PermRock Royalty Trust reported a significant decline in financial performance for the second quarter of 2026, with total revenue of $706,672, down from $1,557,602 in the same period of 2025. The Trust's net profits income also fell sharply to $697,904 from $1,545,465 year-over-year. This decrease is attributed primarily to reduced oil and gas sales volumes and lower natural gas prices, despite an increase in oil prices. For the first half of 2026, total revenue was $1,363,640, compared to $3,280,905 in the first half of 2025, reflecting a similar trend.

The Trust's distributable income for the three months ended June 30, 2026, was $409,050, or $0.033622 per Trust unit, a decrease from $1,200,518, or $0.098679 per unit, in the prior year. For the six-month period, distributable income was $813,117, or $0.066834 per unit, down from $2,666,713, or $0.219196 per unit, in 2025. The decline in distributable income was influenced by lower net profits income and a decrease in interest income, which fell to $8,768 from $12,137 in the previous year.

Operationally, the Trust's underlying properties, located in the Permian Basin, experienced a decrease in oil sales volumes by 28.4% and natural gas sales volumes by 45.7% for the three months ended June 30, 2026, compared to the same period in 2025. The decline in production was attributed to natural declines in the producing properties and weather-related shut-ins during winter storms in early 2026. The average realized oil price increased to $81.09 per barrel, while the average natural gas price decreased to $1.89 per Mcf, reflecting market conditions and pricing differentials.

Looking ahead, T2S, the operator of the underlying properties, has set a workover budget of approximately $0.7 million for 2026, which includes workovers on 22 shut-in wells and one plugging and abandonment operation. As of June 30, 2026, T2S reported that approximately $0.4 million of this budget had been spent. The Trust continues to maintain cash reserves of $1 million to cover future administrative expenses and liabilities. The Trustee remains cautious about the impact of fluctuating commodity prices and operational challenges on future distributions and overall financial performance.

About PermRock Royalty Trust

PermRock Royalty Trust owns a passive interest in oil and natural gas properties in the Permian Basin, Texas. It receives 80% of net profits from production sales, derived from underlying operated and non-operated assets. The trust distributes cash to unitholders, with no management responsibilities. Its core business involves holding and distributing income from oil and gas royalties, relying on third-party operators and market-driven sales.

This description was generated via AI from an annual report. Updated about 1 year ago.

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