Permian Basin Royalty Trust reported significant declines in financial performance for the second quarter and first half of 2025 compared to the same periods in 2024. For the three months ended June 30, 2025, the Trust generated total income of $3.1 million, a decrease of 65.1% from $8.8 million in the prior year. Royalty income specifically fell to $3.1 million from $8.8 million, while interest income also decreased to $15,751 from $29,106. The Trust's distributable income for the quarter was $2.4 million, or $0.05 per unit, down from $8.4 million, or $0.18 per unit, in the same quarter of 2024. For the six-month period, total income was $6.2 million, down from $14.9 million, with distributable income dropping to $5.0 million, or $0.11 per unit, from $13.9 million, or $0.30 per unit.
The Trust's financial difficulties were attributed to a deficit position in the Waddell Ranch properties, which resulted in no royalty income being received during the second quarter of 2025. This situation arose due to excess working interest costs, which were not present in the same period of 2024. The average realized prices for oil and gas from the Waddell Ranch properties also decreased, with oil averaging $70.27 per barrel and gas at $2.41 per thousand cubic feet for the second quarter of 2025, compared to $73.40 and $1.83, respectively, in the prior year. The Texas Royalty properties experienced similar declines, with oil prices averaging $68.61 per barrel, down from $78.00, while gas prices increased slightly to $10.15 per thousand cubic feet from $10.04.
Operationally, the Trust has faced challenges in obtaining timely information from Blackbeard Operating, LLC, the operator of the Waddell Ranch properties. Blackbeard has not provided necessary production and financial data since May 2024, which has hindered the Trust's ability to calculate net proceeds for distributions. The Trust has initiated legal proceedings against Blackbeard, seeking over $9 million in damages for alleged improper calculations and deductions related to royalties. The trial is scheduled for November 2025, and discovery is ongoing.
As of June 30, 2025, the Trust's total assets were reported at $1.87 million, down from $2.29 million at the end of 2024. The Trust's liabilities also decreased to $1.70 million from $2.12 million, primarily due to a reduction in distributions payable to unitholders. The Trust's corpus, representing the value of its units, was $163,122, down from $164,407 at the end of the previous fiscal year. The Trust currently has 46,608,796 units of beneficial interest outstanding.
Looking ahead, the Trust's financial outlook remains uncertain, heavily influenced by commodity price fluctuations and ongoing legal disputes. The Trustee has indicated that future distributions will depend on the resolution of these issues and the recovery of excess costs. The Trust's passive nature limits its operational control, and it relies on the performance of the underlying properties for income generation. The Trustee continues to monitor market conditions and the performance of the properties to provide updates to unitholders.
About PERMIAN BASIN ROYALTY TRUST
Permian Basin Royalty Trust is a Texas-based entity that owns net overriding royalty interests in oil and gas properties, primarily in the Permian Basin. It collects income from production on underlying properties, mainly in Waddell Ranch and Texas fields, and distributes proceeds to unit holders. The trust operates passively, with income dependent on commodity prices, production levels, and operator performance, offering investors exposure to energy royalties and depleting assets.
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