$300M Oil Tycoon: Keys to Unlocking Massive Wealth in Energy

Hey, welcome to another episode of Making Billions, I'm your host, Ryan Miller and today I have my dear friend RJ Burr.

RJ is the president and CEO at Panex Exploration, an oil producing company with its main focus on the Gulf Coast. Mr. Burr's companies have raised and deployed get this over $300 million in upstream development and have partnered with some of the largest oil and gas companies, namely Shell, BP, Marathon to develop several million barrels in reserves.

So what this means is RJ is about to teach you the fundamentals of oil and gas investing so that you can find even more opportunities in your pursuit of Making Billions.

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[THE GUEST]: RJ is the president and CEO at Panex Exploration, an oil producing company with its main focus on the Gulf Coast.

[THE HOST]: Ryan is a Venture Capital & Angel

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• 14:50 (Cont.) $300M Oil Tycoon: Keys to Unlocking Massive Wealth in Energy

Transcript

Ryan Miller  

My name is Ryan Miller and for the past 15 years have helped hundreds of people to raise millions of dollars for their funds, and for their startups. If you're serious about raising money, launching your business or taking your life to the next level, this show will give you the answers so that you too can enjoy your pursuit of Making Billions. Let's get into it.

Ryan Miller  

I realized that this is not the most popular opinion, but despite what you may hear in mainstream media, oil and gas actually is a great industry to work and invest in. Join me and my next guest as we chop it up on how to invest in energy opportunities and why you should consider it as part of your alternative assets in your portfolio so that you too can enjoy your pursuit of Making Billions. Here we go. 

Ryan Miller  

Hey, welcome to another episode of Making Billions, I'm your host, Ryan Miller and today I have my dear friend RJ Burr. RJ is the president and CEO at Panex Exploration, an oil producing company with its main focus on the Gulf Coast. Mr. Burr's companies have raised and deployed get this, over $300 million in upstream development and have partnered with some of the largest oil and gas companies, namely Shell, BP, Marathon to develop several million barrels in reserves. So what this means is RJ is about to teach you the fundamentals of oil and gas investing so that you can find even more opportunities in your pursuit of Making Billions. So RJ, welcome to the show, man.

RJ Burr  

Hey, Ryan, it's great being here, when, when you think of Making Billions, one of the things that I've always loved is excellence, and the fact that you have some of the greatest minds that are willing to show you how they've done it. It's just, it's kind of humbling to be in that company, so to speak.

Ryan Miller  

Yeah, well, you're certainly one of them, we've been fortunate to be number in the top 2% and we've buried in the top 10% Investing podcasts. And we've done amazing all because of amazing guests like you and we're going to chop it up in oil and gas investing. My first love, this is where I cut my teeth in the industry was oil and gas 100 years ago and so I am absolutely thrilled to talk about this oil and gas. It hasn't gotten the respect it deserves, but hopefully today we're going to turn some heads and change our minds on exactly the power of oil and gas investing in all of our pursuit of Making Billions, so thank you for that. Now, let's jump right into it, man you've done a ton of stuff, brother, but there's some beginners out there that are looking at you looking at me, and they're wondering, how do I make money in this industry? How do I make money at all? What would you say to them who are looking to get some early points on the board? And then maybe we'll follow up with how to avoid ruining it in the beginning. So what would you tell a beginner? 

RJ Burr  

Education is the key, look that, oil and gas is something that well, just looking at our education system and to know that you have a product that has lifted more product, more people out of poverty, has created more upward mobility than any product used in the history of man, yet we literally know next to nothing about it. Most people don't even really know where it comes from, they don't know what products it creates. And so the first thing I would tell you to do is educate yourself on the role that oil plays in your day to day life, you'd be shocked.

Ryan Miller  

Yeah, and you know, when it comes to making money is something that I learned from you, is you have this philosophy and I'm wondering if you can unpack it a little bit. I believe when you explained it, you called it the three S's of making money, I'm wondering if maybe you can unpack that for our audience today. What are, the three S's are making money in your opinion?

RJ Burr  

Well, in oil and gas specifically, but by nature, oil and gas is speculative, if anybody ever tells you different they're lying to you. You know, you never know exactly what's going to be down there, all you can do is head down, till up and keep plowing. Now when it comes to my partners, they live out of what I call the three piles of three S's. The first pile is their sacred pile, that pile of money nobody touches. That's what they pay for their family, their bills, that's what they take care of their whole life with. Well, their second pile is a safe pile, their safe pile, which is where they put their real estate, their goal, their money that they want it to grow, don't get me wrong. But the main goal is when they go back to it, they want to make sure just as much and hopefully more is there. The third palace or speculation pile, that's the pile that they want to make multiples 2, 3, 5, 10 to 1 on the money. That's the pile, they play with an oil and gas because like I said, by nature, one gas is speculative. Now what separates the men from the boys so to speak, is how you manage the risk. And so when you look at that speculation pile, that's where they want to put in the program and you need to know what you're looking at and that's where the education comes in. Are you taking a 1 in a 100 shot at making 101 on your money? Or you take an 80, 85% shot and making 4-5 to one on the money. A lot of my partners, you know, you come from the old school world. When it comes to my health, I go to my doctor, when it comes to my taxes, I go to my CPA, but when it comes to oil and gas, they come to me. And so it's finding people that have a reputation in the business who've done it for a long time and like I said, I'm not gonna insult your intelligence and tell you I've won every time I've got a dribble in the ground. It's, oil and gas is difficult, however, I don't think I've ever had one partner upset with how we conduct our business because it is what it is. If it's black, it's black. If it's white, it's white, there is no gray. The gray is where you get in trouble and so I completely avoided it.  As long as you guys know that you're doing everything in your power to make them as much money as you possibly can make them, well then I'll let the chips fall where they may and not back up from anybody.

Ryan Miller  

I love that and you've obviously followed the show as well. We have similar ethos is we always say the reputation relationships are the two most valuable assets in your possession. Not the only two, but probably the most, they're right up there with oxygen as far as importance. Every time in my career, and maybe you and the 1000s of you that are listening around the world, every time a door has opened and investment has been made, it has all come through my, either my reputation or my relationships. That has smoothed out so many things that I've tried to build and I've tried to grow throughout my career, always comes back to R&R Brother. Now you and I have spoken offline and you mentioned that you have a lot of investors that have stuck with you for a long time, why do you think that is?

RJ Burr  

We're good at what we do. I mean, at the end of the day, I'm an old jock and I'm one of those guys that you keep score for a reason and when I stopped playing ball, I had to figure out a way to keep score. And it just made sense, it's how you make money and so don't get me wrong, I'm friendly with all of my partners, but that's not why they hire me. They hire me for one purpose and one purpose alone, to save them taxes and generate, generate them revenue. Fortunately, we've been in the right place at the right time, quite a few times over the last 30 years and we've done well for our guy's.

Ryan Miller  

Brilliant, so beginners is, understand the three S's and understand and possess the value of a solid reputation. I love that. Now, just getting upside and putting points on the board. That's good, but there's also when you're starting out, or even when you're not, there's still risks and you can blow it up at any time. I'm just wondering, talk about some of the risks that you found, and maybe some of the remedies that come to follow for beginners in your industry.

RJ Burr  

Well, in oil, the risk is really the types of wells you're drilling. You know, like I said, if you're going out and drilling a Wildcat well, and most people don't understand the kinds of wells and I'm giving very simplistic, there's shades of gray in between. But typically, what you're looking at is a Wildcat well is you're going out in the middle of nowhere, and you're trying to establish production from areas that have never produced before. Historically, your success rate is going to be, if you're great at them 1 out of 10 but on average, probably 1 out of 20. Now when you hit one of those Wildcat wells, you can get rich overnight, however, how many losses can you sustain before you hit that one. Now once you hit a wildcat, well, now you're doing developmental wells, your Wildcat well discovered a new area or well, you will go north, south, east and west. And you'll keep stepping out until you miss the field, those are developmental wells, you're gonna hit roughly industry wise about 65 to 75% of those. Now, once you've established the parameters of the field, now you're doing infield development wells, you're going in between producing wells. You should hit roughly eight or nine out of 10 of those. And so that's really the types of what you're drilling now, when it comes to, it is really the risk reward ratio. Your Wildcat wells, you'd have much more risk, however, if you get it you have much more reward. Your infield developmental wells, again, you have much less risk, however, the upside, you have a pretty good idea of what you're going to get going into it and so that's really the first step of understanding what kind of programs you're getting involved in.

Ryan Miller  

I love that, thanks RJ and just to complement that, in finance, I have a saying that says optimal is not always maximal. Maximal is not always optimal. So you could go for maximum return, but often when you are seeking for maximal return, you're usually chasing a lot of risk in order to get maximum profit. The optimal is return given the amount of risk is saying how do I create a disparity to say, can I get a five to one risk to return or return to risk ratio, that tends to be more optimal, even though it's not maximal. And so managing that risk, like you said, and Wildcat and you're saying sure you could make immense profit, you have a 10% probability. So I don't know if that's optimal. But if the 1 in 10 chance, if you hit it great, good for you. But you have to take an immense amount of risk and I think what you're saying is just if you're gonna do it, do it with your eyes wide open, man, it's like it's great, until it's not.

RJ Burr  

What we would try to do, we always called it capital preservation through diversification and we would take a big rank wildcat, and we'd pair it together with a handful of smaller wells that were safer wells. That way if we missed the Wildcat, these wells should protect the investment and so that was how we kind of now once again, because you have multiple more wells in the deal versus that one Wildcat. You have more money spread out and so your upside of Wildcat is limited a little more, however, you still have that upside potential. Now with what we're doing now that's a little different is we're essentially, our riskier wells are still direct offset wells, however, they're just direct offsetting logs that we didn't produce. There are safer wells, were directly offsetting wells that we drilled in the same field. And so we figured, oh, I would love to say it was more intricate than this, but we basically let the we stand on the shoulders of giants and get what they left behind.

Ryan Miller  

So would you say that's like a Brownfield investment?

RJ Burr  

Well, you take the job. This is, it's in Baton Rouge that well, when you hear him talk about the Strategic Petroleum Reserve, that's our salt well, we own the roughly 3000 acres around it. Well, they drilled roughly 200 to 250 wells on that field over the last 80 some odd years. Well, when you acquire one of these properties, the first thing you do all of that data is public data if you know where to find it, and so we went out and we acquired 40,000 different data sets on this field. Well, every time you drill a well, even back in the 30s, and 40s, you run a log on the well, drop a tool down the well reads permit to the permeability, veracity, resistivity. Well, the beauty is, even though today's logs contain more data, the base data is the same data you got back in the 30s. And so yes, our maps are prettier, our computers and our printers are better, but the data is essentially the same. And so we'll sit down and we'll build a field profile, we'll start going through each one of the successful wells out there, looking at the logs, and okay, these wells should average anywhere from half a million to a million a half barrels, they'll have multiple pay sands, their production life would be 20 to 40 years. And so you build this kind of profile, well, then all of a sudden, we'd see a log looks just like the other multiple stack pay sands, there should be a half million to a million barrels of oil in this well, then you look at the production, they produce 50,000 barrels. So you wonder why you kind of set it aside and you keep going through, then you see another beautiful stack pay sands little production. Well, by the time we were done, we had several dozen of these wells. 

RJ Burr  

When, when you go back and do the research on these wells, you realize that these guys really had two problems, gluttony and sand. If the time they were drilling, whether they were competing with somebody else in the field, or it was just the time and they wanted to produce as much as they could, they turned them wide open. Think about it this way, if you go to 7-11, you get a Big Gulp full of crushed ice and Coke, and you just want to drink the coke, but you don't have a lid. You have to block the cup with your lips or your teeth, and slowly drink it just to get the Coke. Well, that's how you have to produce these wells, these guys basically just open their mouth and poured it in. So yes, they would get an initial flush of oil, but all of a sudden, they're getting the sand. Next thing you know, they're beautiful oil wells turned into a 5000 foot column of cement and so they just walk away. 

RJ Burr  

Well, now we know how to deal with the sand and so essentially, we had a treasure map with dozens of X's all over it, but the difference is somebody's actually dumped down to the treasure, got and dug it out, brought it back to the top and set it on the X to show what it was there. We've drilled 11 times out here in the last two years, we placed 10 into production. The one well we missed was a mechanical failure that we had oil in it, we just lost the well, we'll go back and drill it at a later date. Once we figured out how to get through that one little snag we had, but we know the oils here. 

RJ Burr  

Now what is each well going to do? There's your speculation are we going to get a well that comes in producing 100 barrels a day, 300 barrels a day, 50 barrels a day, that's where we're not sure. You know, we just we finished drilling a well here a couple of weeks ago, that we had an idea that we'd get into a new fault block, but we weren't 100%. But we knew we were offsetting two of our wells, we had good solid production there. But all of a sudden, we did jump into that new fault block we got, I think it was 360 feet of total pay through nine different pay sands. This well right here, when producing for the next 40 years, the best zone in this well and that's what a lot of my partners have never been in this position where they don't realize what they have. Because you produce this from deep to deep moving up, you start at the lowest surface, even if it's not the best, because you're not going to go back down and get it. Well the best zone on this well as the fourth from the bottom, it's gonna take us 10-15 years just to get to it. What do you think gold price will be 15 years from now, all of a sudden oil prices are 120 a barrel, we popped this well. It comes in producing 300 barrels a day, they're making 200%, 15 years after they originally made the investment, that's the kind of potential these things have. Now we have other wells, they're going to make the partners 2-1 one their money, 3-1, you know, and so that's why we package multiple wells together, just spread the risk out.

Ryan Miller  

I love that and so that's where you take, you blend from just maximum into optimal, I absolutely love that. Now, you mentioned earlier, and I'd love to capture this, whether briefly or you go as deep as you want. But you mentioned that sometimes people come to you for tax advantages as well in oil and gas. Maybe if you could touch I mean, this isn't financial advice, folks is just saying just your opinion on some of the tax advantages of investing in oil and gas for our family offices and pension funds and I see you out there, I know you're listening. What are some of the tax advantages for those who are looking at bouncing their private alternative asset portfolio out? What tax advantages can investors expect, if they ever say invested with you or anybody that does what you do?

RJ Burr  

Ryan, honestly I think they're the best in the business. Now, once again, I'm not a CPA, I'm just gonna give you a general rule of thumb, but what you're looking at here for, let's say a partner puts in $100,000. If you're in a direct participation program, drilling oil wells, you put $100,000 and Uncle Sam's roughly gonna pay for a 30 year invest. You owe him 150,000 in taxes at the end of the year, you invest 100,000 in a drilling program, you now owe him roughly 115,000. It's an above line deduction and then like 10% of your income is tax free. And so a lot of my partners, what they'll do is they'll utilize their money, however they want the first 10 months of the year, then in November, they'll call their CPA, and then December, they'll call me and look for the tax benefits.

Ryan Miller  

I love that and that's one of the advantages and so folks, just like what RJ and I are talking about in oil and gas. This is actually quite symptomatic of a lot of alternative investments like oil and gas and many other ones is to say, sure, you can look at the asset class and that's what most people see. But if you're a sophisticated investor, which if you listen to show called Making Billions you're no rookie, that's for sure, but if you listen to the show one of the things you can look at is not only what asset am I investing in what sector? But also what are the tax advantages? How are these things structured as far as government grants? What are those incentives, tax incentives, accelerated depreciation, there's so many different things that you can start putting in and then you can start peppering in a lot of your investment into these alternatives. And so not only what sector in what asset but also what structure, in oil and gas, I knew what your answer was, and I agree oil and gas is phenomenal from a structure standpoint alone right now on top of all the other benefits, so such a wonderful industry. Now we couldn't we couldn't have a show called Making Billions of talking about taxes and structures and alternative estimates without talking about the market. So I'm just curious, maybe we can turn the page here and just talk about the markets, your eyeballs deep into the oil and gas sector. What have you seen in the market right now?

RJ Burr  

Well, it starts about four years ago, my first life and oil ended probably 12 or 13 years ago, when Marathon Oil, bought my family's company, and entered into early retirement was gonna play on the PGA Tour until it took me about a month to realize that what's going to happen, and finally told me that it took me a couple years ago stir crazy and it'll be eight years ago next month is when we started Panex and what we saw is we really saw converging factors. Oh, you look at supply, well, upstream investment in oil from 2013 till now is down roughly 60, 70%. We were at right at a trillion dollars worldwide and upstream investment that's to replace the oil that we produced. We were right at a trillion dollars in 2013. Last year, I think it was right at 3-400 billion, this year, they're looking at might be 500. I mean, so it's creeping back but we're still down 50-60%. Well, then you look at so okay, supply we're not we're not producing as much to cover what we what we consume daily. Well, then you look at the market, well, what is demand going to do? Well, 83% of the world is just now beginning to use oil and see its benefits. What do you think they're gonna do? You think they're gonna say, oh, we're destroying the planet? Let's stop using or they tell Greta shove it and use more of it. And so you see where all where the supply demand is going with oil and so you see that? Well, heck, I can't be the only one who sees that, I'm sure other, there are more pedigreed people than I see that. 

RJ Burr  

Well, then you look okay, well, surely there's something to replace oil with because if I see this, heck that's causing a lot of pain, if we don't fix it. Well, then you look at the alternative energy, and there's really nothing that can effectively replace oil. That's not me being mean, that's just me, looking at numbers, facts, don't care what you feel about. And we do not have any alternative technology that can do it, oil does and that's set aside the climate change and the green debate. Set that whole argument aside, I'm just looking at sheer numbers, we don't have the power grid. 

RJ Burr  

Now, if you truly wanted to fix energy to do what they want to do, we would have to destroy the world, first. We would have to rape it for raw materials like we never had before, you'd have to move half a million pounds of material to create one lithium battery and so if your goal is to save the world, yet, to do it, we got to destroy it first, you're not a serious person, I won't engage with you because that doesn't make sense. Especially when we have stuff like natural gas and nucular that has their. Most homes already have natural gas lines running to them, you could put converters on every car, I mean, so there are solutions that reach the goals that they get, they're not valid solutions for some reason. And so you look at that whole dynamic, and you're like, okay, well, we still need oil demand still going up, and there's nothing to replace it with and so we saw this whole thing coming together. We knew if there was a catalyst, there was a crash in the market company, well, hello, President Trump, whether you like him or not, what he did is undeniable. For the last 70 years, OPEC has basically been the main player when it came to what oil prices were going to be, all of a sudden, the US is producing so much oil, that they're really irrelevant. 

RJ Burr  

And so what you had was basically Saudi Arabia and Russia enter into, for lack of a better term economic war with our sailors. They flooded the market with oil, and we're pushing the prices down, because most of our sale industry is highly leveraged, need $50 a barrel just to pay their bills. Well, if prices get to 40-45 a barrel, they're in trouble and so really, that's what we saw brewing, oh, we we put together our funds. I mean, we kept our powder dry, we were ready for it. We thought it takes 12-18 months to play out, then all of a sudden little thing called COVID came out. And COVID took that 18 to 24 months and crunched it down into 30 days and it culminated on April 20th, 2020, the oil market crashed. And so I tell my kids whenever something on the ball field happens it's bad you strike out on calls bad, whatever you get one moment, you get one moment at whatever you got to do to get it out of your system, you get one moment flush it and then you move on and don't look back. And so when that when the market crashed I remember that day. I'm sitting there watching the news and I see it go from 30, 25, 18 and I think when it got to seven I'd had enough. And I get out I went literally like a block down the street to get me an Arby's roastbeef, came back, walk back to my desk and I look up and I see 40. Okay, corrected, and I sit down and about the time I got the sandwich I wasn't hanging on there was a little line in front of that 40 and I've been in this my whole life, I didn't know that was possible and so we're at negative 40. 

RJ Burr  

Well, if anybody had the right to curl up in the fetal position and suck their thumb at that moment, it was us. I mean, it'd be really hurt two of our partnerships. Now, their partner is going to be good, I mean, these partnerships had 50 and 60% of their money returned in the first distribution we were about to raise, we're about to raise $100 million that summer. I mean, I knew and I've been there before, I saw it coming, and then all of a sudden the market crashed on us. Well, we had our dang it moment and once we got out of that, dang it moment, we looked at each other, said hey, guys, this is what we expected to happen anyway. And so when everybody else was battening down the hatches, we opened our sails and started making acquisitions. And from that point, till today, we've made 23 acquisitions secured, oh, we believe to be about 100 million barrels and reserve $70 oil, that's $7 billion, we think it's gonna take about 300 million to develop the whole thing. If we're wrong five times over, we've turned 300 million to 350 million. If we're right, I've set the oh, I've set my future generations up pretty well and I've set my partner's future generations about pretty well. And the beauty is, is the acquisition window's still open? 

RJ Burr  

I was at the CPAC here oh a year ago, this kid from PBS comes up to me, he said, oh, you're the oil guy, aren't you? I said, yeah. He said, well, who do you want to win in 24? I said well, depends on what me ask. He said what do you mean? I said well, if you ask the everyday American that has to pay the same thing that you pay at the pump, I want Trump to win. Because he understands something that some reason politicians don't get, he understands that oil prices have to be such that it makes it worth the oil companies going out and spending the risk to get it. However, they can't be too high to hurt the consumer and we found a sweet spot between 60 and 80. So I can live there, I can be completely happy, I can make my partner's plenty money and everybody's good. 

RJ Burr  

That however, if you ask the oil man inside of me, I want Biden to win. He said, why is that?  ESG scoring it, keep chasing people off and keep calling oil the enemy and keep running as many dollars away as you can because you know, it's gonna happen. While you're doing that, I'm going to keep buying it and all of a sudden when the illusion busts, and they realize that there is no getting away from oil, those who own the most of it can be in a position to shrink aren't they. And that's our goal, we were sitting on the we think about 100 million right now. We wanted to be half a billion before it's all over. Somebody's going to consolidate this oil, I mean, when you look at the American oil industry, that's the final piece of the puzzle. Most people when they think of American oil they think of what they see on TV. They think reruns a Dallas I mean, they think it's Exxon. No, the oil and gas industry in America is roughly 9,000 independent oil and gas producers that average 12 employees or less. We produce 83% of the oil and 90% of the gas and drill more than 93% of the wells. That's the American oil industry and so when you look at who we're competing with, I mean, a lot of them I'm not I'm not really, I don't want to go whoa, but a lot of them we born in the last 20 years. 

RJ Burr  

Well, I cut my teeth in oil at the end of the JR Ewing era of oil, the most ruthless time oil ever had. These guys have no idea what I'm about to do, to them and so the fact of the matter is, somebody is going to consolidate this oil. COVID taught me an important lesson, if a country doesn't control its food, its medicine, or its energy, somebody else does. I can't do anything about the food, I can't do anything about the medicine, by God, I can do something about the energy. And so I'm trying to get as many people as I can under this tent, because there's enough of this pie for every one of us to get a piece. And there has not been an American Oil Company reached the major oil company, stat 100 million market cap, in almost 40 years based on American oil. Why, because nobody's gone out and consolidated, now's the time to do it and so that's what we're trying to do. We're trying to get as many of these under one umbrella as we can because like I said, oil is not going anywhere. And with the way the market set up and the way everybody trying it, man, what do you think's gonna happen when these 83 million actually reach first world status? I mean, you truly, you measure a country's affluence by the amount of energy each citizen consumes, fact. And so I want to make sure we have more energy than anybody.

Ryan Miller  

Absolutely and that's, that's a metric that I look at, as well as access to energy versus a country's poverty levels, those are directly correlated as the more access to energy and the better the infrastructure to consume that energy and utilize it like electricity and grids and roads and all that. Alright, that asphalts gotta go somewhere, so we can't just crank out bunker fuel, we got to use those heavy things. And so as we're, as we're doing, all of these things are giving access to several countries and this is the thing I remember many, many years ago, there was someone who was against oil and gas and was sending lovely, we'll say, compliments to me and my position on oil and gas. And I said, this is one reason one of many, this is a first world view but it's even more serious in second and third world, which is something that I deeply care about. Which is you could take a young man let's say he just he wasn't delt a fair card and he ended up dropping out of high school. Well, I promise you the oil and gas industry will take in that young man it will love him, it will give him some good hardware to the right, you got hands and a strong back you're in buddy. And somewhere outside of oil and gas you could argue this, which I do outside of oil and gas like I could most likely odds are not guaranteed but odds are he'll probably be on some type of social program and thank goodness that they're there sure. But it with the oil and gas industry and this adds further strength to my argument for second and third world. You take someone with maybe a little bit of education, not much, oil and gas industry will take that young man and he can make his way he can run his own rig, making 400,000 a year. Putting his babies through ballet lessons, guitar lessons baseball games and now you've given an opportunity to people independently.

Ryan Miller  

And so I'm a huge fan of that, but not just oil and gas, but all energy and I think that's the point. Yes oil and gas for sure, I'm a little biased, admittedly, because I worked for a wonderful company here in Canada many, many years ago. And I'll tell you, it is, I'm a huge fan of energy and I think we need to increase the floodgates of all energy, right? Sure. produce it, produce it ethically, produce a clean, yeah, okay, absolutely, no one's gonna argue with that, right. But the fact of the matter is not only that, not only does it bring in people and create more opportunities, but exactly what you said RJ, is that this is an industry that most people don't realize is typically run by small business owners, and to eliminate that can do a lot of harm. Now, there's ways to deal with it and we'll let that debate happen, maybe elsewhere. 

Ryan Miller  

But I think really in, the moral of the story here, at least for me is, it's very important that we don't just think about oil and gas is in such a narrow view of saying, we got to put more gasoline in cars and exhaust fumes, you're like, no. If you look at it from the geopolitics standpoint, and you increase the production of energy and the access to that production globally, you're going to start to create a lot more alleviation of poverty and also access to good paying jobs for wonderful families. Most people just want to have a get married to someone they love, raise a family or not, but they just want to progress in their life. And I think and like you said, in the first thing, educate yourself and you'll find out how much of your life and the prosperity of not only you, but your entire country hangs on the balance of access to energy. 

Ryan Miller  

And so with, with the market, where do you see the smart money going RJ? We're like in oil and gas we talked about buying reserves, and Wildcating and all these different things. Where would you say, looking forward, your investors run to you for this great advice and you're really good at this. What would you say looking forward? What are you looking at, where do you see the smart money going? Just in your opinion.

RJ Burr  

I think you gotta back it with an asset that has a value that you know, it's gonna have a value. I had a partner two years ago, had several million in silver certificates. And you remember when all of a sudden the silver rush came, and everybody realized, oh, my God, there's more certificates than there is actual silver. Well, he had, a he had a crisis on his hand, he had several million in silver and so he calls me freaking out, when my partners have a problem, typically I have a problem, and I have to try to solve it. And I'm laying in one bed night, and it hit me about three in the morning, I popped up and scared my wife, my dog bit me, and I go running down to the office and start, you know, I started running numbers. And my wife comes down about eight o'clock and she said, what were you doing? I said, baby, let me ask you this, what is the one product in the world that everybody has to have, that half the population want it free, and half the population wanted a million dollars a barrel, so you have two equally opposing forces pulling and the demand is not going to go down? It's oil. So if I can figure out a way for my partners to get their money out of the rat race, nobody can explain what's going on in the stock market. I mean, here the US government, looking at how, I mean, 2 trillion a year in debt, we're going in, and the market, so not, you can't figure out, I mean, I can't figure it out. I'm not, I guess I'm not smart enough and you know, but I can't find any rhyme or reason in any of it.

RJ Burr  

However, I do know this, if my partners can get their money out of the rat race, and park it in oil. Now, if we didn't know we had the oil, completely different conversation. If we didn't know we're sitting on it, we're going out and taking a one in 10 shot at getting a whole nother conversation. However, with what we have, the biggest question that our partners typically face, is when they put in $1 are they going to get back $2? Or they're gonna get back $10? That's the question we typically look at. And so what I tell my guys, look, if you're tired of running that race, get it out of it and park it in oil. I'm looking at putting the deal and this is, I'm just spitballing right now, because I was, here's what I do. I'll go home tonight, and I get on my motorcycle, and it's me and my quiet time and I go all the way out through the country. That's about a 30 minute drive to get home and I think I mean, it's just it's my time where I process everything and this hit me last night on my ride home. And, you know, because here's what we do, typically, when we purchase a field, we'll get a fun together to kickstart the field, like on this field, we raised $10 million to put in the infrastructure to get everything ready and for that $10 million, we gave the partners a 10% carry and everyone we drilled on the field. 

RJ Burr  

Well, if we have 100 million barrels, and there's $7 billion, those partners just made 7, 10% of 7 billion for $10 million. They're sitting to make maybe 30-40 to 1 on their money if we're right and that's it $70 oil. And so I'm trying to think well, hey, how could we parlay that and put it towards acquisitions and I mean, I came up last, we do a $20 million offering. Basically every field we acquire with this money, the partners get 5% across the board on everything we draw. And I sat down and ran the numbers and if we as a company pay the, pay you 5% until the production from the field takes over, once that 5% is covered by the production and our 5% ends and we roll to whatever it is. And I sat down to put a pencil on it and I can easily show the partners 15 to 20 to 1 on their money, if we can do half of what we did with the charcoal. And so there's opportunities there to get your money out of the rat race and back in oil and something that you know is going to have value. And, now the next step for me is how we funded our deals for the last 30 years. We're a small operation, there's pretty much two guys in this office and I'm proud of us, heck, we handle 20 to 30 million a year ourselves in direct participation programs. I've never heard anybody doing that, you know, so I'm pretty proud, I believe we do it, is bigger, better than anybody else in this particular neck of the woods. However, like to develop a chalk talk, I need 2-300 million to develop the whole thing, for somebody outside to come in and try to skin everything we built here. No I don't need that money, that bad, I can do it myself, it'll just take us 10 years to do it. And so I don't have a gun to me doing it, however, if I wanted to expedite the process, I could, if I could figure out a way to raise 2-300 million, I have no doubt I'd make those partners tremendously happy that they, that they jumped in and backed us because we're good at what we do.

Ryan Miller  

That's brilliant. So would you say then when you talked about parking in oil and gas, would you say just buying reserves is the next next play?

RJ Burr  

Yeah, I mean, yeah, because it's gonna have a value and it hasn't exploded yet. I mean, everything's kind of so chaotic right now the prices are doing this. They'll go down a little bit, come up a little bit, you'll see it when it's getting ready, it will take off because you'll see the work. The world's economies are not going to be held back, they're not going to be. People are gonna get tired of all this because there's no sense in it, there you look at all the crazy stupid wars we fought why, huh? No, you're not taking my kid and sending them over there and getting them killed in the middle of a Soviet field or a Ukrainian field? No, they shouldn't be doing it either. Stop, I mean, it's all these guys getting in a pissing contest, when, you know, I truly believe the vast majority of the world I'd say 80-90% of the world want nothing but the best for everybody. I look at Dubai and I think man, that's awesome, that's human excellence at its best. I mean, look at what they've done in the desert, how are we not proud of that? I love excellence. 

Ryan Miller  

You know, this is the part of the show where we really get into the secret sauce and give our listeners a competitive advantage or an unfair advantage. Maybe you can explain, say two or three things that you can leave behind a value. So if you had to teach somebody, and you would say, look if you really want to nail it in this industry, here's the things to focus on. What would you say? 

RJ Burr  

Number one, my son was asked me the other night, he said, Dad, what's the secret to success? And I said one work hard, two work harder, three work the hardest. If the talent is there, everything else will take care of itself. So that's the number one thing as I said, we were golfers I said, most people see Tiger Woods on Thursday, Friday, Saturday, Sunday. They don't see the 20 million shots he hit Monday through Wednesday, I said he worked harder than anybody else there's a reason he was where he's at. So that'd be the number one thing I tell him, number one, you have to be have an uncontrollable desire to succeed and be willing to work harder than anybody else. As Vince Lombardi said, winners are willing to do what losers are not willing to do, so number one. 

RJ Burr  

Number two, when it comes to oil and gas, if you're looking, well, we call it the three F's is the three factors, there are three factors involved before I'll ever do business with anyone. The first responsibility is the buyer's responsibility, the second responsibility are mine. The factor is the buyers, I'm sure he guess it's the money, I can't tell them how much they have, I can't tell them how much they can invest. I can't tell them what they're comfortable with, only they can answer that. Well, once I know that factor's positive, we won't address it again, now it's strictly on my shoulders. First and foremost, who are we? The people you're getting involved with? The Burr family, are we the kind of people that you'd be proud to know that we're working for you? Could you, could you envision yourself breaking bread with me and my family? If the answer to that is no, who cares what I can do for you economically. I can tell you, I can make you 400 to 1 on your money, but if you don't see that I'm somebody that should be on your team, that's irrelevant. So the first thing you have to see is that I'm somebody that you want on your team. 

RJ Burr  

Now once you get past that, then we look at what can we do for you economically, of all the investments in the world where you can put your hard earned money, because please understand, when somebody invests their money with you, most people didn't get their money easily. Most people had to bust their butt to get it, most people had to make sacrifices they had to miss literally games, they had to miss the ballet with their daughter. While there they had to sacrifice to get to where they're at, so when they make the decision to place their money with you, that's the most sacred decision that can be made in business. And so of all the places you could place your money, why is it what we're doing something that you need to do? 

RJ Burr  

Now when it comes to why we do what we do, I am a really an area specific guy. First thing I do is I find a geologist that is in the area I'm looking at that is an expert in that area. Take my geologist right now, Bruce, he has been drilling on this Louisiana rock for 40 years. It's all he knows, he's the best in the business, I've drilled, drilled wells all over the country, and I've never had a guy as accurate as he is when he says a sand is going to be at a depth, he's darn near within a foot of that sand being at that depth. Now if I took Bruce and put them in East Texas, he'd probably be good just because he's a really good geologist. However, he doesn't know that rock like he does Louisiana rock and so that's another key. And so if you're looking for the secret sauce to get ahead and oil, the first is you have to work hard, well find people that work hard. If you're looking for somebody else to steer the ship on this, find people that work that work harder than anybody else. Secondly, find people that you want to do business with, that you do the research on, that you dig out every hair on their body because look, this is your money we're talking about. That's why I mean, heck, I'm an open book, I tell you to look me up, dig me through, we're going to be married. 

RJ Burr  

Now, one of the little changes that I've made in my life from my first life in oil of my second life in oil. In my first life in oil, I was more of a salesman who happened to be an oil and gas. And so if my partner's called, I was closing, I mean, I was the ABC always be closing, I mean, that was, that was what I cut my teeth and that was what I how I lit. Well, as we got my second life in oil, I realized that if I educated my partners and turn them into truly partners, versus investors, I didn't have to add the zeros and commas to the amount that they invested. They did it willingly, because now they understood what we were trying to do and so I'm more moved to the service side of the industry. And now don't get me wrong, I'm still capitalistic, I'm still greedy, I still want the biggest house, the biggest car, the biggest dog, I'm not, none of that fire has diminished. However, I know that for me to do that, I first have to win for my guys and so every decision we make has one foundation and one foundation alone is good for the partners. And if it's not good for the partners, I don't care what it does for us, we're not going to do it. And so once we crossed that bridge, and once they know that we're the kind of people that you want to do business with, that we know what we're doing, and we're giving you an honest shot for your money. Well, then do the math if it makes sense to you jump in, if not heck, I laugh, they say Dennis, you're more nose than anybody on the planet, no man, they, Dennis has never seen somebody who smiles and bows 1400 times a day. My mom's been called some crazy stuff over the years. 

Ryan Miller  

I love that man, that's helpful advice. Any final remarks, anything else you'd like to say? Like how do they get a hold of you maybe where they can go to learn more about this industry anything at all?

RJ Burr  

Yeah, you want to get a hold of me easiest way, email, rjburr@panex.us, everything comes to my inbox, I'll get back with you and I'm the only one who sees it. Now the second thing when it comes to the education side, we put together a website called panex.us/learn and that was specifically designed for individuals who have never looked at oil and gas before. Oil and gas 101 just gives you a basic understanding of the industry, oil and gas 102 shows you the tax benefits of the industry and how they work. We have videos on the page, we did a movie called a morning without oil, here a couple years ago, I was making me a cup of coffee and started counting up everything in the kitchen that was made from oil and we were shocked and as I'm walking back to my office, well dang RJ if this shocked you how many other people don't know this and that was one of mourning without oil was born. And it's about a five minute video where we basically take a couple, and we remove all the oil products from their life. And it's how they get from waking up in the morning to leaving and going to work and how your life changed without oil and it's pretty eye opening. 

RJ Burr  

And so that's probably the best place, there'll be a little form there, we can put your name on the only person they come to and I am selfish when it comes to people's names, I don't give them to anybody. I mean, I'm sorry, being in the sales because I just don't I don't I don't share your information, I'm selfish like that. And so I'm the only one who sees it and so look, I don't twist any arms on me, I can hear I give my partner's two guarantees. In fact, the G word is a cuss word around here it doesn't exist, however, and that breath do give my partners to one if you call me and by chance I don't answer, I'll call you back before I go to bed that night. And two if you ask me a question that I don't know the answer to, I'll find it for you and that's really all I can do another day, I'm gonna do everything I tell you, I'm gonna do and I'm gonna work as hard as I can and leave no stone unturned when it comes to making as much money as I possibly can and giving you all I got that's about all I can give. 

Ryan Miller  

Man, that's the guy I would say I want on my team, that's for sure just someone who delivers and I guess the orientation to know the importance of reputation and relationships. So just to wrap things up, folks, learn to work hard and harder in your sector really build out your reputation and your relationships and dare I say a third R, your results. Number two thing that RJ left behind here for us to really sink our teeth in is don't lose sight, build a reputation where investors would be proud to have you on their team. Number three, if you want to really get good at making money, say the smart money is going forward as in holding reserves, get the best geologists you can find if you're going to make money in this sector. And then finally, number four is look at your investments, more than just a bunch of assets, but actually a bunch of partnerships and when you humanize those, you too will be well on your way in your pursuit of Making Billions.

Ryan Miller  

Wow, what a show, I hope you enjoyed this episode as much as I did. Now if you haven't done so already, be sure to leave a comment and review on new ideas and guests you want me to bring on for future episodes. Plus, why don't you head over to YouTube and see extra takes while you get to know our guest even better. And make sure to come back for our next episode where we dive even deeper into the people, the process and the perspectives of both investors and founders. Until then, my friends stay hungry, focus on your goals and keep grinding towards your dream of Making Billions.