For the full annual 2019 Texas Petro-Wealth report in pdf click on the following link: 2019-Petro-WealthReport

Produced by Blackbeard Data to outline the demographics of Texas oil and gas ownership.

Executive Summary

In 2019 the petro-wealth for Texas roughly totals $101.4 billion. Like past past petro-wealth reports we have compiled corporations hold the highest total of petro-wealth at $79.4 billion, followed by individuals with a cumulative wealth of $16.5 billion, and trusts totaling $3.6 billion. The rest of the $1.9 billion of petro-wealth is split among non-profits, educational institutions, the government, and various religious organizations.

Overview

On a county by county basis we did a comprehensive decline curve analysis to get the total amount of petro-wealth. We estimate, based on our calculations, that Texas has around $101.4 billion in proved producing reserves. The price of oil was at $55.96 per barrel when our calculations were performed.
Please note that this report will only focus on proved producing petroleum reserves. This report does not include the non-producing, probable, and possible classed reserves in this report.
The graph below illustrates the wealth of the proved producing reserves based on Working Interest, Royalty Interest, and Override Interest. If you are unfamiliar with what these interest types mean used in this report there is a glossary at the end of the report defining each interest type.

Ownership Of Total Petro-Wealth By Entity Class

To show how the petro-wealth is distributed by entity type, Royalty Interests, Working Interests, and Override Interests have been grouped together by entity class.
The highest value of petro-wealth is held by corporations but working interest values are owned by corporations. Typically, working interest is a higher dollar value compared to a royalty or override interest.

Ownership Of Royalty Petro-Wealth By Entity Class

In this graph we removed working interest from the calculations. Notice we now have a more realistic view of the distribution among entity types of oil & gas wealth in Texas. Wealth among individuals has decreased by 28 percent, and wealth held by corporate entities decreased in value by almost 84 percent. That is a drastic decrease in the corporation class once working interest has been removed.

Ownership of Royalty Interest By State

There is a higher ratio of Texans owning the interest of an asset located in Texas than people living in other states just based on simple geographics. Our next graph is supported by this theory.
Also, a second graph was created that shows ownership of interest by state but does not include Texas. We did this so that the reader can get a better glimpse of the distribution of Texas petro-wealth among other states. The concentration of petro-wealth is disproportionately higher in Texas than other states and the initial graph can make viewing other states’ ownership difficult.

Bulk of wealth owned by Texans

Around 84 percent of the total override and royalty interests of producing oil and gas property located in Texas is owned by Texans.
After Texas, Oklahoma is the second highest state of ownership for Texas petro-wealth. The percentage is only 7.9 percent of the total petro-wealth, followed by Colorado at 5 percent. The rest of the states are smaller than 1 percent of ownership per state.

Petro-Wealth By City

Our final series of graphs shows the top 20 cities of petro-wealth. In the graph below we have included all interest types. There will be a bias to Houston and Midland because many oil companies are located in these cities and working interest was factored in the graph.

Texas Petro-Wealth By City – Royalties Only

In this graph we have removed working interest from our calculations. There is a slight shift in the top cities but Houston and Midland are still top 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 20 years.
For more information, or to purchase lease ownership information, contact us at 800 762 3057 or visit us at www.BlackbeardData.com

 

 

Petro-Wealth Ownership Report for Texas, 2019