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Item 1. Financial Statements

2023-08-14 compared with 2023-05-15 · 558 added, 477 removed, 218 unchanged (83% of the section changed)

3 unchanged sentences

Cash and cash equivalents

Net profits interest in oil and natural

gas properties, net

Net profits interest in oil and natural gas properties, net

LIABILITIES AND TRUST CORPUS

Trust corpus (33,000,000 units issued

and outstanding)

Total liabilities

and Trust corpus

Trust corpus (33,000,000 units issued and outstanding)

Total liabilities and Trust corpus

The accompanying notes are an integral part of

these financial statements.

PERMIANVILLE ROYALTY

PERMIANVILLE ROYALTY TRUST

Statements of Distributable

Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Income from net profits interest

Income from sale of assets

Income from sale/lease of assets

Interest and investment income

General and administrative expenses

Cash reserves used (withheld) for Trust

Cash reserves (withheld) used for Trust expenses

Distributable income

Distributable income per unit (33,000,000

Distributable income per unit (33,000,000 units)

The accompanying notes are an integral part of

2 unchanged sentences

Statements of Changes in Trust Corpus

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Trust corpus, beginning of period

Cash reserves withheld for Trust expenses

Cash reserves withheld (used) for Trust expenses

Distributable income

Distributions to unitholders ($0.1332 and $0.089 per unit)

Distributions to unitholders

Amortization of net profits interest

Trust corpus, end of period

Distributable income per unit (33,000,000 units)

The accompanying notes are

3 unchanged sentences

TRUST ORGANIZATION AND PROVISIONS

Permianville Royalty Trust

(the “Trust”), previously known as Enduro Royalty Trust, is a Delaware statutory trust formed in May 2011 pursuant to

a trust agreement (the “Trust Agreement”) among Enduro Resource Partners LLC (“Enduro”), as trustor, The Bank

of New York Mellon Trust Company, N.A.

(the “Trustee”), as trustee, and Wilmington Trust Company (the “Delaware Trustee”),

as Delaware Trustee.

The Trust was created to

acquire and hold for the benefit of the Trust unitholders a net profits interest representing the right to receive 80% of the net profits

from the sale of oil and natural gas production from certain properties in the states of Texas, Louisiana and New Mexico held by Enduro

as of the date of the conveyance of the net profits interest to the Trust (the “Net Profits Interest”).

The properties in

which the Trust holds the Net Profits Interest are referred to as the “Underlying Properties.”

In connection with the closing

of the initial public offering in November 2011, Enduro contributed the Net Profits Interest to the Trust in exchange for 33,000,000

units of beneficial interest in the Trust (the “Trust Units”).

Permianville Royalty Trust (the “Trust”),

previously known as Enduro Royalty Trust, is a Delaware statutory trust formed in May 2011 pursuant to a trust agreement (the “Trust

Agreement”) among Enduro Resource Partners LLC (“Enduro”), as trustor, The Bank of New York Mellon Trust Company, N.A.

(the “Trustee”), as trustee, and Wilmington Trust Company (the “Delaware Trustee”), as Delaware Trustee.

The Trust was created to acquire and hold for

the benefit of the Trust unitholders a net profits interest representing the right to receive 80% of the net profits from the sale of

oil and natural gas production from certain properties in the states of Texas, Louisiana and New Mexico held by Enduro as of the date

of the conveyance of the net profits interest to the Trust (the “Net Profits Interest”).

The properties in which the Trust

holds the Net Profits Interest are referred to as the “Underlying Properties.”

In connection with the closing of the initial

public offering in November 2011, Enduro contributed the Net Profits Interest to the Trust in exchange for 33,000,000 units of beneficial

interest in the Trust (the “Trust Units”).

On August 31, 2018, COERT Holdings 1 LLC (“COERT”

or the “Sponsor”) acquired from Enduro the Underlying Properties and all of the outstanding Trust Units owned by Enduro (the

“Sale Transaction”).

In connection with the Sale Transaction, COERT assumed all of Enduro’s obligations under the Trust

Agreement and other instruments to which Enduro and the Trustee were parties.

As of March 31, 2023, the Sponsor owned 7,517,942

Trust Units, or 23% of the issued and outstanding Trust Units.

The Net Profits Interest

is passive in nature and neither the Trust nor the Trustee has any management control over or responsibility for costs relating to the

operation of the Underlying Properties.

or the “Sponsor”)

acquired from Enduro the Underlying Properties and all of the outstanding Trust Units owned by Enduro (the “Sale Transaction”).

In connection with the Sale Transaction, COERT assumed all of Enduro’s obligations under the Trust Agreement and other instruments

to which Enduro and the Trustee were parties.

As of June 30, 2023, the Sponsor owned 7,517,942 Trust Units, or 23% of the issued

and outstanding Trust Units.

The Net Profits Interest is passive in nature

and neither the Trust nor the Trustee has any management control over or responsibility for costs relating to the operation of the Underlying

The Amended and Restated Trust Agreement provides, among other provisions, that:

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the Net Profits Interest;

annual cash proceeds received by the Trust attributable to the Net Profits Interest are less

than $2 million for each of any two consecutive years;

PERMIANVILLE ROYALTY TRUST

NOTES TO FINANCIAL STATEMENTS

annual cash proceeds received by the Trust attributable to the Net Profits Interest are less

than $2 million for each of any two consecutive years;

holders of at least 75% of the outstanding Trust Units vote in favor of dissolution;

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BASIS OF PRESENTATION

The Statement of Assets,

Liabilities and Trust Corpus as of December 31, 2022, which has been derived from audited financial statements, and the unaudited

interim financial statements as of March 31, 2023 and for the three months ended March 31, 2023 and 2022 have been prepared

pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”).

Accordingly, certain information

and disclosures normally included in annual financial statements have been condensed or omitted pursuant to those rules and regulations.

Therefore, these financial statements should be read in conjunction with the financial statements and notes thereto included in the Trust’s

Annual Report on Form 10-K for the fiscal year ended December 31, 2022 (the “2022 Annual Report on Form 10-K”).

In the opinion of the Trustee,

the accompanying unaudited financial statements reflect all adjustments, consisting only of normal, recurring, that are necessary for

a fair presentation of the interim periods presented and include all the disclosures necessary to make the information presented not

These interim results are not necessarily indicative of results for a full year.

The preparation of financial

statements requires the Trustee to make estimates and assumptions that affect reported amounts of assets and liabilities and the reported

amounts of revenues and expenses during the reporting period.

Although the Trustee believes that these estimates are reasonable, actual

results could differ from those estimates.

The Trust uses the modified

cash basis of accounting to report Trust receipts of income from the Net Profits Interest and payments of expenses incurred.

Profits Interest represents the right to receive revenues (oil and natural gas sales), less direct operating expenses (lease operating

expenses and production and property taxes) and development expenses of the Underlying Properties, multiplied by 80%.

Cash distributions

of the Trust are made based on the amount of cash received by the Trust pursuant to terms of the Conveyance creating the Net Profits

Under the terms of the Conveyance,

the monthly Net Profits Interest calculation includes oil and natural gas revenues received during the relevant month.

Monthly operating

expenses and capital expenditures represent estimated incurred expenses and, as a result, represent accrued expenses as well as expenses

paid during the period.

The financial statements

of the Trust are prepared on the following basis:

(a) Income from Net

Profits Interest is recorded when distributions are received by the Trust;

(b) Distributions to

Trust unitholders are recorded when paid by the Trust;

administrative expenses (which includes the Trustee’s fees as well as accounting, engineering, legal, and other professional fees)

are recorded when paid;

(d) Cash reserves for

Trust expenses may be established by the Trustee for certain future expenditures that would not be recorded as contingent liabilities

under accounting principles generally accepted in the United States of America (“GAAP”);

(e) Amortization of

the Net Profits Interest in oil and natural gas properties is calculated on a unit-of-production basis and is charged directly to the

Trust corpus;

The Statement of Assets, Liabilities and Trust

Corpus as of December 31, 2022, which has been derived from audited financial statements, and the unaudited interim financial statements

as of June 30, 2023 and for the three and six months ended June 30, 2023 and 2022 have been prepared pursuant to the rules and

regulations of the Securities and Exchange Commission (“SEC”).

Accordingly, certain information and disclosures normally

included in annual financial statements have been condensed or omitted pursuant to those rules and regulations.

Therefore, these

financial statements should be read in conjunction with the financial statements and notes thereto included in the Trust’s Annual

Report on Form 10-K for the fiscal year ended December 31, 2022 (the “2022 Annual Report on Form 10-K”).

In the opinion of the Trustee, the accompanying

unaudited financial statements reflect all adjustments, consisting only of normal, recurring, that are necessary for a fair presentation

of the interim periods presented and include all the disclosures necessary to make the information presented not misleading.

These interim

results are not necessarily indicative of results for a full year.

The preparation of financial statements requires

the Trustee to make estimates and assumptions that affect reported amounts of assets and liabilities and the reported amounts of revenues

and expenses during the reporting period.

Although the Trustee believes that these estimates are reasonable, actual results could differ

from those estimates.

The Trust uses the modified cash basis of accounting

to report Trust receipts of income from the Net Profits Interest and payments of expenses incurred.

The Net Profits Interest represents

the right to receive revenues (oil and natural gas sales), less direct operating expenses (lease operating expenses and production and

property taxes) and development expenses of the Underlying Properties, multiplied by 80%.

Cash distributions of the Trust are made based

on the amount of cash received by the Trust pursuant to terms of the Conveyance creating the Net Profits Interest.

Under the terms of the Conveyance, the monthly

Net Profits Interest calculation includes oil and natural gas revenues received during the relevant month.

Monthly operating expenses

and capital expenditures represent estimated incurred expenses and, as a result, represent accrued expenses as well as expenses paid

during the period.

The financial statements of the Trust are prepared

on the following basis:

(a) Income from Net Profits Interest is recorded when distributions are

received by the Trust;

(b) Distributions to Trust unitholders are recorded when paid by the Trust;

fees as well as accounting, engineering, legal, and other professional fees) are recorded

(d) Cash reserves for Trust expenses may be established by the Trustee for

certain future expenditures that would not be recorded as contingent liabilities under accounting

principles generally accepted in the United States of America (“GAAP”);

(e) Amortization of the Net Profits Interest in oil and natural gas properties

is calculated on a unit-of-production basis and is charged directly to the Trust corpus;

PERMIANVILLE ROYALTY TRUST

NOTES TO FINANCIAL STATEMENTS

(f) The Net Profits

Interest in oil and natural gas properties is periodically assessed whenever events or circumstances indicate that the aggregate value

may have been impaired below its total capitalized cost based on the Underlying Properties.

If an impairment loss is indicated by the

carrying amount of the assets exceeding the sum of the undiscounted expected future net cash flows of the Net Profits Interest, then

an impairment loss is recognized for the amount by which the carrying amount of the asset exceeds its estimated fair value determined

using discounted cash flows.

(f) The Net Profits Interest in oil and natural gas properties is periodically

assessed whenever events or circumstances indicate that the aggregate value may have been

impaired below its total capitalized cost based on the Underlying Properties.

If an impairment

loss is indicated by the carrying amount of the assets exceeding the sum of the undiscounted

expected future net cash flows of the Net Profits Interest, then an impairment loss is recognized

for the amount by which the carrying amount of the asset exceeds its estimated fair value

determined using discounted cash flows.

Any impairment is a direct charge to the Trust Corpus.

9 unchanged sentences

to be the most meaningful because monthly distributions to the Trust unitholders are based on net cash receipts.

This comprehensive basis

of accounting other than GAAP corresponds to the accounting permitted for royalty trusts by the SEC as specified by Staff Accounting

Bulletin Topic 12:E, Financial Statements of Royalty Trusts .

This comprehensive basis of accounting other than

GAAP corresponds to the accounting permitted for royalty trusts by the SEC as specified by Staff Accounting Bulletin Topic 12:E, Financial

Statements of Royalty Trusts .

NET PROFITS INTEREST IN OIL AND NATURAL GAS PROPERTIES

The Net Profits Interest

in oil and natural gas properties was recorded at its fair value on the date of conveyance.

Amortization of the Net Profits Interest

in oil and natural gas properties is calculated on a unit-of-production basis based on the Underlying Properties’

production and

The reserves upon which the amortization rate is based are quantity estimates that are subject to numerous uncertainties inherent

in the estimation of proved reserves.

The volumes considered to be commercially recoverable fluctuate with changes in commodity prices

and operating costs.

The Net Profits Interest in oil and natural gas

properties was recorded at its fair value on the date of conveyance.

Amortization of the Net Profits Interest in oil and natural gas

properties is calculated on a unit-of-production basis based on the Underlying Properties’

production and reserves.

upon which the amortization rate is based are quantity estimates that are subject to numerous uncertainties inherent in the estimation

of proved reserves.

The volumes considered to be commercially recoverable fluctuate with changes in commodity prices and operating costs.

These estimates are expected to change as additional information becomes available in the future.

Downward revisions

in proved reserves may result in an increased rate of amortization.

Amortization is charged directly to the Trust corpus balance and

does not affect the distributable income of the Trust.

Accumulated amortization as of March 31, 2023 and December 31, 2022

was $298,607,686 and $297,449,526, respectively.

The Net Profits Interest

is periodically assessed for impairment whenever events or circumstances indicate that the current fair value based on expected future

cash flows of the Underlying Properties may be less than the carrying value of the Net Profits Interest.

While the Trust did not record

an impairment during the three months ended March 31, 2023 or 2022, future downward revisions in actual production volumes relative

to current forecasts, higher than expected operating costs, or lower than anticipated commodity prices could result in recognition of

impairment in future periods.

Downward revisions in proved reserves

may result in an increased rate of amortization.

Amortization is charged directly to the Trust corpus balance and does not affect the

distributable income of the Trust.

Accumulated amortization as of June 30, 2023 and December 31, 2022 was $299,725,266 and

$297,449,526, respectively.

The Net Profits Interest is periodically assessed

for impairment whenever events or circumstances indicate that the current fair value based on expected future cash flows of the Underlying

Properties may be less than the carrying value of the Net Profits Interest.

While the Trust did not record an impairment during the six

months ended June 30, 2023 or 2022, future downward revisions in actual production volumes relative to current forecasts, higher

than expected operating costs, or lower than anticipated commodity prices could result in recognition of impairment in future periods.

Federal Income Taxes

For federal income tax purposes,

the Trust is a grantor trust and therefore is not subject to tax at the trust level.

Trust unitholders are treated as owning a direct

interest in the assets of the Trust, and each Trust unitholder is taxed directly on his or her pro rata share of the income and gain

attributable to the assets of the Trust and entitled to claim his or her pro rata share of the deductions and expenses attributable to

the assets of the Trust.

The income of the Trust is deemed to have been received or accrued by each unitholder at the time such income

is received or accrued by the Trust rather than when distributed by the Trust.

The deductions of the Trust

consist of severance taxes and administrative expenses.

In addition, each unitholder is entitled to depletion deductions because the

Net Profits Interest constitutes “economic interests”

in oil and natural gas properties for federal income tax purposes.

Each unitholder is entitled to amortize the cost of the Trust Units through cost depletion over the life of the Net Profits Interest

or, if greater, through percentage depletion.

Unlike cost depletion, percentage depletion is not limited to a unitholder’s depletable

tax basis in the Trust Units.

Rather, a unitholder could be entitled to percentage depletion as long as the applicable Underlying Properties

generate gross income.

For federal income tax purposes, the Trust is

a grantor trust and therefore is not subject to tax at the trust level.

Trust unitholders are treated as owning a direct interest in

the assets of the Trust, and each Trust unitholder is taxed directly on his or her pro rata share of the income and gain attributable

to the assets of the Trust and entitled to claim his or her pro rata share of the deductions and expenses attributable to the assets

of the Trust.

The income of the Trust is deemed to have been received or accrued by each unitholder at the time such income is received

or accrued by the Trust rather than when distributed by the Trust.

PERMIANVILLE ROYALTY TRUST

NOTES TO FINANCIAL STATEMENTS

Some Trust Units are held

by a middleman, as such term is broadly defined in U.S.

Treasury Regulations (and includes custodians, nominees, certain joint owners,

and brokers holding an interest for a custodian in street name).

Therefore, the Trustee considers the Trust to be a non-mortgage widely

held fixed investment trust (“WHFIT”) for U.S.

The deductions of the Trust consist of severance

taxes and administrative expenses.

In addition, each unitholder is entitled to depletion deductions because the Net Profits Interest

constitutes “economic interests”

in oil and natural gas properties for federal income tax purposes.

Each unitholder is entitled

to amortize the cost of the Trust Units through cost depletion over the life of the Net Profits Interest or, if greater, through percentage

Unlike cost depletion, percentage depletion is not limited to a unitholder’s depletable tax basis in the Trust Units.

Rather, a unitholder could be entitled to percentage depletion as long as the applicable Underlying Properties generate gross income.

Some Trust Units are held by a middleman, as such

term is broadly defined in U.S.

Treasury Regulations (and includes custodians, nominees, certain joint owners, and brokers holding an

interest for a custodian in street name).

Therefore, the Trustee considers the Trust to be a non-mortgage widely held fixed investment

trust (“WHFIT”) for U.S.

federal income tax purposes.

The Bank of New York Mellon Trust Company, N.A.,

601 Travis, 16 th Floor, Houston, Texas 77002, telephone number (512) 236-6545, is the representative of the Trust that will

provide tax information in accordance with applicable U.S.

Treasury Regulations governing the information reporting requirements of the

Trust as a WHFIT.

Tax information is also posted by the Trustee at www.permianvilleroyaltytrust.com .

Notwithstanding the foregoing,

the middlemen holding units on behalf of unitholders, and not the Trustee of the Trust, are solely responsible for complying with the

information reporting requirements under the U.S.

Treasury Regulations with respect to such units, including the issuance of IRS Forms

1099 and certain written tax statements.

Unitholders whose units are held by middlemen should consult with such middlemen regarding the

information that will be reported to them by the middlemen with respect to the Trust Units.

The tax consequences to

a unitholder of ownership of Trust Units will depend in part on the unitholder’s tax circumstances.

Unitholders should consult

their tax advisors about the federal tax consequences relating to owning the Trust Units.

The Trust’s revenues

are from sources in the states of Louisiana, New Mexico, and Texas.

Because it distributes all of its net income to unitholders, the

Trust is not taxed at the trust level in Louisiana or New Mexico.

Although the Trust does not owe tax, the Trustee is required to

file a return with Louisiana reflecting the income and deductions of the Trust attributable to properties located in that state.

Louisiana and New Mexico tax nonresident income from real property located within that state.

Louisiana and New Mexico impose a corporate

income tax which may apply to unitholders organized as corporations.

Texas does not impose a

state income tax, so the Trust’s income is not subject to income tax at the trust level in Texas.

Texas imposes a franchise tax

at a rate of 0.75% on gross revenues less certain deductions for returns originally due on or after January 1, 2016, as specifically

set forth in the Texas franchise tax statutes.

The Bank of New York Mellon Trust Company, N.A., 601 Travis, 16 th

Floor, Houston, Texas 77002, telephone number (512) 236-6545, is the representative of the Trust that will provide tax information

in accordance with applicable U.S.

Treasury Regulations governing the information reporting requirements of the Trust as a WHFIT.

information is also posted by the Trustee at www.permianvilleroyaltytrust.com .

Notwithstanding the foregoing, the middlemen holding

units on behalf of unitholders, and not the Trustee of the Trust, are solely responsible for complying with the information reporting

requirements under the U.S.

Treasury Regulations with respect to such units, including the issuance of IRS Forms 1099 and certain

written tax statements.

Unitholders whose units are held by middlemen should consult with such middlemen regarding the information that

will be reported to them by the middlemen with respect to the Trust Units.

The tax consequences to a unitholder of ownership

of Trust Units will depend in part on the unitholder’s tax circumstances.

Unitholders should consult their tax advisors about the

federal tax consequences relating to owning the Trust Units.

The Trust’s revenues are from sources in

the states of Louisiana, New Mexico, and Texas.

Because it distributes all of its net income to unitholders, the Trust is not taxed at

the trust level in Louisiana or New Mexico.

Although the Trust does not owe tax, the Trustee is required to file a return with Louisiana

reflecting the income and deductions of the Trust attributable to properties located in that state.

Presently, Louisiana and New Mexico

tax nonresident income from real property located within that state.

Louisiana and New Mexico impose a corporate income tax which may

apply to unitholders organized as corporations.

Texas does not impose a state income tax, so the

Trust’s income is not subject to income tax at the trust level in Texas.

Texas imposes a franchise tax at a rate of 0.75% on gross

revenues less certain deductions for returns originally due on or after January 1, 2016, as specifically set forth in the Texas

franchise tax statutes.

Entities subject to tax generally include trusts unless otherwise exempt.

receive at least 90% of their federal gross income from designated passive sources, including royalties from mineral properties and other

income from other non-operating mineral interests, and do not receive more than 10% of their income from operating an active trade or

business, generally are exempt from the Texas franchise tax as “passive entities.”

Although the Trust is intended to be exempt

from Texas franchise tax at the trust level as a passive entity, each unitholder that is considered a taxable entity under the Texas

franchise tax would generally be required to include its portion of Trust net income in its own Texas franchise tax computation.

Each unitholder should consult

his or her own tax advisor regarding state tax requirements, if any, applicable to such person’s ownership of Trust Units.

Trusts that receive at least 90% of

their federal gross income from designated passive sources, including royalties from mineral properties and other income from other non-operating

mineral interests, and do not receive more than 10% of their income from operating an active trade or business, generally are exempt

from the Texas franchise tax as “passive entities.”

Although the Trust is intended to be exempt from Texas franchise tax

at the trust level as a passive entity, each unitholder that is considered a taxable entity under the Texas franchise tax would generally

be required to include its portion of Trust net income in its own Texas franchise tax computation.

Each unitholder should consult his or her own

tax advisor regarding state tax requirements, if any, applicable to such person’s ownership of Trust Units.

DISTRIBUTIONS TO UNITHOLDERS

11 unchanged sentences

NOTES TO FINANCIAL STATEMENTS

The following table provides

information regarding the Trust’s distributions per unit paid during the periods indicated:

The following table provides information regarding

the Trust’s distributions per unit paid during the periods indicated:

Declaration Date

Three Months Ended March 31, 2023:

Six Months Ended June 30, 2023:

December 16, 2022

7 unchanged sentences

March 13, 2023

March 16, 2023

March 31, 2023

April 14, 2023

April 17, 2023

April 28, 2023

June 14, 2023

Year to Date –

Three Months Ended March 31, 2022:

Six Months Ended June 30, 2022:

December 17, 2021

7 unchanged sentences

March 14, 2022

March 18, 2022

March 31, 2022

April 14, 2022

April 18, 2022

April 29, 2022

June 14, 2022

Year to Date –

Under the terms of the Trust

Agreement, the Trust pays an administrative fee of $200,000 per year to the Trustee and an annual fee of $2,000 to the Delaware Trustee.

During each of the three-month periods ended March 31, 2023 and 2022, the Trust paid $50,000 to the Trustee and $0 to the Delaware

Trustee pursuant to the terms of the Trust Agreement.

Under the terms of the Trust Agreement, the Trust

pays an administrative fee of $200,000 per year to the Trustee and an annual fee of $2,000 to the Delaware Trustee.

During each of the

three-and six-month periods ended June 30, 2023 and 2022, the Trust paid $100,000 to the Trustee and $0 to the Delaware Trustee

pursuant to the terms of the Trust Agreement.

SUBSEQUENT EVENTS

Distributions Paid or Declared

On April 14, 2023, a

distribution of $0.019350 per unit, which was declared on March 16, 2023, was paid to Trust unitholders of record as of March 31,

On April 17, 2023, the

Trust declared a distribution of $0.030000 per unit to unitholders of record as of April 28, 2023.

The distribution was paid to

unitholders on May 12, 2023.

Proposed Property Divestitures

On May 3, 2023, the

Sponsor notified the Trustee that the Sponsor had entered into an agreement to divest certain acreage and associated production in the

Permian Basin (the “Divestiture Properties”) that constitute part of the Underlying Properties and are therefore burdened

by the Trust’s Net Profits Interest, for a total purchase price of approximately $6.7 million.

Accordingly, the Sponsor will seek,

through a vote at a special meeting of unitholders, unitholder approval of the release of the Net Profits Interest with respect to the

Divestiture Properties.

If the transactions are approved, unitholders will receive 80% of the net proceeds of the sale of the Divestiture

The income from net profits interest from the Divestiture Properties has not been significant historically and represented

less than 6% and less than 5% of total proved reserves attributable to the Trust and the PV-10 of the Underlying Properties at December 31,

2022, respectively.

The Divestiture Properties are being acquired by the Operator of the Divestiture Properties, whom the Sponsor views

as the most logical acquirer.

On May 12, 2023, the

Trust filed a preliminary proxy statement with the SEC with respect to a special meeting of unitholders to be held in 2023 for the purpose

of considering and acting on proposals to approve:

transaction pursuant to which (a) the Sponsor will sell its interests in the Divestiture

Properties, (b) the Trust will release the related Net Profits Interest associated with

the Divestiture Properties, and (c) the net proceeds received by the Trust with respect

to such sale will be distributed to the Trust unitholders;

On July 14, 2023, a distribution of $0.012500

per unit, which was declared on June 16, 2023, was paid to Trust unitholders of record as of June 30, 2023.

On July 17, 2023, the Trust declared a distribution

of $0.053500 per unit to Trust unitholders of record as of July 31, 2023.

The distribution will be paid to Trust unitholders on

August 14, 2023.

Non-producing Property Divestiture

In May 2023, the Sponsor sold approximately

$0.3 million in non-producing, non-cash flowing acreage to a private oil company, free and clear of the Net Profits Interest, as permitted

under the Trust Agreement.

The proceeds from this sale attributable to the Trust’s 80% Net Profits Interest, or approximately $240,000, will be included in

the distribution that will be paid to Trust unitholders on August 14, 2023.

PERMIANVILLE ROYALTY TRUST

NOTES TO FINANCIAL STATEMENTS

to the Trust Agreement to raise certain threshold requirements for a vote of Trust unitholders

in connection with similar future transactions;

to the Conveyance to raise certain threshold requirements for a vote of Trust unitholders

in connection with similar future transactions;

adjournment of the special meeting, if necessary or appropriate, to permit solicitation of

additional proxies in favor of the above proposals.

The Trustee makes no recommendation

regarding any of the foregoing proposals.

Unitholders should review carefully the definitive proxy statement that will be filed with

the SEC with respect to the special meeting, when it becomes available, because it will contain important information about the release

of the Trust’s Net Profits Interest with respect to the Divestiture Properties in connection with the proposed transaction.

Sale of Divestiture Properties

May 3, 2023, the Sponsor notified the Trustee that the Sponsor had entered into an agreement to divest certain acreage and associated

production in the Permian Basin (the “Divestiture Properties”) that constituted part of the Underlying Properties and were

therefore burdened by the Trust’s Net Profits Interest, for a total purchase price of approximately $6.7 million.

2023, at a special meeting of Trust unitholders, the unitholders approved the foregoing transaction and the release of the Trust’s

Net Profits Interest in the Divestiture Properties.

On August 9, 2023, the Sponsor completed the sale of the Divestiture Properties.

The total proceeds received by the Sponsor from the Divestiture Properties, after preliminary closing adjustments, were approximately

$6.5 million, inclusive of the escrow funded by the buyer and partial expense reimbursement associated with the proxy solicitation.

The Sponsor will deduct final transaction expenses from the sales proceeds, along with an escrow amount of $250,000 to cover possible

indemnification obligations under the purchase and sale agreement (the “Indemnification Escrow Amount”), to arrive at final

net proceeds, based upon the Trust’s 80% Net Profits Interest.

The Sponsor will set a record date and the special distribution,

reflecting 50% of the Trust’s share of the net proceeds, will be paid to Trust unitholders on or before September 22, 2023.

The remaining 50% of the Trust’s share of the net proceeds will be temporarily retained by the Sponsor as a source of payment of

the Trust’s proportionate share of any post-closing purchase price adjustments, with any amount remaining (less any amounts in

dispute) after such adjustments to be paid to the Trust within five business days after finalization of the settlement statement (which

is expected to occur within 90 days following the closing of the sale) and included in a distribution to unitholders.

Within 12 months

after the closing of the sale, any remaining amount from the Indemnification Escrow Amount (less any amounts in dispute) will be released

to the Trust and included in a distribution to unitholders.

Trustee’s Discussion and Analysis of Financial Condition

1 unchanged sentence

References to the “Trust”

in this document refer to Permianville Royalty Trust, previously known as Enduro Royalty Trust, while references to “COERT”

or the “Sponsor”

document refer to Permianville Royalty Trust, previously known as Enduro Royalty Trust, while references to “COERT”

“Sponsor”

in this document refer to COERT Holdings 1 LLC.

References to “Enduro”

in this document refer

to Enduro Resource Partners LLC, the original sponsor of the Trust.

The following review of the Trust’s financial condition and

results of operations should be read in conjunction with the financial statements and notes thereto, as well as Management’s Discussion

and Analysis of Financial Condition and Results of Operations contained in the Trust’s 2022 Annual Report on Form 10-K.

Trust’s annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all other filings

with the SEC are available on the SEC’s website at www.sec.gov .

in this document refer to Enduro

Resource Partners LLC, the original sponsor of the Trust.

The following review of the Trust’s financial condition and results of

operations should be read in conjunction with the financial statements and notes thereto, as well as Management’s Discussion and

Analysis of Financial Condition and Results of Operations contained in the Trust’s 2022 Annual Report on Form 10-K.

The Trust’s

annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all other filings with the

SEC are available on the SEC’s website at www.sec.gov .

Forward-Looking Statements

This Form 10-Q includes

“forward-looking statements”

within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E

of the Securities Exchange Act of 1934, as amended.

All statements other than statements of historical fact included in this Form 10-Q,

including without limitation the statements under this “Trustee’s Discussion and Analysis of Financial Condition and Results

of Operations”

This Form 10-Q includes “forward-looking

statements”

within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities

Exchange Act of 1934, as amended.

All statements other than statements of historical fact included in this Form 10-Q, including

without limitation the statements under this “Trustee’s Discussion and Analysis of Financial Condition and Results of Operations”

are forward-looking statements.

Such statements may be influenced by factors that could cause actual outcomes and

results to differ materially from those projected.

Such statements may be influenced by factors that could cause actual outcomes and results to differ materially

from those projected.

No assurance can be given that such expectations will prove to have been correct.

When used in this document, the words “believes,”

When used in this document, the

words “believes,”

“expects,”

1 unchanged sentence

“intends”

or similar expressions are intended to identify such forward-looking statements.

The following important factors, in addition to those

discussed elsewhere in this Form 10-Q, in the Trust’s 2022 Annual Report on Form 10-K and the Trust’s other filings

with the SEC could affect the future results of the energy industry in general, and COERT and the Trust in particular, and could cause

actual results to differ materially from those expressed in such forward-looking statements:

risks associated with the drilling and operation of oil and natural

the amount of future direct operating expenses and development

or similar expressions are intended

to identify such forward-looking statements.

The following important factors, in addition to those discussed elsewhere in this Form 10-Q,

in the Trust’s 2022 Annual Report on Form 10-K and the Trust’s other filings with the SEC could affect the future results

of the energy industry in general, and COERT and the Trust in particular, and could cause actual results to differ materially from those

expressed in such forward-looking statements:

associated with the drilling and operation of oil and natural gas wells;

amount of future direct operating expenses and development expenses;

health concerns, including the COVID-19 pandemic;

actions of the Organization of Petroleum Exporting Countries;

the armed conflict between Russia and Ukraine and the potential

destabilizing effect such conflict may pose for the global oil and gas markets;

the effect of existing and future laws and regulatory actions;

the effect of changes in commodity prices or alternative fuel

the prohibition on the Trust’s entry into any new hedging

arrangements under the terms of the Conveyance;

conditions in the capital markets;

competition from others in the energy industry;

climate change and the potential impact on fossil fuels;

uncertainty of estimates of oil and natural gas reserves and

cost inflation.

You should not place undue

reliance on these forward-looking statements.

armed conflict between Russia and Ukraine and the potential destabilizing effect such conflict

may pose for the global oil and gas markets;

effect of existing and future laws and regulatory actions;

effect of changes in commodity prices or alternative fuel prices;

prohibition on the Trust’s entry into any new hedging arrangements under the terms

of the Conveyance;

in the capital markets;

· changes in interest rates;

· competition

from others in the energy industry;

change and the potential impact on fossil fuels;

· uncertainty

of estimates of oil and natural gas reserves and production;

You should not place undue reliance on these forward-looking

All forward-looking statements speak only as of the date of this Form 10-Q.

does not undertake any obligation to release publicly any revisions to the forward-looking statements to reflect events or circumstances

after the date of this Form 10-Q or to reflect the occurrence of unanticipated events, unless the securities laws require the Trust

This Form 10-Q describes

other important factors that could cause actual results to differ materially from expectations of the Sponsor and the Trust.

All forward-looking

statements in this report and all subsequent written and oral forward-looking statements attributable to the Sponsor or the Trust or

persons acting on behalf of the Sponsor or the Trust are expressly qualified in their entirety by such factors.

The Trust assumes no

obligation, and disclaims any duty, to update these forward-looking statements.

Permianville Royalty Trust,

a statutory trust created in May 2011, completed its initial public offering in November 2011.

The Trust’s only asset

and source of income is the Net Profits Interest, which entitles the Trust to receive 80% of the net profits from oil and natural gas

production from the Underlying Properties.

The Net Profits Interest is passive in nature and neither the Trust nor the Trustee has any

management control over or responsibility for costs relating to the operation of the Underlying Properties.

Additionally, third parties

operate substantially all of the wells on the Underlying Properties and, therefore, the Sponsor is not in a position to control the timing

of development efforts, associated costs, or the rate of production of the reserves.

On August 31, 2018,

COERT completed the acquisition from Enduro of the Underlying Properties and all of the outstanding Trust Units owned by Enduro (the

“Sale Transaction”).

In connection with the Sale Transaction, COERT assumed all of Enduro’s obligations under the Amended

and Restated Trust Agreement of the Trust and other instruments to which Enduro and the Trustee were parties.

The Trust is required to

make monthly cash distributions of substantially all of its monthly cash receipts, after deducting the Trust’s administrative expenses,

to the holders of Trust Units as of the applicable record date (generally the last business day of each calendar month) on or before

the 10 th business day after the record date.

The Net Profits Interest is entitled to a share of the profits from and after

July 1, 2011 attributable to production occurring on or after June 1, 2011.

The amount of Trust revenues and cash distributions

to Trust unitholders depends on, among other things:

· oil and natural gas sales prices;

· volumes of oil and natural gas produced and sold attributable

to the Underlying Properties;

· production and development costs;

· price differentials;

· potential reductions or suspensions of production;

· the amount and timing of Trust administrative expenses;

The Trust does not undertake any obligation

to release publicly any revisions to the forward-looking statements to reflect events or circumstances after the date of this Form 10-Q

or to reflect the occurrence of unanticipated events, unless the securities laws require the Trust to do so.

This Form 10-Q describes other important

factors that could cause actual results to differ materially from expectations of the Sponsor and the Trust.

All forward-looking statements

in this report and all subsequent written and oral forward-looking statements attributable to the Sponsor or the Trust or persons acting

on behalf of the Sponsor or the Trust are expressly qualified in their entirety by such factors.

The Trust assumes no obligation, and

disclaims any duty, to update these forward-looking statements.

Permianville Royalty Trust, a statutory trust

created in May 2011, completed its initial public offering in November 2011.

The Trust’s only asset and source of income

is the Net Profits Interest, which entitles the Trust to receive 80% of the net profits from oil and natural gas production from the

Underlying Properties.

The Net Profits Interest is passive in nature and neither the Trust nor the Trustee has any management control

over or responsibility for costs relating to the operation of the Underlying Properties.

Additionally, third parties operate substantially

all of the wells on the Underlying Properties and, therefore, the Sponsor is not in a position to control the timing of development efforts,

associated costs, or the rate of production of the reserves.

On August 31, 2018, COERT completed the acquisition

from Enduro of the Underlying Properties and all of the outstanding Trust Units owned by Enduro (the “Sale Transaction”).

In connection with the Sale Transaction, COERT assumed all of Enduro’s obligations under the Amended and Restated Trust Agreement

of the Trust and other instruments to which Enduro and the Trustee were parties.

The Trust is required to make monthly cash distributions

of substantially all of its monthly cash receipts, after deducting the Trust’s administrative expenses, to the holders of Trust

Units as of the applicable record date (generally the last business day of each calendar month) on or before the 10 th business

day after the record date.

The Net Profits Interest is entitled to a share of the profits from and after July 1, 2011 attributable

to production occurring on or after June 1, 2011.

The amount of Trust revenues and cash distributions to Trust unitholders depends

on, among other things:

and natural gas sales prices;

of oil and natural gas produced and sold attributable to the Underlying Properties;

and development costs;

differentials;

reductions or suspensions of production;

amount and timing of Trust administrative expenses;

establishment, increase, or decrease of reserves for approved development expenses or future

liabilities of the Trust.

Generally, the Sponsor receives

cash payment for oil production 30 to 60 days after it is produced and for natural gas production 60 to 90 days after it is produced.

The overall outlook for

development activity on the Underlying Properties remained stable during the first quarter of 2023, despite a quarter-over-quarter decline

in commodity prices.

Meanwhile, the global economy remains volatile, reflecting, among other factors, the armed conflict between Russia

and Ukraine and the lingering effects of the COVID-19 pandemic.

Further clouding the outlook for commodity demand is the banking sector

crisis and its potential impact on lending availability to consumers and businesses.

Nevertheless, the Sponsor does not expect that these

events will have a material impact on the Underlying Properties and the 2023 development activity compared to previously estimated levels

detailed in the Trust’s 2022 Annual Report on Form 10-K, aside from the effects of volatile commodity prices.

The West Texas

Intermediate spot price of crude oil has decreased materially from $80.26 per barrel on December 30, 2022 to $70.78 per barrel on

May 11, 2023.

Natural gas prices have experienced greater pressure, with the Henry Hub spot price decreasing from $3.52 per MMBTU

on December 30, 2022 to $2.12 per MMBTU on May 11, 2023.

the price volatility, the Sponsor currently expects the previously disclosed capital spending outlook to remain within the range

of $6.0 million to $9.0 million, or $4.8 million to $7.2 million net to the Trust’s 80% Net Profits Interest.

While operators continue

to evaluate their planned capital expenditures for 2023, taking into account the volatility in commodity prices, the majority of the

operators of the Underlying Properties are Permian-focused, large cap operators who have indicated to the Sponsor their intent to continue

with planned activities.

The Sponsor does expect some moderation in the previously expected capital expenditure activity in the Haynesville

area of the Underlying Properties.

The Sponsor also expects that some of the inflationary pressures and supply chain bottlenecks operators

of the Underlying Properties reported during 2022 will moderate this year.

Given the market volatility, the Sponsor may reestablish a

cash reserve for approved, future development expenses during 2023, similar to the cash reserve that the Sponsor had established in 2022.

The Sponsor indicates that it continues to have access to adequate capital and liquidity to fund such capital expenditures as they come

The Sponsor believes there

could be further opportunity in 2023 for prospective divestitures, as operators of some of the Underlying Properties look to acquire

assets at compelling valuations against the backdrop of favorable oil prices compared to prior years.

Generally, the Sponsor receives cash payment for

oil production 30 to 60 days after it is produced and for natural gas production 60 to 90 days after it is produced.

The overall outlook for development activity on

the Underlying Properties remained relatively stable during the first half of 2023, despite a year-over-year volatility in commodity

Although the global economy remains volatile, reflecting, among other factors, the armed conflict between Russia and Ukraine

and the lingering effects of the COVID-19 pandemic, the Sponsor does not expect that these events will have a material impact on the

Underlying Properties or the expected 2023 development activity as detailed in the Trust’s 2022 Annual Report on Form 10-K,

aside from the effects of volatile commodity prices.

The West Texas Intermediate spot price of crude oil has modestly improved from $80.26

per barrel on December 30, 2022 to $82.82 per barrel on August 10, 2023.

Natural gas prices have declined year-over-year, with

the Henry Hub spot price decreasing from $3.52 per MMBtu on December 30, 2022 to $2.83 per MMBtu on August 10, 2023.

oil prices achieving greater stability in recent periods, the Sponsor currently expects an incremental increase in the previously

disclosed capital spending outlook, from the earlier range of $6.0 million to $9.0 million, or $4.8 million to $7.2 million net

to the Trust’s Net Profits Interest, to an updated range of $8.0 million to $12.0 million, or $6.4 million to $9.6 million net

to the Trust’s Net Profits Interest.

The increase in expected capital expenditures is driven primarily by greater activity in the

Permian basin by large-cap public operators, which compose the majority of the operators of the Underlying Properties.

Meanwhile, the

Sponsor continues to expect some moderation in the expected capital expenditure activity in the Haynesville portion of the Underlying

Properties, although any declines in this area would be at least partially offset by higher, oil-weighted Permian activity.

Nevertheless,

the outlook for capital expenditures remains subject to change, as operators are expected to continue to reevaluate their planned capital

expenditures, particularly to the extent commodity prices experience further volatility in the future.

Over the first half of 2023, the Sponsor has begun

to see a moderation in some of the inflationary pressures and supply chain bottlenecks that had been affecting the Underlying Properties.

Given the market volatility and recently increased capital expenditure activity levels, the Sponsor may establish a new cash reserve

for approved, future development expenses during 2023, similar to the cash reserve that the Sponsor had established in 2022.

indicates that it continues to have access to adequate capital and liquidity to fund such capital expenditures as they come due.

The Sponsor believes there could be further opportunity

in 2023 for prospective divestitures, as operators of some of the Underlying Properties look to acquire assets at compelling valuations

against the backdrop of favorable oil prices compared to prior years.

Capex Drilling Activity Update

Presented below is a summary

of the current status of certain notable capital projects recently undertaken on the Underlying Properties pursuant to the capital expenditure

program described above.

The following table is not

intended to be a comprehensive list reflecting all capital expenditures to date.

In addition, there can often be a several-month delay

from the time of capital expenditures to the time of production and cash flows attributable to the Underlying Properties, especially

given the non-operated nature of the Underlying Properties.

Working Interest

Presented below is a summary of the current status

of certain notable capital projects recently undertaken on the Underlying Properties pursuant to the capital expenditure program described

The following table is not intended to be a comprehensive

list reflecting all capital expenditures to date.

The table provides information regarding current projects that remain in process and

have not yet begun to generate revenues.

Additional information regarding producing wells drilled pursuant to the capital expenditure

program is provided following the table.

There can often be a several-month delay from

the time of capital expenditures to the time of production and cash flows attributable to the Underlying Properties, especially given

the non-operated nature of the Underlying Properties.

For example, as previously disclosed, in May 2023 three wells from one of

the larger, previously detailed drilling projects were finally converted to first revenues after a delay associated with the operator.

These wells began generating revenues in 2022, but the amounts were only finalized for non-operating partners in 2023.

The cash revenue

catch-up totaled approximately $3.7 million, or approximately $2.9 million net to the Trust’s Net Profits Interest, which

was reflected in the net profits interest calculation reported in July and will be included in the distribution that will be paid

to Trust unitholders on August 14, 2023.

(in thousands)

1 unchanged sentence

D&C New Drills

1 Drilled, Awaiting First Revenues;

Large Cap E&P 1

13 unchanged sentences

D&C New Drills

Large Cap E&P 4

D&C New Drills

Private E&P 2

Of those projects identified above that are still

in process or awaiting first revenues, the Sponsor expects a majority to be completed and to begin producing during 2023.

Special Meeting of Unitholders to Consider Property Divestitures

May 12, 2023, the Trust filed a preliminary proxy statement with the SEC with respect to a special meeting of unitholders to be

held in 2023 for the purpose of considering and acting on proposals to approve:

(1) a transaction pursuant to which (a) the

Sponsor will sell its interests in certain oil and natural gas properties that constitute part of the oil and natural gas properties

burdened by the Net Profits Interest held by the Trust (the “Divestiture Properties”), (b) the Trust will release the

related Net Profits Interest associated with the Divestiture Properties, and (c) the net proceeds received by the Trust with respect

to such sale will be distributed to the Trust unitholders;

(2) amendments to the Trust Agreement to raise certain threshold requirements

for a vote of Trust unitholders in connection with similar future transactions;

(3) amendments to the Conveyance to raise certain

threshold requirements for a vote of Trust unitholders in connection with similar future transactions;

and (4) an adjournment of

the special meeting, if necessary or appropriate, to permit solicitation of additional proxies in favor of the above proposals.

makes no recommendation regarding any of the foregoing proposals.

Unitholders should review carefully the definitive proxy statement

that will be filed with the SEC with respect to the special meeting, when it becomes available, because it will contain important information

about the release of the Trust’s Net Profits Interest with respect to the Divestiture Properties in connection with the proposed

As reflected in the table above, the Sponsor indicates

that since the first quarter a new Haynesville project has commenced (Large Cap E&P 4).

In addition, as indicated above, three wells

in the Midland began paying revenues during the second quarter, and the same operator (Large Cap E&P 1) has begun to produce from

three wells that had been previously categorized as drilling in-process, in addition to adding one new pre-drill project.

one of the Haynesville wells drilled (Large Cap Major 1) has come online and began to generate first revenues in the second quarter.

For the other projects identified above that are still in process or awaiting first revenues, the Sponsor expects a majority to be completed

and to begin producing during 2023.