Cashflow Masterclass: Making Billions in Oil Without Touching a Single Drill

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Hey, welcome to another episode of Making Billions, I'm your host, Ryan Miller and today I have my dear friend Jace Graham. 

Jace is the CEO and founder at Rising Phoenix Resources, a 60 million AUM group of companies that specializes in a wildly profitable corner of alternative assets that deal with oil, gas and mineral rights. 

So what does this mean? Well, it means that Jace understands how to find, close and exit winning energy assets, and he's about to teach you how it's done. 

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[THE GUEST]: Jace Graham is the CEO and founder at Rising Phoenix Resources.

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• 25:38 (Cont.) Cashflow Masterclass: Making Billions in Oil Without Touching a Single Drill

Transcript

Ryan Miller  

My name is Ryan Miller, and for the past 15 years, I've helped hundreds of people to raise millions of dollars for their funds and for their startups. If you're serious about raising money, launching your business or taking your life to the next level, this show will give you the answers so that you too can enjoy your pursuit of Making Billions. Let's get into it. 

Ryan Miller  

What if I told you there's a way to make money from oil and gas without drilling a single well, risking millions or working those grueling 80 hour workers? See, most people think oil Investing is for billionaires with massive capital, but today, I'm sitting down with Jace Graham, a guy who has literally cracked a code to generating passive income from mineral rights that anyone can learn. See in this episode, we're going to cover how to buy producing wells without operational headaches, the exact process to acquire mineral rights directly and why family offices and private equity are flooding into this market, as well as the secret strategy you can use to earn mailbox money month after month. See, this just isn't another investment strategy, this could quite possibly be your blueprint to financial trade. So if you want to learn how to turn energy assets into personal cash machines, you do not want to miss what's coming next. All this and more coming right now. Here we go. 

Ryan Miller  

Hey, welcome to another episode of Making Billions, I'm your host, Ryan Miller and today I have my dear friend Jace Graham. Jace is the CEO and founder at Rising Phoenix Resources, a 60 million AUM group of companies that specializes in a wildly profitable corner of alternative assets that deal with oil, gas and mineral rights. So what does this mean? Well, it means that Jace understands how to find, close and exit winning energy assets, and he's about to teach you how it's done. So Jace, welcome to the show man.

Jace Graham  

Hey, Ryan, I really appreciate it. Listen, been a big fan of the podcast Making Billions, I mean, where were you 10 years ago? I mean, when I was starting off and trying to learn how to raise money and like, how to structure a fund and all those types of things. And, man, you just, you really kind of done a great job and of bringing on, you know, excellent talent that in, in fund managers that know what they're talking about. So I really enjoyed, kind of listening to several of the episodes, and just honored to be on here talking about what I love, oil and gas, minerals.

Ryan Miller  

Oh, man, that's where I cut my teeth. So I was probably just starting in oil and gas about 10 years ago, I'm not sure. Yeah, man and it's super big honor to have you. We're in, I think, I don't know, top 2 or 3% the world of all podcasts. So we're very fortunate to have amazing guests like you. So, let's jump right into it, man. You know, you buying mineral rights oil and gas, you could, it's a bit of a stretch, but this could be somewhat of a real estate play, but there's so many things that we have in here. So let's talk about, when you're entering oil and gas, particularly in your sector, how do people get some early points on the board? 

Jace Graham  

Great question. So, you know, let's, I think it's first, you know, let's kind of unpack, kind of investing upstream in oil and gas, what that looks like and where you can't invest. We're not talking about investing in oil and gas companies like Exxon, Mobil and Chevron through the stock market. We're talking actually invest in upstream where the development occurs. So let's just say that there's, you know, there's three main ways to invest in oil and gas. You can be an operator, we're not going to talk about that. That's, that's noisy, you have to, you got rigs, you've got crews, you've got ton of personnel, it's high risk, high reward. It just takes a lot of CapEx to get going, we're not going to go there, okay? You have non op working interest. So that is actually where you participate in the drilling of wells. You invest with operators, so you share it on the cost. There's risk there, there's dry hole risk. I know that that's something that kind of comes up with investing in oil and gas, but you don't really control the you know what goes on, because the operator is the one kind of in the pole position, we're not going to talk about that either, okay? We're going to talk about oil and gas minerals, okay, it's nice and safe, that's where we play. You own the land. It is a real estate play, like you mentioned. So you own the minerals under the land. Okay, so when, when land is, you know, originally sold, it's the minerals are part of the bundles of sticks that go with the land rights. And so there's no OPEX, there's no capex, just monthly cash flow, man, and that's what we love. There's no dry hole risk, and kind of, we're definitely going to step into that and go deep into kind of how that's done but we really like this space upstream. It's nice cash flowing, safer investment strategy without the dry hole risk. 

Ryan Miller  

Yeah, and, and I grew up in oil and gas counties in Canada, and literally, we did all, I guess, accounting and I'm literally going through my head of write offs of dry hole expense, but well, what, what we really want to talk about here is cash flow, like you said. And so when it comes to that and you're avoiding, so this is something I did not know, is, I assume that you got to be involved in an operating, uh, operations, of a well. And you're like, no, actually, you don't. You can do that, that's a model and sure, lots of people do that , there's a market for that. But what you're, what you just said earlier, is, but that's really expensive, and you got to have hundreds of millions of dollars depending on the well and the development to really develop at these sites. What you're saying is, well, there's an alternative where you can still benefit from that industry without all of the capex that comes with it. So this is the part, folks that we're really going to dive into a lot more. So with that model that you said, how do people get early points on the more on the board, doing mineral rights, what would you say? 

Jace Graham  

Yeah, so when we talk about the oil and gas mineral rights, Ryan, you got it right on the head, you know, it's, it's not operations, okay? So we're buying the passive mineral and multi stream that go with the mineral interest. All right, I grew up in and around operations, my father was a independent operator, so I got to see and learn from the on the shoulder of a giant from an operation standpoint, again, very noisy, very loud. A lot of risk, you know, he'd always tell me, hey, son, if you drill four wells, you know, one of them was going to be a dry hole, two were going to be marginal, and one was going to be great. And so I just, I did several of those projects with him, and over time, I just kind of realized, and we said we did an oil and gas mineral clay and I said, this is definitely where we want to, kind of cut our teeth, But to kind of answer your question directly, you know, there's, I guess there's two main ways that, you know, an investor can come in and invest in oil and gas minerals. First way they can just jump in, there's public auctions out there. Okay, we love to go to public auctions, and that's where we like to sell our mineral interest, okay, so those are out there. There's, you know, websites, oil and gas clearing houses, one energy nets another, and you'll see a lot of just minerality deals that are on a public auction. 

Ryan Miller  

Okay.

Jace Graham  

Definitely need to know how to underwrite those, we're going to unpack that in this podcast on how you underwrite oil and gas minerals and what you need in order to do that. There's no Zillow or MLS for this stuff Ryan, I mean, it's, you got to really understand what's going on there. It's not like a flat cap rate. There's decline analysis going on. There's reservoir pressures, there's, you know, different operators or do different things. And of course, you got commodity price swing. But auctions is definitely the easiest way anybody can do that. Okay, what we're going to talk about is how you can do it direct, bypass the middleman, bypass the auctions, and actually go direct to mineral owners and you know Ryan I was thinking about it, you know, I don't think that this is ever been really explained to the general public. I mean, you could look online and say, how do I invest in oil and gas minerals, and try to get, you know, there's no master class, there's no online course for this type of stuff. So, you know, it's a little bit of, you know, kind of understanding the industry. But we're going to, kind of, I'm going to break it down into nice bite sized steps on how to do this, if this is something you want to do. But happy to unpack that and then jump right in. 

Ryan Miller  

So, auctions are good. I assume there's markup. Every time it passes one organization pass on another, fees always go up. So I'm assuming you can go to an auction, kind of a done for you thing, sort of, but it requires a larger budget, is that right? 

Jace Graham  

Yes, kind of, kinda in these auctions, I mean, there's deals that are trading, you know, $5,000 type transactions all the way up to 50 million. Okay, so you know, it's not necessarily the size of the deal and these auctions, it's just that this is where guys like me, industry guys, go to sell, to buy, retail buyers that may not understand kind of the nature of how these assets are underwritten. And so we typically get the highest price on the auctions, quite frankly. So we like to go there to sell assets. It's a great place to sell, probably not the best place to buy, unless you really understand what you're looking at. 

Ryan Miller  

Understood. Okay, so then how do you bypass all that was super helpful. I didn't know that either. How do you bypass that and go direct. What would you say?

Jace Graham  

All right, so we're gonna unpack this. This is gonna be fun. I've never really explained this in detail, but we're gonna, we're gonna go, okay.

Ryan Miller  

All right, Making Billions first.

Jace Graham  

Yeah, Making Billions, I'm all about abundance mentality, so let's go full kimono, let's pop the hood. Um, okay, so first what we want to do is, you want to find an area where there's activity. Where are the rigs right now? Where's the drilling, where are the permits, where are the operators going? You don't want to be buying and looking in areas that are, you know, East Kansas, or who knows where, right? So first, I mean, this is pretty basic stuff find where the rigs are. You can look online, Texas has a website where you can go and kind of look and see where activities going. It's the Railroad Commission is kind of the government filing site on in Texas. It's where we play most of the time, but we buy in every major basin in the lower 48 in the United States. But we want to kind of figure out where to buy first, kind of where we want to kind of point our team to go after motivated mineral sellers. In order to do that, you're going to be pulling a little bit of data down, like I mentioned. So it's just kind of a high level scrub, second we need to kind of identify who are the mineral owners. How do we find a list of mineral owners? And just like whether it's a real estate deal, whether you do an SFR, commercial real estate or land deals, you know there's, there's tax, taxes that are, that, are that the property owner pays. And so you can track that back to the assessor, the tax assessor, and get a list of owners. And in this case, it's mineral owners. In Texas, they pay what's called ad valorem tax. It's basically like a property tax, but ad valorem tax and you get a list of all the owners that are currently receiving royalty income from operators. Wells have already been drilled, on the on their on the on their on their middle interest, and they're receiving royalty income, and they get taxed on it. So we start there, and we pull that list down, and we kind of work that list a little bit. We use some I've got a guy up in the Northeast that's kind of an old school sequel database guy lives in a cabin in the middle of nowhere, and he kind of kind of goes in and kind of Scrubs that list. I mean, you can find places online, whether that's through five or out up work. They can also do this, but kind of get it in a manner that we can kind of work with it. 

Jace Graham  

Okay, from there, we're going to pin phone numbers. Okay, so this is heavy ground game cold calling, man, there's nothing sexy about it. All right, so we're going to get phone numbers appended. We run those also through a DNC list to make sure that, you know, we're not that we're TCPA compliant, that's a big thing right now. So definitely make sure that you're running your list of the DNC call lists and litigator list and pulling out all those DNC numbers, and then we're loading these in and making phone calls, and our guys are, you know, in house team, and so you're out doing cold calling and just entertaining see if people are interested in entertaining offers. We're also sending direct mail to those addresses that we got on those tax rolls. Also doing the same thing, so we got kind of a two prong approach. One's more offensive, the other's a little bit what we call defensive with the direct mail. So we're going out and just trying to just basically cast a big net, trying to gage motivation.  Our sales team is like trained in kind of the Jeremy Minor, any PQ. I think it's like neuro emotional persuasion, questioning sales strategy, which is kind of really jumping into the why and the motivation behind that. And so we work on really good sales process, from soup to nuts. We're not going we're trying to provide value to these to these mineral owners. And so how we do that is we start providing evaluations to them. Would you like evaluation on your mineral interest? If so, we'd love to provide that to you, there's no cost whatsoever, and you can look at this and kind of get some information on how we underwrite and how we value your minerals. 

Jace Graham  

So once we start talking to these mineral owners, we get check stubs in. Okay, so that's the next piece of data that we get to these royalty and mineral owners are getting check stubs from Exxon Mobil Chevron, you name it, Suncorp, you name it, and so we get that data, those check stubs. There's a lot of important information on there that our underwriting team looks at from the different wells, the decimals of interest, the marketing, deducts, the transportation, a lot of data on those check stubs. And so our team, then, I've got a we've got virtual assistants in the Philippines, take those check stubs, load those into kind of a spreadsheet format, so that my in house petroleum engineer, Adam La Bucha, he's just a stud, can start underwriting these assets. He throws it into a petroleum engineering software called PhD win. Okay, he's, uh, he went to college for this stuff. He understands how to underwrite these types of assets, because it's a declining asset, right? It's not a flat cap rate. There's only so much oil and gas in the ground, and so he's doing that deep underwriting. That's a big, big, big component, whether you want to, you know, do it to an auction, or do it direct, you need to have some sort of a petroleum engineering understanding of what's going on, because that really kind of shows what we think the forecast is on the remaining production. So Adam will finish that underwriting, and he'll get back, and he'll kind of let me know, let our team know. Hey, based on what I'm seeing, I'm seeing this many producing wells. I'm seeing this much potential upside locations that haven't been drilled and developed. Based on surrounding development that's occurring, it can kind of forecast out what he thinks the value is of these minerals. So we then present that back to the mineral owner, and then we try to negotiate a price. So it's kind of a lump sum payout, versus them getting those monthly checks. From that point, okay, I told you, we're gonna break this down, Ryan. 

Ryan Miller  

Let's keep going man ya.

Jace Graham  

Going down to the to the NATs eyelash, man, I'm popping the hood.

Ryan Miller  

Yeah, I do have a question for you, and I appreciate it. So you mentioned you negotiate on price now that that is something all fund managers, I assume, for the most part, unless you're a hedge fund, if you're hedge fund, just plug your ears for this part. But for the rest of us who actually try to acquire assets or companies or whatever that is, there's some negotiation around price, how do you establish that? Do you re engineer reports or how do you guys, kind of, know, get a range of what this thing is worth? 

Jace Graham  

Well, we back everything back into like a present value depending on where the cash flow is today. Okay, so if cash flow is current and we got producing wells, we typically pay PV 10, PV 12, okay, 10% to 12% present value. So we haircut it a little bit, right? So that if it just cash flows out, we're going to earn 10 to 12% on our money. The next bucket would be permitted wells, wells that aren't producing, but there's permits and they will be producing. So we can kind of point to those, those we typically pay PB 15 to PB 20, okay, because there's a further in time. And then upside locations were PV 30, PV 40. And so that's kind of how we formulate our offers out to these mineral owners. But a lot of times, the mineral owners are only concerned about their current cash flow. They don't have all this understanding and deep understanding of what all this long term upside, and we do everything we can to kind of demystify that process. And quite frankly, a lot of them don't really care. They understand that, hey, listen, I realized that I got all these reserves, but they're not paying today, and I want the cash now, and so they'll take the lump sum payout and, and, you know, and move on down the road.

Ryan Miller  

Okay, so then, so then, where do we go from there?

Jace Graham  

Okay, so, from there. So, so let's say we negotiate the deal and then, and then they agree on, we agree on a price. Next step is we're gonna, we're gonna get a contract sign. Okay, just like real estate, I want to this is a real estate transaction at its basic, you know, understanding, okay, so I have a real estate company, and so it just these things just play just so easily across board members. So I don't want to really confuse it, like minerals and royalties, those are but it's a real estate transaction. So we get a contract, here's kind of the fun part. We start running title back to patent, okay, on the asset. When I say patent, I'm talking about like when that President of that state deeded the first deed over to the first owner, probably in a log cabin in the middle of nowhere. We run the title, we chain the title all the way back to that okay? Because what we've got to do is we've got to see if that chain has been broken. Okay? Because you can sell your real estate, you can't sell your surface estate and reserve the minerals. Okay and in areas that have been active since, say, the 30s, 40s, 50s, like the Permian Basin, where we play in West Texas, there's been reservations made back as far as that long, because there was value in those minerals. So now, a lot of times that surface owner doesn't own those minerals underneath their land, some guy in New York, or, you know, cousin in Florida, or who knows where, own those assets, because it's kind of gone down through the family tree.

Ryan Miller  

So that's what you're looking for, then, is when you look at title, you're trying to say, well, it's not just the land, but we want to make sure that the mineral rights are owned, and at no point during the legal recording of ownership of this land was mineral rights sold. And so we're we don't want to buy just the land, we want to buy mineral rights attached to that land. So that's why you go back that far is to make sure that the mineral rights you are getting, what you think you're getting.

Jace Graham  

Exactly, title companies, you know that there's no title policy issued for this kind of stuff. You've got to run your own title, but we run it back, we use land teams. That's what I started out doing when I got in the business, is chaining title in the courthouse. I mean, you pulling these big old grantor, grantee indexes. I mean, this is before, like, the typewriter was around. I mean, you're seeing, like, where they were using a feather to, like, do these conveyance deeds back before 1900 it's a trip, but we're running that title. And then we have a title attorney who specializes in this stuff, basically, look at all this information that the title team brought, and it makes any suggestions that he thinks, hey, let's, let's fix this. Hey, let's, let's get the family to sign an affidavit of ownership. Let's clean this up before we close on that asset. So that's a big piece that you got to pay attention to to make sure that you're getting good title. Because you can't always trust the operator that they've done it right because they are paying that mineral owner, and they're going to also run their own title before they put that well on. But we have to do our supporting backup to make sure that we agree as well. So, so that's a big piece, so that usually takes, I mean, we've got some deals moving as quick as two weeks, but I'm going to say, on average, probably 30 days to kind of get that done, and then we move towards a closing. 

Ryan Miller  

30 days? 

Jace Graham  

Yeah, once we close that transaction, it's a conveyance deed. It's just like real estate, like a general warranty deed, if you sold your house instead, it's a mineral and royalty deed. Filed a record at the same county courthouse that you file your real estate transactions at, okay, so then from there, we then send that to the operator. So in this case, maybe it was Exxon Mobil, who was paying Farmer Brown. Now he's paying Rising Phoenix, and we have to notify the operator that, hey, we we bought these interests. Stop paying him, start paying us and so they look at that, and then they send what's called a division order. Some operators are great to work with, some take 60 days to get you and pay status, some take you 180 days plus. Okay, just kind of depends on the operator and their bandwidth, but they're going to get you into pay status, and then ultimately you're going to start getting royalty payments from that operator. So that was a lot from, you know, looking at the areas of interest, kind of understanding what's going on, all the way to the underwriting, to the offer, to the sales part, the negotiation, to the title, to the talking to the operator, to getting the assets and pay status. But that's, I mean, that's pretty much it, I mean, it's not rocket science, but definitely the devil's in the details. 

Ryan Miller  

So let's talk about the area you mentioned, that's a big part, and you want to look at that, and I know that this deals with downside risk. So the area, and by area, I don't mean the state as much as I do mean the basin, that the state is top. So any of these energy basins, what's your opinion are there some that are better than others, are like, how does that work? What are some good areas that you think, both from a basin standpoint, but also you're dealing with governments and records and you know, going through a process of transferring assets and buying them, maybe round out a little bit of what you're seeing. Any advice on where to do this if you're just starting out? 

Jace Graham  

Yeah, I mean, listen, the 900 pound gorilla is the Permian Basin. Permian Basin in West Texas generates more oil than Saudi Arabia, okay. So, it is a massive reservoir, multiple layers, meaning multiple zones, meaning you could produce oil and natural gas out of different zones at different depths. So it's the gift that keeps giving. So you can't go wrong in the Permian, deal with the Permian a lot of competition, right? All the private equity shops, I mean, that's a lot of them are just only focused in Permian, in the Permian Basin, but there are some other areas. So the shale revolution, you know, occurred kind of when I was, when I started and got going in this business, around early 2000s right? And so before that, everybody was drilling these conventional vertical wells into these little tight pockets. And if they could hit it, that was great. But if they missed it by 100 yards, dry hole, another 100 yards dry hole, back in, the money good to go. And so that's my dad made a career out of that. So not knocking that whatsoever and there's still operators out there, usually smaller in nature, that are drilling what we call conventional reservoirs, where there's pockets of trapped oil and gas. What really opened it up are, is the shell play in the horizontal drilling, and I'm gonna say a bad word, fracking.

Ryan Miller  

The F word.

Jace Graham  

So the F word, man, but without that, I mean, listen, we are on a we are we're energy independent because of it. We no longer rely on foreign oil, we no longer rely on foreign gas. We are completely energy independent because of that and there's just so much shale and the horizontal play into that. So imagine if you drill vertical into an area and then you stimulate that. You're only going to stimulate just right around that level if you drill horizontally, horizontally, two miles through a reservoir, and then you stimulate that you're breaking up all that rock in the oil and natural gas is flowing freely back up. So it just really is open it up but it started out the Barnett Shale in my backyard, in Fort Worth, Texas, just just west of Dallas. That's where I cut my teeth on the mineral side, it was, it was inside of Fort Worth. So about, geez, I was young, but I did. We bought 12,000 quarter acre lots under these town lots. Wouldn't do that again, but it was definitely a learning experience. But it migrated up into the Bakken Shale up in your neck of the woods, Ryan and the Marcellus Shale in the Northeast is big. The Utica Shale in Ohio, Eagle Ford shale in Texas is another one. The Haynesville shale is in Texas and Louisiana, right there on the Gulf Coast, where a lot of these new LNG plants are being built liquefied natural gas, where they're moving natural gas to these LNG plants, liquefying it, putting on a tank or ship, and then sitting across the country, the world, I should say to the biggest buyer. And so that's that's a big, big demand, that's this continue to increase, and you can say what you want, but with the current administration, they are definitely Pro on opening up the permitting of more of those types of facilities.

Ryan Miller  

Excellent. So, so that being said, so we talked a lot about how to acquire your first land, some of the areas and the trade offs like Permian gift that keeps on giving. If you can get ads, pretty crowded party over there, but that's pretty common. If there's money to be made, people will flood in to go capture it, why not you? So I'd love to switch gears a little bit. That was absolute master class, and you know, a big part of doing business, especially in commodities, is the market. So I'm curious, what are you looking at right now, as far as the market goes, what are you seeing out there? 

Jace Graham  

You know, oil has been hovering around, let's just say, 70 bucks for the last four, four years or so. That's a great price for it, okay, uh, operators can make money the general. Population isn't complaining too much because gasoline is hovering around. Call it three bucks a gallon, and so it's a good place for oil to be. Now we know that oil can be volatile. It can go as high as it got, as high as 140 bucks a barrel.

Ryan Miller  

Right, I remember that.

Jace Graham  

 It got as low around COVID, around 20 bucks a barrel.

Ryan Miller  

I remember that too.

Jace Graham  

 I know there was, there was discussions of, hey, oil went negative that was the future strip, it never, it never went negative in real time. It wouldn't like me as a mineral owner, a passive mineral owner, owed the operator money that have been a trip, but hover around 70 bucks a barrel is a great, great place. I know we've got the current administration talking about drill, baby drill, I don't think that's necessarily going to happen. These operators, these domestic operators, are, I mean, they know what they're doing. I mean, they're after COVID. They really, like, you know, chewed up their balance sheets, got rid of as much debt as possible, started paying out the dividends and doing, you know, what a good operating company should do, and just because the administration says drill, baby drill, doesn't mean they're just going to do that and just flood the market with supply, thus dropping price, it may be silly. So the good news is it's just, it's just opening up all the call it permitting and development restrictions, that is just going to help kind of, you know, maintain that price where we're at. But something crazy you go over in the Middle East, okay, prices could pop up. I don't see them really trending down too much in the foreseeable future. But definitely, you've got some upside on the oil, if, if all hell breaks loose overseas, and so. And natural gas is a different commodity that we track, right, we buy natural gas minerals. We also buy oil minerals and some of these basins have a mixture of both. But natural gas is, I mean, in 2022 it was eight bucks. In MCF last year it went down to two, okay and right now it's hovering around four. So I think nat gas has got a lot of upside potential. Okay, so it's gonna be hard for oil to go from 70 bucks to 140 bucks, but nat gas can go from four to eight, four to six, especially with all this new this exporting of LNG that's going on, and then the one that's kind of coming up within the last couple of years that was not on the radar five years ago, when we were, you know, when, when analysts were looking at, you know, future demand of, say, natural gas is AI data centers, and their massive thirst of electricity. And electricity, for those of you that may not be aware, is primarily made out of natural gas, natural gas is converted into electricity. So, so a lot of ups. New demand is coming online for the supply that's being developed.

Ryan Miller  

Brilliant. And so a lot of demand and then you mentioned earlier are, how is, how's the LNG? So we talked about LNG, are you seeing it as far as getting because there's infrastructure on the internal part, and then there's also ports, which are infrastructure, but those aren't the same, even though you're saying infrastructure is happening. But if we're seeing it in ports versus pipelines internally, that might tell us that we're getting ready for export. Are you seeing anything between internal versus the coast development with LNG? 

Jace Graham  

Well, I mean, so these ports can be turned either direction, okay, but the ones that are being, the ones that are actually that are they're being permanent. And these are massive. I mean, these are huge, huge projects. I mean, there's one that just got completed out of Louisiana, the whole project was literally one square mile. I mean, the whole thing, and it had.

Ryan Miller  

Yeah, they're like a city.

Jace Graham  

It's huge, I think at one point in time, it had the most cranes, it than any, anything, any, any development in any place on, in the world, okay, down in Louisiana, building an LNG facility. So the ones that we're building United States are for exporting purposes. Listen, we've got a ton of natural gas here, I love it. It's, I look at as an energy source of tomorrow. We've got just so much of it, it's abundant, it's cheap, okay. You know, it's hard to compete with natural gas, especially on some of the other things that are a little greener, if you will. But natural gas is considered a green, you know, because it clean, it burns clean, but it's hard for like solar and wind really compete without the subsidies, just because of the price point of natural gas. When natural gas goes up to eight bucks in MCF, 10 bucks in MCF, yeah, then those other types of energy resources can make sense, but you know, to go back to what you're saying. I mean, there's more and more countries that are kind of building the importing type facility infrastructure for natural gas coming, quite frankly, from the United States of America. 

Ryan Miller  

Brilliant. And where do you see the smart money going in the future with, just from a market standpoint, just in your opinion?

Jace Graham  

The smart money. I mean, listen, I, I like, you know, when prices are low, I like when everyone's running out of the, you know, out of the fire I'm running in. So when COVID hit, not saying that I'm wanting another COVID to hit whatsoever. But, I mean, that was a phenomenal opportunity to buy, you know, right now we're hovering around, I think it's a great time to buy natural gas assets. You know, oil has been around 70 bucks holding there, nat gas is moved up to about four, but it was around two, we love buying it at two man, that was awesome. Buy as much as I can it too, so I'm kind of watching natural gas, I think, you know, keep an eye on that. It just has the ability to 2x that commodity price, a lot easier than oil. And so that's what we're paying attention to, that's where we're, you know, buying our own internal assets for the long haul, is in natural gas. But however, I will say a lot, and I mean a lot of money, a lot of private equity backed money, is chasing oil right now. I mean, it's the Darling right now, it's, it's, you know, in, primarily in the Permian Basin as well yet other areas that they're looking at. But their oil is, I mean, we have no problem selling oil deals, oil mineral deals out of the Permian Basin. But again, I like, I like the long term upside, buy it, park it, let it just sit there, because the serendipity that goes on with these assets and how they grow and drill additional wells on your acres when you buy it one time, by rights, it's like if you were to buy, invest in an apartment complex, a one story apartment complex. I know that sounds crazy, but and you invested in that, and then they built a second story and a third story and a fourth story and maybe even a fifth story, you didn't have to pay for any of those stories, but you get to benefit in the in the income that comes out of those. That's what kind of the fun part about owning oil and gas minerals long term, because of all the additional wells that these operators are figuring out how to get into your area that you own without any additional cost to you. That's why I love this space so much, because it's the one time purchase of that asset, and then it's the ongoing benefit of the monthly world royalty income. I mean, it's, it's mailbox money man.

Ryan Miller  

Yeah, and you're, it's already producing. So it's not like, so when most people think of oil and gas, you buy a piece of land, crush your fingers, put a big drill down into the ground, and hopefully you hit something valuable. But what you're saying is, why, like, that's, that's quite expensive, why don't you just buy the ones that already hit it, they're producing oil. And then instead of farmer Dan, or whatever you said, they pay me the royalty because now, so all you're doing, really, it sounds like is you're just after the mineral rights, and that gives you the right to collect the oil royalties that the operators on that land. This brilliant model man.

Jace Graham  

Yeah, it's great. You're taking the guesswork out, you're taking the dry hole risk out. Yeah, that's a big, big you know that anytime you bring up, you know, oil and gas investing at a cocktail party, people are like, oh, that that's, that's super risky, and all that stuff. Yeah, there is a portion of that and I've got no problem with that side of the business. In fact, I still, I invest in those types of deals, and we do those types of deals, and there's massive tax write offs for those types of deals.

Ryan Miller  

Oh ya.

Jace Graham  

 This is different. This is your, the, it's known, production is there, you have to understand how to underwrite it. So don't get me wrong there, don't just take a look at it and say, hey, I'm getting this 1000 bucks a month. I can offer, you know, 40 times that monthly multiple and I'm good to go, because you don't know where you're buying an overall production decline life of that well. So, you know, you need to make sure you understand that part, because you can be buying something 1000 bucks a day, and, you know, in six months, it's 200 bucks a month. So you gotta be careful there but there's, you know, there's people out there, there's Consulting Engineers, petroleum engineers, that can kind of help navigate you through those types of scenarios. 

Ryan Miller  

Brilliant. And so as we round third base, I'm just curious, brother, you've been doing this for a long time. I'm curious, from your perspective, what are, say, two or three unfair advantages in making money in this sector, what are two or three unfair advantages that you can share with our listeners today?

Jace Graham  

I mean, I wish I'd give you like this sexy silver bullet that just comes in and makes it happen, all that kind of stuff, man. It's hard work. It's good, old fashioned ground game. It's like understanding your client. It's, you know, we're teaching sales classes once a week. I mean, it's working a CRM, you know, we do use some, some tech that helps, right? There's a, there's a company called Enverus that we utilize was drilling info, it's not, it's not cheap, but it gives you information on where rigs are and what the what the formations are looking like, and all that stuff to kind of give you an idea what's going on. But, I mean, listen, it's, you know, we talk about, you know, the ground game, and it's, and that's what, that's what's made us successful. That's what made my father successful is rolling up your sleeves, looking at something that's got a ton of hair on it, finding the value Rising Phoenix, I mean, that was what it's all about. You know, the Phoenix rises from the ashes. So it's doable, anybody can do it, but it is, there is a process, there is a there's a way to do this pipeline. But, you know, like I said, I'd say, you know, if you, if you want to kind of step out into this world, I wouldn't do it alone. You know, try partnered up with, with somebody that's in the industry that knows what they're doing. We do deals with, with folks that are interested in, you know, buying alongside us, we're typically a million bucks above and that in that area. We also have our mineral funds where people can just, you know, if they're like, man you, there's a lot of work here. Let's just, you know, give Jace our money, let him do his thing, we've got those funds as well that are a lot easier, and we just sent out monthly check stubs to our to our investors. 

Ryan Miller  

Yeah, okay, make your money work harder than yourself, which is hard to do, but it's great when it does, so I love that. And you know, on this show and a lot of stuff that I do, we talk about raising capital from other funds, private investors, you name the whole spread institutions, sovereign wealth, endowments, you get the idea. Is there any particular from, from a class of investor, are there any particular kinds of investors that are really loving this asset class that you can kind of point our listeners to to say, hey, if you want to raise capital and really scale this, nail it and scale it, these particular investors really like that. Is there anything like that that you're seeing? 

Jace Graham  

Yeah, you know, we've always raised our capital high net worth a credit investor. So we're 506 the offerings and we love that. We've got several very sophisticated oil and gas investors and families that have been in the business business over generations, that invest with us. So that's kind of the easiest, where you can, you know, raise capital and kind of, you know, get people going. Family Offices are really kind of starting to jump in and love this asset class. We've got a group that we work with out of New Mexico that kind of is, I mean, they are a family office. They've, they've got a field named after them, quite frankly, in New Mexico, so they know what they're doing. So there's definitely family offices that like that cash flow. And then, of course, you know, we got private equity coming in, they entered the market probably 10 years ago. It was not even a, you know, there wasn't really even a known asset class, but, but now you're seeing some, some big shops coming in, Blackstone, natural gas partners, Arch, you know, several different groups BizStreet that are coming in and, you know, loading these, these teams up with 200, 500, a billion dollars and and capital to deploy. And so there's definitely, you know, if that's the space that you're in, I mean, there's definitely, definitely some, some room there. I mean, we just, you know, we aggregate assets, we're not, you know, this massive organization. We aggregate for our funds and if it doesn't fit the buy box for our funds, we love flipping to private equity, you know, they, they're not going to do the ground game, they're not going to, you know, pick up the phone and make the cold calls and do all that stuff. They're just going to, they want to pay a premium, and we're happy to deliver it at that.

Ryan Miller  

Brilliant before we wrap things up. Is there anything else that you would like, final thoughts, ways people can reach out to you if they wanna learn more, anything at all?

Jace Graham  

No, I mean, it's been fun. I mean, I love talking about this, like I said, I grew up in around the business, fourth generation guides in our blood. In fact, I was, we were down in an oil and gas conference in Houston a few weeks ago, and I had my boys, Jet and Bo, eight and 11 years old, down the conference at our booth, and they were learning how to pitch. So it's great, I love this industry, it's so resilient. There's so many ways to kind of get in it and make money, but man, I hope that you know, kind of popping the hood and demystifying. You know how you can actually go out and buy a mineral interest direct, there is the auction route. Obviously, you can invest alongside us, or invest with us, we welcome that opportunity. But I would say, if you want to reach out, learn more, I'm on LinkedIn, Jace, J, A, C, E, Graham, you can DM me minerals, and I've got a little you know, how to evaluate minerals in five steps that I can send your way. We got a current fund in play right now called La Plata peak la, L, A, P, L, A, T, A peakfund.com so there's a few ways to reach out learn more about this asset class. 

Ryan Miller  

Yeah, and in that DM, mentioned Making Billions. So, so Jace knows where you heard about it, under it, so you're already qualified if you've listened to what his opinions are on here. So just just to summarize everything that we talked about, PE loves this, this asset class, there's a lot of investors, you're literally just acquiring paperwork, mineral rights, and then you shift who gets the rights to the cash flow from the guy actually producing, so instant cash flow, already buying, producing, cash flowing wells. The second thing is leverage tech to gain that unfair advantage, like Enverus, E, N, V, E, R, U S, it's a little pricey you said probably 40-150,000 and then honestly, from, from what he'd mentioned was, don't, don't do your first deal alone, man, work with a mentor or just a pro who knows this business. You do these things you too will be well on your way in your pursuit of Making Billions. 

Ryan Miller  

Wow, what a show, I hope you enjoyed this episode as much as I did. Now, if you haven't done so already, be sure to leave a comment and review on new ideas and guests you want me to bring on for future episodes. Plus, why don't you head over to YouTube and see extra takes while you get to know our guests even better, and make sure to come back for our next episode where we dive even deeper into the people, the process and the perspectives of both investors and founders. Until then, my friends, stay hungry, focus on your goals and keep grinding towards your dream of Making Billions.