Permianville Royalty Trust(PVL) - 2022 Q3 - Quarterly Report

Financial Performance - The Trust's net profits income for Q3 2022 was $3,722,863, a 58% increase from $2,358,728 in Q3 2021[81] - Total gross profits for Q3 2022 reached $17,117,863, an 82% increase compared to $9,423,728 in Q3 2021[81] - The Trust's distributable income for Q3 2022 was $3,003,000, a 600% increase from $429,000 in Q3 2021[81] - Net profits attributable to the Underlying Properties for Q3 2022 were $3.0 million, up from $1.9 million in Q3 2021, representing a 58% increase[83] - For the nine months ended September 30, 2022, total gross profits reached $44.4 million, an 84% increase from $24.2 million in the same period of 2021[86] - The Trust's distributable income for the nine months ended September 30, 2022, was $8.6 million, a significant increase of 1,896% from $429,000 in the same period of 2021[86] Revenue Growth - Oil sales revenue increased by 71% to $12,315,980 in Q3 2022 from $7,212,993 in Q3 2021, while natural gas sales revenue surged by 117% to $4,801,883 from $2,210,735[81] - Oil sales increased by $5.1 million in Q3 2022, driven by a 69% increase in realized oil prices compared to Q3 2021[85] - Natural gas sales rose by $2.6 million in Q3 2022, attributed to a 93% increase in realized gas prices and a 13% increase in gas sales volumes[85] Production and Prices - The average realized oil price increased by 69% to $103.87 per barrel in Q3 2022 from $61.60 per barrel in Q3 2021[82] - Natural gas prices realized rose by 93% to $4.90 per Mcf in Q3 2022 from $2.54 per Mcf in Q3 2021[82] - Production volumes for oil increased by 1% to 118,574 Bbls in Q3 2022, while natural gas production rose by 13% to 979,552 Mcf[82] - Average realized oil prices increased by 76% to $85.10 per barrel for the nine months ended September 30, 2022, compared to $48.39 per barrel in 2021[88] - Average realized natural gas prices increased by 122% to $4.72 per Mcf for the nine months ended September 30, 2022, compared to $2.13 per Mcf in 2021[88] Capital Expenditure and Reserves - The Trust's capital expenditure program for 2022 is now expected to be between $10 million and $15 million, up from the previous estimate of $6 million to $8 million[76] - The Sponsor has established a cash reserve for future development expenses to support increased activity levels[76] - The Trust withheld $0.7 million for future development expenses, which may be released as cash distribution if not spent[90] - As of September 30, 2022, the Trust had cash of $720,501 available for future expenses, up from $67,116 as of December 31, 2021[94] Outlook and Strategy - The Trust's outlook remains positive despite global economic volatility, with expectations of continued development activity in 2022[75] - Development expenses surged by 380% to $9.5 million for the nine months ended September 30, 2022, due to drilling and completion costs for new wells[86] Financial Instruments and Risk - The Trust is classified as a "smaller reporting company" and is not required to provide detailed market risk disclosures[102] - The Trust's interest-bearing obligations include those of the United States government[102] - The Trust invests in money market funds that focus solely on United States government securities[102] - The Trust engages in repurchase agreements secured by interest-bearing obligations of the United States government[102] - The Trust holds bank certificates of deposit as part of its financial strategy[102]