Pacific Coast Oil Trust (OTC: ROYTL), a royalty trust established by Pacific Coast Energy Company LP (PCEC), announced that there will be no cash distribution for unitholders of record on October 31, 2024. This decision is based on net profits generated in August 2024, as outlined in the conveyance of net profits and royalty interests. PCEC has indicated that future payments may not cover the Trust’s administrative expenses or its outstanding debt to PCEC, making near-term distributions highly unlikely.
Due to annual proceeds from net profits interests and the 7.5% overriding royalty interest falling below $2 million in both 2020 and 2021, the Trust is set to be dissolved per the amended Trust Agreement. All financial and operational data in this release come from PCEC.
Additionally, a former PCEC employee, Brendan Potyondy, filed a lawsuit on October 23, 2024, in the U.S. District Court for the Central District of California. The complaint alleges retaliation for whistleblowing activities, including reports to agencies like the SEC and OSHA, accusing PCEC of providing false data on asset retirement obligations. PCEC denies these claims and intends to defend itself, explore counterclaims, and seek reimbursement for legal expenses.
For August 2024, the Developed Properties generated $1.5 million in operating income, with revenues of $3.3 million and expenses of $1.7 million. The average price realized was $75.31 per Boe, down from $87.15 in July. The net profits deficit for these properties decreased from $18.4 million to $17.6 million. The 7.5% royalty interest from Orcutt properties added $69,000, with average prices at $73.41 per Boe. However, total expenses exceeded income, resulting in a $144,000 shortfall.
