The Forensic Accountant
Research analyst, oil & gas, energy

Permian Basin Royalty Trust: Production, Distribution (And Risk) Rising

As those familiar with my articles know, I analyze trusts using a bottom-up, engineering-style model that considers forecasts of production, sales prices, and expenses and unique underlying circumstances. I recently added Permian Basin Royalty Trust (NYSE:PBT) to the stable of trusts that I follow and this article discusses the assumptions of the model and its resulting valuation.

Distribution set to rise

PBT is an oil and gas trust operated by Burlington Resources, a subsidiary of ConocoPhillips (NYSE:COP), with long-life, mature wells in the state of Texas. PBT is investing in a sizable capital investment program and, along with increased costs, is realizing increased production.

For PBT:

    Future well production assumes growth, followed by a fixed decline...
Join Seeking Alpha PRO to read this archived article and 11,574 other archived articles
FREESA PRO MEMBERS
IDEA GENERATORXExclusive access to 10 PRO ideas every day
INVESTING IDEAS LIBRARYXExclusive access to PRO library of more than 15,000 ideas
SECTOR EXPERT NETWORKXExclusive access to all sector experts for direct consultation
PERFORMANCE TRACKINGXTrack performance of all PRO stock ideas
PROFESSIONAL TOOLSXProfessional Idea Filters to zero-in based on industry, market cap and more
"In just the first month of using PRO, I used it to generate two ideas which were actionable for me. As a result of these two positions, I have earned more than 20 times the annual subscription costs for PRO."Michael Yagemann, Greenbridge Capital
"I am pleasantly surprised with the scope of small and mid-cap coverage PRO offers. You can't find that any where else."Patrick Rice, Mainstay Capital Management
You may cancel at any time for any reason, and receive a prompt refund for membership on months paid and not used (max. 6 months). Details