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UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
   FORM 10-K (Mark One) [X]
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2003 OR [   ]
    
    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
(State or Other
Jurisdiction of
Incorporation or
Organization)
    
    
    
    75-6280532
(I.R.S. Employer Identification No.)
 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 [ X ] No
[  ] 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. [X] 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 [X] No [  ] 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 $103,268,565. At March 1, 2004, there were 46,608,796 Units of Beneficial Interest of
the Trust outstanding. DOCUMENTS INCORPORATED BY REFERENCE Units of Beneficial Interest at page 1; Trustees Discussion and
Analysis for the Three-Year Period Ended December 31, 2002 at pages 7 through
10; Results of the 4th Quarters of 2002 and 2001 at page 9
; and Statements
of Assets, Liabilities and Trust Corpus, Statements of Distributable Income,
Statements of Changes in Trust Corpus, Notes to Financial Statements and
Independent Auditors Report at page 11 et seq., in registrants Annual
Report to security holders for fiscal year ended December 31, 2002 are
incorporated herein by reference for Item 5, Item 7 and Item 8 of Part II of
this Report.




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TABLE OF CONTENTS  PART IItem 1. BusinessWebsite/SEC FilingsItem 2. PropertiesPRODUCING ACREAGE, WELLS AND DRILLINGOIL AND GAS PRODUCTIONPRICING INFORMATIONOIL AND GAS RESERVESREGULATIONItem 3. Legal ProceedingsItem 4. Submission of Matters to a Vote of Security HoldersPART IIItem 5. Market for Units of the Trust and Related Security Holder MattersItem 6. Selected Financial DataItem 7. Managements Discussion and Analysis of Financial Condition and Results of OperationItem 7A. Quantitative and Qualitative Disclosures about Market RiskItem 8. Financial Statements and Supplementary DataItem 9. Changes in and Disagreements with Accountants on Accounting and Financial DisclosureItem 9A. Controls and ProceduresPART IIIItem 10. Directors and Executive Officers of the RegistrantItem 11. Executive CompensationItem 12. Security Ownership of Certain Beneficial Owners and ManagementItem 13. Certain Relationships and Related TransactionsItem 14. Principal Accounting Fees and ServicesPART IVItem 15. Exhibits, Financial Statement Schedules and Reports on Form 8-KSIGNATURERegistrant's Annual Report to Security HoldersConsent of Cawley, Gillespie & Associates, Inc.Certification Required by Rule 13a-14(a)/15d-14(a)Certification Required by Rule 13a-14(b)/15d-14(b)    Table of Contents  TABLE OF CONTENTS PagePART I
    
    
    1Item 1. Business
    
    
    1Website/SEC Filings
    
    
    3Item 2. Properties
    
    
    3PRODUCING ACREAGE, WELLS AND DRILLING
    
    
    3OIL AND GAS PRODUCTION
    
    
    4PRICING INFORMATION
    
    
    5OIL AND GAS RESERVES
    
    
    5REGULATION
    
    
    8Item 3. Legal Proceedings
    
    
    9Item 4. Submission of Matters to a Vote of Security Holders
    
    
    9PART II
    
    
    9Item 5. Market for Units of the Trust and Related Security Holder Matters
    
    
    9Item 6. Selected Financial Data
    
    
    9Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operation
    
    
    9Item 7A. Quantitative and Qualitative Disclosures about Market
Risk
    
    
    10Item 8. Financial Statements and Supplementary Data
    
    
    10Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    
    
    10Item 9A. Controls and Procedures
    
    
    10PART III
    
    
    10Item 10. Directors and Executive Officers of the Registrant
    
    
    10Item 11. Executive Compensation
    
    
    11Item 12. Security Ownership of Certain Beneficial Owners and Management
    
    
    11Item 13. Certain Relationships and Related Transactions
    
    
    12Item 14. Principal Accounting Fees and Services
    
    
    12PART IV
    
    
    13Item 15. Exhibits, Financial Statement Schedules and Reports on Form 8-K
    
    
    13
 ii




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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. Although the Trustee believes that the expectations reflected in such
forward looking statements are reasonable, such expectations are subject to
numerous risks and uncertainties and the Trustee can give no assurance that
they will prove correct. There are many factors, none of which is within the
Trustees control, that may cause such expectations not to be realized,
including, among other things, factors such as actual oil and gas prices and
the recoverability of reserves, capital expenditures, general economic
conditions, actions and policies of petroleum-producing nations and other
changes in the domestic and international energy markets. Such forward looking
statements generally are accompanied by words such as estimate, expect,
anticipate, goal, should, assume, believe, or other words that convey
the uncertainty of future events or outcomes. 
 PART I 
 Item 1. Business The Permian Basin Royalty Trust (the Trust) is an express trust created
under the laws of the state of Texas by the Permian Basin Royalty Trust
Indenture (the Trust Indenture) entered into on November 3, 1980, between
Southland Royalty Company (Southland Royalty) and The First National Bank of
Fort Worth, as Trustee. Bank of America, N.A., a banking association organized
under the laws of the United States, as the successor of The First National
Bank of Fort Worth, is now the Trustee of the Trust. The principal office of
the Trust (sometimes referred to herein as the Registrant) is located at 901
Main Street, Dallas, Texas (telephone number (214) 209-2400). On October 23, 1980, the stockholders of Southland Royalty approved and
authorized that companys conveyance of net overriding royalty interests
(equivalent to net profits interests) to the Trust for the benefit of the
stockholders of Southland Royalty of record at the close of business on the
date of the conveyance consisting of a 75% net overriding royalty interest
carved out of that companys fee mineral interests in the Waddell Ranch
properties in Crane County, Texas and a 95% net overriding royalty interest
carved out of that companys major producing royalty properties in Texas. The
conveyance of these interests (the Royalties) was made on November 3, 1980,
effective as to production from and after November 1, 1980 at 7:00 a.m. The
properties and interests from which the Royalties were carved and which the
Royalties now burden are collectively referred to herein as the Underlying
Properties. The Underlying Properties are more particularly described under
Item 2. Properties herein. The function of the Trustee is to collect the income attributable to the
Royalties, to pay all expenses and charges of the Trust, and then distribute
the remaining available income to the Unit holders. The Trust is not empowered
to carry on any business activity and has no employees, all administrative
functions being performed by the Trustee. The Royalties constitute the principal asset of the Trust and the
beneficial interests in the Royalties are divided into that number of Units of
Beneficial Interest (the Units) of the Trust equal to the number of shares of
the common stock of Southland Royalty outstanding as of the close of business
on November 3, 1980. Each stockholder of Southland Royalty of record at the
close of business on November 3, 1980, received one Unit for each share of the
common stock of Southland Royalty then held. In 1985, Southland Royalty became a wholly-owned subsidiary of Burlington
Northern Inc. (BNI). In 1988, BNI transferred its natural resource
operations to Burlington Resources Inc. (BRI) as a result of which Southland
Royalty became a wholly-owned indirect subsidiary of BRI. As a result of these
transactions, El Paso Natural Gas Company (El Paso) also became an indirect
subsidiary of BRI. In March 1992, El Paso completed an initial public offering
of 5,750,000 newly issued shares of El Paso common stock, thereby decreasing
BRIs ownership of El Paso to approximately eighty-five percent (85%). On June
30, 1992, BRI distributed all of the shares of El Paso common stock 1




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owned by BRI to BRIs stockholders of record as of June 15, 1992. See
Pricing Information under ITEM 2. Properties herein. Effective January 1, 1996, Southland Royalty, a wholly-owned subsidiary of
Meridian Oil Inc. (MOI) was merged with and into MOI, by which action the
separate corporate existence of Southland Royalty ceased and MOI survived and
succeeded to the ownership of all of the assets of Southland Royalty and has
assumed all of its rights, powers and privileges, and all of its liabilities
and obligations. In 1996, MOI changed its name to Burlington Resources Oil &
Gas Company (BROG). The term net proceeds as used in the above described conveyance means
the excess of gross proceeds received by BROG (the Company) during a
particular period over production costs for such period. Gross proceeds
means the amount received by BROG (or any subsequent owner of the Underlying
Properties) from the sale of the production attributable to the Underlying
Properties, subject to certain adjustments. Production costs means,
generally, costs incurred on an accrual basis in operating the Underlying
Properties, including both capital and non-capital costs; for example,
development drilling, production and processing costs, applicable taxes, and
operating charges. If production costs exceed gross proceeds in any month, the
excess is recovered out of future gross proceeds prior to the making of further
payment to the Trust, but the Trust is not liable for any production costs or
liabilities attributable to these properties and interests or the minerals
produced therefrom. If at any time the Trust receives more than the amount due
from the Royalties, it shall not be obligated to return such overpayment, but
the amounts payable to it for any subsequent period shall be reduced by such
overpaid amount, plus interest, at a rate specified in the conveyance. To the extent it has the legal right to do so, BROG is responsible for
marketing the production from such properties and interests, either under
existing sales contracts or under future arrangements at the best prices and on
the best terms it shall deem reasonably obtainable in the circumstances. BROG
also has the obligation to maintain books and records sufficient to determine
the amounts payable to the Trustee. BROG, however, can sell its interests in
the Underlying Properties. Proceeds from production in the first month are generally received by BROG
in the second month, the net proceeds attributable to the Royalties are paid by
BROG to the Trustee in the third month and distribution by the Trustee to the
Unit holders is made in the fourth month. The identity of Unit holders
entitled to a distribution will generally be determined as of the last business
day of each calendar month (the monthly record date). The amount of each
monthly distribution will generally be determined and announced ten days before
the monthly record date. Unit holders of record as of the monthly record date
will be entitled to receive the calculated monthly distribution amount for each
month on or before ten business days after the monthly record date. The
aggregate monthly distribution amount is the excess of (i) net revenues from
the Trust properties, plus any decrease in cash reserves previously established
for contingent liabilities and any other cash receipts of the Trust over (ii)
the expenses and payments of liabilities of the Trust plus any net increase in
cash reserves for contingent liabilities. Cash held by the Trustee as a reserve for liabilities or contingencies
(which reserves may be established by the Trustee in its discretion) or pending
distribution is placed, at the Trustees discretion, in obligations issued by
(or unconditionally guaranteed by) the United States or any agency thereof,
repurchase agreements secured by obligations issued by the United States or any
agency thereof, or certificates of deposit of banks having a capital surplus
and undivided profits in excess of $50,000,000, subject, in each case, to
certain other qualifying conditions. The income to the Trust attributable to the Royalties is not subject in
material respects to seasonal factors nor in any manner related to or dependent
upon patents, licenses, franchises or concessions. The Trust conducts no
research activities. The Trust has no employees since all administrative
functions are performed by the Trustee. BROG has advised the Trustee that it believes that comparable revenues
could be obtained in the event of a change in purchasers of production. 2




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Website/SEC Filings Our Internet address is http://www.pbt-permianbasintrust.com. You can
review the filings the Trust has made with respect to its annual reports on
Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and
amendments to those reports filed or furnished pursuant to Section 13(a) or
15(d) of the Securities Exchange Act of 1934. We shall post these reports as
soon as reasonably practicable after we electronically file them with, or
furnish them to the SEC. 
 Item 2. Properties The net overriding royalties conveyed to the Trust (the Royalties)
include: (1) a 75% net overriding royalty carved out of BROGs (as successor to
Southland Royalty) 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 BROGs (as successor to Southland Royalty) 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 furnished to the Trustee by BROG. 
 PRODUCING ACREAGE, WELLS AND DRILLING Waddell Ranch Properties. The Waddell Ranch properties consist of 78,175
gross (34,205 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,
2003, the Waddell Ranch properties contained 716 gross (316 net) productive oil
wells, 186 gross (88 net) productive gas wells and 323 gross (141 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 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.
There were 4 gross (1.75 net) wells drilled and completed on the Waddell Ranch
properties during 2002. At December 31, 2002 there were no wells in progress
on the Waddell Ranch properties. During 2001 there were 11 gross (4.87 net)
wells drilled and completed on the Waddell Ranch properties. At December 31,
2001 there were 8 gross (3.75 net) wells in progress on the Waddell Ranch
properties. BROG has advised the Trustee that the total amount of capital expenditures
for 2003 with regard to the Waddell Ranch properties totalled $11.8 million.
Capital expenditures include the cost of remedial and maintenance activities.
This amount spent is approximately $1.8 million more than the budgeted amount
projected by BROG for 2003. BROG has advised the Trustee that the capital
expenditures budget for 2004 totals approximately 13.2 million, of which
approximately $2.0 million is attributable to the 2004 drilling program, and
$11.1 million gross to workovers and recompletions. Accordingly, there is a
12% increase in capital expenditures for 2004 as compared with the 2003 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, 3




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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.
BROG indicated to the Trustee that BROG will work together with CMC and
Riverhill Energy in an effort to assure that various administrative functions
and reporting requirements assumed by Riverhill Energy are met. The Trustee
has been advised that independent auditors representing Riverhill Energy and
CMC are PriceWaterhouseCoopers. 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 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, are 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, 2003, the gross and net producing wells and acres for the Company
Interests. The net wells and acres are determined by multiplying the gross
wells or acres by the Company 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
    
    NetCompany Interests
    
    
    1,221
    
    
    
    544
    
    
    
    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, 2003, excluding portions attributable to the adjustments discussed below,
were as follows: Waddell Ranch
    
    Texas RoyaltyProperties
    
    Properties
    
    Total2003
    
    2002
    
    2001
    
    2003
    
    2002
    
    2001
    
    2003
    
    2002
    
    2001Royalties:ProductionOil (barrels)
    
    
    395,226
    
    
    
    426,719
    
    
    
    577,243
    
    
    
    304,176
    
    
    
    301,594
    
    
    
    363,959
    
    
    
    699,402
    
    
    
    728,313
    
    
    
    941,202Gas (Mcf)
    
    
    2,510,904
    
    
    
    2,440,678
    
    
    
    3,109,734
    
    
    
    650,017
    
    
    
    751,497
    
    
    
    765,852
    
    
    
    3,160,921
    
    
    
    3,192,175
    
    
    
    3,875,586Underlying Properties:ProductionOil (barrels)
    
    
    858,225
    
    
    
    922,766
    
    
    
    1,032,678
    
    
    
    342,619
    
    
    
    350,157
    
    
    
    402,305
    
    
    
    1,200,844
    
    
    
    1,272,923
    
    
    
    1,434,983Gas (Mcf)
    
    
    5,509,899
    
    
    
    5,310,364
    
    
    
    5,572,143
    
    
    
    734,057
    
    
    
    878,651
    
    
    
    869,155
    
    
    
    6,243,956
    
    
    
    6,189,015
    
    
    
    6,441,298Average PriceOil/barrel
    
    $
    28.25
    
    
    $
    22.44
    
    
    $
    25.64
    
    
    $
    27.70
    
    
    $
    22.12
    
    
    $
    23.68
    
    
    $
    27.97
    
    
    $
    22.31
    
    
    $
    24.88Gas/Mcf
    
    $
    4.61
    
    
    $
    2.80
    
    
    $
    4.68
    
    
    $
    4.92
    
    
    $
    2.55
    
    
    $
    4.34
    
    
    $
    4.69
    
    
    $
    2.74
    
    
    $
    4.70
 4




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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 2003 was $22,417,000
(gross) and $8,556,913 (net). The lease operating expense increased 11% from
2002 to 2003 primarily because of 2002 deregulation of electricity markets
which caused a decline of 2002 invoices. Waddell Ranch lifting cost on a
barrel of oil equivalent (BOE) basis was $5.41/bbl. The lifting cost on a
barrel of total fluid produced (BTF) basis was $.44/bbl. 
 PRICING INFORMATION Reference is made to 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, BROG is not 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 June 30, 2004, 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 Hydrocarbons 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%. 5




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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, 2001 through
December 31, 2003 (in thousands): Waddell Ranch
    
    Texas RoyaltyProperties
    
    Properties
    
    TotalOil
    
    Gas
    
    Oil
    
    Gas
    
    Oil
    
    Gas(Bbls)
    
    (Mcf)
    
    (Bbls)
    
    (Mcf)
    
    (Bbls)
    
    (Mcf)January 1, 2001
    
    
    6,311
    
    
    
    30,543
    
    
    
    3,907
    
    
    
    5,948
    
    
    
    10,218
    
    
    
    36,491Extensions, discoveries, and
other additions
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0Revisions of previous estimates
    
    
    (1,960
    )
    
    
    (7,311
    )
    
    
    60
    
    
    
    613
    
    
    
    (1,900
    )
    
    
    (6,698
    )Production
    
    
    (577
    )
    
    
    (3,110
    )
    
    
    (364
    )
    
    
    (766
    )
    
    
    (941
    )
    
    
    (3,876
    )December 31, 2001
    
    
    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
    
    
    
    27,247
 Estimated quantities of proved developed reserves of crude oil and natural
gas as of December 31, 2003, 2002 and 2001 were as follows (in thousands): Crude Oil
    
    Natural Gas(Bbls)
    
    (Mcf)December 31, 2003
    
    
    6,470
    
    
    
    26,475December 31, 2002
    
    
    6,851
    
    
    
    26,927December 31, 2001
    
    
    6,614
    
    
    
    23,280
 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. 6




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##### Table of Contents



The 2003, 2002 and 2001 change in the standardized measure of discounted
future net cash revenues related to future royalty income from proved reserves
attributable to te Royalties discounted at 10% is as follows (in thousands): Waddell Ranch
    
    Texas RoyaltyProperties
    
    Properties
    
    Total2003
    
    2002
    
    2001
    
    2003
    
    2002
    
    2001
    
    2003
    
    2002
    
    2001January 1
    
    $
    117,234
    
    
    $
    59,283
    
    
    $
    214,029
    
    
    $
    55,972
    
    
    $
    34,519
    
    
    $
    65,784
    
    
    $
    173,206
    
    
    $
    93,802
    
    
    $
    279,813Extensions,
discoveries, and
other additions
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0Accretion of discount
    
    
    11,723
    
    
    
    5,928
    
    
    
    21,403
    
    
    
    5,597
    
    
    
    3,452
    
    
    
    6,578
    
    
    
    17,320
    
    
    
    9,380
    
    
    
    27,981Revisions of
previous estimates
and other
    
    
    10,318
    
    
    
    67,650
    
    
    
    (147,806
    )
    
    
    7,303
    
    
    
    26,205
    
    
    
    (26,370
    )
    
    
    17,621
    
    
    
    93,855
    
    
    
    (174,176
    )Royalty income
    
    
    (21,520
    )
    
    
    (15,627
    )
    
    
    (28,343
    )
    
    
    (11,076
    )
    
    
    (8,204
    )
    
    
    (11,473
    )
    
    
    (32,596
    )
    
    
    (23,831
    )
    
    
    (39,816
    )December 31
    
    $
    117,755
    
    
    $
    117,234
    
    
    $
    59,283
    
    
    $
    57,796
    
    
    $
    55,972
    
    
    $
    34,519
    
    
    $
    175,551
    
    
    $
    173,206
    
    
    $
    93,802
 Oil and gas prices of $30.70 and $29.91 per barrel and $4.76 and $4.71 per
Mcf 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 are 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 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 are due
to increase in oil and gas prices from 2001 to 2002. Oil and gas prices of $17.05 and $17.62 per barrel and $2.15 and $1.93 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, 2001. The upward revisions of both reserves and
discounted future net cash flows for the Waddell Ranch properties and the Texas
Royalty properties are due to increases in oil and gas prices from 2000 to
2001. 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, 2003, 2002 and 2001 (in thousands except amounts per
Unit): 2003
    
    2002
    
    2001Estimated
    
    Present
    
    Estimated
    
    Present
    
    Estimated
    
    PresentFuture
    
    Value at
    
    Future Net
    
    Value at
    
    Future Net
    
    Value atNet Revenue
    
    10%
    
    Revenue
    
    10%
    
    Revenue
    
    10%Total ProvedWaddell Ranch properties
    
    $
    200,297
    
    
    $
    117,755
    
    
    $
    204,776
    
    
    $
    117,234
    
    
    $
    102,860
    
    
    $
    59,283Texas Royalty properties
    
    
    120,410
    
    
    
    57,796
    
    
    
    114,777
    
    
    
    55,972
    
    
    
    71,482
    
    
    
    34,519Total
    
    $
    320,707
    
    
    $
    175,551
    
    
    $
    319,553
    
    
    $
    173,206
    
    
    $
    174,342
    
    
    $
    93,802Total Proved per Unit
    
    $
    6.88
    
    
    $
    3.77
    
    
    $
    6.85
    
    
    $
    3.72
    
    
    $
    3.74
    
    
    $
    2.01Proved DevelopedWaddell Ranch properties
    
    $
    184,055
    
    
    $
    111,202
    
    
    $
    179,798
    
    
    $
    105,903
    
    
    $
    84,996
    
    
    $
    52,778Texas Royalty properties
    
    
    120,410
    
    
    
    57,796
    
    
    
    114,777
    
    
    
    55,972
    
    
    
    71,482
    
    
    
    34,519Total
    
    $
    304,465
    
    
    $
    168,998
    
    
    $
    294,575
    
    
    $
    161,875
    
    
    $
    156,478
    
    
    $
    87,297
 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. 7




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##### Table of Contents



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 oil and gas reserves or the costs that
would be incurred to acquire equivalent reserves. A market value determination
would include many additional factors. 
 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. 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). 8




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##### Table of Contents



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. 
 Item 3. Legal Proceedings There are no material pending legal proceedings to which the Trust is a
party or of which any of its property is the subject. 
 Item 4. Submission of Matters to a Vote of Security Holders No matters were submitted to a vote of Unit holders, through the
solicitation of proxies or otherwise, during the fourth quarter ended December
31, 2003. 
 PART II 
 Item 5. Market for Units of the Trust and Related Security Holder Matters The information under Units of Beneficial Interest at page 1 of the
Trusts Annual Report to security holders for the year ended December 31, 2003,
is herein incorporated by reference. The Trust has no equity compensation plans and has not repurchased any
units during the period covered by this report. 
 Item 6. Selected Financial Data For the Year Ended December 31,2003
    
    2002
    
    2001
    
    2000
    
    1999Royalty income
    
    $
    32,596,078
    
    
    $
    23,830,604
    
    
    $
    39,816,141
    
    
    $
    35,835,746
    
    
    $
    18,799,659Distributable income
    
    
    32,113,125
    
    
    
    23,415,406
    
    
    
    39,473,395
    
    
    
    35,545,141
    
    
    
    18,471,842Distributable income per Unit
    
    
    0.688993
    
    
    
    0.502382
    
    
    
    0.846908
    
    
    
    0.762627
    
    
    
    0.396317Distributions per Unit
    
    
    0.688993
    
    
    
    0.502382
    
    
    
    0.846908
    
    
    
    0.762627
    
    
    
    0.396317Total assets, December 31
    
    $
    4,865,569
    
    
    $
    4,543,780
    
    
    $
    4,213,606
    
    
    $
    5,651,376
    
    
    $
    5,305,223
 
 Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operation The Trustees Discussion and Analysis for the Three Year Period Ended
December 31, 2003 and Results of the 4th Quarters of 2003 and 2002 at pages
6 through 8 of the Trusts Annual Report to security holders for the year ended
December 31, 2003 is herein incorporated by reference. 9




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##### Table of Contents



Item 7A. Quantitative and Qualitative Disclosures about Market Risk The Trust is a passive entity and other than the Trusts ability to
periodically borrow money as necessary to pay expenses, liabilities and
obligations of the Trust that cannot be paid out of cash held by the Trust, the
Trust is prohibited from engaging in borrowing transactions. The amount of any
such borrowings is unlikely to be material to the Trust. The Trust
periodically holds short-term investments acquired with funds held by the Trust
pending distribution to Unit holders and funds held in reserve for the payment
of Trust expenses and liabilities. Because of the short-term nature
of these borrowings and investments and certain limitations upon the types
of such investments which may be held by the Trust, the Trustee believes that
the Trust is not subject to any material interest rate risk. The Trust does
not engage in transactions in foreign currencies which could expose the Trust
or Unit holders to any foreign currency related market risk. The Trust invests
in no derivative financial instruments and has no foreign operations or
long-term debt instruments. 
 Item 8. Financial Statements and Supplementary Data The Financial Statements of the Trust and the notes thereto at page 9 et
seq. of the Trusts Annual Report to security holders for the year ended
December 31, 2003, are herein incorporated by reference. 
 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure There have been no changes in accountants and no disagreements with
accountants on any matter of accounting principles or practices or financial
statement disclosures during the twenty-four months ended December 31, 2003. 
 Item 9A. Controls and Procedures. As of the end of the period covered by this report, the trustee carried
out an evaluation of the effectiveness of the design and operation of the
Trusts disclosure controls and procedures pursuant to Exchange Act Rule 13a-15
and 15d-15. Based upon that evaluation, the Trustee concluded that the Trusts
disclosure controls and procedures are effective in timely alerting the trustee
to material information relating to the Trust required to be included in the
Trusts periodic filings with the Securities and Exchange Commission. In its
evaluation of disclosure controls and procedures, the trustee has relied, to
the extent considered reasonable, on information provided by Burlington
Resources Oil & Gas Company and River Hill Energy Corporation. There has not
been any change in the Trusts internal control over financial reporting that
has materially affected, or is reasonably likely to materially affect, the
Trusts internal control over financial reporting. 
 PART III 
 Item 10. Directors and Executive Officers of the Registrant DIRECTORS AND OFFICERS The Trust has no directors or executive officers. The Trustee is a
corporate trustee which may be removed, with or without cause, at a meeting of
the Unit holders, by the affirmative vote of the holders of a majority of all
the Units then outstanding. AUDIT COMMITTEE AND NOMINATING COMMITTEE Because the Trust has no directors, it does not have an audit committee,
an audit committee financial expert or a nominating committee. SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE Section 16(a) of the Securities Exchange At of 1934 requires the Trusts
directors, officers or beneficial owners of more than ten percent of a
registered class of the Trusts equity securities to file reports of ownership
and changes in ownership with the SEC and to furnish the Trust with copies of
all such reports. 10




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##### Table of Contents



The Trust has no directors or officers and based solely on its review of
the reports received by it, the Trust believes that during the fiscal year of
2003, no person who was a beneficial owner of more than ten percent the Trusts
Units failed to file on a timely basis any report required by Section 16(a). CODE OF ETHICS Because the Trust has no employees, it does not have a code of ethics.
Employees of the Trustee, Bank of America, N.A., must comply with the banks
code of ethics, a copy of which will be provided to Unit holders, without
charge, upon request made to Bank of America, N.A., Trustee, P.O. Box 830650,
Dallas, Texas 75202, Attention: Ron Hooper. 
 Item 11. Executive Compensation During the years ended December 31, 2003, 2002 and 2001, the Trustee
received total remuneration as follows: Name of Individual or Number
    
    Capacities in
    
    Cashof Persons in Group
    
    Which Served
    
    Compensation
    
    YearBank of America, N.A
    
    Trustee
    
    $41,608(1)
    
    
    2003$45,062(1)
    
    
    2002$53,796(1)
    
    
    2001
   (1)
    
    Under the Trust Indenture, the Trustee is entitled to an administrative
fee for its administrative services, preparation of quarterly and annual
statements with attention to tax and legal matters of: (i) 1/20 of 1% of
the first $100 million and (ii) Trustees standard hourly rate in excess
of 300 hours annually. The administrative fee is subject to reduction by
a credit for funds provision. 
 Item 12. Security Ownership of Certain Beneficial Owners and Management (a) Security Ownership of Certain Beneficial Owners. The following table
sets forth as of March 1, 2004, information with respect to each person known
to own beneficially more than 5% of the outstanding Units of the Trust: Amount and Nature ofName and Address
    
    Beneficial Ownership
    
    Percent of ClassBurlington Resources Oil & Gas
Company LP(1)
5051 Westheimer, Suite 1400
Houston, Texas 77056-2124
    
    27,577,741 Units
    
    
    59.17
    %
   (1)
    
    This information was provided to the Securities and Exchange Commission
and to the Trust in a Form 4 dated January 6, 1994, filed with the
Securities and Exchange Commission by Southland Royalty, a wholly-owned
subsidiary of BRI, and in Amendment 5 to Schedule 13D and Schedule 13E-3
dated December 28, 1993, filed with the Securities and Exchange Commission
by Southland Royalty and BRI. Such Units were reported to be owned
directly by Southland Royalty, now BROG.The Form 4 filed by Southland Royalty and the Schedule 13D and Schedule
13E-3 filed by Southland Royalty and BRI with the Securities and Exchange
Commission may be reviewed for more detailed information concerning the
matters summarized herein. 11




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##### Table of Contents



(b) Security Ownership of Management. The Trustee does not beneficially
own any securities of the Trust. In various fiduciary capacities, Bank of
America, N.A. owned as of March 1, 2004, an aggregate of 143,065 Units with no
right to vote all of these Units, shared right to vote none of these Units and
sole right to vote none of these Units. Bank of America, N.A., disclaims any
beneficial interests in these Units. The number of Units reflected in this
paragraph includes Units held by all branches of Bank of America, N.A. (c) Change In Control. The Trustee knows of no arrangements which may
subsequently result in a change in control of the Trust. 
 Item 13. Certain Relationships and Related Transactions The Trust has no directors or executive officers. See Item 11 for the
remuneration received by the Trustee during the years ended December 31, 2002,
2001 and 2000 and Item 12(b) for information concerning Units owned by Bank of
America, N.A. in various fiduciary capacities. 
 Item 14. Principal Accounting Fees and Services. Fees for services performed by Deloitte & Touche LLP for the years ended
December 31, 2003 and 2002 are: 2003
    
    2002Audit Fees
    
    $
    57,000
    
    
    $
    54,000Audit-related fees
    
    
    
    
    
    
    Tax fees
    
    
    
    
    
    
    All other fees
    
    
    
    
    
    
    $
    57,000
    
    
    $
    54,000
 As referenced in Item 10 above, the Trust has no audit committee, and as a
result, has no audit committee pre-approval policy with respect to fees paid to
Deloitte & Touche LLP. 12




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##### Table of Contents



PART IV Item 15. Exhibits, Financial Statement Schedules and Reports on Form 8-K The following documents are filed as a part of this Report: 1. Financial Statements Included in Part II of this Report by reference to the Annual Report of
the Trust for the year ended December 31, 2003: Independent Auditors Report Statements of Assets, Liabilities and Trust Corpus at December 31,
2003 and 2002 Statements of Distributable Income for Each of the Three Years in
the Period Ended December 31, 2003 Statements of Changes in Trust Corpus for Each of the Three Years
in the Period Ended December 31, 2003 Notes to Financial Statements 2. Financial Statement Schedules Financial statement schedules are omitted because of the absence of
conditions under which they are required or because the required information is
given in the financial statements or notes thereto. 3. 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.*(13
    )
    
    
    
    Registrants Annual Report to security holders for fiscal year ended December 31, 2003.**
 13




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##### Table of Contents



ExhibitNumber
    
    
    
    Exhibit(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. REPORTS ON FORM 8-K During the last quarter of the Trusts fiscal year ended December 31,
2003, there were no reports on Form 8-K filed by the Trust. Forms 8-K were
furnished by the Trust on November 20, 2003 and December 12, 2003, pursuant to
item 12 of Form 8-K announcing the Trusts monthly distributions. 14




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##### Table of Contents



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., TrusteeBy
    
    /s/ Ron E. HooperRon E. HooperSenior Vice President
 Date: March 12, 2004 (The Trust has no directors or executive officers.) 15




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##### Table of Contents



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.*(13)
    
    
    
    Registrants Annual Report to security holders for fiscal year ended
December 31, 2003.**(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. 16