PermRock Royalty Trust owns 80% net profits interest in the oil and natural gas production properties acquired by Boaz Energy II, LLC in Permian Basin, Texas. Its underlying properties comprising 22,997 net acres, which include 2,434 net acres on the Central Basin Platform of the Permian Basin in Hockley and Terry counties, Texas; 1,667 net acres on the Central Basin Platform of the Permian Basin in Terry and Cochran counties, Texas; 14,727 net acres on the Eastern Shelf of the Permian Basin in Glasscock, Schleicher, Stonewall, and Coke counties, Texas; and 4,169 net acres on the Central Basin Platform of the Permian Basin in Ward, Crane, Terry, and Ector counties, Texas. The company was founded in 2017 and is based in Fort Worth, Texas.
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Analogy 1: A Real Estate Investment Trust (REIT) for oil and gas royalties.
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- Cash Distributions to Unitholders: The trust collects net profits from underlying oil and natural gas production and distributes the available cash to its unitholders on a regular basis.
- Passive Investment Vehicle for Oil & Gas Royalties: PRT offers investors a financial instrument to gain exposure to the income generated from oil and natural gas royalty interests without direct operational involvement.
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PermRock Royalty Trust (PRT) is a royalty trust that derives its revenue from a net profits interest in oil and natural gas properties. As such, the trust does not directly sell oil and gas to end customers (either companies or individuals). Instead, it receives payments from the operating company that extracts and sells the resources from the underlying properties.
Therefore, PRT's major "customer" (the entity that is obligated to make the net profits interest payments to the trust) is:
- Permian Resources Operating, LLC, which is a subsidiary of **Permian Resources Corporation** (PR).
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- The Bank of New York Mellon (NYSE: BK)
- Deloitte & Touche LLP
- Vinson & Elkins LLP
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PermRock Royalty Trust (PRT) is a Delaware statutory trust, and as such, it does not have a traditional management team with a CEO or CFO in the conventional sense. The Trust's affairs are managed by a corporate trustee.
The current Trustee for PermRock Royalty Trust is Argent Trust Company, effective December 30, 2022, succeeding Simmons Bank. The Trust itself has no employees. The Trustee's primary function is to collect monthly net proceeds attributable to the net profits interest and make monthly distributions to unitholders, after deducting administrative expenses and any amounts necessary for cash reserves.
Given this structure, and the explicit information that PermRock Royalty Trust has no CEO, it is not possible to provide a list of individual management team members, including a CEO and CFO, for PermRock Royalty Trust.
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The accelerating global transition to alternative energy sources (such as solar, wind, and electric vehicles) and enhanced energy efficiency measures, which could lead to a sustained, structural decline in demand for crude oil and natural gas. This fundamental shift threatens to permanently depress commodity prices, thereby undermining the long-term profitability of the trust's underlying oil and gas assets and, consequently, its ability to generate distributions.
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PermRock Royalty Trust (PRT) primarily derives its revenue from an 80% net profits interest in oil and natural gas producing properties located in the Permian Basin of West Texas and southeastern New Mexico. Therefore, the addressable market for PermRock Royalty Trust's main products or services is the crude oil and natural gas production within the Permian Basin, United States.
Based on available data for the Permian Basin (United States):
- In 2023, crude oil production was approximately 5,790 thousand barrels of oil per day (mbd).
- In 2023, natural gas production was approximately 19,315 million cubic feet per day (mmcfd).
Projections for 2025 indicate continued growth in the region:
- Crude oil output in the Permian Basin is projected to reach 6.6 million barrels per day (b/d).
- Marketed natural gas production is expected to grow to an impressive 25.8 billion cubic feet per day.
The Permian Basin currently accounts for nearly 40 percent of all oil production and nearly 15 percent of natural gas production in the United States. The United States Permian Basin oil and gas shale market value is projected to grow at a Compound Annual Growth Rate (CAGR) of 5.10% between 2025 and 2034.
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PermRock Royalty Trust (PRT) is expected to have its future revenue growth over the next 2-3 years primarily driven by the following factors:
- Fluctuations in Oil and Natural Gas Prices: The Trust's revenue is directly tied to the market prices of oil and natural gas. Higher commodity prices translate into increased royalty income, while lower prices can negatively impact revenue. For instance, a decline in net profits income in 2024 was attributed to decreased oil and natural gas sales volumes and prices. Conversely, the Trust tends to benefit significantly from rising oil prices.
- Oil and Natural Gas Production Volumes: Revenue is derived from the royalties on oil and natural gas produced from the underlying properties in the Permian Basin. An increase in oil sales volumes has been observed, with a 10.9% rise to 24,965 barrels from 22,491 barrels in a recent period, though natural gas volumes saw a decrease. Sustained or increased production volumes are crucial for long-term earnings for oil producers.
- Operator's Capital Expenditures and Drilling Activities: The activities of the operating company (currently Boaz Energy, with a pending sale of interests to T2S Permian Acquisition II LLC expected to close by the end of March 2025) directly influence the production from the underlying properties. Capital expenditures, such as those for drilling activities on non-operated wells in the Permian Shelf, impact future production volumes and thus the Trust's royalty income.
- Strategic Focus on the Permian Basin: The Trust's strategic positioning, with its focus on oil and natural gas properties in the Permian Basin, a highly prolific oil-producing region in the U.S., allows it to capitalize on the region's production rates. The continued strategic emphasis and successful operations in this basin by the operator are vital for revenue generation.
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PermRock Royalty Trust (PRT) is a statutory trust formed to own a perpetual 80% net profits interest in certain oil and natural gas producing properties in the Permian Basin of West Texas. The Trust's primary function is to collect net proceeds and make monthly distributions to unitholders, after deducting administrative expenses and any necessary cash reserves. Due to its structure as a royalty trust, the capital allocation decisions typically associated with operating companies, such as direct share repurchases, share issuances, inbound or outbound investments, and capital expenditures, are not generally undertaken by the Trust itself. The underlying operator (Boaz Energy II, LLC) handles the capital expenditures related to the oil and natural gas properties before calculating the net profits distributed to the Trust.
As a result, no significant capital allocation decisions falling into the specified categories have been identified for PermRock Royalty Trust over the last 3-5 years.
