Permianville Royalty Trust 10-K

Item 8. Financial Statements and Supplementary Data. Report of Independent Registered Public Accounting Firm To the Trustee and Unitholders of Permianville Royalty Trust: Opinion on the Financial Statements We have audited the accompanying statements of assets, liabilities and trust corpus of Permianville Royalty Trust (the Trust) as of December 31, 2024 and 2023, and the related statements of distributable income and changes in trust corpus for the years then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Trust as of December 31, 2024 and 2023, and its distributable income and changes in trust corpus for the years then ended, in conformity with the modified cash basis of accounting, as described in Note 2, which is a comprehensive basis of accounting other than accounting principles generally accepted in the United States of America. Basis of Accounting As described in Note 2 to the financial statements, these financial statements were prepared on the modified cash basis of accounting, which is a comprehensive basis of accounting other than accounting principles generally accepted in the United States of America. Basis for Opinion These financial statements are the responsibility of the Trustee. Our responsibility is to express an opinion on these financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Trust in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Trust is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Trust’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters. /s/ Weaver and Tidwell, L.L.P . We have served as the Trust’s auditor since 2021. Houston, Texas March 19, 2025 58 PERMIANVILLE ROYALTY TRUST Statements of Assets, Liabilities and Trust Corpus December 31, 2024 2023 ASSETS Cash and cash equivalents $ 2,193,787 $ 1,394,697 Net profits interest in oil and natural gas properties, net 41,892,402 50,233,433 Total assets $ 44,086,189 $ 51,628,130 LIABILITIES AND TRUST CORPUS Advances to the Trust $ 150,000 - Total liabilities 150,000 - Trust corpus (33,000,000 units issued and outstanding) 43,936,189 51,628,130 Total liabilities and Trust corpus $ 44,086,189 $ 51,628,130 The accompanying notes to financial statements are an integral part of these statements. 59 PERMIANVILLE ROYALTY TRUST Statements of Distributable Income Year Ended December 31, 2024 2023 Income from net profits interest $ 4,259,281 $ 10,347,619 Income from sale/lease of assets 117,120 245,000 Income from sale of producing properties - 4,848,281 Interest and investment income 80,032 63,142 General and administrative expenses (985,843 ) (919,148 ) Cash reserves withheld for Trust expenses (649,090 ) (471,784 ) Distributable income $ 2,821,500 $ 14,113,110 Distributable income per unit (33,000,000 units) $ 0.085500 $ 0.427670 The accompanying notes to financial statements are an integral part of these statements. 60 PERMIANVILLE ROYALTY TRUST Statements of Changes in Trust Corpus Year Ended December 31, 2024 2023 Trust corpus, beginning of period $ 51,628,130 $ 60,564,545 Sale of net profits interest of producing properties - (4,163,851 ) Cash reserves (used) withheld for Trust expenses 649,090 471,784 Distributable income 2,821,500 14,113,110 Distributions to unitholders (2,821,500 ) (14,113,110 ) Amortization of net profits interest (8,341,031 ) (5,244,348 ) Trust corpus, end of period $ 43,936,189 $ 51,628,130 The accompanying notes to financial statements are an integral part of these statements. 61 PERMIANVILLE ROYALTY TRUST NOTES TO FINANCIAL STATEMENTS 1. 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 (as amended and restated, and as further amended, 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”). Through the initial public offering in 2011 and a secondary offering in 2013, Enduro sold a total of 24,400,000 Trust Units. As of December 31, 2017, Enduro owned 8,600,000 Trust Units, or 26% of the issued and outstanding Trust Units. At a special meeting of Trust unitholders held on August 30, 2017, unitholders approved several proposals, including amendments to the Trust Agreement. In September 2017, Enduro, the Trustee and the Delaware Trustee entered into the First Amendment to Amended and Restated Trust Agreement, which amended certain provisions of the Trust Agreement to, among other things, allow Enduro to sell interests in the Underlying Properties free and clear of the Net Profits Interest with the approval of Trust unitholders holding at least 50% of the then outstanding units of the Trust at a meeting held in accordance with the requirements of the Trust Agreement. This amendment reduced the required threshold for approval of such sales from 75% to 50% of the outstanding units of the Trust. On August 31, 2018, COERT Holdings 1 LLC (“COERT” or the “Sponsor”) acquired the Underlying Properties and all of the outstanding Trust Units owned by Enduro (the “Sale Transaction”). In connection with the Sale Transaction, the Sponsor assumed all of Enduro’s obligations under the Trust Agreement and other instruments to which Enduro and the Trustee were parties. As of December 31, 2024, the Sponsor owned 7,363,961 Trust Units, or 22% 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. The Trust has no directors, officers or employees. The business and affairs of the Trust are administered by The Bank of New York Mellon Trust Company, N.A., as Trustee. The duties of the Trustee are defined by the Trust Agreement. The Trustee does not make operating or business decisions affecting the assets of the Trust, and the Trustee’s functions under the Trust Agreement are ministerial in nature. The Trust Agreement provides, among other provisions, that: · the Trust’s business activities are limited to owning the Net Profits Interest and any activity reasonably related to such ownership, including activities required or permitted by the terms of the Conveyance of Net Profits Interest, dated effective as of July 1, 2011 (as supplemented and amended to date, the “Conveyance”); as a result, the Trust is not permitted to acquire other oil and natural gas properties or net profits interests or otherwise to engage in activities beyond those necessary for the conservation and protection of the Net Profits Interest; · the Trust may dispose of all or any material part of the assets of the Trust (including the sale of the Net Profits Interests) if approved by at least 75% of the outstanding Trust Units; · the Sponsor may sell a divided or undivided portion of its interests in the Underlying Properties, free from and unburdened by the Net Profits Interest, if approved by at least 50% of the outstanding Trust Units at a meeting of Trust unitholders; 62 PERMIANVILLE ROYALTY TRUST NOTES TO FINANCIAL STATEMENTS—Continued · the Trustee will make monthly cash distributions to Trust unitholders (Note 5); · the Trustee may create a cash reserve to pay for future liabilities of the Trust; · the Trustee may authorize the Trust to borrow money to pay administrative or incidental expenses of the Trust that exceed its cash on hand and available reserves; in that event, no further distributions will be made to Trust unitholders until such amounts borrowed are repaid; and · the Trust is not subject to any pre-set termination provisions based on a maximum volume of oil or natural gas to be produced or the passage of time; the Trust will dissolve upon the earliest to occur of the following: · the Trust, upon approval of the holders of at least 75% of the outstanding Trust Units, sells the Net Profits Interest; · the 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; · the holders of at least 75% of the outstanding Trust Units vote in favor of dissolution; or · the Trust is judicially dissolved. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Accounting 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 (including 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 from the Sponsor 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 by the Sponsor 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; (c) Trust general and 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; and 63 PERMIANVILLE ROYALTY TRUST NOTES TO FINANCIAL STATEMENTS—Continued (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. The financial statements of the Trust differ from financial statements prepared in accordance with GAAP because revenues are not accrued in the month of production; certain cash reserves may be established for contingencies which would not be accrued in financial statements prepared in accordance with GAAP; general and administrative expenses are recorded when paid instead of when incurred; and amortization of the net profits interest calculated on a unit-of-production basis and any impairment recorded is charged directly to trust corpus instead of as an expense. While these statements differ from financial statements prepared in accordance with GAAP, the modified cash basis of reporting revenues, expenses, and distributions is considered 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 U.S. Securities and Exchange Commission (“SEC”) as specified by Staff Accounting Bulletin Topic 12:E, Financial Statements of Royalty Trusts . Use of Estimates The preparation of financial statements in conformity with the basis of accounting described above requires the Trust 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. Significant estimates affecting these financial statements include estimates of proved oil and natural gas reserves, which are used to compute the Trust’s amortization of net profits interest and its impairment assessments. Although the Trustee believes that these estimates are reasonable, actual results could differ from those estimates. Cash and Cash Equivalents Cash and cash equivalents include cash in banks, money market accounts, and all highly liquid investments with an original maturity of three months or less. Impairment The Net Profits Interest in oil and natural gas properties 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 years ended December 31, 2024 or 2023, 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. New Accounting Pronouncements As the Trust’s financial statements are prepared on the modified cash basis, most accounting pronouncements are not applicable to the Trust’s financial statements. No new accounting pronouncements have been adopted or issued that would impact the financial statements of the Trust. 64 PERMIANVILLE ROYALTY TRUST NOTES TO FINANCIAL STATEMENTS—Continued 3. 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 reserves. The reserves upon which the amortization rate is based are quantity estimates which 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 December 31, 2024 and 2023 was $311,034,905 and $302,693,874, 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 years ended December 31, 2024 or 2023, 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. Sale of 2023 Divestiture Properties 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 “2023 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. On July 19, 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 2023 Divestiture Properties. On August 9, 2023, the Sponsor completed the sale of the 2023 Divestiture Properties, and the Trustee, on behalf of the Trust, reconveyed, terminated and released to the Sponsor the Net Profits Interest with respect to the 2023 Divestiture Properties. The total proceeds received by the Sponsor from the 2023 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 deducted the 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 Net Profits Interest. On September 20, 2023, the Trust announced a special cash distribution to Trust unitholders of $0.069670 per Trust Unit, payable on October 13, 2023 to Trust unitholders of record on October 2, 2023, reflecting 50% of the Trust’s share of the net proceeds, after accounting for the Indemnification Escrow Amount. The following table displays the aggregate net proceeds from the sale of the 2023 Divestiture Properties and the aggregate net proceeds allocable to Trust unitholders for this distribution: Net Proceeds from sale of 2023 Divestiture Properties $ 6,712,000 Less: Transaction expenses (627,149 ) Plus: Buyer proxy expense reimbursement 288,000 Net proceeds from sale of 2023 Divestiture Properties $ 6,372,851 Less: Amount allocable to the Sponsor’s 20% interest (1,274,570 ) Net proceeds allocable to the Trust’s 80% Interest $ 5,098,281 Less: Indemnification Escrow amount (250,000 ) Less: Estimated Settlement Escrow amount (2,549,140 ) Initial Cash available for distribution by the Trust $ 2,299,141 Number of units 33,000,000 Initial special cash distribution per unit $ 0.069670 65 PERMIANVILLE ROYALTY TRUST NOTES TO FINANCIAL STATEMENTS—Continued The remaining 50% of the Trust’s share of the net proceeds was 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 and included in a distribution to Trust unitholders. On November 6, 2023, the Trust announced a special cash distribution to Trust unitholders of $0.077250 per Trust Unit, payable on November 22, 2023 to Trust unitholders of record on November 16, 2023, reflecting the remaining 50% of the Trust’s share of the net proceeds (net of the Indemnification Escrow Amount). The following table displays the aggregate net proceeds from the sales of the 2023 Divestiture Properties and the aggregate net proceeds allocable to Trust unitholders for this distribution: Net Proceeds from sale of 2023 Divestiture Properties $ 6,712,000 Less: Transaction expenses (627,149 ) Plus: Buyer proxy expense reimbursement 288,000 Net proceeds from sale of 2023 Divestiture Properties $ 6,372,851 Less: Amount allocable to the Sponsor’s 20% interest (1,274,570 ) Net proceeds allocable to the Trust’s 80% Interest $ 5,098,281 Less: Indemnification Escrow amount (250,000 ) Less: October 13, 2023 Initial Cash Distribution (2,299,110 ) Remaining cash available for distribution by the Trust $ 2,549,171 Number of units 33,000,000 Remaining special cash distribution per unit $ 0.077250 See “Note 7. Subsequent Event” for information regarding the release of the Indemnification Escrow Amount and its inclusion in a special distribution to Trust unitholders. Impairment of Net Profits Interest Fair value accounting guidance includes a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 inputs) and the lowest priority to unobservable inputs (Level 3). When indicators of impairment are present and it is determined that the carrying value of the Net Profits Interest exceeds the estimated undiscounted cash flows of the subject interest, fair value estimates utilized in the impairment assessment are determined based on inputs not observable in the market and thus represent Level 3 measurements. 4. INCOME TAXES 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 net income. 66 PERMIANVILLE ROYALTY TRUST NOTES TO FINANCIAL STATEMENTS—Continued 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. Trust 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. Trust unitholders should consult their tax advisors about the federal tax consequences relating to owning the Trust Units. State Taxes 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 presently have income taxes which tax income of nonresidents from real property located within that state. Louisiana and New Mexico also impose a corporate income tax which may apply to unitholders organized as corporations. 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. 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. 5. DISTRIBUTIONS TO UNITHOLDERS Each month, the Trustee determines the amount of funds available for distribution to the Trust unitholders. Available funds are the excess cash, if any, received by the Trust from the Net Profits Interest and other sources (such as interest earned on any amounts reserved by the Trustee) that month, over the Trust’s liabilities for that month, subject to adjustments for changes made by the Trustee during the month in any cash reserves established for future liabilities of the Trust. Distributions are made to the holders of Trust Units as of the applicable record date (generally the last business day of each calendar month) and are payable on or before the tenth business day after the record date. 67 PERMIANVILLE ROYALTY TRUST NOTES TO FINANCIAL STATEMENTS—Continued The following table provides information regarding the Trust’s distributions paid during the periods indicated: Declaration Date Record Date Payment Date Distribution per Unit 2024: July 18, 2024 July 31, 2024 August 14, 2024 $ 0.011000 August 16, 2024 August 30, 2024 September 16, 2024 $ 0.035000 September 16, 2024 September 30, 2024 October 15, 2024 $ 0.014000 October 18, 2024 October 31, 2024 November 15, 2024 $ 0.015000 November 18, 2024 November 29, 2024 December 13, 2024 $ 0.010500 Total—2024 $ 0.085500 2023: December 16, 2022 December 30, 2022 January 14, 2023 $ 0.058000 January 18, 2023 January 31, 2023 February 14, 2023 $ 0.056000 February 17, 2023 February 28, 2023 March 13, 2023 $ 0.019200 March 16, 2023 March 31, 2023 April 14, 2023 $ 0.019350 April 17, 2023 April 28, 2023 May 12, 2023 $ 0.030000 May 15, 2023 May 31, 2023 June 14, 2023 $ 0.013500 June 16, 2023 June 30, 2023 July 14, 2023 $ 0.012500 July 17, 2023 July 31, 2023 August 14, 2023 $ 0.053500 August 18, 2023 August 31, 2023 September 15, 2023 $ 0.009000 September 18, 2023 September 29, 2023 October 13, 2023 $ 0.003700 September 20, 2023 – Special Distribution October 02, 2023 October 13, 2023 $ 0.069670 October 16, 2023 October 31, 2023 November 13, 2023 $ 0.006000 November 06, 2023 – Special Distribution November 16, 2023 November 22, 2023 $ 0.077250 Total—2023 $ 0.427670 6. TRUSTEE FEES AND RELATED PARTY TRANSACTIONS Trustee Administrative Fee. Under the terms of the Trust Agreement, the Trust pays an annual administrative fee of $200,000 to the Trustee and $2,000 to the Delaware Trustee. During the years ended December 31, 2024 and 2023, the Trust paid $200,000 and $200,000, respectively, to the Trustee and $0 and $2,010, respectively, to the Delaware Trustee pursuant to the terms of the Trust Agreement. Letter of Credit . Under the terms of the Trust Agreement, COERT has provided the Trust with a $1,200,000 letter of credit to be used by the Trust if its cash on hand (including available cash reserves) is not sufficient to pay ordinary course administrative expenses. The letter of credit is issued to the benefit of the Trustee. The standby letter of credit was issued by West Texas National Bank and matures on December 31, 2025. The letter of credit to the Trustee is unfunded as of December 31, 2024. Advances from COERT . From time to time, if the Trust’s cash on hand (including available cash reserves, if any) is not sufficient to pay the Trust’s ordinary course administrative expenses that are due prior to the monthly payment to the Trust of proceeds from the Net Profits Interest, COERT may advance funds to the Trust to pay such expenses. Such advances are recorded as a liability on the Statements of Assets, Liabilities and Trust Corpus until repaid. As of December 31, 2024 and 2023, advances to the Trust were $150,000 and $0, respectively. Registration Rights Agreement. The Trust and COERT (as the assignee of Enduro, in connection with the Sale Transaction) are parties to a Registration Rights Agreement, as amended, whereby COERT, its affiliates and certain permitted transferees holding registrable Trust Units are entitled, upon receipt by the Trustee of written notice from holders of a majority of the then outstanding registrable Trust Units, to demand that the Trust effect the registration of the registrable Trust Units. The holders of the registrable Trust Units are entitled to demand a maximum of five such registrations. In connection with the preparation and filing of any registration statement, COERT will bear all costs and expenses incidental to any registration statement, excluding certain internal expenses of the Trust, which will be borne by the Trust. Any underwriting discounts and commissions will be borne by the seller of the Trust Units. On June 22, 2022, pursuant to the Registration Rights Agreement, the Trust filed a registration statement on Form S-3 registering the offering by COERT of up to 8,600,000 Trust Units. The registration statement was declared effective on July 7, 2022. 68 PERMIANVILLE ROYALTY TRUST NOTES TO FINANCIAL STATEMENTS—Continued 7. SUBSEQUENT EVENT On March 17, 2025, the Trust announced a special cash distribution to Trust unitholders of $0.008548 per Trust Unit, payable on April 14, 2025 to Trust unitholders of record on March 31, 2025, reflecting the release of the Indemnification Escrow Amount withheld in connection with the sale of the 2023 Divestiture Properties discussed in Note 3 above, together with interest, for a total of $282,072. 69 PERMIANVILLE ROYALTY TRUST UNAUDITED SUPPLEMENTARY INFORMATION 8. Supplementary Oil and Natural Gas Information (Unaudited) Oil and Natural Gas Reserve Quantities Estimates of proved reserves attributable to the Trust and the related valuations were based 100% on reports prepared by the Trust’s independent petroleum engineers, Cawley, Gillespie & Associates, Inc. Estimates were prepared in accordance with guidelines prescribed by the SEC and the Financial Accounting Standards Board, which require that reserve estimates be prepared under existing economic and operating conditions based upon an average of the first-day-of-the-month commodity price during the 12-month period ending on the balance sheet date with no provision for price and cost escalations except by contractual arrangements. Prices used in estimating reserves were as follows: 2024 2023 Oil (per Bbl) $ 75.48 $ 78.22 Natural gas (per MMBTU) $ 2.13 $ 2.64 Proved reserve quantity estimates are subject to numerous uncertainties inherent in the estimation of proved reserves and in the projection of future rates of production and the timing of development expenditures. The accuracy of such estimates is a function of the quality of available data and of engineering and geological interpretation and judgment. Results of subsequent drilling, testing and production may cause either upward or downward revisions of previous estimates. Further, the volumes considered to be commercially recoverable fluctuate with changes in prices and operating costs. The process of estimating quantities of oil and natural gas reserves is very complex, requiring significant subjective decisions in the evaluation of all available geological, engineering and economic data for each reserve. Consequently, these estimates are expected to change as additional information becomes available in the future. As of December 31, 2024 and 2023, all of the Underlying Properties’ oil and natural gas reserves were attributable to properties within the United States. Proved reserves attributable to the Trust and related standardized measure valuations are prepared on an accrual basis, which is the basis on which Enduro and, following the Sale Transaction, the Sponsor, and the Underlying Properties maintain their production records and is different from the basis on which the Trust production records are computed. The following is a summary of the changes in quantities of proved oil and natural gas reserves attributable to the Trust for the periods indicated: Trust Net Profits Interest Oil (1) (MBbls) Natural Gas (MMcf) Total (MBOE) Balance—January 1, 2023 3,976 8,493 5,392 Extensions and discoveries 386 6,584 1,483 Revisions of previous estimates (1,234 ) (2,815 ) (1,703 ) Divestiture of Reserves (525 ) (126 ) (546 ) Income from Net Profits Interest (440 ) (2,782 ) (904 ) Balance—December 31, 2023 2,163 9,354 3,722 Extensions and discoveries 353 9,295 1,902 Revisions of previous estimates 858 1,075 1,037 Income from Net Profits Interest (635 ) (5,580 ) (1,565 ) Balance—December 31, 2024 2,739 14,144 5,096 Proved developed reserves: December 31, 2023 1,880 7,706 3,164 December 31, 2024 2,441 13,182 4,638 Proved undeveloped reserves: December 31, 2023 283 1,648 558 December 31, 2024 298 962 458 (1) Reserves for natural gas liquids are immaterial and included as a component of oil reserves. 70 PERMIANVILLE ROYALTY TRUST UNAUDITED SUPPLEMENTARY INFORMATION—Continued Revisions of previous estimates . During the year ended December 31, 2024, revisions of previous estimates increased oil reserves by 40%.The NYMEX average oil price of $75.48 per Bbl used to determine reserves as of December 31, 2024 was 4% lower than the $78.22 per Bbl average NYMEX oil price as of December 31, 2023. During the year ended December 31, 2023, revisions of previous estimates decreased oil reserves by 31%, primarily due to a decrease in the average oil price used to estimate future net reserves. The NYMEX average oil price of $78.22 per Bbl used to determine reserves as of December 31, 2023 was 16% lower than the $93.67 per Bbl average NYMEX oil price as of December 31, 2022. Standardized Measure of Discounted Future Net Cash Flows The standardized measure of discounted future net cash flows relating to proved oil and natural gas reserves is computed by applying commodity prices used in determining proved reserves (with consideration of price changes only to the extent provided by contractual arrangements) to the estimated future production of proved reserves less estimated future expenditures (based on year-end costs) to be incurred in developing and producing the proved reserves, discounted using a rate of 10% per year to reflect the estimated timing of the future cash flows. Future cash inflows were computed by applying the commodity prices utilized in determining proved reserves to estimated future production. Future production and development costs are computed by estimating the expenditures to be incurred in developing and producing the proved oil and gas reserves at year-end, based on year-end costs and assuming continuation of existing economic conditions. As the Trust is not subject to federal income taxes, future income taxes have been excluded. The standardized measure of discounted future net cash flows relating to proved oil and natural gas reserves attributable to the Trust was as follows as of the dates indicated: December 31, 2024 2023 (in thousands) Future cash inflows $ 197,669 $ 165,087 Future production taxes (15,945 ) (13,316 ) Future net cash flows $ 181,724 $ 151,771 10% annual discount for estimated timing of cash flows (90,362 ) (75,115 ) Standardized measure of discounted future net cash flows $ 91,362 $ 76,656 The changes in standardized measure of discounted future net cash flows relating to proved oil and natural gas reserves attributable to the Trust for the periods indicated were as follows (in thousands): Year Ended December 31, 2024 2023 Extensions, discoveries, and other additions $ 13,869 $ 12,709 Accretion of discount 7,666 16,316 Revisions of previous estimates and other (2,569 ) (97,416 ) Divestiture of reserves – (7,765 ) Income from Net Profits Interest (4,259 ) (10,348 ) Change in present value of future net revenues 14,706 (86,504 ) Balance, beginning of period 76,656 163,160 Balance, end of year $ 91,362 $ 76,656 71 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. Not applicable.