When you look at the US production, eighty three percent of your oil,
ninety percent of your gas, and more than ninety percent of the wells drilled
are drilled by roughly nine thousand independent companies that average twelve and boys or less.
That's the American oil industry. And so when looking well, just look
at your podcast Financial survivor well, how do you survive? During this time?
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than ever. And welcome. You are listening to watching the Financial Survival Network
and I'm your host, Kerry Loves Well. Just when you thought it was
safe to plug in your EV, we're finding more lithium. Isn't it wonderful?
But oil is not yet dead. RJ. Burr, Senior VP of
his family company Panics. R J. You've put together more than four hundred
million dollars worth of the partnerships and that's over sixty deals. You put together.
You're an expert in this, your family has been in it, You're
in Louisiana, and hey, somebody told me recently that the age of fracking
is ending. You believe that? Well, no, no, I mean
there's there's arguments on all sides, and when people are dealing emotionally, it's
easy to tap into people's emotions and get him to get him to not like
the boogie boogie man. And I'm one of those guys. I love movies
and one of my favorite quotes from a movie was from the Usual Suspects when
he said the greatest trick the devil ever ould was convincing the world he didn't
exist. And honestly, I believe I like to mold that to today.
And the greatest trick environmentalist ever pulled was convincing the world that hold with back
because there's been more gang civilization wise and society wise rewaring gas than any other
product. And but what maybe, like a maybe the age of fracking is
going to go, but we're in being the age of refracking, right yeah,
Well, I mean, well, we don't even know what's on an
adic oceans. Do you really think we know how much oils in the ground
across the globe. They can give estimates, they can guess, but nobody
really knows how much. How much is in the Gulf of Mexico. It's
just stuff leaks out all the time, exactly. I mean, does it
regenerate? Is it really? Is it biotic or is it a biotic?
Does oil regenerate that gas certainly seems to right. You give it enough time,
I mean, you go give it up time you have if you have,
you know, say a formation that was empty and something happens geologically where
it attaches to another formation, Yes that could refill, but there's always an
explanation as to why it doesn't. But the main thing you really look at
when it comes to the oil is well, I had a partner send me,
send me a picture the other day. We were having a discussion on
environmental concerns. And you know what an eyesore truly was. And the picture
he set me. On the one half of it, you have this beautiful
pristine hill, sun setting in the background, trees, and yes there was
a pump jack on top of the hill and that was you know, and
that was one picture. Well, on the other side was a lithium mark,
and at the bottom of it says, now, who's destroying the environment.
And what about the windmills? What about those ugly, hideous looking windmills.
Probably that we're on the other side because down south, especially in Texas,
got wind all the time. And then what about all the wells that
are getting killed from erection of off site to the windmill farms. I mean,
we spent billions of dollars getting these guys off the endangered species list,
forcing the world not to hunt and basically kill wales, and now we're building
these windmills that offshore that are killing them all. I mean, you tell
me kill mother Nature, thence, let's kill mother nature to save mother Nature.
We got to kill the village to save it, like they said in
Vietnam. Right, Well, it just it goes back to the complete disingenuous
nature of the argument to begin with. I mean, when you look at
it, honestly, we're not talking about killing Mother Earth. We're talking about
killing the human race. When we're long gone, are still gonna be here.
She's gonna make it, and she was here long before us, She's
gonna be here long after us. We're just talking about the composition of what's
better for humans. And I look at it and say, okay, hey
they're complaining about CO two, Well what breathe? C O two? But
the building me is that more plants wouldn't there and or anything you look at
well you look at the at the data. Aren't you look at the green
growth, the coral growth. Do you look at the growth over the last
twenty five years that if you actually go out and get a verified scientifical report
that shows this growth and you post it on the social media account, they'll
flag it as false information. Well why would they do that when it's because
it's all disingenuous there, there's a different agenda to it. It's uh so
what is the jett though? What are they have to Honestly, you don't
want to jump down the rabbit hole? But I look at it this way.
If they turn every car into an electrocute, how do they stop you
from going a where they flip the electric golf? If you're during they hack
the uh the AI and it makes you run around in circles all day?
Right? Yeah, it as long as I got to take a gas,
I'm mobile. It doesn't matter what you do. I'm still mobile. Unless
you want to come to break my engine. And so I mean, it's
it's just it, it's it's distant. And then they don't do the math.
One plus one will always equal to well math. I don't want to
say the R word here, but you know what I'm saying. Math,
Math has a history. Needs that airplanes are too, and everything all our
technology based on math. You can't get away from math. And yet they
want to teach it in such a way that nobody, nobody gets it anyway.
Well, hey, well let's not go down that rabbit hole. Meantime.
Uh, if we need the oil, all right, we're gonna have
to do a massive program to drill. Right, it's going to be massive.
Once we really shortage this, we're gonna right, I mean not no,
not if we turn't loose. Yeah, that's ever. Everything that happened,
everything that's happening right now is selfing in what human nature dictates is that
humans are not going to choose to lower their living standard when that's not a
choice they have to make. And so yeah, I can force us to
do all this, but eventually it's going to end because it's not logistically it's
impossible. It is just not feasible to do to do what they're wanting to
do. And so when you take when you take the bedrock of all society,
and people will argue all that, but look, the bedrock of all
society is energy. If you if your country does not have energy, you're
a third world country. Go ask the Germans, would they rather have their
natural gas or they want to keep cutting down their force for firewood. I
believe they'd rather have their natural gas. Then you look at oil in general,
you realize fifty percent of the world production is consumed by seventeen percent of
the world's population. Eighty three percent of the world's population is just now beginning
to use oil. What do you think that's going to do to demand?
Now you look at it. In twenty fourteen, we invested worldwide roughly a
trillion dollars an upstream to about finding more one today that's about sixty percent off
of what it was. So we're not investing enough to find more oil.
So we're not producing enough to cover what our demand is. Right now,
our demands about ten fifteen million barrels a day more than we produce. They
expect that number to be over thirty million by twenty thirty. So when you
look at all these dynamics and then you say, okay, surely there's something
that they have up their sleeve to replace all because a kindergartener can predict where
this is going to go, where this train wrecks happening. Well, all
of a sudden, you go, well, is it solar? No?
To produce the amount of energy the United States consumes annually, it would take
a solar corban using the most technologically have banned solar panels on the market the
size of New Jersey, and would require the sun to shine three hundred and
sixty five days a year twenty four hours a day. It Arizona summertime intensity.
It's just it's not feasible for it to happen. And so one day
somebody, some wizard of smart, is going to come up with some invention.
He's going to come up with the greatest thing since slice bread that will
replace oil. How does that happen? Yet? And looking at human nature,
if you had made the most important discovery in the history of band which
would be the replacement to oil, well, I believe you'd tell somebody about
it. And I don't hear anybody taller than that you would think, Hey,
so a hundred years we've been doing us. Remember what we had before
we had oil. We hadn't energy, you know, and energy is like
green energy. You know, it came out of the tailpipe of all these
horses. New York City had six feet of maneuver downtown and you had disease,
you had outbreaks, not to mention the stench of the place. So
you know, they were happy to get tailpipe pollution to get rid of all
the horse pollution in New York City. They want us to go back to
horses or jay, Well that they can. They can have horses all they
wanted. I love horses. I got horses and love writing. When I
choose to ride them, I want, you know, so I don't slick
at them my horse and ride into the offices that take me all day.
Yeah. Well, it's just one of those that I look at times like
we're in and when you look back through US history, at every crisis point,
at every moment there was an economic crisis, there have been a group
of people that came out of the other side looking like geniuses. And when
you string their stories together, there's really only two common characteristics that they shared.
The first is that when the crisis happened, they had cash on hand.
They were liquid, so they could do something. Well, probably more
important or as important as being liquid, when their opportunity presented itself, they
had what my dad calls intestinal fortitude. They had the intestinal portitude to push
the chips in the middle of the table. Yeah, I can't go and
so well, we saw happening, and you know what, we've been doing
this a long time. This is not this is not. Our first rodeo
was on. I was in the first field in lil In, Texas when
I was seven years old. That was the first time my dad took me
to go a oil paction and get out of the gard. If anybody's ever
been to Louling, you'll know there's a distinct smell to Louling. And when
I get out of the car, I was like, Dad, what's that
smell? Because you know, it was like you've never smelled it. Cour
smells pretty bad. And it's like, Dad, what's that smell? He
goes, maybe that's money. And that was my introduction to oil. Well,
I've been hooked everydays. Yeah, and well, because it's the it's
the it's the engine that runs the world, I mean every world. You
look at the standard of living perse aside, the average American consumes two point
six gallons of oil a day. The average civilized society across the globe average
is one point six gallons of oil a day that they can sit you want
to traverge world. The average derb world country point three gallons. It is
a direct correlation to your society standard of living is how much oil they consume.
And most people don't realize oil is in everything from our clothes to plastics,
to our cars, everything to the medicine, everything we do. I
would be willing to bet and you could grab any American, if any city,
just reach out and grab them, and they will have at least two
whole products on them at any given time. And man, these people don't
realize that. And so when you when you see everything, because it's really
clear, when you step back and just look at it, you see that
we're not investing enough, we're not producing enough, demands too high, there's
nuh and to replace it with. Well, the final factor is the true
American oil industry. Most people have no idea of who the American oil industry
is. When you look at the crash from April twenty twenty. When that
crash happened. If you grab the average American that says, well, how's
it going to affect the American oil companies, they say, well, it's
Exxon, it's Chevrol. They'd pick one of the majors and said they're big,
it's not going to hurt them as much. Well, in all honesty,
not to no disrespect to them, they are who they are, but
they're not American companies. Just because they're based in Houston doesn't mean they have
what's for the best intent getting their printing from overseas for sixty years now exactly
exactly. And so they're beholding to their stockholders. And once again I have
no problem with that. They're their own company. They can do what they
want, but that's who they're beholding it. When you look at the US
production, eighty three percent of your oil, ninety percent of your gas,
and more than ninety percent of the wells drilled are drilled by roughly nine thousand
independent companies that average twelve em boys or less. That's the American oil industry.
And so when looking well, just look at your podcast Financial survivor,
Well, how do you survive during this time because we're all in the oil
business. RJ. It's a big excrement sandwich and they want us all to
take a bite. Yeah, but you know what, I figured out a
way to make that ship sandwich taste good and make you some money while doing
it. All right, tell us, tell us how do we well,
do you make you any money? RJA? How can you make no?
Like seven minute ago, everybody is in the whole business, whether you want
to be or not. If you live in a modern society, you always
have money going out of your pocket. Tool Well, well, we simply
put our partners in a position where they have money coming from it. This
is a great thing. Like I came up with a system where the average
household can pretty much hedge most of their commodity purchases because we're all in the
commodity business. You buy food, guess what, wheat corn, everything's a
commodity. You buy energy, You buy electricity, all of its energy.
So the key is you invest in the companies that produce that stuff because you
know that it's going to get more expensive and therefore your profits are going to
go up. So if you can get closer to the wellhead like with you,
then that could be a great thing. Right oh without it now now
look, and don't get you wrong. By nature, I don't want anybody
to think this, it is easy. But by nature, oil and gas
is speculat If anybody ever tells you different their lines, who wait, it's
much easier than it ever was. Man, you used to get two You
used to get two gushers and eight dry holes. Now you get nine gushhers
and one dry hole. Right, well, if you're in the right area,
well, if you're in the right kids, and then we're obviously going
to drill. Well that that's the key to it, because when it comes
to when it comes to being successful for your partners, because that's that's the
name of the game. Everything we do here is based on our partners,
because if we don't win for them, they don't keep investing. And all
of a sudden and I sell them. Sign goes in the front door.
And So when I was telling you a minute ago, before we before we
got on that we essentially we'd had two lives in all My first life in
all ended. When marithon my family is coming and we crank back up six
years ago, me and my dad, my brother. We knew we'd be
successful. We're good at it. We've been doing this a long time.
And when knew the path to do what we wanted to do would reveal itself.
As long as we were patient, as long as we're diligent, everything
we did and what we saw coming was really we saw Saudi Arabian Russia.
Because whether you like Trump or not, what he did was he completely changed
the power structure in the war world. When OPEC was created, they became
the center of the whole world. Well by us increasing our production as much
as we did, all of a sudden, they didn't have a say as
much. And what price per barrel was Resident Trump knew that we had to
keep the price such where it made it worth all companies going out and finding
yet, but we had to keep it down enough where it wasn't killing the
consumers. And he found that equal balance. Well, it's two bucks two
bucks a gallon, guests sleep roughly sixty dollars a barrel, Yeah, roughly
that the sixty to sevent He was roughly this this sweet spot. Well,
then all of a sudden, Russian and Saudi Arabia started increasing their production.
And what we saw was them pushing the price down, tried to get it
the wrong growth a barrel, Well it was to flow out. Yeah,
well its essentially it was. It was an economic war with the shale industry.
Yeah, they were trying to put in the show industry out of business
and so that that's really what we saw coming. And so we got started
getting our pattery drive, we started getting our cash ready because we knew once
that happened there would be some acquisition opportunities. Well, then a funny thing
happened. Then all of a sudden, Corona came. And what Corona did
while the while we were wrong on what the trigger would be. We thought
the trigger would be the Russian Saudier rape. The trigger was Corona it but
the result was the same thing. It took rough way what we thought would
take eighteen to twenty four months and crunched it down in the thirty days.
And the first thing that happened on April twenty when the prices dropped, that
was the first wave of your independence. Were locked out. Most of those
companies were either beginning companies or companies were on shaky financial ground, but all
of a sudden, when prices crashed like that, boom out of business sign
goes in there front window. Well, the next wave that got knocked out
for a couple of months later when we sent everybody home for COVID. Your
companies that could pay their employees to come back to the field, they were
the ones that survived. The companies that couldn't, all of a sudden,
they were gone too. And so once you had was you had a clearing
of a deck that hadn't happened in my life and oil and all of a
sudden, now well really for the first time that well, it's only happened
once in forty years, and that's a company becoming a major one hundred million
market cap on American production alone. It's only happened one time in forty years.
And so all of a sudden, we saw an avenue where hey,
we can acquire some significant reserves for pennies on the dollar. And that's exactly
what we started doing. We started buying up leases and in the end and
we're still in We're still in the acquisition process. We thought we thought that
window would close in twenty two. We thought grown ups would return, but
asked the grown ups, are Jay have left the building? Yeah? Will
I was at Seaback earlier this year and I had a kid from PBS come
up to me and he says, you're the wool guy, aren't chi?
I will, well, yeah, He said, well, well, who
do you want to win in twenty four as it? Well, it depends
on what me you ask? I said, what do you mean as it?
Well, if you ask the average me, the guy that lives here
just like you, I want rebulicives to win because I know prices will stabilize
and I know we'll understand the world we live in again. However, if
you ask the wool and gas guy in me, I want binding them to
win. He said, really why? I said, because they're going to
keep attacking AID, keep staring people away from and to keep running people all.
And you know what I'm gonna do while they're doing that, I'm gonna
keep buying it because what's gonna happen all of a sudden, The illusion's gonna
bust all of a sudden, the Ether's gonna wear all if people are gonna
realize, oh my god, nothing can replace oil, at least not right
now, and they're gonna be running back. And when they do, person
owns the lol is gonna be sitting in a pretty good position, aren't they.
You gotta be at And so that's what we've done. We made twenty
three different acquisitions and secured a well we believe to be over one hundred million
barrels of reserve. And really all we're doing right now is developing. Now,
what I tell partners, the best thing they could do, especially somebody
who's never looked at us before, go to our website. It's pan x
dot us slash learn Yeah out of that page was specifically designed for partners that
have never invested with us. It gives you an idea, just a general
education on the wall industry, what the uses of a wall are, how
we develop wells, how we drill wells, just kind of gives you a
basic thumb sketch of the industry, gives you a basic numb sketch of the
tax codectits. Look, you don't do all for tax panetics, don't give
me wrong. I had a partner one time. I said, well,
mister Johnson, you can write it off. He said, if we wanted
to write it off, I give it to the boys cous and so I
was young, and you know, it was one of those last call.
Okay, that made sense to and so you don't do it for the tax
benefits. However, to dismiss the tax benefits wouldn't be that'd be ridiculous.
Because when you invest in direct participation programs, when you invest in drilling wells,
Uncle Sam's roughly going to pay for a third of the investment. Now,
I'm not a CPA. Everybody varies a little bit, but going in
and year one, before I've even produced one barrel of oil, I've already
made the partners thirty three percent on their money. And then we don't pay
any taxes on it through the depletion allowance, and you keep rolling over your
investments and you never pay any taxes. Wow, I hadn't got I've got
partners right now that we'll be receiving revenue from their wells. I'd be willing
to bet for the next twenty five years. So what's our r R on
your average deal? Bar jauh? It depends on what how do you look
at the deals if it's in the drilling programs, and just where's the straight
drilling. We have some equity programs we've run also in the drilling programs.
I'd say after tax inefates we're averaging were from twenty five to forty percent from
a program we're doing well, yeah, we got we got one program that
now this is more of an equity fund, but they own a piece.
What we'll do whenever we acquire a field, the first thing we'll do is
we'll fund. We'll put together fund to cover the entire field, and we
basically kick start the field. We put the infrastructure in and we give those
partners a piece of every well we draw in the field, regardless how many
wells there are. Okay, so let me ask you. Are you buying
any producing fields now or the stood, So what's your criteria? Do you
look for a value add on a producer so that you can how we love
salt domes. We love salt domes. And the reason we love salt domes
is one, well, there's really two races. One is the lack of
competition. Most people don't want to drill and solve those. It's a working
man's field. You have to have somebody up location dealing with the well every
day. And so it's it's something that to deuce and rill salt doug fields
or did and so those companies don't have the will or the expertise, and
so they stay away from well. That's one reason, but the main reason
we love them is salt dumes were your original old fields, and salt domes
were the spendal tops. They were the fields that got the old moon going.
If a field lad your old old companies. I guess the best way
I could describe them that they're about like spoiled kids, and a spoiled kid
their favorite toys their next toy. And so what they would do is they'd
go out, they drill a well, they'd hit it, they'd all cut
back blips. Well, they drove bobrom denmore wells. Well, then all
of a sudden they drill another well five miles away and hit it. Well,
then they'd pick up everything they add right here and go over there.
Well, how much oil did they leave right here? Because they really didn't
have the technology. You know exactly what they don't know the secondary recovery.
Now, things like pollen are flooding. We've got to upgrading where you can
take heavy oil turned it into better than WTI. We don't even have to
do that. We're drilling traditional wells the same way they draw them joinal verticals,
no cards. Yeah, well, I mean it's it's it will never
be a straight line sun on a solid dome at moves, and we do
put a directional bid at one point to target. We have yeah, one
section that's kind of getting in the weed, but we we have one section
where we put a directional bit in there to toilet his own. But then
we pull it all back out and let it go naturally. But all we
really do, I'd love to I'd love to say that it takes a rocket
scientist to explain what we're doing, but it's not. All we're doing is
going in fields that weren't developed and we're developed, you know, and we
stand on the show where it's the giants and get what they left behind.
Okay, So all Jay for really appreciate you're filling us in. We're definitely
going to have you back on the show. You're going to defer one of
our regular go to guys for energy because energy is fundamental. Like you said,
oh, we basically be in the fields now pretty much with our pickaxes
at our sites cutting down wheat and uh, you know, half the world
would have starved already, maybe two thirds of it so, Hey, tell
us the website where we find you, how we connect with you panax dot
us slash larn and then my email is r J Burr at pan X I
U S P A n e X dot us. Excellent. When that will
we hope be one Well we have we have one standing standing guaranteed you ask
them ask us a question to do we don't know the answer to, we'll
find it for you. I want to make sure that every question is answered.
This is your money we're talking about, and if you're not completely comfortable
with who we are and what we're doing, we'll be the first one to
tay to keep it all right. Well, maybe you want to come down
to your neck of the woods for a show. Next time, I'll come
stop by and see you guys. Hey, show notes, make sure you
look at them on Financial Survival Network dot com. RJ's contact and is a
web site will be there. If you got a question for r J or
myself, and I'm sure you do, shoot me an email kl at kreluts
dot com. We will get you an answer. And while you're at the
site, make sure you sign up for your free newsletter. RJ really enjoyed
speaking with you. We'll talk to you again real soon. Carry yourself a
great winner. Thanks for listening to carry Lutz's Financial Survival Network, your solution
to today's trying times. For the latest, go to Financial Survival Network dot
com. Financial Survival Network now more than ever,