[FORM 10-Q General Information](index=1&type=section&id=FORM%2010-Q%20General%20Information) This section details the Permian Basin Royalty Trust's Form 10-Q filing for Q2 2025, covering its NYSE symbol (PBT) and filer status - Permian Basin Royalty Trust filed Form 10-Q for the quarterly period ended June 30, 2025[2](index=2&type=chunk) Units of Beneficial Interest Trading Information | Title of each class | Trading Symbol(s) | Name of each exchange on which registered | |---|---|---| | Units of Beneficial Interest | PBT | New York Stock Exchange | - The registrant is classified as a **non-accelerated filer** and a **smaller reporting company**[3](index=3&type=chunk) - Number of units of beneficial interest outstanding at August 13, 2025: **46,608,796**[3](index=3&type=chunk) [PART I - FINANCIAL INFORMATION](index=2&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) This part contains the unaudited condensed interim financial statements, Trustee's Discussion and Analysis, and disclosures on market risk and controls - The condensed interim financial statements are unaudited and prepared on a **modified cash basis of accounting**, not in conformity with GAAP[5](index=5&type=chunk)[32](index=32&type=chunk) - Weaver and Tidwell, L.L.P. reviewed the financial statements and are not aware of any material modifications needed for conformity with the modified cash basis of accounting[6](index=6&type=chunk)[11](index=11&type=chunk) [Item 1. Financial Statements](index=2&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed interim financial statements for Q2 2025 and 2024, prepared on a modified cash basis, with the auditor's report [Report of Independent Registered Public Accounting Firm](index=3&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) Weaver and Tidwell, L.L.P. reviewed the condensed interim financial statements for Q2 2025 and 2024, finding no material modifications required for conformity with the modified cash basis of accounting - Weaver and Tidwell, L.L.P. reviewed the condensed interim financial statements and found no material modifications needed for conformity with the modified cash basis of accounting[11](index=11&type=chunk) - The firm previously issued an unqualified opinion on the Trust's financial statements for the year ended December 31, 2024[13](index=13&type=chunk) [Condensed Interim Statements of Assets, Liabilities and Trust Corpus](index=4&type=section&id=Condensed%20Interim%20Statements%20of%20Assets,%20Liabilities%20and%20Trust%20Corpus) The statement shows the Trust's financial position as of June 30, 2025, and December 31, 2024, with total assets decreasing primarily due to reduced cash and short-term investments Condensed Interim Statements of Assets, Liabilities and Trust Corpus | ASSETS | June 30, 2025 (Unaudited) | December 31, 2024 | |---|---|---| | Cash and short-term investments | $1,704,817 | $2,122,585 | | Net overriding royalty interests | $163,122 | $164,407 | | **TOTAL ASSETS** | **$1,867,939** | **$2,286,992** | | LIABILITIES AND TRUST CORPUS | | | | Distribution payable to Unitholders | $604,817 | $1,022,585 | | Commitments and reserves for contingencies | $1,100,000 | $1,100,000 | | **Total Liabilities** | **$1,704,817** | **$2,122,585** | | Trust corpus | $163,122 | $164,407 | | **TOTAL LIABILITIES AND TRUST CORPUS** | **$1,867,939** | **$2,286,992** | - Total assets decreased by approximately **$419,053** from December 31, 2024, to June 30, 2025, mainly driven by a reduction in cash and short-term investments[17](index=17&type=chunk) [Condensed Interim Statements of Distributable Income (Unaudited)](index=5&type=section&id=Condensed%20Interim%20Statements%20of%20Distributable%20Income%20(Unaudited)) Distributable income significantly decreased for both the three and six months ended June 30, 2025, primarily due to a substantial drop in royalty income and increased general and administrative expenditures Distributable Income (Unaudited) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | |---|---|---|---|---| | Royalty income | $3,089,889 | $8,803,389 | $6,144,586 | $14,809,031 | | Interest income | $15,751 | $29,106 | $32,274 | $68,153 | | Total Income | $3,105,640 | $8,832,495 | $6,176,860 | $14,877,184 | | General and administrative expenditures | $(708,385) | $(395,807) | $(1,183,393) | $(948,290) | | Distributable income | $2,397,255 | $8,436,688 | $4,993,467 | $13,928,894 | | Distributable income per Unit | $0.05 | $0.18 | $0.11 | $0.30 | - Royalty income for the three months ended June 30, 2025, decreased by **64.9% YoY to $3,089,889**, and for the six months, it decreased by **58.5% YoY to $6,144,586**[19](index=19&type=chunk)[20](index=20&type=chunk) - General and administrative expenditures increased by **79%** for the three months and **24.8%** for the six months ended June 30, 2025, primarily due to legal proceedings with Blackbeard[19](index=19&type=chunk)[20](index=20&type=chunk)[60](index=60&type=chunk)[73](index=73&type=chunk) [Condensed Interim Statements of Changes in Trust Corpus (Unaudited)](index=6&type=section&id=Condensed%20Interim%20Statements%20of%20Changes%20in%20Trust%20Corpus%20(Unaudited)) The Trust Corpus remained relatively stable, with distributable income being fully offset by distributions declared, and amortization of net overriding royalty interests also reducing the corpus Condensed Interim Statements of Changes in Trust Corpus (Unaudited) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | |---|---|---|---|---| | Trust corpus, beginning of period | $163,765 | $209,625 | $164,407 | $221,474 | | Amortization of net overriding royalty interests | $(643) | $(12,000) | $(1,285) | $(23,849) | | Distributable income | $2,397,255 | $8,436,688 | $4,993,467 | $13,928,894 | | Distributions declared | $(2,397,255) | $(8,436,688) | $(4,993,467) | $(13,928,894) | | **Total Trust Corpus, end of period** | **$163,122** | **$197,625** | **$163,122** | **$197,625** | | Distributions per Unit | $0.05 | $0.18 | $0.11 | $0.30 | - Distributions declared for both periods exactly matched distributable income, indicating a **full payout policy**[22](index=22&type=chunk)[23](index=23&type=chunk) - Amortization of net overriding royalty interests significantly decreased from **$12,000 to $643** for the three months, and from **$23,849 to $1,285** for the six months, year-over-year[22](index=22&type=chunk)[23](index=23&type=chunk) [NOTES TO CONDENSED INTERIM FINANCIAL STATEMENTS (UNAUDITED)](index=7&type=section&id=NOTES%20TO%20CONDENSED%20INTERIM%20FINANCIAL%20STATEMENTS%20(UNAUDITED)) These notes provide essential context for the financial statements, covering the Trust's structure, accounting methods, royalty income, excess costs, tax implications, commitments, trustee fees, and subsequent events [Note 1. TRUST ORGANIZATION AND PROVISIONS](index=7&type=section&id=Note%201.%20TRUST%20ORGANIZATION%20AND%20PROVISIONS) The Trust, established in 1980, holds significant net overriding royalty interests in Waddell Ranch and Texas Royalty properties, with Argent Trust Company serving as the passive Trustee - The Trust holds a **75% net overriding royalty** in Waddell Ranch properties and a **95% net overriding royalty** in Texas Royalty properties[25](index=25&type=chunk) - Argent Trust Company became the Trustee on December 30, 2022[29](index=29&type=chunk) - The Trust is **passive**, prohibited from engaging in business or commercial activity, and cannot acquire assets other than those initially conveyed[30](index=30&type=chunk) [Note 2. ACCOUNTING POLICIES](index=8&type=section&id=Note%202.%20ACCOUNTING%20POLICIES) The Trust's financial statements are prepared on a modified cash basis, differing from GAAP by not accruing revenues in the month of production, recording expenses when paid, and establishing cash reserves for contingencies - The Trust's financial statements are prepared on a **modified cash basis of accounting**, not GAAP, where revenues are not accrued in the month of production and expenses are recorded when paid[32](index=32&type=chunk) - Amortization of net overriding royalty interests is charged directly to trust corpus[32](index=32&type=chunk) - Royalty income for the Waddell Ranch properties was **not received** for the three and six months ended June 30, 2025, due to excess costs[37](index=37&type=chunk)[42](index=42&type=chunk) [Note 3. NET OVERRIDING ROYALTY INTERESTS AND DISTRIBUTION TO UNITHOLDERS](index=9&type=section&id=Note%203.%20NET%20OVERRIDING%20ROYALTY%20INTERESTS%20AND%20DISTRIBUTION%20TO%20UNITHOLDERS) Monthly distributions are determined by cash received from royalties minus liabilities and reserve increases, but Blackbeard's refusal to provide information has led to no royalty income from Waddell Ranch due to excess costs - Monthly Distribution Amounts are calculated based on cash received from royalties, reduced by liabilities paid and increases in cash reserves[39](index=39&type=chunk) - Blackbeard, operator of Waddell Ranch properties, has refused to provide information for net proceeds calculation since May 2024, impacting monthly distributions[41](index=41&type=chunk) - No royalty income was received from Blackbeard for the Waddell Ranch properties for the three and six months ended June 30, 2025, due to excess costs[42](index=42&type=chunk) [Note 4. EXCESS COSTS](index=9&type=section&id=Note%204.%20EXCESS%20COSTS) Excess costs from Waddell Ranch or Texas Royalty properties are recovered from future net proceeds of that specific conveyance, with Waddell Ranch properties remaining in a deficit position since October 2024 - Excess costs for Waddell Ranch properties or Texas Royalty properties are carried forward with accrued interest and recovered from future net proceeds of the respective conveyance[43](index=43&type=chunk) - Waddell Ranch properties have been in a **deficit position since October 2024**, not contributing to royalty income[43](index=43&type=chunk) Cumulative Excess Costs and Accrued Interest (Net to the Trust) | Metric | Amount (Net to the Trust) | |---|---| | Cumulative excess costs remaining at 12/31/2024 | $10,217,517 | | Net excess costs (recovery) for Q1 2025 | $10,438,707 | | Net excess costs (recovery) for Q2 2025 | $6,253,355 | | **Cumulative excess costs remaining at 6/30/2025** | **$26,909,579** | | Accrued interest at 6/30/25 | $883,907 | | **Total remaining to be recovered at 6/30/25** | **$27,793,486** | [Note 5. FEDERAL INCOME TAXES](index=9&type=section&id=Note%205.%20FEDERAL%20INCOME%20TAXES) The Trust is a grantor trust, not subject to federal income tax at the trust level, with Unitholders taxed directly on income, and the recently signed OBBBA includes significant federal income tax provisions - The Trust is taxed as a **grantor trust**, meaning Unitholders are considered to own the Trust's income and principal and are taxed directly[46](index=46&type=chunk) - The **One Big Beautiful Bill Act (OBBBA)**, signed July 4, 2025, includes significant federal income tax provisions, such as permanent extension of income tax rates and restoration of favorable business tax treatment, with multiple effective dates[47](index=47&type=chunk)[48](index=48&type=chunk) [Note 6. STATE TAX CONSIDERATIONS](index=10&type=section&id=Note%206.%20STATE%20TAX%20CONSIDERATIONS) All Trust revenues originate from Texas, which does not impose individual income tax, and the Trust is exempt from Texas franchise tax as a passive entity - All Trust revenues originate from Texas, which does not have an individual income tax[49](index=49&type=chunk) - The Trust is exempt from Texas franchise tax as a '**passive entity**' due to receiving over **90%** of its income from passive sources like mineral royalties[49](index=49&type=chunk) - Taxable Unitholders are required to include their share of Trust revenues in their own Texas franchise tax calculations[49](index=49&type=chunk) [Note 7. COMMITMENTS AND CONTINGENCIES](index=10&type=section&id=Note%207.%20COMMITMENTS%20AND%20CONTINGENCIES) Unfavorably resolved contingencies related to the Underlying Properties would reduce future royalty income and cash distributions, with the Trustee maintaining an expense reserve to cover obligations - Unfavorably resolved contingencies on Underlying Properties would reduce future royalty income and Unitholder distributions[51](index=51&type=chunk) - The Trustee maintains an expense reserve of **$1,100,000** to cover Trust obligations in case of insufficient royalty income[51](index=51&type=chunk) [Note 8. TRUSTEE FEES](index=10&type=section&id=Note%208.%20TRUSTEE%20FEES) Trustee fees decreased for both the three and six months ended June 30, 2025, compared to the same periods in 2024 Trustee Fees | Period | 2025 | 2024 | |---|---|---| | Three Months Ended June 30 | $29,136 | $35,922 | | Six Months Ended June 30 | $60,501 | $68,549 | - Trustee fees decreased by **18.89%** for the three months and **11.67%** for the six months ended June 30, 2025, compared to 2024[52](index=52&type=chunk) [Note 9. SUBSEQUENT EVENTS](index=10&type=section&id=Note%209.%20SUBSEQUENT%20EVENTS) Subsequent to June 30, 2025, the Trust declared a distribution of $0.015311 per Unit, payable on August 14, 2025 - On July 21, 2025, the Trust declared a distribution of **$0.015311 per Unit**, payable August 14, 2025[53](index=53&type=chunk) [Item 2. Trustee's Discussion and Analysis](index=11&type=section&id=Item%202.%20Trustee's%20Discussion%20and%20Analysis) This section provides management's discussion and analysis of the Trust's financial condition and results of operations, covering forward-looking statements, commodity prices, liquidity, and a detailed comparison of results [Forward Looking Information](index=11&type=section&id=Forward%20Looking%20Information) The report contains forward-looking statements regarding capital expenditures, drilling, production, hydrocarbon prices, litigation, and regulatory matters, which are subject to numerous risks and uncertainties beyond the Trustee's control - Forward-looking statements in the report cover capital expenditures, drilling, production, hydrocarbon prices, litigation, and regulatory matters[54](index=54&type=chunk) - Expectations are subject to numerous risks and uncertainties, including oil and gas prices, recoverability of reserves, economic conditions, and geopolitical factors[54](index=54&type=chunk) [Commodity Prices](index=11&type=section&id=Commodity%20Prices) The Trust's income and distributions are highly sensitive to volatile commodity prices, influenced by supply/demand, market uncertainty, and geopolitical events, with declining prices reducing distributable income and operator activity - Trust income and distributions are heavily influenced by **volatile commodity prices**, which fluctuate due to supply/demand, market uncertainty, and geopolitical conditions[55](index=55&type=chunk) - Oil prices hit a high of **$79.28 per barrel** on January 17, 2025, and decreased to **$67.81 per barrel** by July 28, 2025[55](index=55&type=chunk) - Declining crude oil and natural gas prices reduce distributable income and may lead to decreased exploration and development activity by operators[56](index=56&type=chunk) [Liquidity and Capital Resources](index=11&type=section&id=Liquidity%20and%20Capital%20Resources) The Trust is a passive entity with no control over property operations, and its liquidity is limited to royalties and the ability to periodically borrow funds to cover expenses - The Trust is a **passive entity** with no control over the operation of its underlying properties[57](index=57&type=chunk) - The Trust's only sources of liquidity are royalties and the ability to periodically borrow money to pay expenses, liabilities, and obligations[58](index=58&type=chunk) [Results of Operations - Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024](index=12&type=section&id=Results%20of%20Operations%20-%20Three%20Months%20Ended%20June%2030,%202025%20Compared%20to%20Three%20Months%20Ended%20June%2030,%202024) Royalty income for Q2 2025 significantly decreased due to Waddell Ranch properties contributing no royalty income and Blackbeard's refusal to provide timely information, while general and administrative expenses increased, leading to a substantial drop in distributable income per unit Key Financials (Three Months Ended June 30) | Metric | 2025 | 2024 | Change (%) | |---|---|---|---| | Royalty income | $3,089,889 | $8,803,389 | -64.9% | | Interest income | $15,751 | $29,106 | -45.9% | | Total expenses | $708,385 | $395,807 | +79.0% | | Distributable income | $2,397,255 | $8,436,688 | -71.6% | | Distributable income per Unit | $0.05 | $0.18 | -72.2% | - The decrease in royalty income is primarily due to a **deficit position in Waddell Ranch properties**, resulting in no royalty income from them in Q2 2025, unlike Q2 2024[59](index=59&type=chunk) - Blackbeard's refusal to provide timely information for Waddell Ranch properties has impacted the calculation and distribution of royalty income[59](index=59&type=chunk)[62](index=62&type=chunk)[63](index=63&type=chunk) [Results of Operations - Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024](index=14&type=section&id=Results%20of%20Operations%20-%20Six%20Months%20Ended%20June%2030,%202025%20Compared%20to%20Six%20Months%20Ended%20June%2030,%202024) For the six months ended June 30, 2025, royalty income significantly decreased due to Waddell Ranch properties being in a deficit position and Blackbeard's failure to provide timely information, leading to a substantial drop in distributable income per unit Key Financials (Six Months Ended June 30) | Metric | 2025 | 2024 | Change (%) | |---|---|---|---| | Royalty income | $6,144,586 | $14,809,031 | -58.5% | | Interest income | $32,274 | $68,153 | -52.7% | | Total expenses | $1,183,393 | $948,290 | +24.8% | | Distributable income | $4,993,467 | $13,928,894 | -64.2% | | Distributable income per Unit | $0.11 | $0.30 | -63.3% | - The decrease in royalty income is primarily due to the Waddell Ranch properties being in a **deficit position** for the first six months of 2025, unlike the prior year[72](index=72&type=chunk) - Increased total expenses are primarily attributed to professional services associated with legal proceedings against Blackbeard[73](index=73&type=chunk) [Pricing and Production Discussion](index=13&type=section&id=Pricing%20and%20Production%20Discussion) Average realized oil prices decreased for both Waddell Ranch and Texas Royalty properties, while gas prices generally increased, and Blackbeard's refusal to provide timely production and capital expenditure data for Waddell Ranch continues to hinder reporting Average Realized Prices (Waddell Ranch Properties) | Commodity | Period | 2025 (Avg Price) | 2024 (Avg Price) | Change | |---|---|---|---|---| | Oil (per Bbl) | Q2 Production (Jan-Mar) | $70.27 | $73.40 (Feb-Mar) | -4.27% | | Gas (per Mcf) | Q2 Production (Jan-Mar) | $2.41 | $1.83 (Feb-Mar) | +31.69% | Average Realized Prices (Texas Royalty Properties) | Commodity | Period | 2025 (Avg Price) | 2024 (Avg Price) | Change | |---|---|---|---|---| | Oil (per Bbl) | Q2 | $68.61 | $78.00 | -12.04% | | Gas (per Mcf) | Q2 | $10.15 | $10.04 | +1.10% | - Blackbeard has refused to provide monthly production, product sales, capital expenditure, and development information for the Waddell Ranch properties since May 2024, now providing it quarterly[63](index=63&type=chunk)[76](index=76&type=chunk) [Blackbeard Capital Expense Discussion](index=13&type=section&id=Blackbeard%20Capital%20Expense%20Discussion) Capital expenditures for Waddell Ranch properties significantly increased in Q2 2025 and for the six months ended June 30, 2025, while Blackbeard has not provided an updated 2025 capital expenditures budget or development information Waddell Ranch Properties Capital Expenditures (Gross) | Period | 2025 | 2024 | Change (%) | |---|---|---|---| | Three Months Ended June 30 | $61.3 million | $15.6 million | +292.9% | | Six Months Ended June 30 | $109.2 million | $43.9 million | +148.7% | - Blackbeard has not provided an updated 2025 capital expenditures budget or development information for the Waddell Ranch properties[68](index=68&type=chunk)[69](index=69&type=chunk)[82](index=82&type=chunk) - Lease operating expenses and property taxes for Waddell Ranch properties increased to **$19.8 million (gross)** in Q2 2025 from **$14.7 million (gross)** in Q2 2024, and to **$41.2 million (gross)** for the six months ended June 30, 2025, from **$37.5 million (gross)** in 2024[71](index=71&type=chunk)[83](index=83&type=chunk) [Calculation of Royalty Income](index=15&type=section&id=Calculation%20of%20Royalty%20Income) Royalty income is calculated as a percentage of net profit from property operations, with Waddell Ranch properties showing a net loss in Q2 2025, resulting in no contribution to distributable income, while Texas Royalty properties contributed positively - Royalty income is computed as **75% of net profit** for Waddell Ranch properties and **95%** for Texas Royalty properties[84](index=84&type=chunk)[85](index=85&type=chunk) Royalty Income Calculation (Three Months Ended June 30, 2025) | Metric | Waddell Ranch Properties | Texas Royalty Properties | |---|---|---| | Gross proceeds of sales | $83,693,355 | $3,673,127 | | Less: Severance tax, Gathering & Transportation, Lease operating expense & property tax, Capital expenditures | $92,644,852 | $420,612 | | Net profits | $(8,951,497) | $3,252,515 | | Net overriding royalty interests | 75% | 95% | | Royalty income | $(6,713,623) | $3,089,889 | | *Note: Waddell Ranch properties did not contribute to royalty income due to an NPI deficit.* | | | [Critical Accounting Policies and Estimates](index=16&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) There have been no significant changes to the Trust's critical accounting policies or estimates during the six months ended June 30, 2025 - No significant changes to critical accounting policies and estimates occurred during the six months ended June 30, 2025[86](index=86&type=chunk) [Distributable Income Per Unit](index=16&type=section&id=Distributable%20Income%20Per%20Unit) Basic distributable income per Unit is calculated by dividing distributable income by the weighted average of Units outstanding, with basic and diluted figures being identical due to no equivalent Units outstanding - Basic distributable income per Unit is calculated by dividing distributable income by the weighted average of Units outstanding[87](index=87&type=chunk) - Basic and diluted distributable income per Unit are identical as there were no equivalent Units outstanding[87](index=87&type=chunk) [New Accounting Pronouncements](index=16&type=section&id=New%20Accounting%20Pronouncements) There are no new accounting pronouncements expected to have a significant impact on the Trust's financial statements - No new accounting pronouncements are expected to significantly impact the Trust's financial statements[88](index=88&type=chunk) [Item 3. Qualitative and Quantitative Disclosures About Market Risk](index=16&type=section&id=Item%203.%20Qualitative%20and%20Quantitative%20Disclosures%20About%20Market%20Risk) As a passive entity, the Trust's market risk exposure is minimal, with no material interest rate risk, foreign currency transactions, derivative financial instruments, or long-term debt - The Trust is a **passive entity** with minimal market risk exposure[89](index=89&type=chunk) - The Trust is not subject to material interest rate risk due to the short-term nature of its borrowings and investments[89](index=89&type=chunk) - The Trust does not engage in foreign currency transactions, derivative financial instruments, or have foreign operations or long-term debt[89](index=89&type=chunk) [Item 4. Controls and Procedures](index=16&type=section&id=Item%204.%20Controls%20and%20Procedures) The Trustee concluded that the Trust's disclosure controls and procedures are effective as of June 30, 2025, with no material changes to internal control over financial reporting during the period - The Trustee concluded that the Trust's disclosure controls and procedures are **effective** as of June 30, 2025, based on the 2013 COSO Framework[90](index=90&type=chunk)[91](index=91&type=chunk) - The evaluation relied on information provided by Blackbeard and Riverhill Energy Corporation[91](index=91&type=chunk) - No material changes to the Trust's internal control over financial reporting occurred during the reporting period[92](index=92&type=chunk) [PART II - OTHER INFORMATION](index=18&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) This section details other relevant information not covered in the financial statements, including ongoing legal proceedings, risk factors, and a list of exhibits [Item 1. Legal Proceedings](index=18&type=section&id=Item%201.%20Legal%20Proceedings) The Trustee filed a Second Amended Petition in a lawsuit against Blackbeard, operator of Waddell Ranch properties, seeking over $9 million in damages for alleged improper royalty calculations and failure to pay - The Trustee filed a Second Amended Petition in a lawsuit against Blackbeard, operator of Waddell Ranch properties, seeking over **$9 million in damages**[94](index=94&type=chunk)[95](index=95&type=chunk) - Allegations include improper calculation and deduction of overhead, labor, and saltwater disposal fees, and failure to pay on all produced volumes from April 2020 to December 2023[95](index=95&type=chunk) - The trial date is scheduled for **November 17, 2025**, in the District Court of Tarrant County, Texas[94](index=94&type=chunk) [Item 1A. Risk Factors](index=18&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the Trust's risk factors have occurred during the six months ended June 30, 2025, beyond those already disclosed in the annual report - No material changes to the Trust's risk factors have occurred during the six months ended June 30, 2025[97](index=97&type=chunk) [Item 5. Other Information](index=18&type=section&id=Item%205.%20Other%20Information) The Trust does not have directors or officers, and therefore, no Rule 10b5-1 or non-Rule 10b5-1 trading arrangements were adopted or terminated by such persons - The Trust has no directors or officers, thus no Rule 10b5-1 or non-Rule 10b5-1 trading arrangements were adopted or terminated[99](index=99&type=chunk) [Item 6. Exhibits](index=19&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including the Amended and Restated Royalty Trust Indenture, its amendment, Net Overriding Royalty Conveyances, and certifications under the Sarbanes-Oxley Act - Exhibits include the Permian Basin Amended and Restated Royalty Trust Indenture and its amendment, Net Overriding Royalty Conveyances, and certifications under Sections 302 and 906 of the Sarbanes-Oxley Act[102](index=102&type=chunk) [SIGNATURES](index=20&type=section&id=SIGNATURES) The report is signed on behalf of Permian Basin Royalty Trust by Jana Egeler, Vice President of Argent Trust Company, as Trustee, on August 13, 2025 - The report was signed by Jana Egeler, Vice President of Argent Trust Company, as Trustee for Permian Basin Royalty Trust, on August 13, 2025[104](index=104&type=chunk) - The Trust has no directors or executive officers[104](index=104&type=chunk)

[Distribution Announcement and Key Updates](index=1&type=section&id=Distribution%20Announcement%20and%20Key%20Updates) Permian Basin Royalty Trust announces July cash distribution details, Waddell Ranch reporting changes, and Texas Royalty Properties performance [July Cash Distribution Details](index=1&type=section&id=July%20Cash%20Distribution%20Details) The Trust declared a **$0.015311 per unit** cash distribution for July, payable August 14, 2025, primarily due to Texas Royalty Properties' natural gas performance - Cash distribution declared: **$0.015311 per unit**[2](index=2&type=chunk)[9](index=9&type=chunk) - Distribution payable on August 14, 2025, to unit holders of record on July 31, 2025[2](index=2&type=chunk) - Distribution increased compared to the previous month due to higher natural gas volumes and pricing from Texas Royalty Properties, partially offset by lower oil volumes[3](index=3&type=chunk) - Waddell Ranch properties did not contribute to the distribution due to total production costs exceeding gross proceeds, resulting in a continuing excess cost position[2](index=2&type=chunk) [Waddell Ranch Properties Update](index=1&type=section&id=Waddell%20Ranch%20Properties%20Update) Blackbeard Operating's refusal to provide NPI data resulted in no Waddell Ranch proceeds for July, prompting the Trustee to shift to quarterly reporting [Information Disclosure Issues](index=1&type=section&id=Information%20Disclosure%20Issues) Blackbeard Operating, LLC refused to provide the Trustee with necessary NPI proceeds information for July 2025, leading to its exclusion from the distribution - Blackbeard Operating, LLC refused to provide NPI proceeds information for July 2025[4](index=4&type=chunk) - As a result, NPI proceeds from Waddell Ranch were not included in the July distribution[4](index=4&type=chunk) - If NPI proceeds are received on or prior to the record date, they will be included in the August distribution[4](index=4&type=chunk) [Financial Impact and Reporting Changes](index=1&type=section&id=Financial%20Impact%20and%20Reporting%20Changes) No proceeds were received from Waddell Ranch for the July distribution due to an excess cost position, leading to a change in the Trustee's reporting frequency - No proceeds were received from Waddell Ranch for the July distribution due to an excess cost position[5](index=5&type=chunk) - All excess costs, including accrued interest, must be recovered by future proceeds before any distributions to the Trust[5](index=5&type=chunk) - The Trustee will provide Waddell Ranch production, pricing, and cost information quarterly in Form 10-Q and 10-K reports, instead of monthly, due to Blackbeard's reporting frequency change[5](index=5&type=chunk)[8](index=8&type=chunk) [Texas Royalty Properties Performance](index=1&type=section&id=Texas%20Royalty%20Properties%20Performance) Texas Royalty Properties generated **$949,109** in Net Profit for July, contributing **$901,654** to the distribution after taxes and expenses - Net Profit for Texas Royalty Properties in July: **$949,109**[6](index=6&type=chunk) - Net contribution by Texas Royalty Properties to this month's distribution: **$901,654** (based on 95% NPI)[6](index=6&type=chunk) Texas Royalty Properties Production and Pricing (Net to Trust) | Metric | Current Month (April/March) | Prior Month | | :---------------- | :-------------------------- | :---------- | | Oil Volumes (bbls) | 12,190 | 14,430 | | Gas Volumes (Mcf) | 10,109 | 8,278 | | Oil Average Price (per bbl) | $68.37 | $65.46 | | Gas Average Price (per Mcf) | $11.75 | $9.48 | - Revenues for Texas Royalty Properties: **$1,085,196**[6](index=6&type=chunk) - Taxes and expenses deducted from revenues: **$136,087**[6](index=6&type=chunk) [Financial Summary of Distribution](index=1&type=section&id=Financial%20Summary%20of%20Distribution) After deducting General and Administrative Expenses, the total distribution amounted to **$713,634**, resulting in **$0.015311 per unit** for 46,608,796 units outstanding - General and Administrative Expenses (net of interest earned): **$188,020**[9](index=9&type=chunk) - Total distribution amount: **$713,634**[9](index=9&type=chunk) - Units outstanding: **46,608,796**[9](index=9&type=chunk) - Distribution per unit: **$0.015311**[9](index=9&type=chunk) - Worldwide market conditions continue to affect pricing for domestic production, making future distributions difficult to predict[9](index=9&type=chunk) [Trust Litigation](index=1&type=section&id=Trust%20Litigation) The Trustee has filed a Second Amended Petition in its lawsuit against Blackbeard Operating, LLC, seeking over **$9 million** in damages [Lawsuit Against Blackbeard Operating, LLC](index=1&type=section&id=Lawsuit%20Against%20Blackbeard%20Operating%2C%20LLC) The Trustee has filed a Second Amended Petition against Blackbeard Operating, LLC, seeking over **$9 million** in damages for alleged royalty and reporting failures, with a trial scheduled for November 17, 2025 - Trustee filed a Second Amended Petition in a lawsuit against Blackbeard Operating, LLC[10](index=10&type=chunk) - The lawsuit seeks to recover more than **$9 million** in damages[11](index=11&type=chunk) - Allegations include Blackbeard's failure to properly calculate and pay royalties, impermissible deduction of overhead, labor, and saltwater disposal fees, failure to pay on all produced volumes, and failure to provide annual reports[11](index=11&type=chunk) - The claims relate to production months from April 2020 through December 2023[11](index=11&type=chunk) - Trial date is scheduled for November 17, 2025[10](index=10&type=chunk) - Discovery is ongoing, and a joint venture audit of 2024 production months is underway[10](index=10&type=chunk)[11](index=11&type=chunk) [Additional Information](index=2&type=section&id=Additional%20Information) This section provides investor resources, outlines forward-looking statement disclaimers, and lists contact information for the Trust [Investor Resources](index=2&type=section&id=Investor%20Resources) The 2024 Annual Report on Form 10-K, including the December 31, 2024 Reserve Summary, has been filed with the SEC and is available to investors - The 2024 Annual Report with Form 10-K, including the December 31, 2024 Reserve Summary, has been filed with the SEC[12](index=12&type=chunk) - Available resources on Permian's website (http://www.pbt-permian.com/) include cash distribution history, financial reports, tax information booklets, and SEC filings[12](index=12&type=chunk)[13](index=13&type=chunk) - Printed reports can be requested and are mailed free of charge[13](index=13&type=chunk) [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) This press release contains forward-looking statements subject to risks described in the Trust's SEC reports, with no obligation for the Trustee to update them - Statements about future events or conditions are considered forward-looking statements under the Private Securities Litigation Reform Act of 1995[14](index=14&type=chunk) - Factors or risks that could cause actual results to differ materially are described in the Trust's Form 10-K and Form 10-Q reports[14](index=14&type=chunk) - The Trustee disclaims any obligation to update these forward-looking statements[15](index=15&type=chunk) [Contact Information](index=3&type=section&id=Contact%20Information) For inquiries, investors can contact Jana Egeler, Vice President at Argent Trust Company, who serves as the Trustee - Contact Person: Jana Egeler, Vice President, Argent Trust Company, Trustee[16](index=16&type=chunk) - Toll Free Contact Number: **1.855.588.7839**[16](index=16&type=chunk)

Core Points - Argent Trust Company declared a cash distribution of $0.015311 per unit for the Permian Basin Royalty Trust, payable on August 14, 2025, to unit holders of record on July 31, 2025 [1] - The distribution increased from the previous month due to higher natural gas volumes and improved oil and natural gas pricing, despite lower oil volumes reported [2] - The Waddell Ranch properties did not contribute to this month's distribution due to production costs exceeding gross proceeds, and the operator, Blackbeard Operating, LLC, has not provided necessary information for calculating net profits interest [3][4] Texas Royalty Properties - Production from Texas Royalty Properties was 13,896 barrels of oil and 11,503 Mcf of gas, with the Trust's allocated portion being 12,190 barrels of oil and 10,109 Mcf of gas [5] - The average price for oil was $68.37 per barrel and for gas was $11.75 per Mcf, leading to revenues of $1,085,196 after deducting taxes and expenses of $136,087, resulting in a net profit of $949,109 for July [5][6] - The Trust's net profit interest of 95% from the Texas Royalty Properties contributed $901,654 to this month's distribution [5] Waddell Ranch Issues - The Trustee has filed a lawsuit against Blackbeard for over $9 million in damages due to alleged improper calculations and deductions related to royalties owed to the Trust [10][11] - Blackbeard has been providing production, pricing, and cost information quarterly instead of monthly, affecting the Trust's ability to report timely [4][8] - The trial date for the lawsuit is set for November 17, 2025, with ongoing discovery [10] Financial Summary - General and administrative expenses for the month were $188,020, resulting in a total distribution of $713,634 to 46,608,796 units outstanding [9] - The current market conditions continue to impact pricing for domestic production, making future distributions difficult to predict [9]

Core Viewpoint - Argent Trust Company declared a cash distribution of $0.012976 per unit for the Permian Basin Royalty Trust, with the distribution affected by production costs exceeding gross proceeds from the Waddell Ranch properties [1][2]. Distribution Summary - The cash distribution decreased compared to the previous month due to lower natural gas volumes and oil pricing, although higher oil volumes and natural gas pricing partially offset these declines [2]. - The total distribution amount is $604,826, distributed among 46,608,796 units outstanding, resulting in a per-unit distribution of $0.012976 [9]. Waddell Ranch Properties - The Trustee has not received necessary information from Blackbeard Operating, LLC to calculate net profits interest (NPI) proceeds for June 2025, which affects the distribution [3][4]. - No proceeds were received from the Waddell Ranch properties in May 2025, and all excess costs must be recovered from future proceeds before any distribution can occur [4]. - Blackbeard is now providing production, pricing, and cost information quarterly instead of monthly, impacting the reporting schedule for the Trust [4][8]. Texas Royalty Properties - Production from Texas Royalty Properties was 16,367 barrels of oil and 9,392 Mcf of gas, with the Trust's allocated portion being 14,430 barrels of oil and 8,278 Mcf of gas [5]. - The average price for oil was $65.46 per barrel and for gas was $9.48 per Mcf, leading to revenues of $1,160,353 after deducting taxes and expenses [5][6]. Legal Matters - The Trustee filed a Second Amended Petition against Blackbeard in connection with a lawsuit regarding alleged improper calculations and payments of royalties, seeking over $9 million in damages [10][11]. - The trial date is set for November 17, 2025, with ongoing discovery related to the case [10].

Core Viewpoint - Argent Trust Company, as Trustee of the Permian Basin Royalty Trust, has filed a Second Amended Petition against Blackbeard Operating, LLC, seeking over $9 million in damages due to alleged improper royalty calculations and payments [1][2]. Group 1: Legal Action Details - The lawsuit pertains to Blackbeard's alleged failure to accurately calculate and pay royalties owed to the Trust, including improper deductions for overhead costs, labor expenses, and saltwater disposal fees [2]. - The claims cover production months from April 2020 to December 2023, with an ongoing audit for the 2024 production months that may reveal additional claims [2][3]. - A trial date has been set for November 17, 2025, with ongoing discovery processes including audits and expert witness analyses [3].

Cash Distribution - The cash distribution declared by the Permian Basin Royalty Trust is $0.019615 per unit, payable on May 14, 2025, to unit holders of record on April 30, 2025[2]. Production and Revenue - Production for the Texas Royalty Properties was 17,157 barrels of oil and 10,093 Mcf of gas, resulting in revenues of $1,351,295 after deducting taxes and expenses of $147,465, leading to a net profit of $1,203,830 for April[6]. - The Trust's net profit interest (NPI) of 95% from the Texas Royalty Properties contributed $1,143,639 to this month's distribution[6]. - The average price for oil was $71.97 per barrel and for gas was $11.54 per Mcf, reflecting significant pricing increases compared to the previous month[6]. Expenses and Distribution - General and Administrative Expenses for the month were $229,374, resulting in a total distribution of $914,265 to 46,608,796 units outstanding[9]. Litigation and Operational Issues - The Trust is currently facing an excess cost position for the Waddell Ranch properties, as production costs exceeded gross proceeds for March 2025[2]. - Blackbeard, the operator of the Waddell Ranch properties, has not provided necessary information for calculating net profits interest, leading to delays in reporting[4]. - The Trust has initiated litigation against Blackbeard seeking to recover over $25 million in damages related to disputed overhead costs and other expenses[11]. - The trial date for the ongoing litigation is scheduled for November 17, 2025[10]. Market Conditions - Future distributions may be affected by worldwide market conditions, making predictions challenging[9].

DALLAS, May 19, 2025 /PRNewswire/ -- Argent Trust Company, as Trustee of the Permian Basin Royalty Trust (NYSE: PBT) ("Permian" or the "Trust") today declared a cash distribution to the holders of its units of beneficial interest of $0.018841 per unit, payable on June 13, 2025, to unit holders of record on May 30, 2025. The distribution does not include proceeds from the Waddell Ranch properties, as total production costs ("Production Costs") exceeded gross proceeds ("Gross Proceeds") for the month of April ...

Financial Performance - Distributable income for the three months ended March 31, 2025, was $2,596,212, down 52.8% from $5,492,206 for the same period in 2024[19] - Distributable income per Unit was $0.06 for the three months ended March 31, 2025, down from $0.12 for the same period in 2024, indicating a 50% decrease[19] - Royalty income decreased to $3,054,697 for the three months ended March 31, 2025, compared to $6,005,642 for the same period in 2024, reflecting a decline of 49.2%[19] - Interest income for the three months ended March 31, 2025, was $16,523, down from $39,048 for the same period in 2024, a decline of approximately 57.7%[19] - The Trust's distribution payable to Unitholders decreased to $848,624 as of March 31, 2025, from $1,022,585 as of December 31, 2024, a decrease of about 16.9%[17] Assets and Liabilities - Total assets as of March 31, 2025, were $2,112,389, a decrease from $2,286,992 as of December 31, 2024, representing a decline of approximately 7.6%[17] - Total liabilities as of March 31, 2025, were $1,948,624, down from $2,122,585 as of December 31, 2024, a decrease of approximately 8.2%[17] - The Trust's cash and short-term investments were $1,948,624 as of March 31, 2025, compared to $2,122,585 as of December 31, 2024, a decline of about 8.2%[17] - The Trust's total trust corpus at the end of the period was $163,765, down from $209,625 at the end of the same period in 2024, a decrease of about 21.9%[21] Operational Costs - General and administrative expenditures for the three months ended March 31, 2025, were $475,008, a decrease from $552,484 in the same period of 2024, reflecting a reduction of approximately 14%[19] - Lease operating expenses and property taxes for the Waddell Ranch properties were $21.4 million in Q1 2025, a decrease from $22.8 million in Q1 2024[68] - Trustee fees for the period ending March 31, 2025, were $31,365, a slight decrease from $32,628 in the same period of 2024[49] Commodity Prices - Average realized oil prices for the Waddell Ranch properties decreased from $73.08 per barrel in Q1 2024 to $68.83 per barrel in Q1 2025, while gas prices fell from $2.01 per thousand cubic feet to $1.66[57] - The Texas Royalty properties also saw a decline in average realized oil prices from $75.17 per barrel in Q1 2024 to $68.96 per barrel in Q1 2025, and gas prices decreased from $9.09 per thousand cubic feet to $8.61[57] - The Trust's income and distributions are significantly influenced by commodity prices, which have shown volatility due to geopolitical conditions and market uncertainties[52] Legal Proceedings - The Trustee filed a complaint against Blackbeard Operating, LLC seeking to recover over $15 million in damages due to alleged improper deductions from royalty payments[78] - The lawsuit was voluntarily dismissed on March 5, 2024, but a new petition was filed on May 8, 2024, seeking damages exceeding $25 million related to additional claims[78] - Blackbeard's counterclaim includes requests for declaratory judgment regarding disputed overhead charges and limitations on information provided to the Trust[78] - The trial date for the ongoing legal proceedings is set for November 17, 2025[78] - There are no material pending legal proceedings other than the aforementioned lawsuit[79] Risk Factors - Risk factors related to the Trust are detailed in the Annual Report on Form 10-K for the fiscal year ended December 31, 2024, with no material changes reported[80] - The Trust does not have any directors or officers, thus no trading arrangements were adopted or terminated[82]

DALLAS, April 17, 2025 /PRNewswire/ -- Argent Trust Company, as Trustee of the Permian Basin Royalty Trust (NYSE: PBT) ("Permian" or the "Trust") today declared a cash distribution to the holders of its units of beneficial interest of $0.019615 per unit, payable on May 14, 2025, to unit holders of record on April 30, 2025. The distribution does not include proceeds from the Waddell Ranch properties, as total production costs ("Production Costs") exceeded gross proceeds ("Gross Proceeds") for the month of Ma ...

Core Points - Argent Trust Company declared a cash distribution of $0.018047 per unit for the Permian Basin Royalty Trust, payable on April 14, 2025, to unit holders of record on March 31, 2025 [1] - The distribution increased slightly from the previous month due to higher oil and natural gas volumes from Texas Royalty Properties, despite lower natural gas pricing [2] - The Waddell Ranch properties did not contribute to the distribution as production costs exceeded gross proceeds for February 2025 [1][4] Texas Royalty Properties - Production from Texas Royalty Properties was 16,839 barrels of oil and 10,659 Mcf of gas, with the Trust's allocated portion being 14,957 barrels of oil and 9,462 Mcf of gas [5] - The average price for oil was $70.81 per barrel and for gas was $7.88 per Mcf, leading to revenues of $1,276,384 after deducting taxes and expenses of $137,983, resulting in a net profit of $1,138,401 for March [5][8] - The Trust's net profit interest of 95% from the Texas Royalty Properties contributed $1,081,481 to this month's distribution [5] Waddell Ranch Properties - Blackbeard, the operator of the Waddell Ranch properties, has not provided necessary information for calculating net profits interest proceeds for March 2025, affecting the distribution [3][4] - All excess costs from the Waddell Ranch properties must be recovered by future proceeds before any distribution can occur [4] - The Trustee will now receive production, pricing, and cost information quarterly instead of monthly, impacting future reporting [4][7] Legal Matters - The Trustee has initiated a lawsuit against Blackbeard Operating, seeking to recover over $15 million in damages due to alleged improper deductions from royalty payments [10][11] - The trial is scheduled for November 17, 2025, with ongoing discovery and audits related to the Waddell Ranch properties [10] - The Trustee's claims have been amended to seek damages exceeding $25 million, with attempts to resolve disputes outside of court having been unsuccessful [11]