Newsletter #2

MARKET PULSE
Oil Price Stability: What It Means for Royalty Investors

After months of volatility, oil prices have found a footing, holding in the $62 to $65 WTI range. This stability comes from a balance of forces: OPEC+ has carefully managed supply, U.S. production growth is moderating, and inventories remain steady. Even geopolitical tensions, which often rattle markets, have had little lasting impact on flows.

Looking ahead, most forecasts point to oil prices staying in this band through the near term. Prices could move higher if demand surprises or supply is disrupted, but they could also slip below $65 if global growth softens or OPEC+ accelerates its unwinding of production cuts.

For royalty investors, this stability is welcome news. Cash flows remain steady, particularly from low-cost basins like the Permian and DJ, where breakevens are among the best in the U.S. On the natural gas side, new LNG export facilities and rising demand from data centers are creating additional opportunities, especially in gas-rich regions.

The takeaway is clear: in a market where operators must adjust capital plans to price swings, royalty owners continue to benefit from production without taking on operational risk. Stability and commodity exposure work in your favor, making royalties an attractive piece of a diversified portfolio.

ROYALTY SPOTLIGHT
Working Interest vs. Royalty Interest

In oil and gas, not all ownership is created equal. Two of the most common forms are working interest and royalty interest, and the differences are critical for investors to understand.

A working interest means you share directly in the costs and risks of drilling and operations. Investors are responsible for their share of expenses — everything from drilling and completion costs to ongoing lease operating expenses. While working interest offers a slice of the upside, it also exposes investors to significant financial obligations and potential capital calls.

A royalty interest, by contrast, is far simpler and far less risky. Royalty owners receive a portion of production revenue, free and clear of drilling or operating costs. Operators bear all the expenses of getting oil and gas out of the ground, while royalty owners enjoy pure cash flow tied directly to production and commodity prices.

For investors, the distinction couldn’t be clearer: working interest is about operating risk; royalty interest is about passive income. That’s why at PetroPeak we focus exclusively on royalties — they provide exposure to energy upside, steady distributions, and tax benefits, without the burden of operational risk.

BASIN FOCUS
DJ Basin — Shifting Gears, Selective Growth

The DJ Basin is proving that it’s far from yesterday’s play. In recent months, acquisitions have picked up, with deals reshaping the operator landscape and reaffirming investor interest. The most notable was Elk Range Royalties’ $905 million acquisition of Occidental Petroleum’s mineral and royalty position — a transaction that underscores just how much capital is flowing back into the basin. At the same time, Prairie Operating Co. has expanded its footprint through bolt-on acquisitions, and private players like Bison Oil & Gas IV are making aggressive moves to become the largest private operator in the region.

Meanwhile, stability at the top end of the operator mix remains strong. Chevron continues to highlight its DJ Basin acreage as some of the most competitive in its portfolio, with breakevens below $50/barrel giving it resilience even in lower-price environments. Civitas Resources is maintaining its production outlook through year-end, even as it trims capital spending and divests non-core assets. These moves show a disciplined approach — balancing shareholder returns with steady development across core acreage.

At the same time, smaller and mid-sized operators are stepping up. Bison’s acquisition of ~48,000 acres and plans for 58 new wells are a signal that entrepreneurial capital sees opportunity where others are divesting. By leaning into efficiency, technology, and targeted acreage, these firms are positioning themselves to fill the development gap left by larger companies tightening their capital discipline.

For royalty investors, the implications are clear. Large operators provide a foundation of stability and long-term production, while smaller entrants create incremental drilling activity and near-term cash flow opportunities. Combined with improving economics and a basin that’s becoming leaner and more competitive, the DJ Basin offers a blend of resilience and upside that many overlook. For those with exposure to royalties here, the result could be longer production timelines, fresh well activity, and more durable income streams.

• $905M – Elk Range Royalties’ acquisition of Oxy’s DJ Basin mineral & royalty assets

• <$50/barrel – Chevron’s estimated breakeven on core DJ acreage

• 58 new wells – Planned by Bison Oil & Gas IV following its recent 48,000-acre acquisition

• $100+ million – Recent bolt-on investments by Prairie Operating Co. to expand its DJ footprint

• 2 Major Anchors – Chevron & Civitas maintain steady production forecasts into year-end

INVESTOR ADVANTAGE
How PetroPeak Manages Risk

Every investment carries some level of risk. At PetroPeak, our job is to minimize risk where we can and manage it where we can’t. Here’s how we approach it:

• No Drilling Risk
  We focus on mineral and royalty interests — which means we don’t pay to drill wells. Operators take on the cost and execution risk, while our investors share in the revenue from production.

• Cash-Flowing Assets First
  We prioritize acquisitions that are already producing. That means income starts quickly, rather than waiting years for uncertain development.

• High-Quality Basins & Operators
  We target proven U.S. basins like the Permian and DJ, where geology is strong and breakeven costs are low. We also align with established operators who have the scale and track record to deliver consistent results.

• Diversification
  By spreading investments across multiple wells, tracts, and operators, we reduce exposure to any single project or commodity swing.

• Conservative Price Assumptions
  Our models don’t rely on best-case pricing. We run scenarios at lower oil and gas prices to ensure assets still make sense in a down market.

The result: investors capture the upside of U.S. energy production while avoiding the most common pitfalls of oil and gas investing.

LOOKING AHEAD
Investor FAQ:
How is my money protected in a royalty investment?

Your capital is tied to ownership of real mineral assets, not a promise or debt instrument. That means even if an operator changes, your royalty rights remain intact. We also avoid drilling risk — operators pay the costs, while our investors receive their share of production revenue.

At PetroPeak, we believe royalties are more than just an investment — they’re a strategy for stability, income, and long-term wealth preservation. If you’re ready to explore how royalties can fit into your portfolio, visit www.petropeakinvest.com or reach out to schedule a conversation with our team.