Marc Lichtenfeld is the Oxford Club's Chief Income Strategist and he believes last year’s outstanding oil and gas performance is just the start of a multiyear trend.
This is why he has singled out a little-known alternative investment that could be the #1 Oil and Gas Royalty Play for 2023 and provide us with a big monthly income.
Oil and gas royalty trusts produced an average return of 196% last year, so he may be on to something here.
Marc Lichtenfeld describes himself as an author, speaker, and financial guru to 500,000 readers who receive his publications each week. We would describe him as an income stock promoter whose teasers we have reviewed here in the past, including his #1 “IRM” Play for the Housing Crisis and our complete guide to his Oxford Income Letter.
He thinks we can 25x our money on this play and he has some facts to back his claim up.
For starters, he's not the only one that's bullish on the energy sector.
If we follow the money, we see that whales like Warren Buffett, Ken Griffin, and David Tepper have collectively invested billions in oil and gas by taking substantial minority stakes in large oil and gas stocks, like Occidental Petroleum, Constellation Energy, and EQT Corp. to name a few.
The Organization of Petroleum Exporting Countries (OPEC) also recently announced further oil output cuts of around 1.16 million barrels per day.
Combine this with U.S. strategic oil reserves being at the lowest level since 1985 and we have several tangible catalysts that together will send oil and gas prices sharply higher and support another rally in the energy sector.
Most Promising Oil and Gas Opportunity Ever?
Unlike low-risk, low-reward large-cap oil stocks, Marc says the biggest opportunity lies in a little-known corner of the market.
It's not options, oil futures, or anything complicated. Rather it's one of the world's most lucrative ways to play the bull market in oil and collect regular monthly income.
Marc is talking about Oil and Gas Royalty Trusts and his #1 pick produces a “never-ending stream of money.”
All of the details on this opportunity are included in Marc's newest special report called “The #1 Oil and Gas Royalty for 2023.”
This report along with two others is ours with a risk-free subscription to The Oxford Income Letter for only $49 for the first year. It comes equipped with a 365-day money-back guarantee, a model income portfolio, and an income-investing video series called Dividend Riches. If you can't already tell, Marc is deadly serious about income.
If Oil Goes Down, You Get Paid. If Oil Goes Up, You Get Paid Even More.
The long-term trend for energy is up due to a serious supply and demand imbalance.
But if you've been following our teaser reviews here at Green Bull, you'll know that investing directly in oil and gas explorers can still be a risky bet. Commodity producers will always be subject to a natural boom and bust cycle that can have you swimming in a sea of gold one year like Scrooge McDuck and in the poor house the very next year.
It doesn't have to be this way.
Oil and Gas Royalty Trusts are a safer and much less volatile way to play the energy market.
Charlie Munger agrees, as Berkshire Hathaway's curmudgeon, centenarian Vice Chairman, he has been making $100,000 per year from an oil royalty trust investment he made before many of us were even born in the early 60s.
The deal came to him from a golf buddy named Al Marshall, who has no relation to J. Howard Marshall, the oil tycoon who was briefly married to Anna Nicole Smith for the last 14 months of his life.
Munger realized that trusts are the ultimate passive income investment and you don't need much to get started either.
Unlike oil and gas operators that need to put up hundreds of millions of dollars or even billions to extract, refine, and retain their oil. Trusts on the other hand, simply own a right to a portion of the income from some of America's biggest and best-producing oil and gas fields. As an asset class, royalty trusts have even out-performed some alternative investment favorites:
Basically, every time a producer sells a barrel of oil or cubic foot of natural gas, you get paid.
In Texas, they call this mailbox money because all ya' gotta do is walk out to the mailbox, and boom, a check is there waiting for you.
In short, since trusts are the epitome of a low-cost business if the price of oil goes down, you still get paid. If it goes up, you get paid even more.
Marc's #1 royalty play has a 33-year history of paying out dividends through all economic cycles. Let's find out its name.
Revealing The Oxford Club's #1 Oil and Gas Royalty Play for 2023
Here are the clues that were provided to figure this thing out:
- The trust is currently trading at around $25 per unit
- It derives its income from oilfield interests in one of the premier oil basins in the US, which is still in its prime – The Permian Basin in Texas.
- Besides its Permian Basin interests, the trust also holds a 95% overriding royalty in the Texas Royalty properties, which consist of approximately 125 separate royalty interests in 33 counties in Texas.
- The trust has no debt of any kind, more than $11 million in cash, and makes monthly cash distributions.
Marc is talking about Permian Basin Royalty Trust (NYSE: PBT) here. This is why I'm so sure:
- Permian's current unit price is just under $24 dollars.
- Per its name, Permian derives most of its income from the Waddell Ranch properties located in the Permian Basin.
- The trust also owns a 95% net overriding royalty interest in the Texas Royalty properties.
- Permian's latest financial report for Q3 2022 shows an $11.5 million cash balance with no debt of any kind, and it makes monthly cash distributions to owners.
Steady Income and Big Capital Gains with Oil Trusts?
Over the past five years, Permian Basin Royalty stock is up 150% and if I included monthly cash distributions, it would be much higher.
So a quality oil and gas royalty trust can definitely live up to its promise.
The only real downside is that eventually, the fields and wells a trust owns will be depleted, and the gravy er' oil train will come to an end. But so long as you're careful not to buy into a trust nearing the end of its productive life, this risk is decades in the future and not of immediate concern.
Just sit back, relax, and count the mailbox money.
Quick Recap & Conclusion
- Marc Lichtenfeld is the Oxford Club's Chief Income Strategist and he's teasing an Oil and Gas Royalty Play for 2023 to provide us with big monthly income.
- We already know the long-term trend for energy is up due to a serious supply and demand imbalance, but oil and gas stocks remain vulnerable to the commodity boom and bust cycle. Oil and Gas Royalty Trusts are a much safer and less volatile way to play this trend.
- All of the details on the trust we should buy are included in Marc's newest special report called “The #1 Oil and Gas Royalty for 2023.” The report is ours with a risk-free subscription to The Oxford Income Letter for only $49 for the first year, with a 365-day money-back guarantee.
- If you're reading this, you're in luck because we revealed the #1 Oil and Gas Royalty for 2023 as Permian Basin Royalty Trust (NYSE: PBT).
- PBT is a quality trust with no debt, a monthly cash distribution, and long-producing royalty interests in Texas' Permian Basin, which is still in its prime.
Do you own any Oil and Gas Royalty Trusts? Let us know your favorites in the comment section.