Permianville Royalty Trust Announces Monthly Operational Update
August 18 2020 - 4:15PM
Business Wire
Permianville Royalty Trust (NYSE: PVL, the “Trust”) today
announced the net profits interest calculation for August 2020. The
net profits interest calculation represents reported oil production
for the month of May 2020 and reported natural gas production
during April 2020. The calculation includes accrued costs incurred
in June 2020.
As a result of the significant decline in sales volumes and
commodity prices since the beginning of the year, caused by the
continuing economic volatility related to the COVID-19 pandemic,
direct operating and development expenses for the current month net
profits interest calculation exceeded cash receipts, leading to a
shortfall of $1.8 million this month. As a result, no distribution
will be paid to the Trust’s unitholders in September 2020.
The following table displays reported underlying oil and natural
gas sales volumes and average received wellhead prices attributable
to the current and prior month recorded net profits interest
calculations. The amounts in the table have not been adjusted to
reflect temporarily delayed sales and shut-in oil volumes discussed
below.
Underlying Sales
Volumes
Average Price
Oil
Natural Gas
Oil
Natural Gas
Bbls
Bbls/D
Mcf
Mcf/D
(per Bbl)
(per Mcf)
Current Month
42,572
1,373
230,867
7,696
$
17.25
$
1.13
Prior Month
41,444
1,381
247,040
7,969
$
15.58
$
1.25
Recorded oil cash receipts from the oil and gas properties
underlying the Trust (the “Underlying Properties”) totaled $0.7
million for the current month on realized wellhead prices of
$17.25/Bbl, up $0.1 million from the prior month distribution
period. Similar to last month, some operators of the Underlying
Properties looked to defer sales, utilize infield storage and/or
temporarily shut-in production to address the recent oil price
volatility. Based on current data for the Underlying Properties,
COERT Holdings 1 LLC (the “Sponsor”) indicates that production and
cash receipts have continued to normalize.
Recorded natural gas cash receipts from the Underlying
Properties remained approximately the same at $0.3 million for the
current month on realized wellhead prices of $1.13/Mcf.
Total accrued operating expenses for the period remained
approximately the same at $1.9 million. Capital expenditures
increased $1.3 million from the prior month. This increase is
primarily due to previously unbilled completion costs associated
with the three Wolfcamp area wells drilled by Pioneer Natural
Resources during early 2019. The monthly net profits interest
calculation includes received oil and natural gas receipts from the
operators of the Underlying Properties, but represents accrued
operating expenses as well as expenses paid during the period,
which for a month where production sales were curtailed can lead to
higher operating expenses when compared to production receipts. In
addition, the Conveyance of Net Profits Interest prohibits the
Sponsor from entering into new hedging arrangements burdening the
Trust. As a result, all production in which the Trust has an
interest is unhedged, and the amount of cash distributions is
subject to the possibility of greater fluctuations due to changes
in oil and natural gas prices.
The cumulative shortfall in net profits for the current month
and the prior month will be deducted from any net profits in next
month’s net profits interest calculation. At this time based on
current commodity prices, the Sponsor anticipates that the
Underlying Properties will return to generating positive net
profits later this year.
About Permianville Royalty Trust
Permianville Royalty Trust is a Delaware statutory trust formed
to own a net profits interest representing the right to receive 80%
of the net profits from the sale of oil and natural gas production
from certain, predominantly non-operated, oil and gas properties in
the states of Texas, Louisiana and New Mexico. As described in the
Trust’s filings with the Securities and Exchange Commission (the
“SEC”), the amount of the periodic distributions is expected to
fluctuate, depending on the proceeds received by the Trust as a
result of actual production volumes, oil and gas prices, the amount
and timing of capital expenditures, and the Trust’s administrative
expenses, among other factors. Future distributions are expected to
be made on a monthly basis. For additional information on the
Trust, please visit www.permianvilleroyaltytrust.com.
Forward-Looking Statements and Cautionary Statements
This press release contains statements that are “forward-looking
statements” within the meaning of Section 21E of the Securities
Exchange Act of 1934, as amended. All statements contained in this
press release, other than statements of historical facts, are
“forward-looking statements” for purposes of these provisions.
These forward-looking statements include the amount and date of any
anticipated distribution to unitholders, expected expenses,
including capital expenditures, and expectations regarding the
ability of the Underlying Properties to generate positive net
profits later this year. The anticipated distribution is based, in
large part, on the amount of cash received or expected to be
received by the Trust from the Sponsor with respect to the relevant
period. The amount of such cash received or expected to be received
by the Trust (and its ability to pay distributions) has been and
will continue to be directly affected by the volatility in
commodity prices, which have declined since the beginning of 2020
in response to the economic effects of the COVID-19 pandemic and
the dispute over production levels between Russia and the members
of the Organization of Petroleum Exporting Countries, including
Saudi Arabia, resulting in an oversupply of crude oil and
exacerbating the decline in crude oil prices, and could remain low
for an extended period of time. Continued low oil and natural gas
prices will reduce profits to which the Trust is entitled, which
will reduce the amount of cash available for distribution to
unitholders and in certain periods could result in no distributions
to unitholders. Other important factors that could cause actual
results to differ materially include expenses of the Trust,
reserves for anticipated future expenses and the effect, impact,
potential duration or other implications of the COVID-19 pandemic.
In addition, future monthly capital expenditures may exceed the
average levels experienced in 2019 and prior periods. Statements
made in this press release are qualified by the cautionary
statements made in this press release. Neither the Sponsor nor the
Trustee intends, and neither assumes any obligation, to update any
of the statements included in this press release. An investment in
units issued by the Trust is subject to the risks described in the
Trust’s filings with the SEC, including the risks described in the
Trust’s Annual Report on Form 10-K for the year ended December 31,
2019, filed with the SEC on March 16, 2020, and the Trust’s
Quarterly Report on Form 10-Q for the period ended June 30, 2020,
filed with the SEC on August 7, 2020. The Trust’s quarterly and
other filed reports are or will be available over the Internet at
the SEC’s website at http://www.sec.gov.
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version on businesswire.com: https://www.businesswire.com/news/home/20200818005691/en/
Permianville Royalty Trust The Bank of New York Mellon Trust
Company, N.A., as Trustee Sarah Newell 1 (512) 236-6555
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