#United States #Dallas #Permian Basin #Argent Trust #Blackbeard Operating

Permian Basin Royalty Trust Reaches Settlement with Blackbeard Operating

In a pivotal development for stakeholders, the Permian Basin Royalty Trust (NYSE: PBT), managed by Argent Trust Company, has successfully resolved its legal dispute with Blackbeard Operating, LLC. This settlement is rooted in a lawsuit aimed at recovering upwards of $9 million in damages claimed to have resulted from Blackbeard's mismanagement in calculating and remitting royalties due to the Trust.

Background of the Litigation

The legal battle focused on properties located at Waddell Ranch in Crane County, Texas, where the Trust holds a 75% net overriding royalty interest. The Trust initially filed suit against Blackbeard, alleging considerable financial discrepancies owing to improper royalty calculations. These calculations are essential as they directly impact the Trust’s income and the distributions made to its unitholders.

Terms of the Settlement

Under the terms of the agreement reached, Blackbeard will compensate the Trust a total of $9 million. Notably, an immediate payment of $4.5 million will be made within 30 days of signing the settlement. The remaining balance will be disbursed in quarterly installments of $1.125 million throughout 2026. This structured payment plan is designed to facilitate cash flow management for both parties involved.

Apart from the monetary aspects, the settlement outlines new agreed-upon mechanisms for calculating costs associated with overhead and third-party services. For example, Blackbeard may now recover expenses related to saltwater disposal and the costs of technical labor, specifically for reservoir engineers, in a manner pre-approved by the Trust.

Additionally, both parties have consented to a stipulation that the Trust will not file future claims regarding lost volumes related to ordinary line loss. However, the Trust has retained the right to conduct annual audits at its own cost, ensuring transparency and accountability going forward.

Future Implications

For unitholders, this settlement is a positive outcome, promising both immediate cash recovery and long-term stability concerning royalty payments. As Nancy Willis, Director of Royalty Trust Services at Argent Trust, remarked, “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.”

This agreement not only rectifies past discrepancies but also lays a foundation for improved collaboration between the Trust and Blackbeard, thus enhancing operational clarity and financial governance in future dealings.

Looking Ahead

The development will likely lead to heightened expectations from both investors and stakeholders regarding the Trust's financial transparency and operational efficacy. As forward-looking statements in official communications indicate, the Trust acknowledges potential external factors that could influence outcomes in terms of future financial performance.

In summary, the successful resolution of this litigation illustrates the Trust’s commitment to protecting the interests of its unitholders while also fostering a cooperative relationship with its operational partners.

For further updates on this matter or more about the Permian Basin Royalty Trust's activities, stakeholders are encouraged to stay informed via official announcements and quarterly reports.

For inquiries, interested parties may contact Jana Egeler, Vice President of Argent Trust Company, at 1.855.588.7839.

This settlement marks a significant turning point in the Trust's operational dynamics and signifies a renewed pledge to uphold the interests of its investors.