Produced by Blackbeard Data to outline the demographics of Texas oil and gas ownership.
For the full annual 2022 Texas Petro-Wealth report in pdf click on the following link: 2022-Petro-Wealth-Report
Executive Summary
Texas petro-wealth totals approximately $225 billion in 2022 with the highest petro-wealth amount held by corporations at $177.6 billion, individuals ranked second at $35.3 billion,trusts ranked third at $6.9 billion , and the rest of the petro-wealth divided among non-profits, educational institutions, various governmental agencies, and religious organizations
Overview
We did a comprehensive decline curve analysis to get the total amount of petro-wealth on a county-by-county basis. There is around $225 billion in proved producing reserves for Texas. When this report was created the price of oil was at $109.55 per barrel.
This report includes proved producing petroleum reserves and doesn’t include the non-producing, probable, or possible classed reserves.
Below the graph shows the wealth of the proved producing reserves based on the three main interest types, working interest, royalty interest, and override interest.
*If you have any questions about the terms used there is a definition at the end of the report.
Ownership Of Total Petro-Wealth By Entity Class
To show the distribution of petro-wealth, each entity class had been grouped together. The classes in the graph below include royalty interests, working interests, and override interests.
It is common for working interests to be held by corporations and have the highest value of petro-wealth. Working interest is typically a higher dollar value compared to other interest types.
Ownership Of Royalty Petro-Wealth By Entity Class
When working interest is removed from the calculations, notice how we have a more realistic view of the distribution among entity types of oil & gas wealth. There is a 42 percent decrease in wealth held by individuals, and wealth held by corporate entities has decreased in value by about 80 percent. There is a noticeable different in the corporation class total once working interest has been taken out of the totals.
Ownership of Royalty Interest By State
The next graph supports the theory that there is a higher ratio of Texans owning the interest of an asset located in Texas than people living in other states based on geographics.
A second graph that shows ownership of interest by state but excludes Texas. By viewing the, second graph the reader can get a better glimpse of the distribution of Texas petro-wealth among other states. Petro-wealth is much higher in Texas than other states and the initial graph makes viewing other states’ ownership hard to view.
Bulk of wealth owned by Texans
About 80 percent of the total override and royalty interests of producing oil and gas property located in Texas is owned by Texans.
Oklahoma is the second highest state of ownership for Texas petro-wealth at only 11 percent of the total petro-wealth, followed by Colorado at 7 percent.
Petro-Wealth By City
The next series of graphs shows the top 20 cities of petro-wealth. We have included all interest types in the graph below. Many oil companies are located in Houston and Midland and working interest was factored in the graph. Both cities have a higher concentration of petro-wealth because of this.
Texas Petro-Wealth By City – Royalties Only
In the last graph, we removed working interest from our totals. There is a small 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