Permian Basin Royalty Trust (PBT): Business Model Canvas [Dec-2025 Updated]

You're looking at Permian Basin Royalty Trust (PBT), and honestly, its business model is as clean as it gets: it's a pure-play bet on Permian Basin oil prices, not on drilling success. As someone who has mapped these structures for years, I see a passive entity collecting Net Overriding Royalty Income (NPI) from operators like Blackbeard Operating, LLC, while sending monthly checks to its 46,608,796 unitholders. But here's the catch you need to see: while you get that clean, debt-free income stream, the Q3 2025 performance showed a $6.405 million excess cost deficit on the Waddell Ranch properties, meaning revenue hit zero there that quarter, all while activist pressure mounts. Dive into the canvas below to see exactly how this passive structure handles operator disputes and delivers that monthly yield.

Permian Basin Royalty Trust (PBT) - Canvas Business Model: Key Partnerships

You're looking at the core relationships that drive the Permian Basin Royalty Trust's cash flow, and right now, those relationships are defined by operator performance and activist pressure. Here's the breakdown of the key players and the latest numbers we have as of late 2025.

Argent Trust Company, acting as the fiduciary Trustee, declared the November cash distribution of $0.019233 per unit on November 17, 2025, payable on December 12, 2025, to holders of record on November 28, 2025. This total distribution amounted to $896,437 across 46,608,796 units outstanding. The October net profit from the Texas Royalty Properties contributed $925,270 to this specific distribution.

The Trust's operations rely heavily on two main asset groups, each with a distinct operator and Net Profit Interest (NPI) structure, which you can see summarized here:

For the Texas Royalty Properties, the October 2025 figures supporting that contribution were:

• Revenues: $1,111,632.
• Taxes and Expenses: $137,663.
• Allocated Production: 14,356 barrels of oil and 9,425 Mcf of gas.

Blackbeard Operating, LLC is noted to provide production, pricing, and cost information quarterly, not monthly. Furthermore, the Trust settled litigation with Blackbeard Operating, LLC for a total of $9,000,000. The first installment of $4,500,000 was paid in September 2025, with the remaining balance set to be paid in four equal quarterly installments of $1,125,000 each during 2026.

Finally, you have the unitholder group pushing for governance change. SoftVest Advisors, LLC, along with other holders owning more than 15% of outstanding Units, called a Special Meeting of the Trust's Unit holders. The meeting is scheduled for December 16, 2025, with a record date of November 11, 2025. It's defintely a key relationship to watch given the governance implications.

Permian Basin Royalty Trust (PBT) - Canvas Business Model: Key Activities

The core of Permian Basin Royalty Trust (PBT) Key Activities revolves around the administration of its royalty interests and the mandated distribution of cash flow to its unitholders. You, as an analyst, need to track the inputs from the two property groups to understand the output.

Collecting net overriding royalty income from two distinct property groups.

The Trustee's primary activity is receiving income from two distinct royalty interests: the 75% net overriding royalty interest in the Waddell Ranch properties and the 95% net overriding royalty interest in the Texas Royalty properties. Activity on the Waddell Ranch properties is currently a net cost center, meaning no income is flowing to the Trust.

Here's a look at the latest reported performance from the Texas Royalty Properties, which are currently the sole contributors to distributions:

The Waddell Ranch properties, subject to a 75% net overriding royalty interest, are in a continuing excess cost position. For example, for the month of September 2025, Production Costs exceeded Gross Proceeds, resulting in zero proceeds flowing to the Trust for that month's distribution. Earlier data shows a March deficit of $(257,024) net, leading to a cumulative excess cost deficit of $8.2 million net that must be recovered before any future Waddell proceeds are distributed.

Calculating and executing monthly cash distributions to 46,608,796 unitholders.

The Trustee must calculate the distributable cash flow monthly and execute the payment to the unit holders of record. This involves taking the net proceeds from the Texas Royalty Properties and deducting administrative costs.

Key distribution figures for the November 2025 payment are:

• Distribution per Unit: $0.019233
• Total Cash Distribution: $896,437
• Units of Beneficial Interest Outstanding: 46,608,796
• Record Date: November 28, 2025
• Payable Date: December 12, 2025

The Year-to-Date (YTD) total distribution per unit through the November 2025 declaration was $0.293609.

Managing Trust administrative functions and ensuring SEC compliance (10-Q, 10-K).

Argent Trust Company, as Trustee, handles all fiduciary and administrative duties. This includes maintaining the Trust's books and records and ensuring timely filing of required documents with the Securities and Exchange Commission (SEC). The Trustee deducts general and administrative expenses, net of interest, before calculating the final distribution amount. For the November 2025 distribution, these expenses totaled $28,833.

A significant administrative event involves governance oversight. The Trustee received a request from SoftVest Advisors, LLC, and other holders representing more than 15% ownership, to call a Special Meeting of unitholders scheduled for December 16, 2025, with a record date of November 11, 2025. This meeting is to vote on potential reformation of the Trust Indenture.

Monitoring operator production, pricing, and cost data, especially for the Waddell Ranch NPI.

Since the Waddell Ranch operator, Blackbeard, provides necessary Net Profits Interest (NPI) data quarterly instead of monthly, a key activity is managing this information lag. The Trustee monitors this data when received to reconcile the excess cost position. For the Texas Royalty Properties, the Trustee monitors monthly production and pricing to calculate the Net Profit Interest contribution. For instance, the October 2025 distribution relied on oil priced at approximately $63.38 per barrel and gas at $7.10 per Mcf (including NGL pricing).

The Trustee's monitoring activities include:

• Tracking monthly allocated production volumes for Texas Royalty Properties.
• Analyzing realized oil and gas prices for revenue calculation.
• Reviewing quarterly reports from Blackbeard for Waddell Ranch cost recovery status.
• Ensuring compliance with the Trust Indenture regarding timing of Waddell proceeds inclusion.

Finance: draft 13-week cash view by Friday.

Permian Basin Royalty Trust (PBT) - Canvas Business Model: Key Resources

You're looking at the core assets that drive Permian Basin Royalty Trust (PBT)'s entire existence. These aren't factories or inventory; they are legal rights to a share of production revenue, which is a very different kind of resource base. The value here is entirely in the ground and the legal documents that secure your cut.

The primary Key Resources are the two distinct royalty interests that form the Trust Estate (the assets held by the Trustee). These interests are carved out from the Underlying Properties, which are mature producing oil and gas fields primarily in the Permian Basin region of West Texas.

The structure itself, governed by the legally binding Trust Indenture, is a key resource because it dictates the passive, pass-through nature of the entity. The Trustee's sole function is to collect net proceeds, pay administrative expenses, and distribute the remainder to Unit Holders pro rata. This structure means PBT bears none of the exploration or operational costs.

Here's a breakdown of the hard assets and legal claims:

• 75% Net Overriding Royalty Interest (NPI) in the Waddell Ranch properties, located in Crane County, Texas.
• 95% Net Overriding Royalty Interest (NPI) in the Texas Royalty properties, covering major producing royalty properties across 33 Texas counties.
• The Underlying oil and gas reserves in the Permian Basin, which are the source of all revenue.
• The Trust Indenture, which legally establishes the passive, pass-through structure for Unit Holders.

To give you a sense of the current financial reality tied to these resources as of late 2025, look at the recent performance, which highlights the sensitivity to operational costs at the largest asset:

The Waddell Ranch properties, historically responsible for over 95% of consolidated gross proceeds, have been in an excess cost position, meaning they generated a deficit of $6.405 million for Q3 2025 alone, resulting in zero proceeds from that asset since November 2024. This means the 95% interest in the Texas Royalty Properties is currently the sole contributor to cash flow.

For instance, the distribution declared on October 10, 2025, payable November 17, 2025, totaled only $896,437, or $0.019233 per unit. This modest payout reflects the operational drag from the Waddell Ranch asset combined with lower commodity prices affecting the Texas Royalty Properties, which generated a net profit of $973,969 for October.

The structure also dictates how reserves are treated, though specific reserve volumes aren't in the latest reports, the nature of the asset is clear:

• The interests are Net Profits Interests (NPI), meaning the Trust only receives revenue after the operator covers production costs.
• The Trustee must sell the interests if they fail to generate net revenue of at least $1,000,000 per year over any consecutive two-year period.
• The Trustee is prohibited from demanding partition or distribution of the Royalties while the Trust continues.

Finance: draft 13-week cash view by Friday.

Permian Basin Royalty Trust (PBT) - Canvas Business Model: Value Propositions

You're looking at the core benefits Permian Basin Royalty Trust (PBT) offers unitholders as of late 2025. It's about pure cash flow entitlement without the headaches of running the oil field.

Passive income stream with monthly cash distributions.

The Trust delivers distributions monthly, directly translating production revenue into cash for you. For the November 2025 period, Argent Trust Company declared a cash distribution of $0.019233 per unit, payable on December 12, 2025, based on the November 17, 2025 declaration. This resulted in a total distribution of $896,437 across the 46,608,796 units outstanding. Looking at the third quarter of 2025, the distributable income was $6.86M, equating to $0.15 per unit. For the nine months ending September 30, 2025, the total distributable income reached $11,855,354, or $0.25 per Unit. The annualized payout currently stands at $0.34 per share, with a corresponding dividend yield of 1.85%, and a payout ratio of 98.5%.

Here's a look at the recent monthly cash flow mechanics:

• October 2025 distribution per unit: $0.020021.
• Net contribution from Texas Royalty Properties to October 2025 distribution: $972,969.
• Texas Royalty Properties generated $1,164,303 in revenues for the October 2025 period.
• General and administrative expenses net of interest deducted from the November 2025 distribution totaled $28,833.

Direct, high-leverage exposure to oil and gas commodity price upside.

Your return is directly tied to the realized prices of the underlying commodities, offering leverage to price movements without the need to manage the physical assets. For the October 2025 distribution period, the stated average prices underpinning the net profit were:

Avoidance of direct operational costs, drilling expenses, and E&P liabilities.

You receive royalty income; the operator handles the capital and operating expenditures. This is clear when looking at the Waddell Ranch properties, which have recently required cost recovery before distributions flow to the Trust. For the month of September 2025, Production Costs exceeded Gross Proceeds, creating a continuing excess cost position. This situation was also present for August 2025.

The scale of the underlying expenses is substantial, illustrating what you avoid:

• Q3 2025 gross lease operating expenses and property taxes (Waddell Ranch): $26.6 million.
• Q3 2025 gross capital expenditures for drilling/maintenance (Waddell Ranch): $53.3 million.

Exceptionally clean balance sheet with $0.00 in total debt.

The Trust structure avoids traditional corporate debt financing, which is a significant structural benefit. As of the Most Recent Quarter (MRQ), the balance sheet reflects this clean profile. You can see the current liquidity position alongside the debt structure:

This means the Total Debt to Equity ratio, based on trailing twelve months (TTM) data, is reported as 0.00%.

Permian Basin Royalty Trust (PBT) - Canvas Business Model: Customer Relationships

You're looking at the Permian Basin Royalty Trust (PBT), and the key thing to grasp about your relationship with this entity is that it's almost entirely passive and transactional. You own a unit of beneficial interest, which is functionally like owning a share of stock, but PBT itself isn't an operating company; it doesn't drill wells or manage leases. Argent Trust Company acts as the Trustee, managing the administrative side of the royalty payments flowing from the underlying properties.

This means your primary interaction is receiving money when it's declared, or reading about why you aren't receiving as much as you hoped. The relationship is defined by the flow of cash, not by customer service or product development.

Transactional and Passive Nature

The Trust's role is to collect and pass through the net proceeds from the royalty interests it owns. You, as a unit holder, are a recipient, not a customer in the traditional sense that requires ongoing engagement or support. The most significant factor affecting this passive relationship recently has been the ongoing issue with the Waddell Ranch properties, where production costs are eating up the revenue.

Here are the hard numbers illustrating the impact of this passivity:

Because of this deficit, the Trustee must communicate that distributions are coming only from the Texas Royalty Properties until the Waddell costs are recovered. That's a critical piece of information for your investment decision, but it's delivered as a financial update, not a service interaction.

Regulatory and Financial Disclosure

The formal communication channel is strictly regulatory. You get your information through mandated public filings and press releases issued by Argent Trust Company, as Trustee. This is how the Trust fulfills its duty to keep the market informed about the performance of the underlying assets.

The Trust adheres to a regular disclosure schedule:

• Monthly cash distribution announcements via press release, typically around the 17th to 21st of the month for the prior month's performance.
• Quarterly financial data reported on Form 10-Q, which is crucial for understanding the full picture, especially regarding the Waddell Ranch costs.
• Annual comprehensive data in the Form 10-K filing.

For instance, the November 17, 2025, press release detailed the October net profit from the Texas Royalty Properties was $973,969, which contributed $925,270 to that month's distribution, reflecting the Trust's 95% Net Profits Interest (NPI) share. The report also explicitly stated that no proceeds from Waddell Ranch were included for October due to the excess cost position.

Here's a look at the recent per-unit distribution history, which is the core transactional data you receive:

Trustee-Led Communication Regarding Corporate Actions

The Trustee communicates directly about any significant corporate actions that affect your unit ownership or the Trust's governance. This is where the relationship becomes slightly more active, as it involves decisions you might vote on. The most immediate example is the governance challenge underway.

Key corporate action communications include:

• Notices regarding litigation settlements, such as the one announced August 19, 2025, concerning Blackbeard Operating, LLC.
• Announcements of Special Meetings of Unit holders, like the one called by SoftVest Advisors, LLC, scheduled for December 16, 2025.
• Information on the total distribution amount, such as the $896,437 total declared for the December 12, 2025, payment.

The Trustee is also forced to communicate deviations from the norm, such as Blackbeard Operating, LLC refusing to provide monthly Net Profits Interest (NPI) information, forcing the Trustee to rely on quarterly data for the Waddell Ranch properties. This lack of timely data directly impacts the predictability of your cash flow, which the Trustee must report transparently.

Permian Basin Royalty Trust (PBT) - Canvas Business Model: Channels

The Permian Basin Royalty Trust (PBT) relies on established financial market infrastructure for unit trading and distribution of its royalty income.

Unit Trading on the New York Stock Exchange (NYSE)

Trading of the units of beneficial interest occurs exclusively on the New York Stock Exchange (NYSE) under the ticker symbol PBT. As of early December 2025, the stock price showed movement, with a closing price reported at $18.67 on December 5, 2025. The trading activity reflects the market's valuation, with the market capitalization noted around $870.186M as of December 5, 2025. The 52-week trading range for PBT units has been between a low of $8.01 and a high of $20.46.

Key trading metrics as of early December 2025 include:

• Last Traded Price (Dec 3, 2025): $17.3350
• 200-Day Simple Moving Average: $15.50
• Average Volume (10 Day): 113,184 units
• Volume on December 3, 2025: 87,437 shares
• Payout Ratio (Latest): 67.65%

The distribution mechanism is a core channel for returning value to unit holders. The November 2025 monthly cash distribution was declared at $0.019233 per unit, payable on December 12, 2025, to holders of record on November 28, 2025. This distribution totaled $896,437 across 46,608,796 units outstanding. The annualized forward dividend rate was cited as $0.32, corresponding to a forward yield of 1.77% based on one report.

The primary entities facilitating unit transactions and payments are:

You execute unit purchases or sales directly through your broker, as the Trust itself cannot buy or sell the units. The Trustee, Argent Trust Company, manages the distributions.

Public Announcements and Information Dissemination

Public announcements and official documentation are channeled through the Trust's digital presence and regulatory filings. The official website serves as a primary source for general information.

• Official Trust Website: https://www.pbt-permian.com
• Primary News Wire for Press Releases: PR Newswire
• Regulatory Filings Channel: SEC Filings (e.g., Form 8-K, Form 10-Q)
• Trust Counsel: Holland & Knight, LLP, Dallas, Texas

For example, the November cash distribution announcement was disseminated via PR Newswire on November 17, 2025. The Trust's underlying properties include a 75% net overriding royalty interest in Waddell Ranch properties and a 95% net overriding royalty interest in Texas Royalty properties.

Permian Basin Royalty Trust (PBT) - Canvas Business Model: Customer Segments

You're looking at the core group of people who hold units in Permian Basin Royalty Trust (PBT). These aren't typical stock buyers; they are highly focused on the cash flow generated by the underlying Permian Basin assets. Honestly, the customer segments are quite distinct, driven almost entirely by the trust's structure as a pass-through entity.

Income-focused retail and institutional investors seeking yield.

This group is primarily chasing the monthly income stream. They are attracted by the high payout frequency, even if the yield fluctuates with commodity prices and operating costs. For example, the latest declared cash distribution for the November 28, 2025, record date was $0.019233 per unit, payable on December 12, 2025. This is part of a pattern where the trust has paid 13 dividends in the past year. The annualized payout as of late 2025 stands at approximately $0.34 per share, translating to a current dividend yield of about 1.85%. To be fair, that yield is lower than the historical 5-year average of 4.0%. These investors are sensitive to the payout ratio, which was reported at 98.5% for the annualized figure.

Here's a quick look at the key metrics driving this segment's interest:

• Monthly payout frequency.
• Annualized payout of $0.34 per share.
• Latest declared distribution: $0.019233 per unit.
• Total November 2025 distribution: $896,437 across 46,608,796 units outstanding.
• Trailing Price-to-Earnings (PE) ratio: 55.33.

Investors seeking pure-play exposure to Permian Basin energy cash flows.

This segment values the direct, albeit passive, connection to production volumes and commodity pricing in the Permian Basin. They are less concerned with corporate structure and more with the underlying asset performance. The trust provides a lens into one of North America's most prolific oil and gas regions. You see this influence clearly when looking at the drivers behind distribution changes. For instance, July 2025 saw a 53% dividend increase, supported by the Texas Royalty Properties generating $901,654 in net profit for that month, alongside oil at $68.37 per barrel and gas at $11.75 per Mcf. However, this exposure carries risk, as evidenced by the Waddell Ranch properties having total production costs exceeding gross proceeds for both August and September 2025, creating a continuing excess cost position that must be recovered before any proceeds flow to unitholders.

The composition of the investor base includes significant institutional participation, which suggests a level of professional due diligence on the underlying assets. Here are some of the major institutional holders as of early 2025:

Activist unitholders focused on governance and maximizing distributions.

This is a smaller but highly influential segment, focused on structural changes to improve distributions or governance. As of October 2025, SoftVest Advisors, LLC, along with other holders, collectively claimed ownership of more than 15% of the outstanding Units. This group formally requested a special meeting of Unit holders for December 16, 2025, to vote on amending the Trust Indenture. The proposal seeks to lower the threshold for approving amendments to require only the affirmative vote of a majority of Units cast at a meeting where a quorum is present. This segment is keenly aware of one-time cash injections, such as the first installment of $4.5 million from the settlement with Blackbeard Operating, LLC, which was included in the September 2025 distribution of $0.115493 per unit.

The trust's overall market capitalization as of the latest data was $845.95 million, with an enterprise value of $839.46 million.

Permian Basin Royalty Trust (PBT) - Canvas Business Model: Cost Structure

Trust General and Administrative (G&A) expenses are a direct cost to the Trust structure itself, separate from the operator's costs on the underlying properties.

• Trust General and Administrative (G&A) expenses net of interest deducted for the November 2025 distribution were $28,833.
• G&A expenses net of interest deducted for the October 2025 distribution announcement were $39,774.
• G&A expenses net of interest deducted for the June 2025 distribution announcement were $365,230.

Taxes and expenses deducted from Texas Royalty gross revenues represent the non-production cost deductions taken off the smaller, but currently sole contributing, asset base.

• Taxes and expenses deducted from Texas Royalty gross revenues for the period reflecting the October 2025 distribution were $137,663.
• For the period reflecting the October 2025 distribution, the Net Profit from Texas Royalty Properties after these deductions was $973,969.

Increased professional service and legal fees arose directly from the ongoing operational disputes with the operator, Blackbeard Operating, LLC.

• Total expenses for the third quarter of 2025 amounted to $411,626, an increase from $367,625 in the third quarter of 2024, primarily attributed to increased expenses for professional services associated with legal proceedings with Blackbeard.
• The litigation, which was set for trial in November 2025, was resolved via settlement in August 2025.
• The settlement amount agreed to by Blackbeard was $9,000,000.
• The settlement payment structure includes $4,500,000 paid within 30 days of the August 19, 2025 announcement, and the remainder paid in four equal quarterly installments of $1,125,000 during the 2026 calendar year.

Operator's gross production costs and capital expenditures on the Waddell Ranch properties are critical as they determine when the largest asset will cease its cost deficit and begin contributing revenue.

The Waddell Ranch properties have been in a continuing excess cost position, meaning total production costs exceeded gross proceeds, resulting in zero proceeds flowing to the Trust from this asset since November 2024 through September 2025. The estimated oil price required to generate a net profit for the Q3 2025 period was at least $70 per barrel.

Permian Basin Royalty Trust (PBT) - Canvas Business Model: Revenue Streams

You're looking at the core income drivers for Permian Basin Royalty Trust (PBT) as of late 2025. Honestly, the revenue streams are quite simple because this is a royalty trust, meaning it doesn't operate the wells; it just collects a percentage of the production revenue, net of costs.

The primary revenue sources flow from two distinct sets of properties, though one is currently under a cost recovery burden. Here's a breakdown of the key financial components that feed the distributable income:

• Net profit proceeds from the Texas Royalty properties.
• Net profit proceeds from the Waddell Ranch properties, which are currently zero.
• Interest income earned on cash reserves.

The most recent monthly data available, tied to the November 2025 distribution announcement, gives us a clear look at the Texas Royalty contribution. For the month of October 2025, the underlying properties generated revenues of $1,111,632. After deducting taxes and expenses of $137,663, the Net Profit was $973,969. Since the Trust holds a 95% Net Profits Interest (NPI) in these assets, this resulted in a net contribution of $925,270 to the November distribution. That's the clean, direct cash flow component right now.

The Waddell Ranch properties, which historically account for a significant portion of gross proceeds, are currently a drag on revenue flow. Blackbeard, the operator, has reported that total production costs exceeded gross proceeds for September 2025. This created a continuing excess cost position that must be recovered before any proceeds flow to the Trust. Specifically, the loss incurred by the Waddell Ranch properties for the three months ended September 30, 2025, was $6.405 million. So, for the revenue stream analysis, the net profit proceeds from Waddell Ranch properties are effectively zero until that deficit is cleared.

To give you the big picture on overall performance leading up to this point, here are the cumulative nine-month results:

Finally, you can't forget the small, passive income component. The Trustee holds cash reserves, and while commodity prices and lower balances have compressed returns, there is still some interest income. For the quarter ended September 30, 2025, the interest income earned on cash reserves was a minimal $15,049.

To summarize the key revenue inputs for the period:

• Texas Royalty Net Contribution (for November Payout): $925,270.
• Waddell Ranch Net Contribution: $0 due to a continuing excess cost deficit.
• Q3 2025 Waddell Ranch Loss: $6.405 million.
• Interest Income (Q3 2025): $15,049.