A Six Percent And Growing Royalty On Surging Permian Production
At this point I’m sure you are familiar with charts like the one below.
This chart shows where production in the Permian Basin is going over the next four or five years.
This is the chart from one analyst. I can show you five more like it from the next five analysts. Where Permian production is going is a mystery to no one at this point.
Today the Permian is producing a little more than two million barrels of oil per day. By 2020 it will be over 4.5 million barrels of oil per day. That is truly a spectacular rate of growth.
And these are conservative projections by the way. This is assuming that we don’t get a recovery in oil prices. It also assumes that the industry doesn’t keep getting better at drilling wells.
Can you imagine what that growth curve might look like with $60, $70 or $80 per barrel oil?
This Permian growth is not a secret. What is a little more complicated is determining the best way to profit from it.
I’m certain I can help with that.
I’ve uncovered a company that literally gets paid a royalty based on how much production is coming out of the Permian. This isn’t a leveraged producer that may or may not actually generate positive cash flow while growing production.
This is a different kind of business model. In fact this is the perfect business model.
Tell me how this sounds….
This company has no debt, only a few employees and virtually no expenses. The only thing that this company needs to do is cash the royalty checks that keep arriving in the mail each and every month.
As I said, this is literally a royalty on Permian production.
This is the ultimate high margin business that gushes cash flow and is perfect for paying a large and growing dividend.
With No Spending Requirements – All Cash Goes To Shareholders
The beautiful thing about this business is that there is only one thing to do with all of the cash that is generated. It gets paid to shareholders through a growing dividend.
Today the company yields over 6 percent. This is with sub $50 oil and current levels of Permian production.
As Permian production grows that dividend is going to increase.
It is going to increase a lot.
But even more than you know.
As I said this company has a royalty on Permian production. That royalty is not on all of the Permian.
It is on a select portion of the core of the Permian. An area that is growing much faster than the Permian as a whole.
So while the Permian in total more than doubles production in the next four years, the production that this company generates its royalty from is going to do a lot better.
Today the dividend yield on this company is 6 percent. With production growing faster than the entire Permian you can extrapolate for yourself what that will mean for where this dividend is headed.
There are no other opportunities like this one in the market today.
No debt.
Highly aligned management.
A 6 percent and rapidly growing dividend.
Virtually no expenses.
Growth, safety, yield……this one has it all.
Clearly with a 6 percent yield and no debt the market hasn’t found this company yet. It will and when it does that yield will shrink as the company’s share price increases.
So here is your opportunity to lock in that 6 percent yield before the market takes it away from you….
