Rigs to Riches EP01: Tim Pawul- O&G Investing: Minerals, Royalties & Non-Op

Let’s start right there. >> Sure. So, grew up in New York. No exposure to gas at all. Grew up in a golf family. Went down to Rice University in Houston on a golf scholarship. So, that’s how I got down south. Why I’m in Houston today. When I graduated from Rice, I wanted to go into banking. Uh I was an intern at a small merchant bank in the Galleria area uh called Corporate Finance Associates as a a tax analyst or as I like to say a spreadsheet pitch. You know, I really loved it. And then I went around and tried to, you know, submit my resume going to TPH and Goldman and Morgan Stanley, you name it, right? And I didn’t even get an interview. So, had to get a job, had to pay mortgage. Um um had to get a job, had to, you know, pay rent, right? Um graduation was coming up around the corner. Buddy gets me a job um with an oil and gas advisory firm called PLS. uh had no intentions really to go into oil and gas, but there was a lot of similarities in the advisory side of their business to what the merchant bank that I was at did and that was kind of the loose connection. But I would say, you know, weeks into that that job, it’s a long story. I’ll kind of keep it short. I I always had an intrigue to having an international career in the beginning at that stage of my life as well. So there’s an opportunity to to kind of stand up an international business development division um for the kind of the software services side of this firm very centered around all gas M&A and M&A evaluations and things of that nature. And so for the next three years when I was with that company I traveled the world. I was in London six times a year, Calgary once a month, twice a month, Australia, Hong Kong, all over Latin America, all over Africa, all over Europe. If there’s a finance city that touches oil on gas, I was in it. And I beat the pavement and had thousands of face to face meetings. And so, as a young guy who didn’t really know much about the industry, I was rubbing elbows with sea suite like right out of the gate. I became a quick study. That was my style. I had to feel prepared when I was speaking to the CEO of a10 billion dollar market cap company so that I didn’t feel like a joke so I would, you know, kind of over overstudy for what I needed to do for my role. Quite frankly, I was selling software at the time, but I got into who’s doing the financings and M&A activity and trends and just I was able to really piece it together thoughtfully and u that kind of became my style of doing business was be in the weeds, be educated, and do things face to face. So, you fast forward, I ended up joining a company called Energy Council in 2014 who owns uh who’s is owned by Blackstone today. So it’s it’s an investor relations media platform within the Blackstone broader portfolio that focuses on oil and gas and oil and gas finance. Was with them for seven years. I ran Canada, Latin America and the US. And through that I really was the extended business development investor relations arm for a lot of clients. That was kind of the business model. So I would go around and I knew, you know, you ever hear the expression mile wide, inch deep knowledge base, like I knew everyone and I knew a little bit about everybody to where I could connect the dots and set up meetings, right? So the the motto was just speak to the capital markets both debt and equity, figure out what they want to allocate capital to and then meet with all the oil and gas teams in the industry, predominantly CFOs and CEOs and then try to figure out who needs to meet with who. And so they would do events in London and Singapore in in New York at the New York Stock Exchange in Houston and then we would facilitate hundreds of meetings kind of behind the scenes and then it would be a normal kind of networking event right so through that process developed some incredible relationships pretty deep knowledge base on on on the all gas space predominately the upstream space and then um along that way started to become more and more specialized in minerals. Minerals were not really a space at at that time. I always called it the institutionalization of minerals started around 2013 2014 and I just that’s when I joined energy council and it was the right place right time. Viper energy partners goes public. Prairie sky royalty goes public in Canada. Capital markets love the stories. It was new. They’re their first pure play royalty publiclix ever. And I said, “Hm, this is interesting.” Like business model, right? The MO of of my job is see what the investors like and and kind of follow that that crumb trail. And so I said, “Who else does this?” And there was six, seven private equity backed teams that had been launched in within the year or so. Kane Anderson, NCAAP, NGP, Pinebrook, Riverstone, you name it, right? The big names. And I just went around, hey, you know, who backs you? How much dry powder do you have? Where do you buy? How do you buy? What’s your secret sauce? What’s the ultimate game plan? What’s the vision? And I just, there was really no game plan, Casey. It was like, this is fun and this is interesting. This is going to just, I don’t know, probably be something I investigate for 6 months and then the shiny object will go away and there’ll be another one in the capital markets. Like this is typically what happens. like years ago it was water midstream infrastructure and oil and gas was the hot thing and that’s not really as vogue and you know data centers is big now and so I just thought it would have its moment I dig in I get to know the players but but I enjoyed like it was tons of deal flow there was capital coming in it was just you know a younger space so for me at the time being in my 20s the CEOs of the companies are 35 40 like they’re more relatable married kids same age, all that stuff. So, from a relationship building standpoint, there was something beyond just I know so and so CEO. Now, it’s I can actually hang out maybe on the weekends, like that kind of relationship. And so, you follow that going around figuring out what everyone’s doing. Well, the next year, 2015, 15 20 more teams pop up, right? So, I go around like, hey, who back to you? What’s your structure? What’s your strategy? How do you buy? Where do you buy? You you kind of get the gist, right? And I started tracking that intel. 2016, 40 more teams pop up. And at this point now, you’re starting to get turnover, right? You’re starting to have full cycle exits on investments. Everyone in the team makes good money. And you know, mid-management says, “Hey, you know, maybe I can do this.” And they split out. They hang their own shingle, you know, either broker or raise friends and family or get their own commitments from larger investors. And so that kind of snowball effect happened year on year and minerals became more and more important in my day-to-day. Um, and it wasn’t until co, you know, given I was in in a business that was centered around events and travel and putting to people together in person, you know, obviously it was a very challenging time. I pivoted 100% into minerals in 2020 just because it was the only thing that had a heartbeat. they, you know, it was pretty lean team. So, you didn’t have the the massive layoffs that that a lot of upstream and service and, you know, mid-stream companies had to instill to keep the lights on. You know, I just saw the other day, I was telling my wife, we were driving down I 10, Kico just laid off 25% or announced a 25% layoff across their workforce and we were passing the Kico building on I 10. I was like, that’s a lot of people. That’s brutal, right? But >> oh yeah, >> most investors think the lack of cash is their biggest barrier. But like Tim shared, the real wins come when you specialize, leverage what you already have, and surround yourself with the right people. That’s exactly what we’ll be diving into at the Revive Summit, unlocking capital here in Houston, Texas. Our previous Revive Summits have been a huge success. Investors walked away with new partnerships, creative financing strategies, and their next 90-day game plan already mapped out. This time we’re going even bigger. Over 2 days, you’ll discover how to unlock funding from the tools you already have like credit, retirement accounts, brokerage lines, and then on day two, we’ll work shoulder-to-shoulder and build your personalized 90-day plan to actually put those tools into work. Here’s the fun part. We’re giving away five free tickets to our listeners. Just drop your biggest takeaway from Tim’s story in the comments below, and you could be in the room right with us. Don’t miss it. This is where barriers turn to bridges and your assets become fuel for real wealth. >> Going back to co it, yes, deal flow was slow. Yes, capital raising was slow, but there was still deal flow and capital raising going on and companies were just hunkering down. It wasn’t like there was huge layoffs. I mean, they had three people, right? So, there was stuff to do and for the first time in my career, I became specialized in something. So the riches and niches and and all the specialization is better than generalization like don’t jack of all trades, master none, don’t be that. Like all those idioms that we hear about like I can attest firsthand changed my career that I decided to go into what seemingly would be too narrow of a space cuz I knew you know upstream folks all over the world. So you think about okay now the the world is my playground upstream you know US Canada Latin America services midstream royalties some renewables you want optionality right you want you know TAM you know total adjustable market well what I found was I went into something that was only US and super targeted and it was the birth of my own firm and where I’m at now and you know it’s been phenomenal for my family you know we’re we’re making a lot more money you know God bless you know a lot of things fell into place for that on on type of hard work. But I think you know just from a 30,000 foot view from a business perspective it was that specialization that this decision to say hey I was at the right place right time when this space kind of started from an institutional perspective I know more people than anyone I know more about these firms than anyone and this is a super low-key private space I think I’m on to something here and when co happened and I dove in every single day I probably spoke to a thousand minerals executives like throughout the year, Zoom meetings and inferson meetings like Casey, there’s like 1500 executives in the mineral space. So, it’s I talked to everybody, right? And I just saw like, wow, there is there is room for someone to be super in the weeds and to facilitate deal flow and place capital and do everything in between. And I had coincidentally started my minerals and royalties podcast January of 2020. So I launch it and then co happens like a month later and then the podcast really takes off. And so that was serendipitous timing and the combination of the relationships and the intel and the size of the space and the the timing of you know the development you know the baseball innings analogy of like where minerals was as a as an industry coupled with now having a personal bl brand and a platform you know gave me the courage to jump out on my own. I got my securities licenses and launched minerals and royalties authority and now I call myself a merchant bank because my wife and I own it and we invest off of the balance sheet as well very modestly I’ll say uh but predominantly we raise capital uh for minerals and non-op funds we divest assets on behalf of minerals and non-op funds and and then everything in between right I mean if it has to do with minerals and non-op talking to you I want to be in the middle of the chatter and that’s kind of my business models are just have access to everyone and have relationships and be on top of what’s going on. And it’s a you know, I kind of made it up along the way, Casey, but I’m having a blast. And uh you know what’s cool about having a podcast and a content platform is you get to collaborate with people like yourself that are kind of swimming adjacent to each other, but there’s there’s some cool overlap. And it was I was really pleased to hear that, you know, when you came on my podcast, some of my listeners have actually started to partner with you on on projects, which is which is amazing. The rising tide raises all boats, right? >> Yeah. Oh, man. I love it. Tim, so many questions right here, man. I had to write them down so I didn’t forget them. True. >> But let’s go here. Let’s go. This is real basic, right? Because our audience, some of them probably might just be like myself, an engineer working in the industry or maybe downstream, wherever they’re at, probably don’t even understand what minerals and royalties and non-op mean. So, just give them a quick breakdown of that and then we’ll dive into what you said. >> Yeah. So very quickly, you know, in the US, very uniquely to any other country in the world except parts of Canada, individuals own the mineral rights for oil and gas in the ground. Uh the government will typically own those internationally and they’ll hold, you know, tenders or farm out rounds or or bid rounds and give oil and gas companies the right to extract their minerals and then they’ll do some sort of production sharing agreement. In the US, individuals own those and they’ve owned those forever. And you know, the very generic example is great great grandpa owned a ranch in West Texas, had four kids. He put the mineral estate into his his trust. It got divided four ways to those kids. Those kids had four kids, they did the same, and those kids had four kids. And so what that example kind of personifies is a an extreme fragmentation of these interests. And so now you have oil and gas mineral interests fragmented across hundreds of millions of people like like to the extent or they’re not producing and they’re in the middle of nowhere to they’re producing 10 bucks a month to you know an individual and a family generating 100 plus million a year in revenue. So, it’s all shapes and sizes and the quote unquote institutionalization of the space that I referred to earlier was just capital coming in at scale to aggregate these fractionalized interest into investable portfolios. I always joke around and I call put Humpty Dumpty back together again, right? So it has the right amount of yield, the right amount of of growth potential and the and the right size and diversification that an institutional investor would want to put in their portfolio. So that’s minerals and you know minerals are just like a surface estate. There’s the mineral state. So it’s really real estate for oil and gas underground is the the very simplest way to think about it. And then non-op is minority participation in the drilling of a well. That that’s really at at its simplest form. So let’s just say you have Exxon Mobile drilling some wells in the perian. They might have 80% of the working interest. Meaning they are paying for 80% of the cost. Well 20% of the cost is going to go to minority interest holders. And that could be one firm, that could be 80 people. It it just depends on kind of the evolution of that lease. Uh but when if you are a 1% work interest owner in that well, you will pay 1% of the costs and you’ll get your proportionate percentage of revenue. And this again has always existed. You could be a lease holder and and you can get dragged along in a pooling order and participate in in development in very small fractionalized amounts. Or you could be an oil gas company that does acreage trades and ends up with a non-op portfolio just by putting together your acreage position for drilling drilling wells yourself to you know forming uh drilling partnerships at scale. So in the past the nanos space I would think of it as kind of two traditional buckets. You had very large drilling JVS typically with credit funds or some sort of financial player where it would be kind of planned cadence drilling over a period of time and it would be for a certain an AMI or an area of mutual interest and you would jointly develop they would commit $300 million to set operator set operator has to you know satisfy certain conditions in the drilling in the drilling agreement and they continue to drill along the way. The other kind of smaller version is the oil and gas guy who worked at Shell retires, has his prospect that he’s been coveting for his entire career. He goes out, leases it, goes to his buddies at the country club and says, “Hey, I I got all the seismic on it. I love this thing. It’s unloved. Like Shell looked at it 20 years ago. It was too small for them. No one’s paying attention. and everyone’s chasing shale. Let’s pass a hat around 9 million bucks and we’re going to drill two wells and if it works like I think it’ll work. We’ll all make 200% IRRa and if it doesn’t work it’s goose, right? Like the the rags to riches like you know kind of joke that or stereotype that you would see in the movies is was kind of that phenomena, right? When when drilling was really risky. Nonop for me and why I got into it again when you talk about institutionalization of minerals the current nonop space as we know it today really only started in 2017 18 and it was a function of ESG driving capital out of oil and gas you have folks like endowments and pensions on the equity side who whose stakeholder base has said no more hydrocarbons they’re evil like you know the whole headline whether it’s right or not is is for them. That’s that’s fine, you know, but the result of it is, you know, these were large ticket writers, right? Hundred, two, three, four, $500 million commitments to various private equity funds. And so when you suck out hundred million plus dollar commitments from a market, you know, billions of dollars leave, that’s a huge gaping hole. and the need to drill on gas wells to feed energy demand doesn’t go away at the same pace. Right? On the on the debt side, you had a lot of banks kind of traditional lending and commercial bank debt. A lot, you know, Canadian and European banks were big supporters of of oil and gas upstream drilling for a very long time. Same kind of thing. constituencies and ESG pressure, a lot of them exited or, you know, for those who stayed in, bank covenants got, you know, a lot tighter, right? Especially after all the money that was lost in in some of the downturns, 2014 as an example. So net result, less traditional debt capital available. So that void of capital was there, you know, got to love capitalism, you know, go USA. there’s always g money is going to find a way you know to a solution. So you had a lot of private credit funds pop up and then on the equity side that’s non-op funds were formed and so these non-op funds were formed to participate in the drilling and kind of fill that void of capital. Uh and so combined kind of the private credit markets and the non-op space have kind of come in to be that drilling partner. Now the other thing that’s a little different is the phenomena of the AF market. So an AF is just it it’s the bill to you know participate in the drilling of a well right I’d mentioned earlier you would have these large partnerships. Well it now becomes apparent that instead of doing some blanket long-term complicated partnership with someone and you don’t know what the future holds and what commodity prices are going to be and what costs are going to be. you could quote unquote cost average out your non-opositions as an operator and so you could sell the AFS individually and just sell the wellbor and they started to become a pretty liquid market for these of buyers these funds started to be raised to do that individuals from the mineral space started to buy these for tax purposes this is how I got into it was just having calls like this Casey and it was like nonup nup nup nup you know sidecar non-up fun, you know, looking to buy Nonop in in December to offset my royalty income. Like, I’m moving to the Nano space. Like, in a month, I think I heard Nonop mentioned 45 times in 60 calls. I was like, “Holy I got to I got to get up to speed and, you know, and get to know this nano space because everything I’m hearing, a it’s different than Minerals, but it’s very similar in a lot of respects.” >> Y >> and B, it sounds a whole lot like the mineral space in 20134. Like, I’ve seen this movie before. >> Yeah. Yep. So like let me just you know do the same thing I did in minerals and I have the playbook already so I can I can get there a little faster right and so that’s what I did around 2021 which is why my my platform is kind of dually focused on minerals and nana but you know going back just to wrap it up this phenomena of like participating in individual wells enabled a lot more interest to kind of come to the market where there wasn’t really a market before and and oil and gas companies wouldn’t really think to monetize um option optionality on their balance sheet in that way. So I think that the need for capital will be ongoing because of the need to to drill new wells and replenish you know the natural decline of of US production and and I just think it’s like a self-fulfilling treadmill. I I don’t think you quoteunquote run out, right? So, it’s it’s a fun space and they minerals and non-UP complement themselves very well. And so, when I’m meeting with investors, sometimes doing both makes sense. Sometimes the risk profile or the tax benefits of one or the other make more sense. So, it’s it’s great when I’m speaking with registered investment advisors and family offices and high net worths, I have more relevant things to talk about with them. And then the deal flow side, same thing. I would say my deal flow in terms of deals I I successfully broker and sell is probably, you know, 50/50 minerals and non-UP these days. And then everyone is intertwined from a networking industry standpoint. So whoever listens to this podcast, whoever goes to my events, minerals and non-op, you know, it’s all big one big happy family. So everyone’s potentially doing deals with everybody, right? So it’s a lot of fun. >> Okay. a couple things there and I’m going to circle back to like your kind of entrepreneurial journey and the layoffs. I think our listeners will really enjoy that. I want to dig in deeper, but I want to keep going with where you’re talking because there’s a ton of sort of we’ll call it you talked about swimming in the same lanes, but just common parallels between what you’re doing in oil and gas and what we are doing in real estate and it to tie it all together. Our listeners are a lot of times have both goes crossovers, but Tim, I want to talk about because I know in the space depreciation plays a big role. You kind of touched on it and as far as non-op and it offsets income just like in real estate, we go buy a rental property to offset and do the bonus depreciation, right? All right. So, I want to hear that is one. >> And two though, you go whichever one you like first. But the second thing is I want to talk about like risk and mitigation, right? Because you gave that example where you go drill a well and the guy the buddy the guy that goes to the country club and says, “Hey, we’re either going 200% IRR or a goose egg.” So, talk I’d be curious how you when you’re operating your investments or just looking at a deal. I’m assuming it’s a mix, but how do you manage like, hey, we’re going to go hit some home runs when it comes to non-op or some of them we’re just going to go play it safe and go with a proven operator. How does that work? >> Yeah, so I think in terms of um I I’ll talk to the tax stuff in a second and disclaimer uh not a tax expert. These are my own opinions and please everyone’s tax situation is very specific to them. So these are highle things you can use as a starter and then you can investigate it further with with a tax expert. But on diversification first. So I think strategies to mitigate risk. There’s diversification. Obviously this is a basic investment principle. Diversification by operator, diversification by basin, and then diversification by well count. So statistically speaking, I think well count’s probably the most important. If you can get in enough well wars and then spread your risk out across multiple operators, I think that that’s really helpful. So you get statistics on your side. Second is cost averaging. So if you’re going to invest into a fund or alongside a fund, whatever the structure is, the fact that that fund is underwriting deals all day long, every day based on current strip pricing and is looking to meet single oil economics and fund thresholds at that moment in time. you know, whether they buy at $50 oil or $100 oil, you know, theoretically doesn’t really matter as long as the deals are passing the underwriting thresholds at that moment. And if you’re buying all the way along the roller coaster together, you know, theoretically with, you know, cost averaging, you know, investment philosophy, you will smooth out your risk profile, right? >> Um, so that’s number two. Number three is hedging, of course. So if you want to lock in some some base returns and and have some downside protection having some sort of hedging program I think makes sense. I would say for minerals predominantly most groups will not hedge unless they have some sort of bank debt or you know in a larger acquisition they might have hedging to you know lock in returns because that cost averaging aspect. If they’re all of a sudden making a monster acquisition, they want to lock in returns at that moment because there’s probably some sort of income or distribution aspect to that deal that they need to deliver to investors. And so to go naked at, you know, single moment in time underwriting risk, I think is is a little scary. And so there there’s usually some sort of hedging component around larger deals. Then of course the banks will require you to hedge at some level if you’re if you’re um you know taking out an RBL or some sort of line of credit on the production in your portfolio. But a lot of folks like minerals because they just like the pure commodity exposure. So one thing that was really telling I was speaking with some investment bankers and then actually had a a meeting with the CIO of Texas Teachers. the bankers and and Carolyn from Texas Teachers were telling me we view uh minerals investing at scale, you know, so Texas teachers big player, call it 100 plus million dollar swings in minerals as one of the only plays to get pure commodity exposure at the asset level. And so if you want to go into a a commodities index fund, right, there’s fees and costs that drag down that kind of pure exposure. And then if you’re in a publicly traded company that does royalties, great. Some of them are better than others and they all perform great at certain times, but there’s still, you know, management incentives and and management costs and all that. So if you own minerals directly and have a thesis on commodity prices, i.e. you know there’s a lot of turmoil right now geopolitically and I feel like oil’s got a spike and I want to buy minerals at $60 oil and you believe it’s going to go to 100. If you want to play that thesis, Minerals is is one of the best games in town at scale because there aren’t really other financial products that exist to put that kind of money to work, 50, 100 plus million dollars to get that kind of exposure. So that was it’s kind of interesting to think about and and so you look and you go, okay, is that playing out in the market? Well, you have pensions, you know, like Texas teachers telling me firsthand that that’s a view they have. You have uh John Arnold’s family office years ago. They made close to a half a billion dollars in minerals acquisitions in the Perian in 2022. John Arnold was a ex-trader ran the natural gas book for Enron. So hedge fund guy clearly sophisticated enough to be taking views and risks on commodities. And what I heard through the grapevine is they had a thesis on oil going up and they when they bought those portfolios, don’t quote me on this, but I want to say roughly 70 to $80 a barrel and oil ran up to 110 the next year when I imagine there was a ton of flush production coming onto the portfolio. So, you know, well played like they they executed and and it and it worked. And then there’s another group uh Saxom Energy Partners who is family office back. But Adam Sin also an exhedge fund guy was one of the largest kind of anchor LPs in that fund went into that deal. And again I’m just going to make a similar thesis like he was wanting to get exposure to the commodity directly as a as a trader who kind of understands that world. So you know that from a from a hedging perspective in minerals that’s kind of like a holistic view but some interesting food for thought. Nonup has a lot more hedging and the reason noneap has more hedging is because you have cost exposure. So if if thing goes things go wrong you want to make sure you’re at least getting your capex commitments met and typically you know folks again will like to you know kind of lock in some of those base returns. Others will, you know, in in the non-op universe, there’s the folks who are, you know, hedging away as much risk risk as possible, not using any debt and basically participating the wells and distributing cash. And then there’s the folks who are saying, “We’re going to invest in these wells. We’re going to lever the cash flow. We’re going to compound that cash and then reinvest it back into new wells. Do that again. Do that again. Do that again.” and just create this giant snowball of cash in the future and really, you know, compound that original equity dollar. Those two strategies will have different levels of hedging along the way, but they both use hedging for the most part. And again, the main thing is no matter how uh aggressive someone wants to get in hedging, typically everyone’s going to be making sure they if hits the fan, they can meet their, you know, distribution clauses for the for the fund for investors, their their prefer rate, whatever it is, and meet their capex commitments so they’re not underwater and they lose the lose the assets to the bank. So yeah, so that’s uh you know, we’re talking about you know, risk mitigation. So diversification, hedging, and cost averaging. That’s the the main way I see it. And so what’s interesting about going back to your country club reference of pass the hat around, you know, 200% IR or donut that that’s kind of tongue and cheek. Uh, you know, I think is it that severe nowadays? Probably not. The major risk in that scenario if someone wants to do conventional drilling or just a smaller amount of wells today is just is just the statistical concentration risk that you’re taking. So does happen. There’s cost overruns. Maybe a well is supposed to come online. It’s September 5th today. Maybe you invest in a well and you’re planning and you’re modeling that it’s going to be completed and brought online October 5th. Well, it gets brought online November 5th. That really screws up your IR, right? And you know, there could be cost overruns. COVID could happen. CO 2.0, whatever that looks like. Like happens. Oil prices obviously can go up and down. And so if you only have two or three wells and you kind of underwrote them and invested them at the same time, you’re really, you know, your eggs are all in one basket. And that that’s challenging. What’s really cool and and what I what makes it exciting for me to bring the non-op space to investors today is hey you can get all the tax benefits that makes non-up investing really attractive and we’ll get into those in a second but you can go in with a manager that’s cost averaging in is a professional is is giving you exposure to 40 50 100 plus well boards in a portfolio right has the platform and the sophistication to get a line of credit, to do hedging, do all the things that are going to give you the appropriate amount of downside protection that you want as an investor while also giving you great asset level return exposure and the tax benefits. So, that didn’t really exist for investors pre 2017 and really at at more scale 2020 2021 like there there were very few players doing non-up precoid. So that’s kind of the exciting game in town. I think uh you know both of these things when I’m going to LA or Philly or New York or Atlanta, you know, Palm Beach, Miami, these are cities that are not, you know, predominantly known for oil and gas investing. And you know, I I could go to him and say, look around at the other industries you’ve invested into. Minerals is essentially 13 14 years old institutionally and Nonop is 7 to 8 years old but it’s underpinned by an industry that’s fourth fifth largest in the world in terms of you know total size and of dollars and and it’s hundreds of years old so really unique combination of opportunity set there uh which is why I obviously love it and have kind of gone all in on my career the tax stuff and this is where I I think your audience is is going to really appreciate you know the the these investment products is you have we’ll start with depletion um for for oil and gas wells. So, as a general rule of thumb, 15% of the revenue that you generate from oil and gas production, whether it’s non-op working interest or it’s minerals, you can write off about 15% of that revenue and cash flow each year towards depletion for the the, you know, depletion of the wells. Again, check with your tax experts, you know, 8020 rule here. That’s a general kind of back of the napkin math. Beyond that, there isn’t really anything tax efficient for minerals outside of 1031s, which we can talk about in a second, which is obviously very very familiar, very relevant for for the real estate space. But on the non-op side, if you’re looking for tax efficiency with oil gas, non-op is where it’s at. There’s something called intangible drilling costs. An intentional drilling cause is a is a section in a code in the in in the IRS that says an oil and gas company or an investor who is participating in the drilling of a well can offset the intangible drilling costs related to drilling that well referred to as an IDC. Now when this was instituted 100 plus years ago oil and gas drilling was extremely risky, right? It was I’m making up the statistics cuz I don’t know the exact numbers but call it like one out of 10 would work the other nine would be dry holes. So like the term wildcatting like really diff like really risky stuff. So to incentivize companies to take that risk they want the government wanted to give tax relief so that they would be incentivized to drill more wells and provide cheap energy for the US consumer. Right. Well, that tax code’s the same, but over the years, technology’s gotten better. There’s been hundreds of thousands, millions of wells drilled across the US, and specifically in unconventional basins. We’ve shifted now into manufacturing mode as an error. There isn’t really tons of testing. It’s kind of like you know the big companies Exxon and others who have started to consolidate these massive positions. They have the biggest balance sheets and access to the cheapest uh cost of capital in the world from an upstream perspective and they have massive inventories now and it’s just systematic development on proven technologies with economies of scale on cost efficiency. So like that’s where we’re at. Like from a risk perspective, there’s always risk, but it’s substantially lower than it was 100 years ago when the IDC tax code was created. >> So the investor gets to go in if you want to go in to a tier one, you know, from a real estate perspective, class A real estate in Manhattan, lower risk developed. You’re going to have to pay up for it, but you kind of know what you’re getting. You kind of know demand’s going to be there. or the market is, you know, is is there always your risk on the drilling side is lower. There’s offset data. Statistically speaking, that, you know, when you’re underwriting something, it’s just like if you’re going into real estate, you have tons of comps. Like, it’s just you’re you’re lowering the risk on on your your basis and your entry, and then you can mitigate the remaining risk with hedging and cost averaging and diversification like we talked about, but you you still get the benefits. And so typically general rule of thumb 80% of the cost of a well will be towards IDC’s 20% will be towards equipment and the equipment is what falls into the bonus depreciation uh department. Now with Trump’s big beautiful bill or whatever the hell he calls it. Bonus depreciation is is now back up to 100% I believe. So, you know, that obviously it helps the oil and gasing. The IDC’s are really the driver, but it’s an extra bump in in tax efficiency for oil and gas as well for that equipment part. So if you’re investing directly into a well, so if you’re a company or you’re in the GP of of an oil and gas fund, you can offset any type of active ordinary income in the year that those drilling costs and the bonus depre appreciation is uh is incurred. As an investor, you could be an LP, which for all the reasons you want to be an LP, you know, you’re not driving the car, limited exposure, all that. You still get the IC and the bonus depreciation benefits on passive income. So I think and you know you could have again I’m not a tax expert so how the you know you can acrue these tax credits you know through the life of a fund if you don’t need them you may or may not be able to apply them to different parts of your portfolio but at a minimum that cash flow that’s going to be churning out on that non-up fund at some point you can use those tax credits against those and so it’s kind of a self-sufficient tax vehicle from that perspective and and becomes really really attractive. And so we jokingly refer to it as the minerals in a non-op treadmill uh investment treadmill. So if you invest in minerals and they work out, you got this great asset base. It’s kicking out a bunch of cash. Now you got ordinary income exposure. What do you do? You look for tax efficient products. What do I know? I know oil and gas really well. Let me go into some non-opsells. You get the tax exposure to offset the ordinary income. Well, lo and behold, then it produces more ordinary income. What do you do? you invest in more non-up you diversify into more minerals to balance the risk profile and then and then it goes like this over and over and over again. So that’s what a lot of Texas families and a lot of individuals in our space do, right? And I’d love to get your thoughts on this cuz folks that I know that do both real estate and oil and gas love to add a third leg on the stool of that kind of dual strategy I mentioned. And now you bring in real estate. it brings in more diversification. You could 1031 back and forth. You could um you know, real estate has a different level of debt than oil and gas does. And there’s just different ways to kind of play them complimentary themselves in a broader portfolio, which is kind of your whole thesis, right, of bringing oil and gas guys into real estate. But curious how you’ve seen that guys you work with, how they’ve paired real estate with with oil and gas because I I always love hearing those stories. >> Yeah. Well, I think it’s so cool the different parallels and at the end of the day, it’s just yeah, diversification like you said in different asset classes and there’s so many so many intriguing things about what you said and the the appeal of that. But just to kind of drive the point home, make sure our listeners kind of are grasping it. So, I I’ll compare it to like a real estate deal. Like if I go fix and flip a house, I’m going to have ordinary income from that. Well, I can at the same year I can go buy a rental property and I have ordinary income. Well, I get depreciation. And it’s kind of funny because the the rule of thumbs are so similar. Like we look at a property. If I buy this house for $100,000, I’m going to about 20% of that I can write off in year one. So if I made $20,000 on a flip, I’m just using small easy numbers for somebody understand. They wash out. So I’m hearing you saying the same thing. So if you’re investing in royalties, right, and you go make you guys go cra let’s use bigger numbers, right? So let’s say that you made $20,000 a year in active income or it could be passive. They just have to match up. Let’s say the passive scenario, right? So they made as an LP, passive investor, they made 20,000. Okay. If they also invested in nonop and it was a million-doll project, you’re saying it’s about and they were passive. If that 20% it would pretty much wash out. Am I speaking that right? >> Yeah. Get like um give or take the >> Yeah. the a quick back in the napkin math, you know, equation that I’ve taken from guys who who run these funds and kind of have to dumb it down for investors to just absorb before getting into the models and everything. If you’re kind of maximizing the IDC and the bonus depreciation on an investment, >> it typically boils down to about a 33% cash tax benefit on a dollar invested. So assuming that dollar qualifies for the deduction, you invest a dollar, you’re going to get 33 cents back purely on tax savings that would have gone to the government before you make a return on the investment. So that’s really powerful, right? So there are there are fund strategies out there that have an interesting structure that enable investors to come in and actually participate at the GP level before reverting back to being an LP and they’re able to capture those tax benefits, participate in the drilling and offset, you know, capital gains, W2 income, things of that nature. So when you’re looking at an investment like Nonup that typically kicks out 20 to 35% yields depending on the strategy and you know you’re going to be getting 30 cents plus as a starting point of really sunk cost money that would have gone to the government. Really cool. Now you know there’s recapture and there’s all sorts of other things with any tax strategy. Most times you’re you’re kicking the can down the road. But if you can compound and reinvest tax savings gets really powerful. But because of depletion, if you if you stay in these these assets long enough, you can always lower your basis every year. Um you you cash flowed out. So that’s what’s kind of interesting versus 1031 where, you know, you’re really just purely deferring it. you know, the the IDC uh you know, and and bonus depreciation is there’s a lot of ways to play it. It just it just depends on your your you know, tax situation, what you’re looking to do with your cash, how you’re looking to manage risk, all that stuff. The other thing would love to hear you talk about 1031s a little bit just for everyone listening who may not know that minerals and nonop qualify for 1031 Litecon exchanges and you can do it from oil and gas to to oil and gas assets or real estate to oil and gas assets or vice versa. You know, I’m not an expert in it, but had a phenomenal uh episode on my podcast with Alan Brown, the president of Petroleum Strategies about two, three months ago. They’ve been in the business for 30 years and they specialize in energy related 1031s as a QI and have done 50 billion plus in in 1031. So they they have a little bit of a track record and Allen for an hour and a half went into the weeds on every nuance you could think about. It was freaking awesome. So if anyone is interested in doing 1031s and kind of crossing the bridge between real estate and oil and gas or or back into real estate like check out that episode. reach out to petroleum strategies like I they’ll be a great resource uh and explain any kind of gray areas that you’re thinking about cuz you know the one it was funny someone called me the other day they run a uh a minerals fund out of out of Midland and he’s like hey I I listened to your episode with Allen he’s a good buddy of mine really good he’s like we’ve done 50 1031s with them over the years and I I didn’t know half the that he was talking about I learned a ton. So, you know, go figure on that, right? So, if you know the rules, God, there’s so many ways you can leverage it. And it’s uh ju just like I remember when I had you on and you were talking about all these different scenarios where you just you can very strategically leverage different things to enhance the investment and and that that’s this is just one of those those tools for for the space. >> Yeah. Well, we’ll definitely we’ll put that link in the show notes. But guys, to drive this home, the funny thing is again a connection that I I made through met through Tim through his podcast. We bought this 120 unit apartment deal. And guess what? We actually last minute we had this in and I didn’t click till right now. We actually the way we were taking title had to do with them doing a 1031 exchange. That’s actually actually got into the deal to take maximize the tax benefits. So yeah, I would I’m going to go listen to that. I would encourage listeners too because I think a lot of people are thinking, “Oh, I if I do a So, here’s the thing, Tim. You’re always like in real estate, you’re doing a 1031 and the only downside of it I typically hear is the pressure, right? You’ve got to identify, you’ve got to and you sometimes you get locked into buying a deal that maybe you wouldn’t have already done, right? And you don’t ever want to be backed in a corner like I got to buy a deal and then buy a bad deal.” So this I think would be an awesome way to where okay now you can spread a wider net look at more deals and heck you might find out that the oil and gas type of asset is actually maybe it makes more sense from an asset level but if all else you’re making sure you get into the right deal when you do the second part right >> yeah I mean a a little plug I mean a large part of what I do is just to try to be a guide and and a helpful resource for folks so there’s been half a dozen uh individuals that have explored the 1031 one route and reached out to me and said, “Hey, I’m selling a commercial property or I’m I’m selling, you know, something in their real estate portfolio. Can you help me identify an asset?” And so, I know everyone in the space and know folks who were best fit to do that. And it’s it’s been a really good process. And along the way, you know, I’ve I’ve kind of figured out who who’s really good to work with in that process. who are the right independent engineers and advisers that those real estate investors are going to need to be guided along the way to make sure they can appropriately um underwrite and assess the risk of these deals. And uh if anyone here listening is thinking about selling an asset and wants to explore optionality on 1031ing, by all means reach out. I think what well you mentioned Casey, right? reach out to someone like Casey, explore optionality for that 45day window to pick pick your assets on real estate. Talk to me, look at it from minerals, and if you end up going with the real estate stuff with Casey, my feelings are not going to be hurt. I can just give you options, though, and it’s whatever options are best for you at that point in time. Um, the other thing I think which is really interesting, I feel like there’s an arbitrage that exists back and forth with real estate and and minerals. And I I’ll or just we’ll say oil and gas, minerals and and nana, but I’ll I’ll I’ll say it this way because real estate uses a lot of debt, interest rates can go up and down. I feel like and then with oil and gas, you have commodity prices going up and down. So there’s periods of time I can imagine that the real estate market might lock up or deal flow can kind of get gridlocked because of different things like interest rates like shooting up and shooting down, right? And same thing with oil and gas. And so I feel like if you have capital put aside and you’re looking to make investments, is there an opportune time to take your real estate dollars and put them into minerals and then an opportune time to put your minerals dollars into real estate and just continually do that back and forth and just pick, you know, there’s going to just be windows of opportunity that open and close all the time. And if you have access to the right deal flow and the right people you can trust to get the right, you know, eyes on the right stuff. I I know folks who do that, right, who have expertise in both and they do it all day long and it works, right? And you you’re you could diversify into different markets that oil and gas are not in. So when you look at like statistical diversification in your portfolio, if you want to get exposure to like the real estate Phoenix market, you’re not going to get that kind of uh macroeconomic exposure in oil and gas production. There’s no basins in Phoenix. So it’s just a madeup example. So I don’t know, just food for thought for folks to kind of kick some stuff around and explore. >> Yes. I love that. So a couple thoughts here, guys. I mean, yeah. I just to me, Tim, when we think about that, it’s like, yeah, you’re you’re playing both ends. And if you’re doing both and you’re involved in both, and like Tim said, you’ve got the right contacts that you trust, you could throttle up and down, right? Like like you said, like when one’s up or the other, like, oh man, I love that. I love that investment thesis. Money isn’t the destination, it’s the fuel to get you where you want to go. That’s the heartbeat of Revive Summit, unlocking capital, which is happening right here in Houston, Texas. At our previous summits, attendees said the connections alone were worth 10x of the ticket price. They left with new strategies, new lenders, and confidence that they didn’t need piles of cash just to take action. Our next summit is taking it even further. Day one is all about unlocking capital that you didn’t realize you even had. From 0% credit strategies to brokerage accounts to DSCRs and much more. On day two is where it all comes together. We get hands-on in workshops, hot seats, and small groups. So, at the end of the two days, you leave with your next 90 days mapped out, customized just for you. And because we want more of you in the room, we’re giving away five free tickets. All you have to do is like this post and comment your biggest takeaway from Tim’s podcast today for a chance to win. Revive Summit isn’t about isolated investment. It’s about building wealth that creates impact. come see what happens when you’re in the right room. >> So Tim, I’m going to I’m going to go back to the personal stuff now and just I think a lot of people love to hear kind of some a little bit more about your journey and how you’ve done it. But guys, if you we’ve gotten super technical today, which I’ve loved. If you guys want to go deeper, again, go check out Tim’s podcast. All right, guys, listen to it. I’ll put the links in the notes. All right, so you guys can go check it out. But if you want to go really deep into the weeds and get an understanding, I encourage you guys to go there. But Tim, let’s go into you talked about like the the inch deep but a mile wide and then it’s kind of funny then you eventually went into diving into the niches. But I’m curious when you were like having to get up to speed because a lot of people like networking we all know the value of that, right? Seems like you like mastered that and you did it fast like any kind of tips or things you learned along the way to like got you to do it so quickly, get up to speed and connect with so many people. Well, overnight 10 year success, right, as they say. Um, >> yeah. >> No, listen, I think uh everyone has their their strengths. For me, thankfully, you know, it’s connecting with people and I enjoy it. It it charges me up. You’re either introverted or you’re extroverted. Even if you enjoy people, if you’re introverted, you can go into a room and you just your energy will be drained. It’s like my wife. It’s why we’re together. We’re yin and yang. Um. >> Yep. Me, too. >> I go in a room, I get on calls like this. I have great meetings. I it is like charging up my battery. Yeah. You know, it’s a supercharged. And so I’ve always enjoyed learning and and you know, thankfully for me, my my work peer group, my professional peer group has been some of the smartest minds in finance and oil and gas, two of the biggest industries in the world. So what a phenomenal, you know, group of people to surround yourself with all the time. So >> you I’ve always been in kind of this advisory consulting >> seat where I can talk to everybody and so being able to look under the hood of like every innovation that’s happening, every business deals that are happening is fun to me. But I guess, you know, going back to like tactics and like going about doing that, I don’t know. I in the beginning of my career when I had more time and I didn’t have a family and it was like I’ll go anywhere. I I’ll go I’ll network to anything. Like don’t don’t be too fancy. Like don’t think you’re better than anyone. You never know when you’re going to meet the person who could unlock something incredible for your career. And I have so many stories whether it’s relationships that spawned into friendships or partnerships or back when I was more kind of selling software and stuff and partnerships at Energy Council. Like where some of my biggest relationships spawned from is like what I thought was going to be the biggest dog waste of time reception in Tyler, Texas or Denver or something. And I’m like, God, why am I doing this? And then it ends up if you’re just present and authentic and you connect with people, like good things can happen. Right now, over the years, I’ve been thoughtful about like I I don’t want to be going to everything. You know, obvious advertising, right? Ideally, you would advertise everywhere, but you don’t have infinite money to do everything. So, you got to pick what’s most effective. And so, that’s how I look at it with my time now. And you know, I like I’ve always been the guy who organizes stuff. You know, in college, I always hosted parties. And in in uh high school, I was the backdoor poker game. Like when World Series of Poker was going, I always had 20 30 guys in my house. So like I’ve always liked putting people together. And then I worked for an events company for seven years. So I basically have built my networking platform that I control, which is nice because I get to invite who I want there. And then I pepper in other third-party things that are very specific to minerals and nana. Yeah, I I think don’t be too proud proud. Uh go meet hands, meet people, shake hands. And then I would say like one thing I did in my career was it was a contest to get as many business cards as I could. And I find myself kind of going deeper and speaking to less people. Now, I think that is more of a function of I don’t need to speak to everyone in the room cuz, you know, maybe not everyone’s super relevant at that point in time or maybe I know a lot of the people in the room already and I don’t need to like shake hands and kiss babies and like do surface level interactions. But I would say if you can have like deep meaningful connection authentically that’s going to really go a lot further. So, you can get really thoughtful on okay, I’m going to try everything from a networking standpoint. Then I’m going to say, “Okay, tried everything. Not going to do that again. This was really good. Let me do let me do this again.” And then you just kind of go in and saying like, “Who can I connect with?” Like for real, you know, who can I build a rapport with? Who can I add value to? I One of the things I love um I don’t know if you’re a Gary Vaynerchuk guy, but Gary Vaynerchuk has >> a saying called 5149. So he said in life whether it’s your wife, your family, your clients, your employees, if you can live out 5149, you’ll win. And by 5149, he’s meaning give 51% expect 49% in return. You’re always giving more, right? You’re always overd delivering. And that, you know, he always says is, hey, I’m not a good sales guy. I just love the leverage of goodwill. I like always kind of being on top and saying in this interaction I gave more because I cared. And I think that’s a principle I’ve always had. You know, a lot of guys sometimes my career I’ve always connected. I’ve been a connector, right? So you talk to someone, I go, “Oh, I know someone who would be a really good fit for your business. Like let me connect you.” And then um you know, when I started my firm, you know, I’m putting dinners together and I’m putting receptions. I’m really trying to create as much connectivity and transparency in the space as possible. I have the podcast. People tell their stories. Now, on the flip side, I have a business that makes advisory fees on the lack of transparency in the space. So, it’s kind of counterintuitive if you think about it. Like the fact my ability to broker deals is a function of people not knowing who the right people are. Meanwhile, concurrently, I’m doing everything in my power to make people as connected and knowledgeable about each other as possible. And then I’m doing it in a content perspective. So, I’ve had folks say like, “Man, aren’t you worried about like just giving away everything?” And and I I would say just the goodwill and just genuinely saying like, “How can I help your business? Like, I’m not asking for anything in return.” How that’s circled back is is tremendous. And it’s it’s not a measured thing. I’m not keeping score, but you know, whether it’s directly in business or it’s, you know, good fortune personally or people helping me out or what whatever it is like in the balance of life, I feel like I’m I’m coming out way ahead on on those exchanges and I’ll continue to to operate my life and my business that way. And so that would be 5149 uh for sure would be would be advice. Yeah. >> Yeah. Oh yeah. I mean, it’s the abundance mindset and you I mean, it’s you said it’s ironic with the how you how you run your business and make money and then how you give everything, but I’m the same perspective, man. It’s like just give it. Most people won’t do it, right? But if you give and give and give, it just comes back and you’re living it out. And I think that’s that’s super cool. So, I wanted to re reiterate that point. Another one you made about taking the leap and just going. And I I have this I have this conversation with my wife all the time because I’ll be like she’s like, “Oh, why are we going and doing this?” or oh man, why are you doing that one? Or would you get out of this one? I’m like, I’m not always going to find the right connection or it’s not I’m not going to hit a home run on every networking event or every summit I go to or every conference, right? But you never know because there’s I’ve had the same same experience as you, Tim, where you go and you’re like, “Oh man, do I want to go this one?” And all of a sudden, you come out of it, you’re like, “I almost didn’t go there and I would have never made that connection and done this then that and it all >> Well, it’s the Yeah, it it’s the uh golden handcuffs of being a business development person, right? Because as soon as you decide to taper back something and then you go and go, you know what? >> Got to go to that again. Even though it seemed like a waste of time, like I got this huge deal out of it. Like, see honey, I told you. And oh, god damn it. Okay, I guess you’re going to be in the world more. I get it. I get it. >> Um, >> well, so another thing too, you know, if we’re going to go down the the personal route, a huge thing that’s molded me is personal development. So my journey and like I look at uh the biggest aha moment or realization I had after I graduated is that you know learning never stops and education never stops. I always kind of looked at it as you know you get in high school you you do as well in high school as you can to get into the college you want. you might do a master’s or some sort of secondary, you know, college education after that, but like after you get that degree, like you’re done and then it’s like your career and that’s so wrong. And what really replaced or became the new version of college and everything for me was personal development seminars. So, I’m a big Tony Robbins guy. I’ve been to 15 seminars over the years, and the ones I continue to go back to are the business ones. It’s amazing. Like, I I would say from a content perspective, I I know and I’ve heard most of it by now. There’s some refresh stuff over the years, but it’s the it’s the environment, the high energy, the thousand CEOs that in a room, the the cross-pollination of ingenuity and ideas and just saying, “I’m going to go somewhere six hours or six days in a row, 18 hours straight, and just completely turn off everything and focus on my business and focus on getting better and giving more and innovation, all that.” And so that you know uh and then over the years we’re you know Tony Robbins is very much like boom like make make it happen like you know jump you know jump off the cliff like do it now very kind of western like energy if you may like capitalist like America you know all that stuff. I’ve gotten into more of like the other stuff around I’ll call it like the yin to the yang of the west which is like the east which is like meditation and mindfulness and so my wife is a lot softer I guess in spirit than me so she’s gravitated towards that kind of personal development >> has gotten me into it so Joe Dispens is someone >> yes >> we’ve done a lot of work with if anyone’s doesn’t know who that is or is like eh meditation I got a the cal app for five minutes like Jodispens is assigned that basically is describing meditation through quantum physics. Like it’s fascinating data driven stuff and you know it when you combine that with Tony Robbins with with all the podcasts I consume with everything in between. My wife and I are going to a a seminar in New York run by a guy called David Geum who’s someone we just started listening to who I listen to in a podcast recently and like the principles from that are super interesting. So, like that is really helpful, I think, as you get older. I had a buddy reach out to me the other day. He was like, “Hey, I’ve had some tough stuff happen in my life. Like, some parents have passed away and, you know, I’m kind of depressed and I I don’t really feel like I don’t feel the the fire anymore for work. Like, do you have any advice?” And it’s just this is what happens. Like you have to constantly work on yourself and figure out what’s important and what your values are and what drives you and what fulfills you. And like what got me super pumped to wake up and work 15 years ago is not the same today. But I’m still fired to wake up and and and work, right? And and take risk and do that stuff. And the main thing, the main reason I have that drive is because I want to keep growing so I can give back more. Like that’s the purpose. >> Yeah. >> It’s not the sales target or all that stuff like because you get to a certain level of success. It you know we’re just human brains are the worst. Like they’ll normalize anything. It doesn’t matter how good it is. So you have to keep growing and doing different things. And so like that’s the ultimate why for me is just like and so I have I love you know anytime friends come over I love bringing them into my home office. Couple years ago, I got a a corkboard on the back wall behind my computers. And that corkboard on the top of it, it says, you know, the meaning of life is to find your gifts. The purpose of life is to give them away. And I just have pictures of memories we’ve created and charities we’ve donated to and all sorts of stuff that’s been created because I sit down at that desk and I bust my butt. And that is like on the tough days, like I look at that and it it inspires me. And so that’s like that’s where the creativity and the hunger still comes from to then you know apply the you know the business tactics and the innovation tactics and all that. And so I’m 36 now. I still got a long way to go in my career. But like that’s been a huge shift in the last five six years is just like I feel like it’s just upping your game. Like the game is a lot bigger. It’s a lot more profound and uh it’s it’s in big part to all those things, right? And continue to be a student of the game, right? to continue to learn and polish it. >> Yeah. Oh, I love so many parts of that, Tim. Even from like the yin and the yang, right? You’re getting you’re leveraging both the stuff from Tony Robbins to motivate you and then also the Yeah. Like you say, the Joe Despens, a great author. I mean, if you you’re mastering it and it makes sense why you’re being so successful, Tim, like you’re taking the best of both these worlds and implementing every day. So, man, that’s cool. I’m going to wrap up with our final four or we call it our freedom four questions for you. Before I go there though, I want to highlight guys, it’s such a cool story Tim has shared with you guys. And I think one part I think will resonate that we kind of went through quickly as he shared a lot, but you mentioned like when COVID hit and all the layoffs, right? And he was like that’s when you kind of mentioned royalties were already going and it was like they were lean and they didn’t they weren’t all stressed, right? I always talk about with our my financial freedom like the reason why I give back and why I want to help people is because I’ve been in those shoes. We were all there, a lot of us in oil and gas or in any industry during when COVID hit and you’re wondering and maybe today somebody’s asking themselves right now with AI like what’s going to be eliminated where am I going to be at? So anyway, I like how you were taking action. You had built you had built a foundation a and just built an incredible network and then you found this really niche space in royalties that was kind of like in a way was recession proof, right? People were doing deals and now it’s it’s grown. So, I think it’s just a really cool perspective to share people that like when they’re stressed or they’re trying to think about how they’re going to d-risk things or they’re going to what if this what happens here just the path you took and the fact that like royalties was like a it seem and actually give me that quick answer because I didn’t answer that. What would you say to somebody who’s intrigued by, let’s just talk royalties specifically, but they want to get into it, but maybe they’ve only got 50,000. And actually, can you can they do it if they’re are there nonacredited opportunities to get into royalties andor if they’re credited? >> Yeah. So, the the the simplest way always if you’re unacredited is to look at the publicly traded companies, right? Okay. And you could if you have an advisor that that’s like a simple way to get access. Yes, there’s opportunities. I think, you know, at that level, you can I think jump in on a deal with someone who’s kind of passing the hat is probably what comes to mind the most. >> Mhm. >> You know, funds that are out there that are kind of doing, you know, regggae type raises. Like there’s not as many of those quite frankly. It’s more like the friends and family like circles. >> But listen, I think it’s a incredibly divisible asset class. So, like you could buy $1,000 worth of minerals out of a million dollar package. Like you really could uh go to Energy Net, Energy Domain, All Gas Clearing House. These are auction platforms that will have a lot of smaller assets potentially to to go bid on. I would, you know, advise everyone if you’re going to go down that road, you know, make sure you’re educated enough to be able to underwrite these things. you’re going to be competing with professionals that have data and software and engineers and geologists and all that stuff. So, if if you don’t have that background, just surround yourself with some consultants who do and then you can, you know, take a look at it. And I’m happy to anyone who’s curious. I I love talking to anyone who’s interested in the space. So, if you just want to ask questions, there’s no such thing as a bad question. if you want to get access to some of those independent consultants. I know most of them happy to make introductions for you like help you, you know, start down the yellowbook road that is uh that is minerals and royalties cuz it’s a great space and I think once you get started and get a little taste of it, especially if you’re a deal junkie, there’s a lot of deals in this space, all shapes and sizes, it’s it’s fun and they’re great people, too. like really just good people in this space that a lot of them have done really well and I think they they don’t have too big a head on their shoulders. They just they realize like life is good and family is important and all the all the stuff that matters. So it it’s good to do business with people that share values for sure. >> Oh yeah, I love it. Every time I this is talking to Tim several times now. Every time I do I’m like I start getting that shiny object syndrome. I’m like man I would love I’m a deal junkie too, right? So I just love this space. But anyway, you’ve laid out a good blueprint so people can do it and not have to know all the answers. But but all right, let’s segue. Let’s go to these final >> freedom four. What’s that? >> All right. So, if you lo I think I know part of your answer here, but I’m going to let you give it to us and we’ll do these in about five minutes, Tim. But if you lost it all today, what’s the first thing you would do to get it all back? >> I would reach out to trust the relationships I have and I wouldn’t be afraid to ask for help. I’d have humility and sincerity and and I know they’d be there to help me out and I wouldn’t be if people said no, I wouldn’t take it personally and I’d just go on to the next one, right? And and >> you know, I think you never know where you’re going to be in the future. You know, hopefully you never have financial hardship, but while you have abundance, if you help those in need whenever you need it, you know that it comes full circle. So, >> love that. I figured you’d be drawing on that network you’ve you worked hard to build. Cool. All right, number two. What’s one deal you’ll never do again and why? This is an interesting one for you. Like could be any any any type of deal or like a good learning you’ve had on a deal that maybe >> Yeah, I I’ll just kind of generically say this like cuz most of the deals I’m involved in as an adviser, >> I would say when I go in to a deal and I’m like, man, you know, this is going to be really hard to sell. like there isn’t really a market for this and the date is a mess and this and that and instead of saying I’ll just figure it out kind of assessing it and being like this is not a good allocation of my time like in that like a holistically I’m doing more and more of there’s a difference between just being busy and fgging deals all the time there’s a busy a difference between like getting a really good deal and and getting something done because that’s the only time I make money is when you actually get it sold. So, if someone comes to me with like an undeveloped mineral package in the Powder River Basin, gosh, that’s going to be really difficult to move. I’m not going to take it. Can someone else sell it? Maybe. Is there a buyer out there for it? Somewhere, but not worth my time, right? >> Yeah. >> As an example, so more of like a principle learning, if you may. >> That’s so good, man. That’s a good one. I’m I’m a listen to you, too. That’s a that’s a guilt of mine, right? I’m like, “Hey, I could do I could figure that out. >> I can do it. Yeah, let me just bring it, you know? I’ll figure it out.” Tony Robbins like there’s always a way, find a way, right? >> Yeah. >> You’re like not on this one. >> Yeah, that’s that’s great wisdom. >> Well, it could be, but then the net the net uh benefit of your time ends up, you know, the ROI on your time be gets drawn down. So, like at what point is there that that line? >> Yep. Love it. Okay. Number three. What’s the one thing you do that most other investors overlook? You’ve shared quite a few today, but what would be the one you would say you do most other people don’t? I I would say like just the the the grinding and like going out there and not being too fancy. I think that’s I’ll always have that in my DNA. I think if some people reach a certain level of success, maybe they’re they think certain things are beneath them. Like I don’t I don’t really care. Like I’ll always know what what kind of DNA got me to where I’m at and keep that rooted. Just be smart and and a little more sophisticated as I go. So you you mentioned from the perspective of investor. I just look at it like if I’m building my network of investors and helping place capital or helping do deals like just being scrappy and just not sitting on an ivory tower. Like that’s I think always keeping perspective, right? Never thinking you quote unquote made it. Yeah. >> Not because I’m trying to be the underdog. Just like >> being grateful and always keeping things in perspective. >> Yeah. Oh, love it. Love it. Okay, last one. We’re going to go deep here. So, this we call this our fiveyear mirror question. So, two-parter, Tim. If you could go back, this one’s the first one’s a little kind of a softball easier. If you go back five years, what is one piece of advice you would give yourself that would have changed the game? And then the second part is looking five years. All right. So, Tim, you’re 36 today. You said when you’re 41, what’s some advice you think you would tell yourself today? So, I’ll let you take the first one. Five years ago first. >> Yeah. Five years ago. So, this is co. So, it’s interesting because we just told that whole story. So, yep. >> Yeah, I think uh >> there’s been there’s been a couple of things like whether it’s patterns in in my relationship or patterns with financial investing and saving or or patterns with like work habits at at work that my advice would be, you know, take a step back, pause for a second, you know, kind of ask yourself, you know, why is this in my movie? Why is this happening again? Or why am I doing this? and try to see the the broader perspective in it. And I think I could have maybe saved a couple of laps around the track to learn a lesson. And that’s just kind of a broader principle. So that that would say cuz you know I look back and I would say I wouldn’t change everything. I love the journey but you know there’s there’s been some bumps in the road and I think it would be that like how many times does life have to keep bringing a certain pattern back until like it hits you in the head and you go okay I get it now. Like I’m gonna change that behavior. I’m gonna learn or I’m gonna do this. So that’ll be that. If I’m 41, what advice would I give myself now? >> Yeah. Thinking because you you’ve you’ve obviously achieved a lot of this wisdom. So kind of looking back, what do you think? And maybe something you challenge yourself every day, right? You’re like, I know in 5 years I’m going to be telling myself, don’t do this, you know? >> Yeah. I would say uh don’t put yourself in a box and don’t put limits on what’s possible because where you’re at now is so much bigger than you ever thought you would get to. And you know I can say that now because it’s the same from five six years ago. So >> you know it was really interesting. I I’ll tell kind of a side story related to that comment looping back Tony Robbins. So I remember >> when I was working at my old company before I started my business. I had a you know good salary and commission structure and it was a we had a good life right? We had beautiful home good neighborhood and we could travel. We weren’t like super wealthy but we had a really good life. And um I always told my wife like I don’t need to do anything else or I don’t need to make millions of dollars because and I kind of put a connotation on like then I’d be greedy or something like I I kind of put that down and um I went to a Tony Robbins event and he someone raised their hand and it was about limiting beliefs and it was something similar to like what I was just describing like I don’t need to make more money or I don’t need to take this risk. blah blah blah. And then he just point blank looks at him and goes, “You selfish asshole.” And everyone’s like jarred. Cuz this is what he does. He uses language and he like He catches your attention. And he’s like, “God gave you all these incredible gifts and just because you’re selfish or you’re scared or whatever, you’re not going to realize your full potential.” And all that money you could have been making, even if you don’t feel like you need it, you could be giving that back to the world and changing the world. And because you’re thinking small, you’re robbing the world of your gifts and everything. And in that moment, I was like, “Oh my god, like I can grow. I can expand infinitely. I could make a hund00 million if I wanted and still have my core principles and I could theoretically give it all away.” Now, I’m not going to. I enjoy life. I, you know, have vacations. I like nice things just like everyone else. But it was a mindset switch. And so I would say when I was back then what I thought was a lot of success or a lot of responsibility or whatever or whatever at that stage. I’m just saying when I’m 41 I think I can’t fathom what that amount of responsibility and success would be then. But looking back as a 41y old to me now it’s say it’s a lot bigger than you think. So don’t limit yourself. Makes sense. >> Oh yeah. Oh man. That’s a huge one that’s connected with me. I didn’t hear from Tony Robbins but I’ve heard it from others. It’s like, yeah, you do good so you can give more back to others and and it’s it’s just shown with what you’re doing and your vision and your your why, right, while you get up every day, Tim, and and keep keep going. Like you said, you could definitely be easy to just coast right now, but you want to keep giving back. So, >> well, Tim, it’s been awesome having you as a guest and reconnecting with you. I think you showed shared a ton with our audience today given a different perspective on different investments like got really technical on how they work but also just your path and how you got to where you’re going and and I know there’s just other people today working their W2 that are having these same limiting beliefs that you had and the steps you took and now where you’re at. It’s super inspiring. So Tim, really appreciate you coming on today. >> Casey, I’m uh I’m always fun talking to you and I’m I’m sorry it took so long to do this. We’ve been wanting to do this for a while and I’m I’m glad it was now cuz uh it was a great conversation and I enjoyed it and I can’t wait to see you again in person soon. >> Yeah, we’ll be Hey guys, we will be doing a revive summit. We’re working get Tim on our schedule for January so he can come speak to us. So be on the lookout for that. Thanks Tim. >> Awesome. >> All right, thanks Casey. >> If you’re listening to this because you’re chasing freedom not just for yourself but for your family, then don’t let this just be the background noise. Take action. Shoot me a DM. Reach out. Find a property. Make a call. Remember, small moves today create the life your future self and your family will thank you for tomorrow.