Permian Basin Royalty Trust (NYSE:PBT) (NYSE: PBT) is a passive, grantor-type trust that holds net overriding royalty interests in oil and natural gas properties located in the Permian Basin of West Texas. Unlike conventional energy companies, the trust does not conduct drilling, exploration or field operations. Instead, it receives royalty income based on a percentage of production volumes and proceeds from wells operated by third parties across multiple legacy fields.
The trust’s primary assets consist of overriding royalty interests originally carved out from oil and gas leases owned by major producers. Revenue is generated when operators extract hydrocarbons and sell them into regional and national pipelines and commodity markets. Permian Basin Royalty Trust distributes substantially all net cash proceeds to unitholders on a quarterly basis, after covering minimal administrative and operational fees assessed by the trust’s trustee.
Established in 1980, the trust’s assets trace back to legacy properties developed over many decades by predecessor companies in the Permian Basin, including areas around Midland, Andrews, Ector and Martin counties. Over time, technological advances such as horizontal drilling and enhanced recovery techniques have helped maintain production levels from mature reservoirs, supporting continued royalty payments. The trust structure offers investors exposure to oil and natural gas price fluctuations without directly assuming the capital costs or liabilities of field operations.
Permian Basin Royalty Trust is administered by a corporate trustee, which handles accounting, distribution calculations and tax reporting. As a royalty trust, it has no employees or executive management team in the traditional corporate sense, and it does not reinvest cash flow; instead, it provides a direct pass-through of petroleum revenue to unitholders. Its focus remains on efficiently converting oil and gas royalties into regular income distributions for investors seeking exposure to the prolific Permian Basin region.
