8-K: PermRock Royalty Trust Announces Closing of Boaz Energy's Sale to T2S Permian Acquisition II LLC

PermRock Royalty Trust announces the completion of Boaz Energy's sale of its oil and gas properties to T2S Permian Acquisition II LLC.

Summary

• PermRock Royalty Trust announced that Boaz Energy II, LLC completed the sale of its oil and gas properties to T2S Permian Acquisition II LLC on March 31, 2025.
• The sale was contemplated by the Purchase and Sale Agreement entered into on January 10, 2025.
• Under the agreement, the Grantors sold their rights to the Underlying Properties, which remain burdened by the net profits interest.
• Boaz Energy also sold its 4,884,861 Trust units to Ustx LLC, a subsidiary of the Buyer.
• Boaz Energy intends to help facilitate the transfer of operations to the Buyer.
• Argent Trust Company, as trustee, expects to continue administration of the Trust in the ordinary course of business.
• PermRock Royalty Trust is a Delaware statutory trust that owns a net profits interest representing the right to receive 80% of the net profits from the sale of oil and natural gas production from the Underlying Properties.

Sentiment

Score: 6

Explanation: The sentiment is neutral. The announcement confirms a previously announced transaction. There are forward looking statements that are subject to risks.

Positives

• The sale of the properties and units has been completed, removing uncertainty.
• Argent Trust Company will continue administering the Trust in the ordinary course of business, ensuring continuity.

Risks

• The press release contains forward-looking statements that are subject to risks and uncertainties.
• Actual results could differ materially from those contained in any forward-looking statement.
• The transition of operations of the Underlying Properties and processes in support of the administration of the Trust may face unforeseen challenges.

Future Outlook

The Trust expects to continue administration in the ordinary course of business, and Boaz Energy intends to help facilitate the transfer of operations to the Buyer. These statements are forward-looking and subject to risks.

Management Comments

• Boaz Energy reports that it intends to help facilitate the transfer of operations of the Underlying Properties from Boaz Energy to the Buyer.
• Argent Trust Company, as trustee of the Trust (the Trustee), expects to continue administration of the Trust in the ordinary course of business.

Industry Context

The sale reflects ongoing consolidation and acquisition activity in the Permian Basin, a key oil and gas producing region. This transaction indicates continued interest in the region's assets.

Comparison to Industry Standards

• It's difficult to compare this specific transaction to industry standards without knowing the financial details of the sale (price, reserves, production rates, etc.).
• However, similar royalty trust transactions often involve comparing the sale price to metrics like proved reserves, daily production, and discounted cash flow estimates.
• Comparable companies in the royalty trust space include Viper Energy Partners LP (VNOM) and Black Stone Minerals, L.P. (BSM), although their asset bases and royalty structures may differ.

Stakeholder Impact

• Shareholders: The sale could impact future distributions from the Trust, depending on the Buyer's operational efficiency and production levels.
• Employees: The transition of operations may affect employees of Boaz Energy involved in the Underlying Properties.
• Customers and Suppliers: The change in ownership could lead to changes in operational practices and relationships.

Next Steps

• Transfer of operations of the Underlying Properties from Boaz Energy to the Buyer.
• Continued administration of the Trust by Argent Trust Company.

Key Dates

Keywords

PermRock Royalty Trust, Boaz Energy, T2S Permian Acquisition II LLC, oil and gas properties, sale, net profits interest, trust units, Argent Trust Company