PermRock Royalty Trust Declares Monthly Cash Distribution

Rhea-AI Summary

PermRock Royalty Trust (NYSE:PRT) has declared a monthly cash distribution of $489,995.26 ($0.040276 per Trust Unit) for January 2025, payable on February 14, 2025. The distribution is based on November 2024 production.

Key production metrics show oil sales volumes decreased to 22,491 barrels (750 Bbls/D) from 24,938 barrels, while natural gas volumes increased slightly to 28,372 Mcf (946 Mcf/D). Average oil prices declined to $67.80 per barrel from $70.24, while natural gas prices increased to $2.53 per Mcf from $2.37.

Oil receipts decreased by $0.23 million to $1.52 million, while natural gas receipts remained stable at $0.07 million. Operating expenses increased by $0.38 million to $0.97 million. Capital expenses decreased by $0.06 million to $0.05 million due to completed recompletion projects. The Trust applied $208,000 of previously reserved funds to this month's calculation.

Positive

• Natural gas production increased to 28,372 Mcf from 27,951 Mcf
• Natural gas prices improved to $2.53 per Mcf from $2.37
• Capital expenses decreased by $0.06 million to $0.05 million
• $208,000 of reserved funds applied to current distribution

Negative

• Monthly distribution decreased due to lower oil sales and prices
• Oil production declined to 22,491 barrels from 24,938 barrels
• Oil prices dropped to $67.80 per barrel from $70.24
• Operating expenses increased by $0.38 million to $0.97 million

Insights

Financial Analyst

The latest distribution announcement reveals a complex picture of PermRock's operational dynamics. The $0.040276 per unit distribution reflects underlying operational challenges, with oil sales volumes declining by 9.8% month-over-month and oil prices dropping from $70.24 to $67.80 per barrel.

The concerning aspect is the 64.4% surge in direct operating expenses to $0.97 million, which significantly impacts the Trust's distributable cash flow. While the $208,000 release from reserves provides some cushion, the fundamental metrics suggest pressure on future distributions. The reduction in capital expenses to $0.05 million might appear positive for short-term distributions but could indicate reduced investment in future production capacity.

For retail investors, it's important to understand that royalty trusts like PRT are essentially depleting assets. The declining production volumes (from 804 to 750 Bbls/D for oil) combined with higher operating costs create a challenging environment for maintaining distribution levels. The modest natural gas contribution of $0.07 million offers diversification benefit in the current price environment.

Energy Market Specialist

The production metrics reveal some concerning trends in the Trust's underlying assets. The 6.7% decline in daily oil production rate to 750 Bbls/D, coupled with the 3.5% drop in oil prices, signals potential challenges in the Permian Basin operations. While natural gas volumes showed a slight improvement, the minimal impact on revenue ($0.07 million) demonstrates the Trust's heavy dependence on oil performance.

The completion of recompletion projects in the Permian Abo area marks a transition point, but the substantial increase in operating expenses raises questions about operational efficiency. The release of $208,000 from reserves, while providing temporary support to distributions, could indicate organic growth potential. In simpler terms, the Trust is drawing from its savings to maintain payments, which isn't sustainable long-term without improved operational performance.

DALLAS, Jan. 21, 2025 /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 January 31, 2025, and payable on February 14, 2025, in the amount of $489,995.26 ($0.040276 per Trust Unit), based principally upon production during the month of November 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	22,491	750	28,372	946	$67.80	$2.53
Prior Month	24,938	804	27,951	902	$70.24	$2.37

Oil cash receipts for the properties underlying the Trust totaled $1.52 million for the current month, a decrease of $0.23 million from the prior month's distribution period.  This decrease was primarily due to a decrease in oil sales prices and volumes.

Natural gas cash receipts for the properties underlying the Trust totaled $0.07 million for the current month, essentially unchanged from the prior month's distribution period.

Total direct operating expenses, including marketing, lease operating expenses, and workover expenses, were $0.97 million, an increase of $0.38 million from the prior month's distribution period. Severance and ad valorem taxes included in this month's net profits calculation were $0.10 million.

Capital expenses were $0.05 million, a decrease of $0.06 million from the prior month's distribution period. Boaz Energy reports the decrease was primarily related to the conclusion of recompletion projects on two wells in the Permian Abo area.

Boaz Energy informed the Trust that this month's net profits calculation included the application of $208,000 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

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SOURCE PermRock Royalty Trust

FAQ

What is PRT's monthly distribution amount for January 2025?

PermRock Royalty Trust (PRT) declared a monthly distribution of $489,995.26, or $0.040276 per Trust Unit, payable on February 14, 2025.

How did PRT's oil production volumes change in November 2024?

PRT's oil production decreased to 22,491 barrels (750 Bbls/D) from the previous month's 24,938 barrels (804 Bbls/D).

What caused the decrease in PRT's distribution for January 2025?

The decrease was primarily due to lower oil sales prices and volumes, with oil prices dropping to $67.80 per barrel from $70.24 and decreased production volumes.

How much did PRT's operating expenses increase in the current period?

PRT's total direct operating expenses increased by $0.38 million to $0.97 million from the prior month's distribution period.

What was the impact of reserved funds on PRT's current distribution?

PRT applied $208,000 of previously reserved funds to the current month's net profits calculation, which were originally reserved for future capital obligations and expenses.