For the full annual 2016 Texas Petro-Wealth report in pdf click on the following link: 2016 Petro-Wealth Report
Produced by Blackbeard Data to outline the demographics of Texas oil and gas ownership.
Executive Summary
Texas contains $125.9 billion worth of petro-wealth.. From the total amount of petro-wealth corporations own $98 billion of that amount, individuals own $20.8 billion, trusts own $4.1 billion, with the remaining $2.6 billion spread between non-profits, educational institutions, the government, and various religious organizations.
Overview
Currently based on our calculations, Texas holds $125.9 billion of proved producing reserves. An extensive decline curve analysis was performed on a county by county basis to get this figure. The price of oil was $48.52 per barrel at the time the analysis was calculated.
Non-producing, probable, and possible classed reserves will not be included in this report. Proved producing petroleum reserves are what this report will address.
In the graph below the wealth of the proved producing reserves is outlined.
Ownership Of Total Petro-Wealth By Entity Class
For this report all types of ownership have been aggregated together. 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.
The highest concentration of petro-wealth is held by corporations. A heavy factor that plays into this high amount is working interest values owned by corporations.
Ownership Of Royalty Petro-Wealth By Entity Class
In this second chart we have removed working interest from our totals. Now we have a more accurate view of the distribution among entity types of oil & gas wealth in Texas. Wealth among individuals decreased by only $5 billion, or 24%. Notice the vast decrease in wealth held by corporate entities.
Ownership of Royalty Interest By State
Geographically speaking, 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. Our next chart reinforces this theory. There is a large distribution of ownership owned by Texas.
A second graph has been created omitting Texas since the concentration of petro-wealth is disproportionally higher in Texas than other states.
Bulk of wealth owned by Texans
The first graph shows that Texans own roughly 84% of the total override and royalty interests in oil and gas property in Texas.
Texas oil and gas property ownership outside of Texas are the following: Oklahoma 3%,California 1.5%, Colorado 1.4%, and Arkansas 0.5%.
A very small fraction of Texas petro-wealth is 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
For simplicity we selected the top 20 cities of petro-wealth. The graph includes working interest as well as the royalty and override interests. Since working interest is included, there is going to be a bias to Houston and Midland. These two cities are where many oil companies are located.
Texas Petro-Wealth By City – Royalties Only
Once working interest has been removed there is a slight shift in top 20 cities now but Houston and Midland are still the top two cities.
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 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 19 years.
For more information, or to purchase lease ownership information, contact us at 800 762 3057 or visit us at www.BlackbeardData.com