PermRock Royalty Trust announced that Boaz Energy II, LLC ("Boaz Energy"), the owner and operator of the oil and gas properties underlying the Trust (the "Underlying Properties"), informed the Trust that Boaz Energy and its affiliate, Boaz Energy II Royalty, LLC ("Boaz Royalty" and, together with Boaz Energy, the "Grantors"), entered into a Purchase and Sale Agreement on January 10, 2025 (the "Purchase and Sale Agreement") with T2S Permian Acquisition II LLC, a Delaware limited liability company (the "Buyer"), with respect to the Underlying Properties. The Underlying Properties are subject to the net profits interests (the "Net Profits Interest") conveyed to the Trust pursuant to that certain Conveyance of Net Profits Interest, dated May 4, 2018, by and among the Grantors, Simmons Bank (as trustee of the Trust, succeeded by Argent Trust Company) and Wilmington Trust, National Association (the "Conveyance").
Boaz Energy informed the Trust that, pursuant to the Purchase and Sale Agreement, the Grantors will sell and convey to the Buyer all of (a) Boaz Energy's right, title and interest in and to the Underlying Properties (which shall remain burdened by the Net Profits Interest and subject to the Conveyance); and (b) Boaz Energy's 4,884,861 Trust units representing beneficial interests in the Trust (the "Boaz Trust Units").
Boaz Energy reports that the Purchase and Sale Agreement contains customary conditions to the parties' obligations to consummate the closing of the transaction (the "Closing"). If customary closing conditions are satisfied, the Closing is anticipated to occur in March 2025. From and after the Closing, the Buyer will own the Underlying Properties (burdened by the Trust's Net Profits Interest and subject to the Conveyance) and the Boaz Trust Units, and the Buyer (or an affiliate thereof) will become the operator of the Underlying Properties.
Boaz Energy reports that it will help facilitate the transfer of operations of the Underlying Properties from Boaz Energy to the Buyer. Argent Trust Company, as trustee of the Trust (the "Trustee"), expects to continue administration of the Trust in the ordinary course of business.