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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-Q
 þ
    
    Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the Quarterly Period ended March 31, 2006
 o
    
    Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the transition period from _________ to ________
 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.)
 
 
 þ o
  o þ o
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TABLE OF CONTENTS  PART I FINANCIAL INFORMATIONItem1. Financial StatementsItem2. Trustees Discussion and AnalysisItem3. Qualitative and Quantitative Disclosures About Market RiskItem4. Controls and ProceduresPART II  OTHER INFORMATIONItems 1 through 5.Item6. ExhibitsSIGNATURESINDEX TO EXHIBITSAwareness Letter of Deloitte & Touche LLPCertification Pursuant to Section 302Certification Pursuant to Section 906    Table of Contents  PERMIAN BASIN ROYALTY TRUST
 
 PART I  FINANCIAL INFORMATION
 
 Item 1. Financial Statements
  
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
       
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##### Table of Contents





PERMIAN BASIN ROYALTY TRUST


CONDENSED STATEMENTS OF ASSETS, LIABILITIES AND TRUST CORPUS


March 31,2006
    
    
    December 31,(Unaudited)
    
    
    2005ASSETSCash and short-term investments
    
    $
    6,265,957
    
    
    $
    7,264,048Net overriding royalty interests in
producing oil and gas properties
(net of accumulated amortization of
$9,405,060,and $9,364,586 at March
31, 2006 and December 31, 2005,
respectively)
    
    
    1,570,156
    
    
    
    1,610,630TOTAL ASSETS
    
    $
    7,836,113
    
    
    $
    8,874,678LIABILITIES AND TRUST CORPUSDistribution payable to Unit holders
    
    $
    6,265,957
    
    
    $
    7,264,048Commitments and contingencies Trust
corpus  46,608,796 Units of
beneficial interest authorized and
outstanding
    
    
    1,570,156
    
    
    
    1,610,630TOTAL LIABILITIES
AND TRUST CORPUS
    
    $
    7,836,113
    
    
    $
    8,874,678




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PERMIAN BASIN ROYALTY TRUST


CONDENSED STATEMENTS OF DISTRIBUTABLE INCOME (UNAUDITED)
 THREE MONTHS ENDED
    
    
    THREE MONTHS ENDEDMarch 31, 2006
    
    
    March 31, 2005Royalty income
    
    $
    18,917,927
    
    
    $
    13,531,071Interest income
    
    $
    35,513
    
    
    
    11,475$
    18,953,440
    
    
    $
    13,542,546General and
administrative
expenditures
    
    
    (300,467
    )
    
    
    (298,693
    )Distributable income
    
    $
    18,652,973
    
    
    $
    13,243,853Distributable
income per Unit
(46,608,796 Units)
    
    $
    .40
    
    
    $
    .28
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PERMIAN BASIN ROYALTY TRUST


CONDENSED STATEMENTS OF CHANGES IN TRUST CORPUS (UNAUDITED)
 THREE MONTHS ENDED
    
    
    THREE MONTHS ENDEDMarch 31, 2006
    
    
    March 31, 2005Trust corpus, beginning of period
    
    $
    1,610,630
    
    
    $
    1,795,267Amortization of net overriding
royalty interests
    
    
    (40,474
    )
    
    
    (49,290
    )Distributable income
    
    
    18,652,973
    
    
    
    13,243,853Distributions declared
    
    
    (18,652,973
    )
    
    
    (13,243,853
    )Total Trust Corpus, end of period
    
    $
    1,570,156
    
    
    $
    1,745,977Distributions per Unit
    
    $
    .40
    
    
    $
    .28
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PERMIAN BASIN ROYALTY TRUST


NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
 1.
    
    BASIS OF ACCOUNTING
  
    
    Royalty income recorded for a month is the amount computed and paid to Bank of
America, N.A. (Trustee) as Trustee for the Trust by the interest owners: Burlington
Resources Oil & Gas Company LP (BROG), a subsidiary of Burlington Resources Inc.
(BRI), for the Waddell Ranch properties and Riverhill Energy Corporation (Riverhill
Energy), formerly a wholly owned subsidiary of Riverhill Capital Corporation
(Riverhill Capital) and formerly an affiliate of Coastal Management Corporation
(CMC), for the Texas Royalty properties. Schlumberger Technology Corporation (STC)
conducts all field, technical and accounting operations on behalf of BROG with regard
to the Waddell Ranch properties. Riverhill Energy currently conducts the accounting
operations for the Texas Royalty properties. Royalty income consists of the amounts
received by the owners of the interest burdened by the net overriding royalty interests
(Royalties) from the sale of production less accrued production costs, development
and drilling costs, applicable taxes, operating charges, and other costs and deductions
multiplied by 75% in the case of the Waddell Ranch properties and 95% in the case of
the Texas Royalty properties.As was previously reported, in February 1997, BROG sold its interest in the Texas
Royalty properties to Riverhill Energy.The Trustee has been advised that in the first quarter of 1998, STC acquired all of
the shares of stock of Riverhill Capital. Prior to such acquisition by STC, CMC and
Riverhill Energy were wholly-owned subsidiaries of Riverhill Capital. The Trustee
has further been advised that in connection with STCs acquisition of Riverhill
Capital, the shareholders of Riverhill Capital acquired ownership of all of the
shares of stock of Riverhill Energy. Thus, the ownership in the Texas Royalty
properties referenced above remained in Riverhill Energy, the stock ownership of
which was acquired by the former shareholders of Riverhill Capital.
    
    On March 31, 2006, ConocoPhillips announced that it had completed an acquisition of
BRI.
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
    
    Trust expenses recorded are based on liabilities paid and cash reserves established
out of cash received or borrowed funds for liabilities and contingencies.
    
    Distributions to Unit holders are recorded when declared by the Trustee.
    
    Royalty income is computed separately for each of the conveyances under which the
Royalties were conveyed to the Trust. If monthly costs exceed revenues for any
conveyance (excess costs), such excess cannot reduce royalty income from other
conveyances, but is carried forward with accrued interest to be recovered from future
net proceeds of that conveyance.
  New
Accounting Pronouncements
   2.
    
    FEDERAL INCOME TAXES
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3.
    
    SUBSEQUENT EVENTS







Item 2. Trustees Discussion and Analysis


Forward Looking Information
  Three Months Ended March 31, 2006 Compared to Three Months Ended March 31, 2005
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First Quarter2006
    
    
    2005Royalties:Oil sales (Bbls)
    
    
    205,912
    
    
    
    208,024Gas sales (Mcf)
    
    
    895,338
    
    
    
    913,669Product Sales From Which The Royalties Were
Carved:Oil:Total oil sales (Bbls)
    
    
    302,938
    
    
    
    308,892Average per day (Bbls)
    
    
    3,293
    
    
    
    3,358Average price per Bbl
    
    $
    54.79
    
    
    $
    40.17Gas:Total gas sales (Mcf)
    
    
    1,421,963
    
    
    
    1,501,946Average per day (Mcf)
    
    
    15,456
    
    
    
    16,326Average price per Mcf
    
    $
    9.56
    
    
    $
    6.36
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Calculation Of Royalty Income
  THREE MONTHS ENDED MARCH 31,2006
    
    
    2005WADDELL
    
    
    TEXAS
    
    
    WADDELL
    
    
    TEXASRANCH
    
    
    ROYALTY
    
    
    RANCH
    
    
    ROYALTYPROPERTIES
    
    
    PROPERTIES
    
    
    PROPERTIES
    
    
    PROPERTIESGross proceeds of sales from
the Underlying PropertiesOil proceeds
    
    $
    11,900,526
    
    
    $
    4,697,518
    
    
    $
    8,598,425
    
    
    $
    3,809,529Gas proceeds
    
    
    11,930,222
    
    
    
    1,666,686
    
    
    
    8,385,450
    
    
    
    1,160,016Total
    
    
    23,830,748
    
    
    
    6,364,204
    
    
    
    16,983,875
    
    
    
    4,969,545Less:Severance tax:Oil
    
    
    508,771
    
    
    
    187,338
    
    
    
    344,489
    
    
    
    154,611Gas
    
    
    726,302
    
    
    
    111,920
    
    
    
    540,219
    
    
    
    77,442Lease operating expense and
property tax:
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THREE MONTHS ENDED MARCH 31,2006
    
    
    2005WADDELL
    
    
    TEXAS
    
    
    WADDELL
    
    
    TEXASRANCH
    
    
    ROYALTY
    
    
    RANCH
    
    
    ROYALTYPROPERTIES
    
    
    PROPERTIES
    
    
    PROPERTIES
    
    
    PROPERTIESOil and gas
    
    
    3,695,189
    
    
    
    599,993
    
    
    
    2,894,823
    
    
    
    288,563Capital expenditures
    
    
    598,857
    
    
    
    
    
    
    
    798,225
    
    
    
    Total
    
    
    5,529,119
    
    
    
    899,251
    
    
    
    4,577,756
    
    
    
    520,616Net profits
    
    
    18,301,629
    
    
    
    5,464,953
    
    
    
    12,406,119
    
    
    
    4,448,929Net overriding royalty interests
    
    
    75
    %
    
    
    95
    %
    
    
    75
    %
    
    
    95
    %Royalty income
    
    $
    13,726,222
    
    
    $
    5,191,705
    
    
    $
    9,304,589
    
    
    $
    4,226,482
 Critical Accounting Policies and Estimates
  Basis of Accounting
  
    
    Royalty income and interest income are recorded in the period in which amounts are
received by the Trust rather than in the period of production and accrual, respectively.
    
    General and administrative expenses recorded are based on liabilities paid and cash
reserves established out of cash received.
    
    Amortization of the royalty interests is calculated on a unit-of-production basis and
charged directly to trust corpus when revenues are received.
    
    Distributions to Unit holders are recorded when declared by the Trustee (see Note 1 to
the Financial Statements).
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New
Accounting Pronouncements
   Revenue Recognition
  Reserve Disclosure
  Contingencies
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Use of Estimates
  
 Item 3. Qualitative and Quantitative Disclosures About Market Risk
  
 Item 4. Controls and Procedures
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PART II  OTHER INFORMATION
 
 Items 1 through 5.
  
 Item 6. Exhibits
 4.1
    
    Permian Basin Royalty Trust Indenture dated November 3, 1980,
between Southland Royalty Company (now Burlington Resources Oil & Gas Company
LP) 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.4.2
    
    Net Overriding Royalty Conveyance (Permian Basin Royalty Trust)
from Southland Royalty Company (now Burlington Resources Oil & Gas Company LP)
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.4.3
    
    Net Overriding Royalty Conveyance (Permian Basin Royalty Trust
  Waddell Ranch) from Southland Royalty Company (now Burlington Resources Oil &
Gas Company LP) 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.10.1
    
    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.10.2
    
    Underwriting Agreement dated December 15, 2005 among the
Permian Basin Royalty Trust, Burlington Resources, Inc., Burlington Resources
Oil & Gas L.P. and Lehman Brothers Inc. and Wachovia Capital Markets, LLC as
representatives of the several underwriters, heretofore filed as Exhibit 10.1
to the Trusts current report filed on Form 8-K to the Securities and Exchange
Commission filed on December 19, 2005, is incorporated herein by reference.
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10.3
    
    Underwriting Agreement dated August 2, 2005 among the Permian
Basin Royalty Trust, Burlington Resources, Inc., Burlington Resources Oil & Gas
L.P. and Goldman Sachs & Co. and Lehman Brothers Inc. as representatives of the
several underwriters, heretofore filed as Exhibit 10.1 to the Trusts current
report filed on Form 8-K to the Securities and Exchange Commission filed on
August 8, 2005, is incorporated herein by reference.15.1
    
    Awareness Letter of Deloitte & Touche LLP.31.1
    
    Certification by Ron E. Hooper, Senior Vice President and Trust
Administrator of Bank of America, Trustee of Permian Basin Royalty Trust, dated
May 9, 2006 and submitted pursuant to Rule 13a-14(a)/15d-14(a) and pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.32.1
    
    Certificate by Bank of America, Trustee of Permian Basin
Royalty Trust, dated May 9, 2006 and submitted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350).
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SIGNATURES
  BANK OF AMERICA, N.A.,TRUSTEE FOR THEPERMIAN BASIN ROYALTY TRUSTBy:
    
    /s/ RON E. HOOPER

Ron E. Hooper,Senior Vice President and Trust AdministratorBank of America, N.A.Date:
May 9, 2006
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INDEX TO EXHIBITS
 ExhibitNumber
    
    Exhibit4.1
    
    Permian Basin Royalty Trust Indenture dated November 3,
1980, between Southland Royalty Company (now Burlington
Resources Oil & Gas Company LP) 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.*4.2
    
    Net Overriding Royalty Conveyance (Permian Basin Royalty
Trust) from Southland Royalty Company (now Burlington
Resources Oil & Gas Company LP) 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.*4.3
    
    Net Overriding Royalty Conveyance (Permian Basin Royalty
Trust  Waddell Ranch) from Southland Royalty Company (now
Burlington Resources Oil & Gas Company LP) 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.*10.1
    
    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.*10.2
    
    Underwriting Agreement dated December 15, 2005 among the
Permian Basin Royalty Trust, Burlington Resources, Inc.,
Burlington Resources Oil & Gas L.P. and Lehman Brothers
Inc. and Wachovia Capital Markets, LLC as representatives
of the several underwriters, heretofore filed as Exhibit
10.1 to the Trusts current report filed on Form 8-K to the
Securities and Exchange Commission filed on December 19,
2005, is incorporated herein by reference.*10.3
    
    Underwriting Agreement dated August 2, 2005 among the
Permian Basin Royalty Trust, Burlington Resources, Inc.,
Burlington Resources Oil & Gas L.P. and Goldman Sachs & Co.
and Lehman Brothers Inc. as representatives of the several
underwriters, heretofore filed as Exhibit 10.1 to the
Trusts current report filed on Form 8-K to the Securities
and Exchange Commission filed on August 8, 2005, is
incorporated herein by reference.*
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ExhibitNumber
    
    Exhibit15.1
    
    Awareness Letter of Deloitte & Touche LLP.31.1
    
    Certification by Ron E. Hooper, Senior Vice President and
Trust Administrator of Bank of America, Trustee of Permian
Basin Royalty Trust, dated May 9, 2006 and submitted
pursuant to Rule 13a-14(a)/15d-14(a) and pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1
    
    Certificate by Bank of America, Trustee of Permian Basin
Royalty Trust, dated May 9, 2006 and submitted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C.
Section 1350).
 
 *
    
    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., 901
Main Street, Dallas, Texas 75202. 19