Originally published in AAPL Landman Magazine
I have had landmen unfamiliar with Texas ask me what RRD 1-6 covers. The area covers roughly one-half of Texas and can be described rather loosely as everything east of a line running from Fort Worth south to Austin and then to Del Rio, Texas.
A few transactions since my last report focused on oil rather than gas. Natural gas is hovering around the $2.00/mcf range, which is not economical. The largest deal was Conoco’s acquisition of Marathon, which has high-quality Eagle Ford assets. Repsol purchased Impex’s 70,000 net acres in the Eagle Ford, and Wildfire acquired Apache’s 237,000 acres in the East Texas Austin Chalk. The rig count in Haynesville has dropped 30.0% since the first quarter of 2024 and 20.0% in the Eagle Ford. This has meant fewer jobs for landmen, and I have heard of several long-time brokerage shops closing due to the lack of work.
Despite the current challenges, this area's oil and gas industry has a history of resilience. We can expect a rebound, as we have seen in the past, once we navigate through this consolidation phase. The process will begin with companies like Chevron, Conoco, Exxon, Apache, and Oxy starting to divest the noncore assets they acquired to smaller private equity-backed companies with lower operations costs. This will create opportunities for landmen with divestiture and acquisition due diligence experience and in-house landmen, instilling hope and optimism for the future.
The real future for Landmen is to adapt as US car companies have in the last few years. They started manufacturing hybrid vehicles, and their sales soared. So, to stay in business and be relevant as a landman, you must be a “Hybrid Landman." Continue to provide services to the oil and gas industry but reach out to renewable companies to research titles and negotiate solar, wind, and battery storage rights. Cinco started several years ago as a hybrid land firm and currently has projects in wind, solar, battery storage, lithium, geothermal, CCS, and many more renewable or transition energy projects. The AAPL can help you get the training and education you need to make this transition. Many other land firms have adopted the hybrid model and are doing well.
Being a landman in RRD 1-6 has some special benefits. Several technology firms have moved to Texas, with more to follow, including Tesla and Oracle, Austin, and HP, Houston. As part of the move, “Data Centers” are being built in the DFW area, along the I-35 corridor from Waco, Austin, San Antonio, and Houston, to support their Artificial Intelligence (“AI”), which requires massive amounts of energy. Amazon, Google, Facebook, and Microsoft are all investing in Data Centers in Texas and require clean energy (solar, battery storage, wind) to provide as much energy as possible to the Data Centers. By 2033, the energy needed to power these Data Centers in Texas, according to ERCOT, will be enough to power 650,000 homes or 3,300MW.
There is also land work in East Texas related to mining lithium and developing geothermal resources along the Gulf Coast using enhanced geothermal systems (“EGS”). Remember, if you want longevity in this industry, do not be a petroleum or renewable landman; be an Energy landman. If you need help finding these opportunities, please get in touch.