#USA #Dallas #Permian Basin #Waddell Ranch #Royalty Trust

Permian Basin Royalty Trust Increases Cash Distribution

On March 21, 2025, Argent Trust Company, acting as the Trustee of the Permian Basin Royalty Trust (NYSE: PBT), announced a cash distribution of $0.018047 per unit for its unit holders. This distribution will be payable on April 14, 2025, to those who hold units by the record date of March 31, 2025. While this announcement marks a slight increase from the previous month, it notably excludes any proceeds from the Waddell Ranch properties due to exceeding production costs.

Distribution Details

The March cash distribution reflects an uptick primarily fueled by higher oil and natural gas volumes from Texas Royalty Properties. Despite a rise in oil prices, the overall benefits were slightly mitigated by decreased natural gas prices, illustrating the fluctuating landscape of energy commodities. The cash flow from the Texas Royalty Properties accounted for about $1,276,384 in revenues, from which operational expenses and taxes were deducted, resulting in a net profit of $1,138,401. The Trust's Net Profit Interest (NPI), pegged at 95%, made it possible for the Texas Royalty Properties to contribute $1,081,481 to this month's distribution.

Waddell Ranch Production Issues

A significant concern remains with the Waddell Ranch properties. Despite multiple requests, the current operator, Blackbeard Operating, has not provided the crucial information needed for calculating the net profits interest (NPI) proceeds as of this distribution's announcement date. Historically, Blackbeard had offered this data monthly, but communications have recently shifted to a quarterly basis, creating uncertainties about the Trust's future cash flows from these properties. As a result, any proceeds from Waddell Ranch will only be incorporated into subsequent distributions once that data is received.

Financial Performance

The Waddell Ranch and Texas Royalty statistics reveal a dichotomy in performance. While Texas Royalty Properties saw production of 16,839 barrels of oil and 10,659 Mcf of gas, the Waddell Ranch properties have been less transparent, leading to operational and financial setbacks for the Trust. The environmental conditions impacting pricing and production remain unpredictable, with stakeholders concerned about how these factors will affect distributions in coming months.

Ongoing Litigation

The complexity surrounding these properties has been further exacerbated by ongoing litigation against Blackbeard Operating. Filed in May 2024, this lawsuit seeks to recover more than $15 million in alleged overcharges deducted from royalty payments over the years. Blackbeard's defenses, while still evolving, challenge the Trustee’s claims, asking the court for declaratory decisions to support their position regarding administering overhead charges.

Discovery continues, and as the litigation unfolds scheduled for trial on November 17, 2025, the Trustee's audits highlight irregularities in the charges made by Blackbeard, setting the stage for potentially significant recoveries or further disputes. The dynamic nature of this case reverberates through the Trust's operational strategies and financial forecasts, underscoring the challenges posed by external market pressures and internal mismanagement claims.

Looking Ahead

As the Permian Basin Royalty Trust navigates through this period of uncertainty, its cash distribution history and operational transparency will be critical for unit holders. The anticipated data from the Waddell Ranch properties, once delivered, will be included in future reports and distributions, with Argent Trust committed to providing timely updates to stakeholders. For more detailed financial reports and ongoing developments, stakeholders can visit the Trust's official website for the latest news and updates regarding performance and regulatory filings.

In conclusion, while the March distribution paints a picture of resilience amid adversity, the challenges faced by the Trust highlight the need for ongoing diligence and adaptation in response to both market conditions and operational realities.