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Permian Basin Royalty Trust Reports Operating Results (10-Q)

November 02, 2009 | About:

10qk

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Permian Basin Royalty Trust (PBT) filed Quarterly Report for the period ended 2009-09-30.

PERMIAN BASIN ROYALTY TRUSTs principal assets are comprised of a 75% net overriding royalty interest carved out of Southland Royalty Company's fee mineral interests in the Waddell Ranch properties in Crane County Tex. and a 95% net overriding royalty interest carved out of Southland Royalty Company's major producing royalty properties in Texas. Permian Basin Royalty Trust has a market cap of $611 million; its shares were traded at around $13.11 with a P/E ratio of 8.5 and P/S ratio of 5.4. The dividend yield of Permian Basin Royalty Trust stocks is 8.9%. Permian Basin Royalty Trust had an annual average earning growth of 16.5% over the past 10 years. GuruFocus rated Permian Basin Royalty Trust the business predictability rank of 3.5-star.

Highlight of Business Operations:

For the quarter ended September 30, 2009, royalty income received by the Trust amounted to $10,469,008 compared to royalty income of $35,552,084 during the third quarter of 2008. The decrease in royalty income is primarily attributable to significant decreases in both oil and gas prices and related production.

Interest income for the quarter ended September 30, 2009, was $335 compared to $20,118 during the third quarter of 2008. The decrease in interest income is primarily attributable to less funds available for investment and significantly lowered interest rates. General and administrative expenses during the third quarter of 2009 amounted to $135,642 compared to $134,748 during the third quarter of 2008. The increase in general and administrative expenses can be primarily attributed to professional expenses.

These transactions resulted in distributable income for the quarter ended September 30, 2009 of $10,333,701 or $.221711 per Unit of beneficial interest. Distributions of $.074511, $.079435 and $.067764 per Unit were made to Unit holders of record as of July 31, 2009, August 31, 2009 and September 30, 2009, respectively. For the third quarter of 2008, distributable income was $35,437,454, or $.760317 per Unit of beneficial interest.

The average received price of oil decreased to an average price per barrel of $59.65 per Bbl in the third quarter of 2009, compared to $104.07 per Bbl in the third quarter of 2008 due to worldwide market variables. The Trustee has been advised by ConocoPhillips that for the period of August 1, 1993, through September 30, 2009, the oil from the Waddell Ranch properties was being sold under a competitive bid to a third party. The average price of gas decreased from $11.06 per Mcf in the third quarter of 2008 to $4.48 per Mcf in the third quarter of 2009 due to change in overall market variables.

Capital expenditures for drilling, remedial and maintenance activities on the Waddell Ranch properties during the third quarter of 2009 totaled $3,881,031 as compared to $2,643,259 to the Trust for the third quarter of 2008. ConocoPhillips has informed the Trustee that the 2009 capital expenditures budget has been revised to $27.1 million (gross) for the Waddell Ranch properties. The total amount of capital expenditures for 2008 was $24.1 million. Through the third quarter of 2009, capital expenditures of $20.2 million (gross) have been expended.

Lease operating expenses and property taxes totaled $4.7 million for the third quarter of 2009, compared to $4.2 million in the third quarter of 2008 on the Waddell Ranch properties. This increase is primarily attributable to increased ad valorem taxes and an increase in the project management fee.

Read the The complete Report

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10qk
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