Permian Basin Royalty Trust(US:PBT)2025-11-13 19:07Financial Performance - Distributable income for the three months ended September 30, 2025, was $6,861,887, down 14.8% from $8,053,284 for the same period in 2024[19] - For the nine months ended September 30, 2025, distributable income was $11,855,354, a decrease of 46% compared to $21,982,178 for the same period in 2024[20] - Total income for the nine months ended September 30, 2025, was $13,450,373, a decline of 42.3% from $23,298,094 for the same period in 2024[20] - Distributions per unit for the three months ended September 30, 2025, were $0.15, down from $0.17 in the same period of 2024[22] - Distributable income for Q3 2025 was $6,861,887 or $0.15 per Unit, compared to $8,053,284 or $0.17 per Unit in Q3 2024[69] - Distributable income for the nine months ended September 30, 2025, was $11,855,354, or $0.25 per Unit, down from $21,982,178, or $0.47 per Unit, for the same period in 2024, representing a decrease of about 46%[80] Revenue and Income Sources - Royalty income for the three months ended September 30, 2025, was $7,258,464, down 13.2% from $8,366,375 in the prior year[19] - Royalty income for the nine months ended September 30, 2025, was $13,403,049, a decrease of approximately 42% compared to $23,175,406 for the same period in 2024[78] - The Trust's royalty income is computed as a percentage of net profit, with the Waddell Ranch properties contributing 75% and the Texas Royalty properties contributing 95% to the royalty income[90] Asset and Liability Overview - As of September 30, 2025, total assets of the Permian Basin Royalty Trust amounted to $6,655,631, a significant increase from $2,286,992 as of December 31, 2024[17] - The total liabilities as of September 30, 2025, were $6,493,208, reflecting an increase from $2,122,585 at the end of 2024[17] - The cash and short-term investments increased to $6,493,208 as of September 30, 2025, compared to $2,122,585 at the end of 2024[17] Operational Metrics - Oil sales for Waddell Ranch properties totaled 913,912 barrels in Q3 2025, compared to 533,073 barrels in Q3 2024, while gas sales increased to 4,072,978 Mcf from 3,387,875 Mcf[71] - Oil sales (Bbls) from the Waddell Ranch properties for the nine months ended September 30, 2025, were 2,310,987, compared to 1,468,441 for the same period in 2024, indicating an increase of approximately 57%[83] - Gas sales (Mcf) from the Waddell Ranch properties for the nine months ended September 30, 2025, were 11,138,948, compared to 8,761,191 for the same period in 2024, reflecting an increase of about 27%[83] Price and Market Influences - The price of oil fluctuated between $58.50 and $75.89 per barrel in the second quarter of 2025, impacting the Trust's income and distributions[59] - Average realized oil price for Waddell Ranch properties decreased to $62.32 per barrel in Q3 2025 from $79.91 per barrel in Q3 2024, while gas price increased to $1.35 per Mcf from $1.19 per Mcf[72] - For Texas Royalty properties, average realized oil price fell to $65.20 per barrel in Q3 2025 from $79.06 per barrel in Q3 2024, and gas price decreased to $8.65 per Mcf from $10.54 per Mcf[74] - Average realized oil prices for the Waddell Ranch properties decreased to $66.68 per Bbl for the nine months ended September 30, 2025, down from $76.62 per Bbl for the same period in 2024, reflecting a decline of about 13%[84] - Average realized gas prices for the Waddell Ranch properties increased to $1.80 per Mcf for the nine months ended September 30, 2025, compared to $1.61 per Mcf for the same period in 2024, marking an increase of approximately 11.8%[84] Settlements and Legal Matters - The Trust received a partial settlement of $4.5 million in September 2025 from Blackbeard, with a total settlement amount of $9 million to be paid in installments[47] - The Trust has entered into a Settlement Agreement with Blackbeard, agreeing to a payment of $9,000,000, with $4,500,000 paid in September 2025 and the remaining amount to be paid in four quarterly installments of $1,125,000 during 2026[100][101] - The Settlement Agreement establishes an overhead rate for the Trust and allows Blackbeard to pass through third-party charges for saltwater disposal and other services[102] - There have been no material changes in the Trust's internal control over financial reporting during the reporting period[98] - The Trust has no material pending legal proceedings against it or its properties[103] Expenses and Cost Management - Total expenses in Q3 2025 were $411,626, up from $367,625 in Q3 2024, mainly due to increased legal expenses related to Blackbeard[68] - Lease operating expenses and property taxes for the nine months ended September 30, 2025, amounted to $67.8 million (gross), up from $60.1 million (gross) in the same period of 2024, indicating an increase of about 28%[89] - The Trust maintains an expense reserve of $1,100,000 to cover obligations in case of insufficient royalty income[54] Governance and Meetings - A special meeting of Unitholders is scheduled for December 16, 2025, to discuss potential amendments to the Trust Indenture[63] - Blackbeard will provide quarterly production and sales information to the Trust, enhancing transparency and reporting accuracy[71] - The Trust does not have any directors or officers, and therefore no trading arrangements have been adopted or terminated[106] Risk Factors - Risk factors related to the Trust remain unchanged from the previous Annual Report for the fiscal year ended December 31, 2024[104] - The Trust's income is heavily influenced by commodity prices, which have shown volatility due to geopolitical conditions[59] - The Trust's accounting policies differ from GAAP, with revenues not accrued in the month of production and expenses recorded when paid[32] - The Trust is exempt from Texas franchise tax as a passive entity, benefiting Unitholders from tax considerations[49]