PERMIAN BASIN ROYALTY TRUST ANNOUNCES SETTLEMENT OF BLACKBEARD LITIGATION

Rhea-AI Summary

Permian Basin Royalty Trust (NYSE: PBT) has reached a settlement agreement with Blackbeard Operating, LLC regarding litigation over royalty payment calculations at the Waddell Ranch properties. Under the settlement, Blackbeard will pay the Trust a total of $9 million, with $4.5 million due within 30 days and the remaining amount to be paid in four quarterly installments of $1.125 million during 2026.

The agreement also establishes new terms for overhead rates, third-party charges, and technical labor costs against the Trust's 75% net overriding royalty. Additionally, it provides guidelines for future royalty payment calculations and grants the Trust the option to conduct annual site audits.

Positive

• None.

Negative

• Trust agrees to not make future claims for ordinary line loss volumes
• Trust must bear the expense of annual site audits if conducted

Insights

Energy Royalty Trust Analyst

PBT secures $9M settlement from Blackbeard, with clear terms for future royalty calculations, benefiting unitholders with immediate and structured payments.

Permian Basin Royalty Trust has successfully resolved its litigation against Blackbeard Operating with a $9 million settlement - a significant win for unitholders. The payment structure provides both immediate liquidity ($4.5 million within 30 days) and predictable future cash flows ($1.125 million quarterly throughout 2026).

The settlement's structural components are particularly valuable beyond the monetary recovery. It establishes clear parameters for overhead rates chargeable to the Trust and delineates specific conditions for third-party charges related to salt water disposal and gathering/transportation. The agreement on technical labor charges for reservoir engineers using an agreed allocation methodology adds transparency to future accounting.

For unitholders, this resolution eliminates litigation uncertainty and expense while creating a more predictable royalty calculation framework. The negotiated audit rights - allowing annual site audits at the Trust's expense - provide an important verification mechanism to ensure compliance with the settlement terms.

The provisions regarding ordinary line loss (defined by third-party purchase agreements) and agreed-upon reporting requirements further strengthen the Trust's position by establishing clear boundaries and information flow. This comprehensive settlement effectively resolves current claims while implementing safeguards against similar disputes arising in the future, preserving unitholder value and trust management efficiency.

DALLAS, Aug. 19, 2025 /PRNewswire/ -- Argent Trust Company, as Trustee of the Permian Basin Royalty Trust (NYSE: PBT) ("Permian" or the "Trust") today announced that it has reached a settlement agreement in connection with its litigation 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. Pursuant to the lawsuit, the Trustee had sought to recover more than $9 million in damages it alleged resulted from Blackbeard's failure to properly calculate and pay royalties due and owing to the Trust.

Pursuant to the settlement agreement, Blackbeard has agreed to pay the Trust $9,000,000, of which $4,500,000 will be paid to the Trust within 30 days, and the remainder of which will be paid in four equal installments of $1,125,000 quarterly during the 2026 calendar year.

Additionally, the settlement agreement established the overhead rate that may be charged to the Trust and permits Blackbeard to pass through third-party charges for salt water disposal and gathering and transportation, and charge technical labor on reservoir engineers using an agreed allocation methodology against the net overriding royalty. The parties also agreed that the Trust would not make future claims for lost volumes in the case of ordinary line loss (as defined by third party purchase agreements with purchasers). The Trust will have the option to conduct annual site audits, at its expense. The settlement agreement also set forth agreed reporting that Blackbeard will provide the Trustee going forward.

"We are pleased that we were able to resolve these claims in a way that provides value to Trust unitholders, as well as anticipated predictability with regard to how future royalty payments are calculated," said Nancy Willis, Director of Royalty Trust Services of Argent Trust Company.

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

View original content:https://www.prnewswire.com/news-releases/permian-basin-royalty-trust-announces-settlement-of-blackbeard-litigation-302533915.html

SOURCE Permian Basin Royalty Trust

FAQ

What is the total settlement amount Blackbeard will pay to Permian Basin Royalty Trust (PBT)?

Blackbeard will pay a total settlement of $9 million to the Trust, with $4.5 million paid within 30 days and the remainder in four quarterly installments of $1.125 million during 2026.

What was the reason for PBT's lawsuit against Blackbeard Operating?

The Trust sought to recover over $9 million in damages allegedly resulting from Blackbeard's failure to properly calculate and pay royalties due to the Trust from the Waddell Ranch properties.

What percentage of net overriding royalty does PBT hold in the Waddell Ranch properties?

Permian Basin Royalty Trust holds a 75% net overriding royalty in the Waddell Ranch properties in Crane County, Texas.

What new rights does the settlement agreement grant to PBT?

The settlement grants PBT the right to conduct annual site audits at its expense and establishes agreed reporting requirements from Blackbeard going forward.

How will the settlement payment schedule work for PBT shareholders?

The settlement payment will be distributed in two phases: $4.5 million within 30 days of the agreement, followed by four quarterly payments of $1.125 million throughout 2026.