Permian Basin Royalty Trust reaches settlement agreement with Blackbeard

Argent Trust Company, as Trustee of the Permian Basin Royalty Trust (PBT), announced that it has reached a settlement agreement in connection with its litigation against Blackbeard Operating, the operator of properties in the Waddell Ranch, in Crane County, Texas, in which the Trust holds a 75% net overriding royalty. Pursuant to the lawsuit, the Trustee had sought to recover more than $9M in damages it alleged resulted from Blackbeard’s failure to properly calculate and pay royalties due and owing to the Trust. Pursuant to the settlement agreement, Blackbeard has agreed to pay the Trust $9M of which $4.5M will be paid to the Trust within 30 days, and the remainder of which will be paid in four equal installments of $1.125M quarterly during the 2026 calendar year. Additionally, the settlement agreement established the 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, and charge technical labor on reservoir engineers using an agreed allocation methodology against the net overriding royalty. The parties also agreed that the Trust would not make future claims for lost volumes in the case of ordinary line loss. The Trust will have the option to conduct annual site audits, at its expense. The settlement agreement also set forth agreed reporting that Blackbeard will provide the Trustee going forward.