Permianville Royalty Trust Announces Monthly Operational Update

Rhea-AI Summary

Permianville Royalty Trust (NYSE: PVL) announced the net profits interest calculation for October 2020, reflecting July's oil production and June's natural gas production. Despite a slight increase in oil and natural gas sales, totaling $1.9 million and $0.6 million respectively, a cumulative net profits shortfall of approximately $2.2 million means no distribution will be made to unitholders for October. Anticipated distributions will resume once the shortfall is addressed, although operating expenses rose to $2.3 million due to increased production.

Positive

• Oil cash receipts were $1.9 million, up $0.4 million from the prior month.
• Natural gas cash receipts increased by $0.3 million from the previous month.

Negative

• No distribution to unitholders due to a cumulative shortfall of approximately $2.2 million.
• Total accrued operating expenses rose to $2.3 million, a $0.8 million month-over-month increase.

HOUSTON--(BUSINESS WIRE)--Permianville Royalty Trust (NYSE: PVL, the “Trust”) today announced the net profits interest calculation for October 2020. The net profits interest calculation represents reported oil production for the month of July 2020 and reported natural gas production during June 2020. The calculation includes accrued costs incurred in August 2020.

This month, there was a continued rebound in the reported oil volumes, which partly reflects a return of previously deferred sales and shut-in production by some of the operators of the oil and gas properties underlying the Trust (the “Underlying Properties”). Excluding prior net profits interest shortfalls, income from the distributable net profits interest this month would have been approximately $0.1 million, or $0.0042 per unit. As a result of the cumulative outstanding net profits shortfall of approximately $2.4 million, however, no distribution will be paid to the Trust’s unitholders of record on October 30, 2020 in November 2020. Distributions to the Trust will resume once the cumulative net profits shortfall, which now totals approximately $2.2 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. The amounts in the table have not been adjusted to reflect temporarily delayed sales and shut-in oil volumes discussed below.

		Underlying Sales Volumes								Average Price
		Oil				Natural Gas				Oil			Natural Gas
		Bbls		Bbls/D		Mcf		Mcf/D		(per Bbl)			(per Mcf)
Current Month		54,070		1,744		465,732		15,524		$	35.70		$	1.23
Prior Month		44,028		1,468		230,839		7,446		$	33.31		$	1.12

Recorded oil cash receipts from the Underlying Properties totaled $1.9 million for the current month on realized wellhead prices of $35.70/Bbl, up $0.4 million from the prior month distribution period. Based on current data for the Underlying Properties, COERT Holdings 1 LLC (the “Sponsor”) indicates that production and cash receipts continue to normalize.

Recorded natural gas cash receipts from the Underlying Properties totaled $0.6 million for the current month, an increase of $0.3 million from the prior month’s distribution period, due in part to the receipt of proceeds from the sales of prior months’ production.

Total accrued operating expenses for the period were $2.3 million, a $0.8 million increase month-over-month from September 2020 primarily due to the increase in recorded production. Capital expenditures increased $0.4 million from the prior month.

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, 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 June 30, 2020, filed with the SEC on August 7, 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.