Permian Basin Royalty Trust (PBT) risk factors, FY2025 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 distributions39% rewritten
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. 04Proposed actions by certain Unit holders may have the effect of converting the Trust into a different type of investment, terminating the Trust, and/or permitting other changes to the Trust to occur that may not be acceptable to all Unit holdersNew
5. 05Trust 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
6. 06relationships with landowners, working interest partners, pipeline companies and others23% rewritten
7. 07Government 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
8. 08The Trustee may be subject to attempted cybersecurity disruptions from a variety of sources including state-sponsored actors
9. 09Future royalty income may be subject to risks relating to the creditworthiness of third parties
10. 10The market price for the Units may not reflect the value of the royalty interests held by the Trust
11. 11Operational risks and hazards associated with the development of the Underlying Properties may decrease Trust distributions69% rewritten
12. 12Increased concerns about climate change and environmental sustainability could have an impact on development of the Underlying Properties57% rewritten
13. 13Terrorism, continued hostilities in Eastern Europe, the Middle East, and South America 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 Properties66% rewritten
15. 15The Units may lose value and cash available for distribution may be reduced as a result of title deficiencies with respect to the Royalty PropertiesNew
16. 16The 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
17. 17The operator developing any Underlying Property may transfer its interest in the property without the consent of the Trust or the Unit holders
18. 18The operator developing any Underlying Property may abandon the property, thereby terminating the Royalties payable to the Trust
19. 19The Royalties can be sold and the Trust would be terminated
20. 20The 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
21. 21Financial information of the Trust is not prepared in accordance with GAAP
22. 22The limited liability of the Unit holders is uncertain
23. 23The tax treatment of an investment in Trust Units could be affected by recent and potential legislative changes, possibly on a retroactive basis