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): September 16, 2022
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 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 September 16, 2022, Permianville Royalty Trust (the “Trust”) issued a press release announcing the Trust’s distribution to be paid in October 2022. 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 September 16, 2022. |
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: September 16, 2022 | By: | /s/ Sarah Newell | |
| Sarah Newell | |||
| Vice President | |||
Exhibit 99.1
Permianville Royalty Trust Announces Monthly Cash Distribution
HOUSTON, Texas—(BUSINESS WIRE)— September 16, 2022
Permianville Royalty Trust (NYSE: PVL, the “Trust”) today announced a cash distribution to the holders of its units of beneficial interest of $0.050500 per unit, payable on October 17, 2022 to unitholders of record on September 30, 2022. The net profits interest calculation represents reported oil production for the month of June 2022 and reported natural gas production during May 2022. The calculation includes accrued costs incurred in July 2022.
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 | 37,873 | 1,262 | 287,116 | 9,262 | $ | 110.92 | $ | 6.85 | ||||||||||||||||
| Prior Month | 37,350 | 1,205 | 297,117 | 9,904 | $ | 107.77 | $ | 5.37 | ||||||||||||||||
Recorded oil cash receipts from the oil and gas properties underlying the Trust (the “Underlying Properties”) totaled $4.2 million for the current month on realized wellhead prices of $110.92/Bbl, up $0.2 million from the prior month’s oil cash receipts.
Recorded natural gas cash receipts from the Underlying Properties totaled $2.0 million for the current month on realized wellhead prices of $6.85/Mcf, up $0.4 million from the prior month.
Total accrued operating expenses for the period were $2.6 million, a decrease of $0.1 million from the prior period. Capital expenditures decreased $0.8 million from the prior period to $0.9 million.
Given the increase in rig count and operator activity on the Underlying Properties, COERT Holdings 1 LLC (the “Sponsor”) has notified the Trustee that it is withholding $0.3 million from the current month’s net profits to be added to the Sponsor’s previously established cash reserve for approved, future development expenses this year. With this addition, the total reserve is currently approximately $1.0 million. This reserve is intended to fund an expected increase in development expenses; however, if those expenses are ultimately delayed or are less than expected, or if the outlook changes, amounts reserved but unspent will be released as an incremental cash distribution in a future period.
Capex Drilling Activity Recap and Update
In light of the incurred, announced and/or expected capital expenditures resulting from increased operator activity in 2022, below is a summary of the current status of certain notable capital projects recently undertaken on the Underlying Properties. The following table is not intended to be a comprehensive list reflecting all capital expenditures to date. As a reminder, there can often be a several-month delay from the time of capital expenditures to the time of production and cash flows attributable to the Underlying Properties, especially given the non-operated nature of the Underlying Properties.
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| Operator | Region | Number of Wells | Underlying Properties Working Interest | Project | Status | |||||||||
| Large Cap Major | Haynesville | 2 | 2.5% | D&C New Drills | 1 Drilled, Awaiting Completion; 1 Pre-Drill | |||||||||
| Large Cap E&P 1 | Midland | 5 | 6.6% | D&C New Drills | Producing, Awaiting First Revenues | |||||||||
| Large Cap E&P 2 | Conventional Permian | N/A (Field) | 0.8% | New Drills / Workovers | In-process/ Continual Program | |||||||||
| Large Private E&P | Haynesville | 1 | 17.2% | Refrac | Producing, Awaiting First Revenues | |||||||||
| PE-Backed Private 1 | Delaware | 8 | 5.4% | D&C New Drills | 4 Producing, Awaiting First Revenues; 4 Pre-Drill | |||||||||
| PE-Backed Private 2 | Delaware | 3 | 0.8% | D&C New Drills | Producing, Awaiting First Revenues | |||||||||
| PE-Backed Private 3 | Delaware | 3 | 0.8% | D&C New Drills | Drilling In-Process | |||||||||
| Private E&P 1 | Conventional Permian | 3 | 24.0% | New Drills / Workovers | Producing, Awaiting First Revenues | |||||||||
| Private E&P 2 | Haynesville | 3 | 3.6% | Refrac | In-Process | |||||||||
In addition, the Sponsor now expects that the 2022 capital expenditure program will be between $10 million and $15 million attributable to the Underlying Properties, or between $8 million and $12 million net to the Trust’s 80% Net Profits Interest, an increase from the previously disclosed expected capital expenditure program of $6 million to $8 million, or $4.8 million to $6.4 million net to the Trust’s 80% Net Profits Interest.
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, expectations regarding the cash reserve for future development expenses and expectations regarding current and future capital expenditures and development activities on 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 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 2021 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, 2021, filed with the SEC on March 25, 2022. 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, 16th Floor
Houston, Texas 77002
Sarah Newell 1 (512) 236-6555