Oil and gasoline prices show no signs of slowing down as they continue to rise across the board. A new week is unfolding and most trending stocks are part of the energy sector. Both large and small cap companies with ties to oil mining and production are seeing significant growth as market supply fears push oil prices to their highest point in more than a decade. Among today’s market winners is a name that isn’t as widely known to many. Marine Petroleum Trust (NASDAQ:MARPS) has been rising steadily for the past week, demonstrating impressive gains.
Let’s take a closer look at what it is and why investors should be paying close attention.
What Is the Marine Petroleum Trust?
The Marine Petroleum Trust, often referred to simply as Marine, has existed since 1965. Formed under Texas state laws, it operates as a royalty trust. According to Marine’s webpage, the trust was “organized for the sole purpose of providing an efficient, orderly and practical means for the administration and liquidation of rights to payments from certain oil and natural gas leases in the Gulf of Mexico.”
The site also notes that the original agreement was “pursuant to license agreements and amendments” with Gulf Oil Corporation. Gulf has since been acquired by Chevron (NYSE:CVX). Marine, meanwhile, operates Marine Petroleum Corporation. This wholly-owned subsidiary “holds title to interests” in offshore Louisiana properties.
According to the trust webpage, “Ninety-eight percent of all oil, natural gas, and other mineral royalties collected by Marine Petroleum Corporation, less the cost of receiving and collecting, are paid to the Trust.”
The Numbers Behind It
How much of the trust’s royalty revenues can be attributed to oil and how much to natural gas? According to the webpage, the ratio is roughly 40/60. The factors that affect these royalty revenues include oil-well-production capabilities and demand fluctuations by season.
Of course, revenues are also greatly affected by oil and natural gas prices. Given how high prices for both have been lately, it makes sense that the Marine Petroleum Trust would be trending in the green. Despite a dip this morning, MARPS is up more than 29% for the day and seems determined to rebound.
Oil prices recently reached $130, and while they’ve declined since then, they still remain elevated. Many experts remain bullish in their oil price predictions, forecasting further spikes in the coming months.
Where Will MARPS Go from Here?
That doesn’t mean that it’s been an easy year for Marine. The trust saw shares fall early in February 2022. However, the current oil boom has propelled it into the green. This should give investors some cause to relax as prices continue to rise, particularly given its impressive performance of late.
Even so, MARPS is proving that it can ride the wave generated by the current boom as well as any oil stocks. It has outperformed several sector giants so far today and has shown no signs of slowing down since shares began climbing again this morning. Investors should be watching Marine Petroleum Trust closely as the oil boom plays out.
On the date of publication, Samuel O’Brient did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.