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].
Permianville Royalty Trust(PVL) - 2024 Q3 - Quarterly Report