PERMIAN BASIN ROYALTY TRUST

PERMIAN BASIN ROYALTY TRUST is an express trust established under Texas law on November 3, 1980. The Trust's primary function is to hold and manage specific royalty interests in oil and gas properties for the benefit of its unitholders. The Trust was created through an indenture between Southland Royalty Company and The First National Bank of Fort Worth, as Trustee. Argent Trust Company, a Tennessee chartered trust company, currently serves as the Trustee. The Trust's principal office is located at 3838 Oak Lawn Ave, Suite 1720, Dallas, Texas. On October 23, 1980, Southland Royalty Company's stockholders approved the conveyance of net overriding royalty interests to the Trust. These interests, equivalent to net profits interests, were conveyed on November 3, 1980, effective for production from and after November 1, 1980, at 7:00 a.m. The conveyed interests consist of a 75% net overriding royalty interest from Southland Royalty's fee mineral interests in the Waddell Ranch properties in Crane County, Texas, and a 95% net overriding royalty interest from Southland Royalty's major producing royalty properties, also located in Texas. The Trustee's responsibilities include collecting income generated by these royalty interests, paying all Trust expenses and charges, and then distributing the remaining available income to the unitholders. The Trust itself does not engage in any business activities and has no employees; all administrative functions are handled by the Trustee.