Core Points - Permianville Royalty Trust announced a cash distribution of $0.023000 per unit, payable on October 15, 2025, to unitholders of record on September 30, 2025 [1] - The net profits interest calculation is based on reported oil production for June 2025 and natural gas production for May 2025 [1] - The calculation includes accrued costs incurred in July 2025 [1]

[Glossary of Certain Oil and Natural Gas Terms](index=4&type=section&id=Glossary%20of%20Certain%20Oil%20and%20Natural%20Gas%20Terms) This section provides definitions for significant terms used in the report, such as Bbl (barrel), Boe (barrel of oil equivalent), Btu (British Thermal Unit), Completion, Differential, Field, GAAP, Gross/Net acres/wells, MBbl, Mboe, Mcf, MMBoe, MMBtu, MMcf, Net profits interest, NYMEX, NYSE, Plugging and abandonment, Reservoir, and Working interest - This section provides definitions for significant terms used in the report, such as Bbl (barrel), Boe (barrel of oil equivalent), Btu (British Thermal Unit), Completion, Differential, Field, GAAP, Gross/Net acres/wells, MBbl, Mboe, Mcf, MMBoe, MMBtu, MMcf, Net profits interest, NYMEX, NYSE, Plugging and abandonment, Reservoir, and Working interest[10](index=10&type=chunk)[11](index=11&type=chunk)[12](index=12&type=chunk)[13](index=13&type=chunk)[14](index=14&type=chunk)[15](index=15&type=chunk)[16](index=16&type=chunk)[17](index=17&type=chunk)[18](index=18&type=chunk)[19](index=19&type=chunk)[20](index=20&type=chunk)[21](index=21&type=chunk)[22](index=22&type=chunk)[23](index=23&type=chunk)[24](index=24&type=chunk)[25](index=25&type=chunk)[26](index=26&type=chunk)[27](index=27&type=chunk) [PART I — FINANCIAL INFORMATION](index=5&type=section&id=PART%20I%20%E2%80%94%20FINANCIAL%20INFORMATION) This part presents the unaudited interim financial statements, management's discussion and analysis, market risk disclosures, and controls and procedures for the Trust [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited interim financial statements of Permianville Royalty Trust, including the Statements of Assets, Liabilities and Trust Corpus, Statements of Distributable Income, Statements of Changes in Trust Corpus, and accompanying notes, for the periods ended June 30, 2025, and December 31, 2024 [Statements of Assets, Liabilities and Trust Corpus](index=5&type=section&id=Statements%20of%20Assets%2C%20Liabilities%20and%20Trust%20Corpus) This statement details the Trust's financial position, including assets, liabilities, and trust corpus, as of June 30, 2025, and December 31, 2024 | ASSETS / LIABILITIES AND TRUST CORPUS | June 30, 2025 (unaudited) | December 31, 2024 | | :------------------------------------ | :------------------------ | :------------------ | | Cash and cash equivalents | $2,239,884 | $2,193,787 | | Net profits interest in oil and natural gas properties, net | $39,429,178 | $41,892,402 | | **Total assets** | **$41,669,062** | **$44,086,189** | | Advances from Sponsor | $550,323 | $150,000 | | **Total liabilities** | **$550,323** | **$150,000** | | Trust corpus (33,000,000 units issued and outstanding) | $41,118,739 | $43,936,189 | | **Total liabilities and Trust corpus**| **$41,669,062** | **$44,086,189** | [Statements of Distributable Income](index=6&type=section&id=Statements%20of%20Distributable%20Income) This statement outlines the Trust's income and expenses, leading to distributable income for the three and six months ended June 30, 2025 and 2024 | Income / Expense | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Income from net profits interest | $419,589 | $– | $419,589 | $169,372 | | Interest and investment income | $23,097 | $18,332 | $46,097 | $36,635 | | General and administrative expenses | $(289,272) | $(416,976) | $(537,828) | $(608,104) | | Cash reserves used for Trust expenses | $128,670 | $398,644 | $354,226 | $402,097 | | **Distributable income** | **$282,084** | **$–** | **$282,084** | **$–** | | Distributable income per unit ($/unit) | $0.008548 | $– | $0.008548 | $– | [Statements of Changes in Trust Corpus](index=7&type=section&id=Statements%20of%20Changes%20in%20Trust%20Corpus) This statement tracks changes in the Trust's corpus, reflecting income, distributions, and amortization for the three and six months ended June 30, 2025 and 2024 | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Trust corpus, beginning of period | $42,509,676 | $50,142,008 | $43,936,189 | $51,628,130 | | Cash reserves used for Trust expenses | $(128,670) | $(398,644) | $(354,226) | $(402,097) | | Distributable income | $282,084 | $– | $282,084 | $– | | Distributions to unitholders | $(282,084) | $– | $(282,084) | $– | | Amortization of net profits interest | $(1,262,267) | $(1,933,769) | $(2,463,224) | $(3,416,438) | | **Trust corpus, end of period** | **$41,118,739** | **$47,809,595** | **$41,118,739** | **$47,809,595** | | Distributions per unit ($/unit) | $0.008548 | $– | $0.008548 | $– | [Notes to Financial Statements](index=8&type=section&id=Notes%20to%20Financial%20Statements) These notes provide essential context and detail for the financial statements, covering the Trust's formation, its passive nature, accounting policies (modified cash basis), treatment of net profits interest, income tax implications, distribution policies, and trustee fees [1. Trust Organization and Provisions](index=8&type=section&id=1.%20TRUST%20ORGANIZATION%20AND%20PROVISIONS) This note details the Trust's formation, its passive operational nature, dissolution conditions, and Sponsor's unit ownership - The Trust, formerly Enduro Royalty Trust, was formed in May 2011 to acquire and hold an **80% net profits interest** from oil and natural gas production in Texas, Louisiana, and New Mexico[39](index=39&type=chunk)[40](index=40&type=chunk) - The Trust's business activities are limited to owning the Net Profits Interest, with no management control over the Underlying Properties. Dissolution can occur if unitholders approve a sale, annual cash proceeds are less than **$2 million** for two consecutive years, or judicial dissolution[41](index=41&type=chunk)[47](index=47&type=chunk) - As of June 30, 2025, the Sponsor (COERT Holdings 1 LLC) owned **7,363,961 Trust Units**, representing **22%** of the issued and outstanding units[40](index=40&type=chunk) [2. Basis of Presentation](index=9&type=section&id=2.%20BASIS%20OF%20PRESENTATION) This note explains the Trust's modified cash basis accounting, which differs from GAAP and aligns with royalty trust reporting - The financial statements are prepared on a **modified cash basis**, differing from GAAP by recording income when received, distributions when paid, expenses when paid, and charging amortization and impairment directly to Trust corpus[45](index=45&type=chunk)[48](index=48&type=chunk)[49](index=49&type=chunk) - This modified cash basis is considered most meaningful for royalty trusts as monthly distributions are based on net cash receipts, aligning with SEC Staff Accounting Bulletin Topic 12:E[49](index=49&type=chunk)[50](index=50&type=chunk) [3. Net Profits Interest in Oil and Natural Gas Properties](index=10&type=section&id=3.%20NET%20PROFITS%20INTEREST%20IN%20OIL%20AND%20NATURAL%20GAS%20PROPERTIES) This note describes the amortization and impairment assessment of the Net Profits Interest, which is charged directly to Trust corpus - The Net Profits Interest is amortized on a unit-of-production basis, charged directly to Trust corpus, and does not affect distributable income. Accumulated amortization was **$313,498,129** as of June 30, 2025, up from **$311,034,905** at December 31, 2024[51](index=51&type=chunk) - The Net Profits Interest is periodically assessed for impairment, but no impairment was recorded for the three and six months ended June 30, 2025 or 2024[52](index=52&type=chunk) [4. Income Taxes](index=10&type=section&id=4.%20INCOME%20TAXES) This note clarifies the Trust's grantor trust status for federal income tax, unitholder tax responsibilities, and state tax implications - For federal income tax purposes, the Trust is a **grantor trust**, meaning unitholders are taxed directly on their pro rata share of income and deductions, including depletion[53](index=53&type=chunk)[54](index=54&type=chunk) - The Trust is considered a non-mortgage widely held fixed investment trust (WHFIT) for U.S. federal income tax purposes, with middlemen responsible for information reporting[55](index=55&type=chunk) - The Trust's income from Louisiana and New Mexico is not taxed at the trust level, but nonresident unitholders may be subject to state income tax. Texas does not impose state income tax, and the Trust is intended to be exempt from Texas franchise tax as a 'passive entity'[57](index=57&type=chunk)[58](index=58&type=chunk) [5. Distributions to Unitholders](index=11&type=section&id=5.%20DISTRIBUTIONS%20TO%20UNITHOLDERS) This note outlines the Trust's distribution policy, including conditions for payment and details of recent special distributions - Monthly distributions are made from excess cash after liabilities and cash reserves. No distributions are made until any Net Profits Interest shortfall is recouped and outstanding Sponsor advances are repaid[60](index=60&type=chunk)[61](index=61&type=chunk) | Period | Declaration Date | Record Date | Payment Date | Distribution per Unit ($/unit) | | :---------------------- | :--------------- | :---------- | :----------- | :----------------------------- | | Six Months Ended June 30, 2025: | | | | | | Special Distribution | March 17, 2025 | March 31, 2025 | April 14, 2025 | $0.008548 | | Year to Date – 2025 | | | | $0.008548 | | Six Months Ended June 30, 2024: | | | | | | Year to Date – 2024 | | | | $0.000000 | - A special cash distribution of **$0.008548 per unit** was paid on April 14, 2025, reflecting the release of **$250,000** (plus interest) from escrow related to a prior asset sale[63](index=63&type=chunk) [6. Trustee Fees](index=12&type=section&id=6.%20TRUSTEE%20FEES) This note details the annual administrative fees paid to the Trustee and Delaware Trustee, along with quarterly fee payments - The Trust pays an annual administrative fee of **$200,000** to the Trustee and **$2,000** to the Delaware Trustee[64](index=64&type=chunk) | Fees Paid | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Trustee Fees | $50,000 | $100,000 | $100,000 | $200,000 | | Delaware Trustee Fees | $0 | $2,010 | $2,010 | $2,010 | [Item 2. Trustee's Discussion and Analysis of Financial Condition and Results of Operations](index=13&type=section&id=Item%202.%20Trustee%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides the Trustee's perspective on the Trust's financial performance, operational activities, and future outlook. It includes forward-looking statements, an overview of the Trust's structure, an outlook on development activities and commodity markets, a capital expenditure update, detailed results of operations for the three and six months ended June 30, 2025, and discussions on liquidity, capital resources, and accounting policies [Forward-Looking Statements](index=13&type=section&id=Forward-Looking%20Statements) This section highlights that the report contains forward-looking statements subject to various risks that could cause actual results to differ - The report contains forward-looking statements subject to risks that could cause actual results to differ materially, including drilling risks, operating expenses, geopolitical events, global economic conditions, OPEC actions, regulatory changes, and commodity price volatility[66](index=66&type=chunk) - The Trust does not undertake to publicly revise forward-looking statements unless required by securities laws[67](index=67&type=chunk) [Overview](index=14&type=section&id=Overview) This section describes Permianville Royalty Trust's sole asset as an 80% net profits interest in oil and gas production, with no operational control - Permianville Royalty Trust's sole asset and income source is an **80% net profits interest** from oil and natural gas production in Texas, Louisiana, and New Mexico, with the Trust having no operational control[69](index=69&type=chunk) - COERT Holdings 1 LLC acquired the Underlying Properties and outstanding Trust Units from Enduro in August 2018, assuming Enduro's obligations[70](index=70&type=chunk) - Trust revenues and distributions are influenced by oil and natural gas sales prices, production volumes, production and development costs, price differentials, and administrative expenses[71](index=71&type=chunk)[73](index=73&type=chunk)[77](index=77&type=chunk) [Outlook](index=15&type=section&id=Outlook) This section provides an outlook on development activity, commodity prices, and operating costs, anticipating positive net profits interest payments in 2025 - Development activity on Underlying Properties remained elevated in H1 2025, though declining from H1 2024. Initial revenues from three new Haynesville wells are expected in Q3 2025, with the Sponsor anticipating a return to **positive monthly net profits interest payments in calendar year 2025**[75](index=75&type=chunk) - The Sponsor is guiding to the high end of its revised 2025 capital spending outlook of **$10.0 million to $15.0 million** (**$8.0 million to $12.0 million net to the Trust**), primarily focused on the Haynesville area[78](index=78&type=chunk) - Oil prices ranged from **$57 to over $80 per Bbl**, and natural gas prices from **$2.93 to $4.49 per MMBtu** between December 2024 and August 2025, reflecting volatility due to OPEC supply, geopolitical uncertainty, and global trade environment concerns[76](index=76&type=chunk) - Operating costs decreased in H1 2025 due to increased production from newer, lower-cost wells, though some legacy properties continue to face operating and production issues[79](index=79&type=chunk) [Capex Drilling Activity Update](index=16&type=section&id=Capex%20Drilling%20Activity%20Update) This section summarizes ongoing capital projects and drilling activities across various regions, with most expected to begin production in 2025 | Operator | Region | Number of Wells | Underlying Properties W/I | Project | Capex Cumulative Total (in thousands) | Status | | :---------------- | :-------- | :-------------- | :------------------------ | :-------------- | :------------------------------------ | :-------------------- | | Large Cap E&P 1 | Delaware | 3 | 5.0% | D&C New Drills | – | 3 Pre Drills | | Large Cap E&P 2 | Midland | 4 | 3.4% | D&C New Drills | $1,062 | 4 Drilling In-Process | | Large Cap E&P 3 | Delaware | 19 | 1.0% | D&C New Drills | – | 19 Pre Drills | | Large Major Cap E&P 1 | Haynesville | 3 | 8.9% | D&C New Drills | – | 3 Pre Drills | | PE-Backed Private 1 | Delaware | 2 | 4.6% | D&C New Drills | – | 2 Pre Drills | | PE-Backed Private 2 | Delaware | 4 | 0.7% | D&C New Drills | – | 4 Drilling in-Process | - Most identified capital projects are in process or awaiting first revenues, with the majority expected to be completed and begin producing during 2025[83](index=83&type=chunk) [Results of Operations](index=17&type=section&id=Results%20of%20Operations) This section provides a detailed comparison of the Trust's financial performance for the three and six months ended June 30, 2025, against the same periods in 2024, highlighting significant changes in oil and natural gas sales, operating expenses, development expenses, and their impact on net profits and distributable income [Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024](index=17&type=section&id=Three%20Months%20Ended%20June%2030%2C%202025%20Compared%20to%20Three%20Months%20Ended%20June%2030%2C%202024) This section compares the Trust's financial performance for Q2 2025 versus Q2 2024, detailing changes in sales, costs, and net profits | Item | 2025 | 2024 | Increase (Decrease) | | :------------------------------------ | :------------ | :------------- | :------------------ | | **Gross profits:** | | | | | Oil sales | $7,978,067 | $15,754,950 | (49)% | | Natural gas sales | $3,240,447 | $2,690,578 | 20% | | **Total Gross Profits** | **$11,218,514** | **$18,445,528** | **(39)%** | | **Costs:** | | | | | Lease operating expenses | $4,787,000 | $8,408,000 | (43)% | | Compression, gathering and transportation | $968,000 | $898,000 | 8% | | Production, ad valorem and other taxes | $720,000 | $1,273,000 | (43)% | | Development expenses | $2,798,000 | $12,895,000 | (78)% | | **Total Costs** | **$9,273,000** | **$23,474,000** | **(60)%** | | Gross proceeds from sale of assets | $– | $146,400 | (100)% | | **Net profits** | **$1,945,514** | **$(4,882,072)** | **140%** | | Net profits allocable to Net Profits Interest | $1,556,412 | $(3,905,657) | 140% | | Negative Net Profits Carryforward | $(1,418,895) | $– | (100)% | | Less: Repayment of Sponsor Loan | $(137,517) | $– | (100)% | | Plus: Release of Escrow | $282,072 | $– | 100% | | Plus: Net profits allocable to Net Profits Interest shortfall | $– | $3,905,657 | (100)% | | **Distributable income** | **$282,072** | **$–** | **100%** | - Net profits attributable to Underlying Properties increased by **$6.8 million**, from **$(4.9) million** in Q2 2024 to **$1.9 million** in Q2 2025, primarily due to a **$10.1 million decrease in development expenses** and a **$3.6 million decrease in lease operating expenses**[85](index=85&type=chunk)[88](index=88&type=chunk) - Oil sales decreased by **$7.8 million (49%)** due to a **47% reduction in produced volumes** (primarily from 2024 Permian wells) and a **5% decrease in realized prices**. Natural gas sales increased by **$0.5 million (20%)** due to higher produced volumes (**25% increase**), partially offset by lower realized prices[85](index=85&type=chunk)[88](index=88&type=chunk) | Production / Price Item | 2025 | 2024 | Increase (Decrease) | | :---------------------------------- | :---------- | :---------- | :------------------ | | **Underlying Properties Production Volumes:** | | | | | Oil (Bbls) | 108,972 | 205,150 | (47)% | | Natural Gas (Mcf) | 1,308,205 | 1,050,147 | 25% | | Combined (Boe) | 327,006 | 380,175 | (14)% | | **Average Prices:** | | | | | Oil - NYMEX (applicable NPI period) ($/Bbl) | $72.00 | $74.99 | (4)% | | Differential ($/Bbl) | $1.21 | $1.81 | (33)% | | Oil prices realized ($/Bbl) | $73.21 | $76.80 | (5)% | | Natural gas - NYMEX (applicable NPI period) ($/Mcf) | $3.09 | $2.85 | 8% | | Differential ($/Mcf) | $(0.61) | $(0.29) | (112)% | | Natural gas prices realized ($/Mcf) | $2.48 | $2.56 | (3)% | [Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024](index=19&type=section&id=Six%20Months%20Ended%20June%2030%2C%202025%20Compared%20to%20Six%20Months%20Ended%20June%2030%2C%202024) This section compares the Trust's financial performance for H1 2025 versus H1 2024, detailing changes in sales, costs, and net profits | Item | 2025 | 2024 | Increase (Decrease) | | :------------------------------------ | :------------- | :------------- | :------------------ | | **Gross profits:** | | | |\ | Oil sales | $16,508,772 | $25,460,484 | (35)% | | Natural gas sales | $5,282,124 | $4,378,759 | 21% | | **Total Gross Profits** | **$21,790,896** | **$29,839,243** | **(27)%** | | **Costs:** | | | | | Lease operating expenses | $9,516,000 | $15,016,000 | (37)% | | Compression, gathering and transportation | $1,970,000 | $1,497,000 | 32% | | Production, ad valorem and other taxes | $1,428,000 | $2,175,000 | (34)% | | Development expenses | $9,955,000 | $15,968,000 | (38)% | | **Total Costs** | **$22,869,000** | **$34,656,000** | **(34)%** | | Gross proceeds from sale of assets | $– | $146,400 | (100)% | | **Net profits** | **$(1,078,104)** | **$(4,670,357)** | **77%** | | Net profits allocable to Net Profits Interest | $(862,483) | $(3,736,285) | 77% | | Plus: Sponsor reserve release for capital expenditures | $1,000,000 | $– | (100)% | | Less: Repayment of Sponsor Loan | $(137,517) | $– | (100)% | | Plus: Release of Escrow | $282,072 | $– | 100% | | Plus: Net profits allocable to Net Profits Interest shortfall | $– | $3,905,657 | (100)% | | Less: Trust general and administrative expenses and cash withheld for expenses net of interest income | $– | $(169,372) | 100% | | **Distributable income** | **$282,072** | **$–** | **100%** | - Net profits attributable to Underlying Properties improved by **$3.6 million**, from **$(4.7) million** in H1 2024 to **$(1.1) million** in H1 2025, driven by a **$6.0 million decrease in development expenses** and a **$5.5 million decrease in lease operating expenses**[93](index=93&type=chunk)[99](index=99&type=chunk) - Oil sales decreased by **$8.9 million (35%)** due to a **30% decrease in produced volumes** and a **7% decrease in realized prices**. Natural gas sales increased by **$0.9 million (21%)** due to a **41% increase in produced volumes**, offset by a **15% decrease in realized prices**[93](index=93&type=chunk)[94](index=94&type=chunk) | Production / Price Item | 2025 | 2024 | Increase (Decrease) | | :---------------------------------- | :---------- | :---------- | :------------------ | | **Underlying Properties Production Volumes:** | | | | | Oil (Bbls) | 223,352 | 320,493 | (30)% | | Natural Gas (Mcf) | 2,488,665 | 1,761,271 | 41% | | Combined (Boe) | 638,130 | 614,038 | 4% | | **Average Prices:** | | | | | Oil - NYMEX (applicable NPI period) ($/Bbl) | $73.86 | $79.54 | (7)% | | Differential ($/Bbl) | $0.06 | $(0.10) | 158% | | Oil prices realized ($/Bbl) | $73.92 | $79.44 | (7)% | | Natural gas - NYMEX (applicable NPI period) ($/Mcf) | $2.11 | $2.46 | (14)% | | Differential ($/Mcf) | $0.01 | $0.03 | (65)% | | Natural gas prices realized ($/Mcf) | $2.12 | $2.49 | (15)% | [Liquidity and Capital Resources](index=21&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the Trust's cash flow, cash reserves, and Sponsor advances, which impact its liquidity and distribution capacity - The Trust's liquidity sources are cash flow from the Net Profits Interest and a **$1.2 million letter of credit** from COERT. The Trust had cash of **$2,239,884** as of June 30, 2025, up from **$2,193,787** at December 31, 2024[96](index=96&type=chunk)[98](index=98&type=chunk) - The Trustee withholds **$50,000 monthly** to build a cash reserve, totaling **$1,241,386** as of June 30, 2025. No amounts were withheld in H1 2025 due to the cumulative Net Profits Interest shortfall[97](index=97&type=chunk) - Outstanding advances from the Sponsor to the Trust for administrative expenses were **$550,323** at June 30, 2025, compared to **$150,000** at December 31, 2024. These advances must be repaid before distributions to unitholders[100](index=100&type=chunk) [Off-Balance Sheet Arrangements](index=22&type=section&id=Off-Balance%20Sheet%20Arrangements) This section confirms the Trust has no off-balance sheet arrangements, debt guarantees, or contingent obligations - The Trust has no off-balance sheet arrangements, has not guaranteed any debt, and has no relationships that could result in unconsolidated debt, losses, or contingent obligations[103](index=103&type=chunk) [Critical Accounting Policies and Estimates](index=22&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section states that there were no material changes to the Trust's critical accounting policies or estimates during the quarter - There were no material changes to the Trust's critical accounting policies or estimates during the three months ended June 30, 2025[104](index=104&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=22&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Permianville Royalty Trust is exempt from providing the quantitative and qualitative disclosures about market risk typically required by this Item - The Trust is not required to provide information on market risk disclosures as it qualifies as a 'smaller reporting company'[105](index=105&type=chunk) [Item 4. Controls and Procedures](index=23&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details the evaluation of the Trust's disclosure controls and procedures, confirming their effectiveness as of June 30, 2025, and states that there were no material changes in internal control over financial reporting during the quarter [Evaluation of Disclosure Controls and Procedures](index=23&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) This section confirms the effectiveness of the Trust's disclosure controls and procedures as of June 30, 2025, relying on Sponsor-provided information - The Trustee concluded that the Trust's disclosure controls and procedures were **effective** as of June 30, 2025, ensuring timely communication of required information[107](index=107&type=chunk) - The disclosure controls rely on information provided by the Sponsor regarding operations, costs, revenues, capital expenditures, and reserve reports from independent engineers[108](index=108&type=chunk) [Changes in Internal Control over Financial Reporting](index=23&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) This section reports no material changes in the Trust's internal control over financial reporting during the quarter ended June 30, 2025 - There were no changes in the Trust's internal control over financial reporting that materially affected, or are reasonably likely to materially affect, the Trust's internal control over financial reporting during the quarter ended June 30, 2025[109](index=109&type=chunk) [PART II — OTHER INFORMATION](index=24&type=section&id=PART%20II%20%E2%80%94%20OTHER%20INFORMATION) This part includes information on risk factors, other disclosures, exhibits, and official signatures for the Form 10-Q [Item 1A. Risk Factors](index=24&type=section&id=Item%201A.%20Risk%20Factors) This section confirms that there have been no material changes to the risk factors previously disclosed in the Trust's 2024 Annual Report on Form 10-K - No material changes to the risk factors contained in Item 1A of the Trust's 2024 Annual Report on Form 10-K[112](index=112&type=chunk) [Item 5. Other Information](index=24&type=section&id=Item%205.%20Other%20Information) This section reports that no Rule 10b5-1 trading arrangements were adopted, modified, or terminated by policy-making personnel of the Trustee during the three months ended June 30, 2025 - No officer or employee of the Trustee performing policy-making functions adopted, modified, or terminated any Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement during the three months ended June 30, 2025[113](index=113&type=chunk) [Item 6. Exhibits](index=24&type=section&id=Item%206.%20Exhibits) This section provides an index of exhibits filed or furnished as part of this Form 10-Q, including various trust agreements and certifications - The report includes an index of exhibits, such as the Agreement and Plan of Merger, Certificate of Trust, Certificate of Amendment to Certificate of Trust, Amended and Restated Trust Agreement, Second Amendment to Amended and Restated Trust Agreement, and certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002[114](index=114&type=chunk)[116](index=116&type=chunk) [Signatures](index=25&type=section&id=Signatures) This section contains the official signatures for the Form 10-Q, executed by The Bank of New York Mellon Trust Company, N.A., as Trustee for Permianville Royalty Trust - The report is signed by The Bank of New York Mellon Trust Company, N.A., as Trustee for Permianville Royalty Trust, by Sarah Newell, Vice President and Trust Officer, on August 14, 2025[117](index=117&type=chunk)[118](index=118&type=chunk)[119](index=119&type=chunk)[120](index=120&type=chunk)

[Monthly Operational Update (July 2025)](index=1&type=section&id=1.%20Monthly%20Operational%20Update%20(July%202025)) Permianville Royalty Trust's July 2025 operational update covers distribution status, sales volumes, financial performance, and future outlook [Distribution Announcement](index=1&type=section&id=1.1%20Distribution%20Announcement) Permianville Royalty Trust announced no monthly distribution will be paid in August 2025 due to a net profits shortfall of approximately $0.3 million, primarily caused by elevated capital expenditures - No monthly distribution will be paid in August 2025 to unitholders[3](index=3&type=chunk) - A shortfall of approximately **$0.3 million** occurred in the current month[3](index=3&type=chunk) - The shortfall resulted from direct operating and development expenses exceeding cash receipts, driven by elevated capital expenditures[3](index=3&type=chunk) [Operational Performance (Sales Volumes & Prices)](index=1&type=section&id=1.2%20Operational%20Performance%20(Sales%20Volumes%20%26%20Prices)) The Trust reported underlying oil and natural gas sales volumes and average wellhead prices for the current and prior months, showing slight decreases in oil volumes and prices, and decreased natural gas volumes but increased prices Underlying Sales Volumes and Average Prices (Current vs. Prior Month) | | Oil (Bbls) | Oil (Bbls/D) | Natural Gas (Mcf) | Natural Gas (Mcf/D) | Oil (per Bbl) | Natural Gas (per Mcf) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Current Month** | 33,340 | 1,111 | 405,522 | 13,081 | $63.10 | $2.85 | | **Prior Month** | 33,806 | 1,091 | 435,227 | 15,544 | $68.01 | $2.62 | [Financial Performance (Cash Receipts & Expenses)](index=1&type=section&id=1.3%20Financial%20Performance%20(Cash%20Receipts%20%26%20Expenses)) Oil cash receipts decreased by $0.2 million, while natural gas cash receipts increased by $0.1 million; accrued operating expenses remained consistent, but capital expenditures rose by $0.2 million to $1.2 million, primarily due to three Haynesville wells Cash Receipts and Expenses (Current vs. Prior Month) | Metric | Current Month | Change from Prior Month | | :--- | :--- | :--- | | Oil Cash Receipts | $2.1 million | Down $0.2 million | | Natural Gas Cash Receipts | $1.2 million | Up $0.1 million | | Accrued Operating Expenses | $2.4 million | Consistent | | Capital Expenditures | $1.2 million | Up $0.2 million | - Elevated capital expenditures were primarily due to the continued completion of three Haynesville wells, recently brought online in Q2 2025[7](index=7&type=chunk) [Future Outlook & Shortfall Impact](index=1&type=section&id=1.4%20Future%20Outlook%20%26%20Shortfall%20Impact) The current net profits shortfall will be deducted from future net profits, delaying distributions until the shortfall and prior expense advancements are eliminated, with the Sponsor anticipating a return to positive net profits in 2025 - The current month's net profits shortfall will be deducted from next month's net profits interest calculation[8](index=8&type=chunk) - No further distributions will be made until the net profits shortfall and any expense advancements or borrowed funds are repaid[8](index=8&type=chunk) - The Sponsor anticipates the Underlying Properties will return to generating positive net profits in 2025, based on current commodity prices[8](index=8&type=chunk) - The recently completed Haynesville wells are expected to start generating working interest revenues attributable to the net profits interest in the coming months[7](index=7&type=chunk) [About Permianville Royalty Trust](index=2&type=section&id=2.%20About%20Permianville%20Royalty%20Trust) Permianville Royalty Trust is a Delaware statutory trust holding an 80% net profits interest from oil and natural gas production in non-operated properties across Texas, Louisiana, and New Mexico, with distributions fluctuating based on various factors - Permianville Royalty Trust is a Delaware statutory trust[9](index=9&type=chunk) - The Trust owns a net profits interest representing the right to receive **80%** of the net profits from oil and natural gas production[9](index=9&type=chunk) - The underlying properties are predominantly non-operated and located in Texas, Louisiana, and New Mexico[9](index=9&type=chunk) - Periodic distributions are expected to fluctuate based on actual production volumes, oil and gas prices, the amount and timing of capital expenditures, and administrative expenses[9](index=9&type=chunk) [Forward-Looking Statements & Risks](index=2&type=section&id=3.%20Forward-Looking%20Statements%20%26%20Risks) This section outlines the forward-looking nature of statements regarding future distributions, revenues, and net profits, emphasizing significant risks from commodity price volatility, Trust expenses, and potentially higher future capital expenditures, which could lead to reduced or no distributions - Forward-looking statements include anticipated distributions, future revenues from recently completed wells, and future generation of net profits[10](index=10&type=chunk) - Distributions are directly affected by the volatility in commodity prices, which can fluctuate significantly due to factors beyond the Trust's control[10](index=10&type=chunk) - Low oil and natural gas prices will reduce profits and cash available for distribution, potentially resulting in no distributions[10](index=10&type=chunk) - Other important factors causing material differences include Trust expenses, reserves for anticipated future expenses, and potential for future monthly capital expenditures to exceed average levels[10](index=10&type=chunk) - Investment in Trust units is subject to risks detailed in the Trust's SEC filings, including the Annual Report on Form 10-K for the year ended December 31, 2024[10](index=10&type=chunk) [Contact Information](index=2&type=section&id=4.%20Contact%20Information) This section provides the contact details for Permianville Royalty Trust, including the Trustee's name, address, and phone number for inquiries - Contact for Permianville Royalty Trust is The Bank of New York Mellon Trust Company, N.A., as Trustee[11](index=11&type=chunk) - Address: 601 Travis Street, 16 Floor, Houston, Texas 77002[11](index=11&type=chunk) - Phone: Sarah Newell 1 (512) 236-6555[11](index=11&type=chunk)

Financial Performance - The cumulative outstanding net profits shortfall decreased from approximately $1.1 million to approximately $0.6 million, resulting in no distribution for May 2025[3]. - Recorded oil cash receipts totaled $2.8 million for the current month, consistent with the prior month, while natural gas cash receipts increased by $0.1 million to $1.0 million[5][6]. - Total accrued operating expenses decreased by $0.2 million to $2.1 million, while capital expenditures remained steady at $1.0 million[7]. Production and Pricing - Oil production for January 2025 was reported at 37,927 Bbls, with an average wellhead price of $72.92/Bbl, while natural gas production for December 2024 was 379,445 Mcf at $2.66/Mcf[5][6]. - The Trust owns a net profits interest representing 80% of the net profits from oil and natural gas production from properties in Texas, Louisiana, and New Mexico[9]. Future Distributions - The Trust will not receive proceeds from net profits interest until the cumulative shortfall is eliminated, with expectations of returning to positive net profits in 2025 based on current commodity prices[8]. - Future distributions are expected to fluctuate based on production volumes, oil and gas prices, capital expenditures, and administrative expenses[9]. - The anticipated distribution is influenced by cash received from the Sponsor, which is affected by commodity price volatility[10]. - Low oil and natural gas prices may reduce profits and cash available for distribution, potentially resulting in no distributions in certain periods[10]. Risks and Considerations - The Trust's filings with the SEC detail risks associated with investments in its units, including potential future capital expenditures exceeding historical averages[10].

Financial Performance - The Trust's gross profits for Q1 2025 were $10,572,381, a decrease of 7% compared to $11,393,715 in Q1 2024[82] - The Trust reported a net loss of $3,023,619 for Q1 2025, compared to a profit of $211,715 in Q1 2024, marking a 1,528% decrease[82] - The net loss attributable to the Underlying Properties for the three months ended March 31, 2025 was $(3.0) million, a decrease of $3.2 million from a profit of $0.2 million in the same period in 2024[84] Revenue Breakdown - Oil sales decreased by 12% to $8,530,705, while natural gas sales increased by 21% to $2,041,676[82] - Oil sales decreased by $1.2 million due to a $0.1 million decrease in produced volumes and a $1.1 million decrease in realized prices, with the average oil price received dropping by 11%[84] - Natural gas sales increased by $0.4 million, driven by a $1.1 million increase in produced volumes, although realized prices fell by 27%[84] Operating Expenses - Direct operating expenses increased by 22% to $13,596,000, driven by a 133% rise in development expenses to $7,157,000[82] - Lease operating expenses decreased by $1.9 million compared to the same period in 2024, while development expenses increased by $4.1 million due to higher drilling and completion costs[84] - Compression, gathering, and transportation costs increased by $0.4 million due to new wells coming online during the three months ended March 31, 2025[84] Production Volumes - For the three months ended March 31, 2025, oil production volumes decreased by 1% to 114,380 Bbls compared to 115,343 Bbls in 2024, while natural gas production volumes increased by 66% to 1,180,460 Mcf from 711,124 Mcf[84] Cash and Reserves - The Trust experienced a shortfall of approximately $1.4 million as of March 31, 2025, due to direct operating and development expenses exceeding cash receipts[82] - As of March 31, 2025, the Trust had cash of $2,216,799 available for future expenses, compared to $2,193,787 as of December 31, 2024[88] - The Trustee has withheld $1,241,386 toward a cash reserve for future liabilities as of March 31, 2025, with no amounts withheld during the three months ended March 31, 2025 due to a Net Profits Interest shortfall[87] - The Trust has a $1.2 million letter of credit available for administrative expenses if cash on hand is insufficient[88] Future Outlook - The Sponsor expects capital expenditures for 2025 to be revised to a range of $10.0 million to $15.0 million, up from the previous range of $7.0 million to $13.0 million[74] - The Sponsor continues to maintain cash reserves for future development expenses despite the current macroeconomic uncertainties[72] Market Conditions - Oil prices fluctuated between $57 and $80 per barrel from December 2024 to May 2025, impacting budget planning for several companies[73] - Natural gas prices ranged from $2.93 to $4.49 per MMBtu during the same period, reflecting volatility in the market[73] Development Activity - Development activity on the Underlying Properties increased over 130% in Q1 2025 compared to the same period in 2024[72] - The Trust has not borrowed any funds since its formation and has no current plans to authorize borrowing[88]

Trust Structure and Operations - The Trust holds a net profits interest representing the right to receive 80% of the net profits from oil and natural gas production from certain properties in Texas, Louisiana, and New Mexico[46]. - The Trust is not subject to pre-set termination provisions based on production volume or time, and will dissolve upon specific conditions being met[60]. - The Trust's administrative functions are performed by the Trustee, which has no management control over the operation of the underlying properties[54]. - The Trust's net profits interest is passive, and it is not permitted to acquire other oil and natural gas properties beyond those necessary for the conservation of the net profits interest[53]. - The Trust's marketing of oil and natural gas production is managed by the Sponsor, which cannot charge marketing fees other than those paid to non-affiliates[61]. - The Trust unitholders are entitled to the same limitation of personal liability as stockholders of private corporations under Delaware law[77]. - The Trustee is not obligated to return any cash received from the Net Profits Interest[91]. - The Trust unitholders are not entitled to proceeds from the sale or transfer of the Sponsor's interest in the Underlying Properties[92]. - The Trust's cash distributions may be significantly affected by fluctuations in oil and natural gas prices, with a decline potentially leading to reduced profits and cash available for distribution to unitholders[157]. - The Trust's operations are concentrated in Texas, Louisiana, and New Mexico, making it vulnerable to adverse developments in these regions that could impact cash flows and distributions[175]. - The Trust has not entered into any hedge contracts for oil and natural gas production, exposing it to greater cash flow volatility due to price changes[159]. - The Trust's cash distributions are highly dependent on oil and natural gas prices, which can fluctuate widely due to various uncontrollable factors[153]. - The Trust's cash reserve totaled $1,241,386 as of December 31, 2024, with a targeted cash reserve of approximately $2.3 million being built gradually[58]. - The Trust has established a cash reserve for contingent liabilities, which could reduce net profits and distributions to unitholders[148]. - The Trust has established a cash reserve of approximately $2.3 million, withholding $50,000 monthly from distributions to build this reserve[186]. - As of December 31, 2024, the cumulative cash reserve balance was $1,241,386[186]. - The Trust indirectly bears an 80% share of all costs related to the Underlying Properties, which can reduce cash available for distribution[182]. - If operating and development expenses exceed gross profits, the Trust will not receive net profits until future gross profits exceed these costs[183]. - The Trust's cash distributions may be reduced by uninsured claims, as the Sponsor does not maintain comprehensive insurance for all operational risks[188]. - The Trust may be treated as an unsecured creditor in the event of the Sponsor's bankruptcy, risking the value of the Net Profits Interest[194]. - The Trust unitholders have no voting rights regarding the operations or development of the Underlying Properties, making it a passive investment[195]. - The Trust must dissolve if annual cash proceeds from the Net Profits Interest are less than $2 million for two consecutive years[199]. - Conflicts of interest may arise between the Sponsor and the Trust, potentially impacting cash distributions[200]. - The Trust is classified as a "smaller reporting company," with a market value of less than $250 million as of the end of the most recently completed second fiscal quarter[204]. - The Trust's financial statements are prepared on a modified cash basis, differing from GAAP, which may affect investor analysis[203]. - The Trust Units' average closing price must remain above $1.00 to avoid delisting from the NYSE, with a recent range of $1.55 to $1.395 over a 30-day trading period[206]. - The Trust's market price may not reflect the actual value of the Net Profits Interest due to external factors affecting cash distributions[208]. Financial Performance and Distributions - The Trust distributed remaining proceeds from the net profits interest to unitholders after paying obligations and expenses, with cash held in reserve potentially invested in interest-bearing obligations[59]. - Monthly distributions to Trust unitholders are determined based on available funds after deducting liabilities and reserves[71]. - 80% of the aggregate net profits from oil and natural gas sales will be paid to the Trust monthly[84]. - The Trust uses a modified cash basis of accounting for reporting net profits and expenses[90]. - If net profits for any period are negative, the Trust will receive no payment for that period, and the negative amount will be deducted from future gross profits[88]. - The Trust's income and expenses are recognized for tax purposes in the month received or paid, not when distributed[72]. - The Trust's income from net profits interest is influenced by major purchasers, with Pioneer Natural Resources USA accounting for 23% of sales in 2024 and Phillips 66 for 18%[63]. - The Trust had 33,000,000 Trust Units outstanding as of March 19, 2025[70]. - Actual reserves and future production may be less than current estimates, which could lead to reduced cash distributions and lower Trust Unit values[160]. - Future oil and natural gas prices will directly affect Trust distributions, reserves estimates, and future net revenues[67]. Regulatory and Environmental Considerations - The Sponsor believes it is in substantial compliance with all existing environmental laws and regulations, which may affect profitability and cash distributions to Trust unitholders[111]. - The regulatory burden on the oil and natural gas industry increases operational costs, potentially impacting the Sponsor's financial position[111]. - The Sponsor is subject to liability under CERCLA for hazardous substance releases, which may include costs for cleanup and damages to natural resources[114]. - The Sponsor generates petroleum hydrocarbon wastes classified as hazardous under RCRA, which imposes strict requirements on waste management[114]. - The EPA's 2023 rule on "waters of the United States" is currently in effect in about half of the states, impacting the Sponsor's regulatory obligations and permitting costs[119]. - The Sponsor's operations may face increased costs due to potential restrictions on wastewater disposal from hydraulic fracturing under the CWA[116]. - The EPA's 2024 regulations will require reductions in volatile organic compound and methane emissions from oil and gas sources constructed or modified after December 2022[127]. - The Sponsor has developed SPCC plans to comply with the Oil Pollution Act, which mandates measures to prevent oil spills[122]. - The Texas Railroad Commission announced draft amendments to water protection rules in October 2023, encouraging waste recycling[125]. - The Sponsor may incur capital expenditures for air pollution control equipment due to new air emissions regulations, but these are not expected to materially affect operations[130]. - The 2024 presidential election may influence air quality-related requirements affecting the Sponsor's operations[129]. - The Sponsor's ability to obtain permits may be delayed or prohibited due to stricter NAAQS implementation, impacting operational costs[128]. - The EPA adopted a final rule in 2024 to regulate methane emissions from new oil and gas sources, requiring reductions in GHG emissions through various operational controls[132]. - The Waste Emissions Charge (WEC) will apply to methane emissions exceeding 25,000 tons of CO2 equivalent, starting at $900 per ton in 2024 and increasing to $1,500 per ton in subsequent years[134]. - More than one-third of U.S. states are developing GHG emission inventories and regional cap-and-trade programs, which could impact the Sponsor's operations and financial condition[135]. - Changes in laws and regulations could increase operating costs and adversely affect the financial condition of the operators of the Underlying Properties[219]. - The SEC's final rule on climate-related disclosures mandates extensive reporting on climate risks and emissions, potentially increasing compliance costs for the Sponsor[226]. - New regulations on hydraulic fracturing could increase operational costs and delays, affecting the viability of oil and gas production[228]. - The Inflation Reduction Act of 2022 includes provisions that could impose additional costs and regulatory burdens on the oil and gas sector[223]. - The potential repeal of the EPA's WEC rules by Congress could impact the regulatory landscape for greenhouse gas emissions[223]. - The Sponsor faces uncertainty regarding the impact of climate change regulations on demand for its natural gas products[225]. - The Trust is subject to complex federal, state, and local laws, including environmental regulations, which could adversely affect operational feasibility[156]. - The Trust's operations are subject to stringent environmental laws, which could impose significant costs and liabilities, reducing cash available for distribution[211]. - Cyber-attacks pose significant risks to the Sponsor's IT systems, potentially leading to data theft and operational disruptions[231]. Market and Economic Factors - The oil and natural gas industry is highly competitive, affecting the Trust's net profits interest indirectly due to market conditions[65]. - The ability of OPEC and other oil-exporting nations to manage production levels significantly impacts commodity prices, which could further affect cash distributions to unitholders[163]. - The bankruptcy of the Sponsor or third-party operators could impede well operations and development of proved undeveloped reserves[148]. - The Sponsor's ability to perform obligations may be limited by restrictions under its debt agreements, potentially affecting operations[148]. - The adoption of climate change regulations could increase operating costs and reduce demand for the oil and natural gas produced by the Sponsor[156]. - The Trust is limited in its ability to acquire new properties or interests to replace depleting assets, leading to a gradual decline in cash distributions over time[177]. - Future maintenance projects on the Underlying Properties may be delayed or not undertaken, potentially increasing the rate of production decline beyond current expectations[178].

Financial Performance - In January 2025, the Trust reported a shortfall of approximately $1.3 million due to elevated capital expenditures, resulting in no monthly distribution for February 2025[3] - The cumulative net profits shortfall now totals approximately $2.2 million, which will be deducted from future net profits calculations[8] - Total accrued operating expenses decreased to $2.2 million, while capital expenditures decreased to $2.9 million[7] Production and Pricing - Oil production for the current month was 36,977 barrels, with an average wellhead price of $76.92 per barrel, an increase of $0.2 million from the prior month[5] - Natural gas production was reported at 386,922 Mcf, with an average price of $1.63 per Mcf, down $0.1 million from the prior month[6] Future Outlook - The Trust anticipates that the Underlying Properties will return to generating positive net profits in 2025 based on current commodity prices[8] - Future distributions are expected to fluctuate based on actual production volumes, oil and gas prices, and capital expenditures[9] - The Trust's ability to pay distributions is directly affected by commodity price volatility, which may lead to periods with no distributions[10] Ownership and Reporting - The Trust owns a net profits interest representing 80% of the net profits from oil and natural gas production from predominantly non-operated properties in Texas, Louisiana, and New Mexico[9] - The Trust's quarterly and other filed reports are available on the SEC's website, providing further insights into financial performance and risks[10]

Distribution and Cash Flow - Monthly cash distribution of $0.015000 per unit, payable on November 15, 2024 [1] - Future distributions expected to fluctuate based on production volumes, oil and gas prices, and capital expenditures [5] - Forward-looking statements highlight potential impacts of commodity price volatility and future capital expenditures on distributions [6] Oil Sales and Revenue - Current month oil sales volumes: 52,287 Bbls (1,687 Bbls/D) at an average price of $79.43/Bbl [2] - Oil cash receipts totaled $4.2 million, up $1.2 million from the prior month [2] Natural Gas Sales and Revenue - Current month natural gas sales volumes: 1,105,204 Mcf (36,840 Mcf/D) at an average price of $2.44/Mcf [2] - Natural gas cash receipts totaled $2.7 million, up $2.1 million from the prior month [3] Operating Expenses and Capital Expenditures - Total accrued operating expenses: $3.5 million, a $1.0 million increase month-over-month [3] - Capital expenditures increased to $1.9 million, up $1.6 million from the prior period [3] Cash Reserves and Future Development - $0.5 million withheld from net profits to establish a cash reserve for future development expenses [4]

Development Activity - The Sponsor reported a 150% increase in development activity on the Underlying Properties for the nine-month period ended September 30, 2024, compared to the same period in 2023[48]. - The Sponsor expects a majority of ongoing projects to be completed and begin producing by early 2025[54]. - The Sponsor has established a cash reserve for approved future development expenses expected in the near term[48]. - Development expenses surged by 169% to $17,808,000 for the nine months ended September 30, 2024, due to increased drilling and completion activities[64]. Financial Performance - For the three months ended September 30, 2024, total gross profits increased by 25% to $17,528,195 compared to $13,990,321 in the same period of 2023[56]. - Oil sales rose by 27% to $14,577,415, while natural gas sales increased by 19% to $2,950,780, contributing to the overall growth in gross profits[56]. - Net profits for the three months ended September 30, 2024, surged by 121% to $7,890,195, compared to $3,563,571 in the prior year[56]. - For the nine months ended September 30, 2024, total gross profits increased by 20% to $47,367,438 compared to $39,517,648 in the same period of 2023[64]. - Oil sales for the nine months increased by 34% to $40,037,899, while natural gas sales decreased by 24% to $7,329,539[64]. - Net profits for the nine months ended September 30, 2024, fell by 72% to $3,219,838 compared to $11,380,898 in the same period of 2023[64]. Cash and Liquidity - As of September 30, 2024, the Trust had cash of $1,808,446, an increase from $1,394,697 as of December 31, 2023, including amounts withheld for a cash reserve[72]. - The Trustee has been withholding $50,000 monthly since April 2023 to build a cash reserve, which totaled $1,091,386 as of September 30, 2024[71]. - The Trust has a $1.2 million letter of credit available for administrative expenses if cash on hand is insufficient[72]. - The Trust pays an annual administrative fee of $200,000 to the Trustee and $2,000 to the Delaware Trustee, along with other operational expenses[76]. - The Trust has not borrowed any funds since its formation and has no off-balance sheet arrangements[78]. - The Trust's only use of cash, aside from administrative expenses, is for distributions to Trust unitholders[70]. - The Trust's cash reserves may be invested in interest-bearing obligations of the U.S. government or money market funds[75]. Market Conditions - The West Texas Intermediate spot price of crude oil improved from $71.89 per barrel on December 31, 2023, to $69.58 per barrel on October 31, 2024[49]. - Natural gas prices declined year-over-year, with the Henry Hub spot price decreasing from $2.58 per MMBtu on December 31, 2023, to $1.82 per MMBtu on October 31, 2024[49]. - The average oil price realized decreased by 1% to $79.56 per barrel, while the average natural gas price realized dropped by 52% to $1.97 per Mcf[65]. Operational Expenses - Lease operating expenditures per barrel of oil equivalent declined for the nine months ended September 30, 2024, compared to the same period in 2023[51]. - Lease operating expenses increased by 15% to $20,733,000 for the nine months ended September 30, 2024, compared to $17,956,000 in the same period of 2023[64]. - For the nine months ended September 30, 2024, the Trust withheld $0.5 million and paid $0.7 million for general and administrative expenses, compared to $1.2 million withheld and $0.8 million paid in the same period of 2023[69]. Strategic Opportunities - There are potential opportunities for divestitures and/or leasing of some or all of the Underlying Properties as certain operators look to acquire assets[52]. - Four wells in the Haynesville area began paying revenues from first production during the three months ended September 30, 2024[54]. Accounting Policies - There were no material changes to the Trust's critical accounting policies or estimates during the nine months ended September 30, 2024[79].

Revenue and Profitability - In July 2024, revenues exceeded direct operating and development expenses, allowing the Trust to fully repay approximately $3.3 million in Net Profits Interest shortfall[30]. - The Trust declared a distribution of $0.0110000 per unit to unitholders, payable on August 14, 2024[30]. - For the three months ended June 30, 2024, oil sales increased by 82% to $15,754,950 compared to $8,639,804 in the same period of 2023[47]. - Total gross profits for the three months ended June 30, 2024, were $18,445,528, a 63% increase from $11,331,321 in 2023[47]. - Net profits attributable to the Underlying Properties for the three months ended June 30, 2024, were $(4.9) million, a decrease from $2.9 million in 2023[50]. - For the six months ended June 30, 2024, oil sales totaled $25,460,484, a 39% increase from $18,369,023 in the same period of 2023[55]. - Total gross profits for the six months ended June 30, 2024, were $29,839,243, reflecting a 17% increase from $25,527,327 in 2023[55]. - The Trust reported a Net Profits Interest shortfall of $(4.7) million for the six months ended June 30, 2024, compared to a profit of $7.8 million in the same period of 2023[58]. Sales and Production - Natural gas sales remained stable at $2,690,578, showing a negligible decrease of 0% from $2,691,517 in the prior year[47]. - Natural gas sales for the six months ended June 30, 2024, decreased by 39% to $4,378,759 from $7,158,304 in 2023[55]. - Natural gas sales decreased by $2.8 million primarily due to a 54% decrease in realized gas prices, despite a 33% increase in gas sales volumes which contributed an additional $2.3 million in revenues[59]. - Fifteen wells in Midland began paying revenues in the second quarter of 2024 following the completion of pending title work[45]. Expenses and Costs - Development expenditures for the six-month period ended June 30, 2024 increased over 300% compared to the same period in 2023[39]. - Direct operating expenses for the same period increased by 180% to $23,474,000, up from $8,385,000 in 2023[47]. - Lease operating expenses increased by $3.8 million for the six months ended June 30, 2024, compared to the same period in 2023[59]. - Compression, gathering, and transportation costs increased by $0.8 million due to new wells coming online during the six months ended June 30, 2024[59]. - Production, ad valorem, and other taxes increased by $0.6 million during the six months ended June 30, 2024, due to higher oil and natural gas production volumes[61]. Liquidity and Financial Position - The Trust had cash of $1,519,676 as of June 30, 2024, compared to $1,394,697 as of December 31, 2023, including amounts withheld for a cash reserve[64]. - The Trustee has withheld $991,386 toward a cash reserve as of June 30, 2024, to cover future liabilities[63]. - COERT has provided a $1.2 million letter of credit to the Trust for administrative expenses if cash on hand is insufficient[64]. - An outstanding advance of $527,076 was recorded as of June 30, 2024, compared to $0 at December 31, 2023[66]. - The Trust's principal sources of liquidity are cash flow from the Net Profits Interest and borrowing capacity under the letter of credit[62]. Market Conditions - The West Texas Intermediate spot price of crude oil improved from $71.89 per barrel on December 31, 2023 to $74.99 per barrel on August 2, 2024[39]. - Natural gas prices declined year-over-year, with the Henry Hub spot price decreasing from $2.58 per MMBtu on December 31, 2023 to $1.89 per MMBtu on August 2, 2024[39]. - The Sponsor observed a stabilization of inflationary pressures and operating costs, with a slight decline in lease operating expenditures per barrel of oil equivalent for the six months ended June 30, 2024 compared to the same period in 2023[42]. - The Sponsor revised its 2024 capital spend outlook to $18.0 million to $23.0 million, netting $14.4 million to $18.4 million for the Trust's Net Profits Interest[40]. - The Sponsor leased approximately $0.1 million in non-producing acreage to two private oil companies for upfront cash payments and future royalty revenues[46].