##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
 FORM 10-K/A  (Mark One) þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the fiscal year
ended December 31, 2004
 OR o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 Commission file number 1-8033 PERMIAN BASIN ROYALTY TRUST (Exact Name of Registrant as Specified in the Permian Basin Royalty Trust Indenture)
 Texas
    
    75-6280532(State or Other Jurisdiction of
    
    (I.R.S. Employer Identification No.)Incorporation or Organization)
 Bank of America, N.A.
Trust Department
P.O. Box 830650
Dallas, Texas 75202
(Address of Principal Executive
Offices; Zip Code) (Registrants Telephone Number, Including Area Code)
(214) 209-2400 SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT: Name of Each Exchange onTitle of Each Class
    
    Which RegisteredUnits of Beneficial Interest
    
    New York Stock Exchange
 SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:None 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
(or for such shorter period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days. Yes  þ  No o Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation
S-K is not contained herein, and will not be contained, to the best of registrants knowledge, in
definitive proxy or information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K.  þ Indicate by check mark whether the registrant is an accelerated filed (as defined in Rule
12b-2 of the Securities Exchange Act of 1934). Yes  þ  No o The aggregate market value of the registrants units of beneficial interest outstanding (based
on the closing sale price on the New York Stock Exchange) held by non-affiliates of the registrant
as of the last business day of the registrants most recently completed second fiscal quarter was
approximately $172,611,669. At March 1, 2005, there were 46,608,796 Units of Beneficial Interest of the Trust outstanding. DOCUMENTS INCORPORATED
BY REFERENCE: None




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TABLE OF CONTENTS  PART IItem 2. PropertiesPART IVItem 15. Exhibits, Financial Statement SchedulesSIGNATUREINDEX TO EXHIBITSConsent of Cawley, Gillespy & Associates, Inc.Certification Required by Rule 13a-14(a)/15d-14(a)Certification Required by Section 906    Table of Contents  EXPLANATORY NOTE This Amendment No. 2 on Form 10-K/A filed by the Trust for the year ended December 31, 2004
that was originally filed on March 16, 2005, as amended by Amendment No. 1 filed on April 6, 2005
(the Original 10-K) is being filed solely to revise a typographical error in the Original 10-K. Part I, Item 2, Properties, Page 8 of the Original 10-K has been revised to correct
typographical errors with respect to two numbers in the Total Gas (Mcf) column of the table
presenting a reconciliation of proved reserve quantities from January 1, 2002 to December 31, 2004.
The total revisions of previous estimates for Gas (Mcf) from
December 31, 2003 to December 31, 2004 has been modified from 3,673 to 3,783 and the
corresponding total for Gas (Mcf) as of December 31, 2004 has been modified from 27,985 to 27,785. This Amendment No. 2 on Form 10-K/A continues to speak as of the date of the Original 10-K,
and we have not updated the disclosure contained herein to reflect any events that occurred at a
later date. All information contained in this Amendment No. 2 on Form 10-K/A is subject to
updating and supplementing as provided in our periodic reports filed with the Securities and
Exchange Commission subsequent to the date of the filing of the Original 10-K.




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PART I 
 Item 2. Properties The net overriding royalties conveyed to the Trust (the Royalties) include: (1) a 75% net
overriding royalty carved out of Southland Royalty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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. References below to
net wells and acres are to the interests of BROG (from which the Royalties were carved) in the
gross wells and acres. The following information under this Item 2 is based upon data and information, including
audited computation statements, furnished to the Trustee by BROG and Riverhill. 3




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PRODUCING ACREAGE, WELLS AND DRILLING Waddell Ranch Properties. The Waddell Ranch properties consist of 76,922 gross (33,246 net)
producing acres. A majority of the proved reserves are attributable to six fields: Dune, Sand
Hills (Judkins), Sand Hills (McKnight), Sand Hills (Tubb), University-Waddell (Devonian) and
Waddell. At December 31, 2004, the Waddell Ranch properties contained 776 gross (345 net)
productive oil wells, 197 gross (93 net) productive gas wells and 318 gross (138 net) injection
wells. BROG is operator of record of the Waddell Ranch properties. All field, technical and
accounting operations have been contracted by an agreement between the working interest owners and
Schlumberger Integrated Project Management (IPM) but remain under the direction of BROG. The Waddell Ranch properties are mature producing properties, and all of the major oil fields
are currently being waterflooded for the purpose of facilitating enhanced recovery. Proved
reserves and estimated future net revenues attributable to the properties are included in the
reserve reports summarized below. BROG does not own the full working interest in any of the tracts
constituting the Waddell Ranch properties and, therefore, implementation of any development
programs will require approvals of other working interest holders as well as BROG. In addition,
implementation of any development programs will be dependent upon oil and gas prices currently
being received and anticipated to be received in the future. There were 4 gross (2 net) wells
drilled and completed on the Waddell Ranch properties during 2004. At December 31, 2004 there were
no wells in progress on the Waddell Ranch properties. There were 2 gross (.88 net) wells drilled
and completed on the Waddell Ranch properties during 2003. At December 31, 2003 there were no
wells in progress on the Waddell Ranch properties. During 2002 there were 4 gross (1.75 net)
wells drilled and completed on the Waddell Ranch properties. At December 31, 2002 there were no
wells in progress on the Waddell Ranch properties. BROG has advised the Trustee that the total amount of capital expenditures for 2004 with
regard to the Waddell Ranch properties totaled $13.2 million. Capital expenditures include the
cost of remedial and maintenance activities. This amount spent is approximately $.061 million less
than the budgeted amount projected by BROG for 2004. BROG has advised the Trustee that the capital
expenditures budget for 2005 totals approximately $14.3 million, of which approximately $3.5
million (gross) is attributable to the 2005 drilling program, and $9.7 million (gross) to workovers
and recompletions. Accordingly, there is a minor 8% increase in capital expenditures for 2005 as
compared with the 2004 capital expenditures. Texas Royalty Properties. The Texas Royalty properties consist of royalty interests in mature
producing oil fields, such as Yates, Wasson, Sand Hills, East Texas, Kelly-Snyder, Panhandle
Regular, N. Cowden, Todd, Keystone, Kermit, McElroy, Howard-Glasscock, Seminole and others. The
Texas Royalty properties contain approximately 303,000 gross (approximately 51,000 net) producing
acres. Detailed information concerning the number of wells on royalty properties is not generally
available to the owners of royalty interests. Consequently, an accurate count of the number of
wells located on the Texas Royalty properties cannot readily be obtained. In February 1997, BROG sold its interests in the Texas Royalty properties that are subject to
the Net Overriding Royalty Conveyance to the Trust dated effective November 1, 1980 (Texas Royalty
Conveyance) to Riverhill Energy Corporation (Riverhill Energy), which was then a wholly-owned
subsidiary of Riverhill Capital Corporation (Riverhill Capital) and an affiliate of Coastal
Management Corporation (CMC). At the time of such sale, Riverhill Capital was a privately owned
Texas corporation with offices in Bryan and Midland, Texas. The Trustee was informed by BROG that,
as required by the Texas Royalty Conveyance, Riverhill Energy succeeded to all of the requirements
upon and the responsibilities of BROG under the Texas Royalty Conveyance with regard to the Texas
Royalty properties. BROG and Riverhill Energy further advised the Trustee that all accounting
operations pertaining to the Texas Royalty properties were being performed by CMC under the
direction of Riverhill Energy. The Trustee has been advised, effective April 1, 1998, Schlumberger Technology Corporation
(STC) acquired all of the shares of stock at Riverhill Capital. Prior to the acquisition by STC,
CMC and 4




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Riverhill Energy were wholly-owned subsidiaries of Riverhill Capital. The Trustee has further
been advised, in accordance with the STC acquisition of Riverhill Capital, the shareholders of
Riverhill Capital acquired ownership of all shares of stock of Riverhill Energy. Effective January
1, 2001 CMC merged into STC. Thus, the ownership in the Texas Royalty properties remained in
Riverhill Energy. The Trustee has been advised as of May 1, 2000, the accounting operations, pertaining to the
Texas Royalty properties, were being transferred from STC to Riverhill Energy. STC currently
conducts all field, technical and accounting operations, on behalf of BROG, with regard to the
Waddell Ranch properties. STC currently provides summary reporting of monthly results for both the
Texas Royalty properties and the Waddell Ranch properties. Well Count and Acreage Summary. The following table shows as of December 31, 2004, the gross
and net producing wells and acres for the BROG and Riverhill interests. The net wells and acres
are determined by multiplying the gross wells or acres by the BROG and Riverhill interests Owners
working interest in the wells or acres. There is very little undeveloped acreage held by the
Trust, and all this is held by production. NUMBER OF WELLS
    
    
    ACRESGross
    
    
    Net
    
    
    Gross
    
    
    NetBROG and Riverhill Interests
    
    
    1,291
    
    
    
    576
    
    
    
    76,922
    
    
    
    33,246
 OIL AND GAS PRODUCTION The Trust recognizes production during the month in which the related distribution is
received. Production of oil and gas attributable to the Royalties and the Underlying Properties
and the related average sales prices attributable to the Underlying Properties for the three years
ended December 31, 2004, excluding portions attributable to the adjustments discussed below, were
as follows: Waddell Ranch
    
    
    Texas RoyaltyProperties
    
    
    Properties
    
    
    Total2004
    
    
    2003
    
    
    2002
    
    
    2004
    
    
    2003
    
    
    2002
    
    
    2004
    
    
    2003
    
    
    2002Royalties:ProductionOil (barrels)
    
    
    471,441
    
    
    
    395,226
    
    
    
    426,719
    
    
    
    307,611
    
    
    
    304,176
    
    
    
    301,594
    
    
    
    779,052
    
    
    
    699,402
    
    
    
    728,313Gas (Mcf)
    
    
    2,642,599
    
    
    
    2,510,904
    
    
    
    2,440,678
    
    
    
    602,518
    
    
    
    650,017
    
    
    
    751,497
    
    
    
    3,245,117
    
    
    
    3,160,921
    
    
    
    3,192,175Underlying Properties:ProductionOil (barrels)
    
    
    873,466
    
    
    
    858,225
    
    
    
    922,766
    
    
    
    349,113
    
    
    
    342,619
    
    
    
    350,157
    
    
    
    1,222,579
    
    
    
    1,200,844
    
    
    
    1,272,923Gas (Mcf)
    
    
    5,291,295
    
    
    
    5,509,899
    
    
    
    5,310,364
    
    
    
    684,572
    
    
    
    734,057
    
    
    
    878,651
    
    
    
    5,975,867
    
    
    
    6,243,956
    
    
    
    6,189,015Average PriceOil/barrel
    
    $
    37.13
    
    
    $
    28.25
    
    
    $
    22.44
    
    
    $
    34.89
    
    
    $
    27.70
    
    
    $
    22.12
    
    
    $
    36.25
    
    
    $
    27.97
    
    
    $
    22.31Gas/Mcf
    
    $
    5.47
    
    
    $
    4.61
    
    
    $
    2.80
    
    
    $
    5.79
    
    
    $
    4.92
    
    
    $
    2.55
    
    
    $
    5.53
    
    
    $
    4.69
    
    
    $
    2.74
 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),
production amounts do not necessarily provide a meaningful comparison. Waddell Ranch properties lease operating expense for 2004 was $21.9 million (gross) and $9.4
million (net). The lease operating expense decreased 2% from 2003 to 2004 primarily because of a
decrease in electrical consumption and a reduction of IPM management fee. Waddell Ranch lifting
cost on a barrel of oil equivalent (BOE) basis was $5.32/bbl. The lifting cost on a barrel of
total fluid produced (BTF) basis was $.44/bbl. 5




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PRICING INFORMATION Reference is made to the caption entitled Regulation for information as to federal
regulation of prices of natural gas. The following paragraphs provide information regarding sales
of oil and gas from the Waddell Ranch properties. As a royalty owner, Riverhill is furnished
detailed information regarding sales of oil and gas from the Texas Royalty properties. Oil. The Trustee has been advised by BROG that for the period August 1, 1993 through November
1, 2005, the oil from the Waddell Ranch properties was and will be sold under a competitive bid to
independent third parties. Gas. The gas produced from the Waddell Ranch properties is processed through a natural gas
processing plant and sold at the tailgate of the plant. Plant products are marketed by Burlington
Resources Trading Inc., an indirect subsidiary of BRI. The processor of the gas (Warren
Petroleum Company, L.P.) receives 15% of the liquids and residue gas as a fee for gathering,
compression, treating and processing the gas. OIL AND GAS RESERVES The following are definitions adopted by the Securities and Exchange Commission (SEC) and
the Financial Accounting Standards Board which are applicable to terms used within this Item: Proved reserves are those estimated quantities of crude oil, natural gas and natural gas
liquids, which, upon analysis of geological and engineering data, appear with reasonable certainty
to be recoverable in the future from known oil and gas reservoirs under existing economic and
operating conditions. Proved developed reserves are those proved reserves which can be expected to be recovered
through existing wells with existing equipment and operating methods. Proved undeveloped reserves are those proved reserves which are expected to be recovered
from new wells on undrilled acreage, or from existing wells where a relatively major expenditure is
required. Estimated future net revenues are computed by applying current prices of oil and gas (with
consideration of price changes only to the extent provided by contractual arrangements and allowed
by federal regulation) to estimated future production of proved oil and gas reserves as of the date
of the latest balance sheet presented, less estimated future expenditures (based on current costs)
to be incurred in developing and producing the proved reserves, and assuming continuation of
existing economic conditions. Estimated future net revenues are sometimes referred to herein as estimated future net cash
flows. Present value of estimated future net revenues is computed using the estimated future net
revenues and a discount factor of 10%. The independent petroleum engineers reports as to the proved oil and gas reserves
attributable to the Royalties conveyed to the Trust were obtained from Cawley, Gillespie &
Associates, Inc. The following table presents a reconciliation of proved reserve quantities from
January 1, 2002 through December 31, 2004 (in thousands): 6




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Waddell Ranch
    
    
    Texas RoyaltyProperties
    
    
    Properties
    
    
    TotalOil
    
    
    Gas
    
    
    Oil
    
    
    Gas
    
    
    Oil
    
    
    Gas(Bbls)
    
    
    (Mcf)
    
    
    (Bbls)
    
    
    (Mcf)
    
    
    (Bbls)
    
    
    (Mcf)January 1, 2002
    
    
    3,774
    
    
    
    20,122
    
    
    
    3,603
    
    
    
    5,795
    
    
    
    7,377
    
    
    
    25,917Extensions, discoveries, and
other additions
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0Revisions of previous estimates
    
    
    700
    
    
    
    5,259
    
    
    
    138
    
    
    
    521
    
    
    
    837
    
    
    
    5,780Production
    
    
    (427
    )
    
    
    (2,441
    )
    
    
    (302
    )
    
    
    (751
    )
    
    
    (728
    )
    
    
    (3,192
    )December 31, 2002
    
    
    4,047
    
    
    
    22,940
    
    
    
    3,439
    
    
    
    5,565
    
    
    
    7,486
    
    
    
    28,505Extensions, discoveries, and
other additions
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0Revisions of previous estimates
    
    
    (121
    )
    
    
    1,393
    
    
    
    241
    
    
    
    510
    
    
    
    120
    
    
    
    1,903Production
    
    
    (395
    )
    
    
    (2,511
    )
    
    
    (304
    )
    
    
    (650
    )
    
    
    (699
    )
    
    
    (3,161
    )December 31, 2003
    
    
    3,531
    
    
    
    21,822
    
    
    
    3,376
    
    
    
    5,425
    
    
    
    6,907
    
    
    
    27,247Extensions, discoveries, and
other additions
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0Revisions of previous estimates
    
    
    546
    
    
    
    2,692
    
    
    
    434
    
    
    
    1,091
    
    
    
    980
    
    
    
    3,783Production
    
    
    (471
    )
    
    
    (2,643
    )
    
    
    (308
    )
    
    
    (602
    )
    
    
    (779
    )
    
    
    (3,245
    )December 31, 2004
    
    
    3,606
    
    
    
    21,871
    
    
    
    3,502
    
    
    
    5,914
    
    
    
    7,108
    
    
    
    27,785
 Estimated quantities of proved developed reserves of crude oil and natural gas as of
December 31, 2004, 2003 and 2002 were as follows (in thousands): Crude Oil
    
    
    Natural Gas(Bbls)
    
    
    (Mcf)December 31, 2004
    
    
    6,988
    
    
    
    27,545December 31, 2003
    
    
    6,470
    
    
    
    26,475December 31, 2002
    
    
    6,851
    
    
    
    26,927
 The Financial Accounting Standards Board requires supplemental disclosures for oil and gas
producers based on a standardized measure of discounted future net cash flows relating to proved
oil and gas reserve quantities. Under this disclosure, future cash inflows are computed by
applying year-end prices of oil and gas relating to the enterprises proved reserves to the
year-end quantities of those reserves. Future price changes are only considered to the extent
provided by contractual arrangements in existence at year end. The standardized measure of
discounted future net cash flows is achieved by using a discount rate of 10% a year to reflect the
timing of future cash flows relating to proved oil and gas reserves. Estimates of proved oil and gas reserves are by their very nature imprecise. Estimates of future
net revenue attributable to proved reserves are sensitive to the unpredictable prices of oil and
gas and other variables. The 2004, 2003 and 2002 change in the standardized measure of discounted future net cash revenues
related to future royalty income from proved reserves attributable to the Royalties discounted at
10% is as follows (in thousands): Waddell Ranch
    
    
    Texas RoyaltyProperties
    
    
    Properties
    
    
    Total2004
    
    
    2003
    
    
    2002
    
    
    2004
    
    
    2003
    
    
    2002
    
    
    2004
    
    
    2003
    
    
    2002January 1
    
    $
    117,755
    
    
    $
    117,234
    
    
    $
    59,283
    
    
    $
    57,796
    
    
    $
    55,972
    
    
    $
    34,519
    
    
    $
    175,551
    
    
    $
    173,206
    
    
    $
    93,802Extensions,
discoveries, and
other additions
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0Accretion of discount
    
    
    11,776
    
    
    
    11,723
    
    
    
    5,928
    
    
    
    5,780
    
    
    
    5,597
    
    
    
    3,452
    
    
    
    17,556
    
    
    
    17,320
    
    
    
    9,380Revisions of
previous estimates
and other
    
    
    57,820
    
    
    
    10,318
    
    
    
    67,650
    
    
    
    31,283
    
    
    
    7,303
    
    
    
    26,205
    
    
    
    89,103
    
    
    
    17,621
    
    
    
    93,855Royalty income
    
    
    (31,337
    )
    
    
    (21,520
    )
    
    
    (15,627
    )
    
    
    (13,680
    )
    
    
    (11,076
    )
    
    
    (8,204
    )
    
    
    (45,017
    )
    
    
    (32,596
    )
    
    
    (23,831
    )December 31
    
    $
    156,014
    
    
    $
    117,755
    
    
    $
    117,234
    
    
    $
    81,179
    
    
    $
    57,796
    
    
    $
    55,972
    
    
    $
    237,193
    
    
    $
    175,551
    
    
    $
    173,206
 7




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Oil and gas prices of $37.90 and $39.07 per barrel and $6.22 and $6.61 per Mcf were used to
determine the estimated future net revenues from the Waddell Ranch properties and the Texas Royalty
properties, respectively, at December 31, 2004. The upward revisions of both reserves and
discounted future net cash flows for the Waddell Ranch properties and the Texas Royalty properties
are primarily due to increase in oil and gas prices from 2003 to 2004. Oil and gas prices of $30.70 and $29.91 per barrel and $4.76 and $4.71 per Mcf were used to
determine the estimated future net revenues from the Waddell Ranch properties and the Texas Royalty
properties, respectively, at December 31, 2003. The upward revisions of both reserves and
discounted future net cash flows for the Waddell Ranch properties and the Texas Royalty properties
were mostly due to increase in oil and gas prices from 2002 to 2003. Oil and gas prices of $31.88 and $28.95 per barrel and $3.80 and $3.79 per Mcf, respectively, were
used to determine the estimated future net revenues from the Waddell Ranch properties and the Texas
Royalty properties, respectively, at December 31, 2002. The upward revisions of both reserves and
discounted future net cash flows for the Waddell Ranch properties and the Texas Royalty properties
were primarily due to increases in oil and gas prices from 2001 to 2002. The following presents estimated future net revenue and the present value of estimated future net
revenue attributable to the Royalties, for each of the years ended December 31, 2004, 2003 and 2002
(in thousands except amounts per Unit): 2004
    
    
    2003
    
    
    2002Estimated
    
    
    Present
    
    
    Estimated
    
    
    Present
    
    
    Estimated
    
    
    PresentFuture Net
    
    
    Value at
    
    
    Future Net
    
    
    Value at
    
    
    Future Net
    
    
    Value atRevenue
    
    
    10%
    
    
    Revenue
    
    
    10%
    
    
    Revenue
    
    
    10%Total ProvedWaddell Ranch properties
    
    $
    257,563
    
    
    $
    156,014
    
    
    $
    200,297
    
    
    $
    117,755
    
    
    $
    204,776
    
    
    $
    117,234Texas Royalty properties
    
    $
    167,402
    
    
    $
    81,179
    
    
    
    120,410
    
    
    
    57,796
    
    
    
    114,777
    
    
    
    55,972Total
    
    $
    424,965
    
    
    $
    237,193
    
    
    $
    320,707
    
    
    $
    175,551
    
    
    $
    319,553
    
    
    $
    173,206
 Reserve quantities and revenues shown in the preceding tables for the Royalties were estimated
from projections of reserves and revenue attributable to the combined BROG, River Hill Energy and
Trust interests in the Waddell Ranch properties and Texas Royalty properties. Reserve quantities
attributable to the Royalties were estimated by allocating to the Royalties a portion of the total
estimated net reserve quantities of the interests, based upon gross revenue less production taxes.
Because the reserve quantities attributable to the Royalties are estimated using an allocation of
the reserves, any changes in prices or costs will result in changes in the estimated reserve
quantities allocated to the Royalties. Therefore, the reserve quantities estimated will vary if
different future price and cost assumptions occur. Proved reserve quantities are estimates based on information available at the time of preparation
and such estimates are subject to change as additional information becomes available. The reserves
actually recovered and the timing of production of those reserves may be substantially different
from the original estimate. Moreover, the present values shown above should not be considered as
the market values of such 8




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oil and gas reserves or the costs that would be incurred to acquire equivalent reserves. A market
value determination would include many additional factors. Detailed information concerning the number of wells on royalty properties is not generally
available to the owner of royalty interests. Consequently, the Registrant does not have
information that would be disclosed by a company with oil and gas operations, such as an accurate
account of the number of wells located on the above royalty properties, the number of exploratory
or development wells drilled on the above royalty properties during the periods presented by this
report, or the number of wells in process or other present activities on the above royalty
properties, and the Registrant cannot readily obtain such information. REGULATION Many aspects of the production, pricing, transportation and marketing of crude oil and natural gas
are regulated by federal and state agencies. Legislation affecting the oil and gas industry is
under constant review for amendment or expansion, frequently increasing the regulatory burden on
affected members of the industry. Exploration and production operations are subject to various types of regulation at the federal,
state and local levels. Such regulation includes requiring permits for the drilling of wells,
maintaining bonding requirements in order to drill or operate wells, and regulating the location of
wells, the method of drilling and casing wells, the surface use and restoration of properties upon
which wells are drilled and the plugging and abandonment of wells. Natural gas and oil operations
are also subject to various conservation laws and regulations that regulate the size of drilling
and spacing units or proration units and the density of wells which may be drilled and unitization
or pooling of oil and gas properties. In addition, state conservation laws establish maximum
allowable production from natural gas and oil wells, generally prohibit the venting or flaring of
natural gas and impose certain requirements regarding the ratability of production. The effect of
these regulations is to limit the amounts of natural gas and oil that can be produced, potentially
raise prices, and to limit the number of wells or the locations which can be drilled. Federal Natural Gas Regulation The Federal Energy Regulatory Commission (the FERC) is primarily responsible for federal
regulation of natural gas. The interstate transportation and sale for resale of natural gas is
subject to federal governmental regulation, including regulation of transportation and storage
tariffs and various other matters, by FERC. Wellhead sales of domestic natural gas are not subject
to regulation. Consequently, sales of natural gas may be made at market prices, subject to
applicable contract provisions. Sales of natural gas are affected by the availability, terms and cost of transportation. The price
and terms for access to pipeline transportation remain subject to extensive federal and state
regulation. Several major regulatory changes have been implemented by Congress and the FERC from
1985 to the present that affect the economics of natural gas production, transportation, and sales.
In addition, the FERC continues to promulgate revisions to various aspects of the rules and
regulations affecting those segments of the natural gas industry, most notably interstate natural
gas transmission companies, that remain subject to the FERCs jurisdiction. These initiatives may
also affect the intrastate transportation of gas under certain circumstances. The stated purpose
of many of these regulatory changes is to promote competition among the various sectors of the
natural gas industry and these initiatives generally reflect more light-handed regulation of the
natural gas industry. The ultimate impact of the rules and regulations issued by the FERC since
1985 cannot be predicted. In addition, many aspects of these regulatory developments have not
become final but are still pending judicial and FERC final decisions. New proposals and proceedings that might affect the natural gas industry are considered from time
to time by Congress, the FERC, state regulatory bodies and the courts. The Trust cannot predict
when or if any such proposals might become effective, or their effect, if any, on the Trust. The
natural gas industry historically has been very heavily regulated; therefore, there is no assurance
that the less stringent regulatory approach recently pursued by the FERC and Congress will
continue. 9




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Sales of crude oil, condensate and gas liquids are not currently regulated and are made at market
prices. Crude oil prices are affected by a variety of factors. Since domestic crude price
controls were lifted in 1981, the principal factors influencing the prices received by producers of
domestic crude oil have been the pricing and production of the members of the Organization of
Petroleum Export Countries (OPEC). State Regulation The various states regulate the production and sale of oil and natural gas, including imposing
requirements for obtaining drilling permits, the method of developing new fields, the spacing and
operation of wells and the prevention of waste of oil and gas resources. The rates of production
may be regulated and the maximum daily production allowables from both oil and gas wells may be
established on a market demand or conservation basis, or both. Other Regulation The petroleum industry is also subject to compliance with various other federal, state and local
regulations and laws, including, but not limited to, environmental protection, occupational safety,
resource conservation and equal employment opportunity. The Trustee does not believe that
compliance with these laws by the operating parties will have any material adverse effect on Unit
holders. 10




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PART IV 
 Item 15. Exhibits, Financial Statement Schedules The following documents are filed as a part of this Report: Exhibits ExhibitNumber
    
    
    
    Exhibit(4)(a)
    
    
    
    Permian Basin Royalty Trust Indenture dated November 3, 1980,
between Southland Royalty Company and The First National Bank of Fort
Worth (now Bank of America, 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 to The First National Bank of Fort Worth
(now Bank of America, 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 to The First National
Bank of Fort Worth (now Bank of America, 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.*
 11




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ExhibitNumber
    
    
    
    Exhibit(10)
    
    
    
    Registration Rights Agreement dated as of July 21, 2004 by and
between Burlington Resources, Inc. and Bank of America, N.A., as
trustee of Permian Basin Royalty Trust, heretofore filed as Exhibit
10.1 to the Trusts Quarterly Report on Form 10-Q to the Securities
and Exchange Commission for the quarterly period ended June 30, 2004
is incorporated herein by reference.*(13)
    
    
    
    Registrants Annual Report to security holders for fiscal year ended December 31, 2004,
heretofore filed as Exhibit 13 to the Trusts Annual Report on Form 10-K to the Securities and Exchange Commission for the
fiscal year ended December 31, 2004, is incorporated herein by reference.*(23)
    
    
    
    Consent of Cawley, Gillespie & Associates, Inc., reservoir engineer.**(31.1)
    
    
    
    Certification required by Rule 13a-14(a)/15d-14(a).**(32.1)
    
    
    
    Certification required by Rule 13a-14(b)/15d-14(b) and Section 906
of the Sarbanes-Oxley Act of 2002.**
   *
    
    A copy of this Exhibit is available to any Unit holder, at the actual cost of reproduction,
upon written request to the Trustee, Bank of America, N.A., P.O. Box 830650, Dallas, Texas
75283-0650.**
    
    Filed herewith. 12




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SIGNATURE PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(d) 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. PERMIAN BASIN ROYALTY TRUSTBy:
    BANK OF AMERICA, N.A., Trustee By:
    /s/
Ron E. HooperRon E. HooperSenior Vice President Date: July 25, 2005 (The Trust has no directors or executive officers.) 13




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INDEX TO EXHIBITS EXHIBITNUMBER
    
    
    
    EXHIBIT(4)(a)
    
    
    
    Permian Basin Royalty Trust Indenture dated November 3,
1980, between Southland Royalty Company and The First
National Bank of Fort Worth (now Bank of America, 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 to The First National
Bank of Fort Worth (now Bank of America, 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 to The
First National Bank of Fort Worth (now Bank of America,
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.*(10)
    
    
    
    Registration Rights Agreement dated as of July 21, 2004 by
and between Burlington Resources, Inc. and Bank of America,
N.A., as trustee of Permian Basin Royalty Trust, heretofore
filed as Exhibit 10.1 to the Trusts Quarterly Report on Form
10-Q to the Securities and Exchange Commission for the
quarterly period ended June 30, 2004 is incorporated herein
by reference.*(13)
    
    
    
    Registrants Annual Report to security holders for fiscal year ended December 31, 2004,
heretofore filed as Exhibit 13 to the Trusts Annual Report on Form 10-K to the Securities and Exchange Commission for the
fiscal year ended December 31, 2004, is incorporated herein by reference.*(23)
    
    
    
    Consent of Cawley, Gillespie & Associates, Inc., reservoir
engineer.**(31.1)
    
    
    
    Certification required by Rule 13a-14(a)/15d-14(a).**(32.1)
    
    
    
    Certification required by Rule 13a-14(b)/15d-14(b) and
Section 906 of the Sarbanes-Oxley Act of 2002.**
   *
    
    A copy of this Exhibit is available to any Unit holder, at the actual cost of reproduction, upon
written request to the Trustee, Bank of America, N.A., P.O. Box 830650, Dallas, Texas 75283-0650.**
    
    Filed herewith. 14