PBT - Permian Basin Royalty Trust Is Being Upgraded After It Plunged 56% Over The Last Year
2024-04-18 13:33:32 ET
Summary
- Blackbeard advised the Trustee of planned 2024 CAPEX for the Waddell Ranch that caused serious confusion for investors.
- PBT has a relatively modest distribution yield.
- The trustee filed a complaint against Blackbeard seeking to recover $15 million for damages resulting from impermissible deductions, but Argent then filed a notice of dismissal without prejudice.
The recent confusion over the 2024 CAPEX plans by Blackbeard Operating seems to have more of an impact on Permian Basin Royalty Trust ( PBT ) units than the swings in either oil or natural gas prices. After soaring over the last few years because of increased CAPEX, underlying oil production seems to have leveled off. If the latest monthly distribution of $0.041340 per unit continues at approximately the same level going forward, PBT would have a yield of 4.3%. PBT has dropped over 56% since my April 2023 sell recommendation article, compared to an almost 21% increase in the S&P 500 Index. I am upgrading PBT at the current price of $11.54 to a "hold" because there is an implied embedded oil call option in PBT units, and any dramatic war developments could cause energy prices to soar....
Permian Basin Royalty Trust Is Being Upgraded After It Plunged 56% Over The Last Year