Permianville Royalty Trust Announces Monthly Operational Update

Rhea-AI Summary

Permianville Royalty Trust (NYSE: PVL) announced no distribution will be paid in March 2025 due to a cumulative net profits shortfall of approximately $1.4 million, down from $2.2 million in the previous month. Excluding the shortfall, income would have been $0.8 million ($0.02345 per unit).

The Trust reported oil production of 39,754 barrels (1,325 Bbls/D) at $76.61/Bbl and natural gas production of 380,827 Mcf (12,285 Mcf/D) at $1.97/Mcf. Oil cash receipts increased by $0.2 million to $3.0 million, while natural gas receipts rose $0.1 million to $0.7 million. Operating expenses decreased by $0.2 million to $2.0 million, and capital expenditures dropped $2.0 million to $0.9 million, mainly due to drilling of three Haynesville wells.

Based on current commodity prices, the Sponsor anticipates the Underlying Properties will return to generating positive net profits in 2025.

Positive

• Net profits shortfall decreased by $0.8 million from previous month
• Oil cash receipts increased by $0.2 million to $3.0 million
• Natural gas cash receipts increased by $0.1 million
• Operating expenses decreased by $0.2 million

Negative

• No distribution to unitholders in March 2025 due to $1.4 million net profits shortfall
• Capital expenditures remain elevated compared to historical monthly averages
• Trust cannot make distributions until cumulative net profits shortfall is eliminated

Insights

Energy Trust Financial Analyst

The latest operational update from Permianville Royalty Trust presents a mixed picture with both concerning and encouraging elements. The $1.4 million cumulative net profits shortfall represents a significant $0.8 million improvement from the previous month's $2.2 million deficit, suggesting gradual progress toward financial recovery. However, this shortfall continues to prevent distributions to unitholders.

Operating metrics show encouraging trends:

• Oil production increased by 11% to 1,325 barrels per day
• Natural gas realized prices improved by 20.9% to $1.97/Mcf
• Total oil receipts reached $3.0 million, with natural gas contributing $0.7 million

The reduction in capital expenditures from $2.9 million to $0.9 million is particularly noteworthy, though still elevated due to the Haynesville drilling program. This strategic investment in partnership with a super major oil company could potentially enhance future production capacity and revenue generation.

A critical concern for investors is the Trust's complex distribution mechanics. Even after the current shortfall is eliminated, any borrowing or letter of credit draws for administrative expenses must be repaid before distribution resumption. This creates a multi-layered threshold that must be crossed before unitholders can expect income streams to resume.

The Sponsor's anticipation of positive net profits in 2025 provides some optimism, but investors should note this projection's heavy dependence on commodity price stability. The Trust's improved operational metrics and reduced shortfall suggest a trajectory toward recovery, though the timeline remains uncertain and subject to market conditions.

HOUSTON--(BUSINESS WIRE)-- Permianville Royalty Trust (NYSE: PVL, the “Trust”) today announced the net profits interest calculation for February 2025. The net profits interest calculation represents reported oil production for the month of November 2024 and reported natural gas production during October 2024. The calculation includes accrued costs incurred in December 2024.

As a result of the cumulative outstanding net profits shortfall, which declined from approximately $2.2 million in the prior month to approximately $1.4 million in the current month, no distribution will be paid in March 2025 to the Trust’s unitholders of record on February 28, 2025. As discussed below, distributions cannot resume until the cumulative net profits shortfall is eliminated. Excluding the current shortfall, income from the net profits interest would have been approximately $0.8 million in the current month, or $0.02345 per unit.

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		39,754		1,325		380,827		12,285		$	76.61		$	1.97
Prior Month		36,977		1,193		386,922		12,897		$	76.92		$	1.63

Recorded oil cash receipts from the oil and gas properties underlying the Trust (the “Underlying Properties”) totaled $3.0 million for the current month on realized wellhead prices of $76.61/Bbl, up $0.2 million from the prior month’s oil cash receipts.

Recorded natural gas cash receipts from the Underlying Properties totaled $0.7 million for the current month on realized wellhead prices of $1.97/Mcf, up $0.1 million from the prior month.

Total accrued operating expenses decreased $0.2 million from the prior period to $2.0 million. Capital expenditures decreased $2.0 million from the prior period to $0.9 million. The capital expenditures in the current period remained elevated compared to historical monthly averages primarily due to continued drilling of three Haynesville wells operated by a public super major oil company.

The cumulative shortfall in net profits for the current month will be deducted from any net profits in next month’s net profits interest calculation. The Trust will not receive proceeds pursuant to its net profits interest until the cumulative net profits shortfall is eliminated. In addition, if the Trust’s cash on hand is not sufficient to pay ordinary course administrative expenses and the Trust borrows funds or draws on the letter of credit that has been provided to the Trust, or if COERT Holdings 1 LLC (the “Sponsor”) advances funds to the Trust to pay such expenses, no further distributions will be made to Trust unitholders until such amounts borrowed or drawn, or advanced to the Trust, are repaid. At this time based on current commodity prices, the Sponsor anticipates that the Underlying Properties will return to generating positive net profits in 2025.

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 and expectations regarding the future generation of net profits from the Underlying Properties. 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 can fluctuate significantly as a result of a variety of factors that are beyond the control of the Trust and the Sponsor. 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 and reserves for anticipated future expenses. In addition, future monthly capital expenditures may exceed the average levels experienced in 2024 and prior periods, which could reduce the amount of cash available for distribution to unitholders and in certain periods could result in no distributions to unitholders. 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, 2023, filed with the SEC on March 22, 2024. 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250218382516/en/

Permianville Royalty Trust

The Bank of New York Mellon Trust Company, N.A., as Trustee

601 Travis Street, 16^th Floor

Houston, Texas 77002

Sarah Newell 1 (512) 236-6555

Source: Permianville Royalty Trust

FAQ

Why is PVL not paying distributions in March 2025?

PVL is not paying distributions due to a cumulative net profits shortfall of $1.4 million that must be eliminated before distributions can resume.

What were PVL's oil and gas production volumes for the latest reporting period?

PVL reported oil production of 39,754 barrels (1,325 Bbls/D) and natural gas production of 380,827 Mcf (12,285 Mcf/D).

What are the current wellhead prices for PVL's oil and gas production?

PVL received average wellhead prices of $76.61 per barrel for oil and $1.97 per Mcf for natural gas.

When does PVL expect to return to generating positive net profits?

Based on current commodity prices, the Sponsor anticipates the Underlying Properties will return to generating positive net profits in 2025.

What is causing PVL's elevated capital expenditures?

PVL's capital expenditures remain elevated primarily due to the continued drilling of three Haynesville wells operated by a public super major oil company.