PermRock Royalty Trust Declares Monthly Cash Distribution

Rhea-AI Summary

PermRock Royalty Trust (NYSE: PRT) declared a monthly cash distribution of $486,630.74 ($0.040000 per Trust Unit) to record holders as of June 28, 2024. The distribution, payable on July 15, 2024, is based on April's production. Oil sales volumes were 23,159 Bbls at $83.14 per Bbl, and natural gas sales were 27,916 Mcf at $2.31 per Mcf. Compared to the prior month, oil receipts decreased by $0.13 million, and natural gas receipts fell by $0.03 million. Operating expenses increased by $0.01 million to $0.74 million, while severance and ad valorem taxes rose by $0.06 million to $0.14 million. Capital expenses jumped by $0.17 million to $0.30 million due to well conversion in Texas. Boaz Energy applied $14,048 to cover future obligations.

Positive

• Monthly cash distribution of $486,630.74 ($0.040000 per Trust Unit).
• Oil sales price increased to $83.14 per Bbl from $78.88.
• Natural gas sales volume increased to 27,916 Mcf from 28,443 Mcf.
• Severance tax reimbursements qualifying for exemptions.

Negative

• Oil sales volume decreased from 26,162 Bbls to 23,159 Bbls.
• Natural gas sales price decreased from $3.00 per Mcf to $2.31 per Mcf.
• Oil cash receipts decreased by $0.13 million.
• Natural gas cash receipts decreased by $0.03 million.
• Operating expenses increased by $0.01 million to $0.74 million.
• Severance and ad valorem taxes increased by $0.06 million.
• Capital expenses increased by $0.17 million to $0.30 million.

Insights

Financial Analyst

PermRock Royalty Trust announced their monthly cash distribution of $486,630.74 ($0.040000 per Trust Unit), which was based on April 2024 production numbers. Notably, the cash receipts for oil decreased by $0.13 million from the previous month, while natural gas cash receipts decreased by $0.03 million. These declines were attributed to a decrease in sales volumes and prices respectively. Additionally, operating expenses slightly increased by $0.01 million and severance and ad valorem taxes rose by $0.06 million due to the end of certain tax exemptions. Increased capital expenses, particularly for a well conversion project, also impacted the net profits.

From an investment perspective, the decrease in oil and gas receipts is a minor concern. However, it's mitigated by the average wellhead prices holding steady for oil and only slightly declining for natural gas. This suggests that while volume fluctuations are influencing short-term cash distributions, the underlying asset values remain relatively robust. Increased operating and capital expenses are typical in ongoing operations, but investors should keep an eye on future capital outlays, especially if they continue to impact distributions.

Short-term, the reduced distribution might concern some income-focused investors. Long-term, the continuous investment in well conversions and maintenance could sustain or even improve future production and distributions. Investors should balance these short-term dips with the potential for long-term operational stability and growth.

Market Research Analyst

The distribution declaration reflects the operational intricacies of the oil and gas industry. The drop in natural gas prices to $2.31 per Mcf from $3.00 last month highlights the commodity price volatility, which is a critical factor for stakeholders to monitor. The decrease in oil sales volumes but holding oil price at $83.14 per barrel compared to $78.88 previously, suggests supply-demand dynamics are favoring oil prices despite volume reductions.

Higher direct operating expenses and increased severance taxes are factors that can erode investor returns. However, the proactive conversion of a well to an injector in Terry County, Texas, signifies ongoing efforts to enhance production efficiency and reservoir management. This strategic investment indicates a long-term focus on optimizing asset performance, which could benefit investors.

For retail investors, the primary takeaway should be the importance of understanding operational costs and capital investments in the context of commodity price trends. While monthly distributions may fluctuate, the underlying strategy of maintaining and improving assets can indicate future profit potential.

DALLAS, June 17, 2024 /PRNewswire/ -- PermRock Royalty Trust (NYSE: PRT) (the "Trust") today declared a monthly cash distribution to record holders of its trust units representing beneficial interests in the Trust ("Trust Units") as of June 28, 2024, and payable on July 15, 2024, in the amount of $486,630.74 ($0.040000 per Trust Unit), based principally upon production during the month of April 2024.

The following table displays underlying oil and natural gas sales volumes and average received wellhead prices attributable to the current and prior month net profits interest calculations:

	Underlying Sales Volumes				Average Price
	Oil		Natural Gas		Oil	Natural Gas
	Bbls	Bbls/D	Mcf	Mcf/D	(per Bbl)	(per Mcf)
Current Month	23,159	772	27,916	931	$83.14	$2.31
Prior Month	26,162	844	28,443	918	$78.88	$3.00

Oil cash receipts for the properties underlying the Trust totaled $1.93 million for the current month, a decrease of $0.13 million from the prior month's distribution period.  This decrease was primarily due to a decrease in oil sales volumes.

Natural gas cash receipts for the properties underlying the Trust totaled $0.06 million for the current month, a decrease of $0.03 million from the prior month's distribution period.  This decrease was primarily due to a decrease in gas sales prices. 

Total direct operating expenses, including marketing, lease operating expenses, and workover expenses, were $0.74 million, an increase of $0.01 million from the prior month's distribution period. Severance and ad valorem taxes were $0.14 million, an increase of $0.06 million from the prior month's distribution period. Boaz Energy reports this increase was due to severance tax reimbursements for qualifying exemptions that reduced severance tax amounts in the prior month's distribution period. Capital expenses were $0.30 million, an increase of $0.17 million from the prior month's distribution period. Boaz Energy reports the increase was primarily due to capital expenses for the conversion of a well to an injector in Terry County, Texas.

Boaz Energy informed the Trust that this month's net profits calculation included the application of $14,048 net to the Trust of funds previously reserved by Boaz Energy to cover future capital obligations and expenses.

About PermRock Royalty Trust

PermRock Royalty Trust is a Delaware statutory trust formed by Boaz Energy II, LLC ("Boaz Energy") to own a net profits interest representing the right to receive 80% of the net profits from the sale of oil and natural gas production from certain properties owned by Boaz Energy in the Permian Basin of West Texas. For more information on PermRock Royalty Trust, please visit our website at www.permrock.com.

Cautionary Statement Concerning Forward-Looking Statements

Certain statements contained in this press release constitute "forward-looking statements." These forward-looking statements represent the Trust's and Boaz Energy's expectations or beliefs concerning future events, and it is possible that the results described in this press release will not be achieved. These forward-looking statements include the amount and date of any anticipated distribution to unitholders, future cash retentions, advancements or recoupments from distributions, and statements regarding Boaz Energy's operations and the resulting impact on the computation of the Trust's net profits. The amount of cash received or expected to be received by the Trust (and its ability to pay distributions) has been and will continue to be directly affected by volatility in commodity prices and oversupply. Other important factors that could cause actual results to differ materially from those projected in the forward-looking statements include expenses of the Trust and reserves for anticipated future expenses, uncertainties in estimating the cost of drilling activities and risks associated with drilling and operating oil and natural gas wells.

Any forward-looking statement speaks only as of the date on which it is made, and, except as required by law, the Trust does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for the Trust to predict all such factors. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements in the Trust's Annual Report on Form 10-K filed with the SEC on April 1, 2024, and other public filings filed with the SEC. The risk factors and other factors noted in the Trust's public filings with the SEC could cause its actual results to differ materially from those contained in any forward-looking statement. The Trust's filed reports are or will be available over the Internet at the SEC's website at http://www.sec.gov.

Contact:	PermRock Royalty Trust
	Argent Trust Company, Trustee
	Jana Egeler, Vice President, Trust Administrator
	Toll-free: (855) 588-7839
	Fax: (214) 559-7010
	Website:  www.permrock.com
	e-mail:  trustee@permrock.com

View original content:https://www.prnewswire.com/news-releases/permrock-royalty-trust-declares-monthly-cash-distribution-302173792.html

SOURCE PermRock Royalty Trust

FAQ

What is the monthly cash distribution declared by PermRock Royalty Trust in June 2024?

PermRock Royalty Trust declared a monthly cash distribution of $486,630.74 ($0.040000 per Trust Unit).

When is the distribution payable for PermRock Royalty Trust's declared distribution?

The distribution is payable on July 15, 2024.

What were the oil sales volumes for PermRock Royalty Trust in April 2024?

The oil sales volumes were 23,159 Bbls.

What was the average price received for natural gas by PermRock Royalty Trust in April 2024?

The average price received for natural gas was $2.31 per Mcf.

How did the oil cash receipts change for PermRock Royalty Trust from the prior month's distribution period?

Oil cash receipts decreased by $0.13 million from the prior month's distribution period.

What amount of funds did Boaz Energy apply to cover future capital obligations and expenses for PermRock Royalty Trust?

Boaz Energy applied $14,048 to cover future capital obligations and expenses.