Permianville Royalty Trust is a Delaware statutory trust created in May 2011 (originally known as Enduro Royalty Trust) to hold a net profits interest in specified oil and natural gas properties. Under its governing agreement, the Trust is entitled to receive 80 % of the net profits from production (i.e. revenues minus operating costs, capital expenditures, and other allowable deductions) on certain underlying properties in Texas, Louisiana, and New Mexico.
The Trust is non-operating in nature: it does not itself operate wells or manage drilling or production. Instead, it relies on revenue flows generated by third-party operators of the underlying leases. Its income depends heavily on production volumes, commodity prices, and the costs incurred by those operators (which are deducted before the “net profits” calculation).
PVL’s annual and monthly distributions reflect the variability inherent in oil & gas operations. Because the Trust only captures its share after costs and capital expenses, its cash flows can swing markedly (especially when operators increase capital spending or during low commodity price periods). Moreover, the Trust may withhold portions of profits in reserve for anticipated expenditures, and any shortfalls must be recouped in subsequent periods before resuming full distributions.