Permianville Royalty Trust (PVL)·Q1 2025 Earnings Summary

Executive Summary

• Q1 2025 produced net (loss) profits of $(3.0)M at the Underlying Properties and zero distributable income per unit, driven by a 133% YoY surge in development expenses and lower realized commodity prices, despite a 28% YoY decline in LOE and 66% increase in natural gas volumes .
• The Trustee/Sponsor raised FY 2025 capital expenditure guidance to $10.0–$15.0M gross ($8.0–$12.0M net to the Trust’s NPI), citing elevated Haynesville drilling by a super-major; management expects several projects to turn to sales in 2025 .
• Monthly shortfalls narrowed quickly through Q1: cumulative NPI shortfall fell from ~$2.2M in January to ~$1.1M in March, then ~$0.6M in April, and was fully recouped by May, but no June distribution occurred due to repayment of prior advances; resumption is contingent on sustained positive net profits and absence of advances .
• Special cash distribution of $0.008548 per unit (from released Permian divestiture reserve) paid April 14, 2025; otherwise, regular distributions were paused during Q1 .
• Near-term stock catalyst: Haynesville wells turning online and sustained elimination of shortfalls could re-start monthly distributions; watch commodity price volatility and operator capex cadence .

What Went Well and What Went Wrong

What Went Well

• LOE fell 28% YoY in Q1 2025, supported by cost stability and newer wells with lower operating costs (“continued decline in lease operating expenditures per barrel of oil equivalent”) .
• Gas volumes rose 66% YoY; combined Boe rose 33% YoY, partially offsetting price headwinds .
• Management improved visibility on capital projects with Haynesville-focused activity (super-major-operated), expected to begin producing in 2025 .
  • Quote: “development activity… remained elevated through the first three months of 2025, increasing over 130% from the same period in 2024… associated with Haynesville wells… expected to come online in the coming months.”

What Went Wrong

• Development expenses surged 133% YoY to $7.16M, driving Q1 net losses and a ~$1.4M shortfall carried forward .
• Realized prices declined: oil realized −11% YoY to $74.59/Bbl; gas realized −27% YoY to $1.73/Mcf, compressing gross profits despite volume strength .
• No distributions for Q1 (and continued pauses), with shortfalls/advances needing full repayment prior to any payout; distributable income per unit was $0.00 .

Financial Results

Underlying Properties P&L and Trust Distribution Metrics

Production Volumes and Realized Prices

Monthly Operational Update Snapshots (Q1 to early Q2 2025)

Guidance Changes

Earnings Call Themes & Trends

(No earnings call transcript filed for Q1 2025; themes extracted from 10-Q MD&A and monthly operational updates.)

Management Commentary

• Strategic focus: “Directionally, the Sponsor expects oil-directed capital expenditures in the Permian basin to decline and gas-directed capital expenditures in the Haynesville to remain stable or perhaps even slightly increase… the Sponsor continues to maintain its previously established cash reserve for approved, future development expenses expected in the near-term.”
• Macro and risk framing: “The outlook for the oil and gas industry has become increasingly complicated since the start of 2025, especially with the development of trade disputes and indications that OPEC may increase oil production… Natural gas prices have experienced similar volatility… mergers and acquisitions continue to change the makeup of companies in the sector.”
• Cost execution: “the Sponsor continued to see a stabilization of inflationary pressures and operating costs… continued decline in lease operating expenditures per barrel of oil equivalent… decline also benefited from increased production from newer wells.”

Q&A Highlights

• No Q1 2025 earnings call transcript or Q&A was filed; operational and guidance disclosures came via the 10-Q and monthly operational updates .

Estimates Context

• S&P Global consensus coverage for EPS and revenue was unavailable for Q1 2025; no EPS consensus, and no reported number of revenue estimates; actual revenue data for PVL is not comparable to typical corporates given trust accounting. Values retrieved from S&P Global.*
• With zero distributable income per unit and net loss profits in Q1, Street models may need to reflect the raised FY 2025 capex range and the path to distribution resumption contingent on eliminating shortfalls/advances .

Key Takeaways for Investors

• Q1 2025 was operationally challenged: development spending spiked and realized prices fell, yielding $(3.0)M net (loss) profits and no distributions; watch LOE gains and Haynesville ramp for improvement .
• Guidance is more constructive: capex raised to $10–$15M gross, with several Haynesville wells expected to turn to sales in 2025; this is the primary lever to restore positive net profits .
• Distributions could resume once shortfalls and any advances are cleared; as of May, shortfalls were eliminated, but repayment of prior advances deferred payouts—sustained monthly net profits is the gating factor .
• Commodity volatility remains the key macro variable; management flagged OPEC supply risk and LNG demand uncertainty—oil price drift lower and gas recovery favor Haynesville-weighted projects .
• Cost discipline is improving: LOE per boe declined YoY, aided by newer wells; legacy wells still present risk to operating cost trajectory .
• Near-term trading setup: watch monthly 8-K operational updates for (1) net profits staying positive, (2) absence of new advances, and (3) capital projects hitting first revenues—these are catalysts for reinstating distributions .
• Medium-term thesis: consolidation and large-cap operator involvement may stabilize execution and costs but can induce more binary capex cycles; PVL’s non-operated structure amplifies timing lags and volatility .

* Values retrieved from S&P Global.