Executive Summary

Q3 2024 distributable income was $1.34M ($0.110208 per unit), down 8.6% year over year on lower volumes, weaker natural gas pricing, and higher development spend; total revenue was $1.56M versus $1.71M in Q3 2023 .
Net profits margin compressed versus Q2 as gross profits declined and development expenses rose; average realized oil price increased year over year to $78.07/bbl, partially offsetting gas price weakness ($2.07/Mcf) .
Monthly distributions during Q3 summed to $0.110208 per unit (July: $0.030026; August: $0.040161; September: $0.040021), with a subsequent October- production distribution rising to $0.050326 per unit, a potential near-term sentiment catalyst .
No earnings call transcript was filed for Q3; Wall Street consensus (S&P Global) estimates were unavailable for EPS/revenue, indicating limited sell-side coverage.

What Went Well and What Went Wrong

What Went Well

Higher realized oil pricing year over year supported gross profits: oil price $78.07/bbl in Q3 2024 vs $70.44/bbl in Q3 2023, while Q2 2024 was $78.89/bbl .
Operating cost discipline in certain areas: lease operating expenses were lower year over year for Q3 on reduced marginal well expenses; G&A decreased $16,883 YoY due to timing of payments .
Capital reserve management: Boaz’s capital reserve stood at $826,909 net to the Trust at quarter-end, with applications/credits used in monthly computations aiding distributable cash variability post-quarter .

Quote: “This decrease in net profits income was primarily due to decreased oil and gas production, lower natural gas prices, and higher development expenses, which were only partially offset by the higher oil prices…” (Trustee’s Discussion & Analysis) .

What Went Wrong

Volumes declined: oil -8.1% YoY and gas -8.0% YoY for Q3, driven by natural decline and demand softness, pressuring net profits despite better oil prices .
Natural gas price headwind: average realized gas price fell to $2.07/Mcf in Q3 2024 vs $2.68/Mcf in Q3 2023; Q2 was $2.98/Mcf, dragging mixed revenue composition .
Development expenses rose YoY for Q3 (stimulating/upgrading wells in Permian Platform), compressing net profits margin versus Q2 and Q3 prior year .

Financial Results

Summary vs Prior Periods and Year

Metric	Q3 2023	Q2 2024	Q3 2024
Total Revenue ($USD)	$1,706,629	$1,673,029	$1,564,340
Net Profits Income ($USD)	$1,691,590	$1,658,420	$1,548,855
Distributable Income ($USD)	$1,466,168	$1,350,037	$1,340,784
Distributable Income per Unit ($)	$0.120516	$0.110969	$0.110208
Gross Profits ($USD)	$5,698,983	$6,002,827	$5,739,895
Net Profits ($USD)	$1,679,487	$2,285,465	$1,594,569

Margins (Net Profits/Gross Profits)

Metric	Q3 2023	Q2 2024	Q3 2024
Net Profits Margin (%)	29.5%	38.1%	27.8%

KPI Detail (Volumes and Prices)

KPI	Q3 2023	Q2 2024	Q3 2024
Oil Sales Volumes (Bbl)	76,784	72,477	70,584
Gas Sales Volumes (Mcf)	98,109	81,308	90,213
Total Sales (Boe)	93,136	86,028	85,620
Avg Realized Oil Price ($/Bbl)	$70.44	$78.89	$78.07
Avg Realized Gas Price ($/Mcf)	$2.68	$2.98	$2.07

Monthly Distributions (Within/around Q3)

Record Date	Payment Date	Distribution per Unit ($)
Jul 31, 2024	Aug 14, 2024	$0.040021
Aug 30, 2024	Sep 16, 2024	$0.040161
Sep 30, 2024	Oct 15, 2024	$0.030026
Oct 31, 2024	Nov 15, 2024	$0.030219
Nov 29, 2024	Dec 13, 2024	$0.030271
Dec 31, 2024	Jan 15, 2025	$0.050326

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Boaz Energy Capex Budget (Underlying Properties)	FY 2024	$4.5M (Q2 2024)	$4.5M (Q3 2024)	Maintained
Capex Spent YTD (net to properties)	FY 2024 through quarter end	~$1.5M (as of 6/30/24)	~$2.6M (as of 9/30/24)	Increased execution
Trustee Administrative Cash Reserves	Ongoing	$1,000,000	$1,000,000	Maintained

Note: The Trust does not provide formal revenue/EPS/margin guidance; monthly distribution declarations reflect realized net profits and cost flows rather than forward guidance .

Earnings Call Themes & Trends

No earnings call transcript was filed for Q3 2024. Themes below use Trustee’s Discussion & Analysis and monthly press releases.

Topic	Previous Mentions (Q1 & Q2 2024)	Current Period (Q3 2024)	Trend
Commodity Prices	Q1: Lower oil/gas YoY; Q2: Oil price improved, gas still weak	Oil higher YoY; gas lower YoY, mixed pricing backdrop	Stable: supportive oil, weak gas
Production Volumes	Q1: Oil -13.3% YoY, Gas -19.5% YoY	Q2: Oil -8.5% YoY, Gas -11.6% YoY	Q3: Oil -8.1% YoY, Gas -8.0% YoY
Operating/LOE	Q1/Q2: Efficiencies; LOE down in 1H-24 vs prior year on fewer return-to-production projects	Q3: LOE down YoY due to reduced marginal well expenses	Improving cost profile
Development Spend	Q1: Lower vs prior year; Q2: lower vs 2023	Q3: Increase YoY (stimulating/upgrading wells in Permian Platform)	Picking up in Q3
Taxes	Q1/Q2: Severance/ad valorem down vs prior year	Q3: Continued reductions vs prior year; ad valorem credits applied in Nov computation	Beneficial credits reduce volatility
Capital Reserves	Q1: $930,157; Q2: $1,100,109; applications/advancements affect monthly	Q3: $826,909; reserve uses/credits in monthly press releases	Managed down modestly

Management Commentary

“Net profits income… was $1,548,855 compared to $1,691,590 for the same period of the prior year. This decrease… was primarily due to decreased oil and gas production, lower natural gas prices, and higher development expenses, only partially offset by higher oil prices.” (Trustee’s Discussion & Analysis) .
“Development expenses… increased for the three months ended September 30, 2024… due to stimulating and upgrading wells in the Permian Platform.” .
“Boaz Energy had reserved $826,909 net to the Trust for future capital expenses.” .
Monthly distributions commentary highlighted working capital dynamics: ad valorem tax credit of $(100,000) reduced taxes in November’s calculation; subsequent month saw higher taxes as credit rolled off .

Q&A Highlights

No analyst Q&A or earnings call was filed for Q3 2024; clarifications were provided via Trustee’s Discussion & Analysis and monthly press releases on cost/tax drivers and capital reserve applications .

Estimates Context

Wall Street (S&P Global) consensus EPS and revenue estimates for Q3 2024 were unavailable, reflecting limited sell-side coverage of the Trust. Where estimates are unavailable, comparisons to consensus cannot be made.

Key Takeaways for Investors

Distributable income drifted lower YoY on natural declines and weak gas pricing; oil price strength helped but did not fully offset higher development and mixed cost/tax flows .
Cost discipline and targeted development work (Platform upgrades) suggest a focus on sustaining production economics; watch for Q4/Q1 monthly releases to gauge continued improvement .
Capital reserves remain ample and actively managed, creating monthly variability through reserve applications/credits; monitor press releases for ad valorem/tax adjustments that can swing distributions .
Near-term sentiment could benefit from the increased October-production distribution ($0.050326/unit), but sustainability hinges on volumes, commodity prices, and development cadence .
With no formal guidance and limited sell-side coverage, monthly item 2.02 disclosures and the 10-Q are primary sources; focus on realized prices, LOE, development spend, and tax/timing items to anticipate distribution trajectory .
Legal backdrop remains static (2018 litigation on appeal) and did not affect Q3 distributions, but investors should remain aware of potential outcomes .

PermRock Royalty Trust (PRT)·Q3 2024 Earnings Summary