PERMIAN BASIN ROYALTY TRUST ANNOUNCES MAY CASH DISTRIBUTION AND EXCESS COST POSITION ON WADDELL RANCH PROPERTIES

Rhea-AI Summary

Permian Basin Royalty Trust (NYSE: PBT) announced a cash distribution of $0.018841 per unit, payable on June 13, 2025. The distribution shows a decrease from the previous month due to lower oil volumes and prices in Texas Royalty Properties. The Trust reported Texas Royalty Properties production of 15,442 barrels of oil and 11,198 Mcf of gas, with average prices of $68.39 per bbl for oil and $9.42 per Mcf for gas. Notably, Waddell Ranch properties continue to face an excess cost position, with no proceeds included in this distribution. The Trust is currently engaged in litigation against Blackbeard Operating, seeking over $25 million in damages related to disputed overhead charges and production volumes, with a trial date set for November 17, 2025.

Positive

• Texas Royalty Properties generated Net Profit of $1,027,573 for May
• Trust's NPI of 95% resulted in $976,194 contribution from Texas Royalty Properties

Negative

• Distribution decreased from previous month due to lower oil volumes and prices
• Waddell Ranch properties remain in excess cost position with no proceeds
• Blackbeard refused to provide monthly NPI proceeds information
• Oil price decreased from $71.97 to $68.39 per barrel
• Gas price declined from $11.54 to $9.42 per Mcf

Insights

Energy Royalty Trust Analyst

PBT announces reduced distribution of $0.018841/unit with zero contribution from Waddell Ranch properties due to ongoing operator dispute.

The May distribution of $0.018841 per unit announced by Permian Basin Royalty Trust represents a significant decrease from the previous month. This reduction stems primarily from the Texas Royalty Properties experiencing lower oil volumes and reduced pricing for both oil and natural gas, only slightly offset by a marginal increase in natural gas volumes.

Most concerning is the complete absence of revenue contribution from the Waddell Ranch properties, where total production costs exceeded gross proceeds for April. The trustee explicitly notes that Blackbeard, the operator, has refused to provide necessary information to calculate the net profits interest for May's distribution, breaking from their previous pattern of monthly reporting.

The Texas Royalty Properties produced 15,442 barrels of oil and 11,198 Mcf of gas, with the Trust's allocated portion being 13,619 barrels of oil and 9,894 Mcf of gas. Oil pricing averaged $68.39 per barrel (down from $71.97) and gas averaged $9.42 per Mcf (down from $11.54), generating $1,161,479 in revenues. After deducting $133,906 in taxes and expenses, the net profit was $1,027,573, contributing $976,194 to this month's distribution after applying the Trust's 95% NPI.

The ongoing litigation between the Trust and Blackbeard has escalated, with the Trustee seeking over $25 million in damages for allegedly impermissible deductions from royalty payments. The legal dispute centers on overhead charges, duplicate charges, and other contested expenses identified during audits from 2020-2023. A trial date has been set for November 17, 2025, with discovery proceedings including on-site audits currently underway.

The dispute with Blackbeard creates significant uncertainty regarding future distributions, as all excess costs must be recovered before any Waddell Ranch proceeds can be distributed to unitholders. With Blackbeard now only providing quarterly information rather than monthly updates, transparency has materially decreased.

DALLAS, May 19, 2025 /PRNewswire/ -- Argent Trust Company, as Trustee of the Permian Basin Royalty Trust (NYSE: PBT) ("Permian" or the "Trust") today declared a cash distribution to the holders of its units of beneficial interest of $0.018841 per unit, payable on June 13, 2025, to unit holders of record on May 30, 2025. The distribution does not include proceeds from the Waddell Ranch properties, as total production costs ("Production Costs") exceeded gross proceeds ("Gross Proceeds") for the month of April, resulting in a continuing excess cost position for the Waddell Ranch properties. More information regarding the Waddell Ranch properties is described below.

This month's distribution decreased compared to the previous month due primarily to the Texas Royalty Properties having lower oil volumes, along with lower oil and natural gas pricing, partially offset by slightly higher natural gas volumes for the month reported.  

WADDELL RANCH
Notwithstanding requests from the Trustee to Blackbeard, the operator of the Waddell Ranch properties, and the fact that prior to May 2024, Blackbeard has provided this information on a monthly basis since Argent Trust Company has become Trustee of the Trust, Blackbeard has refused to provide the Trustee information necessary to calculate the net profits interest ("NPI") proceeds for May 2025 as of the announcement date for this month's distribution. As a result of Blackbeard's failure to provide this information by the NYSE notification date for the distribution, in accordance with the Trust indenture, if NPI proceeds are received from the Waddell Ranch properties on or prior to the record date, they will be included in the June distribution.

As noted above, no proceeds were received by the Trustee in April 2025 to be included in the May distribution.  All excess costs, including any accrued interest, will need to be recovered by future proceeds from the Waddell Ranch properties before any proceeds are distributed to the Trust. Due to the fact that Blackbeard is providing production, pricing and cost information quarterly instead of monthly, the Trustee will be providing that information in the quarterly reports on Form 10-Q and annual reports on Form 10-K for the foreseeable future (to the extent timely received from Blackbeard).

TEXAS ROYALTY PROPERTIES
Production for the underlying Texas Royalty Properties was 15,442 barrels of oil and 11,198 Mcf of gas. The production for the Trust's allocated portion of the Texas Royalty Properties was 13,619 barrels of oil and 9,894 Mcf of gas. The average price for oil was $68.39 per bbl and for gas was $9.42, which includes significant NGL pricing, per Mcf. This would mainly reflect production and pricing in February for oil and January for gas. These allocated volumes were impacted by the pricing of both oil and gas. This production and pricing for the underlying properties resulted in revenues for the Texas Royalty Properties of $1,161,479. Deducted from these revenues were taxes and expenses of $133,906, resulting in a Net Profit of $1,027,573 for May. With the Trust's NPI of 95% of the Underlying Properties, this would result in a net contribution by the Texas Royalty Properties of $976,194 to this month's distribution.

	Underlying Properties		Net to Trust Sales
	Volumes		Volumes		Average Price
	Oil (bbls)	Gas (Mcf)	Oil (bbls)	Gas (Mcf)(1)	Oil (per bbl)	Gas (per Mcf) (2)
Current Month
Waddell Ranch	(3)	(3)	(3)	(3)	(3)	(3)
Texas Royalties	15,442	11,198	13,619	9,894	$68.39	$9.42
Prior Month
Waddell Ranch	(3)	(3)	(3)	(3)	(3)	(3)
Texas Royalties	17,157	10,093	15,292	8,991	$71.97	$11.54

⁽¹⁾ These volumes are net to the Trust, after allocation of expenses to Trust's net profit interest, including any prior period adjustments.
⁽²⁾ This pricing includes sales of gas liquid products.
⁽³⁾ Information is not being made available monthly but may be provided within 30 days next following the close of each calendar quarter. To the extent the Trustee receives such information timely following the quarter, information will be included in the Trust's quarterly report on Form 10-Q for the applicable quarter (or the annual report on Form 10-K with respect to the fourth quarter).

General and Administrative Expenses deducted for the month, net of interest earned were $98,012 resulting in a distribution of $878,182 to 46,608,796 units outstanding, or $0.018841 per unit.

The worldwide market conditions continue to affect the pricing for domestic production. It is difficult to predict what effect these conditions will have on future distributions.

TRUST LITIGATION
On May 8, 2024, the Trustee announced that it had initiated a lawsuit by filing a petition in the District Court of Tarrant County, Texas against Blackbeard Operating, LLC ("Blackbeard"), the operator of properties in the Waddell Ranch, in Crane County, Texas, in which the Trust holds a 75% net overriding royalty. On June 10, 2024, Blackbeard filed its original answer and counterclaim to the lawsuit. The trial date in the District Court of Tarrant County is scheduled for November 17, 2025, 8:30 a.m., Central Time. Discovery is ongoing, including on-site audits of the Waddell Ranch properties, engagement of and analyses by expert witnesses, and review of documents provided by Blackbeard.

Under the original petition, the Trustee sought to recover more than $15 million in damages to the Trust resulting from overhead costs and other expenses the Trustee alleges were impermissibly deducted from royalty payments to the Trust. The Trustee routinely engages in audits of the revenues and expenses with respect to the Trust's royalty payments. In connection with its audit for the period from 2020-2022 the Trustee identified exceptions to certain expenses deducted from the Trust's royalty payments, including among other things, incorrect overhead charges, application of overhead charges to non-producing wells, duplicate charges for services, materials and utilities as well as other expenses the Trustee alleges are ineligible charges. The Trustee's petition was amended in September 2024 to add additional claims relating to the 2023 audit and production volumes, seeking damages of more than $25 million. Attempts to resolve the disputed charges outside of court have been unsuccessful to date. Included in Blackbeard's original answer and counterclaim are requests for declaratory judgment by the court that it may deduct certain disputed overhead charges from Trust royalty payments and that it may limit information it provides to the Trust to quarterly statements of the net proceeds computation and inspection of books and records during normal business hours.

The 2024 Annual Report with Form 10-K, which includes the December 31, 2024, Reserve Summary, has been filed with the Securities Exchange Commission. Permian's cash distribution history, current and prior year financial reports, tax information booklets, and a link to filings made with the Securities and Exchange Commission, all can be found on Permian's website at http://www.pbt-permian.com/. Additionally, printed reports can be requested and are mailed free of charge.

FORWARD-LOOKING STATEMENTS
Any statements in this press release about future events or conditions, and other statements containing the words "estimates," "believes," "anticipates," "plans," "expects," "will," "may," "intends," and similar expressions, other than historical facts, constitute forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Factors or risks that could cause the Trust's actual results to differ materially from the results the Trustee anticipates include, but are not limited to the factors described in Part I, Item 1A, "Risk Factors" of the Trust's Annual Report on Form 10-K for the year ended December 31, 2024, and Part II, Item 1A, "Risk Factors" of subsequently filed Quarterly Reports on Form 10-Q.

Actual results may differ materially from those indicated by such forward-looking statements. In addition, the forward-looking statements included in this press release represent the Trustee's views as of the date hereof. The Trustee anticipates that subsequent events and developments may cause its views to change. However, while the Trustee may elect to update these forward-looking statements at some point in the future, it specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing the Trustee's views as of any date subsequent to the date hereof.

Contact: Jana Egeler, Vice President, Argent Trust Company, Trustee, Toll Free – 1.855.588.7839

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SOURCE Permian Basin Royalty Trust

FAQ

What is PBT's dividend distribution amount for May 2025?

PBT announced a cash distribution of $0.018841 per unit, payable on June 13, 2025, to unitholders of record on May 30, 2025.

Why did Permian Basin Royalty Trust's distribution decrease in May 2025?

The distribution decreased due to lower oil volumes and prices in Texas Royalty Properties, along with lower oil and natural gas pricing, though partially offset by slightly higher natural gas volumes.

What is the status of PBT's litigation against Blackbeard Operating?

PBT is seeking over $25 million in damages related to disputed overhead charges and production volumes. The trial is scheduled for November 17, 2025, in the District Court of Tarrant County.

What was the production and pricing for PBT's Texas Royalty Properties in May 2025?

Production was 15,442 barrels of oil at $68.39 per bbl and 11,198 Mcf of gas at $9.42 per Mcf, generating revenues of $1,161,479.

Why are there no proceeds from PBT's Waddell Ranch properties in May 2025?

Total production costs exceeded gross proceeds for Waddell Ranch properties, resulting in a continuing excess cost position with no proceeds available for distribution.