Oil and gas are cyclical. Phoenix Energy LLC (AMEX:PXHEP) is trying to build something that isn't.

"We're not building a business that reacts to the market," CEO Adam Ferrari told Benzinga in an exclusive email interview. "We're building one that's designed to thrive through it."

Designing For Down Cycles

Ferrari's philosophy starts with a blunt premise: commodity companies can't rely on high prices to meet obligations. Phoenix invests where returns stay resilient even in middling markets—currently the Williston Basin—while steadily expanding its mineral portfolio.

"In any commodity-driven business, you cannot rely on high prices to meet your obligations," Ferrari said.

Mineral rights, he argues, are the company's defensive backbone. They generate income without drilling risk or operating costs, creating what Phoenix views as cycle-resilient cash flow. Ferrari said the company has met investor obligations with this model and expects to continue doing so.

The Hidden Value Is Time

Ferrari believes the market's biggest blind spot is duration.

"We think that mineral rights' biggest hidden value is time," he said. "Once a well is drilled, checks can keep coming in for 30 to 40 years in some cases, with no additional capital outlays."

That longevity is often underestimated by investors focused on quarterly oil prices and drilling cycles. Ferrari added that minerals can be especially attractive in softer price environments, since they provide cash flow without the capital risk of drilling programs.

Building 40-Year Cash Flow Assets

The pitch is simple: time is the compounding engine most investors ignore.

While markets obsess over barrels and price charts, Phoenix is building assets designed to monetize decades of production. In a sector defined by volatility, Ferrari is betting that duration—not price—is the ultimate edge.

And in commodities, duration may be the most undervalued asset of all.

Image: Courtesy of Phoenix Energy PR