Permian Basin Royalty Trust Reports Significant Decline in Financial Performance for Q1 2025

Permian Basin Royalty Trust reported a significant decline in financial performance for the first quarter of 2025 compared to the same period in 2024. The Trust's royalty income fell to $3.05 million, down from $6.01 million a year earlier, primarily due to a deficit position in the Waddell Ranch properties, which resulted in no royalty income being received during the quarter. Interest income also decreased to $16,523 from $39,048, reflecting reduced funds available for investment. Total expenses decreased to $475,008 from $552,484, contributing to a distributable income of $2.60 million, or $0.06 per unit, compared to $5.49 million, or $0.12 per unit, in the prior year.

The Trust's total assets as of March 31, 2025, were reported at $2.11 million, a decrease from $2.29 million at the end of 2024. The decline in assets was primarily driven by a reduction in cash and short-term investments, which fell to $1.95 million from $2.12 million. The distribution payable to unitholders also decreased to $848,624 from $1.02 million, reflecting the lower distributable income. The Trust's corpus, representing the value of its units, decreased to $163,765 from $164,407.

Operationally, the Trust faced challenges due to the refusal of Blackbeard Operating, LLC, the operator of the Waddell Ranch properties, to provide timely information necessary for calculating net proceeds. This lack of information has impacted the Trust's ability to report accurate royalty income. The average realized prices for oil and gas from the Waddell Ranch properties also decreased, with oil averaging $68.83 per barrel and gas at $1.66 per thousand cubic feet for the quarter, compared to $73.08 and $2.01, respectively, in the prior year. The Texas Royalty properties experienced similar declines in average realized prices.

Looking ahead, the Trust's outlook remains uncertain due to ongoing volatility in oil and gas prices, which are influenced by geopolitical conditions and market dynamics. The Trust's ability to recover from its current deficit position will depend on future production levels and the resolution of issues with Blackbeard regarding royalty payments. The Trustee has indicated that while expectations for recovery are reasonable, they are subject to numerous risks and uncertainties, including fluctuating commodity prices and operational challenges. The Trust continues to monitor these developments closely as it prepares for future distributions to unitholders.