The Permian Basin Royalty Trust () is a United States

oil An oil is any nonpolar chemical substance that is composed primarily of hydrocarbons and is hydrophobic (does not mix with water) & lipophilic (mixes with other oils). Oils are usually flammable and surface active. Most oils are unsaturated ...

and

natural gas Natural gas (also called fossil gas or simply gas) is a naturally occurring mixture of gaseous hydrocarbons consisting primarily of methane in addition to various smaller amounts of other higher alkanes. Low levels of trace gases like carbo ...

royalty trust A royalty trust is a type of corporation, mostly in the United States or Canada, usually involved in oil and gas production or mining. However, unlike most corporations, its profits are not taxed at the corporate level provided a certain high perc ...

based in

Dallas, Texas Dallas () is the third largest city in Texas and the largest city in the Dallas–Fort Worth metroplex, the fourth-largest metropolitan area in the United States at 7.5 million people. It is the largest city in and seat of Dallas County w ...

. With a market capitalization of US $790,000,000, and an average daily trading volume of about 186,000 shares at the end of 2007, it was one of the largest royalty trusts in the United States. Its source of revenue is oil and gas pumped from the geologic formation for which it is named, the Permian Basin in west Texas, as well as a few locations in other parts of the state. Most of the Trust's properties are on the Waddell Ranch in

Crane County, Texas Crane County is a county located in the U.S. state of Texas. As of the 2020 census, its population was 4,675. The county seat is Crane. The county was created in 1887 and later organized in 1927. It was named for William Carey Crane, a pre ...

, where it owns a 75% net overriding royalty interest in the fee mineral interests (in this case, oil and natural gas). Other properties of the trust are in 32 other Texas counties, most of which are in the western portion of the state, on the High Plains; the trust owns a 95% net overriding royalty interest in all of its properties outside of the Waddell Ranch. The principal productive zones for oil on the Waddell Ranch are in two geologic units, the Grayburg and the San Andreas, at a depth of from 2,800 to below ground surface; however there are a total of 12 producing zones on the ranch, including one at a depth of . As of the end of 2006, there were a total of 800 operational and productive oil wells and 205 natural gas wells on the Waddell Ranch in the Trust. On December 31, 2006, the Trust claimed a lifetime of approximately 8.3 years for all mineral reserves of the Trust.Permian Basin: description of properties
Permin Basin Royalty Trust came into being in November 1980, with an agreement between Southland Royalty Company and the First National Bank of Fort Worth. As is the case with U.S. royalty trusts, the trust cannot function as a business, and has no employees; all operations and maintenance are carried out by the Trustee and its subcontractors. Currently, the assets of the Trust are managed by

ConocoPhillips ConocoPhillips Company is an American multinational corporation engaged in hydrocarbon exploration and production. It is based in the Energy Corridor district of Houston, Texas. The company has operations in 15 countries and has production in ...

, which acquired

Meridian Oil Meridian or a meridian line (from Latin ''meridies'' via Old French ''meridiane'', meaning “midday”) may refer to Science * Meridian (astronomy), imaginary circle in a plane perpendicular to the planes of the celestial equator and horizon ...

, the previous operator. Meridian changed its name to

Burlington Resources Burlington Resources Inc. was a company engaged in hydrocarbon exploration. In 2006, the company was acquired by ConocoPhillips. History In 1988, the company was formed to own the resource assets of Burlington Northern Railroad. The company beca ...

Oil and Gas Company, LP, in 1996, prior to being acquired by ConocoPhillips in 2006. The Trust pays a relatively high dividend, yielding an annual rate of 12.4% in early 2008; in addition, it pays out monthly, a relative rarity for U.S. stocks. However, its distribution is dependent on the prices of oil and gas; thus, unlike traditional stocks (who, when declaring a dividend, usually maintain it at the same amount for each quarter of the year), the dividend payout will differ each month. Since the Trust's assets are considered a depletable resource, its dividend payments are not taxed at the regular dividend rate, but rather as

return of capital Return of capital (ROC) refers to principal payments back to "capital owners" (shareholders, partners, unitholders) that exceed the growth (net income/taxable income) of a business or investment. It should not be confused with Rate of Return (ROR ...

instead of return on investment; this is an additional tax advantage in the United States, and applies to all royalty trusts.Explanation in Form 10-K on file with the Securities and Exchange Commission
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References and notes

External links

Permian Basin Trust website
{{Authority control Energy companies of the United States Petroleum in Texas Royalty trusts Companies based in Dallas Energy companies established in 1980 Non-renewable resource companies established in 1980 1980 establishments in the United States Companies listed on the New York Stock Exchange