Rey R.T. Trevino III and Lisa Carmen Wang discuss the future of U.S. oil and gas investing. Trevino describes Pecos Valley Partners' approach to legacy assets, conventional wells, risk, and long-term energy demand.
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About the guest
Rey R.T. Trevino III and Lisa Carmen Wang. Rey R.T. Trevino III is president of Pecos Valley Partners and a third-generation oil and gas investor. Lisa Carmen Wang is founder and general partner of Bad Empire, and is also an author, executive coach, and personal brand strategist.
Key takeaways
- Trevino says the United States produces 14 million barrels of oil a day and describes energy security as a long-term goal.
- Pecos Valley Partners looks for legacy assets that may have been overlooked by larger companies focused on horizontal wells.
- The firm drills conventional, vertical, shallow wells in areas with proven production, according to Trevino.
- Trevino says the company evaluates investments over the long term instead of focusing on daily oil price movements.
- He says investors should review the geology, production history, recoverable reserves, and financial case for each deal.
- Trevino says the company averages a little over 60% a year on returns. He also describes a project that returned over 50% to investors in 18 months, excluding tax deductions.
- He says LPs may receive active tax deductions and that the company invests alongside its LPs. The transcript does not detail the terms or individual tax outcomes.
- Trevino recommends checking an operator's track record and costs, including lease operating expenses, which he says should be at most 13% a month.
- He sees 3D seismic data and AI as tools that may help interpret subsurface data and inform oil extraction.
- Trevino expects data center energy demand to support demand for oil and natural gas, and says oil and gas will remain part of energy supply alongside solar and wind.
Best quotes
"what we feel right now is security and what I mean by that is that right now we have an administration that is pro- energy yes oil and gas as it says but also just pro energy as a whole"
"And what we like to do is maybe we are spending a little bit more money on acquiring these assets. However, we're looking at a lot more opportunity for the returns long-term"
"However, if we really focused on the price of oil every day at POS Valley Partners, we wouldn't be doing this. We're looking at it in the long term."
"Another benefit to working with us is that we are the operators or the boots on the ground. So, you're going to get a straight answer from us."
"And what I like to compare the operator to to all of y'all out there is a property management company."
"The most current advances are really the 3D seismic where we're able to look under the ground and get a good cube sphere sphere look around on where the actual reservoirs are."
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