Newsletter Oct 28,2025

MARKET PULSE
Supply Tightness Meets Capital Restraint — The Shale Disconnect

Despite steady U.S. production levels, a widening gap is emerging between physical supply conditions and capital investment trends. Global inventories remain historically tight, yet operators are signaling restraint — a sign that the next production surge may not materialize as easily as in past cycles.

According to the Dallas Fed’s latest energy survey, activity in the U.S. upstream sector softened again in Q3, with the business activity index falling deeper into negative territory. Executives cited higher service costs and uncertain pricing as key reasons for scaling back 2025 drilling plans.

Meanwhile, Wood Mackenzie reported that U.S. oil production growth is plateauing as capital budgets tighten and operators focus on debt reduction and shareholder returns rather than new drilling.

On the global side, the International Energy Agency (IEA) continues to warn of potential supply deficits heading into 2026 if investment doesn’t recover, citing project delays and under-spending across multiple basins.

For investors, the message is clear: the same capital discipline that limits near-term production also supports commodity prices and enhances the value of royalty income. With fewer new wells being drilled, existing producing assets — and the royalties attached to them — remain the most efficient way to capture ongoing energy returns without operator exposure.

ROYALTY SPOTLIGHT
Surface vs. Mineral Rights — Understanding What You Really Own

In oil and gas, ownership can be more complex than it appears. Landowners often assume that owning property includes everything above and below the surface — but in reality, surface rights and mineral rights can be separated (“severed”) and owned by entirely different parties.

Surface rights refer to the ownership of the land itself — what can be seen, built upon, or cultivated. The surface owner controls physical use: farming, building, or grazing. However, if the mineral rights have been sold or leased, that surface owner may have no claim to the oil, gas, or minerals beneath.

Mineral rights, by contrast, grant ownership of the subsurface resources and the economic benefits derived from their production. The mineral owner has the right to lease those minerals, receive bonus payments, and collect ongoing royalties from production — all without the operational responsibility or risk carried by producers.

In regions like Texas, Oklahoma, and Colorado, many parcels have long been severed — creating a vibrant market for mineral and royalty ownership. For investors, this offers a unique opportunity: to earn passive income from proven U.S. energy production without owning or operating the surface land at all.

At PetroPeak, we specialize in acquiring and managing these mineral interests, allowing investors to participate in the enduring value of American energy — from the ground up.

BASIN FOCUS
The Yeso Trend — Shallow Depth, Strong Returns

The Permian Basin continues to prove that efficiency and innovation still matter as much as scale. Nowhere is that clearer than in the Yeso trend of the Northwest Shelf — an area once considered mature, but today delivering standout results thanks to lower-cost drilling and disciplined capital management.

Spur Energy Partners, a privately held E&P, has become one of the basin’s quiet success stories. The company is producing roughly 36,000 boe/d from the Yeso play while operating some of the lowest-cost wells in the Permian — with drilling and completion costs around $700 per lateral foot, breakevens near $51/bbl, and consistent investor dividends supported by strong cash flow.

The shallow nature of the Yeso formation — typically between 4,000 and 6,000 feet deep — allows operators to drill multiple stacked benches with shorter laterals, dramatically reducing costs compared to the deeper Delaware or Midland formations. According to Spur’s leadership, that cost efficiency translates directly into higher free cash flow and more resilient returns, even in a $60 oil environment.

For investors, the Yeso story underscores a larger theme: that capital discipline and shallow development can coexist with strong yield potential. Mature basins like the Northwest Shelf still hold high-value royalty opportunities — where efficient operators generate consistent output and royalty owners capture the upside without exposure to drilling or operating costs.

At PetroPeak, we view regions like the Yeso trend as examples of what makes royalties so compelling: real production, low break-evens, and steady income from proven acreage that’s still evolving.

INVESTOR ADVANTAGE
Unlocking Opportunity with Self-Directed IRA Investing

Many investors are surprised to learn that their retirement dollars can do more than just follow the stock market. Through a Self-Directed IRA (SDIRA), investors can use existing retirement funds to participate in alternative assets — including oil and gas mineral royalties — and gain the benefits of passive income and portfolio diversification.

PetroPeak has partnered with Preferred Trust Company, a trusted self-directed IRA custodian, to make this process simple and accessible. Preferred Trust specializes in helping investors open or transfer existing IRAs and allocate funds into qualified opportunities like PetroPeak’s mineral and royalty investments.

Here’s how it works:

1. Open or Transfer – Preferred Trust helps you open a new SDIRA or transfer funds from an existing IRA or 401(k).

2. Choose Your Investment – You select from approved alternative investments, including PetroPeak’s royalty offerings.

3. Earn Tax-Advantaged Income – Your royalty distributions flow back into your IRA, where they grow tax-deferred or tax-free, depending on the account type.

For accredited investors, this approach offers an effective way to diversify retirement assets beyond traditional equities and bonds — while maintaining tax efficiency and control.

If you’ve been looking for a smarter way to put your IRA capital to work in real, cash-flowing assets, PetroPeak and Preferred Trust can guide you through the process from start to finish.

LOOKING AHEAD
Energy Transition Realities

In next month’s issue, we’ll explore how traditional oil and gas assets continue to play a critical role in powering an evolving energy economy. Despite rapid growth in renewables, real assets like mineral royalties remain essential for meeting global demand and delivering stable, inflation-resistant returns. We’ll break down where hydrocarbons fit in the long-term energy transition — and why disciplined, cash-flowing investments still anchor resilient portfolios.

Ways to Connect with Us:
Email: [email protected] 
Website: www.petropeakinvest.com
Schedule a Call: Book a time here
Follow us on LinkedIn and socials: PetroPeak Investments LLC, @petropeakinvest

Whether you’re exploring royalties for the first time or looking to deepen your exposure, PetroPeak can guide you through every step — from understanding the asset class to participating in high-quality, cash-flowing deals.

Because at PetroPeak, it’s about more than just investing. It’s about building long-term income you can count on.

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