Marc Lichtenfeld of the Oxford Club just released a new stock teaser.
This one is about "The #1 Oil and Gas Royalty Play for 2023."
He claims this investment can "hand you big monthly income from the oil and gas surge in 2023."
The good news is that Marc left enough clues in this presentation to figure out the name of the stock.
I reveal it below, along with information that should help you determine if it's a worthwhile investment.
Let's get started!
#1 Oil And Gas Royalty Play Summary
Creator: Marc Lichtenfeld
Newsletter: The Oxford Income Club
Stock: Permian Basin Royalty Trust (PBT)
Permian Basin Royalty Trust is a company that owns properties in the oil and natural gas-rich area known as the Permian Basin in Texas and New Mexico.
This area is one of the biggest producers of oil and natural gas in the world.
This is a nice investment because Permian Basin Royalty doesn't actually drill for oil or have many operating costs.
They simply get a cut of what other companies extract from the ground.
So the risk is low for them, and they pay a nice dividend.
However, the stock is basically the highest it's ever been, and the last time it was this high, it dropped pretty significantly.
The stock is around $24, and you could have bought it at $3 just two years ago.
Most experts seem to be betting on the expansion of natural gas drilling and exports in the future, though.
So there could be room for some growth.
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#1 Oil And Gas Royalty FAQ's
I'm sure if you watched the presentation put out by Marc Lichtenfeld about his "#1 oil and gas play of 2023," you have some questions.
I'll answer every question you have below:
1) What is the theme of this presentation?
It seems every stock picker is giving out their favorite natural gas stock picks these days.
In the past few months, we've had LNG stock picks from Whitney Tilson, Joel Litman, Andy Snyder, Louis Navellier, and Porter Stansberry.
Now it's Marc Lichtenfeld's turn.
The many reasons why stock pickers are all bullish on natural gas
The first reason is the Russia-Ukraine war.
Russia was a major supplier of natural gas to Europe and has dramatically cut supply to these countries.
This is causing energy prices to skyrocket in Europe.
As a result, stock pickers believe America will ramp up production of natural gas and take the place Russia had before.
Another reason many are bullish on LNG is that it burns cleaner than coal.
Coal still represents 25% of energy consumption, and it produces a lot of carbon, which is a big no-no with today's climate-obsessed population.
So the idea is that more natural gas will need to be drilled and transported to meet our energy demands.
2) What is the company Marc is pitching?
The company that Marc is pitching here is Permian Basin Royalty Trust (PBT).
There are various clues and hints in the presentation that this is the investment Marc is teasing, including:
- Located in the Permian Basin
- The company is a royalty company.
- Has over 380,000 acres of oil and gas fields.
- No debt
- Over the last year, it brought in $42 million.
- Stock is around $25.
So all of these hints are pointing to the Permian Basin Royalty Trust.
What's appealing about this company is that they don't actually drill or own any heavy equipment to get oil out of the ground.
This is good because all of that stuff is very expensive.
New drilling equipment costs millions of dollars, as does paying the laborers to drill.
not to mention the cost of maintenance or anything like that.
PBT simply owns the land and gets a cut of what it produces.
They then take that cut and distribute it to investors.
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3) What is the Permian Basin?
The Permian Basin is an area located in the southwestern part of the United States, mainly in Texas and New Mexico.
Overall, it covers about 250,000 square miles of land.
This area is one of the biggest producers of oil, gas, and petroleum in the world.
Natural resources have been drilled from this land for over 100 years, and with the invention of fracking, the production has ramped up in the last few decades.
Major landowners in the region include Occidental Petroleum, Exxon Mobil, Chevron, ConocoPhillips, Pioneer Natural Resources, EOG Resources, and Diamondback Energy.
4) What are the drawbacks of the Permian Basin Royalty Trust?
So if you watched the presentation from Marc, you know why he likes the company.
They have a nice dividend; their risk is low because it's just royalties, and the demand for natural gas is expected to increase.
However, there are some drawbacks to investing in natural gas.
You can't just snap your fingers and produce more natural gas.
It takes a lot of infrastructure and a lot of capital to do this.
You have to buy more drilling equipment, build more pipelines, build more refineries, and build the ships capable of transporting natural gas to Europe.
To give you an idea of the cost, each ship that transports natural gas across the Atlantic Ocean costs about $200 million.
The pipelines and everything else will cost billions.
The problem is that interest rates are very high right now, so getting billions in loans isn't going to be easy.
So ramping up production can take years.
On top of that, there are environmental risks (both real and imagined).
Texas is a little looser with its regulations than other places in the country, but you still have to worry about an adversarial federal government at the moment.
The Biden administration is focused on renewables and green energy and has promised to cut drilling in the future.
You don't know what regulations are coming in the future regarding the production and distribution of gas.
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5) Is Marc Lichtenfeld and The Oxford Income Letter legit?
At this point, you probably have enough information to decide if you want to invest in the Permian Basin Royalty Trust.
Now you're probably wondering if you should sign up for the Oxford Income Letter.
I'm very harsh on stock pickers, and it's very rare for me to recommend any stock-picking newsletter.
The reason for this is that most people lose money in the market.
However, I don't feel this way about the Oxford Income Letter.
This is a legit investing newsletter and one I really like (and subscribe to).
The entire newsletter is focused on income-generating stocks and dividends.
Most importantly, it has performed well over the last few years.
It's not my favorite investing newsletter, but it's definitely in my top 5.
Wrapping Things Up
So that's the end of my post covering Marc Lichtenfeld's #1 oil and gas royalty play.
The company is called Permian Basin Royalty Trust, and there's a lot to like about this company.
The best thing is the business model and the expected increase in demand for LNG.
There are risks with this investment just like any other, though.
Environmental risks and regulations could destroy the entire industry (or at least keep it from growing).
But Lichtenfeld is a guy I trust, and his stock picks have done well.
So I'm sure he's looked at all aspects of this company.
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