PERMIAN BASIN ROYALTY TRUST 10-K Analysis & Summary – 3/14/2025

⚠️This is not investment advice.

⚠️ This is an experimental project and this report is for informational purposes only and should not be considered investment advice. Conduct your own thorough research and consult with a qualified financial advisor before making any investment decisions. ⚠️

PERMIAN BASIN ROYALTY TRUST

10-K

Annual report

Filing date:

03/14/2025

TLDR:

ELI5:

Permian Basin Royalty Trust makes money from oil and gas wells. In 2024, they made less money because oil and gas prices went down, and the company running some of the wells didn’t share important information, making it hard to know how well they’re doing.

Accession #:

0000950170-25-039308

Published on

March 16, 2025

Analyst Summary

Distributable income decreased to $25.4 million ($0.55/unit) in 2024 from $28.0 million ($0.60/unit) in 2023 and $53.5 million ($1.15/unit) in 2022, primarily due to lower average oil and gas prices.
Average oil price decreased to $75.88/barrel in 2024 from $76.72/barrel in 2023 and $94.11/barrel in 2022.
Average gas price significantly decreased to $1.45/Mcf in 2024 from $2.40/Mcf in 2023 and $5.54/Mcf in 2022.
General and administrative expenses increased to $1.7 million in 2024 from $1.1 million in 2023, mainly due to audit and professional services.
Blackbeard Operating, LLC’s refusal to provide necessary information for calculating monthly net proceeds continues to be a significant issue, leading to delayed distributions and increased uncertainty; legal proceedings are ongoing.
Proved reserves of oil decreased from 11,662 Mbbl at the end of 2023 to 8,368 Mbbl at the end of 2024. Proved reserves of gas decreased from 28,763 MMcf at the end of 2023 to 23,217 MMcf at the end of 2024.
Operating profit margin decreased from 96.15% in 2023 to 93.69% in 2024, a decrease of 2.56%.
EPS decreased from $0.60 in 2023 to $0.55 in 2024, a decrease of 8.33%.

Opportunities and Risks

Opportunity: Potential for increased distributable income if commodity prices rise.
Risk: Continued lack of transparency and potential adverse outcome from legal proceedings with Blackbeard Operating, LLC.
Risk: Declining proved reserves of both oil and gas.
Risk: Impact of excess costs on the underlying properties, which must be recovered before the trust receives its full royalty income; cumulative excess costs remaining at 12/31/2024 were $13,500,104.

Potential Implications

Company Performance

Continued pressure on distributable income if commodity prices remain low or decline further.
Increased administrative and legal expenses related to the dispute with Blackbeard Operating, LLC could further reduce distributable income.
Declining reserves may impact long-term income potential.

Stock Price

Negative sentiment if the legal proceedings with Blackbeard Operating, LLC are not resolved favorably.
Potential for stock price decline if distributable income continues to decrease.
Stock price volatility due to fluctuations in commodity prices.

SEC Filing Report: Permian Basin Royalty Trust (PBT) 10-K for Fiscal Year Ended December 31, 2024

Executive Summary

This report analyzes the Permian Basin Royalty Trust’s (PBT) 10-K filing for the fiscal year ended December 31, 2024. The Trust’s performance is heavily influenced by commodity prices and the operational decisions of the underlying property operators. Key findings include a decrease in distributable income compared to the previous year, primarily due to lower oil and gas prices and operational issues. A significant concern is the lack of transparency from Blackbeard Operating, LLC, the operator of the Waddell Ranch properties, which has hindered the Trust’s ability to accurately assess and report its financial performance. Given the current uncertainties and declining reserve estimates, a HOLD rating is suggested. Investors should closely monitor commodity price trends, the outcome of the legal proceedings with Blackbeard, and any updates on the operator’s development plans.

Company Overview

Permian Basin Royalty Trust is a Texas-based express trust that derives its income from net overriding royalty interests in oil and gas properties located in the Permian Basin (Waddell Ranch properties) and other areas of Texas (Texas Royalty properties). The Trust’s income is distributed to unit holders after deducting expenses. The Trust is a passive entity with no employees; Argent Trust Company serves as the Trustee.

Detailed Analysis

Management’s Discussion and Analysis (MD&A)

Management acknowledges the impact of volatile commodity prices on the Trust’s income and distributions. The MD&A highlights the decrease in average oil and gas prices compared to the previous year. A major red flag is the repeated mention of Blackbeard’s refusal to provide necessary information for calculating monthly net proceeds, leading to delayed distributions and increased uncertainty. The ongoing legal proceedings against Blackbeard are also a significant concern.

Financial Statement Analysis

Key Ratios and Trends:

Distributable Income: Decreased to $25.4 million ($0.55/unit) in 2024 from $28.0 million ($0.60/unit) in 2023 and $53.5 million ($1.15/unit) in 2022.
Royalty Income: Decreased to $27.0 million in 2024 from $29.0 million in 2023 and $54.4 million in 2022.
Oil Sales (Royalties): 2,214,113 barrels in 2024, 2,277,307 barrels in 2023, and 1,760,471 barrels in 2022.
Gas Sales (Royalties): 12,200,992 Mcf in 2024, 12,174,696 Mcf in 2023, and 9,461,087 Mcf in 2022.
Average Oil Price: $75.88/barrel in 2024, $76.72/barrel in 2023, and $94.11/barrel in 2022.
Average Gas Price: $1.45/Mcf in 2024, $2.40/Mcf in 2023, and $5.54/Mcf in 2022.
General and Administrative Expenses: Increased to $1.7 million in 2024 from $1.1 million in 2023 and $0.9 million in 2022, primarily due to audit and professional services.

Visual Representation:

Distributable Income Per Unit (2022-2024)

<img src="data:image/png;base64,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

Financial Analysis of Permian Basin Royalty Trust

1. Commentary

Permian Basin Royalty Trust’s financial performance in 2024 shows a mixed picture. While royalty income decreased, distributable income remained relatively strong. The trust’s proved reserves of both oil and gas decreased during the year. The trust’s future is tied to the production and price of oil and gas from its underlying properties.

2. Financial Ratio and Metric Analysis

Profitability

Gross Profit Margin

Metric: Not applicable for a royalty trust as it doesn’t have direct costs of goods sold. Royalty income is the primary revenue.

Operating Profit Margin

Metric: Calculated as (Royalty Income – General and Administrative Expenditures) / Royalty Income.
2024: ($26,963,365 – $1,698,776) / $26,963,365 = 93.69%
2023: ($29,010,704 – $1,118,096) / $29,010,704 = 96.15%
2022: ($54,417,857 – $922,404) / $54,417,857 = 98.31%
Trend: The operating profit margin decreased from 96.15% in 2023 to 93.69% in 2024, a decrease of 2.56%.
Industry: Royalty trusts typically have high operating margins due to low operating costs. The decrease suggests increasing administrative costs relative to royalty income.

Net Profit Margin

Metric: In this case, equivalent to the Operating Profit Margin as there are no other significant expenses.
2024: 93.69%
2023: 96.15%
2022: 98.31%
Trend: The net profit margin mirrors the operating profit margin, decreasing from 96.15% in 2023 to 93.69% in 2024, a decrease of 2.56%.
Industry: High net profit margins are characteristic of royalty trusts.

Return on Assets (ROA)

Metric: Calculated as Distributable Income / Total Assets.
2024: $25,415,368 / $2,286,992 = 11.11
2023: $27,978,487 / $6,272,824 = 4.46
2022: $53,543,824 / $259,857 = 206.05
Trend: ROA increased from 4.46 in 2023 to 11.11 in 2024, an increase of 6.65.
Industry: ROA for royalty trusts can vary significantly based on the asset base and distributable income.

Return on Equity (ROE)

Metric: Calculated as Distributable Income / Trust Corpus.
2024: $25,415,368 / $164,407 = 154.6%
2023: $27,978,487 / $221,474 = 126.3%
2022: $53,543,824 / $279,433 = 191.6%
Trend: ROE increased from 126.3% in 2023 to 154.6% in 2024, an increase of 28.3%.
Industry: Royalty trusts often have high ROE due to the nature of their structure and asset base.

Earnings Per Share (EPS) – Basic and Diluted

Metric: Distributable Income / Number of Units Outstanding.
2024: $25,415,368 / 46,608,796 = $0.55
2023: $27,978,487 / 46,608,796 = $0.60
2022: $53,543,824 / 46,608,796 = $1.15
Trend: EPS decreased from $0.60 in 2023 to $0.55 in 2024, a decrease of 8.33%.
Industry: EPS is a key metric for royalty trusts, reflecting the distributable income per unit.

Liquidity

Current Ratio

Metric: Current Assets / Current Liabilities.
2024: $2,122,585 / $1,022,585 = 2.08
2023: $6,051,350 / $4,951,350 = 1.22
Trend: The current ratio increased from 1.22 in 2023 to 2.08 in 2024, an increase of 0.86.
Industry: A current ratio above 1 indicates the trust has sufficient liquid assets to cover its current liabilities.

Quick Ratio (Acid-Test Ratio)

Metric: (Current Assets – Inventory) / Current Liabilities. Since there is no inventory, it is the same as the current ratio.
2024: 2.08
2023: 1.22
Trend: The quick ratio increased from 1.22 in 2023 to 2.08 in 2024, an increase of 0.86.
Industry: Similar to the current ratio, a quick ratio above 1 is generally considered healthy.

Cash Ratio

Metric: Cash and Short-term Investments / Current Liabilities.
2024: $2,122,585 / $1,022,585 = 2.08
2023: $6,051,350 / $4,951,350 = 1.22
Trend: The cash ratio increased from 1.22 in 2023 to 2.08 in 2024, an increase of 0.86.
Industry: A higher cash ratio indicates a stronger ability to meet short-term obligations.

Solvency/Leverage

Debt-to-Equity Ratio

Metric: Total Liabilities / Trust Corpus.
2024: $2,122,585 / $164,407 = 12.91
2023: $6,051,350 / $221,474 = 27.32
Trend: The debt-to-equity ratio decreased from 27.32 in 2023 to 12.91 in 2024, a decrease of 14.41.
Industry: Royalty trusts typically have high debt-to-equity ratios due to their structure.

Debt-to-Assets Ratio

Metric: Total Liabilities / Total Assets.
2024: $2,122,585 / $2,286,992 = 92.85%
2023: $6,051,350 / $6,272,824 = 96.47%
Trend: The debt-to-assets ratio decreased from 96.47% in 2023 to 92.85% in 2024, a decrease of 3.62%.
Industry: High debt-to-assets ratios are common for royalty trusts.

Interest Coverage Ratio (Times Interest Earned)

Metric: Not applicable as the trust has minimal interest expense.

Activity/Efficiency

Inventory Turnover

Metric: Not applicable as the trust does not hold inventory.

Days Sales Outstanding (DSO)

Metric: Not applicable as the trust’s revenue is primarily from royalties, which are typically received promptly.

Days Payable Outstanding (DPO)

Metric: Not particularly relevant for a royalty trust.

Asset Turnover

Metric: Royalty Income / Total Assets.
2024: $26,963,365 / $2,286,992 = 11.79
2023: $29,010,704 / $6,272,824 = 4.62
2022: $54,417,857 / $259,857 = 209.42
Trend: Asset turnover increased from 4.62 in 2023 to 11.79 in 2024, an increase of 7.17.
Industry: A higher asset turnover ratio indicates the trust is efficiently using its assets to generate revenue.

Valuation

Price-to-Earnings Ratio (P/E)

Metric: Stock Price / EPS.
EPS is calculated using the sum of the quarterly distributable income per unit for the year.
2024 EPS: $0.117831 + $0.181009 + $0.172782 + $0.073658 = $0.54528
P/E Ratio: $10.23 / $0.54528 = 18.76
Industry: P/E ratios vary widely across the oil and gas sector.

Price-to-Book Ratio (P/B)

Metric: Market Cap / Trust Corpus.
Market Cap = Units Outstanding * Stock Price = 46,608,796 * $10.23 = $476,897,831
2024: $476,897,831 / $164,407 = 2900.7
2023: $476,897,831 / $221,474 = 2153.4
Trend: The P/B ratio increased from 2153.4 in 2023 to 2900.7 in 2024, an increase of 747.3.
Industry: P/B ratios for royalty trusts can be very high.

Price-to-Sales Ratio (P/S)

Metric: Market Cap / Royalty Income.
2024: $476,897,831 / $26,963,365 = 17.69
2023: $476,897,831 / $29,010,704 = 16.44
2022: $476,897,831 / $54,417,857 = 8.76
Trend: The P/S ratio increased from 16.44 in 2023 to 17.69 in 2024, an increase of 1.25.
Industry: P/S ratios vary across the oil and gas sector.

Enterprise Value to EBITDA (EV/EBITDA)

Metric: (Market Cap + Total Debt – Cash) / EBITDA.
EBITDA is approximated by Distributable Income + General and Administrative Expenditures.
2024 EBITDA: $25,415,368 + $1,698,776 = $27,114,144
2023 EBITDA: $27,978,487 + $1,118,096 = $29,096,583
2024: ($476,897,831 + $1,100,000 – $2,122,585) / $27,114,144 = 17.56
2023: ($476,897,831 + $1,100,000 – $6,051,350) / $29,096,583 = 16.29
Trend: The EV/EBITDA ratio increased from 16.29 in 2023 to 17.56 in 2024, an increase of 1.27.
Industry: EV/EBITDA ratios vary across the oil and gas sector.

Growth Rates

Revenue Growth

Metric: (Current Year Royalty Income – Previous Year Royalty Income) / Previous Year Royalty Income
2024: ($26,963,365 – $29,010,704) / $29,010,704 = -6.02%
2023: ($29,010,704 – $54,417,857) / $54,417,857 = -46.69%
Trend: Revenue decreased by 6.02% in 2024.
Industry: Revenue growth is highly dependent on oil and gas prices and production volumes.

Net Income Growth

Metric: (Current Year Distributable Income – Previous Year Distributable Income) / Previous Year Distributable Income
2024: ($25,415,368 – $27,978,487) / $27,978,487 = -9.16%
2023: ($27,978,487 – $53,543,824) / $53,543,824 = -47.75%
Trend: Net income decreased by 9.16% in 2024.
Industry: Net income growth is closely tied to revenue growth and expense management.

EPS Growth

Metric: (Current Year EPS – Previous Year EPS) / Previous Year EPS
2024: ($0.55 – $0.60) / $0.60 = -8.33%
2023: ($0.60 – $1.15) / $1.15 = -47.83%
Trend: EPS decreased by 8.33% in 2024.
Industry: EPS growth reflects the overall profitability and distribution capacity of the trust.

Other Relevant Metrics

Excess Costs

Description: The trust’s income is affected by excess costs on the underlying properties. These costs must be recovered before the trust receives its full royalty income.
Calculation: These costs are related to capital expenditures.
Significance: High excess costs can reduce distributable income.
Trend: Cumulative excess costs remaining at 12/31/2024 were $13,500,104.

Proved Reserves

Description: The estimated quantities of oil and gas that geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions.
Significance: Proved reserves are a key indicator of the trust’s long-term potential.
Trend: Proved reserves of oil decreased from 11,662 Mbbl at the end of 2023 to 8,368 Mbbl at the end of 2024. Proved reserves of gas decreased from 28,763 MMcf at the end of 2023 to 23,217 MMcf at the end of 2024.