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SABINE ROYALTY TRUST (SBR) stock intrinsic value fair value estimate & owner earnings analysis

Margin of safety$16.00 ComplexitySimple Updated
Analysis Owner's Earnings Geography Growth Strategy Chart Analysis Competitors Circle of Competence
$21.05 $65.24
bear $21.05 base $47.25 bull $65.24 margin of safety $16.00 market price* $72.48
Sabine Royalty Trust holds royalty interests in oil and gas minerals in Texas, Oklahoma, Louisiana, Mississippi, New Mexico and Florida. Operators drill and pay all costs; the Trust receives its share of the revenue each month and passes it to unitholders after trust expenses. It has no employees, no debt, no drilling or equipment spending and no stock compensation, so what unitholders earn is simply royalty receipts plus interest, less trust administrative expense. There are 14,579,345 units. The Trust makes no operating or investment decisions, so its results follow the price of oil and gas and the drilling decisions of others. Earnings per unit over the last ten years were $1.88 (2016), $2.38, $3.42, $3.02, $2.28 (the 2020 shutdown), $3.97, a peak of $8.42 (2022), then $6.19, $5.46 and $5.04 (2025). In 2025 royalty income was $77.1 million on 786,192 barrels of oil sold at $64.85 and 13.7 billion cubic feet of gas at $2.61, and administrative expense rose 16% to $4.09 million. Earnings level used. We took the middle value of 2018-2025, $4.50 per unit. That window includes the 2020 collapse, the 2021 recovery and the 2022 spike, so it covers a full price cycle; 2016-2017 are left to the bear case. Administration cost of $4.09 million in 2025 is about 6 cents per unit above the average for the window; we did not adjust for it. The most recent five years alone would give $5.46, but that is lifted by the 2021-2022 price spike. Growth check: 2025 earnings fell 7.8% from 2024. Our base case starts at $4.50, which is 10.7% below 2025, so it begins below the latest actual trend. That is supported by the first-quarter 2026 report (per-unit income of $0.89 against $1.24 a year earlier, oil volumes down 34% and gas down 27%) and by the monthly payouts announced for May, June, September and October 2026, which ranged from about $0.33 to $0.50 per unit. In the Trust's October 2026 announcement, oil sold in July was about 45,000 barrels at about $80, against roughly 65,000 barrels a month in 2025, so volumes are lower even where prices are better. No growth is credited anywhere. What keeps the earnings going. Proved reserves at the end of 2025 were 19.4 million barrels of oil equivalent against 3.08 million produced in 2025, about six years of output at the current rate. On those reserves alone the stream would shrink quickly. The record, however, is that operators keep replacing them: reserves rose from about 12.8 million at the start of 2018 to 19.4 million at the end of 2025, and reserve additions exceeded output in 2023 (3.7 vs 2.0 million) and 2024 (7.3 vs 3.3 million) and nearly matched it in 2025 (2.9 vs 3.1 million). Reserves also held roughly flat through 2019 and 2020. That eight-year record, funded entirely by operators on acreage the Trust already owns, is why the base case holds the level flat for ten years instead of shrinking it. The Trust's own reserve report values its total proved reserves at $301 million, or $20.66 per unit, with $611 million ($41.92 per unit) of undiscounted future net inflows at recent average prices of $66.01 per barrel of oil and $3.40 per MMBtu. What we left out: any rise in oil or gas prices, any volume growth, and any replacement of reserves beyond year ten, where the evidence stops. Base case, $47.25 per unit. Earnings of $4.50 a year for ten years are worth $33.12 today. After year ten the stream declines 10% a year, against the 16% a year implied by reserves of six years of output, because replacement has so far offset part of depletion; that tail is worth $14.13. Future payments are counted at 6% a year. The Trust owes nothing, so the business value and the per-unit value are the same. The tail is the largest judgement: at an 8% decline the base is about $49.63, at 12% about $45.41, and if earnings were $4.00 instead of $4.50 it would be about $42.00. Bear case, $21.05 per unit. This repeats the industry's own record. In 2015-2016 earnings fell from $3.15 to $1.88, a 40% drop, and in 2020 they fell from $3.02 to $2.28. The bear case has earnings of $3.60 in year one, a trough of $2.10 in year two, a recovery over years three to six to about $2.30-$2.80 (before volume erosion), in line with the 2017-2019 average of $2.94, and a second 2020-style shock in year seven (about 30% lower). Operator replacement of reserves is also assumed to slip, with volumes eroding 4% a year from year three, as the sharp first-quarter 2026 volume decline hints. The resulting years are $3.60, $2.10, $2.21, $2.58, $2.48, $2.29, $1.55, $1.88, $1.95 and $1.88, worth $17.05 today, and after year ten earnings fall 16% a year (no replacement at all), worth $4.01. The Trust owes nothing, so the whole $21.05 belongs to unitholders. It is close to the $20.66 the Trust's reserve report gives for its existing proved reserves. Bull case, $65.24 per unit. Earnings hold at $5.56 a year for ten years, the average of 2023-2025, then fall 6% a year as replacement continues. Ten years are worth $40.92 and the tail $24.32. The Trust owes nothing, so all $65.24 belongs to unitholders. Nothing above recent prices or volumes is assumed. Margin-of-safety price, $16.00. We are not sure of the level: earnings have ranged from $1.88 to $8.42 in ten years, and the trust controls nothing that drives them. The worst plausible outcome is a long oil and gas slump together with operators drilling less on the Trust's acreage. The structure survives that. There is no debt, no fixed costs beyond roughly $4 million of administration, and nothing to refinance, and the Trust would only terminate if gross revenue were below $2 million for two successive years (2025 royalty income was $77.1 million) or unitholders voted to end it. What would hurt is a lasting fall in income, with distributions near $2 a unit for several years, as in 2016. The two things we are most likely to be wrong about are the replacement of reserves and the price level. If replacement stopped altogether while prices stayed where they are, earnings would fall about 16% a year from $4.50 and distributions would equal the margin-of-safety price after about five years rather than the 3.6 years of the base case. Repeating the 2015-2016 and 2020 experience as in our bear case, distributions per unit would still run between $1.55 and $3.60 a year. The price assumes a three-to-five-year holding period with monthly distributions; at $16 the base-case $4.50 is a cash yield above 28%, which with the unit value held steady already exceeds the 20% target, and it leaves room for being wrong on replacement. That is why the margin-of-safety price is $16.00, and not a higher price that works only if replacement continues and prices hold. Other risks. Oklahoma withholding-tax refunds were denied for 2018 through 2023, and trustee and escrow fees are rising. Both are small compared with price and volume risk. The earlier estimate for this Trust (bear $19.00, base $39.50, bull $69.00, August 2026) was prepared on a different basis and is not comparable; what has changed in the business since is the weaker 2026 volume evidence.
Fiscal yearOwner's earningsMethodology
2025 $5.04 ▼
Passive royalty trust: no employees, no debt, no capital expenditures and no stock-based compensation, so owner earnings equal distributable income (cash royalty receipts plus interest less trust general and administrative expenses). FY2025: royalty income $77,061,857 + interest income $471,835 = $77,533,692 total, less general and administrative expenses $4,090,067 = distributable income $73,443,625; divided by 14,579,345 units (basic and diluted) = $5.04 per unit. Realized prices $64.85 per Bbl of oil and $2.61 per Mcf of gas on 786,192 Bbls and 13,685,401 Mcf sold; total production 3,080 MBOE against year-end proved developed reserves of 19,433 MBOE. The Trust states it has no long-term debt instruments, and year-end trust corpus of $8,706,932 is immaterial per unit, so no net-cash bridge adjustment is made. Source: FY2025 Form 10-K (accession 0001193125-26-081251), Statements of Distributable Income, MD&A, and Note 8 Supplemental Oil and Gas Information.
2024 $5.46 ▼
Passive royalty trust: no employees, no debt, no capital expenditures and no stock-based compensation, so owner earnings equal distributable income (cash royalty receipts plus interest less trust general and administrative expenses). FY2024: royalty income $82,569,642 + interest income $601,454 = $83,171,096 total, less general and administrative expenses $3,528,402 = distributable income $79,642,694; divided by 14,579,345 units (basic and diluted) = $5.46 per unit. Realized prices $77.04 per Bbl of oil and $1.88 per Mcf of gas on 815,811 Bbls and 16,509,134 Mcf sold. Source: FY2025 Form 10-K (accession 0001193125-26-081251), Statements of Distributable Income, 2024 comparative column, and MD&A.
2023 $6.19 ▼
Passive royalty trust: no employees, no debt, no capital expenditures and no stock-based compensation, so owner earnings equal distributable income (cash royalty receipts plus interest less trust general and administrative expenses). FY2023: royalty income $93,012,044 + interest income $803,530 = $93,815,574 total, less general and administrative expenses $3,564,339 = distributable income $90,251,235; divided by 14,579,345 units (basic and diluted) = $6.19 per unit. Realized prices $79.60 per Bbl of oil and $3.52 per Mcf of gas on 780,930 Bbls and 11,819,167 Mcf sold. Source: FY2023 Form 10-K (accession 0001193125-24-052967), Statements of Distributable Income; volumes and prices from FY2025 Form 10-K (accession 0001193125-26-081251) MD&A.
2022 $8.42 ▼
Passive royalty trust: no employees, no debt, no capital expenditures and no stock-based compensation, so owner earnings equal distributable income (cash royalty receipts plus interest less trust general and administrative expenses). FY2022: royalty income $125,749,358 + interest income $231,935 = $125,981,293 total, less general and administrative expenses $3,287,420 = distributable income $122,693,873; divided by 14,579,345 units (basic and diluted) = $8.42 per unit. Driven by realized prices of $90.41 per Bbl of oil and $5.96 per Mcf of gas on 608,140 Bbls and 14,092,037 Mcf sold. Source: FY2023 Form 10-K (accession 0001193125-24-052967), Statements of Distributable Income, 2022 comparative column; volumes and prices from FY2022 Form 10-K (accession 0001193125-23-054030) MD&A.
2021 $3.97 ▼
Sabine Royalty Trust is a passive royalty trust: no employees, no debt, no capital expenditures and no stock-based compensation, so owner earnings equal distributable income, which is cash royalty receipts plus interest less trust general and administrative expenses. FY2021: royalty income $60,904,253 + interest income $5,815 = $60,910,068 total, less general and administrative expenses $3,054,186 = distributable income $57,855,882; divided by 14,579,345 units outstanding (basic and diluted; the Trust has no equivalent units) = $3.97 per unit. No capex or SBC adjustment is applicable. Source: FY2023 Form 10-K (accession 0001193125-24-052967), Statements of Distributable Income, 2021 comparative column.
2020 $2.28 ▼
Passive royalty trust: no employees, no debt, no capital expenditures and no stock-based compensation, so owner earnings equal distributable income (cash royalty receipts plus interest less trust general and administrative expenses). Same basis as the stored FY2021-FY2025 rows. FY2020 (2020 shutdown year): royalty income $36,333,273 + interest income $30,601 = $36,363,874 total, less general and administrative expenses $3,057,247 = distributable income $33,306,627; divided by 14,579,345 units (basic and diluted; no equivalent units) = $2.2845 per unit (Trust reports $2.28). Working-capital movement, SBC and maintenance capex are nil for this trust (modified cash basis). Source: FY2020 Form 10-K (accession 0001193125-21-096382), Statements of Distributable Income, 2020 column.
2019 $3.02 ▼
Passive royalty trust: no employees, no debt, no capital expenditures and no stock-based compensation, so owner earnings equal distributable income (cash royalty receipts plus interest less trust general and administrative expenses). Same basis as the stored FY2021-FY2025 rows. FY2019: royalty income $46,726,948 + interest income $166,481 = $46,893,429 total, less general and administrative expenses $2,857,442 = distributable income $44,035,987; divided by 14,579,345 units (basic and diluted; no equivalent units) = $3.0204 per unit (Trust reports $3.02). Working-capital movement, SBC and maintenance capex are nil for this trust (modified cash basis). Source: FY2020 Form 10-K (accession 0001193125-21-096382), Statements of Distributable Income, 2019 column.
2018 $3.42 ▼
Passive royalty trust: no employees, no debt, no capital expenditures and no stock-based compensation, so owner earnings equal distributable income (cash royalty receipts plus interest less trust general and administrative expenses). Same basis as the stored FY2021-FY2025 rows. FY2018: royalty income $52,386,070 + interest income $142,289 = $52,528,359 total, less general and administrative expenses $2,598,657 = distributable income $49,929,702; divided by 14,579,345 units (basic and diluted; no equivalent units) = $3.4247 per unit (Trust reports $3.42). Working-capital movement, SBC and maintenance capex are nil for this trust (modified cash basis). Source: FY2020 Form 10-K (accession 0001193125-21-096382), Statements of Distributable Income, 2018 column.
2017 $2.38 ▼
Passive royalty trust: no employees, no debt, no capital expenditures and no stock-based compensation, so owner earnings equal distributable income (cash royalty receipts plus interest less trust general and administrative expenses). Same basis as the stored FY2021-FY2025 rows. FY2017: royalty income $37,162,911 + interest income $40,514 = $37,203,425 total, less general and administrative expenses $2,474,368 = distributable income $34,729,057; divided by 14,579,345 units (basic and diluted; no equivalent units) = $2.3821 per unit. Working-capital movement, SBC and maintenance capex are nil for this trust (modified cash basis). Source: FY2017 Form 10-K (accession 0001193125-18-075015), Statements of Distributable Income.
2016 $1.88 ▼
Passive royalty trust: no employees, no debt, no capital expenditures and no stock-based compensation, so owner earnings equal distributable income (cash royalty receipts plus interest less trust general and administrative expenses). Same basis as the stored FY2021-FY2025 rows. FY2016: royalty income $30,022,292 + interest income $8,418 = $30,030,710 total, less general and administrative expenses $2,554,716 = distributable income $27,475,994; divided by 14,579,345 units (basic and diluted; no equivalent units) = $1.8846 per unit. Working-capital movement, SBC and maintenance capex are nil for this trust (modified cash basis). Source: FY2017 Form 10-K (accession 0001193125-18-075015), Statements of Distributable Income, 2016 comparative column.

Owner's earnings per share by fiscal year, most recent first. Tap a row to see how that figure was calculated, including the source filing.

Sales geography
United States: royalties on oil and gas produced in Texas, Oklahoma, Louisiana, Mississippi, New Mexico and Florida (South and West regions), including the Permian Basin of West Texas and New Mexico, East Texas, the Texas Gulf Coast and the Anadarko Basin of Oklahoma.
Historical growth strategy
The Trust has no growth strategy of its own: it is a passive royalty trust that cannot acquire properties, borrow to invest or fund drilling. Its income grows or shrinks only with oil and gas prices and with drilling and production by third-party operators on its mineral and royalty acreage in Texas, Oklahoma, Louisiana, Mississippi, New Mexico and Florida.
Chart analysis
Over the past year the units have traded in a sideways band of roughly $65 to $80 (52-week range about $65.31 to $79.86), and in July and August 2026 they held between about $70 and $75.50, closing at $74.85 on August 31, 2026. A chartist would call this a range-bound consolidation with support in the high $60s to low $70s and resistance near $80, with no confirmed breakout in either direction. Daily moves are modest, mostly within about 2%, and the price behaves like an income security that trades on its distribution yield (about 6%), so a decisive close above $80 would be the bullish signal and a break below the mid-$60s the bearish one.
Competitors

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Circle of competence

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