PermRock Royalty Trust(PRT) - 2025 Q3 - Quarterly Report

Financial Performance - As of September 30, 2025, total assets amounted to $70,672,085, a decrease of 4.4% from $73,992,200 on December 31, 2024[10] - Distributable income for the three months ended September 30, 2025, was $1,111,576, down 17.0% from $1,340,784 in the same period of 2024[12] - The net profits income for the nine months ended September 30, 2025, was $4,502,918, slightly down from $4,503,683 in 2024, indicating a stable revenue stream[12] - The total revenue for the three months ended September 30, 2025, was $1,258,795, a decline of 19.5% compared to $1,564,340 in 2024[12] - The trust declared distributions of $1,111,576 for the three months ended September 30, 2025, which is equal to the distributable income for that period[16] - The amortization of net profits interest for the three months ended September 30, 2025, was $926,436, slightly lower than $943,931 in 2024[16] - For the three months ended September 30, 2025, net profits income received by the Trust was $1,246,690, a decrease of 19.5% from $1,548,855 in the same period of the prior year due to decreased oil and gas production and lower prices[58] - Distributable income for the three months ended September 30, 2025, was $1,111,576, or $0.091367 per Trust unit, compared to $1,548,855 and $0.1275 per unit in the prior year[59] - Total gross profits for the three months ended September 30, 2025, were $3,928,334, down from $5,739,895 in the prior year[67] Assets and Liabilities - The trust corpus at the end of the period was $69,293,250, reflecting a decrease of 4.5% from $72,379,939 at the end of 2024[10] - The trust's cash and short-term investments decreased to $1,378,835 from $1,612,261, a decline of 14.5%[10] - The trust's total liabilities and trust corpus remained balanced at $70,672,085 as of September 30, 2025[10] - Total cash reserves remained unchanged at $1,000,000 as of September 30, 2025, and September 30, 2024[61] - As of September 30, 2025, cash reserves held by the Trustee for administrative expenses totaled $1,000,000[33] Operational Highlights - Oil sales volumes decreased by 11,442 Bbls (16.2%) for the three months ended September 30, 2025, compared to the same period in 2024, and 23,985 Bbls (11.0%) for the nine months ended September 30, 2025[69] - The average realized oil price per Bbl decreased to $63.58 for the three months ended September 30, 2025, from $78.07 in the same period of 2024[71] - Natural gas sales volumes decreased slightly by 614 Mcf for the three months ended September 30, 2025, compared to the same period in 2024[70] - Development expenses related to the Underlying Properties decreased for the three and nine months ended September 30, 2025, as T2S participated in drilling only one non-operated well[77] - T2S successfully participated in a non-operated well in the Permian Shelf Area, which was drilled and completed in Q3 2025[84] Budget and Expenditures - T2S revised its capital and workover budget for 2025 from an initial $4.0 million to approximately $1.0 million due to market conditions[39] - Approximately $0.2 million had been spent from the revised budget as of September 30, 2025[55] - The decrease in planned expenditures is primarily due to the deferral of two wells in Crane County, Texas, originally scheduled for drilling[84] - T2S revised its capital expenditure budget for 2025 from $4.0 million to approximately $1.0 million to preserve liquidity and maintain financial flexibility[83] - As of September 30, 2025, T2S had expended approximately $0.2 million of the initial budget[83] Trust Operations - The Trust's main asset is the Net Profits Interest, which entitles it to receive 80% of the net profits from oil and natural gas production from the Underlying Properties[49] - The Trust is required to make monthly cash distributions of substantially all its monthly cash receipts after deducting fees and expenses[50] - The Trust declared a cash distribution of $0.031565 per Trust unit based on production during August 2025[87] - In August 2025, the underlying sales volumes included 22,490 barrels of oil and 25,914 Mcf of gas, with average prices of $58.06 per barrel and $2.31 per Mcf[88] Governance and Compliance - The Trust's disclosure controls and procedures were evaluated as effective as of September 30, 2025[93] - There have been no material changes in the risk factors disclosed in the Trust's Annual Report for the year ended December 31, 2024[97] - The Trust does not have any directors or officers, and therefore has not adopted insider trading policies[101] - The trust's investment in net profits interest is assessed periodically for impairment, with no current indications of impairment despite market volatility[31]