Dr. Anderson's questions to Pure Cycle Corp (PCYO) leadership • Q1 2025
Question
Dr. Anderson asked a series of questions regarding the future of oil and gas revenues, the level of homebuilder incentives at Sky Ranch, and the company's strategy for balancing long-term value creation with reported earnings.
Answer
Executive Mark Harding explained that oil royalties from new wells provide a significant upfront benefit but have a steep decline curve, while frac water sales revenue has a very favorable outlook for the next five years. He noted that homebuilder incentives at Sky Ranch are minimal (around $15,000) compared to higher-priced markets due to its affordable entry-level price point. Regarding strategy, Harding and Director Daniel Kozlowski discussed how the company's historical, low-basis investments are now maturing, allowing it to generate record earnings while simultaneously reinvesting to build long-term asset value.