Permian Basin Royalty Trust (PBT) risk factors, FY2024 10-K

Other

1. 01Crude oil and natural gas prices are volatile and fluctuate in response to a number of factors; Lower prices could reduce the net proceeds payable to the Trust and Trust distributions
2. 02the nature and extent of governmental regulation and taxation
3. 03Increased production and development costs attributable to the Royalties will result in decreased Trust distributions unless revenues also increase
4. 04Trust reserve estimates depend on many assumptions that may prove to be inaccurate, which could cause both estimated reserves and estimated future net revenues to be too high, leading to write-downs of estimated reserves
5. 05relationships with landowners, working interest partners, pipeline companies and others
6. 06Government action, policies or regulations designed to discourage production of, reduce demand for, or promote alternatives to oil and natural gas could impact the price of oil and natural gas produced on the Underlying Properties, directly as intended or through unintended consequences
7. 07The Trustee may be subject to attempted cybersecurity disruptions from a variety of sources including state-sponsored actors
8. 08Future royalty income may be subject to risks relating to the creditworthiness of third parties
9. 09The market price for the Units may not reflect the value of the royalty interests held by the Trust
10. 10Operational risks and hazards associated with the development of the Underlying Properties may decrease Trust distributions
11. 11resulting from any of these or similar occurrences could be deducted as a cost of production in calculating the net proceeds payable to the Trust and would therefore reduce Trust distributions by the amount of such uninsured costs
12. 12Increased concerns about climate change and environmental sustainability could have an impact on development of the Underlying Properties
13. 13Terrorism, continued hostilities in Eastern Europe and the Middle East, or other military campaigns could decrease Trust distributions or the market price of the Units
14. 14Unit holders and the Trustee have no influence over the operations on, or future development of, the Underlying Properties
15. 15The operators developing the Texas Royalty properties have no duty to protect the interests of the Unit holders and do not have sole discretion regarding development activities on the Underlying Properties
16. 16The operator developing any Underlying Property may transfer its interest in the property without the consent of the Trust or the Unit holders
17. 17The operator developing any Underlying Property may abandon the property, thereby terminating the Royalties payable to the Trust
18. 18The Royalties can be sold and the Trust would be terminated
19. 19The voting rights of a Unit holder are more limited than those of stockholders of most public corporations. For example, there is no requirement for annual meetings of Unit holders or for an annual or other periodic re-election of the Trustee
20. 20Financial information of the Trust is not prepared in accordance with GAAP
21. 21The limited liability of the Unit holders is uncertain
22. 22The tax treatment of an investment in Trust Units could be affected by recent and potential legislative changes, possibly on a retroactive basis