PERMIAN BASIN ROYALTY TRUST 10-K

Item 9A. Controls and Procedures. Disclosure 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 Rules 13a-15 and 15d-15 promulgated under the Securities Exchange Act of 1934, as amended. Based on such evaluation, the Trustee concluded that the Trust’s disclosure controls and procedures 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, as amended, 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 information provided by Blackbeard Operating, LLC, the owner of the Waddell Ranch properties, and Riverhill Energy Corporation, the owner of the Texas Royalty properties. Changes in Internal Control over Financial Reporting There has not been any change in the Trust’s internal control over financial reporting during the twelve months ended December 31, 2022 that has materially affected, or is reasonably likely to materially affect, the Trust’s internal control over financial reporting. Trustee’s Report on Internal Control Over Financial Reporting The Trustee is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) promulgated under the Securities and Exchange Act of 1934, as amended. Internal control over financial reporting is a process to provide reasonable assurance regarding the reliability of financial reporting for external purposes in accordance with the modified cash basis of accounting. The Trustee conducted an evaluation of the effectiveness of the Trust’s internal control over financial reporting based on the criteria established in Internal Control-Integrated Framework 2013 issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on the Trustee’s evaluation under the framework in Internal Control-Integrated Framework 2013, the Trustee concluded that the Trust’s internal control over financial reporting are effective as of December 31, 2022. The independent registered public accounting firm of Weaver and Tidwell, L.L.P., as auditors of the statements of assets, liabilities and trust corpus, and the related statements of distributable income and changes in trust corpus for the year ended December 31, 2022, has issued an attestation report on the Trust’s internal control over financial reporting as of December 31, 2022, which is included herein. 44 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Unit Holders of Permian Basin Royalty Trust and Argent Trust Company, Trustee Opinion on Internal Control Over Financial Reporting We have audited Permian Basin Royalty Trust (the Trust)’s internal control over financial reporting as of December 31, 2022 based on criteria established in 2013 Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). In our opinion, the Trust maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on the COSO criteria. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the statements of assets, liabilities, and trust corpus of Permian Basin Royalty Trust as of December 31, 2022 and 2021 and the related statements of distributable income and changes in trust corpus for each of the three years in the period ended December 31, 2022, and our report dated March 1, 2023 expressed an unqualified opinion thereon. Basis for Opinion The Trustee is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Trustee’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Trust’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to Permian Basin Royalty 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. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting An entity’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the modified cash basis of accounting described in Note 2 to the financial statements. An entity’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the entity; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with the modified cash basis of accounting described in Note 2 to the financial statements, and that receipts and expenditures of the entity are being made only in accordance with authorizations of the Trustee and directors of the entity; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the entity’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Weaver and Tidwell, L.L.P. Dallas, Texas March 1, 2023 45 Table of Contents Item 9B. Other Information. None. Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspection. None. 46 Table of Contents 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 Act of 1934, as amended, 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. 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 2022, 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). STANDARDS OF CONDUCT Because the Trust has no employees, it does not have a code of ethics. Employees of the Trustee, Argent Trust Company, must comply with the company’s code of ethics which may be found at www.argentfinancial.com. Item 11. Executive Compensation During the years ended December 31, 2022, 2021 and 2020, Simmons Bank, as Trustee for such periods received total remuneration as follows: Name of Individual or Number of Persons in Group Cash Compensation Year Simmons Bank, Trustee $ 130,209 (1) 2022 Simmons Bank, Trustee $ 108,653 (1) 2021 Simmons Bank, Trustee $ 104,613 (1) 2020 (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. 47 Table of Contents COMPENSATION COMMITTEE Because the Trust has no directors, it does not have a compensation committee or maintain any equity compensation plans, and the Trust has not engaged any consultants to provide advice or recommendations on the amount or form of compensation. The Trust does not have a principal executive officer or employees and therefore, the pay ratio disclosure is not applicable. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters (a) Security Ownership of Certain Beneficial Owners . Based solely on a review of statements filed with the SEC pursuant to Section 13(d) or 13(g) of the Securities Exchange Act of 1934, as amended, the following table sets forth all persons who are known to the Trustee to own beneficially more than 5% of the outstanding Units of the Trust as of December 31, 2022: Name Number of Units Owned(1) Percent(2) Loyd Powell(3) 3,372,195 7.235 % Gideon Powell(3) 1,287,004 2.76 % SoftVest, LP(4) 4,148,095 8.9 % (1) Unless otherwise indicated, all Units are held directly with sole voting and investment power. (2) Based on 46,608,796 Units outstanding as of December 31, 2022. (3) Based on Schedule 13G/A filed February 11, 2021, reporting ownership as of December 31, 2020, jointly and as a group by Loyd Powell and Gideon Powell. The address for each of Loyd Powell and Gideon Powell is P.O. Box 12208; Suite 1610, Dallas, Texas 75225. (4) Based on Schedule 13G/A filed February 13, 2023 reporting ownership as of December 31, 2022, jointly and as a group by SoftVest Advisors, LLC, SoftVest, LP, and SoftVest GP I, LLC. The address for each of SoftVest Advisors, LLC, SoftVest, LP, and SoftVest GI I, LLC is 400 Pine Street, Suite 1010, Abilene, TX, 79601. (b) Security Ownership of Management . The Trustee does not beneficially own any securities of the Trust. (c) Change In Control . The Trustee knows of no arrangements which may subsequently result in a change in control of the Trust. (d) Securities Authorized for Issuance under Equity Compensation Plans. The Trust has no equity compensation plans. Item 13. Certain Relationships and Related Transactions, and Director Independence The Trust has no directors or executive officers. See Item 11 for the remuneration received by the Trustee during the years ended December 31, 2022, 2021 and 2020. Item 14. Principal Accounting Fees and Services Fees for services performed by Weaver and Tidwell, L.L.P. for the years ended December 31, 2022 and 2021 are: Weaver and Tidwell, L.L.P. 2022 2021 Audit fees $ 73,800 $ 84,720 Audit-related fees — — Tax fees — — All other fees — — Total $ 73,800 $ 84,720 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 Weaver and Tidwell, L.L.P. 48 Table of Contents PART IV Item 15. Exhibits, Financial Statement Schedules The following documents are filed as a part of this Report: 1. Financial Statements Included in Part II of this Report: Report of Independent Registered Public Accounting Firm 33 Statements of Assets, Liabilities and Trust Corpus at December 31, 2022 and 2021 34 Statements of Distributable Income for Each of the Three Years in the Period Ended December 31, 2022 34 Statements of Changes in Trust Corpus for Each of the Three Years in the Period Ended December 31, 2022 35 Notes to Financial Statements 36 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 Exhibit Number Exhibit (4)(a) — 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.* (b) — Amendment No. 1 to the Amended and Restated Royalty Trust Indenture of Permian Basin Royalty Trust, dated May 4, 2022, heretofore filed as Exhibit 4.1 to the Trust’s Current Report on Form 8-K to the Securities and Exchange Commission filed on May 6, 2022 is incorporated herein by reference.* (c) — 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) (d) — 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 Simmons Bank), 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.* (P) (10)(a) — 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.* (b) – 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.* 49 Table of Contents Exhibit Number Exhibit (c) — 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.* (d) — 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.* (23.1) — 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.** (99.1) — Report of Cawley, Gillespie & Associates, Inc., reservoir engineer.** * A copy of this Exhibit is available to any Unit holder, at the actual cost of reproduction, upon written request to the Trustee, Argent Trust Company, 2911 Turtle Creek Boulevard, Suite 850, Dallas, Texas 75219. ** Filed herewith. (P) Paper exhibits. 50 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. ARGENT TRUST COMPANY, TRUSTEE FOR THE PERMIAN BASIN ROYALTY TRUST By: /s/ Ron E. Hooper Ron E. Hooper SVP Royalty Trust Services Date: March 1, 2023 (The Trust has no directors or executive officers.) 51