Deadline extended. Looks like progress.
The Committee has continued its work following its update release of December 4 and is continuing to consult with the Trust’s advisors regarding steps to effectuate the Trust’s conversion or reorganization to a corporate structure. As part of this work, the Committee has been evaluating corporate governance terms that may be reflected in the organizational documents of the resulting corporation to be proposed as part of the Committee’s final recommendations to the Trustees. In light of the Committee’s positive ongoing deliberations, the Committee has extended its term through the end of January 2020.
Have a cool Yule! Wishing you all prosperity in 2020.
Chevron Corporation today announced a 2020 organic capital and exploratory spending program of $20 billion. The 2020 budget supports a robust portfolio of upstream and downstream investments, highlighted by Chevron’s world-class Permian Basin position, the company’s major capital project at TCO in Kazakhstan, and an advantaged queue of deepwater opportunities in the Gulf of Mexico.
In the upstream business, approximately $11 billion is forecasted to sustain and grow currently producing assets, including about $4 billion for Permian unconventional development and about $1 billion for other international unconventional development.
Looks like our team has been venturing off the beaten path (Dallas to Midland) a bit with recent stops in Houston and Carlsbad, NM.
Deliberations of the Committee have been productive and informative with the Committee having worked with the management team to develop the Trust’s investor presentation that is now available on the Trust’s website, www.tpltrust.com.
In consultation with the Trust’s advisors, the Committee unanimously recognized compelling reasons to move to a corporate structure. The Committee will continue to work with the advisors to make a final recommendation to the Trustees as to the structure of such conversion or reorganization.
I like the fact that the CC worked with management and CS on the deck that was recently released and presented. I also like the unanimous vote. All seems constructive. Thinking patience to get the exact final form and plan right is warranted.
Mineral rights entitle these firms, including Viper Energy Partners LP and Kimbell Royalty Partners LP, to the first cut of cash once oil and gas wells begin producing. The royalties they receive usually range from about 12% to 25%. Their place at the head of the line for payouts, plus the fact that they bear none of the drilling costs and keep collecting even if producers drill themselves bankrupt, have helped minerals owners outperform most other energy stocks in a year when investor sentiment has collapsed due to low oil and gas prices and profligate spending.
Mineral rights are a uniquely American asset class. In no other country are most mineral rights owned by ordinary citizens. It is also a highly fragmented asset class, akin to rental houses. The National Association of Royalty Owners estimates that there are more than 12 million private owners of mineral rights. Kimbell calculates the total market value of mineral rights at about $550 billion, of which public companies own just 2% or so.
The principal way to acquire mineral rights has usually been to inherit them. “Never sell your minerals” is a marketplace adage. These days, though, that bit of country wisdom is being cast aside by many who have inherited the rights to oil and gas royalties. The result is a consolidation by Wall Street of assets that have long been an integral part of intergenerational family wealth.
Wild that TPL wasn’t mentioned. Thanks to a reader for the heads up on this article!