PermRock Royalty Trust Declares Monthly Cash Distribution

Rhea-AI Summary

PermRock Royalty Trust (NYSE:PRT) announced a monthly cash distribution of $279,468.85 ($0.022971 per Trust Unit) for March 2024, based on January 2024 production. Oil sales volumes decreased, leading to a $0.21 million drop in oil cash receipts, while natural gas cash receipts increased by $0.01 million. Operating expenses decreased, but capital expenses rose due to drilling activities.

Insights

Financial Analyst

The recent distribution announcement by PermRock Royalty Trust is a reflection of the company's operational performance and commodity price fluctuations. The disclosed decrease in oil sales volumes, despite a slight increase in the average received wellhead price for oil, suggests a potential concern for revenue stability. Investors should note that the volatility in commodity prices can significantly influence the trust's distributions. The increase in natural gas prices, on the other hand, has contributed positively to the cash receipts, albeit marginally.

It is also noteworthy that the decrease in direct operating expenses could signal efficiency improvements or cost-cutting measures, which are beneficial for the profit margins. However, the increase in capital expenses due to drilling activities indicates strategic investment for future production, which could potentially enhance long-term revenue. Stakeholders should weigh the short-term impact of increased capital expenditure against the potential for increased production and revenue in the future.

Energy Market Analyst

Examining the sales volumes and pricing data provided, it's evident that the energy sector's inherent price volatility has a direct impact on trusts like PermRock. The fluctuating wellhead prices are a testament to the oil and gas market's response to global economic forces and geopolitical events. The increase in natural gas prices may reflect market trends towards cleaner energy sources, which could lead to a strategic shift in production focus.

Investors should also consider the broader implications of PermRock's drilling activities in the Permian Shelf, a region known for its rich oil reserves. Such capital investments are indicative of a long-term strategy to capitalize on this resource-rich area. The trust's performance is thus not only a measure of its operational success but also of the market's dynamics, which can offer insights into the sector's trajectory.

Tax Specialist

From a taxation perspective, the decrease in severance and ad valorem taxes aligns with the reduced oil sales volumes. Investors should be aware of the tax implications of their trust unit holdings, as these can affect the net income received. The trust's ability to manage its tax liabilities effectively, as seen in the reduced taxes, can have a positive effect on the cash distributions to the unit holders.

Furthermore, understanding the tax benefits and obligations that come with investing in a royalty trust is essential, as it differs from other investment vehicles. The tax treatment of the distributions, which typically include depletion allowances, can offer a unique advantage for investors looking for tax-efficient income streams.

DALLAS, March 18, 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 March 28, 2024, and payable on April 12, 2024, in the amount of $279,468.85 ($0.022971 per Trust Unit), based principally upon production during the month of January 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	22,711		733		26,547		856		$71.89		$3.62
Prior Month	26,163		844		30,533		985		$70.23		$2.97

Oil cash receipts for the properties underlying the Trust totaled $1.63 million for the current month, a decrease of $0.21 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 $0.10 million for the current month, an increase of $0.01 million from the prior month's distribution period. This increase was due to an increase in natural gas prices.

Total direct operating expenses, including marketing, lease operating expenses, and workover expenses, were $0.65 million, a decrease of $0.10 million from the prior month's distribution period. Severance and ad valorem taxes were $0.14 million, a decrease of $0.01 million from the prior month's distribution. Capital expenses this month were $0.32 million, an increase of $0.07 million from the prior month's distribution period. Boaz Energy reports the increase was primarily related to drilling a well in the Permian Shelf.

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 March 31, 2023, 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-302090770.html

SOURCE PermRock Royalty Trust

FAQ

What is the monthly cash distribution announced by PermRock Royalty Trust for March 2024?

PermRock Royalty Trust declared a monthly cash distribution of $279,468.85 ($0.022971 per Trust Unit) for March 2024.

Why did the oil cash receipts decrease for the current month as per the PR?

The decrease in oil cash receipts was primarily due to a decrease in oil sales volumes for the properties underlying the Trust.

What led to the increase in natural gas cash receipts for the current month according to the PR?

The increase in natural gas cash receipts was due to an increase in natural gas prices for the properties underlying the Trust.

What were the total direct operating expenses mentioned in the PR for the current month?

Total direct operating expenses, including marketing, lease operating expenses, and workover expenses, were $0.65 million for the current month.

Why did the capital expenses increase for the current month as per the PR?

The increase in capital expenses was primarily related to drilling a well in the Permian Shelf, as reported by Boaz Energy.