Permianville Royalty Trust Announces Monthly Operational Update

Rhea-AI Summary

Permianville Royalty Trust (NYSE: PVL) announced its net profits interest calculation for February 2021, reflecting oil production for November 2020 and natural gas production for October 2020. The reported income would have been approximately $0.1 million, but due to a cumulative outstanding shortfall of $1.4 million, no distribution will be made in March 2021. Cash receipts from oil totaled $1.7 million, down $0.1 million from the previous period, while natural gas receipts were $0.4 million, down $0.3 million. Operating expenses decreased slightly to $1.8 million.

Positive

• None.

Negative

• No distribution will be paid to unitholders due to a cumulative net profits shortfall of approximately $1.4 million.
• Recorded cash receipts from oil and gas properties decreased month-over-month: oil down $0.1 million and natural gas down $0.3 million.

Permianville Royalty Trust (NYSE: PVL, the “Trust”) today announced the net profits interest calculation for February 2021. The net profits interest calculation represents reported oil production for the month of November 2020 and reported natural gas production during October 2020. The calculation includes accrued costs incurred in December 2020.

This month, excluding prior net profits interest shortfalls, income from the distributable net profits interest would have been approximately $0.1 million. As a result of the cumulative outstanding net profits shortfall of approximately $1.4 million, however, no distribution will be paid to the Trust’s unitholders of record on February 26, 2021 in March 2021. Distributions to the Trust will resume once the cumulative net profits shortfall, which continues to decrease and now totals approximately $1.3 million, is eliminated.

The following table displays reported underlying oil and natural gas sales volumes and average received wellhead prices attributable to the current and prior month recorded 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		45,410		1,514		194,932		6,288		$	38.27		$	1.84
Prior Month		47,347		1,527		419,387		13,980		$	36.97		$	1.55

Recorded oil cash receipts from the oil and gas properties underlying the Trust (the “Underlying Properties”) totaled $1.7 million for the current month on realized wellhead prices of $38.27/Bbl, down $0.1 million from the prior month distribution period.

Recorded natural gas cash receipts from the Underlying Properties totaled $0.4 million for the current month, down $0.3 million from the prior month’s distribution period.

Total accrued operating expenses for the period were $1.8 million, a $0.1 million decrease month-over-month from the prior period. Capital expenditures decreased $0.1 from the prior period.

The remaining cumulative shortfall in net profits for the prior months will be deducted from any net profits in next month’s net profits interest calculation. At this time based on current commodity prices, COERT Holdings 1 LLC (the “Sponsor”) anticipates that the Underlying Properties will continue to generate positive net profits to reduce the cumulative shortfall before returning to monthly distributions again.

About Permianville Royalty Trust

Permianville Royalty Trust is a Delaware statutory trust formed 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, predominantly non-operated, oil and gas properties in the states of Texas, Louisiana and New Mexico. As described in the Trust’s filings with the Securities and Exchange Commission (the “SEC”), the amount of the periodic distributions is expected to fluctuate, depending on the proceeds received by the Trust as a result of actual production volumes, oil and gas prices, the amount and timing of capital expenditures, and the Trust’s administrative expenses, among other factors. Future distributions are expected to be made on a monthly basis. For additional information on the Trust, please visit www.permianvilleroyaltytrust.com.

Forward-Looking Statements and Cautionary Statements

This press release contains statements that are “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. All statements contained in this press release, other than statements of historical facts, are “forward-looking statements” for purposes of these provisions. These forward-looking statements include the amount and date of any anticipated distribution to unitholders, expected expenses, including capital expenditures, and expectations regarding the ability of the Underlying Properties to continue to generate positive net profits before returning to monthly distributions. The anticipated distribution is based, in large part, on the amount of cash received or expected to be received by the Trust from the Sponsor with respect to the relevant period. The amount of such 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. Continued low oil and natural gas prices will reduce profits to which the Trust is entitled, which will reduce the amount of cash available for distribution to unitholders and in certain periods could result in no distributions to unitholders. Other important factors that could cause actual results to differ materially include expenses of the Trust, reserves for anticipated future expenses and the effect, impact, potential duration or other implications of the COVID-19 pandemic. In addition, future monthly capital expenditures may exceed the average levels experienced in 2019 and prior periods. Statements made in this press release are qualified by the cautionary statements made in this press release. Neither the Sponsor nor the Trustee intends, and neither assumes any obligation, to update any of the statements included in this press release. An investment in units issued by the Trust is subject to the risks described in the Trust’s filings with the SEC, including the risks described in the Trust’s Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on March 16, 2020, and the Trust’s Quarterly Report on Form 10-Q for the period ended September 30, 2020, filed with the SEC on November 6, 2020. The Trust’s quarterly and other filed reports are or will be available over the Internet at the SEC’s website at http://www.sec.gov.

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FAQ

What is the net profits interest calculation announced by Permianville Royalty Trust for February 2021?

The net profits interest calculation reflects oil production from November 2020 and natural gas production from October 2020, indicating a $0.1 million income but no distribution due to a $1.4 million shortfall.

Why will there be no distribution to unitholders of PVL in March 2021?

There will be no distribution due to a cumulative outstanding net profits shortfall of approximately $1.4 million.

How much did Permianville Royalty Trust earn from oil and gas in February 2021?

The Trust recorded cash receipts of $1.7 million from oil and $0.4 million from natural gas, which reflects a decrease from the previous month.

What are the current operating expenses for Permianville Royalty Trust?

Total accrued operating expenses for the period were $1.8 million, which is a slight decrease of $0.1 million compared to the prior period.