PBT 10-K & 10-Q changes, risk factors and insider trading
Permian Basin Royalty Trust · NYSE · Oil Royalty Traders · CIK 319654 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “Proposed actions by certain Unit holders may have the effect of converting the Trust into a different type of investment, terminating the Trust, and/or permitting other changes to the Trust to occur that may not be acceptable to all Unit holders.”
New heading “The Units may lose value and cash available for distribution may be reduced as a result of title deficiencies with respect to the Royalty Properties.”
Largest changes
“From a global perspective, the International Energy Agency (“IEA”) observed in its World Energy Outlook 2025 that global electricity demand continued to grow in 2024 and all energy sources, including renewable power and each of the fossil fuels, grew to meet that demand, which stemmed from emerging market and developing economies. …”see in full comparison
“Proposed actions by certain Unit holders may have the effect of converting the Trust into a different type of investment, terminating the Trust, and/or permitting other changes to the Trust to occur that may not be acceptable to all Unit holders.”see in full comparison
“The Units may lose value and cash available for distribution may be reduced as a result of title deficiencies with respect to the Royalty Properties.”see in full comparison
Since May 2024, Blackbeard hassee in full comparisonrefused to provideprovided the Trustee information necessary to calculate the monthly net proceeds from the Waddell Ranch propertiesbyafter the NYSE notification date for each monthlydistribution, notwithstanding Blackbeard’s historical practice of providing such information and requests from the Trustee to Blackbeard for such information.distribution. As a result, distribution of net proceeds from the Waddell Ranch properties each month has been delayed by a monthfrom the timesuchproceedsthathavedistributionhistoricallyandbeenreportingdistributedoftodistributionsunitholders.willInremainresponseoneto the Trust’s lawsuit against Blackbeardmonth inthe District Court of Tarrant County Texas, Blackbeard has filed a counterclaim asking the court to limit the information it provides to the Trust to quarterly statements of the net proceeds computation and inspection of books and record during normal business hours. If Blackbeard continues to limit the information provided to the Trustee, distributions to unitholders of net proceeds from the Waddell Ranch properties will likely continue to be delayed.arrears.
“The International Energy Agency (“IEA”) estimates in its World Energy Outlook 2024 that growth in global energy demand is expected to slow due to efficiency improvements, electrification, and quick expansion of renewables. In addition, the IEA predicts that oil and natural gas, along with coal, are each expected to reach their high point in global energy supply before 2030, with their combined percentage of global energy supply expected to drop below eighty percent (80%) before that time. …”see in full comparison
“SoftVest, L.P., a Unit holder of the Trust, has a petition pending in District Court in Tarrant County, Texas, seeking to judicially modify the Trust indenture to eliminate certain supermajority voting requirements and prohibited amendments to the indenture. If SoftVest, L.P.’s petition is successful, the effect of such modification would be that any provision of the indenture could be amended by a majority in interest of Unit holders constituting a quorum at a meeting of Unit holders where a quorum is present. …”see in full comparison
Full comparison: every changed paragraph (21)
The Trust’s income and monthly distributions are heavily influenced by commodity prices. Commodity prices may fluctuate widely in response to (i) relatively minor changes in the supply of and demand for oil and natural gas, (ii) market uncertainty and (iii) a variety of additional factors that are beyond the Trustee’s control. As of FebruaryMarch 24,16, 2025,2026, the price of oil was $71.06$93.39 per barrel and the price of natural gas was $3.86$3.03 per Mcf.million British thermal units (“MMBtu”). Factors that may impact future commodity prices, including the price of oil and natural gas, include but are not limited to:
political conditions in major oil producing regions, including the conflicts in Eastern Europe andEurope, the Middle EastEast, and South America;
the price and availability of and purchaser or consumer preference for alternative fuels;
the effect of worldwide energy conservation measures and governmental policies and regulatory incentives for investments in non-fossil fuel energy sources; and the nature and extent of governmental regulation and taxation.
Proposed actions by certain Unit holders may have the effect of converting the Trust into a different type of investment, terminating the Trust, and/or permitting other changes to the Trust to occur that may not be acceptable to all Unit holders.
SoftVest, L.P., a Unit holder of the Trust, has a petition pending in District Court in Tarrant County, Texas, seeking to judicially modify the Trust indenture to eliminate certain supermajority voting requirements and prohibited amendments to the indenture. If SoftVest, L.P.’s petition is successful, the effect of such modification would be that any provision of the indenture could be amended by a majority in interest of Unit holders constituting a quorum at a meeting of Unit holders where a quorum is present. While providing greater flexibility to make changes that a majority of Units represented at a meeting are in support of, such a modification could have the result of permitting changes to be made to the Trust that holders of a majority of all outstanding Units are not actually in favor of. SoftVest has stated in documents filed with the SEC that if the judicial modification is successful, it believes the Trust should be converted into a publicly traded corporation or limited liability company to be effected by means of (a) the transfer of the Trust’s assets to a newly-formed corporation or limited liability company (“Newco”), (b) the subsequent distribution of Newco’s equity interests to Unit holders and (c) the termination of the Trust. SoftVest has stated that the proposed conversion would terminate the Trust’s status as a fixed investment trust that is taxed as a grantor trust for federal income tax purposes, and that Newco would be subject to tax at the entity level if it is a corporation (unlike a grantor trust that is not subject to tax at the Trust level). SoftVest also noted that Newco could be a limited liability company treated as a partnership for federal income tax purposes, which would not be subject to tax at the entity level. Any modifications to the Trust’s classification for federal (and applicable state and local) income tax purposes would result in additional costs incurred by the Trust to implement and maintain new reporting procedures, which could result in reduced distributions to Unit holders. Additionally, other changes could be made to the Trust indenture that currently require a supermajority vote, or are prohibited, including ceasing distributions, distributing the Royalties in kind, altering the rights of Unit holders vis-à-vis each other, changing the purpose of the Trust, selling the assets of the Trust, or terminating the Trust. Any or all of these changes may not be acceptable to all Unit holders.
The Trustee has requested information regarding future development and capital expenditures from Blackbeard fordoes fiscal year 2025 but Blackbeard has refused tonot provide any forward looking information despiteregarding havingfuture-development providedand thiscapital informationexpenditures insuch previous years. In contrast to previous years,that the reserve estimates as of December 31, 2024 and forward exclude all proved undeveloped reserves ("PUDs") as a result of Blackbeard's refusal to provide such information.. SEC rules, subject to limited exceptions, permit PUDs to be disclosed only if they relatedrelate to wells scheduled to be drilled within five years after the date of disclosure. Without a development plan reflecting development of wells, the Trust cannot disclose PUDs from the Waddell Ranch properties. In 2023, the proved undeveloped reserves constituted 48.3% of the total proved reserves for the Waddell Ranch properties and 38% of the total proved reserves for the Trust.
The public trading price for the Units tends to be tied to the recent and expected levels of cash distribution on the Units. The amounts available for distribution by the Trust vary in response to numerous factors outside the control of the Trust, including prevailing prices for crude oil and natural gas produced from the Royalties. The market price is not necessarily indicative of the value that the Trust would realize if it sold those Royalties to a third partythird-party buyer. In addition, such market price is not necessarily reflective of the fact that since the assets of the Trust are depleting assets, a portion of each cash distribution paid on the Units should be considered by investors as a return of capital, with the remainder being considered as a return on investment. There is no guarantee that distributions made to a Unit holder over the life of these depleting assets will equal or exceed the purchase price paid by the Unit holder.
There are operational risks and hazards associated with the production and transportation of crude oil and natural gas, including without limitation natural disasters, blowouts, explosions, fires, leakage of crude oil or natural gas, releases of other hazardous materials, mechanical failures, cratering, and pollution. Any of these or similar occurrences could result in the interruption or cessation of operations, personal injury or loss of life, property damage, damage to productive formations or equipment, damage to the environment or natural resources, or cleanup or remediation obligations. The operation of oil and gas properties is also subject to various laws and regulations. Non-compliance with such laws and regulations could subject the operator to additional costs, sanctions or liabilities. The uninsured costs resulting from any of these or similar occurrences could be deducted as a cost of production in calculating the net proceeds payable to the Trust and would therefore reduce Trust distributions by the amount of such uninsured costs.
As of December 31, 2023, oil and gas production from the Waddell Ranch properties was processed through two facilities. Blackbeard has refused to verify if this information is still accurate as of December 31, 2024.2024 and 2025. Should this number still be accurate, the limited number of gas processing facilities for the Waddell Ranch properties may impact future distributions from those properties as they may be particularly susceptible to such operational risks and hazards. AFor example, a partial or complete shut down of operations at that facility could disrupt the flow of royalty payments to the Trust and, accordingly, the Trust’s distributions to its Unit holders. In addition, although Blackbeard is the current operator of record of the properties burdened by the Waddell Ranch overriding royalty interests, none of the Trustee, the Unit holders or Blackbeard, as the current operator, has an operating interest in the properties burdened by the Texas Royalty properties’ (as defined herein) overriding royalty interests. As a result, these parties are not in a position to eliminate or mitigate the above or similar occurrences with respect to such properties and may not become aware of such occurrences prior to any reduction in Trust distributions which may result therefrom.
Finally, itIt should be noted that, recently, concerns about the potential effects of climate change have resulted in certain financial institutions, funds and other sources of capital restricting or eliminating their investment in oil and natural gas activities. These concerns have also led to the oil and gas industry facing growing demand for corporate transparency and a demonstrated commitment to sustainability goals. Furthermore, in March 2024 the U.S. Securities and Exchange Commission (“SEC”) adopted rule amendments that would require public companies to disclose certain climate-related information in their public filings. The new rules also required certain disclosure requirements related to severe weather events and other natural conditions in a company's audited financial statements. However, the SEC stayed implementation of the rules until legal challenges to the rules could be resolved, and following installation of the second Trump presidential administration, is reassessing its position in the litigation. Accordingly, the SEC rules have not yet gone into effect. Environmental, social, and governance (“ESG”) goals and programs, which typically include extralegal targets related to environmental stewardship, social responsibility, and corporate governance, have also become an increasing focus of investors and shareholders across the industry. While reporting on ESG metrics remains voluntary,voluntary in the U.S., access to capital and investors is likely to favor companies with robust ESG programs in place. Ultimately,If participation in these initiatives becomes more common across the industry or if the rulemakings are ultimately reinstated or amended to require ESG-related disclosures, they could increase operational costs and make it more difficult for companies, including the companies that operate the Underlying Properties, to secure funding for exploration and production activities.
From a global perspective, the International Energy Agency (“IEA”) observed in its World Energy Outlook 2025 that global electricity demand continued to grow in 2024 and all energy sources, including renewable power and each of the fossil fuels, grew to meet that demand, which stemmed from emerging market and developing economies. Renewable power generation constituted 70% of the energy sources that met that demand and renewables grow faster than any other energy source in each of the IEA World Outlook current policies, stated policies, net zero emissions by 2050, and accelerating clean cooking and electricity services scenarios. The IEA notes the uncertainty in the energy sector related to global policy and trade and the value of energy supply diversification and supply chain resilience, particularly in light of increased geopolitical competition and conflict. In the last year, the U.S. has diminished its backing of wind, solar and electric vehicles, and increased its support of domestic fossil fuels and nuclear energy. Further, while the IEA noted an increase in the number of countries adopting renewable energy policies and energy performance standards, including vehicle fuel economy standards and energy performance standards for appliances and industrial motors, in the 2010s, those adoptions have somewhat flattened during the 2020s. The IEA also indicates momentum for national and international efforts to reduce emissions appears to have slowed. With the increase in geopolitical uncertainty and current energy market volatility, countries feeling vulnerable are increasingly focusing on enhancing their energy security policies, such as emergency stock oil requirements. The adoption and implementation of any international, federal, or state GHG-emission reduction commitments, legislation or regulations or other restrictions or imposition of taxes, fees, or limits on emissions of GHGs could result in increased development, operation, and compliance costs, additional operating restrictions on the Underlying Properties, and additional regulatory burdens, and thus decrease revenue to the Trust.
The International Energy Agency (“IEA”) estimates in its World Energy Outlook 2024 that growth in global energy demand is expected to slow due to efficiency improvements, electrification, and quick expansion of renewables. In addition, the IEA predicts that oil and natural gas, along with coal, are each expected to reach their high point in global energy supply before 2030, with their combined percentage of global energy supply expected to drop below eighty percent (80%) before that time. In addition, the growth in demand for fossil fuels could be tempered and decrease further if the growth of China’s economy slows and investment in clean and efficient energy by it, as well as other high-energy-demand growth areas, such as India, Southeast Asia, and Africa, continues.
Terrorism, continued hostilities in Eastern Europe andEurope, the Middle East, and South America or other military campaigns could decrease Trust distributions or the market price of the Units.
Terrorist attacks and the threat of terrorist attacks, whether domestic or foreign, as well as military or other actions taken in response, cause instability in the global financial and energy markets. Terrorism, continued hostilities in Eastern Europe andEurope, the Middle East, or South America or other sustained military campaigns could adversely affect Trust distributions or the market price of the Units in unpredictable ways, including through the disruption of fuel supplies and markets, increased volatility in crude oil and natural gas prices, or the possibility that the infrastructure on which the operators developing the Underlying Properties rely could be a direct target or an indirect casualty of an act of terror.
The Units may lose value and cash available for distribution may be reduced as a result of title deficiencies with respect to the Royalty Properties.
The existence of a title deficiency with respect to any of the Royalty Properties could reduce the value or render a property worthless, thus adversely affecting the distributions to Unit holders. An operator’s inability or failure to cure title defects could cause the operator to lose its rights to some or all production from some of the Royalty Properties, which could result in a reduction in proceeds available for distribution to Unit holders and the value of the Units may be reduced.
Changes in the information historically made available to the Trustee by Blackbeard has delayed and maywill continue to delay Trust distributions
Since May 2024, Blackbeard has refused to provideprovided the Trustee information necessary to calculate the monthly net proceeds from the Waddell Ranch properties byafter the NYSE notification date for each monthly distribution, notwithstanding Blackbeard’s historical practice of providing such information and requests from the Trustee to Blackbeard for such information.distribution. As a result, distribution of net proceeds from the Waddell Ranch properties each month has been delayed by a month from the time such proceedsthat havedistribution historicallyand beenreporting distributedof todistributions unitholders.will Inremain responseone to the Trust’s lawsuit against Blackbeardmonth in the District Court of Tarrant County Texas, Blackbeard has filed a counterclaim asking the court to limit the information it provides to the Trust to quarterly statements of the net proceeds computation and inspection of books and record during normal business hours. If Blackbeard continues to limit the information provided to the Trustee, distributions to unitholders of net proceeds from the Waddell Ranch properties will likely continue to be delayed.arrears.
U.S. federal tax reform legislation known as the Tax Cuts and Jobs Act (the “TCJA”) was enacted December 22, 2017, and made significant changes to the federal income tax rules applicable to both individuals and entities, including changes to the effective tax rate on a Unit holder’s allocable share of certain income from the Trust. Additionally, the One Big Beautiful Bill Act (“OBBBA”) was signed into law on July 4, 2025 and, among other items, made permanent, extended or modified certain provisions under the TCJA. The TCJA isand OBBA are complex, thus, Unit holders should consult their tax advisor regarding the TCJA and itsOBBA and their effect on an investment in Trust Units.
Any modification to the U.S. federal income tax laws or interpretations thereof (including administrative guidance relating to the TCJA or OBBA) may be applied retroactively and could adversely affect the Trust’s business, financial condition or results of operations. The Trust is unable to predict whether any changes or other proposals will ultimately be enacted, or whether any adverse interpretations will be issued. Any such changes or interpretations could negatively impact the value of an investment in the Trust Units.
Management's Discussion & Analysis (MD&A)
New heading “Recent Developments”
New heading “SoftVest Special Meeting and Petition”
New heading “Blackbeard Settlement”
Largest changes
“Additionally, the Settlement Agreement established the overhead rate that may be charged to the Trust and permits Blackbeard to pass through third-party charges for salt water disposal, gathering and transportation, and charge technical labor on reservoir engineers using an agreed allocation methodology against the net overriding royalty. The parties also agreed that the Trust would not make future claims for lost volumes in the case of ordinary line loss (as defined by third party purchase agreements with purchasers). …”see in full comparison
“On August 19, 2025, the Trustee entered into a settlement agreement and release (the “Settlement Agreement”) in connection with its lawsuit against Blackbeard, as operator of the properties in the Waddell Ranch, in Crane County, Texas, in which the Trust holds a 75% net overriding royalty. Pursuant to the lawsuit, the Trustee had sought to recover more than $9 million in damages it alleged resulted from Blackbeard’s failure to properly calculate and pay royalties due and owing to the Trust.”see in full comparison
“(1) Total Royalty Income for 2025 does not include the $4.5 million partial payment of the lawsuit settlement paid to the Trust in September 2025 by Blackbeard.”see in full comparison
Full comparison: every changed paragraph (31)
Recent Developments
SoftVest Special Meeting and Petition
On December 16, 2025, the Trust held a special meeting of its Unit holders (the “Special Meeting”). The Special Meeting was called by the Trustee as required by Section 8.02 of the Trust Indenture at the request of SoftVest Advisors, LLC (“SoftVest Advisors”) and other Unit holders of the Trust collectively owning not less than 15% of the outstanding Trust Units. At the Special Meeting, Unit holders approved a non-binding proposal for SoftVest Advisors or another appropriate party to take appropriate actions as beneficiaries of the Trust to effect the judicial reformation or modification of the Trust Indenture, to allow for the approval of any amendment to the Trust Indenture by a simple majority of votes cast by Unit holders at a special meeting at which a quorum is present.
On or about February 10, 2026, SoftVest, L.P. (“SoftVest”), a Unit holder of the Trust, mailed documents to the other Unit holders, which included a cover letter, a Citation in the District Court of Tarrant County, Texas (“Citation”), the Original Petition for Modification of Trust (the “Petition”) in the District Court of Tarrant County, Texas (Cause No. 96-373245-25) seeking judicial modification of the Trust’s Indenture, and the Petitioner SoftVest, L.P.’s Notice of Bench Trial on Petitioner's Original Petition for Modification of Trust (“Notice of Bench Trial”), also collectively known as the “Unit holder Mailing”. The Unit holder Mailing advises Unit holders of a hearing to be scheduled Friday, May 8, 2026, at 10:30 a.m. before the 96th District Court of Tarrant County, Tom Vandergriff Civil Courts Building, 4th Floor, 100 North Calhoun Street, Fort Worth, Texas 76196, on the merits of SoftVest’s Petition pursuant to which it seeks to (1) amend Section 8.03 of the Indenture to eliminate the requirement that certain amendments require approval by 75% of the outstanding Units of the Trust, and (2) delete Section 10.01 of the Indenture that sets forth certain prohibited amendments and replace Article X of the Indenture with a provision permitting amendment of any provision of the Indenture by a vote of Unit holders in accordance with Article VIII (which, as amended, would permit amendment by a majority in interest of Unit holders constituting a quorum at a meeting of Unit holders where a quorum is present).
Blackbeard Settlement
On August 19, 2025, the Trustee entered into a settlement agreement and release (the “Settlement Agreement”) in connection with its lawsuit against Blackbeard, as operator of the properties in the Waddell Ranch, in Crane County, Texas, in which the Trust holds a 75% net overriding royalty. Pursuant to the lawsuit, the Trustee had sought to recover more than $9 million in damages it alleged resulted from Blackbeard’s failure to properly calculate and pay royalties due and owing to the Trust.
Pursuant to the Settlement Agreement, Blackbeard agreed to pay the Trust $9,000,000, of which $4,500,000 was paid to the Trust on September 18, 2025, and the remainder of which will be paid in four equal installments of $1,125,000 quarterly during the 2026 calendar year.
Additionally, the Settlement Agreement established the overhead rate that may be charged to the Trust and permits Blackbeard to pass through third-party charges for salt water disposal, gathering and transportation, and charge technical labor on reservoir engineers using an agreed allocation methodology against the net overriding royalty. The parties also agreed that the Trust would not make future claims for lost volumes in the case of ordinary line loss (as defined by third party purchase agreements with purchasers). The Trust will have the option to conduct annual site audits, at its expense. The Settlement Agreement also set forth agreed reporting that Blackbeard will provide the Trustee going forward.
Royalty income received by the Trust for the three-year period ended December 31, 2024,2025, which for 2025 is only from the Texas Royalty Properties, due to the excess cost position of the Waddell Ranch properties, is reported in the following table:
(1) Total Royalty Income for 2025 does not include the $4.5 million partial payment of the lawsuit settlement paid to the Trust in September 2025 by Blackbeard.
NotwithstandingAs requestsof fromMay the Trustee to2024, Blackbeard, the operator of the Waddell Ranch properties, Blackbeard has refused to provideprovides the Trustee information necessary to calculate the net proceeds as ofafter the NYSE notification date beginning May 2024 such that Royaltyroyalty income of the Trust for the current calendar year is associated with actual oil and gas production for the period from NovemberOctober of the prior year2024 through September of the current year2025 for the Waddell Ranch properties. Royalty income for the Trust for the calendar year for the Texas Royalty properties is associated with actual oil and gas production from November 2024 through October 2024.2025. Oil and gas production for 2024,2025, 20232024 and 20222023 generated by the Royalties and the Underlying Properties, excluding portions attributable to the adjustments discussed hereafter, are presented in the following table:
The average price of oil decreased to $65.95 per barrel in 2025, down from $75.88 per barrel in 2024, down from $76.72 per barrel in 2023.2024. The average price of oil in 20222023 was $94.11$76.72 per barrel. In addition, the average price of gas decreasedincreased from $2.40 per Mcf in 2023 to $1.45 per Mcf in 2024.2024 to $1.78 per Mcf in 2025. The average price of gas in 20222023 was $5.54$2.40 per Mcf. Oil prices have decreased primarily because of world market conditions. Oil prices are expected to remain volatile. Gas liquids values have declined along with gas pricing due to high production levels, consistently mild weather patterns, and decreased heating demand. Blackbeard, after assuming the role of operator of the Waddell Ranch properties, immediately instituted a workover of specific wells, which caused the Trust not to receive any royalty income from the Waddell Ranch properties in 2022 and portions of 2023.2023 and 2024, and all of 2025. Royalty income was also not received for the Waddell Ranch properties for the monthsyear of2025 Octoberdue andto Novemberlarge 2024.capital expenditures.
Subsequent to December 31, 2024,2025, the price of both oil and gas continued to fluctuate, giving rise to a correlating adjustment of the respective standardized measure of discounted future net cash flows. As of FebruaryMarch 24,16, 2025,2026, NYMEX posted oil prices were approximately $71.06$93.39 per barrel, which compared to the posted price of $75.48$65.34 per barrel, used to calculate the worth of future net revenue of the Trust’s proved developed reserves, would result in a smallerlarger standardized measure of discounted future net cash flows for oil. As of FebruaryMarch 24,16, 2024,2026, NYMEX posted gas prices were $3.86$3.03 per million British thermal units.MMBtu. The use of such price, as compared to the posted price of $2.15$3.387 per million British thermal units,MMBtu, used to calculate the future net revenue of the Trust’s proved developed reserves would result in a largersmaller standardized measure of discounted future net cash flows for gas.
Notwithstanding requests from the Trustee to Blackbeard, the operatorAs of theMay Waddell Ranch properties, and the fact that2024, Blackbeard has provided this information on a monthly basis since Argent Trust Company has become Trustee of the Trust, Blackbeard has refused to provide the Trustee information necessary to calculate the net proceeds as ofafter the announcement date for monthly distributionsdistributions. starting in May 2024. As a result of Blackbeard's failure to provide this information by the NYSE notification date for the monthly distribution, inIn accordance with the Trust indenture, if Royaltyroyalty income is received from the Waddell Ranch properties on or prior to the record date, it will be included in the following month'smonth’s distribution, rather than the current month'smonth’s distribution. In the second and third quarter reports, the Royalty income received from Blackbeard after the NYSE notification deadline was included as a liability on the Condensed Statement of Assets, Liabilities, and Trust Corpus titled, "Funds received for future distributions." There was no Royaltyroyalty income received for Octoberthe andyear November of 2024, therefore, there are no funds received for future distributions as ofending December 31, 2024.2025.
Since the oil and gas sales attributable to the Royalties are based on an allocation formula that is dependent on such factors as price and cost (including capital expenditures), production amounts do not necessarily provide a meaningful comparison. For the underlyingUnderlying propertiesProperties oil and gas production decreasedincreased approximately 3%56% and increased less than 1%46% respectively, from 20232024 to 20242025 which the Trustee believes were likely primarily due to lowernew oildevelopment andbased gason prices.the increased levels of capital expenditures.
Total capital expenditures for the eleventwelve months of production reported in 20242025 and used in the net overriding royalty calculation were approximately $109.4$228.7 million (gross). Total capital expenditures were $120.5$109.4 million (gross) in 20232024 and $124.3$120.4 million (gross) in 2022.2023.
Development information for the Waddell Ranch properties, such as well activity, completions, workovers, remedial activities, and plugging and abandonment, wasis not provided by Blackbeard. This information has previously been provided on a monthly basis since Argent Trust Company has become Trustee of the Trust until May 2024.
Blackbeard has advised the Trustee that it willdoes not be providingprovide a proposed capital expenditure budget for 2025, information that has previously been provided on an annual basis.budget.
The Trustee was previously advised by the operator that as of December 31, 2023, the majority of Waddell Ranch oil production is now pipeline connected and sold under long term crude purchase agreements. Blackbeard would not confirm if this information remainsremained accurate for 2024.2024 or 2025.
Distributable income for 2025 was $14,300,162 or $0.31 per Unit. Distributable income includes a $4.5 million partial settlement received from Blackbeard declared in the September 2025 distribution that was paid on October 15, 2025. The $4.5 million partial payment is included in the financial statements under “Statements of Distributable Income” and “Statement of Changes in Trust Corpus” as of December 31, 2025, as well as in “Quarterly Schedule of Distributable Income (Unaudited) for the year ended December 31, 2025” (See Notes 3 and 7).
Distributable income for 2023 was $27,978,487 or $0.60$0.060 per Unit. .
Distributable income for 2022 was $53,543,824 or $1.15 per Unit.
Royalty income received by the Trust for the fourth quarter of 20242025 amounted to $3,784,959$2,652,251 or $0.08$0.06 per Unit, a decrease from the fourth quarter of 2023,2024, when the Trust received royalty income of $14,412,501$3,784,959 or $0.31$0.08 per Unit. The decrease in the fourth quarter of 20242025 was due in part to no Royaltyroyalty income being received from the Waddell Ranch properties infor Octoberthe andfull Novemberquarter ended December 31, 2025, as opposed to just the last two months of the quarter ended December 31, 2024. Interest income for the fourth quarter of 20242025 amounted to $28,091$25,437 compared to $24,688$28,091 for the fourth quarter of 2023.2024. The increasedecrease in interest income is primarily attributable to increaseddecreased amounts of funds available for investment and the length of time of such investment due mainly to the fact that funds received from Blackbeard during the fourth quarter of 2024 were included in the following month's distribution calculation and held for investment for a longer period of time than was held during the fourth quarter of 2023.investment. Total general and administrative expenses waswere $232,880 for the fourth quarter of 2025 compared to $382,860 for the fourth quarter of 2024 compared to $162,490 for the fourth quarter of 2023.2024. The increasedecrease in expenses primarily related to timing of payments of legal and auditor expenses.
NothwithstandingAs requestsof fromMay the Trustee to2024, Blackbeard, the operator of the Waddell Ranch properties, Blackbeard has refused to provideprovided the Trustee information necessary to calculate the net proceeds as ofafter the NYSE notification date beginning May 2024 such that Royaltyroyalty income of the Trust for the fourth quarter is associated with actual oil and gas production for the period from July through September of the current yearand prior years for the Waddell Ranch properties and August through October for the same period in 2023.properties. Royalty income for the Trust for the fourth quarterquarters of 2024 and 2025 for the Texas Royalty properties is associated with actual oil and gas production from August through October 2024.of both years. Oil and gas production attributable to the Underlying Properties for each month in the fourth quarter of 20242025 and the comparable period for 20232025 are as follows:
For the Waddell Ranch properties, the posted price of oil decreased for the fourth quarter of 20242025 compared to the fourth quarter of 2023,2024, resulting in an average price per barrel of $73.78$64.16 compared to $84.40$73.78 in the same period of 2023.2024. The average price of gas decreasedincreased for the fourth quarter of 20242025 compared to the same period in 2023,2024, resulting in an average price per Mcf of $1.23$1.58 compared to $2.27$1.23 in the fourth quarter of 2023.2024. OilBoth oil and gas production decreasedincreased in the fourth quarter of 20242025 compared to the same period in 20232024 for the Waddell Ranch properties.
For the Texas Royalty properties, the posted price of oil decreased for the fourth quarter of 20242025 compared to the fourth quarter of 2023,2024, resulting in an average price per barrel of $74.57$62.90 compared to $83.22$74.57 in the same period of 2023.2024. The average price of gas increaseddecreased for the fourth quarter of 20242025 compared to the same period in 2023,2024, resulting in an average price per Mcf of $10.79$7.88 compared to $4.13$10.79 in the fourth quarter of 2023.2024. Oil production decreased, while gas production increased in the fourth quarter of 20242025 compared to the same period in 20232024 for the Texas Royalty properties.
Development information for the Waddell Ranch properties such as well completions, workovers, remedial activities, and plugging and abandonment, wasis not provided by Blackbeard. This information has previously been provided monthly since Argent Trust Company has become Trustee of the Trust until May 2024.
The Trustee routinely reviews its royalty interests in oil and gas properties for impairment whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. If an impairment event occurs and it is determined that the carrying value of the Trust’s royalty interests may not be recoverable, an impairment will be recognized as measured by the amount by which the carrying amount of the royalty interests exceeds the fair value of these assets, which would likely be measured by discounting projected cash flows. There was no impairment of the assets asduring ofthe years ended December 31, 2024.2025, 2024, or 2023.
The financial statements of the Trust are prepared on the following modified cash basis of accounting and are not intended to present financial position and results of operations in conformity with accounting principles generally accepted in the United States of America (“GAAP”):
The financial statements of the Trust are prepared on the following basis:
Revenues from Royaltyroyalty Interestsinterests are recognized in the period in which amounts are received by the Trust. For the Texas Royalty Properties, royalty income received by the Trust in a given calendar year will generally reflect the proceeds from crude oil and natural gas produced for the twelve-month period ended October 31st in that calendar year. ForAs of May 2024, this was the case for the Texas Royalty properties. Blackbeard has refused to provideprovided the Trustee information necessary to calculate the net proceeds for the Waddell Ranch properties as ofafter the NYSE notification date beginning May 2024 such that Royaltyroyalty income for 20242025 is associated with actual oil and gas production for the 11-month12-month period endedof October 1, 2024 through September 30, 2024.2025. There was no royalty income received from Blackbeard for the calendar year 2025.
What changed in the latest 10-Q
Risk Factors
New heading “The terms of the Combination Agreement and proposed Business Combination were not negotiated by the Trust or the Trustee, and no party has opined on the fairness of the Business Combination to Unitholders.”
Largest changes
“The terms of the Combination Agreement and proposed Business Combination were not negotiated by the Trust or the Trustee, and no party has opined on the fairness of the Business Combination to Unitholders.”see in full comparison
“Neither the Trust nor the Trustee is a party to the Combination Agreement, nor did the Trust or Trustee negotiate the terms of the Business Combination, including the percentage of New PBT shares to be held by Unitholders following the Business Combination. The negotiations were instead conducted by SoftVest, a Unitholder that beneficially owns in the aggregate approximately 13.3% of the outstanding Trust Units, at SoftVest’s initiative. …”see in full comparison
Risk factors relating to the Trust are contained in Item 1A of the Trust's Annual Report on Form 10-K for the fiscal year ended December 31, 2025. Except as set forth in such filing, and as set forth below, no material change to such risk factors has occurred during thesee in full comparisonthreesix months endedMarchJune31,30,2026.2026:
Full comparison: every changed paragraph (3)
Risk factors relating to the Trust are contained in Item 1A of the Trust's Annual Report on Form 10-K for the fiscal year ended December 31, 2025. Except as set forth in such filing, and as set forth below, no material change to such risk factors has occurred during the threesix months ended MarchJune 31,30, 2026.2026:
The terms of the Combination Agreement and proposed Business Combination were not negotiated by the Trust or the Trustee, and no party has opined on the fairness of the Business Combination to Unitholders.
Neither the Trust nor the Trustee is a party to the Combination Agreement, nor did the Trust or Trustee negotiate the terms of the Business Combination, including the percentage of New PBT shares to be held by Unitholders following the Business Combination. The negotiations were instead conducted by SoftVest, a Unitholder that beneficially owns in the aggregate approximately 13.3% of the outstanding Trust Units, at SoftVest’s initiative. Neither the Trust nor the Trustee received any opinion from an investment bank regarding the fairness of the Business Combination from a financial point of view, or any other matter. The Trustee is not making any recommendation with respect to the Business Combination or any other proposals to be considered at the special meeting. Therefore, Unitholders are strongly encouraged to carefully review the information in New PBT’s proxy statement/prospectus, including all annexes and information incorporated by reference, and other available information, so that they can make their own determination as to whether to approve amendments to the Trust Indenture to implement the Business Combination and other proposals at the special meeting.
Management's Discussion & Analysis (MD&A)
Not available: the section could not be located automatically in both filings (non-standard layout or incorporated by reference). See the original filing. Open the filing on SEC.gov.
PBT insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 0 filings. Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
No Form 4 stock transactions in this period.
Well-known investors holding PBT (13F)
None of the 59 investors we track reported a position in their latest 13F.