Permian Basin Trustee Withholds Waddell Ranch Proceeds, Cuts Distribution — Note to Pathward Financial

Trustee withholds Waddell Ranch proceeds amid excess-cost recovery

Argent Trust Company, acting as trustee for the Permian Basin Royalty Trust, declares a March 13 distribution of $0.014221 per unit to holders of record on Feb. 27, 2026, while excluding proceeds from the Waddell Ranch properties because Production Costs exceed Gross Proceeds for January. The trustee cites the trust indenture and the continuing excess-cost position as the reason for withholding Waddell Ranch net profits interest (NPI) proceeds until those costs, plus any accrued interest, are recovered. The move reflects standard trust-administration practices for financial institutions that manage royalty and income-distributing assets.

The trustee explains the February distribution declines versus the prior month for several operational reasons that affect cash available to beneficiaries. A second settlement payment from Blackbeard Operating LLC bolstered last month’s distribution but is absent this cycle. In addition, Texas Royalty Properties posts lower oil volumes and weaker oil and gas pricing in January, only partly offset by higher natural gas volumes. Because Blackbeard supplies production, pricing and cost data on a quarterly basis rather than monthly, NPI proceeds that arrive on or before the record date are included in the following month’s distribution; none were received in January that could be included in February, per the trustee.

The decision to defer Waddell Ranch proceeds until excess costs are recovered highlights operational and disclosure challenges for trustees and financial-services firms that oversee royalty interests. It underscores the need for clear timing rules in indentures and the importance of quarterly regulatory filings when counterparties report on a quarterly cadence. For banks and trust managers such as Pathward Financial and peers, the episode is a reminder of cash-flow sequencing and compliance duties when administering mineral and royalty trusts.

Production, pricing and January accounting

Underlying Texas Royalty Properties produces 15,292 barrels of oil and 9,841 Mcf of gas in January, with the Trust’s allocated portion at 13,325 barrels of oil and 8,573 Mcf of gas. Average oil price is $56.78 per barrel and gas $5.85 per Mcf (including significant NGL pricing), generating $925,795 in revenues. After $118,946 in taxes and expenses, net profit for January totals $806,849, and the Trust’s NPI is 95%.

Trustee monitoring and disclosure plans

Argent Trust says it will monitor Blackbeard receipts and include eligible Waddell Ranch NPI proceeds in subsequent distributions once excess costs and accrued interest are fully recovered. The trustee adds it will disclose Blackbeard production, pricing and cost data in Form 10‑Q and Form 10‑K filings as those quarterly and annual reports are prepared.