Executive Summary

Q4 2024 distributions were suspended as elevated non‑operated capex caused net profits shortfalls despite steady oil volumes and improving realized prices; cumulative shortfall decreased from ~$2.2M to ~$1.1M during the quarter, positioning PVL to resume payouts once eliminated .
Underlying production remained stable: oil 36,977–39,754 Bbls at $75.52–$76.92/Bbl and gas 380,827–474,050 Mcf at $1.63–$1.97/Mcf across Oct–Dec; operating expenses normalized (~$2.0–$2.3M) while capex moderated from $2.9M in Oct to ~$1.0M in Dec .
Excluding the cumulative shortfall, implied income from the net profits interest (“NPI”) would have been ~$0.8M ($0.02345/unit) in Nov and ~$0.3M ($0.009510/unit) in Dec, underscoring improving cash generation as capex rolled off .
No Q4 earnings call or transcript was posted; management reiterated the expectation that the Underlying Properties return to positive net profits in 2025, a potential catalyst for distribution resumption and unit sentiment once the shortfall clears .

What Went Well and What Went Wrong

What Went Well

Capex normalization late in the quarter: monthly capex fell from $2.9M (Oct) to $0.9–$1.0M (Nov–Dec), materially reducing the cumulative shortfall from ~$2.2M to ~$1.1M by March’s update covering December activity .
Solid oil realizations and stable volumes: realized oil prices held ~$76/Bbl in Oct–Nov and $75.52/Bbl in Dec with oil volumes in a tight 36,977–39,754 Bbl band, supporting cash receipts as capex tapered .
Positive “ex‑shortfall” income signals: management quantified that, absent the carryforward deficit, NPI income would have been ~$0.8M ($0.02345/unit) in Nov and ~$0.3M ($0.009510/unit) in Dec, indicating the distribution engine is recovering as spending eases .

What Went Wrong

Distributions suspended for the entire quarter: no distributions in January, February, or April (from monthly NPI), as expenses and development outlays exceeded receipts and the Trust cannot pay until the cumulative shortfall is eliminated .
Elevated spending tied to third‑party operated programs: outlays were driven by two Permian wells (public super‑major), three Haynesville wells (public super‑major), and six Haynesville wells (large private E&P), creating timing mismatches versus receipts .
Gas price headwinds persisted despite a modest uptick: realized gas improved from $1.63/Mcf (Oct) to $1.97/Mcf (Nov) but remains low versus historical norms, constraining NPI despite stable volumes .

Financial Results

Note: PVL is a grantor royalty trust and does not report GAAP revenue/EPS or corporate margins. The most relevant financial KPIs are NPI cash mechanics, distributable income per unit, underlying volumes, realized prices, operating expenses, capex, and cumulative shortfall.

Q4 2024 Monthly Operating Snapshot (Underlying Properties; production months in Q4)

Metric	Oct 2024	Nov 2024	Dec 2024
Oil Sales Volumes (Bbls)	36,977	39,754	37,097
Natural Gas Sales Volumes (Mcf)	386,922	380,827	474,050
Oil Avg Price ($/Bbl)	$76.92	$76.61	$75.52
Gas Avg Price ($/Mcf)	$1.63	$1.97	$1.90
Accrued Operating Expenses ($MM)	$2.2	$2.0	$2.3
Capital Expenditures ($MM)	$2.9	$0.9	$1.0
Cumulative NPI Shortfall ($MM, period end)	~$2.2	~$1.4	~$1.1
Implied NPI Income ex Shortfall ($MM)	n/a	~$0.8	~$0.3
Implied ex‑Shortfall per Unit ($/unit)	n/a	$0.02345	$0.009510
Distribution Declared (from monthly NPI)	$0.000000	$0.000000	$0.000000

Distribution Trend by Quarter

Metric	Q2 2024	Q3 2024	Q4 2024
Distributable Income per Unit ($/unit)	$0.000000	$0.046000	$0.000000 (no monthly NPI distributions in Jan/Feb/Apr)
Notable Distribution Actions	No distributions; NPI shortfall grew	Distributions resumed ($0.011 and $0.035 in July/Aug declarations paid Aug/Sep)	Distributions suspended pending shortfall elimination; special $0.008548/unit (separate divestiture proceeds) payable Apr 14, 2025

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Capital Expenditures (Underlying Properties)	FY 2024	$5.0–$9.0M originally; revised in Q2 to $18.0–$23.0M (net to PVL NPI: $14.4–$18.4M)	Expectation to finish at higher end of $18.0–$23.0M (per Q3 update)	Raised (Q2) and maintained at high end (Q3)
Distributions	Monthly, ongoing	Normal monthly (subject to NPI)	No distributions until cumulative shortfall is eliminated (Jan/Feb/Mar updates)	Lowered/Suspended
Outlook for Positive Net Profits	2025	n/a	Sponsor anticipates return to positive net profits in 2025	New qualitative outlook
Cash Reserve Actions (Sponsor)	Q4 2024	$0.5M reserve established in Oct	$1.0M reserve released in Dec to reduce shortfall	Reserve release reduced shortfall

Earnings Call Themes & Trends

(No Q4 earnings call or transcript; themes derived from 10‑Q MD&A and monthly 8‑Ks.)

Topic	Q2 2024 (Q‑2)	Q3 2024 (Q‑1)	Q4 2024 (Current)	Trend
Development Activity / Capex	2024 capex outlook revised up to $18–$23M; elevated D&C tied to new Permian wells; Haynesville to slow at low gas prices	Activity remained elevated; expected high end of range	Capex high in Oct ($2.9M), normalized to $0.9–$1.0M by Nov–Dec; projects included Permian and Haynesville wells operated by large public/private E&Ps	Elevated then normalizing
Commodity Prices	WTI ~$74.99 (Aug 2); HH gas ~$1.89 (Aug 2) context	WTI $69.58 (Oct 31); HH gas $1.82 (Oct 31)	Realized oil ~$75–$77/Bbl; gas $1.63–$1.97/Mcf	Oil stable; gas weak but improving
Distributions & Shortfall	NPI shortfall grew; no H1 distributions	Shortfall eliminated; distributions resumed	Distributions suspended; shortfall shrank from ~$2.2M to ~$1.1M	Improving trajectory into 2025
Regional Project Updates	New Permian wells began paying; Haynesville program identified	Additional projects in Permian/Haynesville progressing	Spend drivers: 2 Permian (public super‑major), 3 Haynesville (public super‑major), 6 Haynesville (large private)	Execution continues
Operating Costs	Inflation pressure stabilizing; LOE/boe declining vs 2023	Continued stabilization; lower LOE/boe aided by newer wells	OpEx ~$2.0–$2.3M per month	Stable

Management Commentary

“As a result of the elevated capital expenditures … direct operating and development expenses exceeded cash receipts, leading to a shortfall … No monthly distribution will be paid … Distributions … will resume once the cumulative net profits shortfall … is eliminated.”
“The continued high level of capital expenditures was driven by the non‑operated spending for two Permian wells … three Haynesville wells … and six Haynesville wells drilled by a large private oil and gas exploration and production company.”
“At this time based on current commodity prices, the Sponsor anticipates that the Underlying Properties will return to generating positive net profits in 2025.”

Q&A Highlights

No Q4 earnings call or transcript was available for the Trust. Management’s quantitative and qualitative updates were delivered via monthly 8‑K press releases (Items 2.02) .

Estimates Context

Wall Street consensus EPS/Revenue estimates from S&P Global were not available for PVL this quarter due to limited analyst coverage of royalty trusts. We attempted to retrieve S&P Global estimates but none were returned.

Where estimates may need to adjust: not applicable this quarter given lack of formal coverage; investors should instead model distribution timing based on the pace of cumulative shortfall elimination explicitly disclosed by the Trust .

Key Takeaways for Investors

Distribution path is primarily a function of eliminating the ~$1.1M cumulative shortfall that remained at the end of the period; each month of positive NPI reduces this balance before unitholders receive cash .
Capex normalization (from $2.9M in Oct to ~~$1.0M in Dec) and steady oil realizations (~~$75–$77/Bbl) are supportive of clearing the deficit in 2025 absent a step‑up in operator spend or commodity price weakness .
The “ex‑shortfall” run‑rate shows improving cash‑generation capacity: ~$0.8M ($0.02345/unit) in Nov and ~$0.3M ($0.009510/unit) in Dec—useful markers for near‑term distribution potential post‑clearance .
Watch gas pricing and Haynesville activity: realized gas improved to $1.97/Mcf in Nov, and additional Haynesville wells are a capex and volume swing factor; gas price weakness remains a headwind .
Special distribution of $0.008548/unit (from 2023 Permian divestiture escrow release) is non‑recurring and does not reflect NPI cash generation; focus on monthly NPI trajectory for sustainable payouts .
No call/transcript limits color; rely on monthly Item 2.02 updates and the 10‑Q/10‑K for operator activity, cost trends, and timing of first revenues .
Trading implication: the visible monthly reduction in shortfall is the near‑term catalyst—evidence of sustained ex‑shortfall income alongside normalized capex should drive expectations for distribution resumption and potential re‑rating .

Appendices (Prior Quarters for Context)

Q3 2024 summary: Distributable income per unit $0.046 driven by higher volumes and stabilized costs; net profits allocable to NPI $6.31M; oil sales $14.58M and gas sales $2.95M during Q3 period .
Q2 2024 summary: No distributions; net profits shortfall of ~$3.9M at quarter end as prior‑period D&C costs flowed through before receipts, particularly from new Permian wells; distributions resumed in July/August as the shortfall was eliminated post‑quarter .

Permianville Royalty Trust (PVL)·Q4 2024 Earnings Summary