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): October 20, 2015
PERMIAN BASIN ROYALTY TRUST
(Exact name of Registrant as specified in its charter)
| Texas (State or other jurisdiction of incorporation or organization) |
1-8033 (Commission File Number) |
75-6280532 (I.R.S. Employer Identification No.) | ||
| Royalty Trust Management Southwest Bank 2911 Turtle Creek Boulevard Suite 850 Dallas, Texas (Address of principal executive offices) |
75219 (Zip Code) | |||
Registrant’s Telephone Number, including area code: (855) 588-7839
Not Applicable
(Former name, former address and former fiscal year, 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)) |
Item 2.02. Results of Operations and Financial Condition.
On October 20, 2015, the Registrant issued a press release announcing its monthly cash distribution to unitholders of record on October 30, 2015. 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 October 20, 2015.
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: | SOUTHWEST BANK, TRUSTEE FOR PERMIAN BASIN ROYALTY TRUST | |
| By: | /s/ RON HOOPER | |
| Ron Hooper | ||
| Senior Vice President | ||
Date: October 21, 2015
EXHIBIT INDEX
| Exhibit |
Description | |
| 99.1 | Press Release dated October 20, 2015. | |
Exhibit 99.1
Permian Basin Royalty Trust
PERMIAN BASIN ROYALTY TRUST
ANNOUNCES OCTOBER CASH DISTRIBUTION
DALLAS, Texas, October 20, 2015 – Permian Basin Royalty Trust (NYSE: PBT) (“Permian”) today declared a cash distribution to the holders of its units of beneficial interest of $0.019278 per unit, payable on November 16, 2015, to unit holders of record on October 30, 2015.
This month’s distribution decreased from the previous month due to substantially lower pricing for both oil and gas for all properties. Also, increased capital expenditures for the drilling program were incurred in August 2015.
WADDELL RANCH
Production for the underlying properties at the Waddell Ranch was 72,004 barrels of oil and 404,093 Mcf of gas. The production for the Trust’s allocated portion of the Waddell Ranch was (16,908) barrels of oil and (12,897) Mcf of gas. The average price for oil was $41.66 per bbl and for gas was $2.43 per Mcf. This would primarily reflect production and pricing for the month of August for oil and the month of July for gas. These allocated volumes were significantly impacted by the pricing of both oil and gas.
This production and pricing for the Underlying Properties resulted in revenues for the Waddell Ranch Properties of $4,090,735. Deducted from these would be the Lease Operating Expense (LOE) of $1,946,810, taxes of $289,003 and Capital Expenditures (CAPEX) of $2,801,226 totaling $5,037,039 resulting in a Net Profit of $(946,304) for the month of September. With the Trust’s Net Profit Interest (NPI) of 75% of the underlying properties, this would result in negative net by the Waddell Ranch Properties of $(709,728) to this month’s distribution. There is no distribution from the Waddell Ranch’s NPI for this month.
During July and August 2015, the 2015 10 workover well program was completed and producing. The drill well program of ten vertical and two horizontal wells for the 2015 program was started in June 2015. Five vertical wells were completed and producing, seven other wells were being drilled and progressing to completion during August 2015.
ConocoPhillips has advised the Trustee of the 2015 capital expenditure budget which will total $48 million for the entire Waddell Ranch Project and $22.5 million net to the Trust. There will be ten vertical wells, two horizontal wells, ten recompletions, and various facilities projects. The workover/recompletions have completed with the vertical/horizontal drilling beginning in June and the facilities work will occur throughout the year.
| Underlying Properties | Net to Trust Sales | |||||||||||||||||||||||
| Volumes | Volumes | Average | Price | |||||||||||||||||||||
| Oil(bbls) | Gas(Mcf) | Oil(bbls) | Gas(Mcf) | Oil(per bbl) | Gas(perMcf) | |||||||||||||||||||
| Current Month |
||||||||||||||||||||||||
| Waddell Ranch |
72,004 | 404,093 | (16,908 | )* | (12,897 | )* | $ | 41.66 | $ | 2.43 | ** | |||||||||||||
| Texas Royalty Prop |
25,629 | 32,985 | 24,347 | 31,336 | $ | 43.62 | $ | 4.04 | ** | |||||||||||||||
| Prior Month |
||||||||||||||||||||||||
| Waddell Ranch |
71,337 | 429,797 | 2,225 | * | 39,839 | * | $ | 49.69 | $ | 2.55 | ** | |||||||||||||
| Texas Royalty Prop |
27,342 | 36,817 | 25,975 | * | 34,976 | * | $ | 51.70 | $ | 4.27 | ** | |||||||||||||
| * | 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. |
TEXAS ROYALTY PROPERTIES
Production for the underlying properties at the Texas Royalties was 25,629 barrels of oil and 32,985 Mcf of gas. The production for the Trust’s allocated portion of the Texas Royalties was 24,347 barrels of oil and 31,336 Mcf of gas. The average price for oil was $43.62 per bbl and for gas was $4.04 per Mcf. This would primarily reflect production and pricing for the month of August for oil and the month of July 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 $1,251,190. Deducted from these would be taxes of $205,165 resulting in a Net Profit of $1,046,025 for the month of September. 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 $993,724 to this month’s distribution.
General and Administrative Expenses deducted for the month were $95,204 resulting in a distribution of $898,530 to 46,608,796 units outstanding, or $.019278 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.
Permian’s cash distribution history, current and prior year financial reports and tax information booklets, a link to filings made with the Securities and Exchange Commission and more can be found on its website at http://www.pbt-permian.com/. The new toll free number customer service number for the trust is 1-855-588-7839.
* * *
| Contact: | Ron Hooper |
| Senior Vice President |
| Southwest Bank, Trustee |
| Toll Free – 1.855.588.7839 |