For the full annual 2015 Texas Petro-Wealth report in pdf click on the following link 2015 Petro-Wealth Report
Produced by Blackbeard Data to outline the demographics of Texas oil and gas ownership.
Executive Summary
In proved producing reserves, Texas contains $107 billion worth of petro-wealth, down $33 billion or 24% from $140 billion in our 2014 report. Out of this, corporations own $86 billion, individuals own $15.7 billion, trusts own $3.5 billion, with the remaining $1.8 billion spread between non-profits, educational institutions, religious organizations, and the government.
Overview
Texas holds $107 billion of proved producing reserves. This number was derived from extensive decline curve analysis performed on a county by county basis. At the time of the analysis the oil price was $58.95 per barrel.
Only proved producing petroleum reserves will be addressed in this report. We will not address proved non-producing, probable, and possible classed reserves.
The wealth of the proved producing reserves is outlined in the first graph posted below.
Ownership Of Total Petro-Wealth By Entity Class
All types of ownership have been aggregated together for this study. The types of ownership have been plotted by class of entity, to include Royalty Interests, Working Interests, and Override Interests in oil and gas leases in Texas. Please see the Terminology section at the end of this report for clarification on the different interest types.
A noticeable concentration of petro-weath is held by companies. This can be due in part to to the high amount of working interest values owned by corporations. To better represent this distribution, we have removed royalty and overriding interest below.
Ownership Of Royalty Petro-Wealth By Entity Class
With working interest removed, we have a more accurate view of the distribution among entity types of oil & gas wealth in Texas. Wealth among individuals decreased roughly by $2 billion.
Ownership of Royalty Interest By State
If a property is located in Texas there will be a higher ratio of Texans owning the interest in the asset than people living in other states. The chart reinforces this theory by showing a large distribution of ownership owned by Texas.
Since the concentration of petro-wealth is disproportionally higher in Texas than other states we have created a second graph with Texas removed.
With regards to US territories, the Virgin Islands have the largest amount of wealth. Other US territories have such a small amount that we have combined them all together under US Territories rather than splitting out territories individually.
Bulk of wealth owned by Texans
This graph shows that Texans own roughly 86% of the total override and royalty interests in oil and gas property in Texas.
The most prevalent resident states of Texas oil and gas property are the following: Oklahoma 4%, Colorado 1%, New Mexico 1% and California 1%.
There is very little Texas petro-wealth owned by non-US citizens. Some domestic companies may own minerals which are in turn owned by foreign nationals or foreign states via the stock shares.
Petro-Wealth By City
Since there are thousands of cities in our data, we just selected the top 20 cities of petro-wealth. This graph includes working interest as well as the royalty and override interests. With working interest included, there is going to be a bias to Houston and Midland, the locations of many oil companies.
Texas Petro-Wealth By City – Royalties Only
We wind up with just royalty and override wealth once working interest has been removed. There is a slight shift in top 20 cities now.
Terminology
There are three types of ownership for oil and gas assets:
Working Interest – WI ownership is comprised of individuals or corporations who invest in oil and gas drilling. Typically, working interest owners receive 70-90% of the value of oil produced because of the risk assessed with working interest, the risk being having the financial responsibility to pay for all the operating costs.
Royalty Interest – RI ownership receives a risk-free payment. This payment is paid to the mineral owner by the operator. Typically royalty owners combined receive between 10-25% of the value of the oil produced.
Overriding Royalty Interest – This interest is similar to a Royalty Interest, but the owner does not own the minerals. Overriding royalties disappear if the lease expires. Typically 1-5% of the value of the oil produced.
A typical oil lease 20 years ago would be:
87.5% Oil Company (owns 100% WI)
12.5% Mineral Owner
These numbers represent the NRI or Net Revenue Interest which is the division of the revenues from the oil. The Oil company has to pay 100% of the bills, hence the 100% WI.
Modern leases are closer to:
80% Oil Company (owns 100% WI)
20% Mineral Owner
The higher royalty is due to lower risk using modern methods in drilling.
About This Report
Blackbeard Data compiles lease ownership data for all oil producing counties in Texas. From this information, we pull out the different classes of ownership, classify the type of owner, break out city sums, and then adjust all sums of all ownership values using the price of oil at the current time of analysis.
About Blackbeard Data
Blackbeard Data is a data service provider offering lease ownership data for properties throughout Texas, Kansas, Arkansas, and Ohio.
Located in Austin, Texas, it has provided lease ownership information, geospatial lease data, and analytical services to oil investors for over 18 years.
For more information, or to purchase lease ownership information, contact us at 800 762 3057 or visit us at www.BlackbeardData.com