Permian Basin Royalty Trust

What they do

The Trust holds a 75% net overriding royalty interest in the Waddell Ranch properties in Crane County, Texas, and a 95% net overriding royalty interest in the Texas Royalty Properties. It distributes available cash from these interests to unitholders, with production and cost data for Waddell Ranch provided quarterly by the operator, Blackbeard Operating LLC.

Revenue drivers

• Texas Royalty Properties — Contributed $1,375,871 to the July 2026 distribution from net profits of $1,448,285, driven by oil and gas volumes of 13,842 bbl and 5,923 Mcf net to the Trust, at average prices of $99.90/bbl and $8.61/Mcf.
• Waddell Ranch Properties — No proceeds were received in June 2026 due to production costs exceeding gross proceeds, resulting in a continuing excess cost position that must be recovered before distributions resume.
• Settlement Payments from Blackbeard Operating LLC — The July 2026 distribution included a fourth settlement payment of $1,125,000 from Blackbeard, which increased the monthly distribution.

Recent performance

For the quarter ended June 30, 2026, the Trust reported cash and short-term investments of $2,249,988, with a distribution payable of $1,149,988. The July 2026 cash distribution was $0.043566 per unit, payable on August 14, 2026. The distribution increased over the prior month primarily due to the Blackbeard settlement payment and higher oil pricing for Texas Royalty Properties, partially offset by lower volumes and gas pricing. No Waddell Ranch proceeds were included, as the properties remain in an excess cost position.

Strategy

The Trust does not have a stated growth strategy; it is a pass-through royalty trust. Management focuses on collecting and distributing net profits from the underlying properties. The Trustee discloses Waddell Ranch production and cost data quarterly in 10-Q and 10-K filings, as provided by the operator. Future distributions from Waddell Ranch depend on recovery of excess costs from future proceeds.

Risks

• Waddell Ranch excess costs — Continued excess costs on Waddell Ranch could delay or eliminate distributions from those properties as future proceeds must first recover accumulated costs.
• Commodity price volatility — Lower oil and gas prices directly reduce net profits from Texas Royalty Properties, as seen in the July distribution where lower gas pricing partially offset gains.
• Declining production volumes — Oil and gas volumes for Texas Royalty Properties decreased from prior month (16,174 bbl to 15,307 bbl oil), reflecting natural field decline.
• Operator information delays — Waddell Ranch data is provided quarterly rather than monthly, limiting visibility and delaying recognition of potential changes in excess cost position.

Outlook

Management expects Waddell Ranch information to continue being disclosed quarterly. The July distribution included a fourth settlement payment from Blackbeard, suggesting potential for further payments, but no timeline is provided. The Trust's outlook is dependent on future oil and gas prices, production volumes, and the ability of Waddell Ranch to generate proceeds after recovering excess costs.