PermRock Royalty Trust (PRT)

History and Background

PermRock Royalty Trust (NYSE: PRT) was formed in 2017 to acquire and hold net profits interests from oil and natural gas properties in the Permian Basin. It began trading in December 2017. The Trust distributes net profits it receives after payment of trust expenses.

Core Business Areas

• Net Profits Interests: The Trust's sole business is to hold net profits interests in oil and natural gas properties in the Permian Basin and distribute the resulting income to its unitholders.

Leadership and Structure

The Trust is managed by Argent Trust Company, which acts as the trustee. It doesn't have traditional executives or employees. The success of the trust depends on the production and prices of oil and gas from the underlying properties.

Key Offerings

• Net Profits Interests Distributions: PRT provides distributions to its unitholders based on the net profits from oil and natural gas production. Market share is not directly applicable since PRT is a royalty trust and does not compete directly with oil and gas producers. The amount of distributions depends on the price and production levels. Competitors are other royalty trusts in the oil and gas sector (e.g., CRT, BSM). Revenue is equivalent to the trust income before distributions.

Industry Overview

The oil and gas industry is cyclical and heavily influenced by global supply and demand, geopolitical events, and technological advancements. Royalty trusts benefit from higher oil and gas prices and increased production but are vulnerable to price declines and reduced drilling activity.

Positioning

PermRock Royalty Trust is a small player in the broader energy market, focused on providing income to unitholders through royalty interests. Its competitive advantage lies in its pure-play exposure to Permian Basin production.

Total Addressable Market (TAM)

The TAM for royalty trusts is loosely tied to the overall oil and gas market capitalization. Given the trillions of dollars in the global oil and gas market, PRT's influence on TAM is minuscule. Its returns are tied to the specific acreage it holds in the Permian basin. PRT is a passive vehicle providing exposure to existing production rather than competing for the entire market.

Key Competitors

• CRT
• BSM
• KRP

Competitive Landscape

PermRock's market capitalization compared to other royalty trusts suggests it holds a very small share of this niche market.

Historical Growth: PRT's growth is limited by the nature of a royalty trust. There is no growth outside acquisitions. Historical revenue is a function of price and existing production. Declining production will be the norm.

Future Projections: Future performance depends on analyst forecasts for oil and gas prices and production levels in the Permian Basin. There are no specific analyst projections.

Recent Initiatives: PRT has no active growth initiatives as a royalty trust. Its primary focus is distributing income from existing assets.

PermRock Royalty Trust is a vehicle for income. Distributions fluctuate with commodity prices. Oil and gas price risk and lack of control of production are key concerns. Depletion of resources is a major risk and the trust has done no acquisitions.

Data Sources:

• PermRock Royalty Trust SEC filings, company website, and publicly available financial data sources.

Disclaimers:

The information provided is for informational purposes only and should not be considered investment advice. Past performance is not indicative of future results. Investors should conduct their own due diligence before making any investment decisions.