Permianville Royalty Trust (PVL) Q2 2024 earnings summary

Executive summary

• Six-month 2024 property net profits were negative $4.7 million versus positive $7.8 million in 2023; the resulting Net Profits Interest shortfall prevented distributions through June, but was fully repaid after quarter-end.

• Higher oil production and Permian well activity were offset by sharply lower natural gas prices and elevated development costs; 2024 capital-spend guidance increased to $18.0 million–$23.0 million gross.

Financial highlights

• Six-month oil and gas sales were $29.8 million, up 17% YoY; development expenses rose 280% to $16.0 million and total costs rose 96% to $34.7 million.

• Six-month net profits were a $4.7 million shortfall versus $7.8 million positive in 2023; the 80% Net Profits Interest share was a $3.7 million shortfall before shortfall-related adjustments.

• June 30 assets were $48.3 million, including $1.5 million cash, versus $51.6 million and $1.4 million, respectively, at Dec. 31, 2023; outstanding Sponsor advances were $527,076.

• Reported distributable income per unit was $0.196050 for H1 and $0.062850 for Q2; no cash distributions were paid for the first six months because of the cumulative Net Profits Interest shortfall.

Outlook and guidance

• FY 2024 capital-spend outlook rose from $5.0 million–$9.0 million gross to $18.0 million–$23.0 million gross, or $14.4 million–$18.4 million net to the Net Profits Interest; much of the increase reflects $12.9 million of Q2 capex.

• Development activity is expected to decrease materially in H2, with Permian spending normalizing and Haynesville activity declining amid low natural gas prices and lower rig counts.

• Remaining 2024 capex is expected to focus mainly on the Permian; guidance remains subject to operator revisions, commodity prices and capital-market volatility.