UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549   FORM 10-Q    ☒
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Quarterly Period ended June 30, 2020  ☐
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

75-6280532(State or Other Jurisdiction ofIncorporation or Organization)

(I.R.S. EmployerIdentification No.) Royalty Trust Management Simmons Bank 2911 Turtle
Creek Boulevard Suite 850 Dallas, Texas 75219 (Address of Principal Executive Offices; Zip Code) (855) 588-7839 (Registrants Telephone Number, Including Area Code)   Securities registered pursuant to Section 12(b) of the Act:  Title of Each Class

TradingSymbol(s)

Name of Each Exchangeon Which RegisteredUnits of Beneficial Interest

PBT

New York Stock Exchange 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  ☒    No  ☐ Indicate by check mark whether the registrant has
submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period
that the registrant was required to submit such files).    Yes  ☐    No   ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of large accelerated filer, accelerated filer, smaller reporting
company, and emerging growth company in Rule 12b-2 of the Exchange Act.  Large accelerated filer

☐

Accelerated filer

☒Non-accelerated filer

☐

Smaller reporting company

☒Emerging growth company

☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended
transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act).    Yes  ☐    No  ☒ Number of Units of beneficial
interest of the Trust outstanding at August 1, 2020: 46,608,796.




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PERMIAN BASIN ROYALTY TRUST PART IFINANCIAL INFORMATION  Item 1.
Financial Statements The condensed financial statements included herein have been prepared by Simmons Bank as Trustee for the Permian Basin Royalty Trust (the Trust),
without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Effective February 20, 2018, Simmons Bank (the Trustee) became the new trustee for the Trust. Certain information and footnote
disclosures normally included in annual financial statements have been condensed or omitted pursuant to such rules and regulations, although the Trustee believes that the disclosures are adequate to make the information presented not misleading. It
is suggested that these condensed interim financial statements and notes thereto be read in conjunction with the financial statements and the notes thereto included in the Trusts latest annual report on Form
10-K. In the opinion of the Trustee, all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the assets, liabilities and trust corpus of the Permian Basin Royalty Trust as
of June 30, 2020, and the distributable income and the changes in trust corpus for the three-month and six-month periods ended June 30, 2020 and 2019, have been included. The distributable income for
such interim periods is not necessarily indicative of the distributable income for the full year. The condensed interim financial statements as of
June 30, 2020 and for the three-month and six-month periods ended June 30, 2020 and 2019, included herein, have been reviewed by Weaver and Tidwell, L.L.P., an independent registered public
accounting firm, as stated in their report appearing herein.  2




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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Unit Holders of Permian Basin Royalty Trust and Simmons
Bank, Trustee Dallas, Texas Results of Review of
Interim Financial Statements We have reviewed the accompanying condensed statements of assets, liabilities and trust corpus of Permian Basin Royalty
Trust (the Trust) as of June 30, 2020, and the related condensed statements of distributable income and changes in trust corpus for the three-month and six-month periods ended June 30,
2020 and 2019, and the related notes (collectively referred to as the condensed interim financial statements or interim financial information). Based on our reviews, we are not aware of any material modifications that should be made to
the accompanying condensed interim financial statements for them to be in conformity with the modified cash basis of accounting, which is a comprehensive basis of accounting other than accounting principles generally accepted in the United States of
America. As described in Note 2 to the condensed interim financial statements, these condensed interim financial statements were prepared on a modified
cash basis of accounting, which is a comprehensive basis of accounting other than accounting principles generally accepted in the United States of America. We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the
statement of assets, liabilities, and trust corpus as of December 31, 2019, and the related statements of distributable income and changes in trust corpus for the year then ended (not presented herein); and in our report dated March 16,
2020 we expressed an unqualified opinion on those financial statements. In our opinion, the information set forth in the accompanying condensed statement of assets, liabilities and trust corpus as of December 31, 2019, is fairly stated, in all
material respects, in relation to the statement of assets, liabilities, and trust corpus from which it has been derived. Basis for Review Results These condensed interim financial statements are the responsibility of the Trustee. We conducted our review in accordance with the standards of the
PCAOB. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Trust in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange
Commission and the PCAOB. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an
audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. /s/ WEAVER AND TIDWELL, L.L.P. Dallas, TX August 10, 2020  3




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PERMIAN BASIN ROYALTY TRUST CONDENSED STATEMENTS OF ASSETS, LIABILITIES AND TRUST CORPUS  June 30,2020(Unaudited)


December 31,2019ASSETSCash and short-term investments

$
1,184,812


$
2,862,570Net overriding royalty interests in producing oil and gas properties (net of accumulated
amortization of $10,573,036and $10,550,709 at June 30, 2020 and December 31, 2019, respectively)


402,180



424,507TOTAL ASSETS

$
1,586,992


$
3,287,077LIABILITIES AND TRUST CORPUSDistribution payable to Unit holders

$
84,812


$
1,812,570Commitments and reserves for contingencies (Note 6)


1,100,000



1,050,000Trust corpus  46,608,796 Units of beneficial interest authorized and outstanding


402,180



424,507TOTAL LIABILITIES AND TRUST CORPUS

$
1,586,992


$
3,287,077 The accompanying notes are an integral part of these condensed financial statements.  4




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PERMIAN BASIN ROYALTY TRUST CONDENSED STATEMENTS OF DISTRIBUTABLE INCOME (UNAUDITED)  THREE MONTHS ENDEDJune 30, 2020


THREE MONTHS ENDEDJune 30, 2019Royalty income

$
2,446,502


$
4,767,067Interest income


2,423



4,2632,448,925



4,771,330Reserve for expenses

$
(50,000
)


General and administrative expenditures


(470,893
)


(456,419
)Distributable income

$
1,928,032


$
4,314,911Distributable income per Unit (46,608,796 Units)

$
.04


$
.09 The accompanying notes are an integral part of these condensed financial statements.  5




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PERMIAN BASIN ROYALTY TRUST CONDENSED STATEMENTS OF DISTRIBUTABLE INCOME (UNAUDITED)  SIX MONTHS ENDEDJune 30, 2020


SIX MONTHS ENDEDJune 30, 2019Royalty income

$
8,701,011


$
9,297,512Interest income


6,784



11,4218,707,795



9,308,933Reserve for expenses

$
(50,000
)


General and administrative expenditures


(799,756
)


(757,550
)Distributable income

$
7,858,039


$
8,551,383Distributable income per Unit (46,608,796 Units)

$
.17


$
.18 The accompanying notes are an integral part of these condensed financial statements.  6




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PERMIAN BASIN ROYALTY TRUST CONDENSED STATEMENTS OF CHANGES IN TRUST CORPUS (UNAUDITED)  THREE MONTHS ENDEDJune 30, 2020


THREE MONTHS ENDEDJune 30, 2019Trust corpus, beginning of period

$
411,429


$
457,731Amortization of net overriding royalty interests


(9,249
)


(9,373
)Distributable income


1,928,032



4,314,911Distributions declared


(1,928,032
)


(4,314,911
)Total Trust Corpus, end of period

$
402,180


$
458,358Distributions per Unit

$
.04


$
.09 The accompanying notes are an integral part of these condensed financial statements.  7




---

PERMIAN BASIN ROYALTY TRUST CONDENSED STATEMENTS OF CHANGES IN TRUST CORPUS (UNAUDITED)  SIX MONTHS ENDEDJune 30, 2020


SIX MONTHS ENDEDJune 30, 2019Trust corpus, beginning of period

$
424,507


$
467,580Amortization of net overriding royalty interests


(22,327
)


(19,222
)Distributable income


7,858,039



8,551,383Distributions declared


(7,858,039
)


(8,551,383
)Total Trust Corpus, end of period

$
402,180


$
458,358Distributions per Unit

$
.17


$
.18 The accompanying notes are an integral part of these condensed financial statements.  8




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PERMIAN BASIN ROYALTY TRUST NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)  1.
TRUST ORGANIZATION AND PROVISIONS The Permian Basin Royalty Trust (Trust) was established as of November 1, 1980. Simmons Bank (Trustee) is Trustee
for the Trust. The net overriding royalties conveyed to the Trust include (1) a 75% net overriding royalty in Southland Royalty Companys fee mineral interest in the Waddell Ranch in Crane County, Texas (the Waddell Ranch
properties) and (2) a 95% net overriding royalty carved out of Southland Royalty Companys major producing royalty properties in Texas (the Texas Royalty properties). The net overriding royalty for the Texas Royalty
properties is subject to the provisions of the lease agreements under which such royalties were created. The net overriding royalties above are collectively referred to as the Royalties. On November 3, 1980, Units of Beneficial Interest (Units) in the Trust were distributed to the Trustee for the benefit of
Southland Royalty Companys shareholders of record as of November 3, 1980, who received one Unit in the Trust for each share of Southland Royalty Company common stock held. The Units are traded on the New York Stock Exchange. Burlington Resources Oil & Gas Company LP (BROG), a subsidiary of ConocoPhillips, is the interest owner 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), is the interest owner for the Texas Royalty properties. BROG currently conducts all field, technical and accounting operations on behalf of BROG with regard to the Waddell Ranch properties. BROG notified the Trust that on
November 1, 2019, the Waddell Ranch properties that are subject to the Net Overriding Royalty Conveyance (Permian Basin Royalty TrustWaddell Ranch) dated November1, 1980, were sold to Blackbeard Operating, LLC (Blackbeard) of
Fort Worth, Texas. Blackbeard became the operator effective as of April 1, 2020. Riverhill Energy currently conducts the accounting operations for the Texas Royalty properties. In February 1997, BROG sold its interest in the Texas Royalty properties to Riverhill Energy. The Trustee was advised that in the first quarter of 1998, Schlumberger Technology Corporation (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 was further 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.  9




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On January 9, 2014, Bank of America N.A. (as successor to The First National Bank of
Fort Worth) gave notice to Unit holders that it would be resigning as trustee of the Trust subject to certain conditions that included the appointment of Southwest Bank as successor trustee. At a Special Meeting of Trust Unit holders, the Unit
holders approved the appointment of Southwest Bank as successor trustee of the Trust once the resignation of Bank of America N.A. took effect and also approved certain amendments to the Trust Indenture. The effective date of Bank of America
N.A.s resignation and the effective date of Southwest Banks appointment as successor trustee was August 29, 2014. Effective October 19, 2017, Simmons First National Corporation (SFNC) completed its acquisition of
First Texas BHC, Inc., the parent company of Southwest Bank. SFNC is the parent company of Simmons Bank. SFNC merged Southwest Bank with Simmons Bank effective February 20, 2018. The defined term Trustee as used herein shall refer
to Bank of America N.A. for periods prior to August 29, 2014, and shall refer to Southwest Bank for periods from August 29, 2014 through February 19, 2018 and shall refer to Simmons Bank for periods on and after February 20,
2018. The terms of the Trust Indenture provide, among other things, that:  

the Trust shall not engage in any business or commercial activity of any kind or acquire any assets other than
those initially conveyed to the Trust;  

the Trustee may not sell all or any part of the Royalties unless approved by holders of 75% of all Units
outstanding in which case the sale must be for cash and the proceeds promptly distributed;  

the Trustee may establish a cash reserve for the payment of any liability which is contingent or uncertain in
amount;  

the Trustee is authorized to borrow funds to pay liabilities of the Trust; and  

the Trustee will make monthly cash distributions to Unit holders (see Note 3).  10




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2.
ACCOUNTING POLICIES Basis of Accounting The
financial statements of the Trust are prepared on the following basis:  

Royalty income recorded for a month is the amount computed and paid to the Trustee on behalf of the Trust by the
interest owners. Royalty income consists of the amounts received by the owners of the interest burdened by the 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.  

Trust expenses, consisting principally of routine general and administrative costs, 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. The financial statements of the Trust differ from financial statements prepared in accordance with accounting principles generally accepted in
the United States of America (GAAP) because revenues are not accrued in the month of production, expenses are recorded when paid and certain cash reserves may be established for contingencies which would not be accrued in financial
statements prepared in accordance with GAAP. Amortization of the Royalties calculated on a unit-of-production basis is charged directly to trust corpus. This
comprehensive basis of accounting other than GAAP corresponds to the accounting permitted for royalty trusts by the U.S. Securities and Exchange Commission as specified by Staff Accounting Bulletin Topic 12:E, Financial Statements of Royalty Trusts. Use of Estimates The preparation of financial statements in conformity with the basis of accounting described above requires management to make estimates and
assumptions that affect reported amounts of certain assets, liabilities, revenues and expenses as of and for the reporting periods. Actual results may differ from such estimates. Contingencies Contingencies related to the underlying properties that are unfavorably resolved would generally be reflected by the Trust as reductions to
future royalty income payments to the Trust with corresponding reductions to cash distributions to Unit holders.  11




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Distributable Income Per Unit Basic distributable income per Unit is computed by dividing distributable income by the weighted average of Units outstanding. Distributable
income per Unit assuming dilution is computed by dividing distributable income by the weighted average number of Units and equivalent Units outstanding. The Trust had no equivalent Units outstanding for any period presented. Therefore, basic
distributable income per Unit and distributable income per Unit assuming dilution are the same. New Accounting Pronouncements There are no new accounting pronouncements that are expected to have significant impact on the Trusts financial statements.  3.
NET OVERRIDING ROYALTY INTERESTS AND DISTRIBUTION TO UNIT HOLDERS The amounts to be distributed to Unit holders (Monthly Distribution Amounts) are determined on a monthly basis. The Monthly
Distribution Amount is an amount equal to the sum of cash received by the Trustee during a calendar month attributable to the Royalties, any reduction in cash reserves and any other cash receipts of the Trust, including interest, reduced by the sum
of liabilities paid and any increase in cash reserves. If the Monthly Distribution Amount for any monthly period is a negative number, then the distribution will be zero for such month. To the extent the distribution amount is a negative number,
that amount will be carried forward and deducted from future monthly distributions until the cumulative distribution calculation becomes a positive number, at which time a distribution will be made. Unit holders of record will be entitled to receive
the calculated Monthly Distribution Amount for each month on or before 10 business days after the monthly record date, which is generally the last business day of each calendar month. The cash received by the Trustee consists of the amounts received by owners of the interest burdened by the Royalties from the sale of
production less the sum of applicable taxes, accrued production costs, development and drilling costs, 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.  12




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4.
FEDERAL INCOME TAXES For federal income tax purposes, the Trust constitutes a fixed investment trust that is taxed as a grantor trust. A grantor trust is not
subject to federal income tax at the trust level. The Unit holders are considered for federal tax purposes to own the Trusts income and principal as though no trust were in existence. The income of the Trust is deemed to have been received or
accrued by each Unit holder at the time such income is received or accrued by the Trust and not when distributed by the Trust. If the Trust borrows funds to pay liabilities of the Trust, as contemplated in the Trust Indenture, tax-exempt Unit holders could be required to recognize unrelated business taxable income.  5.
STATE TAX CONSIDERATIONS All revenues from the Trust are from sources within Texas, which does not impose an individual income tax. Texas imposes a franchise tax at a
rate of 0.75% on gross revenues less certain deductions, as specifically set forth in the Texas franchise tax statutes. Entities subject to the Texas franchise tax generally include trusts and most other types of entities that provide limited
liability protection, unless otherwise exempt. Trusts that receive at least 90% of their federal gross income from certain passive sources, including royalties from mineral properties and other non-operated
mineral interest income, and do not receive more than 10% of their income from operating an active trade or business, generally are exempt from the Texas franchise tax as passive entities. The Trust has been and expects to continue to be
exempt from Texas franchise tax as a passive entity. Because the Trust should be exempt from Texas franchise tax at the Trust level as a passive entity, each Unit holder that is a taxable entity under the Texas franchise tax generally will be
required to include its portion of Trust revenues in its own Texas franchise tax computation. This revenue is sourced to Texas under provisions of the Texas Administrative Code providing that such income is sourced according to the principal place
of business of the Trust, which is Texas. Unit holders should consult their tax advisors regarding state tax requirements, if any,
applicable to such Unit holders ownership of Trust units.  6.
COMMITMENTS AND CONTINGENCIES Contingencies related to the Underlying Properties that are unfavorably resolved would generally be reflected by the Trust as reductions to
future royalty income payments to the Trust with corresponding reductions to cash distributions to Unit holders.  7.
SUBSEQUENT EVENTS Subsequent to June 30, 2020, the Trust declared a distribution on July 21, 2020 of $0.005702 per Unit payable on August 14, 2020
to Unit holders of record on July 31, 2020. *    *    *    *    *  13




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Item 2.
Trustees Discussion and Analysis Forward-Looking Information Certain information included
in this report contains, and other materials filed or to be filed by the Trust with the Securities and Exchange Commission (as well as information included in oral statements or other written statements made or to be made by the Trust) may contain
or include, forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. Such forward-looking statements may be or may concern,
among other things, capital expenditures, drilling activity, development activities, production efforts and volumes, hydrocarbon prices and the results thereof, and regulatory matters. 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 are 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, predict,
anticipate, goal, should, assume, believe, or other words that convey the uncertainty of future events or outcomes. Commodity Prices The Trusts income and monthly
distributions are heavily influenced by commodity prices. Commodity prices may fluctuate widely in response to (i) relatively minor changes in the supply of and demand for oil and natural gas, (ii) market uncertainty and (iii) a
variety of additional factors that are beyond the Trustees control. Recently, there has been a substantial decrease in oil and natural gas prices due in part to significantly decreased demand as a result of the novel coronavirus (COVID-19) pandemic, which is discussed below under Item 1A- Risk Factors. A combination of these factors resulted in the price of oil falling below
zero to $(37.63) per barrel of oil on April 20, 2020, recovering the following day to $10.01 per barrel of oil. As of August 4, 2020, the price of oil was $41.68. Factors that may impact future commodity prices, including the price of oil
and natural gas, include but are not limited to:  

political conditions in major oil producing regions, especially in the Middle East;  

worldwide economic conditions;  

weather conditions;  14




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

trade barriers;  

public health concerns;  

the supply and price of domestic and foreign crude oil or natural gas;  

the level of consumer demand;  

the price and availability of alternative fuels;  

the proximity to, and capacity of, transportation facilities;  

the effect of worldwide energy conservation measures; and  

the nature and extent of governmental regulation and taxation. Although the Trustee cannot predict the occurrence of events that may affect future commodity prices or the degree to which these prices will be affected, gas
royalty income for a given period generally relates to production three months prior to the period and crude oil royalty income for a given period generally relates to production two months prior to the period and will generally approximate current
market prices in the geographic region of the production at the time of production. When crude oil and natural gas prices decline, the Trust is affected in two ways. First, distributable income from the Royalty Properties is reduced. Second,
exploration and development activity by operators on the Royalty Properties may decline as some projects may become uneconomic and are either delayed or eliminated. It is impossible to predict future crude oil and natural gas price movements, and
this reduces the predictability of future cash distributions to Unit holders. Three Months Ended June 30, 2020 Compared to Three Months Ended
June 30, 2019 For the quarter ended June 30, 2020, royalty income received by the Trust amounted to $2,446,502 compared to royalty income of
$4,767,067 during the second quarter of 2019. The decrease in royalty income is primarily attributable to a decrease in oil and gas pricing, a decrease in oil and gas production due to Blackbeard, after assuming the role of operator of the Waddell
Ranch properties, immediately instituting a workover of specific wells, which caused the Trust not to receive any royalty income from the Waddell Ranch properties in June of 2020. Average oil and gas prices were $32.31 and $0.80, respectively, for
the quarter ending June 30, 2019, compared to $54.90 and $2.72 for the quarter ended June 30, 2019.  15




---

Interest income for the quarter ended June 30, 2020, was $2,423 compared to $4,263 during the second
quarter of 2019. The decrease in interest income is primarily attributable to substantially decreased amounts of funds available for investment. Total expenses during the second quarter of 2020 amounted to $520,893compared to $456,419 during
the second quarter of 2019. The increase in total expenses can be primarily attributed to increased expense for professional services, the timing of payment of expenses, and increase in reserve for expenses of $50,000. These transactions resulted in distributable income for the quarter ended June 30, 2020, of $1,928,032 or $0.04 per Unit of beneficial interest.
Distributions of $0.023048, $0.016499 and $0.001819 per Unit were made to Unit holders of record as of April 30, 2020, May 29, 2020, and June 30, 2019, respectively. For the second quarter of 2019, distributable income was $4,314,911
or $0.09 per Unit of beneficial interest. Royalty income for the Trust for the second quarter of the calendar year is associated with actual oil and gas
production for the period of February, March and April 2020 from the properties from which the Trusts net overriding royalty interests (Royalties) were carved. Oil and gas sales attributable to the Royalties and the properties from
which the Royalties were carved are as follows:  Three Months Ended2020


2019Royalties:Oil sales (Bbls)


76,817



79,772Gas sales (Mcf)


183,189



192,130Properties From Which The Royalties Were Carved:Oil:Total oil sales (Bbls)


205,387



209,185Average per day (Bbls)


2,257



2,299Average price per Bbl

$
32.21


$
54.90Gas:Total gas sales (Mcf)


862,083



849,009Average per day (Mcf)


9,473



9,330Average price per Mcf

$
0.80


$
2.72  16




---

The average received price of oil decreased to an average price per barrel of $32.21 per Bbl in the second
quarter of 2020, compared to $54.90 per Bbl in the second quarter of 2019 due to worldwide market variables. The Trustee has been advised by the operator of the Waddell Ranch properties that for the period of August 1, 1993 through
June 30, 2020, the oil from the Waddell Ranch properties was being sold under a competitive bid to a third party. The average price of gas (including natural gas liquids) decreased from $2.72 per Mcf in the second quarter of 2019 to $0.80 per
Mcf in the second quarter of 2020 due to change in overall market variables. Since the oil and gas sales attributable to the Royalties are based on an
allocation formula that is dependent on such factors as price and cost (including capital expenditures), the production amounts in the Royalties section of the above table do not provide a meaningful comparison. Oil sales volumes decreased and gas
sales volumes increased from the Underlying Properties (as defined in the Trusts Annual Report on Form 10-K for the year ended December 31, 2019) for the applicable period in 2020 compared to
2019. Capital expenditures for drilling, remedial and maintenance activities on the Waddell Ranch properties during the second
quarter of 2020 totaled $706,723 as compared to $1,667,431 for the second quarter of 2019. ConocoPhillips has previously informed the Trustee that the 2020 capital expenditures budget has been approved at $1.35 million (gross) for the Waddell Ranch
properties. The foregoing capital expenditures budget has been revised since Blackbeard assumed the role of operator of the Waddell Ranch properties on April 1, 2020. Blackbeards 2020 budget for the remainder of the year will be approximately
$7 million for drilling and completion, $3 million for recompletions, plug and abandonments, and infrastructure of facilities. The additional expenditures should occur later in the year. The total amount of capital expenditures for 2019 with regard
to the Waddell Ranch properties totaled $1.35 million (gross). The Trustee has been advised that there were 29 workover wells completed, 0 new wells
completed, 0 new wells in progress and 73 workover wells in progress during the three months ended June 30, 2020, as compared to no workover wells completed, no new wells completed, no new wells in progress and no workover wells in progress for
the three months ended June 30, 2019, on the Waddell Ranch properties. There were various facility projects in progress for the second quarter of 2020. Lease operating expenses and property taxes totaled $4.8 million (gross) for the second quarter of 2020, compared to $5.7 million (gross) for the
same period in 2019 on the Waddell Ranch properties due to decreased maintenance work. Six Months Ended June 30, 2020 Compared to Six Months
Ended June 30, 2019 For the six months ended June 30, 2020, royalty income received by the Trust amounted to $8,701,011 compared to royalty
income of $9,297,512 for the six months ended June 30, 2019. The decrease in royalty income is primarily attributable to a decrease in oil pricing, a decrease in oil and gas production, also by a decrease in the price of oil and gas for the six
months ending June 30, 2020, as compared to the six months ended June 30, 2019. Average oil and gas prices were $45.51 and $1.22, respectively, for the six months ending June 30, 2020 compared to $49.61 and $3.08 for the six months
ended June 30, 2019.  17




---

Interest income for the six months ended June 30, 2020, was $6,784 compared to $11,421 during the six
months ended June 30, 2019. The decrease in interest income is primarily attributable to substantially decreased amounts of funds available for investment. Total expenses during the six months ending June 30, 2020, amounted to $849,756compared to $757,550 during the six months ended June 30, 2019. The increase in total expenses can be primarily attributed to increased expense for professional services the timing of payment of expenses, and increase in reserve for
expenses of $50,000. These transactions resulted in distributable income for the six months ended June 30, 2020 of $7,858,039, or $0.17 per Unit.
For the six months ended June 30, 2019, distributable income was $8,551,383, or $0.18 per Unit. Royalty income for the Trust for the six months
ended June 30, 2020, is associated with actual oil and gas production for the period November 2019 through April 2020 from the properties from which the Royalties were carved. Oil and gas sales attributable to the Royalties and the properties
from which the Royalties were carved are as follows:  Six Months Ended2020


2019Royalties:Oil sales (Bbls)


182,754



165,665Gas sales (Mcf)


458,296



413,228Properties From Which The Royalties Were Carved:Oil:Total oil sales (Bbls)


421,856



424,463Average per day (Bbls)


2,331



2,345Average price per Bbl

$
45.51


$
49.61Gas:Total gas sales (Mcf)


1,800,566



1,890,117Average per day (Mcf)


9,948



10,443Average price per Mcf

$
1.22


$
3.08  18




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The average received price of oil decreased during the six months ended June 30, 2019 to $45.51 per
barrel compared to $49.61 per barrel for the same period in 2019 due to worldwide market variables. The decrease in the average price of gas (including natural gas liquids) from $3.08 per Mcf for the six months ended June 30, 2019, to $1.22 per
Mcf for the six months ended June 30, 2020 due to change in overall market variables. Since the oil and gas sales attributable to the Royalties are
based on an allocation formula that is dependent on such factors as price and cost (including capital expenditures), the production amounts in the Royalties section of the above table do not provide a meaningful comparison. Both oil and gas sales
volumes from the properties from which the Royalties are carved have decreased for the applicable period of 2020 compared to 2019. Capital expenditures
for drilling, remedial and maintenance activities on the Waddell Ranch properties for the six months ended June 30, 2020 totaled $1.2 million (gross) compared to $2.5 million (gross) to the Trust for the same period in 2019. ConocoPhillips has
previously advised the Trust that the 2020 capital expenditures budget for the Waddell Ranch properties is $1.35 million (gross). The foregoing capital expenditures budget has been revised since Blackbeard assumed the role of operator of the Waddell
Ranch properties on April 1, 2020. Blackbeards 2020 budget for the remainder of the year will be approximately $7 million for drilling and completion, $3 million for recompletions, plug and abandonments, and infrastructure of facilities. The
additional expenditures should occur later in the year. The foregoing capital expenditures budget may be subject to revision since Blackbeard assumed the role of operator of the Waddell Ranch properties on April 1, 2020. Blackbeard, after assuming
the role of operator of the Waddell Ranch properties, instituted a workover well capital budget for the immediate future. The Trustee has been advised
that [27] workover wells were completed and 73 workover wells were in progress on the Waddell Ranch properties during the six months ended June 30, 2020, as compared to 1 workover well completed and 2 new wells (2 vertical, 0 horizontal)
completed on the Waddell Ranch properties during the six months ended June 30, 2019. There were various facility projects in progress for the second quarter of 2020. Lease operating expenses and property taxes totaled $10 million for the six months ended June 30, 2020, compared to $12.1 million for the same
period in 2019. The decrease in lease operating expense is primarily attributable to increased spending on facilities and maintenance. Calculation of
Royalty Income The Trusts royalty income is computed as a percentage of the net profit from the operation of the properties in which the Trust
owns net overriding royalty interests. The royalty income received and recorded by the Trust was determined by the operator as noted below. These percentages of net profits are 75% and 95% in the case of the Waddell Ranch properties and the Texas
Royalty properties, respectively. Royalty income received by the Trust for the three months ended June 30, 2020 and 2019, respectively, were computed as shown in the table below:  19




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THREE MONTHS ENDED JUNE 302020


2019WADDELLRANCHPROPERTIES


TEXASROYALTYPROPERTIES


WADDELLRANCHPROPERTIES


TEXASROYALTYPROPERTIESGross proceeds of sales from the Underlying PropertiesOil proceeds

$
4,181,955


$
2,432,933


$
8,243,407


$
3,240,092Gas proceeds


548,365



119,086



2,020,644



326,558Other (adjustment)


1,672,389
(1)










Total


6,402,709



2,522,019



10,264,051



3,566,650Less:Severance tax:Oil


193,237



106,400



376,399



119,702Gas


19,517



5,018



71,250



5,963Lease operating expense and property tax:Oil and gas


4,833,468



330,000



5,695,463



360,000Capital expenditures


767,996







1,667,431



Total


5,814,134



441,418



7,810,543



485,665Net profits


588,575



2,110,601



2,453,508



3,080,985Net overriding royalty interests


75
%


95
%


75
%


95
%Royalty income

$
441,431



2,005,071


$
1,840,131



2,926,936  (1)
Due to the NPI deficit, the Waddell Ranch properties did not contribute to Royalty Income for June of 2020. As
of June 30, 2020, the cumulative NPI deficit is $1,254,292.  20




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Critical Accounting Policies and Estimates A disclosure of critical accounting policies and the more significant judgments and estimates used in the preparation of the Trusts financial statements
is included in Item 7 of the Trusts Annual Report on Form 10-K for the year ended December 31, 2019. There have been no significant changes to the critical accounting policies during the six months
ended June 30, 2020. Distributable Income Per Unit Basic distributable income per Unit is computed by dividing distributable income by the weighted average of Units outstanding. Distributable income per Unit
assuming dilution is computed by dividing distributable income by the weighted average number of Units and equivalent Units outstanding. The Trust had no equivalent Units outstanding for any period presented. Therefore, basic distributable income
per Unit and distributable income per Unit assuming dilution are the same. New Accounting Pronouncements There are no new accounting pronouncements that are expected to have significant impact on the Trusts financial statements.  Item 3.
Qualitative and Quantitative Disclosures About Market Risk Not applicable due to the Trusts status as a smaller reporting company.  Item 4.
Controls and Procedures On May 14, 2013, the Committee of Sponsoring Organizations of the Treadway Commission issued an updated version of its Internal Control  Integrated
Framework (the 2013 Framework) which helps organizations design, implement and evaluate the effectiveness of internal control concepts and simplify their use and application. 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 Rules 13a-15 and 15d-15 based on the criteria established in the 2013 Framework. Based upon that evaluation, the Trustee concluded that the Trusts disclosure controls and procedures are effective in recording, processing,
summarizing and reporting, on a timely basis, information required to be disclosed by the Trust in the reports that it files or submits under the Securities Exchange Act of 1934 and are effective in ensuring that information required to be disclosed
by the Trust in the reports that it files or submits under the Securities Exchange Act of 1934 is accumulated and communicated to the Trustee to allow timely decisions regarding required disclosure. In its evaluation of disclosure controls and
procedures, the Trustee has relied, to the extent considered reasonable, on  21




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information provided by Blackbeard, the owner of the Waddell Ranch properties and Burlington Resources Oil & Gas Company LP, the former owner of the Waddell Ranch properties, and
Riverhill Energy Corporation, the owner of the Texas Royalty properties. There has not been any change in the Trusts internal control over financial reporting during the period covered by this report that has materially affected, or is
reasonably likely to materially affect, the Trusts internal control over financial reporting.  22




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PART IIOTHER INFORMATION  Item 1A.
Risk Factors The recent spread of COVID-19, or the novel coronavirus, and the measures taken to mitigate the impact of the COVID-19 pandemic, are likely adversely affecting the business and operations of the operators of the Waddell Ranch properties and the Texas royalty properties, which in turn could have an adverse effect on trust
distributions. The business of the operators of the Waddell Ranch properties and the Texas Royalty properties is likely being adversely affected by
the COVID-19 pandemic and measures being taken to mitigate its impact. As the coronavirus pandemic and government responses are rapidly evolving, the extent of the impact on domestic sales of crude oil and
natural gas remains unknown and is constantly evolving. We experienced a sharp and rapid decline in the demand for crude oil and natural gas as the U.S. and global economy, and commodity prices, were negatively impacted as economic activity is
curtailed in response to the COVID-19 pandemic. Prices have rebounded somewhat but continue to remain depressed. Official restrictions
on non-essential activities, including shelter in place and stay at home orders, have been introduced and re-introduced throughout the
U.S. and the world, and the length of time for which they will remain continues to be unknown, which may impact our operators production activities, and the length of time such measures are in place may further adversely affect us. Fewer
businesses than normal are open and fewer people are going to work which has reduced the demand for oil and natural gas, plus our operators reliance on third-party suppliers, contractors, and service providers exposes them to possibility of
delay or interruption of operations. At this time, the full extent to which COVID-19 will negatively impact the global economy and the oil and gas industry is uncertain, but pandemics or other significant
public health events will most likely have a material adverse effect on our operators business and financial condition which would likely have an adverse effect on trust distributions. Risk factors relating to the Trust are contained in Item 1A of the Trusts Annual Report on Form 10-K for the
fiscal year ended December 31, 2019. Other than the item listed above, no material change to such risk factors has occurred during the six months ended June 30, 2020. Items 2 through 5. Not applicable.  23




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Item 6.
Exhibits  4.1

Permian Basin Amended and Restated Royalty Trust Indenture dated June 20, 2014, between Southland Royalty Company (now Burlington Resources Oil
 & Gas Company LP) and The First National Bank of Fort Worth (now Simmons Bank), as Trustee, heretofore filed as Exhibit 4.1 to the Trusts Quarterly Report on Form 10-Q to the Securities and Exchange Commission for the quarterly period
ended June 30, 2014, 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 Simmons Bank), 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. *
(P)4.3

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 Simmons Bank), 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. *
(P)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 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 on Form 8-K to the Securities and Exchange Commission filed on August
8, 2005, is incorporated herein by reference. *  24




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10.4

Underwriting Agreement dated August 17, 2006, among Permian Basin Royalty Trust, ConocoPhillips, Burlington Resources Oil & Gas Company LP
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 on Form 8-K to the Securities and Exchange Commission filed on August 22,
2006, is incorporated herein by reference. *31.1

Certification by Ron E. Hooper, Senior Vice President Royalty Trust Management of Simmons Bank, Trustee of Permian Basin Royalty Trust, dated August 10, 2020 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 Simmons Bank, Trustee of Permian Basin Royalty Trust, dated August 10, 2020 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, Simmons Bank, 2911 Turtle Creek Boulevard, Suite 850, Dallas, Texas 75219. (P) Paper exhibits.  25




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SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned
thereunto duly authorized.  SIMMONS BANK, TRUSTEE FOR
THE PERMIAN BASIN ROYALTY TRUSTBy:

/s/ RON E. HOOPERRon E. HooperSVP Royalty Trust Management
 Date: August 10, 2020 (The Trust has no directors or executive officers.)  26