PermRock Royalty Trust
For the period ended Dec 31, 2024. Filed Mar 28, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Mar 28, 2025
PRT$1.42+5.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 73 previous paragraphs and 88 current paragraphs.
56 unchanged; 14 reworded; 17 added; 3 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 19 previous and 3 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (17)
Current report
In 2025, Boaz Energy plans to drill new producing wells in the Permian Platform and to invest in workovers, waterflood pattern conformance, and returning to production some wells that are currently shut in. This is subject to modification by the successor operator to Boaz Energy following the closing of the transaction proposed under the Purchase and Sale Agreement.
Current report
Annual sales volumes for 2024 reflect production volumes for November 2023 through October 2024. Annual sales volumes for 2023 reflect production volumes for November 2022 through October 2023. Annual sales volumes for 2022 reflect production volumes for November 2021 through October 2022.
Current report
Boaz Energy is entitled under the Conveyance to reserve up to $3 million from the net profits for certain taxes and development expenses. As of December 31, 2024, the balance of funds held back to cover certain future capital expenses was $526,174 net to the Trust. The balance of funds held, net to the Trust, as of December 31, 2023 and 2022 was $650,157 and $1,478,157, respectively.
Current report
Lease Operating Expenses. Lease operating expenses decreased for the year ended December 31, 2024, as compared to the prior year primarily due to returning fewer wells to production.
Current report
Income from the Net Profits Interest is recorded when distributions are received by the Trust;
Current report
Distributions to Trust unitholders are recorded when declared by the Trust;
Current report
Trust general and administrative expenses (which includes the Trustee’s fees as well as accounting, engineering, legal, tax advisory and other professional fees) are recorded when paid;
Current report
Cash reserves for Trust expenses may be established by the Trustee for certain expenditures that would not be recorded as contingent liabilities under accounting principles generally accepted in the United States of America (“GAAP”);
Current report
Amortization of the investment in the Net Profits Interest is calculated on a unit-of-production basis and is charged directly to Trust corpus, and such amortization does not affect distributions from the Trust; and
Current report
The Trust’s investment in the Net Profits Interest is periodically assessed to determine whether its aggregate value has been impaired below its total capitalized cost basis and, if an impairment loss is indicated by the carrying amount of the assets exceeding the sum of the undiscounted expected future net cash flows, then an impairment loss is recognized for the amount by which the carrying amount of the asset exceeds its estimated fair value.
Removed paragraphs (3)
Previous report
In 2024, Boaz Energy plansto drill new producing wells in the Permian Shelf area and stimulate existing wells to improve production and waterflood operations. In addition, Boaz Energy plans to continue reactivating inactive wells by either returning them to production or recompleting them to new formations to maximize oil and gas production in this high commodity price environment.
Previous report
Lease Operating Expenses. Lease operating expenses increased for the year ended December 31, 2022, as compared to the prior year primarily due to increases in industry pricing for materials and services.
Previous report
*Other Expenses.*Other expenses decreased for the year ended December 31, 2022, as a result of a decrease in professional fees.
Reworded paragraphs (14)
Previous wording
Oil prices increased in 2021 and the first part of 2022 following an extended period of depressed pricing primarily due to the COVID-19 pandemic. It is unclear whether prices will level out or decline further in 2023. Low oil and gas prices on production from the Underlying Properties could cause (i) a reduction in the amount of net proceeds to which the Trust is entitled, which could materially reduce or completely eliminate the amount of cash available for distribution to Trust unitholders and (ii) a reduction in the amount of oil and natural gas that are economic to produce from the Underlying Properties.
Current wording
Low oil and gas prices received for production from the Underlying Properties could cause (i) a reduction in the amount of net proceeds to which the Trust is entitled, which could materially reduce or completely eliminate the amount of cash available for distribution to Trust unitholders and (ii) a reduction in the amount of oil and natural gas that are economic to produce from the Underlying Properties.
Previous wording
In 2023, Boaz Energy participated in non-operated drilling and recompletion projects, waterflood conformance and reactivations in Terry, Coke, and Crane Counties. Boaz Energy completed reentry projects in the Permian Abo and Permian Shelf areas, maintained waterflood operations where prudent, and did necessary repairs to bring wells back to production.
Current wording
In 2024, Boaz Energy participated in non-operated drilling and recompletion projects, waterflood conformance and reactivations in Terry, Coke, Glasscock, and Crane Counties. Boaz Energy completed reentry projects in the Permian Abo and Permian Shelf areas, maintained waterflood operations where prudent, and did necessary repairs to bring wells back to production.
Previous wording
Interest Income. Interest income increased for the year ended December 31, 2022, as compared to the prior year, primarily due to higher interest rates.
Current wording
Interest Income. Interest income decreased slightly for the year ended December 31, 2024, as compared to the prior year, primarily due to lower income to invest.
Previous wording
General and Administrative Expenditures. General and administrative expenditures increased for the year ended December 31, 2022, as compared to the prior year, primarily because of differences in the timing and payment of some expenses.
Current wording
General and Administrative Expenditures. General and administrative expenditures decreased for the year ended December 31, 2024, as compared to the prior year, primarily due to a decrease in legal expenses and differences in the timing and payment of some expenses.
Previous wording
The increase in net profits income was primarily due to increased oil and natural gas prices. See “Computation of Income from the Net Profits Interest Received by the Trust” below.
Current wording
The decrease in net profits income was primarily due to decreased oil and natural gas sales volumes and prices. See “Computation of Income from the Net Profits Interest Received by the Trust” below.
Previous wording
Oil.The average realized oil price per Bbl increased for the year ended December 31, 2022, as compared to the prior year. The average realized oil price per Bbl for the year ended December 31, 2022, is primarily related to production from November 2021 through October 2022,**when the average NYMEX price was $93.39 per Bbl.
Current wording
Oil. The average realized oil price per Bbl decreased for the year ended December 31, 2024, as compared to the prior year. The average realized oil price per Bbl for the year ended December 31, 2024, is primarily related to production from November 2023 through October 2024, when the average NYMEX price was $77.34 per Bbl.
Previous wording
Natural Gas. The average realized natural gas price per Mcf increased for the year ended December 31, 2022, as compared to the prior year. The average realized natural gas price per Mcf for the year ended December 31, 2022, is primarily related to production from November 2021 through October 2022, when the average NYMEX price was $6.03 per Mcf.
Current wording
Natural Gas. The average realized natural gas price per Mcf decreased for the year ended December 31, 2024, as compared to the prior year. The average realized natural gas price per Mcf for the year ended December 31, 2024, is primarily related to production from November 2023 through October 2024, when the average NYMEX price was $2.32 per Mcf.
Previous wording
Capital Reserve and Operator Advance. Boaz Energy is entitled under the Conveyance to reserve up to $3 million from the net profits for certain taxes and development expenses. As of December 31, 2022, the balance of funds held back to cover certain future capital expenses was $1,478,157 net to the Trust**.**
Current wording
Capital Reserve and Operator Advance. Boaz Energy is entitled under the Conveyance to reserve up to $3 million from the net profits for certain taxes and development expenses. As of December 31, 2024, the balance of funds held back to cover certain future capital expenses was $526,174 net to the Trust.
Previous wording
*Direct Operating Expenses.*Direct operating expenses increased for the year ended December 31, 2022, as compared to the prior year primarily due to an increase in workovers to bring wells back into operations.
Current wording
Direct Operating Expenses. Direct operating expenses decreased for the year ended December 31, 2023, as compared to the prior year primarily due to a decrease in capital projects to return wells to production.
Previous wording
*Severance and Ad Valorem Taxes.*Severance and ad valorem taxes increased for the year ended December 31, 2022, as compared to the prior year primarily due to higher sales valuation due to increased industry prices for oil and natural gas.
Current wording
Severance and Ad Valorem Taxes. Severance and ad valorem taxes decreased for the year ended December 31, 2023, as compared to the prior year primarily due to lower sales valuation due to decreased industry prices for oil and natural gas.
Previous wording
*Development Expenses Related to the Underlying Properties.*Development expenses related to the Underlying Properties increased for the year ended December 31, 2022, as compared to the prior year primarily due to the potential for capital projects to have a greater economic benefit given higher oil and gas prices.
Current wording
Development Expenses Related to the Underlying Properties. Development expenses related to the Underlying Properties decreased for the year ended December 31, 2023, as compared to the prior year primarily due to fewer drilling and recompletion projects.
Previous wording
Boaz Energy’s estimated capital budget for 2024 for the Underlying Properties is $4.5 million, of which approximately $0.9 million has been expended as of March 13, 2024. Based on current oil and gas prices, Boaz anticipates continuing to participate in Crane and Glasscock Counties non-operated drilling and waterflood conformance and expansion work in Crane & Terry Counties, as well as drilling 1 new operated wells in Crane County sometime in 2024. The majority of capital spent in 2024 to date was spent on non-operated projects in the Permian Shelf Area. The $4.5 million estimate is subject to change based on, among other things, changes in the price of oil and natural gas, Boaz Energy’s actual capital requirements, the pace of regulatory approvals and the mix of projects.
Current wording
Boaz Energy’s estimated capital budget for 2025 for the Underlying Properties is $4 million, of which approximately $0.1 million has been expended as of March 14, 2025. This is for two new drill wells in Crane County (1 producer and 1 injector). Additionally, Boaz expects to invest in workovers, waterflood pattern conformance, and returning to production some wells that are currently shut in. Based on current oil and gas prices, Boaz anticipates continuing to participate in Crane and Glasscock Counties non-operated drilling and waterflood conformance and expansion work in Crane & Terry Counties, as well as drilling 1 new operated wells in Crane County sometime in 2025. The majority of capital spent in 2025 to date was spent on non-operated projects in the Permian Shelf Area. The $4 million estimate is subject to change based on, among other things, changes in the price of oil and natural gas, Boaz Energy’s actual capital requirements, the pace of regulatory approvals and the mix of projects. Further, the plans of the potential successor to Boaz Energy following closing of the transaction contemplated by the Purchase and Sale Agreement, as well as the effect of those plans on Boaz Energy’s estimated capital budget for 2025 for the Underlying Properties, have not yet been provided to the Trust.
Previous wording
Boaz Energy’s capital expenditure by the end of 2023 was $4.4 million.
Current wording
Boaz Energy’s capital expenditure by the end of 2024 was $3.8 million.
Previous wording
*Impairment of Net Profits Interest.*The Trustee reviews the Trust’s Net Profits Interest in oil and natural gas properties for impairment annually and whenever events or circumstances indicate that the carrying value of the Net Profits Interest may not be recoverable. In the event of material revisions, the Trustee reviews the impact of these revisions on the amortization of Trust Units and impairment estimates. During 2023, a material revision was made to reserves resulting in the additional recognition of amortization of Trust Units. The Trust recognized $4,164,943 of amortization of Trust Units for the year ended December 31, 2023. There was no impairment present for the year ended December 31, 2023, after revisions to undiscounted cash flows. There was also no impairment as of December 31, 2022. In general, neither the Trustee nor Boaz Energy view temporarily low prices as an indication of impairment. The markets for crude oil and natural gas have a history of significant price volatility and though prices will occasionally drop significantly, industry prices over the long term will continue to be driven by market supply and demand. If events and circumstances indicate that the carrying value may not be recoverable, the Trustee would use the estimated undiscounted future net cash flows from the Net Profits Interest to evaluate the recoverability of the Trust assets. If the undiscounted future net cash flows from the Net Profits Interest are less than the Net Profits Interest carrying value, the Trust would recognize an impairment loss for the difference between the Net Profits Interest carrying value and the estimated fair value of the Net Profits Interest. The determination as to whether the Net Profits Interest is impaired is based on the best information available to the Trustee at the time of the evaluation, including information provided by Boaz Energy such as estimates of future production and development and operating expenses.
Current wording
Impairment of Net Profits Interest. The Trustee reviews the Trust’s Net Profits Interest in oil and natural gas properties for impairment annually and whenever events or circumstances indicate that the carrying value of the Net Profits Interest may not be recoverable. In the event of material revisions, the Trustee reviews the impact of these revisions on the amortization of Trust Units and impairment estimates. During 2024, a material revision was made to reserves resulting in the additional recognition of amortization of Trust Units. The Trust recognized $3,496,231 of amortization of Trust Units for the year ended December 31, 2024. There was no impairment present for the year ended December 31, 2024, after revisions to undiscounted cash flows. There was also no impairment as of December 31, 2023. In general, neither the Trustee nor Boaz Energy view temporarily low prices as an indication of impairment. The markets for crude oil and natural gas have a history of significant price volatility and though prices will occasionally drop significantly, industry prices over the long term will continue to be driven by market supply and demand. If events and circumstances indicate that the carrying value may not be recoverable, the Trustee would use the estimated undiscounted future net cash flows from the Net Profits Interest to evaluate the recoverability of the Trust assets. If the undiscounted future net cash flows from the Net Profits Interest are less than the Net Profits Interest carrying value, the Trust would recognize an impairment loss for the difference between the Net Profits Interest carrying value and the estimated fair value of the Net Profits Interest. The determination as to whether the Net Profits Interest is impaired is based on the best information available to the Trustee at the time of the evaluation, including information provided by Boaz Energy such as estimates of future production and development and operating expenses.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Other Expenses. Other expenses increased for the year ended December 31, 2023, as compared to the prior year primarily due to an increase in overhead expenses.