PermRock Royalty Trust Declares No Monthly Cash Distribution for August

Rhea-AI Summary

PermRock Royalty Trust (NYSE: PRT) announced no cash distribution for Trust Unit holders for August 31, 2020. The decision reflects a net profit income of $45,428 intended for administrative expenses. Oil sales increased to $1.39 million as production resumed after previous shutdowns, while natural gas sales reached $0.06 million. Operational expenses rose to $0.64 million. Capital expenditures totaled $0.05 million, with funds reserved to cover future obligations. Market volatility and ongoing low commodity prices pose risks for future distributions.

Positive

• Oil cash receipts increased by $1.11 million from the prior month due to higher production and oil prices.
• Natural gas cash receipts rose by $0.01 million due to increased sales volumes.

Negative

• No monthly cash distribution to Trust Unit holders for August 2020.
• Total direct operating expenses increased by $0.29 million compared to the previous month.
• Ongoing low oil and natural gas prices may result in no distributions for an extended period.

FORT WORTH, Texas, Aug. 21, 2020 /PRNewswire/ -- PermRock Royalty Trust (NYSE: PRT) (the "Trust") today declared there will be no monthly cash distribution to record holders of its trust units representing beneficial interests in the Trust ("Trust Units") as of August 31, 2020.  The net profits calculation was based principally upon production during the month of June 2020 and includes $45,428 in net profits income to be distributed to the Trust, which amount will be used to cover Trust administrative expenses.

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 (per Bbl)	Natural Gas (per Mcf)
	Bbls	Bbls/D	Mcf	Mcf/D
Current Month	38,850	1.295	37,935	1,265	$35.75	$1.64
Prior Month	17,201	555	51,084	1,648	$16.28	$0.93

Oil cash receipts for the properties underlying the Trust totaled $1.39 million for the current month, an increase of $1.11 million from the prior month distribution period due to increased production and oil prices in June 2020. Boaz Energy reported that normal production operations resumed in early June 2020 following the shut in of a material amount of production from the properties underlying the Trust during portions of May 2020 due to oil price uncertainties.

Natural gas cash receipts for the properties underlying the Trust totaled $0.06 million for the current month, an increase of $0.01 million from the prior month's distribution period due to an increase in sales volumes and natural gas prices.

Total direct operating expenses, including marketing, lease operating expenses and workover expenses, were $0.64 million reflecting a $0.29 million increase from the prior month. Severance and ad valorem taxes were $0.18 million.

Capital expenditures were $0.05 million in the current month reflecting a $0.02 million increase from the prior month.  Boaz Energy reported these expenditures primarily related to drilling and completion operations on non-operated properties in Crane County.  Boaz Energy informed the Trust that this month's net profits calculation included $320,960 net to the Trust of funds reserved by Boaz Energy to cover capital obligations and expenses.  Boaz Energy indicated $140,606 of those funds were applied as recoupment of the $140,606 advancement Boaz Energy made to the Trust in July 2020, while the remaining $180,354 was reserved by Boaz Energy to cover Boaz Energy's 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 Boaz Energy's operations with regard to producing leases, anticipated drilling and completion activities 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 the volatility in commodity prices, which have declined since the beginning of 2020 in response to the economic effects of the COVID-19 pandemic and the dispute over production levels between Russia and the members of the Organization of Petroleum Exporting Countries, including Saudi Arabia, resulting in an oversupply of crude oil and exacerbating the decline in crude oil prices, and could remain low for an extended period of time. Further, continued low oil and natural gas prices may continue to result in no distributions to unitholders for an unknown period of time. 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 Securities and Exchange Commission (the "SEC") on March 30, 2020 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
	Simmons Bank, Trustee
	Lee Ann Anderson, Senior Vice President
	Toll-free: (855) 588-7839
	Fax: (817) 298-5579
	Website:  www.permrock.com
	e-mail:  trustee@permrock.com

 

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SOURCE PermRock Royalty Trust

FAQ

Why did PermRock Royalty Trust not declare a cash distribution for August 2020?

PermRock Royalty Trust declared no cash distribution due to low net profits of $45,428, which will be used for administrative expenses.

What were the total oil and natural gas sales for PermRock Royalty Trust in August 2020?

The total oil sales amounted to $1.39 million, while natural gas sales reached $0.06 million.

How have operational expenses changed for PermRock Royalty Trust?

Total direct operating expenses increased to $0.64 million, reflecting a $0.29 million rise from the previous month.

What risks does PermRock Royalty Trust face regarding future distributions?

The Trust faces risks due to ongoing volatility in commodity prices and low oil and natural gas prices, which may hinder future distributions.

What was the impact of Boaz Energy's production on PermRock Royalty Trust?

Boaz Energy's resumption of normal production operations in June 2020 contributed to increased oil sales for the Trust.