mineral interests may be owned in perpetuity. Texas Republic Minerals only purchases and holds fee mineral interests which are generating oil and gas revenue at the time of acquisition. In order for us to purchase these mineral interests, they must be slated for further drilling and development by the operators. Mineral interests bear no expense in the development of oil and gas reserves and have none of the liability which accompanies the development and production process. Fee mineral ownership value is determined by several factors: primarily, where they are located in oil and gas basins, the supply and demand coming from those basins, and commodity prices. Fee mineral ownership is less volatile than ownership of investments in the stock and bond markets.
Why TRM?
"If you don’t know where you’re going, you’ll probably end up somewhere else.” — Lawrence J. Peter
After decades of experience in oil and gas exploration, our team knows where the most promising areas for mineral ownership are. In many cases, the most promising areas to acquire fee mineral interests are not those most publicized. TRM’s focus is on natural gas, an evolving leader in clean energy. Natural gas is abundant and has many paths to its utilization. It is used for powering and heating our homes, generating electrical power, manufacturing of thousands of chemicals and products, and it can be easily liquified and exported to energy-dependent areas of the world. One of the best areas for natural gas production lies in the Haynesville Shale, a natural gas region in East Texas and Northwestern Louisiana. Boasting trillions of feet in natural gas reserves, the Haynesville province serves an ever-increasing demand for its resources in nearby coastal LNG (Liquified Natural Gas) processing and exporting facilities. Furthermore, Haynesville provides excellent pipeline capacity to purchasers working in fields such as power generation, chemical processes, and industrial applications. As one renowned energy periodical stated this year, “the stars are aligned for the Haynesville Shale to explode.”
There are a large number of fee mineral owners in the United States, and the Haynesville Shale is no exception. Among these owners are a small sector of interest holders who, for a variety of reasons, prefer to monetize their fee mineral interests. Generally speaking, these are owners by inheritance, or owners who are simply inclined to receive a lump sum in cash for their asset as opposed to a steady stream of income. In some cases, eventualities demand that they liquidate their mineral assets. Some choose to liquidate in order to enjoy the benefits of their assets now, as opposed to passing them on to their heirs. Whatever the reason, sellers exist within TRM’s area of focus. Once a seller is identified, TRM begins the robust process of scrutinizing the many economic and legal factors of the asset in an effort to justify purchase of the interest. TRM will only purchase interests that are actively producing with cash flow, operated by a qualified entity with plans for well expansion in the near future, and legally obtainable free of any encumbrances. What starts as a large pool of fee mineral acquisition targets shrinks as TRM identifies qualified interests. Those interests that remain are obtained through diligent, fair, and professional business negotiations.
Why now?
In the middle of difficulty lies opportunity” — Albert Einstein
It need hardly be said that there is a lot of uncertainly in every sector of the current financial ecosystem. Fee mineral assets are stable, can be held in perpetuity, or may be sold at a time when profit upside appears to be the best path. During the period between an acquisition and a potential sale, owners enjoy the luxury of a passive investment which many refer to as “mailbox money.” Fee mineral interests are stable assets and resistant to the market fluctuations and financial shocks that are so common in the current economic climate, while also being versatile enough to be held or sold at one’s convenience. These factors make them an attractive commodity, and TRM is excited to work with you should you choose to avail yourself of the stability and versatility of fee mineral interests. For any questions or to learn more about Texas Republic Minerals, please contact us directly.