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): April 18, 2017
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 Southwest 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, former address and former fiscal year, if changed since last report)
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. [ ]
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 April 18, 2017, the Registrant issued a press release announcing its monthly cash distribution to unitholders of record on April 28, 2017 and its 2017 reserve quantities. 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 April 18, 2017. |
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: April 19, 2017
EXHIBIT INDEX
| Exhibit |
Description | |
| 99.1 | Press Release dated April 18, 2017. | |
Exhibit 99.1
Permian Basin Royalty Trust
PERMIAN BASIN ROYALTY TRUST
ANNOUNCES APRIL CASH DISTRIBUTION AND 2017 RESERVE QUANTITIES
DALLAS, Texas, April 18, 2017 – Permian Basin Royalty Trust (NYSE: PBT) (“Permian”) today declared a cash distribution to the holders of its units of beneficial interest of $0.056259 per unit, payable on May 12, 2017, to unit holders of record on April 28, 2017.
This month’s distribution increased from the previous month due to an increase in both the net production of oil and gas and in the pricing of oil and gas production for the Waddell Ranch properties. On January 15, 2017, a fire occurred due to a lightning strike on the Tubb McKnight Water Station which disrupted production of both oil and gas. There were no injuries relating to this incident. The resumption of production on those properties did not resume until January 31. Most of those wells are back on production as of February 28, and will continue to be producing. The Waddell Ranch Properties contributed $1,621,188 to this month’s distribution.
The Texas Royalty Properties had an increase in oil and gas production, along with a slight increase in pricing of oil and gas production. The Texas Royalty Properties contributed $976,573 to this month’s distribution.
Capital expenditures on the Waddell Ranch continue to be lower than previous months, with it being mostly facility projects for the remainder of the year. However, additional expense will be incurred bringing the Tubb McKnight Water Station back on line of approximately $1,228,000 (gross) to the entire project of working interest owners. It is not clear at this time as to what the cost to Trust will be until it is incurred and charged to the Trust.
WADDELL RANCH
Production for the underlying properties at the Waddell Ranch was 54,502 barrels of oil and 299,656 Mcf of gas. The production for the Trust’s allocated portion of the Waddell Ranch was 25,250 barrels of oil and 140,438 Mcf of gas. The average price for oil was $49.02 per bbl and for gas was $3.31 per Mcf. This would primarily reflect production and pricing for the month of February for oil and the month of January 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 $3,632,153. Deducted from these would be the Lease Operating Expense (LOE) of $1,153,396, taxes of $238,694, and Capital Expenditures (CAPEX) of $78,480 totaling $1,470,570 resulting in a Net Profit of $2,161,584 for the month of March. With the Trust’s Net Profit Interest (NPI) of 75% of the underlying properties, this would result in a net contribution by the Waddell Ranch Properties of $1,621,188 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 |
54,502 | 299,656 | 25,250 | 140,438* | $49.02 | $3.31** | ||||||
|
Texas Royalties |
24,135 | 28,523 | 22,928 | 27,097* | $48.74 | $4.63** | ||||||
| Prior Month | ||||||||||||
|
Waddell Ranch |
44,448 | 296,857 | 19,994 | 133,872* | $48.47 | $3.30** | ||||||
|
Texas Royalties |
21,756 | 24,107 | 20,669 | 22,902* | $48.37 | $5.58** | ||||||
| * | 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 24,135 barrels of oil and 28,523 Mcf of gas. The production for the Trust’s allocated portion of the Texas Royalties was 22,928 barrels of oil and 27,097 Mcf of gas. The average price for oil was $48.74 per bbl and for gas was $4.63 per Mcf. This would primarily reflect production and pricing for the month of February for oil and the month of January 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 $1,308,535. Deducted from these would be taxes of $164,454 resulting in a Net Profit of $1,144,081 for the month of March. 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 $1,086,877 to this month’s distribution.
General and Administrative Expenses deducted for the month were $93,706 resulting in a distribution of $2,622,181 to 46,608,796 units outstanding, or $0.056259 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 Basin Royalty Trust, as it does after the end of each year, had a year-end Reserve Report prepared in accordance with the Securities and Exchange Commission’s requirements. This report provides an evaluation of the estimated asset value as of December 31 of each year, which can be used to estimate the remaining life of the Trust.
The estimated net proved reserves, as of January 1, 2017, attributable to the Trust from the properties appraised are approximately 4.5 million barrels of oil and 8.5 billion cubic feet of gas with a future net value of approximately $188,269,000 with a discounted value of $98,077,000.
With the estimated quantities of this year’s reserve estimate of 4.5 million barrels of oil and 8.5 billion cubic feet of gas remaining, it could be estimated that the Trust still has a life span of 9 to 10 years. The report is an exhibit to the Trust’s Annual Report on Form 10-K that was filed on March 10, 2017 and is available to all unitholders at this time on the SEC website.
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 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 |