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

Permian Basin Royalty Trust's December Cash Distribution Announcement

On January 21, 2025, Argent Trust Company, acting as the Trustee for the Permian Basin Royalty Trust (NYSE: PBT), announced a cash distribution to unit holders. For December 2024, the Trust declared a distribution of $0.020510 per unit, which is set to be paid on February 14, 2025. This distribution is significant as it reflects the ongoing financial dynamics affecting the Trust, particularly due to challenges related to the Waddell Ranch properties.

Impact of the Waddell Ranch Properties

Notably, the distribution for December does not encompass any proceeds from the Waddell Ranch properties. The initial assessment indicates that the total production costs exceeded the gross proceeds from these properties for the month of December. As a result, the Trust is currently facing an excess cost position regarding Waddell Ranch.

The current month's distribution has observed a slight decrease compared to the previous month's figure. This reduction is primarily attributed to lower oil volumes from the Texas Royalty Properties, coupled with diminished oil and gas prices. However, this has been partially compensated by an increase in gas volumes reported for the month.

• - Operational Challenges: Despite ongoing attempts by the Trustee to obtain crucial information regarding net profits from Blackbeard, the operator responsible for Waddell Ranch, there have been significant delays. Blackbeard has traditionally provided this data monthly but failed this time, leading to complications in calculating net profit interest (NPI) proceeds for January 2025.

If the Trustee receives NPI proceeds by the distribution record date, the Trust intends to include them in February's distribution.

Texas Royalty Properties Overview

For the underlying Texas Royalty Properties, the production statistics reported indicated 16,839 barrels of oil and 9,283 Mcf of gas. The Trust's share from these properties accounted for 14,914 barrels of oil and 8,213 Mcf of gas. The average prices for oil and gas were reported as $67.69 per barrel and $9.56 per Mcf respectively.

This production volume and pricing resulted in total revenues of $1,228,673 for the Texas Royalty Properties. After deductions for taxes and expenses totaling $142,208, a net profit of $1,086,465 for January was calculated. Given the Trust's 95% NPI in these properties, a significant contribution of $1,032,142 to the distribution was noted.

Financial Overview

The total underlying properties yield significant numbers, despite the absence of critical data from Waddell Ranch. The financial implications of the ongoing operational issues underscore the shadow of rising production costs. The distribution allocated to unit holders amounts to $955,953 across 46,608,796 units, translating into the aforementioned $0.020510 per unit.

As market conditions evolve, impacted by broader global situations, predicting future distributions remains a complex challenge for the Trust leadership.

Ongoing Legal Matters

Legal challenges are also looming over the Trust, as on May 8, 2024, litigation against Blackbeard Operating commenced. The Trust alleges significant damages exceeding $15 million due to questionable overhead deductions from royalty payments. As it stands, the trial date is set for November 17, 2025, with discovery activities currently underway, including on-site assessments of the Waddell Ranch properties. The Trustee's audits have also revealed a series of discrepancies concerning deductions.

From these ongoing issues, it is clear that the Trust's financial landscape is not only influenced by market conditions but also by operational and legal complexities. Stakeholders and unit holders await the outcomes of these developments, hoping for a resolution that honors both financial integrity and the interests of the Trust.

For detailed cash distribution history and related financial information, unit holders can access the Trust's website at Permian Basin Royalty Trust.

Conclusion

In summary, the Permian Basin Royalty Trust’s December distribution highlights the rising operational costs linked to Texas Royalty and Waddell Ranch properties while setting a tone of cautious optimism as they navigate the legal and financial terrain ahead.