Why Did PBT Stock Hit A Record High Today?

• The proposed deal would also include US Land Guild, a Blackbeard subsidiary that is expected to hold around 66,500 acres of land.
• Blackbeard and its affiliates could receive certain working interests currently owned by the trust.
• The new public company would own all assets and operations of the trust, along with certain Blackbeard assets.

Shares of Permian Basin Royalty Trust (PBT) jumped 7% to an all-time high on Tuesday after the firm announced that a major shareholder proposed a potential business combination involving the trust and Blackbeard Holdings' assets.

PBT shares have been on a strong upward run lately, gaining in eight of the last nine trading sessions and surging roughly 38% during the rally.

Creation Of A New Public Company

On Monday, SoftVest, L.P, signed a preliminary non-binding agreement, under which the parties are considering the creation of a new public company that would own all assets and operations of the trust, along with certain Blackbeard assets.

The proposed deal would also include US Land Guild, a Blackbeard subsidiary expected to hold approximately 66,500 acres of land and a 15% royalty interest tied to certain mineral properties.

According to the SEC filing, Blackbeard and its affiliates could receive certain working interests currently owned by the trust, including interests related to the West Ranch and East Ranch properties.

Permian Basin Royalty Trust generates income from oil and gas properties, primarily located in Texas. The trust does not operate or manage the properties directly, instead serving as a vehicle that distributes income generated from assets including the Waddell Ranch properties.

What Does Retail Think Of PBT?

Retail sentiment for PBT on Stocktwits turned ‘neutral’ from ‘bullish’ a day earlier.

On Monday, Permian Basin Royalty Trust said that its Texas Royalty Properties reported higher oil production and stronger oil and gas prices, partly offset by lower natural gas volumes. It had also announced a cash distribution of $0.020355 per unit, payable on June 12.

Meanwhile, U.S. West Texas Intermediate (WTI) futures expiring in July fell about 0.4% to around $104 a barrel on Tuesday. Brent crude futures expiring in July were down 1.3%, at $111 a barrel.

The United States Oil Fund ETF (USO) rose 1.7% while the ProShares Ultra Bloomberg Crude Oil ETF (UCO) gained more than 2% at the time of writing.

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