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

Permian Basin Royalty Trust Announces April Cash Distribution

The Permian Basin Royalty Trust (NYSE: PBT), managed by Argent Trust Company, has declared a significant cash distribution for its unit holders. Set at $0.019615 per unit, this distribution will be payable on May 14, 2025, for those who hold units as of April 30, 2025. It's crucial to note that this distribution excludes any proceeds from the Waddell Ranch properties due to an excess cost position reported for the month of March.

This update reflects a mild increase from previous distributions, largely attributed to enhanced oil production and rising prices in the Texas Royalty Properties, although this was slightly counteracted by a drop in natural gas volumes reported.

Waddell Ranch Properties Update

The situation at the Waddell Ranch properties remains complex. Despite prior communication regarding the production details regularly provided by Blackbeard, the operator of these properties, they have recently refrained from sharing necessary information to assess the net profits interest (NPI) proceeds for April 2025. The Trustee has been working diligently to obtain this data, as it is essential for determining the fiscal outcome related to these properties. Failure to provide this information means that while any potential NPI proceeds received by the record date will be considered for the May distribution, the current standing remains difficult.

Texas Royalty Properties Contributions

In contrast, the production volumes from the Texas Royalty Properties yielded 17,157 barrels of oil and 10,093 Mcf of gas. The Trust's allocated share totaled 15,292 barrels of oil and 8,991 Mcf of gas. The average oil price stood at $71.97 per barrel, while natural gas was priced at $11.54 per Mcf, including substantial NGL (natural gas liquids) pricing. These figures, reflecting production from January and December respectively, contributed to revenues of approximately $1,351,295 for the properties. After deducting relevant taxes and expenses amounting to $147,465, the net profit stood at $1,203,830. Given that the Trust holds a 95% NPI in the underlying properties, this translated to a contribution of $1,143,639 towards the April distribution.

Financial Breakdown

Administrative costs deducted for the month totaled $229,374 with interest earnings considered. Consequently, the total distribution amounted to $914,265 attributed to 46,608,796 units outstanding, leading to the previously mentioned $0.019615 per unit. The prevailing global market conditions continue to heavily influence pricing for domestic production, making future distribution forecasts challenging.

Ongoing Litigation with Blackbeard

Adding to the uncertainty, the Trust has initiated legal proceedings against Blackbeard Operating LLC due to severe discrepancies in overhead costs. The lawsuit filed on May 8, 2024 alleges that more than $15 million in damages has occurred due to improper deductions from royalties paid to the Trust. The upcoming trial in the District Court of Tarrant County is slated for November 17, 2025, amidst ongoing audits and reviews of royalties from the Trust’s perspective. The situation is exacerbated by Blackbeard's counterclaims regarding permissible deductions and limitations on information provided, which adds layers of complexity to Trust operations.

Conclusion

For investors and unit holders, the April distribution announcement comes amidst significant developments, both financially and legally. As more information becomes available—contingent on the forthcoming quarterly updates—a clearer picture of the Trust's standing and future prospects will emerge. Continued diligence by the Trustee aims to safeguard the interests of unit holders while navigating the challenging operational landscape presented by external factors and the legal challenges at hand.