319654--3/13/2007--PERMIAN_BASIN_ROYALTY

related topics

{interest, director, officer}

{loss, insurance, financial}

{operation, international, foreign}

{gas, price, oil}

{operation, natural, condition}

Increased production and development costs attributable to the Royalties will result in decreased Trust distributions unless revenues also increase. Trust reserve estimates depend on many assumptions that may prove to be inaccurate, which could cause both estimated reserves and estimated future net revenues to be too high, leading to write-downs of estimated reserves. The assets of the Trust are depleting assets and, if BROG and the other operators developing the Underlying Properties do not perform additional development projects, the assets may deplete faster than expected. Eventually, the assets of the Trust will cease to produce in commercial quantities and the Trust will cease to receive proceeds from such assets. In addition, a reduction in depletion tax benefits may reduce the market value of the Units. The market price for the Units may not reflect the value of the royalty interests held by the Trust. The assets of the Trust are depleting assets and, if BROG and the other operators developing the Underlying Properties do not perform additional development projects, the assets may deplete faster than expected. Eventually, the assets of the Trust will cease to produce in commercial quantities and the Trust will cease to receive proceeds from such assets. In addition, a reduction in depletion tax benefits may reduce the market value of the Units. The market price for the Units may not reflect the value of the royalty interests held by the Trust. Operational risks and hazards associated with the development of the Underlying Properties may decrease Trust distributions. Terrorism and continued hostilities in the Middle East could decrease Trust distributions or the market price of the Units. Unit holders and the Trustee have no influence over the operations on, or future development of, the Underlying Properties. The operators developing the Texas Royalty properties have no duty to protect the interests of the Unit holders, and do not have sole discretion regarding development activities on the Underlying Properties. The operator developing any Underlying Property may transfer its interest in the property without the consent of the Trust or the Unit holders. The operator developing any Underlying Property may abandon the property, thereby terminating the Royalties payable to the Trust. The Royalties can be sold and the Trust would be terminated. Unit holders have limited voting rights and have limited ability to enforce the Trust s rights against the current or future operators developing the Underlying Properties. The operator developing any Underlying Property may transfer its interest in the property without the consent of the Trust or the Unit holders. The operator developing any Underlying Property may abandon the property, thereby terminating the Royalties payable to the Trust. The Royalties can be sold and the Trust would be terminated. Unit holders have limited voting rights and have limited ability to enforce the Trust s rights against the current or future operators developing the Underlying Properties.

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319654--3/13/2007--PERMIAN_BASIN_ROYALTY_TRUST