Company Overview - Kinetik Holdings (NYSE: KNTK) is a significant player in the US oil and gas infrastructure sector, involved in gathering natural gas, liquids, crude oil, and water from production sites, as well as compressing, transporting, processing, and treating these resources [1] Analyst Experience - The analyst has over 10 years of experience researching companies across various sectors, including commodities like oil, natural gas, gold, and copper, as well as technology companies such as Google and Nokia [1] - The analyst has researched more than 1000 companies in-depth throughout their investing career [1] Investment Focus - The analyst has transitioned from writing a blog to a value investing-focused YouTube channel, where they have researched hundreds of different companies [1] - The analyst expresses a particular interest in covering metals and mining stocks, while also being comfortable with other industries such as consumer discretionary/staples, REITs, and utilities [1]

Company Overview - Kinetik Holdings (NYSE: KNTK) is a significant player in the US oil and gas infrastructure sector, involved in gathering natural gas, liquids, crude oil, and water from production sites, as well as compressing, transporting, processing, and treating these resources [1]. Analyst Experience - The analyst has over 10 years of experience researching companies across various sectors, including commodities like oil, natural gas, gold, and copper, as well as technology companies such as Google and Nokia, and numerous emerging market stocks [1]. Investment Focus - The analyst has transitioned from writing a blog to a value investing-focused YouTube channel, where they have researched hundreds of different companies, with a particular interest in metals and mining stocks, while also being comfortable with other industries like consumer discretionary/staples, REITs, and utilities [1].

Core Insights - Texas has a long history of wealth generated from natural resources, particularly oil and gas, which has led to the establishment of funds that provide financial benefits to its citizens [1][2] - The Texas Royalty Plan allows individuals, even non-residents, to receive payments from oil and gas revenues, with some individuals reporting substantial earnings [6][7] - The state is experiencing a significant boom in oil production, with a notable increase in annual output due to advancements in shale extraction [8][15] Texas Oil and Gas Wealth - Texas has two major funds, the Permanent School Fund and the Permanent University Fund, which are financed by oil royalties and support educational initiatives [2] - The state has seen a 577,990% increase in oil production over the past 17 years, contributing to the financial benefits available to citizens [8] - The Texas Royalty Plan has consistently raised payments for 28 years, indicating a stable income source for participants [7][15] Investment Opportunities - The Texas Royalty Plan is associated with Master Limited Partnerships (MLPs) that are required to distribute 90% of their earnings to shareholders, offering high dividend yields [10][22] - Current yields for these investments range from 6.8% to 9.6%, which is significantly higher than average stock market dividends [11][14] - Companies like Enterprise Products Partners (EPD), Energy Transfer (ET), and Western Midstream Partners (WES) are highlighted as potential investment opportunities within the Texas oil sector [24][26] Market Dynamics - Texas is becoming a hub for data centers due to its cheap and abundant energy, particularly natural gas, which is essential for powering these facilities [19][20] - The state's energy infrastructure is expanding, with a record production of 12.62 trillion cubic feet of natural gas anticipated in 2024, further supporting the growth of the Texas Royalty Plan [20] - Legislative efforts are underway to enhance Texas's digital infrastructure, positioning the state as a leader in the AI data center market [18]

Group 1 - Kinder Morgan is the largest natural gas midstream company in North America, making it the largest gas streaming company globally [2] - The company is being added to the coverage of oil and gas infrastructure companies, indicating its significance in the sector [2] - The analysis provided by the investing group focuses on discovering investment opportunities in the aerospace, defense, and airline industries, highlighting the potential for growth [2]

Core Thesis - LandBridge Company LLC is viewed positively due to its high-margin, capital-efficient business model and durable competitive advantage from extensive land holdings in the Delaware Basin [2][6] Financial Metrics - As of September 10th, LandBridge's share price was $52.40, with trailing and forward P/E ratios of 67.74 and 21.60 respectively [1] - The company has projected free cash flow of $160 million annually from existing operations, resulting in an EV/FCF of approximately 27 at the current share price [5] Revenue Generation - The primary revenue source for LandBridge is leasing land for oil and gas infrastructure, with produced water (PW) handling accounting for about 60-70% of total revenue [2][3] - The company's land use efficiency has improved from $724/acre to $1,018/acre, with a realistic fee range of $1,000–$2,000/acre for PW handling [4][5] Growth Potential - Since its IPO in mid-2024, LandBridge has expanded its land holdings from 72,000 acres to 277,000 acres, with potential processing capacity for over 5 million bbl/d of PW [4] - Future growth catalysts include continued land acquisitions, enhanced surface efficiency, and potential data center projects leveraging available resources [6] Competitive Position - LandBridge's business model is resilient to commodity price fluctuations, as its revenue is more closely tied to the scale of oil and gas development rather than oil prices [3] - The company maintains minimal maintenance CAPEX, resulting in free cash flow margins around 70% [3] Market Context - The stock price of LandBridge has decreased approximately 24% since previous coverage, but the bullish thesis remains intact due to the company's resilient business model [7][8]