Executive Summary

Q2 2024 distributable income rose to $8.44M (up 47% YoY) and $0.18 per unit (vs. $0.12 YoY), driven by higher royalty income and the absence of a Waddell Ranch NPI deficit that weighed on 2023; prior-quarter (Q1) distributable income was $5.49M and $0.12 per unit .
Monthly distributions in the quarter were uneven given Waddell cash-timing: Apr $0.088214, May $0.020052 (omitted Waddell), Jun $0.072743 (included delayed May Waddell proceeds) .
A key overhang persists: Blackbeard (Waddell operator) continues withholding monthly data, forcing a one‑month lag for Waddell proceeds in distributions and limiting visibility; a preliminary trial date is set for Apr 21, 2025 in PBT’s lawsuit seeking >$15M for allegedly impermissible charges .
No formal guidance and no earnings call; near‑term stock catalysts are (i) litigation updates vs. Blackbeard, (ii) Waddell reporting cadence normalization, and (iii) commodity price trajectory that drives monthly royalty receipts .

What Went Well and What Went Wrong

What Went Well
- YoY recovery in Q2: Royalty income increased to $8.80M (vs. $6.07M in Q2’23), lifting distributable income per unit to $0.18 (vs. $0.12) as 2023’s Waddell deficits did not recur in Q2’24 .
- Texas Royalty properties realized stronger gas pricing YoY in Q2 ($10.04/Mcf vs. $4.53/Mcf), supporting royalty cash flows despite lower Texas volumes .
- Inclusion of delayed Waddell proceeds improved June and July payouts; e.g., $2.247M (May) was included in June distribution ($0.072743/unit) and $2.177M (June) in July ($0.070169/unit) .
What Went Wrong
- Operator data opacity: “Blackbeard has refused to provide the Trustee information necessary to calculate the net proceeds” by monthly deadlines starting May, forcing a one‑month lag and limiting production/pricing disclosure for Waddell .
- Expense headwinds persist: Q2 G&A rose YoY to $0.396M (from $0.336M), with higher professional/printing/timing impacts, partially diluting distributable income .
- Ongoing legal uncertainty: Blackbeard’s counterclaims seek declaratory relief to allow disputed overhead deductions and limit information provided; trial preliminarily set for Apr 21, 2025, introducing timeline risk .

Financial Results

Metric	Q2 2023	Q4 2023	Q1 2024	Q2 2024
Royalty income ($USD Millions)	$6.07	$14.41	$6.01	$8.80
Distributable income ($USD Millions)	$5.76	—	$5.49	$8.44
Distributable income per unit ($)	$0.12	$0.31	$0.12	$0.18
G&A expense ($USD Millions)	$0.34	$0.16	$0.55	$0.40

Monthly distributions declared during Q2 2024

Month (record date month)	Distribution per unit
April 2024	$0.088214
May 2024	$0.020052
June 2024	$0.072743

Segment breakdown (royalty income)

Segment	Q2 2023 ($USD Millions)	Q2 2024 ($USD Millions)
Waddell Ranch (75% NPI)	$2.42	$5.33
Texas Royalty Properties (95% NPI)	$3.65	$3.47

KPIs (as disclosed)

KPI	Q2 2023	Q2 2024
Texas Royalty properties – Avg oil price ($/Bbl)	$73.05	$78.00
Texas Royalty properties – Avg gas price ($/Mcf, incl. NGLs)	$4.53	$10.04
Texas Royalty properties – Oil sales (Bbls, royalties)	48,805	44,060
Texas Royalty properties – Gas sales (Mcf, royalties)	60,643	21,782
Waddell Ranch – production/pricing	Not disclosed	Not disclosed (operator withheld)

Notes: Q4 2023 distributable income not disclosed in 10‑K section; table shows “—” to avoid estimation .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Waddell Ranch preliminary capex budget (gross) from operator	FY 2024	~$301.4M (prelim.) communicated in Q1 2024	~$301.4M (prelim.) reiterated; 2024 budget not finalized	Maintained
Waddell proceeds timing in distributions	From May 2024 onward	Historically included in current‑month calc	If proceeds are received after NYSE notice deadline, included in next month’s distribution	Introduced one‑month lag
Litigation milestone (Blackbeard)	Trial schedule	N/A (earlier stage)	Preliminary trial date set Apr 21, 2025, 8:30 a.m. CT	New timeline disclosure

PBT does not issue revenue/EPS/margin guidance.

Earnings Call Themes & Trends

No Q2 2024 earnings call or transcript available for PBT.

Topic	Previous Mentions (Q4 2023 and Q1 2024)	Current Period (Q2 2024)	Trend
Operator reporting/transparency (Waddell)	Normal monthly data through Apr’24; then omissions began in May’24; May 20 PR announced omission of Waddell proceeds	Blackbeard continued to withhold monthly data, preventing Waddell volumes/prices and forcing one‑month distribution lag	Deteriorated
Distribution timing	Historically current‑month; Q1 distributions were regular	Formalized lag: funds received after the monthly NYSE notification included in the following month’s payout	Negative (timing)
Litigation vs. Blackbeard	Lawsuit announced May 8; >$15M damages sought	Counterclaims filed; preliminary trial date set for Apr 21, 2025	Proceeding
Commodity backdrop	Noted volatility; oil ~$78.72 near late Feb	Continued volatility; Q2 Texas average: oil $78/Bbl, gas $10.04/Mcf (incl. NGLs)	Stable YoY for oil; stronger gas mix on Texas
Capex plan (Waddell)	Preliminary 2024 gross capex ~$301.4M, with new wells/recompletions planned	Plan reiterated; quarter disclosed lower gross capex in Q2 vs. 2023; activity details limited by withheld data	Maintained plan; lower Q2 capex YoY
Reserves/visibility risk (PUDs)	—	If no development plan provided, PUDs cannot be disclosed in future reserve reports, risking material reserve reductions	Emerging risk

Management Commentary

“Blackbeard has refused to provide the Trustee information necessary to calculate the net profits interest proceeds… As a result… if NPI proceeds are received… on or prior to the record date, they will be included in the [following month’s] distribution” (press releases and 10‑Q) .
“The Trustee seeks to recover more than $15 million in damages… [alleging] incorrect overhead charges… duplicate charges… and other ineligible expenses,” with a preliminary trial date of April 21, 2025 .
“For the quarter ended June 30, 2024, royalty income… $8,803,389 vs. $6,074,170 in Q2 2023… higher income partly reflects absence of a deficit position at Waddell that existed during portions of Q2 2023” .
Texas Royalty properties pricing: “Average oil $78.00/Bbl; gas (incl. NGLs) $10.04/Mcf” .
Operator‑provided plan: “Preliminary 2024 Waddell capex budget approximately $301.4 million (gross)” (not finalized) .

Q&A Highlights

No earnings call was held; therefore no Q&A or guidance clarifications to report.

Estimates Context

Wall Street consensus (revenue/EPS) for PBT was not available; PBT is a royalty trust with modified cash‑basis reporting and no formal “EPS” beyond distributable income per unit, and we were unable to retrieve S&P Global consensus for Q2 2024. Coverage appears limited for this issuer.

Key Takeaways for Investors

Cash flows improved YoY in Q2: distributable income rose to $8.44M and $0.18/unit, aided by no Waddell deficit in Q2’24 and favorable Texas gas pricing mix .
Expect continued month‑to‑month distribution volatility until Waddell reporting normalizes; proceeds received after the deadline will lag by one month in payout calculations .
Litigation is the key non‑commodity catalyst through 2025; monitor motions, discovery outcomes, and any settlement overtures ahead of the Apr 21, 2025 preliminary trial date .
Reserve disclosure risk: without a formal 2025+ development plan from the operator, PUDs cannot be reported, potentially reducing proved reserves—this may weigh on valuation multiples for distribution‑focused holders .
Operator capex intentions (~$301M gross prelim.) suggest ongoing Waddell activity, but withheld monthly detail limits visibility on volumes, LOE, and capital recovery timing to the NPI .
Macro remains a swing factor; Texas oil prices averaged ~$78 in Q2 and Texas gas (incl. NGLs) ~$10/Mcf, underscoring sensitivity to liquids pricing and NGL realizations .
No formal guidance and no earnings calls; positioning should emphasize monthly press releases and 8‑Ks for cash timing, along with the 10‑Q for quarterly fundamentals.

References:

Q2 2024 10‑Q (filed Aug 8, 2024): royalty/distributable income, segment details, pricing, litigation timeline, and risk factors .
Monthly press releases/8‑Ks: May omission and June inclusion of Waddell proceeds; July/August distributions and continued data withholding .
FY 2023 10‑K: Q4 2023 context and macro framing .

PERMIAN BASIN ROYALTY TRUST (PBT)·Q2 2024 Earnings Summary