PVL Permianville Royalty Trust

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): November 17, 2023

 

Permianville Royalty Trust

(Exact name of registrant as specified in its charter)

 

Delaware	001-35333	45-6259461
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

 

The Bank of New York Mellon Trust Company, N.A., Trustee 601 Travis Street 16th Floor Houston, Texas	77002
(Address of principal executive offices)	(Zip Code)

 

Registrant’s telephone number, including area code: (512) 236-6555

 

Not applicable

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-(b))
¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class	Trading symbol	Name of each exchange on which registered
Units of Beneficial Interest	PVL	The New York Stock Exchange

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

 

 

Item 2.02

Results of Operations and Financial Condition.

 

On November 17, 2023, Permianville Royalty Trust (the “Trust”) issued a press release announcing the Trust’s  monthly net profits interest calculation. A copy of the press release is furnished as Exhibit 99.1 hereto and is incorporated herein by reference.

 

Pursuant to General Instruction B.2 of Form 8-K and Securities and Exchange Commission Release No. 33-8176, the press release attached as Exhibit 99.1 is not “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, is not subject to the liabilities of that section and is not deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, but is instead furnished for purposes of that instruction.

 

Item 9.01

Financial Statements and Exhibits.

 

(d)            Exhibits.

 

Exhibit Number	Description
99.1	Permianville Royalty Trust Press Release dated November 17, 2023.

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

	Permianville Royalty Trust
	By: The Bank of New York Mellon Trust Company, N.A., as Trustee
Date: November 17, 2023	By:	/s/ Sarah Newell
		Sarah Newell
		Vice President

 

 

 

Exhibit 99.1

 

 

 

Permianville Royalty Trust Announces Monthly Operational Update

 

HOUSTON, Texas—(BUSINESS WIRE)— November 17, 2023

 

Permianville Royalty Trust (NYSE: PVL, the “Trust”) today announced the net profits interest calculation for November 2023. The net profits interest calculation represents reported oil production for the month of August 2023 and reported natural gas production during July 2023. The calculation includes accrued costs incurred in September 2023.

 

As a result of the elevated capital expenditures recorded this month as described below, for which timing is not always ratable month-to-month, direct operating and development expenses exceeded cash receipts, leading to a shortfall of approximately $1.2 million this month. As a result, no monthly distribution will be paid in December 2023 to the Trust’s unitholders of record on November 30, 2023.

 

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.

 

		Underlying Sales Volumes																Average Price
		Oil								Natural Gas								Oil				Natural Gas
		Bbls				Bbls/D				Mcf				Mcf/D				(per Bbl)				(per Mcf)
Current Month			36,086				1,164				227,059				7,324			$	78.95			$	2.33
Prior Month			33,461				1,079				222,906				7,430			$	73.07			$	2.02

 

Recorded oil cash receipts from the oil and gas properties underlying the Trust (the “Underlying Properties”) totaled $2.8 million for the current month on realized wellhead prices of $78.95/Bbl, up $0.4 million from the prior month’s oil cash receipts.

 

Recorded natural gas cash receipts from the Underlying Properties totaled $0.5 million for the current month on realized wellhead prices of $2.33/Mcf, consistent with the prior month.

 

Total accrued operating expenses for the period were $2.8 million, a $0.3 million increase month-over-month. Capital expenditures increased $1.9 million from the prior period, to $2.0 million. The increase in capital expenditures was predominately related to several of the projects listed in the Trust’s Quarterly Report on Form 10-Q filed on November 14, 2023 (pertaining to the Large Cap E&P 1, Large Cap E&P 3, Large Cap E&P 5 and PE-Backed Private 2 as listed in “Overview—Capital Drilling Activity Update” in Part I, Item 2 of the report).

 

 

The cumulative shortfall in net profits for the current month will be deducted from any net profits in next month’s net profits interest calculation. The Trust will not receive proceeds pursuant to its net profits interest until the cumulative net profits shortfall is eliminated. In addition, if the Trust’s cash on hand is not sufficient to pay ordinary course administrative expenses and the Trust borrows funds or draws on the letter of credit that has been provided to the Trust, or if COERT Holdings 1, LLC (the “Sponsor”) advances funds to the Trust to pay such expenses, no further distributions will be made to Trust unitholders until such amounts borrowed or drawn, or advanced to the Trust, are repaid. At this time based on current commodity prices, the Sponsor anticipates that the Underlying Properties will return to generating positive net profits by early 2024.

 

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 and expectations regarding the future generation of net profits from the Underlying Properties. 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 experienced significant fluctuation since the beginning of 2020 as a result of a variety of factors that are beyond the control of the Trust and the Sponsor. 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 public health concerns, such as the COVID-19 pandemic. In addition, future monthly capital expenditures may exceed the average levels experienced in 2022 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, 2022, filed with the SEC on March 23, 2023. 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.

 

Contact

 

Permianville Royalty Trust

The Bank of New York Mellon Trust Company, N.A., as Trustee

601 Travis Street, 16^th Floor

Houston, Texas 77002

Sarah Newell 1 (512) 236-6555

 

---