Permian Basin Royalty Trust Reaches Settlement with Blackbeard Operating

Permian Basin Royalty Trust has reached a settlement agreement with Blackbeard Operating, LLC, the operator of properties in the Waddell Ranch, in which the Trust holds a 75% net overriding royalty. Blackbeard will pay the Trust $9,000,000, with $4,500,000 paid within 30 days and the remainder paid quarterly in 2026. The settlement also establishes an overhead rate, permits Blackbeard to pass through third-party charges, and sets forth agreed reporting.

Permian Basin Royalty Trust (NYSE: PBT) has reached a settlement agreement with Blackbeard Operating, LLC, the operator of properties in the Waddell Ranch, in which the Trust holds a 75% net overriding royalty. The settlement, announced on August 19, 2025, resolves a lawsuit alleging that Blackbeard failed to properly calculate and pay royalties due to the Trust.

Under the settlement, Blackbeard will pay the Trust a total of $9,000,000. Of this amount, $4,500,000 will be paid within 30 days, with the remaining $4,500,000 to be paid in four equal installments of $1,125,000 quarterly during 2026 [1].

The settlement agreement also establishes an overhead rate that may be charged to the Trust and permits Blackbeard to pass through third-party charges for salt water disposal and gathering and transportation, as well as technical labor on reservoir engineers using an agreed allocation methodology against the net overriding royalty [2].

Additionally, the agreement provides guidelines for future royalty payment calculations and grants the Trust the option to conduct annual site audits at its expense. The settlement also sets forth agreed reporting that Blackbeard will provide to the Trustee going forward.

"We are pleased that we were able to resolve these claims in a way that provides value to Trust unitholders, as well as anticipated predictability with regard to how future royalty payments are calculated," said Nancy Willis, Director of Royalty Trust Services of Argent Trust Company [1].

The settlement is a significant win for unitholders, providing immediate liquidity ($4,500,000 within 30 days) and predictable future cash flows ($1,125,000 quarterly throughout 2026). The structural components of the settlement, such as the overhead rate and third-party charges, add transparency to future accounting and ensure compliance with the settlement terms [2].

The settlement effectively resolves current claims while implementing safeguards against similar disputes arising in the future, preserving unitholder value and trust management efficiency [2].

References:
[1] https://www.prnewswire.com/news-releases/permian-basin-royalty-trust-announces-settlement-of-blackbeard-litigation-302533915.html
[2] https://www.stocktitan.net/news/PBT/permian-basin-royalty-trust-announces-settlement-of-blackbeard-7nf4d69x75cb.html