UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 21, 2022
PERMIAN BASIN ROYALTY TRUST
(Exact name of Registrant as specified in its charter)
| Texas |
1-8033 |
75-6280532 | ||
| (State or other jurisdiction of incorporation or organization) |
(Commission File Number) |
(I.R.S. Employer Identification No.) | ||
| Royalty Trust Management Simmons Bank 2911 Turtle Creek Boulevard Suite 850 Dallas, Texas |
75219 | |||
| (Address of principal executive offices) | (Zip Code) | |||
Registrant’s Telephone Number, including area code: (855) 588-7839
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2.):
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
| Units of Beneficial Interest | PBT | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition.
On March 21, 2022, the Registrant issued a press release announcing its monthly cash distribution to unitholders of record on March 31, 2022. The press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
This Report on Form 8-K is being furnished pursuant to Item 2.02, Results of Operations and Financial Condition. The information furnished is not deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, is not subject to the liabilities of that section and is not deemed incorporated by reference in any filing under the Securities Act of 1933, as amended.
Item 9.01. Financial Statements and Exhibits.
| (d) | Exhibits | |
| 99.1 | Press Release dated March 21, 2022. | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| PERMIAN BASIN ROYALTY TRUST | ||
| By: | SIMMONS BANK, TRUSTEE FOR | |
| PERMIAN BASIN ROYALTY TRUST | ||
| By: | /s/ RON E. HOOPER | |
| Ron E. Hooper | ||
| Senior Vice President | ||
Date: March 21, 2022
Exhibit 99.1
Permian Basin Royalty Trust
PERMIAN BASIN ROYALTY TRUST
ANNOUNCES MARCH CASH DISTRIBUTION
DALLAS, Texas, March 21, 2022 – Simmons Bank, as Trustee of the Permian Basin Royalty Trust (NYSE: PBT) (“Permian”) today declared a cash distribution to the holders of its units of beneficial interest of $0.019331 per unit, payable on April 14, 2022, to unit holders of record on March 31, 2022.
This month’s distribution decreased from the previous month as the result of a decrease in the production offset by pricing of oil and gas for the Texas Royalty Properties during the month of January. The timing of receipts from some of the larger remitters was delayed due to the end of the month of February. These receipts will be posted in the following month. Currently, only the Texas Royalty Properties are contributing to the monthly distribution.
Since the Waddell Ranch is in current deficit for the foreseeable future, any increase or decrease of the distribution by revenues received, will only be reflective of the activity of the Texas Royalty Properties. The activity of the Waddell Ranch will be discussed with the following narrative until it contributes back to the distribution. This reflects the production month of January.
WADDELL RANCH
In reporting January production of the Underlying Properties for this month’s press release, production for oil volumes was 146,556 (gross) and was priced at about $81.06 per bbl. Production for gas volumes (including gas liquids) was 486,150 Mcf (gross) and was priced at about $6.82 per Mcf, which now includes the value received from plant products and natural gas liquids. Net revenue for the underlying properties of the Waddell ranch was $14,428,514 (gross) for January. Lease Operating Expenses were $2,930,402 (gross) and Capital Expenditures were $6,322,184 (gross) for January. This would put the Trust’s proceeds as a positive $3,881,946 (net) for the month of January, leaving an excess cost deficit cumulative of $6.6 million (net).
A review and update on the ongoing 2021 budget are as follows. The 2021 budget (net to the Trust) has expended through December 2021, approximately $56.0 million, recompleting 47.4 existing wells along with drilling 29.7 new wells to completion, with 4.1 recompletions and 4.1 new drills remaining to be fully completed for the 2021 budget. This has resulted in production of approximately 655,000 barrels of oil and 1.5 Bcf of gas, generating $51.1 million in gross revenue through December 2021, all net to the Trust.
As of the end of January, approximately $55.4 million of net profit revenue has been generated by the 2020-2021 budgeted projects.
Blackbeard has advised the Trustee of the projected 2022 capital expenditure budget for the Waddell Ranch Properties to be an estimated $92 million (net to the Trust) with a projected about 47 new drill wells and 45 recompletions along with about 19 plug and abandoned wells. Of the new drill wells, about 13 will be horizontal drills and about 34 vertical drill wells. In the Form 10-K, to be filed in March, further discussion will be provided.
TEXAS ROYALTY PROPERTIES
Production for the underlying properties at the Texas Royalties was 15,800 barrels of oil and 7,645 Mcf of gas. The production for the Trust’s allocated portion of the Texas Royalties was 14,073 barrels of oil and 6,798 Mcf of gas. The average price for oil was $77.97 per bbl and for gas was $13.26 per Mcf. This would primarily reflect production and pricing for the month of January for oil and the month of December for gas. These allocated volumes were impacted by the pricing of both oil and gas. This production and pricing for the underlying properties resulted in revenues for the Texas Royalties of $1,333,243. Deducted from these were taxes of $133,560 resulting in a Net Profit of $1,199,683 for the month of January. With the Trust’s Net Profit Interest (NPI) of 95% of the Underlying Properties, this would result in net contribution by the Texas Royalties of $1,139,698 to this month’s distribution.
| Underlying Properties | Net to Trust Sales | |||||||||||||||||||||||
| Volumes | Volumes | Average | Price | |||||||||||||||||||||
| Oil (bbls) |
Gas (Mcf) |
Oil (bbls) |
Gas (Mcf) |
Oil (per bbl) |
Gas (per Mcf) |
|||||||||||||||||||
| Current Month | ||||||||||||||||||||||||
| Waddell Ranch |
146,556 | 486,150 | 109,917 | 364,613 | * | $ | 81.06 | $ | 6.82 | ** | ||||||||||||||
| Texas Royalties |
15,800 | 7,645 | 14,073 | 6,798 | * | $ | 77.97 | $ | 13.26 | ** | ||||||||||||||
| Prior Month | ||||||||||||||||||||||||
| Waddell Ranch |
145,009 | 538,676 | 108,757 | 404,007 | * | $ | 70.13 | $ | 6.84 | ** | ||||||||||||||
| Texas Royalties |
19,178 | 13,138 | 19,250 | 13,194 | * | $ | 71.62 | $ | 6.94 | ** | ||||||||||||||
| * | These volumes are the net to the trust, after allocation of expenses to Trust’s net profit interest, including any prior period adjustments. |
| ** | This pricing includes sales of gas liquid products. |
General and Administrative Expenses deducted for the month were $238,697 resulting in a distribution of $901,040 to 46,608,796 units outstanding, or $0.019331 per unit.
The worldwide market conditions continue to affect the pricing for domestic production. It is difficult to predict what effect these conditions will have on future distributions.
The 2021 tax information packets were mailed directly to unit holders in early March 2022. A copy of Permian’s 2021 tax information booklet is posted on Permian’s website. In addition to the tax booklet the Permian website also offers two simple calculators for computing the income and expense amounts and the cost depletion. To facilitate unit holder tax preparation, both the income and expense and the depletion calculators have been updated on Permian’s website for 2021 tax reporting.
The 2020 Annual Report with Form 10-K and the January 1, 2021 Reserve Summary are now available on Permian’s website. Permian’s cash distribution history, current and prior year financial reports, tax information booklets, and a link to filings made with the Securities and Exchange Commission, all can be found on Permian’s website at http://www.pbt-permian.com/. Additionally, printed reports can be requested and are mailed free of charge.
* * *
Contact: Ron Hooper, Senior Vice President, Simmons Bank, Trustee, Toll Free – 1.855.588.7839