SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
Quarterly Report Pursuant To Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Quarterly Period Ended June 30, 1998
Commission File No. 1-8033
PERMIAN BASIN ROYALTY TRUST
Texas I.R.S. No. 75-6280532
NationsBank, N.A., Trust Department
P. O. Box 1317
Fort Worth, Texas 76101
Telephone Number 817/390-6905
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months and (2) has been subject to
such filing requirements for the past 90 days. Yes X No___
Number of Units of beneficial interest of the Trust outstanding at
August 13, 1998: 46,608,796
Page 1 of 16
PERMIAN BASIN ROYALTY TRUST
PART I - FINANCIAL STATEMENTS
ITEM 1. FINANCIAL STATEMENTS
The condensed financial statements included herein have been prepared by
NationsBank, N.A. as Trustee for the Permian Basin Royalty Trust, without
audit, pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosures
normally included in annual financial statements have been condensed or
omitted pursuant to such rules and regulations, although the Trustee
believes that the disclosures are adequate to make the information
presented not misleading. It is suggested that these condensed financial
statements be read in conjunction with the financial statements and the
notes thereto included in the Trust's latest annual report on Form 10-K.
In the opinion of the Trustee, all adjustments, consisting only of normal
recurring adjustments, necessary to present fairly the assets,
liabilities and trust corpus of the Permian Basin Royalty Trust at
June 30, 1998, and the distributable income and changes in trust corpus
for the three-month and six-month periods ended June 30, 1998 and 1997
have been included. The distributable income for such interim periods
is not necessarily indicative of the distributable income for the full
year.
Deloitte & Touche LLP, independent certified public accountants, has made
a limited review of the condensed financial statements as of June 30,
1998 and for the three-month and six-month periods ended June 30, 1998
and 1997 included herein.
-2-
INDEPENDENT ACCOUNTANTS' REPORT
NationsBank, N.A. as Trustee
for the Permian Basin Royalty Trust:
We have reviewed the accompanying condensed statement of assets,
liabilities and trust corpus of the Permian Basin Royalty Trust as of
June 30, 1998 and the related condensed statements of distributable
income and changes in trust corpus for the three-month and six-month
periods ended June 30, 1998 and 1997. These financial statements are
the responsibility of the Trustee.
We conducted our reviews in accordance with standards established by
the American Institute of Certified Public Accountants. A review of
interim financial information consists principally of applying
analytical procedures to financial data and making inquiries of
persons responsible for financial and accounting matters. It is
substantially less in scope than an audit conducted in accordance with
generally accepted auditing standards, the objective of which is the
expression of an opinion regarding the financial statements taken as a
whole. Accordingly, we do not express such an opinion.
The accompanying condensed financial statements are prepared on a
modified cash basis as described in Note 1, which is a comprehensive
basis of accounting other than generally accepted accounting
principles.
Based on our reviews, we are not aware of any material modifications
that should be made to such condensed financial statements for them to
be in conformity with the basis of accounting described in Note 1.
We have previously audited, in accordance with generally accepted
auditing standards, the statement of assets, liabilities and trust
corpus of the Permian Basin Royalty Trust as of December 31, 1997, and
the related statements of distributable income and changes in trust
corpus for the year then ended (not presented herein); and in our
report dated March 20, 1998, we expressed an unqualified opinion on
those financial statements. In our opinion, the information set forth
in the accompanying condensed statement of assets, liabilities and
trust corpus as of December 31, 1997 is fairly stated, in all material
respects, in relation to the statement of assets, liabilities and
trust corpus from which it has been derived.
/s/
- ----------------------
DELOITTE & TOUCHE LLP
July 8, 1998
-3-
PERMIAN BASIN ROYALTY TRUST
CONDENSED STATEMENTS OF ASSETS, LIABILITIES AND TRUST CORPUS
- ------------------------------------------------------------------------------------------------------------
June 30, December 31,
ASSETS 1998 1997
(Unaudited)
Cash and short-term investments $ 271,758 $ 1,724,192
Net overriding royalty interests in producing
oil and gas properties (net of accumulated
amortization of $7,563,845 and $7,478,622
at June 30, 1998 and December 31, 1997,
respectively) 3,411,371 3,496,594
--------- ---------
$ 3,683,129 $ 5,220,786
========= =========
LIABILITIES AND TRUST CORPUS
Distribution payable to Unit holders $ 271,758 $ 1,724,192
Commitments and contingencies
Trust corpus - 46,608,796 Units of beneficial
interest authorized and outstanding 3,411,371 3,496,594
--------- ---------
$ 3,683,129 $ 5,220,786
========= =========
CONDENSED STATEMENTS OF DISTRIBUTABLE INCOME (UNAUDITED)
- ------------------------------------------------------------------------------------------------------------
Three Months Ended Six Months Ended
June 30, June 30,
---------------------------- ----------------------------
1998 1997 1998 1997
Royalty income $ 1,599,573 $ 4,185,854 $ 6,852,540 $12,890,261
Interest income 7,045 14,218 17,913 25,539
--------- --------- --------- ---------
1,606,618 4,200,072 6,870,453 12,915,800
General and administrative
expenditures 148,573 177,535 273,002 321,540
--------- --------- --------- ---------
Distributable income $ 1,458,045 $ 4,022,537 $ 6,597,451 $12,594,260
========= ========= ========= =========
Distributable income per Unit
(46,608,796 Units) $ .031283 $ .086304 $ .141550 $ .270211
========= ========= ========= =========
<FN>
The accompanying notes to condensed financial statements are an integral part of these statements.
</FN>
-4-
PERMIAN BASIN ROYALTY TRUST
CONDENSED STATEMENTS OF CHANGES IN TRUST CORPUS (UNAUDITED)
- ------------------------------------------------------------------------------------------------------------
Three Months Ended Six Months Ended
June 30, June 30,
---------------------------- ----------------------------
1998 1997 1998 1997
Trust corpus, beginning of period $ 3,444,230 $ 3,672,335 $ 3,496,594 $ 3,760,939
Amortization of net overriding
royalty interests (32,859) (51,520) (85,223) (140,124)
Distributable income 1,458,045 4,022,537 6,597,451 12,594,260
Distributions declared (1,458,045) (4,022,537) (6,597,451) (12,594,260)
---------- ---------- ----------- ----------
Trust corpus, end of period $ 3,411,371 $ 3,620,815 $ 3,411,371 $ 3,620,815
========== ========== ========== ==========
<FN>
The accompanying notes to condensed financial statements are an integral part of this statement.
</FN>
-5-
PERMIAN BASIN ROYALTY TRUST
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
- ---------------------------------------------------------------------
1. BASIS OF ACCOUNTING
The Permian Basin Royalty Trust ("Trust") was established as of
November 1, 1980. The net overriding royalties conveyed to the
Trust include: (1) a 75% net overriding royalty carved out of
Southland Royalty Company's fee mineral interests in the Waddell
ranch in Crane County, Texas (the "Waddell Ranch properties"); and
(2) a 95% net overriding royalty carved out of Southland Royalty
Company's major producing royalty interests in Texas (the "Texas
Royalty properties"). The net overriding royalty for the Texas
Royalty properties is subject to the provisions of the lease
agreements under which such royalties were created. The financial
statements of the Trust are prepared on the following basis:
- Royalty income recorded for a month is the amount computed and
paid to NationsBank, N.A. ("Trustee") as Trustee for the Trust by
the interest owners: Burlington Resources Oil & Gas Company
("BROG") for the Waddell Ranch properties and Riverhill Energy
Corporation ("Riverhill Energy"), formerly a wholly owned
subsidiary of Riverhill Capital Corporation ("Riverhill Capital")
and formerly an affiliate of Coastal Management Corporation
("CMC"), for the Texas Royalty properties. CMC currently
conducts all field, technical and accounting operations on behalf
of BROG with regard to the Waddell Ranch properties. CMC also
conducts the accounting operations for the Texas Royalty
properties on behalf of Riverhill Energy. Royalty income
consists of the amounts received by the owners of the interest
burdened by the net overriding royalty interests ("Royalties")
from the sale of production less accrued production costs,
development and drilling costs, applicable taxes, operating
charges, and other costs and deductions multiplied by 75% in the
case of the Waddell Ranch properties and 95% in the case of the
Texas Royalty properties.
As was previously reported, in February 1997, BROG sold its
interest in the Texas Royalty properties that are subject to the
Net Overriding Royalty Conveyance to the Trust dated effective
November 1, 1980 ("Conveyance") to Riverhill Energy.
The Trustee has been advised that in the first quarter of 1998
Schlumberger Technology Corporation acquired all of the shares of
Riverhill Capital. CMC and Riverhill Energy were wholly owned
subsidiaries of Riverhill Capital. The Trustee has further been
advised that as part of the transaction, ownership of Riverhill
Energy's interests in the Texas Royalty properties referenced
above remain in Riverhill Energy which is now owned by the former
shareholders of Riverhill Capital. Accounting operations
pertaining to the Texas Royalty properties are being performed by
CMC under the direction of Riverhill Energy.
- Trust expenses recorded are based on liabilities paid and cash
reserves established out of cash received or borrowed funds for
liabilities and contingencies.
- Distributions to Unit holders are recorded when declared by the
Trustee.
- Royalty income is computed separately for each of the conveyances
under which the Royalties were conveyed to the Trust. If monthly
costs exceed revenues for any conveyance ("excess costs"), such
excess cannot reduce royalty income from other conveyances, but
is carried forward with accrued interest to be recovered from
future net proceeds of that conveyance (see Note 3).
The financial statements of the Trust differ from financial
statements prepared in accordance with generally accepted
accounting principles ("GAAP") because revenues are not accrued in
the month of production and certain cash reserves may be
established for contingencies which would not be accrued
-6-
in financial statements prepared in accordance with GAAP.
Amortization of the Royalties calculated on a unit-of-production
basis is charged directly to trust corpus.
2. FEDERAL INCOME TAXES
For Federal income tax purposes, the Trust constitutes a fixed
investment trust which is taxed as a grantor trust. A grantor
trust is not subject to tax at the trust level. The Unit holders
are considered to own the Trust's income and principal as though no
trust were in existence. The income of the Trust is deemed to have
been received or accrued by each Unit holder at the time such
income is received or accrued by the Trust and not when distributed
by the Trust.
The Royalties constitute "economic interests" in oil and gas
properties for Federal income tax purposes. Unit holders must
report their share of the revenues of the Trust as ordinary income
from oil and gas royalties and are entitled to claim depletion with
respect to such income.
The Trust has on file technical advice memoranda confirming the tax
treatment described above.
The classification of the Trust's income for purposes of the
passive loss rules may be important to a Unit holder. As a result
of the Tax Reform Act of 1986, royalty income will generally be
treated as portfolio income and will not offset passive losses.
3. EXCESS COSTS
In the calculation of royalty income for the month of June 1998,
costs exceeded revenues for the Waddell Ranch properties underlying
the Waddell Ranch Net Overriding Royalty Conveyance by $396,012.
Such excess costs plus accrued interest must be recovered from
future net proceeds of the underlying Waddell Ranch properties
before these properties can again contribute to Trust royalty
income.
4. CONTINGENCIES
See Item 1 Legal Proceedings concerning the status of litigation
matters.
******
-7-
ITEM 2. TRUSTEE'S DISCUSSION AND ANALYSIS
FORWARD LOOKING INFORMATION
Certain information included in this report contains, and other
materials filed or to be filed by the Trust with the Securities and
Exchange Commission (as well as information included in oral
statements or other written statements made or to be made by the
Trust) may contain or include, forward looking statements within the
meaning of Section 21E of the Securities Exchange Act of 1934, as
amended, and Section 27A of the Securities Act of 1933, as amended.
Such forward looking statements may be or may concern, among other
things, capital expenditures, drilling activity, development
activities, production efforts and volumes, hydrocarbon prices and the
results thereof, and regulatory matters. Such forward looking
statements generally are accompanied by words such as "estimate,"
"expect," "predict," "anticipate," "goal," "should," "assume,"
"believe," or other words that convey the uncertainty of future events
or outcomes.
YEAR 2000 ISSUE
Many existing computer programs use only two digits to identify a year
in the date field. These programs were designed and developed without
considering the impact of the upcoming change in the century. If not
corrected, many computer applications could fail or create erroneous
results by or at the Year 2000. The Year 2000 issue affects virtually
all companies and organizations. If a company or organization does
not successfully address its Year 2000 issues, it may face material
adverse consequences.
The Trust is reliant on the performance of BROG and third party
vendors for the receipt of Royalty income, payment of expenses and
disbursement of distributable income. The Trust has made formal
inquiries to BROG and significant third party vendors to determine the
extent to which the Trust is vulnerable to BROG and third parties'
failure to remediate their own Year 2000 issues. The Trustee can
provide no assurance as to whether BROG and third party vendors will
successfully address the Year 2000 issue. Failing to successfully
address the Year 2000 issue by BROG and third party vendors could have
a material adverse impact on the Trust and its Unit holders.
THREE MONTHS ENDED JUNE 30, 1998 AND 1997
For the quarter ended June 30, 1998, royalty income received by the
Trust amounted to $1,599,573 compared to royalty income of $4,185,854
during the second quarter of 1997. The decrease in royalty income is
primarily due to a decrease in oil and gas prices in the second
quarter of 1998, compared to the second quarter of 1997, as well as an
increase in allocated capital expenditures in the second quarter of
1998. In the calculation of royalty income for the month of June
1998, costs exceeded revenues for the Waddell Ranch properties
underlying the Waddell Ranch Net Overriding Royalty Conveyance by
$396,012. Such excess costs plus accrued interest must be recovered
from future net proceeds of the underlying Waddell Ranch properties
before these properties can again contribute to Trust royalty income.
Interest income for the quarter ended June 30, 1998, was $7,045,
compared to $14,218 during the second quarter of 1997. The decrease
in interest income is attributable primarily to a decrease in funds
available for investment. General and administrative expenses during
the second quarter of 1998 amounted to $148,573, compared to $177,535
during the second quarter of 1997. The decrease in general and
administrative expenses can be attributed primarily to timing
differences in the receipt and payment of these expenses.
These transactions resulted in distributable income for the quarter
ended June 30, 1998, of $1,458,045 or $.031283 per Unit of beneficial
interest. Distributions of $.016830, $.008622 and $.005831 per Unit
were made to Unit holders of record as of April 30, May 30 and
June 30, 1998, respectively. For the second quarter of 1997,
distributable income was $4,022,537 or $.086304 per Unit of beneficial
interest.
-8-
Royalty income for the Trust for the second quarter of the calendar
year is associated with actual oil and gas production for the period
February through April 1998 from the properties from which the Trust's
net overriding royalty interests ("Royalties") were carved. Oil and
gas sales attributable to the Royalties and the properties from which
the Royalties were carved are as follows:
Second Quarter
----------------------
1998 1997
ROYALTIES:
Oil sales (Bbls) 88,938 164,044
Gas sales (Mcf) 252,416 435,264
PROPERTIES FROM WHICH THE ROYALTIES WERE CARVED:
Oil:
Total oil sales (Bbls) 468,233 452,078
Average per day (Bbls) 5,261 5,080
Average price per Bbl $12.71 $19.38
Gas:
Total gas sales (Mcf) 1,755,962 1,731,800
Average per day (Mcf) 19,730 19,458
Average price per Mcf $ 2.15 $ 2.39
The posted price of oil decreased for the second quarter of 1998,
compared to the second quarter of 1997, resulting in an average price
per barrel of $12.71, compared to $19.38 in the second quarter of
1997. The Trust has been advised by BROG that for the period
August 1, 1993, through June 30, 1998, the oil from the Waddell Ranch
properties was being sold under a competitive bid to a third party.
The decrease in the average price of gas from $2.39 in the second
quarter of 1997 to $2.15 in the second quarter of 1998 is primarily
the result of a decrease in the spot prices of natural gas.
Since the oil and gas sales attributable to the Royalties are based on
an allocation formula that is dependent on such factors as price and
cost (including capital expenditures), the production amounts in the
Royalties section of the above table do not provide a meaningful
comparison. The oil and gas sales from the properties from which the
Royalties are carved were relatively unchanged for the applicable
period in 1998 compared to 1997.
Capital expenditures for drilling, remedial and maintenance activities
on the Waddell Ranch properties during the second quarter of 1998
totaled $4.5 million as compared to $3.9 million for the second
quarter of 1997. BROG has informed the Trust that the 1998 capital
expenditures budget is $17.6 million for the Waddell Ranch properties,
of which $7.5 million has been expended through the second quarter of
1998. The total amount of capital expenditures for 1997 was $11.8
million.
The Trust has been advised that there were 20 gross (7 net) wells
completed during the three months ended June 30, 1998, and there were
21 gross (8.125 net) wells in progress on the Waddell Ranch
properties. For the three months ended June 30, 1997, there were 2
gross (.5 net) wells completed and there were 17 gross (6.875 net)
wells in progress.
Lease operating expense and property taxes totaled $3.8 million for
the second quarter of 1998, compared to $3.3 million in the second
quarter of 1997. This increase is primarily attributable to an
increase in lease operating expense on the Waddell Ranch properties
due to an increased number of wells operated.
-9-
SIX MONTHS ENDED JUNE 30, 1998 AND 1997
For the six months ended June 30, 1998, royalty income received by the
Trust amounted to $6,852,540 compared to royalty income of $12,890,261
for the six months ended June 30, 1997. The decrease in royalty
income is primarily due to a decrease in oil and gas prices in the
first six months of 1998, compared to the first six months in 1997, as
well as an increase in allocated capital expenditures in the first six
months of 1998. In the calculation of royalty income for the month of
June 1998, costs exceeded revenues for the Waddell Ranch properties
underlying the Waddell Ranch Net Overriding Royalty Conveyance by
$396,012. Such excess costs plus accrued interest must be recovered
from future net proceeds of the underlying Waddell Ranch properties
before these properties can again contribute to Trust royalty income.
Included in the distributable income for March 1998 was approximately
$1.1 million which represented the Trust's portion of an approximate
$1.5 million severance tax refund received from the State of Texas by
BROG, operator of record of the Waddell Ranch properties in Crane
County, Texas. Interest income for the six months ended June 30, 1998
was $17,913 compared to $25,539 during the six months ended June 30,
1997. The decrease in interest income is attributable primarily to a
decrease in funds available for investment. General and
administrative expenses for the six months ended June 30, 1998 were
$273,002. During the six months ended June 30, 1997, general and
administrative expenses were $321,540. The decrease in general and
administrative expenses is primarily due to timing differences in the
receipt and payment of these expenses.
These transactions resulted in distributable income for the six months
ended June 30, 1998 of $6,597,451 or $.141550 per Unit. For the six
months ended June 30, 1997, distributable income was $12,594,260 or
$.270211 per Unit.
Royalty income for the Trust for the period ended June 30, 1998 is
associated with actual oil and gas production for the period November
1997 through April 1998 from the properties from which the Royalties
were carved. Oil and gas production attributable to the Royalties and
the properties from which the Royalties were carved are as follows:
First Six Months
----------------------
1998 1997
ROYALTIES:
Oil sales (Bbls) 258,828 422,261
Gas sales (Mcf) 1,015,594 1,354,339
PROPERTIES FROM WHICH THE ROYALTIES WERE CARVED:
Oil:
Total oil sales (Bbls) 903,710 891,313
Average per day (Bbls) 4,993 4,951
Average price per Bbl $14.33 $21.24
Gas:
Total gas sales (Mcf) 3,538,550 3,503,081
Average per day (Mcf) 19,550 19,462
Average price per Mcf $ 2.32 $ 2.96
The average price of oil decreased during the six months ended
June 30, 1998, compared to the same period in 1997, $14.33 per barrel
as compared to $21.24 per barrel. The decrease in the average price
of oil is primarily due to decreases in the posted price for oil. The
decrease in the average price of gas from $2.96 per Mcf for the six
months ended June 30, 1997 to $2.32 per Mcf for the six months ended
June 30, 1998 is primarily the result of a decrease in the spot prices
of natural gas.
-10-
Since the oil and gas sales attributable to the Royalties are based on
an allocation formula that is dependent on such factors as price and
cost (including capital expenditures), the production amounts in the
Royalties section of the above table do not provide a meaningful
comparison. The oil and gas sales from the properties from which the
Royalties are carved were relatively unchanged for the applicable
period of 1998 compared to 1997.
The Trust has been advised that 36 gross (13.62 net) productive oil
wells on the Waddell Ranch properties were drilled and completed
during the six months ended June 30, 1998, and that 3 gross (.5 net)
productive oil wells on the Waddell Ranch properties were drilled and
completed during the six months ended June 30, 1997. Capital
expenditures for the Waddell Ranch properties for the six months ended
June 30, 1998 totaled $7.5 million compared to $5.1 million for the
same period in 1997. BROG has previously advised the Trust that the
1998 capital expenditures budget for the Waddell Ranch properties is
$17.6 million.
Lease operating expense and property taxes totaled $6.6 million in
1998 compared to $7.0 million in 1997. The decrease in lease
operating expense is primarily attributable to timing in the payment
of certain expenses pertaining to Waddell Ranch field operations.
-11-
CALCULATION OF ROYALTY INCOME
The Trust's royalty income is computed as a percentage of the net
profit from the operation of the properties in which the Trust owns
net overriding royalty interests. These percentages of net profits
are 75% and 95% in the case of the Waddell Ranch properties and the
Texas Royalty properties, respectively. Royalty income received by
the Trust for the three months ended June 30, 1998 and 1997
respectively, were computed as shown in the table below:
Three Months Ended June 30,
------------------------------------------------------------
1998 1997
---------------------------- -----------------------------
Waddell Texas Waddell Texas
Ranch Royalty Ranch Royalty
Properties Properties Properties Properties
Gross proceeds of sales from
properties from which the net
overriding royalties were carved:
Oil proceeds $4,602,226 $1,347,379 $6,435,433 $2,325,184
Gas proceeds 3,277,505 500,433 3,505,691 633,825
---------- --------- --------- ---------
Total 7,879,731 1,847,812 9,941,124 2,959,009
---------- --------- --------- ---------
Less:
Severance tax:
Oil 191,734 50,070 263,982 88,638
Gas (29,388) 25,837 216,617 34,096
Lease operating expense and
property tax:
Oil and gas 3,584,147 201,982 3,348,789 192,030
Capital expenditures 4,517,059 3,879,974
--------- -------- --------- --------
Total 8,263,552 277,889 7,709,362 314,763
--------- -------- --------- --------
Net profits (383,821) 1,569,923 2,231,762 2,644,246
Net overriding royalty interests 75% 95% 75% 95%
--------- --------- -------- ---------
(287,866) 1,491,427 1,673,821 2,512,033
Less: excess cost over revenues (a) 396,012
--------- --------- --------- ----------
Royalty income $ 108,146 $1,491,427 $1,673,821 $2,512,033
========== ========== ========== ==========
-12-
<FN>
(a) In calculating Trust royalty income for the month of June 1998,
costs exceeded revenues by $396,012 for the Waddell Ranch
properties underlying the Waddell Ranch Net Overriding Royalty
Conveyance, dated November 1, 1980. Excess costs from one
conveyance cannot reduce royalty income computed under another
conveyance. Therefore, cumulative excess costs plus accrued
interest must be recovered from future net proceeds of the
underlying Waddell Ranch properties before these properties can
again contribute to Trust royalty income.
</FN>
ITEM 3. QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
-13-
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
As has been previously reported, the Trust was
notified in the third quarter of 1996 of the
settlement of a class action lawsuit pending in the
270th District Court of Harris County, Texas (the
"Court"), Cause No. 92-026182 styled Caroline Altheide
and Langdon Harrison v. Meridian Oil Inc., Meridian
Oil Holding Inc., Meridian Oil Trading Inc., Meridian
Oil Production Inc., Southland Royalty Company, El
Paso Production Company, Meridian Oil Hydrocarbons
Inc., Meridian Oil Gathering Inc., Meridian Oil
Services Inc., and Edward Parker ("Class Action"), in
which the Trust is a class member, remains the subject
of an appeal filed by certain other class members
("Objectors"). The Trustee has been advised that the
petition for review filed by the Objectors with the
Texas Supreme Court was denied on June 23, 1998 and
that a motion for rehearing has not been filed. One
of the conditions set forth in the settlement
agreement relating to the Class Action is that no
settlement proceeds relating to such settlement may be
distributed unless and until the judgment approving
the settlement is no longer subject to further appeal
and, if there is an appeal, not unless and until such
judgment is affirmed or such appeal is dismissed and
the time for any further proceedings in the appellate
court of last resort has expired. Accordingly, there
can be no distribution of settlement funds unless and
until the Objectors have no further appellate
procedures available. As a result of such appeal, no
distribution of settlement proceeds has been made to
the Trust and the Trustee does not know if or when the
Trust will receive proceeds of such settlement.
Items 2 through 4.
Not applicable.
Item 5. Other
At the close of business on May 6, 1998, the Trustee merged
with and into NationsBank, N.A. The Trustee is now
NationsBank, N.A., successor by merger to NationsBank of
Texas, N.A. as Trustee.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
(4)(a) Permian Basin Royalty Trust Indenture dated November
3, 1980, between Southland Royalty Company (now
Burlington Resources Oil & Gas Company) and The
First National Bank of Fort Worth (now NationsBank,
N.A.), as Trustee, heretofore filed as Exhibit
(4)(a) to the Trust's Annual Report on Form 10-K to
the Securities and Exchange Commission for the
fiscal year ended December 31, 1980 is incorporated
herein by reference.
(4)(b) Net Overriding Royalty Conveyance (Permian Basin
Royalty Trust) from Southland Royalty Company (now
Burlington Resources Oil & Gas Company) to The First
National Bank of Fort Worth (now NationsBank, N.A.),
as Trustee, dated November 3, 1980 (without
Schedules), heretofore filed as Exhibit (4)(b) to
the Trust's Annual Report on Form 10-K to the
Securities and Exchange Commission for the fiscal
year ended December 31, 1980 is incorporated herein
by reference.
-14-
(4)(c) Net Overriding Royalty Conveyance (Permian Basin
Royalty Trust - Waddell Ranch) from Southland
Royalty Company (now Burlington Resources Oil & Gas
Company) to The First National Bank of Fort Worth
(now NationsBank, N.A.), as Trustee, dated November
3, 1980 (without Schedules), heretofore filed as
Exhibit (4)(c) to the Trust's Annual Report on Form
10-K to the Securities and Exchange Commission for
the fiscal year ended December 31, 1980 is
incorporated herein by reference.
(27) Financial Data Schedule
(b) Reports on Form 8-K
There were no reports on Form 8-K filed during the quarter
ended June 30, 1998.
-15-
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf
by the undersigned thereunto duly authorized.
NATIONSBANK, N.A.
TRUSTEE FOR THE
PERMIAN BASIN ROYALTY TRUST
By /s/ Eric F. Hyden
--------------------------------
Eric F. Hyden
Vice President
Date: August 13, 1998
(The Trust has no directors or executive officers.)
-16-
INDEX TO EXHIBITS
Sequentially
Exhibit Numbered
Number Exhibit Page
(4)(a) Permian Basin Royalty Trust Indenture dated
November 3, 1980, between Southland Royalty
Company (now Burlington Resources Oil & Gas
Company) and The First National Bank of Fort
Worth (now NationsBank, N.A.), as Trustee,
heretofore filed as Exhibit (4)(a) to the
Trust's Annual Report on Form 10-K to the
Securities and Exchange Commission for the
fiscal year ended December 31, 1980 is
incorporated herein by reference.*
(b) Net Overriding Royalty Conveyance (Permian
Basin Royalty Trust) from Southland Royalty
Company (now Burlington Resources Oil & Gas
Company) to The First National Bank of Fort
Worth (now NationsBank, N.A.), as Trustee,
dated November 3, 1980 (without Schedules),
heretofore filed as Exhibit (4)(b) to the
Trust's Annual Report on Form 10-K to the
Securities and Exchange Commission for the
fiscal year ended December 31, 1980 is
incorporated herein by reference.*
(c) Net Overriding Royalty Conveyance (Permian
Basin Royalty Trust - Waddell Ranch) from
Southland Royalty Company (now Burlington
Resources Oil & Gas Company) to The First
National Bank of Fort Worth (now
NationsBank, N.A.), as Trustee, dated
November 3, 1980 (without Schedules),
heretofore filed as Exhibit (4)(c) to the
Trust's Annual Report on Form 10-K to the
Securities and Exchange Commission for the
fiscal year ended December 31, 1980 is
incorporated herein by reference. *
(27) Financial Data Schedule **
* A copy of this Exhibit is available to any Unit holder, at the
actual cost of reproduction, upon written request to the Trustee,
NationsBank, N.A., P.O. Box 1317, Fort Worth, Texas 76101.
** Filed herewith.