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].
Permianville Royalty Trust(PVL) - 2024 Q2 - Quarterly Report