In short: Special-situation royalty #1: a sleepy 40-year Central Basin Platform trust structured as a net-profits interest, being restructured by SoftVest and operator Blackbeard into a straight royalty (no opex/capex) plus contributed land with water, power/substation and high-performance-computing optionality. Oil-sensitive for now; underwritten at a 10–12% base with mid-teens-to-low-20s upside from land monetization and Central Basin bolt-ons.
PBT is an old trust that collects income from oil and gas wells in West Texas. Until now it was a "net profits interest" — unitholders only got paid after the operator subtracted its running costs, taxes and new drilling spending, so costs ate into the payout.
Davolos likes the planned makeover: SoftVest and the operator Blackbeard are converting it into a straight royalty (a clean cut of revenue with no share of costs) and adding land. That land comes with side businesses — handling the salty water that drilling produces, power substations, even sites for data centers. For now income still swings with the oil price, but he sees a 10–12% base return with a path to mid-teens or better if the land gets monetized and neighboring properties get bolted on.
31:53I mean, I'll give you two that are royalty oriented businesses that have a bit of a special situation tilt to them. The first one is a company called Permian Basin Royalty Trust. So for the past 40-some-odd years, it was basically a sleepy little trust in the Central Basin, which is basically the uplift between, sorry, the Central Basin Platform, which is basically an uplift between the Delaware and the Permian Basin.
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