Replies to post #51930 on MMEX Resources Corp (MMEX)

[BBANBOB]

No you're not misunderstanding me at all ,as that is my take on this as well.
That is why I said the numbers shown seem to me to indicate that mmex OWNED the oil.

[BigOtto]

You're almost correct, MMEX will be buying locally produced crude and condensate, refining it, and selling products, mostly to Mexican customers. Their profits will be based on the "crack spread", selling price minus feed stock and operating cost.
They are buying the surface rights on the land, but the minerals are owned by the state of Texas, and cannot be "severed", or sold separately. If there is any oil under the land, MMEX can STILL get it developed and pumped, but the state gets half for Tx school funds. Not worth it unless oil goes way up again. That's why the land is still fairly cheap.
FWIW, the price of crude can go to $100 or back to $25 and it won't have a big impact on MMEX profits until the existing wells dry up. Just look at refiners PPS during the last oil price drop, like PSX, Hardly any impact at all, while upstream stocks plunged, CHK, for instance.