Advantages of Royalty Interest Ownership
- The net mineral acres are located on 40 lots in Martin County, Texas. There is 1 operator, Diamond Back Energy for the 12-producing oil, gas, and LNG wells.
- Diamond Back Energy (NASDAQ: FANG) is the operator and purchaser.
- Diamondback and the culture that they have developed are grounded in a unique set of core values that are adhered to throughout the entire organization. By establishing core values, they have set the bar extremely high for all of their employees in terms of how they operate and interact, both within the office and out in the field.
- Integrity is achieved when their words and actions consistently reflect their vision and strategy. They are keenly aware that integrity is built over time. While it is difficult to measure, when achieved, integrity is apparent in all their business dealings with their partners and shareholders.
- Diamondback is committed to establishing and maintaining a leadership position within their organization and within their business community. Internally, leadership starts at the top through setting the right vision, sound decision making and effective delegation. Externally, they strive to be perceived as leaders in the industry in terms of how they execute strategy, operate and deliver exceptional results to their shareholders.
- They strive for excellence in all that they do. They have high expectations for their organization. Excellence is achieved when actions exceed the desired outcome. They recognize and reward individual accomplishments with emphasis on contributions to the organization’s success.
- Mutual success depends on their commitment to teamwork. Teamwork is the embodiment of different ideas, personalities and skills to achieve a common goal both within the organization and through effective relationships with their business partners.
Martin County: Core Midland Basin
The Midland Basin is one of the most valuable oil and gas regions in the world, with stacked pay potential across the Wolfcamp, Jo Mill, and Spraberry formations. The USGS estimates the Wolfcamp alone holds 20 billion barrels of oil, 16 trillion cubic feet of natural gas, and 1.6 billion barrels of NGLs, while Pioneer Natural Resources projects the combined Wolfcamp/Spraberry shale could contain up to 75 billion barrels of oil equivalent, second only to Saudi Arabia’s Ghawar field. The Wolfcamp A and B deliver some of the highest returns in the Permian, while the deeper C and D add over 1,000 feet of resource rich potential. The Lower Spraberry, with 10 billion barrels of proved reserves, remains a cornerstone target, and the Middle Spraberry and Jo Mill provide emerging upside. This multi-zone stack offers decades of drilling inventory, efficient multi-well pad development, and strong production economics.
The property has 12 horizontal wells that went into production December 2024 and sold over 252,000 BO, over 162,495 Mmcf, and over 964,000 LNG in December, over 486,000 BO, over 260,000 Mmcf, and over 1,899,000 LNG in January, and over 425,000 BO, over 294,000 Mmcf, and over 2,000,000 LNG in March 2025.
- Royalty Interest ownership is one of the most conservative investments in oil and gas because you own the minerals underneath the ground for life and you are paid a % of the revenue stream from production on the acreage. Your monthly passive income stream has tax benefits.
- Investing in drilling projects are speculative and very risky for the investor because if the well is not commercially viable or a marginal producer could cause the investor to lose his/her entire investment.
- A horizontal well can be fracked 3 times throughout its life which extends the life of the well and the reserves to be produced. Once the operators make the decision to re-enter the wells and frack for the 2nd time and 3rd time, this is no cost to a royalty interest owner and could dramatically increase the monthly and annual passive income as well as the production lives of the wells.
- As oil, natural gas, and LNG continues to increase in price, the passive income from the producing wells increases.
- Diversification in royalty interest gives your portfolio more stability and passive income and creates another strong investment in your portfolio without putting you in a risky situation for the monthly and yearly passive income for decades.