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PB

PERMIAN BASIN ROYALTY TRUST (PBT)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 distributable income and revenue declined sharply year over year amid the Waddell Ranch excess-cost position and operator reporting delays; quarterly revenue was $3.79M and EPS $0.074 vs $14.41M and $0.306 in Q4 2023, largely due to no Waddell proceeds in November and weaker realized prices; consensus estimates were unavailable in S&P Global data for EPS and revenue (values retrieved from S&P Global).* *
  • Monthly distributions in the quarter were $0.029986 (October), $0.021733 (November), and $0.021939 (December); November and December distributions excluded Waddell proceeds due to excess costs and withheld monthly data from the operator, Blackbeard.
  • Texas Royalty Properties carried the quarter, contributing $1.235M (October), $1.110M (November), and $1.175M (December) to distributions, with mixed commodity pricing and volume trends.
  • Ongoing litigation with Blackbeard and the operator’s information restrictions are a key overhang; the trial date has moved to November 17, 2025, which may keep uncertainty elevated through 2025.

What Went Well and What Went Wrong

What Went Well

  • Texas Royalty Properties continued to generate positive net profits and monthly contributions despite lower oil prices, supporting distributions: $1.235M (Oct), $1.110M (Nov), $1.175M (Dec).
  • Gas pricing including NGLs remained supportive on Texas Royalty Properties in parts of Q4 (e.g., $11.05/Mcf in December), offsetting oil price softness in specific months.
  • Management highlights the Trust’s resilience and ability to distribute cash monthly despite operator data constraints: “This month's distribution slightly increased from the previous month due primarily to the Texas Royalty Properties having higher oil and gas volumes, partially offset by lower gas and oil prices...”

What Went Wrong

  • Waddell Ranch remained in an excess-cost position, with October excess costs of $4.99M on underlying properties ($3.74M net to the Trust); November and December distributions excluded Waddell proceeds.
  • Blackbeard refused to provide monthly NPI and production/pricing data by NYSE deadlines since May 2024, forcing delays and creating visibility issues for investors.
  • Distributable income per unit decreased in November ($0.021733) due to no Waddell proceeds and lower Texas Royalty oil volumes and prices; G&A rose in December ($152,583), pressuring net distribution.

Financial Results

MetricQ4 2023Q2 2024Q3 2024Q4 2024
Revenue ($USD)$14.412M*$8.803M*$8.367M*$3.788M*
Diluted EPS ($)$0.306*$0.181*$0.173*$0.074*
Net Income ($USD)$14.275M*$8.437M*$8.053M*$3.433M*
Net Income Margin (%)98.9%*95.5%*95.6%*90.0%*

Note: Values retrieved from S&P Global.*

Prior-quarter distribution detail (monthly within Q4):

Month (Q4 2024)Distribution per Unit ($)Texas Royalty Contribution ($)Waddell Ranch Contribution ($)G&A (net) ($)Units Outstanding
October$0.029986 $1,234,959 $267,781 $105,091 46,608,796
November$0.021733 $1,110,051 $0 $97,095 46,608,796
December$0.021939 $1,175,168 $0 $152,583 46,608,796

Texas Royalty operating metrics (monthly within Q4):

MonthUnderlying Oil (bbl)Underlying Gas (Mcf)Net-to-Trust Oil (bbl)Net-to-Trust Gas (Mcf)Avg Oil Price ($/bbl)Avg Gas Price ($/Mcf)
October17,969 7,932 16,103 7,106 $77.19 $10.02
November16,035 6,521 14,246 5,788 $75.68 $11.30
December18,407 7,073 16,432 6,315 $70.83 $11.05

Key notes:

  • December 8-K EX-99.1 includes a table variant that appears to display October figures; the December press release reflects September/August timing and shows higher underlying oil and gas volumes vs November; use the December press release figures for December month comparability.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueQ4 2024None issuedNone issuedMaintained
EPSQ4 2024None issuedNone issuedMaintained
DistributionsMonthly (Q4 2024)No forward guidanceDistributions declared monthly as shownMaintained
Capex (Waddell)2024Preliminary $301.4M gross (revoked consent) No updated budget; Blackbeard revoked consent; quarterly capex in Q3 was $24.0M gross Withdrawn/Unavailable

No formal guidance was provided; operator (Blackbeard) revoked consent to previously provided 2024 budget and limited information to quarterly statements, reducing forward visibility.

Earnings Call Themes & Trends

No Q4 2024 earnings call transcript was available; PBT does not appear to hold quarterly earnings calls and none were found in the period.

TopicPrevious Mentions (Q2 2024)Previous Mentions (Q3 2024)Current Period (Q4 2024)Trend
Operator reporting cadenceBlackbeard ceased monthly data; quarterly statement only; delayed proceeds included in next month Continued refusal to provide monthly info; quarterly-only after ~30 days Blackbeard refused December monthly NPI; potential inclusion in January if received by record date Deteriorating visibility
Waddell Ranch cost positionApril–May proceeds included; June delayed; capex $15.6M gross in Q2 No deficit in Q3; excess costs not disclosed until October; capex $24.0M gross Excess costs October: $4.99M underlying ($3.74M net); no proceeds in Nov/Dec distributions Negative
LitigationLawsuit filed May; preliminary trial date Apr 21, 2025 Amended petition; damages >$25M; preliminary trial Apr 21, 2025 Trial date moved to Nov 17, 2025; damages sought >$25M Extended duration
Commodity pricesOil $77.27 on Jul 29, 2024; mixed gas pricing Oil $67.65 on Oct 28, 2024; negative realized gas price at Waddell in summer Texas Royalties avg oil down in Dec ($70.83/bbl) vs Oct ($77.19/bbl); gas pricing supportive ($11.05/Mcf) Mixed
DistributionsQ2 per unit totaled $0.181 across months Q3 per unit totaled $0.17; three monthly distributions Q4 monthly distributions as above; November/December excluded Waddell Lower vs Q3 on average

Management Commentary

  • “The distribution does not include proceeds from the Waddell Ranch properties, as total production costs (‘Production Costs’) exceeded gross proceeds (‘Gross Proceeds’) for the month of November, resulting in an excess cost position…”
  • “Notwithstanding requests from the Trustee… Blackbeard has refused to provide the Trustee information necessary to calculate the net profits interest (‘NPI’) proceeds for December 2024… if NPI proceeds are received… on or prior to the record date, they will be included in the January distribution.”
  • “This month's distribution slightly increased from the previous month due primarily to the Texas Royalty Properties having higher oil and gas volumes, partially offset by lower gas and oil prices…”

Q&A Highlights

No Q&A as no earnings call transcript was available for Q4 2024.

Estimates Context

  • S&P Global consensus for Q4 2024 EPS and revenue was unavailable; the dataset returned no consensus counts for EPS or revenue; only an “actual revenue” tag was present, and no EPS consensus. Values retrieved from S&P Global.*
  • With consensus absent, we do not mark beats/misses; directional adjustments should focus on modeling Waddell Ranch (excess costs and timing) and Texas Royalty realized pricing.
MetricQ4 2024 ActualQ4 2024 Consensus Mean# of Estimates
Revenue ($USD)$3.82M*N/A*N/A*
Primary EPS ($)$0.074*N/A*N/A*

Note: Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Visibility risk: Blackbeard’s refusal to provide monthly information and the shift to quarterly statements materially reduces near-term forecasting accuracy and can delay distributions; expect heightened volatility around record/announcement dates.
  • Waddell overhang: October excess costs ($4.99M underlying; $3.74M net) must be recovered before Waddell proceeds resume; monitor subsequent monthly statements for reversal of excess-cost position.
  • Texas Royalties are the backbone near term: contributions of $1.11–$1.18M in Nov–Dec kept distributions flowing; focus on oil/NGL realizations and volume stability to gauge monthly cash flow.
  • Litigation timeline elongates uncertainty: the trial date moved to November 17, 2025; despite potential recovery (> $25M damages sought), the long fuse limits its near-term catalyst value.
  • Model adjustments: given missing consensus, anchor on S&P Global reported quarterly revenue/EPS and incorporate operator-timing effects and excess-cost dynamics; assume no formal guidance and heightened G&A variability (December G&A $152,583). *
  • Trading implications: distributions track commodity prices with lags (oil ~2 months, gas/NGL ~3 months per Trust), creating setup opportunities around monthly PRs; however, operator behavior adds headline risk.
  • Medium-term thesis: value hinges on Waddell’s cost recovery, restoration of monthly transparency, and litigation outcomes; absent these, the Trust functions as a lower-visibility royalty stream predominantly driven by Texas Royalties.