#United States #Dallas #Permian Basin #Waddell Ranch #Royalty Trust

Permian Basin Royalty Trust's February 2025 Cash Distribution

The Permian Basin Royalty Trust, managed by Argent Trust Company, has officially declared a cash distribution of $0.017144 per unit for February 2025. This figure represents a slight decrease from the previous month's distribution, mainly due to the decline in oil volumes and lower natural gas prices from Texas Royalty Properties. The effective date for this distribution is set for March 14, 2025, for all unit holders recorded by February 28, 2025.

In detail, the distribution has been impacted by the Waddell Ranch properties, where total production costs have surpassed gross proceeds for the month of January. As a result, no proceeds were included in this month’s allocation. Over the past month, the Trustee has sought detailed production data from Blackbeard, the operator of the Waddell Ranch properties. Unfortunately, Blackbeard has declined to provide the essential information needed to accurately calculate net profits interest (NPI) proceeds as of the announcement date, hindering the Trust's ability to distribute any potential gains from these properties.

The existing situation presents a continuing excess cost position for the Waddell Ranch operations. Should any proceeds be received by the Trustee prior to the record date, they will be incorporated into the March distribution. The ongoing lack of data from Blackbeard remains a concern, prompting the Trustee to anticipate that future updates on production and pricing will be provided quarterly, instead of monthly, moving forward. This change was attributed to Blackbeard's recent shift in reporting methodology.

Texas Royalty Properties Overview

For February 2025, the Texas Royalty Properties reported a total production output of 15,307 barrels of oil and 9,971 Mcf of gas. Specifically, the Trust’s allocated share consisted of 13,469 barrels of oil and 8,774 Mcf of gas at an average selling price of $68.37 per barrel of oil and $8.38 per Mcf of gas. The revenue generated from these operations amounted to approximately $1,130,112 after deducting taxes and expenses of $139,507, resulting in a net profit of $990,605 for February 2025. With a net profit interest of 95%, the contribution from the Texas Royalty Properties to the current month’s distribution is approximately $941,074.

Last month's production figures reflected a decrease in oil output due to seasonal variations and fluctuating market conditions. Consequently, understanding the dynamics of pricing is crucial as they continue to influence the Trust's overall performance and future distributions.

Trust Litigation Background

In an ongoing legal dispute, the Trustee filed a lawsuit against Blackbeard Operating, LLC in May 2024, seeking to recover over $15 million in damages related to what are alleged to be improper deductions from royalty payments to the Trust. The legal proceedings include claims of incorrect charges and duplicate expense claims dating back to the audits performed from 2020 to 2022. The litigation process, including on-site audits and expert analysis, is proceeding with a trial date set for November 17, 2025.

Trustees routinely review and scrutinize royalty payment practices and residual transactions from production entities. The complexity of the Trust’s operational framework presents challenges, particularly in navigating through alleged discrepancies in financial reporting.

Future Projections

Given the unpredictable nature of global market conditions, the Trust management acknowledges the difficulties in forecasting future distributions. The recent production challenges and changes in reporting from Blackbeard may lead to continued fluctuations in payout amounts. Full transparency and expedient communication with unit holders remain top priorities as the Trust navigates these complexities.

Residents of Texas and stakeholders are encouraged to keep abreast of developments through the Trust's quarterly reports, available on the official website, detailing performance metrics and strategic updates on Trust properties.

For more detailed information on past distributions, operational reports, and the comprehensive financial history of the Trust, please visit Permian Basin Royalty Trust. The site also provides access to tax information and SEC filings relevant to unit holders.

As the situation develops, the Permian Basin Royalty Trust is committed to ensuring that unit holders receive timely updates and maintain confidence in the Trust’s strategic direction and operational accountability.