PERMIAN BASIN ROYALTY TRUST
For the period ended Dec 31, 2024. Filed Mar 14, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Mar 14, 2025
PBT$28.93+1.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-02-29.
0001193125-24-053153
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationCurrent report: 10-K
Period ended 2024-12-31; filed 2025-03-14.
0000950170-25-039308
Item 7. Management’s Discussion and Anal ysis of Financial Condition and Results of OperationThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 44 previous paragraphs and 49 current paragraphs.
22 unchanged; 14 reworded; 12 added; 8 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 7 previous and 5 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (12)
Current report
Prices obtained for oil and gas production depend upon numerous factors that are beyond the control of the Trust. Inflationary pressures continued during 2024, which has impacted the cost of goods and services for operators on the Underlying Properties and administrative costs for the Trust.
Current report
Notwithstanding requests from the Trustee to Blackbeard, the operator of the Waddell Ranch properties, and the fact that Blackbeard has provided this information on a monthly basis since Argent Trust Company has become Trustee of the Trust, Blackbeard has refused to provide the Trustee information necessary to calculate the net proceeds as of the announcement date for monthly distributions starting in May 2024. As a result of Blackbeard's failure to provide this information by the NYSE notification date for the monthly distribution, in accordance with the Trust indenture, if Royalty income is received from the Waddell Ranch properties on or prior to the record date, it will be included in the following month's distribution, rather than the current month's distribution. In the second and third quarter reports, the Royalty income received from Blackbeard after the NYSE notification deadline was included as a liability on the Condensed Statement of Assets, Liabilities, and Trust Corpus titled, "Funds received for future distributions." There was no Royalty income received for October and November of 2024, therefore, there are no funds received for future distributions as of December 31, 2024.
Current report
Total capital expenditures for the eleven months of production reported in 2024 and used in the net overriding royalty calculation were approximately $109.4 million (gross). Total capital expenditures were $120.5 million (gross) in 2023 and $124.3 million (gross) in 2022.
Current report
Development information for the Waddell Ranch properties, such as well activity, completions, workovers, remedial activities, and plugging and abandonment, was not provided by Blackbeard. This information has previously been provided on a monthly basis since Argent Trust Company has become Trustee of the Trust until May 2024.
Current report
Blackbeard has advised the Trustee that it will not be providing a proposed capital expenditure budget for 2025, information that has previously been provided on an annual basis.
Current report
Distributable income for 2024 was $25,415,368 or $0.55 per Unit.
Current report
Assets, liabilities, and distributions for each month in the fourth quarter of 2024 are as follows:
Current report
Development information for the Waddell Ranch properties such as well completions, workovers, remedial activities, and plugging and abandonment, was not provided by Blackbeard. This information has previously been provided monthly since Argent Trust Company has become Trustee of the Trust until May 2024.
Current report
Royalty income recorded for a month is the amount computed and paid to the Trustee on behalf of the Trust by the interest owners. Royalty income consists of the amounts received by the owners of the interest burdened by the Royalties from the sale of production less accrued production costs, development and drilling costs, applicable taxes, operating charges and other costs and deductions multiplied by 75% in the case of the Waddell Ranch properties and 95% in the case of the Texas Royalty properties.
Current report
Trust expenses, consisting principally of routine general and administrative costs, recorded are based on liabilities paid and cash reserves established out of cash received or borrowed funds for liabilities and contingencies.
Current report
Distributions to Unit holders are recorded when declared by the Trustee.
Current report
Royalty income is computed separately for each of the conveyances under which the Royalties were conveyed to the Trust. If monthly costs exceed revenues for any conveyance (“excess costs”), such excess costs cannot reduce royalty income from other conveyances, but is carried forward with accrued interest to be recovered from future net proceeds of that conveyance.
Removed paragraphs (8)
Previous report
Total capital expenditures in 2023 used in the net overriding royalty calculation were approximately $116 million (gross) compared to $124.3 million (gross) in 2022 and $66.6 million (gross) in 2021. The operator of the Waddell Ranch properties has informed the Trustee that, in order to halt the production decline curve and to exploit the remaining potential of the Trust’s assets more fully, a more aggressive, robust capital expenditure budget will be necessary in the future and is being pursued.
Previous report
In 2022, there were 46.9 recompletion wells completed and 17.8 wells permanently plugged on the Waddell Ranch properties. Actual costs for this program in 2022 approximated $124.3 million (gross). In 2023, there were 28.9 new drill wells (net) and 53 recompletion wells (net) completed on the Waddell Ranch properties.
Previous report
Texas law requires all temporarily abandoned wells to be either worked over and recompleted to functional status or permanently plugged and abandoned within a five year time frame. The Waddell Ranch properties contain over 700 such temporarily abandoned wells. In 2023, there were 53** **recompletion wells completed and 31 wells permanently plugged on the Waddell Ranch properties.
Previous report
There were 77 drill wells (gross) completed on the Waddell Ranch properties during 2023. During, 2022, there were 91 drill wells completed on the Waddell Ranch properties.
Previous report
Blackbeard has advised the Trustee that the proposed budget for 2024 has not been finalized; however, it has provided the Trustee with a preliminary capital expenditure budget of approximately $301 million (gross) and development plan reflecting that the 2024 budget will include amounts to be spent on 83 (gross) horizontal wells and 12 (gross) vertical wells along with 24 (gross) recompleted well prospects to be worked over and completed as well as infrastructure and plugging and abandonment costs.
Previous report
Distributable income for 2021 was $10,721,775 or $0.23 per Unit.
Previous report
The Trustee has been advised that oil and gas production increased in the fourth quarter of 2023 compared to the same period in 2022 primarily due to additional drilling.
Previous report
The Trust has been advised that 5.6 (net) wells were drilled and completed during the three months ended December 31, 2023, and there were 4.9 (net) wells in progress.
Reworded paragraphs (14)
Previous wording
Royalty income of the Trust for the calendar year is associated with actual oil and gas production for the period from November of the prior year through October of the current year. Oil and gas production for 2023, 2022 and 2021 generated by the Royalties and the Underlying Properties, excluding portions attributable to the adjustments discussed hereafter, are presented in the following table:
Current wording
Notwithstanding requests from the Trustee to Blackbeard, the operator of the Waddell Ranch properties, Blackbeard has refused to provide the Trustee information necessary to calculate the net proceeds as of the NYSE notification date beginning May 2024 such that Royalty income of the Trust for the calendar year is associated with actual oil and gas production for the period from November of the prior year through September of the current year for the Waddell Ranch properties. Royalty income for the Trust for the calendar year for the Texas Royalty properties is associated with actual oil and gas production from November through October 2024. Oil and gas production for 2024, 2023 and 2022 generated by the Royalties and the Underlying Properties, excluding portions attributable to the adjustments discussed hereafter, are presented in the following table:
Previous wording
The average price of oil decreased to $76.72 per barrel in 2023, down from $94.11 per barrel in 2022. The average price of oil in 2021 was $63.34 per barrel. In addition, the average price of gas decreased from $5.54 per Mcf in 2022 to $2.40 per Mcf in 2023. The average price of gas in 2021 was $3.53 per Mcf. Oil prices have decreased primarily because of world market conditions. Oil prices are expected to remain volatile. Gas liquids values have declined along with gas pricing due to high production levels, consistently mild weather patterns, and decreased heating demand. Blackbeard, after assuming the role of operator of the Waddell Ranch Properties, immediately instituted a workover of specific wells, which caused the Trust not to receive any royalty income from the Waddell Properties in 2021 and portions of 2022 and 2023.
Current wording
The average price of oil decreased to $75.88 per barrel in 2024, down from $76.72 per barrel in 2023. The average price of oil in 2022 was $94.11 per barrel. In addition, the average price of gas decreased from $2.40 per Mcf in 2023 to $1.45 per Mcf in 2024. The average price of gas in 2022 was $5.54 per Mcf. Oil prices have decreased primarily because of world market conditions. Oil prices are expected to remain volatile. Gas liquids values have declined along with gas pricing due to high production levels, consistently mild weather patterns, and decreased heating demand. Blackbeard, after assuming the role of operator of the Waddell Ranch properties, immediately instituted a workover of specific wells, which caused the Trust not to receive any royalty income from the Waddell Ranch properties in 2022 and portions of 2023. Royalty income was also not received for the Waddell Ranch properties for the months of October and November 2024.
Previous wording
Subsequent to December 31, 2023, the price of both oil and gas continued to fluctuate, giving rise to a correlating adjustment of the respective standardized measure of discounted future net cash flows. As of February 20, 2024, NYMEX posted oil prices were approximately $78.72 per barrel, which compared to the posted price of $78.22 per barrel, used to calculate the worth of future net revenue of the Trust’s proved developed reserves, would result in a slightly larger standardized measure of discounted future net cash flows for oil. As of February 21**,** 2024, NYMEX posted gas prices were $1.58 per million British thermal units. The use of such price, as compared to the posted price of $2.64 per million British thermal units, used to calculate the future net revenue of the Trust’s proved developed reserves would result in a smaller standardized measure of discounted future net cash flows for gas.
Current wording
Subsequent to December 31, 2024, the price of both oil and gas continued to fluctuate, giving rise to a correlating adjustment of the respective standardized measure of discounted future net cash flows. As of February 24, 2025, NYMEX posted oil prices were approximately $71.06 per barrel, which compared to the posted price of $75.48 per barrel, used to calculate the worth of future net revenue of the Trust’s proved developed reserves, would result in a smaller standardized measure of discounted future net cash flows for oil. As of February 24, 2024, NYMEX posted gas prices were $3.86 per million British thermal units. The use of such price, as compared to the posted price of $2.15 per million British thermal units, used to calculate the future net revenue of the Trust’s proved developed reserves would result in a larger standardized measure of discounted future net cash flows for gas.
Previous wording
Since the oil and gas sales attributable to the Royalties are based on an allocation formula that is dependent on such factors as price and cost (including capital expenditures), production amounts do not necessarily provide a meaningful comparison. For the underlying properties total oil and gas production increased approximately 30% and 29% respectively, from 2022 to 2023 primarily due to additional production on Waddell due to new drilling.
Current wording
Since the oil and gas sales attributable to the Royalties are based on an allocation formula that is dependent on such factors as price and cost (including capital expenditures), production amounts do not necessarily provide a meaningful comparison. For the underlying properties oil and gas production decreased approximately 3% and increased less than 1% respectively, from 2023 to 2024 primarily due to lower oil and gas prices.
Previous wording
In 2023, lease operating expense and property taxes on the Waddell Ranch properties amounted to approximately $79.6 million, compared to approximately $43.7 million in 2022, and approximately $23 million in 2021.
Current wording
In 2024, lease operating expense and property taxes on the Waddell Ranch properties amounted to approximately $82.2 million, compared to approximately $79.6 million in 2023, and approximately $43.7 million in 2022.
Previous wording
The Trustee has been advised by the operator that the majority of Waddell Ranch oil production is now pipeline connected and sold under long term crude purchase agreements.
Current wording
The Trustee was previously advised by the operator that as of December 31, 2023, the majority of Waddell Ranch oil production is now pipeline connected and sold under long term crude purchase agreements. Blackbeard would not confirm if this information remains accurate for 2024.
Previous wording
During 2023, the monthly royalty receipts were invested by the Trustee in cash and cash equivalents until the monthly distribution date, and earned interest totaled $86,162. Interest income for 2022 and 2021 was $48,371 and $5,112, respectively.
Current wording
During 2024, the monthly royalty receipts were invested by the Trustee in cash and cash equivalents until the monthly distribution date, and earned interest totaled $150,779. Interest income for 2023 and 2022 was $85,879 and $48,371, respectively.
Previous wording
General and administrative expenses in 2023 were $1,118,096 compared to $922,404 in 2022 and $1,088,851** **in 2021, primarily due to audit of properties and other professional services. The reserve for administrative expenses for any potentially extraordinary events and/or expenses was $0 as of December 31, 2023. Total reserves for expenses for the years ended December 31, 2023, 2022 and 2021 was $0, $0 and $0, respectively.
Current wording
General and administrative expenses in 2024 were $1,698,776 compared to $1,118,096 in 2023 and $922,404 in 2022, primarily due to audit of properties and other professional services. The reserve balance for administrative expenses for any potentially extraordinary events and/or expenses was $1,100,000 as of December 31, 2024, 2023 and 2022. There were no additions to the reserves for expenses during the years ended December 31, 2024, 2023 and 2022.
Previous wording
Royalty income received by the Trust for the fourth quarter of 2023 amounted to $14,412,501 or $0.31 per Unit. For the fourth quarter of 2022, the Trust received royalty income of $15,385,233 or $0.33 per Unit. Interest income for the fourth quarter of 2023 amounted to $24,688 compared to $33,117 for the fourth quarter of 2022. The decrease in interest income can be attributed primarily to a decrease of funds available. Total general and administrative expenses was $162,490 for the fourth quarter of 2023 compared to $150,153 for the fourth quarter of 2022. The increase in expenses primarily related to timing of payments of legal and auditor expenses.
Current wording
Royalty income received by the Trust for the fourth quarter of 2024 amounted to $3,784,959 or $0.08 per Unit, a decrease from the fourth quarter of 2023, when the Trust received royalty income of $14,412,501 or $0.31 per Unit. The decrease in the fourth quarter of 2024 was due to no Royalty income being received from the Waddell Ranch properties in October and November of 2024. Interest income for the fourth quarter of 2024 amounted to $28,091 compared to $24,688 for the fourth quarter of 2023. The increase in interest income is primarily attributable to increased amounts of funds available for investment and the length of time of such investment due mainly to the fact that funds received from Blackbeard during the fourth quarter of 2024 were included in the following month's distribution calculation and held for investment for a longer period of time than was held during the fourth quarter of 2023. Total general and administrative expenses was $382,860 for the fourth quarter of 2024 compared to $162,490 for the fourth quarter of 2023. The increase in expenses primarily related to timing of payments of legal and auditor expenses.
Previous wording
Royalty income for the Trust for the fourth quarter is associated with actual oil and gas production during August through October from the Underlying Properties. Oil and gas production attributable to the Underlying Properties for the quarter and the comparable period for 2022 are as follows:
Current wording
Nothwithstanding requests from the Trustee to Blackbeard, the operator of the Waddell Ranch properties, Blackbeard has refused to provide the Trustee information necessary to calculate the net proceeds as of the NYSE notification date beginning May 2024 such that Royalty income of the Trust for the fourth quarter is associated with actual oil and gas production for the period from July through September of the current year for the Waddell Ranch properties and August through October for the same period in 2023. Royalty income for the Trust for the fourth quarter 2024 for the Texas Royalty properties is associated with actual oil and gas production from August through October 2024. Oil and gas production attributable to the Underlying Properties for each month in the fourth quarter of 2024 and the comparable period for 2023 are as follows:
Previous wording
The posted price of oil decreased for the fourth quarter of 2023 compared to the fourth quarter of 2022, resulting in an average price per barrel of $84.23 compared to $88.24 in the same period of 2022. The average price of gas decreased for the fourth quarter of 2023 compared to the same period in 2022, resulting in an average price per Mcf of $2.31 compared to $5.49 in the fourth quarter of 2022.
Current wording
For the Waddell Ranch properties, the posted price of oil decreased for the fourth quarter of 2024 compared to the fourth quarter of 2023, resulting in an average price per barrel of $73.78 compared to $84.40 in the same period of 2023. The average price of gas decreased for the fourth quarter of 2024 compared to the same period in 2023, resulting in an average price per Mcf of $1.23 compared to $2.27 in the fourth quarter of 2023. Oil production decreased in the fourth quarter of 2024 compared to the same period in 2023 for the Waddell Ranch properties.
Previous wording
The financial statements of the Trust differ from financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) because revenues are not accrued in the month of production and certain cash reserves may be established for contingencies which would not be accrued in financial statements prepared in accordance with GAAP. Amortization of the Royalties calculated on aunit-of-production basis is charged directly to trust corpus. This comprehensive basis of accounting other than GAAP corresponds to the accounting permitted for royalty trusts by the SEC as specified by Staff Accounting Bulletin Topic 12:E, Financial Statements of Royalty Trusts.
Current wording
The financial statements of the Trust differ from financial statements prepared in accordance with GAAP because revenues are not accrued in the month of production and certain cash reserves may be established for contingencies which could not be accrued in financial statements prepared in accordance with GAAP. Amortization of the Royalties calculated on a unit-of-production basis is charged directly to trust corpus. This comprehensive basis of accounting other than GAAP corresponds to the accounting permitted for royalty trusts by the SEC as specified by Staff Accounting Bulletin Topic 12:E, Financial Statements of Royalty Trusts.
Previous wording
Revenues from Royalty Interests are recognized in the period in which amounts are received by the Trust. Royalty income received by the Trust in a given calendar year will generally reflect the proceeds from crude oil and natural gas produced for the twelve-month period ended October 31 st in that calendar year.
Current wording
Revenues from Royalty Interests are recognized in the period in which amounts are received by the Trust. Royalty income received by the Trust in a given calendar year will generally reflect the proceeds from crude oil and natural gas produced for the twelve-month period ended October 31 st in that calendar year. For 2024, this was the case for the Texas Royalty properties. Blackbeard has refused to provide the Trustee information necessary to calculate the net proceeds for the Waddell Ranch properties as of the NYSE notification date beginning May 2024 such that Royalty income for 2024 is associated with actual oil and gas production for the 11-month period ended September 30, 2024.
Previous wording
Independent petroleum engineers estimate the net proved reserves attributable to the Royalty Interests. Estimates of future net revenues from proved reserves have been prepared using average 12-month oil and gas prices, determined as an unweighted arithmetic average of thefirst-day-of-the-month benchmark price for each month within the 12-month period preceding the end of the most recent fiscal year, unless prices are defined by contractual arrangements. The standardized measure of discounted future net cash flows is achieved by using a discount rate of 10% a year to reflect the timing of future cash flows relating to proved oil and gas reserves. The reserves actually recovered and the timing of production may be substantially different from the reserve estimates and related costs. Numerous uncertainties are inherent in estimating volumes and the value of proved reserves and in projecting future production rates and the timing of development ofnon-producing reserves. Such reserve estimates are subject to change as market conditions change.
Current wording
Independent petroleum engineers estimate the net proved reserves attributable to the Royalty Interests. Estimates of future net revenues from proved reserves have been prepared using average 12-month oil and gas prices, determined as an unweighted arithmetic average of the first-day-of-the-month benchmark price for each month within the 12-month period preceding the end of the most recent fiscal year, unless prices are defined by contractual arrangements. The standardized measure of discounted future net cash flows is achieved by using a discount rate of 10% a year to reflect the timing of future cash flows relating to proved oil and gas reserves. The reserves actually recovered and the timing of production may be substantially different from the reserve estimates and related costs. Numerous uncertainties are inherent in estimating volumes and the value of proved reserves and in projecting future production rates and the timing of development of non-producing reserves. Such reserve estimates are subject to change as market conditions change.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
For the Texas Royalty properties, the posted price of oil decreased for the fourth quarter of 2024 compared to the fourth quarter of 2023, resulting in an average price per barrel of $74.57 compared to $83.22 in the same period of 2023. The average price of gas increased for the fourth quarter of 2024 compared to the same period in 2023, resulting in an average price per Mcf of $10.79 compared to $4.13 in the fourth quarter of 2023. Oil production increased in the fourth quarter of 2024 compared to the same period in 2023 for the Texas Royalty properties.