Minerals Business Supplement July 2020
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While minerals have been the darling of the oil patch over the past couple of years, even this low-cost investment sector is feeling the rush of escaping capital from the industry.
As operators drop rigs at a record pace, the idea of buying minerals just ahead of the drill bit has become a whole lot murkier proposition. And, alas, no one could have imagined that the spigots on existing production would be tightened down via shut-ins as producers protected their commodity from too-low prices—and giving royalties a
burr-cropped haircut in doing so.
But interesting times make for unprecedented opportunities.
A New Approach to Minerals Valuations
Today’s minerals valuations require greater sophistication, with particular consideration being given to risk as the sector evolves.
Minerals Private Equity: Weathering the Storm
Private-equity companies and their mineral portfolios have been quick in their response to the dramatic slowdown of drilling activity in the shale patch.
Minerals Stocks: Tarnished Crown?
Minerals and royalties companies, favored by investors for the past few years, are now facing their first real test as the pandemic exposes their reliance on E&Ps to generate revenue.
Private Minerals Companies: Solid (Relatively) as the Rock
A brutal downcycle hurts all, but don’t mistake mineral portfolios with struggling E&Ps. The nature of their part of the business means less risk but greater stability in times like these.