PermRock Royalty Trust(PRT) - 2021 Q2 - Quarterly Report

Financial Performance - Distributable income for the three months ended June 30, 2021, was $1.96 million, compared to $0 for the same period in 2020, indicating a significant increase[18] - Distributable income per unit for the six months ended June 30, 2021, was $0.247, up from $0.098 in the same period of 2020, reflecting a growth of approximately 151%[18] - Total revenue for the six months ended June 30, 2021, was $3.47 million, compared to $2.14 million for the same period in 2020, representing a growth of approximately 62%[18] - For the three months ended June 30, 2021, net profits income received by the Trust was $2,175,292, a significant increase from $376,992 for the same period in the prior year, primarily due to higher prices and volumes[62] - For the six months ended June 30, 2021, net profits income received by the Trust was $3,464,931, an increase of 63% compared to $2,131,247 for the same period in the prior year, primarily due to higher oil and gas prices[67] - Distributable income for the six months ended June 30, 2021 was $3,008,639, or $0.247304 per Trust unit, compared to $1,195,064, or $0.098232 per Trust unit for the same period in 2020[68] Assets and Cash Reserves - Total assets decreased from $89.1 million as of December 31, 2020, to $87.6 million as of June 30, 2021, representing a decline of approximately 1.7%[17] - The Trust's cash and short-term investments increased from $1.18 million at the end of 2020 to $1.74 million by June 30, 2021, a rise of about 47%[17] - The Trust retained cash reserves of $1.0 million as of June 30, 2021, unchanged from December 31, 2020[15] - Total cash reserves were $1,000,000 as of June 30, 2021, unchanged from December 31, 2020, with no cash reserves retained during the six months ended June 30, 2021 compared to $400,000 in the prior year period[70] Distributions - The distribution payable to unitholders rose significantly from $181,474 as of December 31, 2020, to $738,345 as of June 30, 2021, marking an increase of approximately 307%[17] - The Trust made monthly cash distributions totaling $0.161129 per unit for the quarter ended June 30, 2021, with individual distributions of $0.044638, $0.055801, and $0.060690 for April, May, and June respectively[5] - The Trust declared a cash distribution of $0.060425 per Trust unit based on production during May 2021, with underlying oil sales volumes of 33,277 Bbls and gas sales volumes of 40,794 Mcf[88] Operational Metrics - Oil sales volumes decreased by 32,088 Bbls (25%) for the three months ended June 30, 2021 compared to the same period in 2020, and by 61,252 Bbls (23%) for the six months ended June 30, 2021[74] - Natural gas sales volumes decreased by 11,293 Mcf (8%) for the three months ended June 30, 2021, and by 15,199 Mcf (5%) for the six months ended June 30, 2021, primarily due to lower demand during the COVID-19 pandemic[75] - The average realized oil price per Bbl increased to $59.67 for the three months ended June 30, 2021, compared to $31.81 in the prior year period[76] - The average realized natural gas price per Mcf increased to $4.01 for the three months ended June 30, 2021, compared to $0.79 in the prior year period[77] Risks and External Factors - The Trust's revenue and distributions are significantly influenced by oil and natural gas prices, which have shown volatility due to various external factors, including the COVID-19 pandemic[38] - The Trust's operations are subject to various risks, including changes in commodity prices and the impact of COVID-19 on oil and gas prices[54] Capital Expenditures - Boaz Energy's estimated capital budget for the Underlying Properties in 2021 is $5.5 million, with approximately $1.9 million expended as of June 30, 2021[48] - As of June 30, 2021, Boaz Energy had reserved $242,157 net to the Trust for future capital expenses[83] Internal Controls and Legal Matters - The Trust's disclosure controls and procedures were evaluated as effective as of June 30, 2021[93] - There were no changes in the Trust's internal control over financial reporting that materially affected the reporting[95] - A lawsuit involving the Trust and Boaz Energy is ongoing, with no anticipated material impact on the Trust[98] - The court has set a hearing for October 1, 2021, regarding pending motions in the litigation[98]