Permianville Royalty Trust(US:PVL)2025-11-14 21:16Financial Performance - For the three months ended September 30, 2025, oil sales decreased by $8.0 million (55%) to $6.6 million, while natural gas sales increased by $2.0 million (69%) to $5.0 million[83]. - Net profits for the three months ended September 30, 2025, were $1.6 million, a decrease of $6.2 million (79%) compared to $7.9 million in the same period of 2024[86]. - Total gross profits for the nine months ended September 30, 2025, were $33.4 million, a decrease of $14.0 million (30%) from $47.4 million in 2024[89]. - The average realized oil price for the nine months ended September 30, 2025, was $70.69 per Bbl, down 11% from $79.56 per Bbl in 2024[92]. - Natural gas sales for the nine months ended September 30, 2025, increased by $3.0 million (40%) to $10.3 million, driven by higher realized prices[89]. - Lease operating expenses for the nine months ended September 30, 2025, decreased by $5.7 million (28%) to $15.0 million compared to the same period in 2024[93]. - The Trust's distributable income for the nine months ended September 30, 2025, was $810,084, a decrease of $707,916 (47%) from $1.5 million in 2024[89]. - The Trust's general and administrative expenses for the nine months ended September 30, 2025, were $0.7 million, a decrease of $0.3 million (43%) compared to $1.0 million in 2024[93]. Capital Expenditures and Reserves - The Trust's capital expenditure outlook for 2025 has been revised to $12.0 million to $17.0 million, or $9.6 million to $13.6 million net to the Trust's Net Profits Interest, up from a previous estimate of $10.0 million to $15.0 million[75]. - The Sponsor established a cash reserve of $0.3 million for near-term capital expenditures as of September 30, 2025[73]. - The Trust has established a cash reserve of approximately $2.3 million, with $1,392,534 withheld as of September 30, 2025, to cover future liabilities[95]. - The Trustee began withholding $50,000 monthly from distributions starting April 2023 to build the cash reserve[95]. - The Trust has not borrowed any funds since its formation and has not drawn on the $1.2 million letter of credit provided by COERT[96]. - Outstanding advances to the Trust were $0 as of September 30, 2025, down from $150,000 as of December 31, 2024[97]. Market Conditions - Oil prices fluctuated between $57 per barrel and $80 per barrel from December 2024 to October 2025, while natural gas prices ranged from $2.70 per MMBtu to $4.49 per MMBtu during the same period[74]. - The average natural gas price realized for the nine months ended September 30, 2025, was $2.47 per Mcf, an increase of 25% from $1.97 per Mcf in 2024[92]. Operational Activities - The Sponsor indicated that development activity on the Underlying Properties decreased compared to the first nine months of 2024 but remained above historical averages[73]. - The Sponsor expects to drill three additional wells in the Haynesville region, following the successful completion of three wells that contributed to the repayment of the Net Profits Interest shortfall[73]. - A non-producing, partial Permian acreage stake was sold for total cash proceeds of $0.4 million, approximately $20,000 per undeveloped acre, with proceeds included in the November 2025 Net Profits Interest calculation[82]. - The Sponsor believes further opportunities for divestitures or leasing of some or all Underlying Properties could arise as operators seek to acquire assets in the Permian and Haynesville regions[78]. Trust Structure and Distributions - The Trust's only asset is the net profits interest representing the right to receive 80% of the net profits from oil and natural gas production from properties in Texas, Louisiana, and New Mexico[67]. - The Trust is required to make monthly cash distributions of substantially all its monthly cash receipts after deducting administrative expenses[69]. - The cumulative outstanding Sponsor advances to the Trust were fully repaid in August 2025, allowing for distributions to unitholders in September 2025[89]. - The Trust's only use of cash is for distributions to unitholders, aside from administrative expenses and reserves[94]. - The Trustee may adjust the cash reserve amount and withholding rate without prior notice to unitholders[95]. - The Trust does not have any transactions or relationships with unconsolidated entities that could affect its liquidity[99]. - The Trust incurs an annual administrative fee of $200,000 to the Trustee and $2,000 to the Delaware Trustee, along with other operational expenses[98]. - The Trust has no off-balance sheet arrangements or guaranteed debts with other parties[100].