The 130-year-old bankruptcy that created a $5-bn oil giant

The 130-year-old bankruptcy that created a $5-bn oil giant

The hottest oil stock from the US shale boom has never pumped a single barrel of crude. Texas Pacific Land Trust, a listed land bank created out of a railroad bankruptcy more than a century ago, has climbed more than 2,200% since 2010, outperforming the stocks of shale oil producers, service companies and prospectors alike. It’s now worth more than $5 billion.

Its secret: vast tracts of mineral rights in the Permian Basin, the world’s hottest major oil region, earning revenues from the likes of Chevron Corp, which have to pay the trust when they produce from its land.

“This stock has been flying way underneath the radar for years,” said Eric Marshall, a Dallas-based fund manager at Hodges Capital Management, an early investor and a top five shareholder, according to data compiled by Bloomberg. “The real activity in the Permian is now in the areas where they have the most acreage.” Read More

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