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Oil and Gas Investor

This article first appeared in the 2022 Minerals Business Report and Buyers Directory

Timing a startup in any phase of the oil and gas industry, with its constant ups and downs, can be a real challenge. However, the two mineral companies highlighted in this feature have the advantage of being part of larger, more established firms. They feature experienced leadership that has either worked directly in minerals or in related areas such as nonoperated interests.


Fortuna Resources CEO Travis Pace has done a wide variety of jobs in his career across the oil and gas industry. Most of his prior endeavors had an entrepreneurial bend and focused on acquiring and optimizing leases, working interests and minerals. Whatever the particulars of the deals, his goal was always to “find creative and strategic ways to create value via win-win transactions.”

Fortuna, which has been on Pace’s business card for five years, currently manages three companies that have deployed more than $200 million in nonoperated assets, including mineral and overrides, during that time frame.

“We have worked very hard to build a reputation as a partner of choice in these asset classes by negotiating fair deals and following through on what we say we will do,” he said. “The new fund we are actively investing out of in partnership with our financial sponsor, North Hudson Resource Partners, is investing in all nonoperated asset classes, including an increased focus on minerals and overrides.”

Pace noted that having worked in partnership with North Hudson for more than five years, the Fortuna team is able to move quickly and efficiently to assess and execute on new deals.

How the minerals strategy started

Pace related that while Fortuna has historically focused on nonop working interests and joint ventures, minerals were also of interest and remain part of the existing portfolio of assets. Because they already had some minerals experience, starting a fund with a minerals component was a natural next step.

“Nonop investing and minerals investing have many parallels that inform the value versus risk decisions for acquisitions and strategic partnerships,” Pace said. “The key variable in both is timing—basically, when will the assets be developed.”

Over the years, as Fortuna honed its nonop acquisition process, it has developed tools and practices to improve the quality of information relevant to the timing question.

“In many cases, it’s based on tangible data. In others, it’s leveraging our proprietary database and extensive relationships to complement that information,” he said. “But these same tools and resources are applicable to the minerals space.”

The focus

Rather than aggregate and sell as some companies do, Pace referred to the fund as “an end buyer.” He added that the company’s goal is to “build a portfolio of high-quality assets that have line of sight to development or a strategic trade opportunity that can accelerate development or further enhance the value proposition.”

In some cases, Fortuna might see that a particular mineral property could be of interest to the operator of the unit it is in. In such a case, Fortuna could propose trading the mineral interest to the operator in exchange for a nonop interest that the operator owns under another operator. A deal like that highlights how the dual strategies complement each other.

“You can use each bucket as currency to improve the other,” Pace said. “The objective there is to accelerate development and bring value forward.”

Fortuna buys from both individuals who have decided to monetize their minerals and from companies seeking to optimize their capital budgets for other investments.Travis Pace

“Nonop investing and minerals investing have many parallels that inform the value versus risk decisions for acquisitions and strategic partnerships.”

—TRAVIS PACE, Fortuna Resources


Pace admits to a bit of a learning curve in minerals, even though they were not totally new to them. However, since minerals and nonops are “sisters but not twins,” he believes Fortuna is becoming competitive faster than they had expected.

Market trends and opportunities

During the pandemic, royalty owners were often not incentivized to sell their rights at depressed prices because, unlike a working interest, there is no cost associated with ownership of minerals. Pace said Fortuna’s other business saw more opportunities then because working interest owners may be motivated to sell in a downturn due to joint interest billing and other costs of ownership.

But anyone who did buy minerals in 2020 has a huge opportunity to make money by selling them in today’s ±$100/bbl marketplace.

Minerals Business and Buyers Directory 2022 - Startup graphic


To say Ted Williams has had a varied career would be an understatement. Descending from three previous generations in the oil field, his own career has migrated from the Marine Corps (a Scout Sniper) to finance, reservoir engineering, investment banking in energy for two firms, then a move to Austin in 2017 to be vice president of business development with Luxe Energy and president of Luxe Minerals.

Fast forward to 2021, Williams founded the Rockport family of companies, where he is president and CEO. That family includes Rockport Minerals and Royalties LLC (RMR), Rockport Energy Solutions LLC (RES) and Rockport Oil and Gas Holdings LLC.

Williams continues to see opportunities in minerals and development in the Permian where many have exited due to competition and pricing. Williams said he loves hearing that minerals are no longer a prime investment and that the Permian “has been picked over.”

The focus

“We are focused on remaining a private company with an investor-first approach,” Williams said. “RES allows me to cover my own G&A [general and administrative] and remain independent. So every dollar an investor puts into RMR, we’re going to put to work—no dead capital.”

RMR focuses on investing long-term capital from institutions, family offices, high-net-worth investors and more.

The company prefers liquid-rich plays in the Permian Basin, but being yield-driven, it is looking for returns in the mid- to upper-teens. Williams said they are “basin and commodity agnostic.”

RMR prefers to buy from private minerals owners because it is organic sourcing at the roots. As with basins, they will look at any deal that is a good investment.Ted Williams

“I might be one of the few oil and gas guys who hates $95 a barrel oil.”

—TED WILLIAMS, Rockport Minerals and Royalties LLC


Staying privately funded instead of seeking private equity capital is an expensive proposition because all fees and expenses are borne by RMR, but Williams said “it’s a tradeoff.”

Getting private equity money comes with its own price, which includes 1% to 2% of committed/deployed capital. Another cost lies in loss of control and ability to flex entrepreneurially. Both approaches have their pros and cons.

A second challenge is in having the budget to keep a good team together during the capital-raising process before realizing any income from investments.

Third is the sudden rise in minerals prices, as that limits the amount of minerals that can be bought with every dollar.

“I might be one of the few oil and gas guys who hates $95 a barrel oil,” he said.

Some of the price increases for minerals are a result of more competition as more people flood into the space. Williams said the pandemic flushed some of the less-capitalized ones out, but it is still a crowded marketplace. That said, those with existing assets, such as Luxe Minerals, are reaping the benefits of higher commodity prices.

Market trends and opportunities

Access to capital is a market opportunity. With higher prices, the minerals space is seeing a lot of new buyers in the last few months, Williams said.

“Everyone’s hitting up the same investor groups,” he said. “PE [private equity] shops are only going to invest in so many mineral companies.”

If the demand is there, that could change. Williams believes oil prices will continue to rise, which would open up more access to capital.

“The capital markets are already opening up,” he added.

The challenge for buyers in a crowded market is that individual sellers begin to expect higher and higher prices, and the downside risk is exacerbated. This upward pressure can lead some buyers to overpay, reducing the opportunity for future returns.