{"url_path":"/sec/pvl/10-q/2026/item-1","section_key":"item-1","section_title":"Item 1 ****Financial Statements.**","topic":"sec","document":{"doc_type":"10-Q","doc_date":"2026-05-15","source_url":"https://www.sec.gov/Archives/edgar/data/1520048/0001104659-26-062622-index.html","accession_number":"0001104659-26-062622","cik":"0001520048","ticker":"PVL","issuer_name":"Permianville Royalty Trust","edgar_url":"https://www.sec.gov/Archives/edgar/data/1520048/0001104659-26-062622-index.html","primary_entity_key":"0001520048","primary_entity_name":"Permianville Royalty Trust"},"word_count":3103,"has_tables":true,"body_markdown":"**Item 1.****Financial Statements.**\n\n**PERMIANVILLE ROYALTY TRUST**\n\n**Statements of Assets, Liabilities and Trust\nCorpus**\n\nMarch 31,\nDecember 31,\n\n2026\n2025\n\n(unaudited)\n\nASSETS\n\nCash and cash equivalents\n$3,186,425\n$2,733,791\n\nNet profits interest in oil and natural gas properties, net\n34,859,282\n36,234,241\n\nTotal assets\n$38,045,707\n$38,968,032\n\nLIABILITIES AND TRUST CORPUS\n\nTrust corpus (33,000,000 units issued and outstanding)\n38,045,707\n38,968,032\n\nTotal liabilities and Trust corpus\n$38,045,707\n$38,968,032\n\nThe accompanying notes are an integral part of\nthese financial statements.\n\n2\n\n**PERMIANVILLE ROYALTY TRUST**\n\n**Statements of Distributable\nIncome**\n\n**(unaudited)**\n\nThree Months Ended March 31,\n\n2026\n2025\n\nIncome from net profits interest\n$1,955,307\n$–\n\nInterest and investment income\n23,418\n23,000\n\nGeneral and administrative expenses\n(107,091)\n(248,557)\n\nCash reserves (withheld) used for Trust expenses\n(452,634)\n225,557\n\nDistributable income\n$1,419,000\n$–\n\nDistributable income per unit (33,000,000 units)\n$0.043000\n$–\n\nThe accompanying notes are an integral part of\nthese financial statements.\n\n3\n\n**PERMIANVILLE ROYALTY TRUST**\n\n**Statements of Changes in Trust Corpus**\n\n**(unaudited)**\n\nThree Months Ended March 31,\n\n2026\n2025\n\nTrust corpus, beginning of period\n$38,968,032\n$43,936,189\n\nCash reserves withheld (used) for Trust expenses\n452,634\n(225,557)\n\nDistributable income\n1,419,000\n–\n\nDistributions to unitholders\n(1,419,000)\n–\n\nAmortization of net profits interest\n(1,374,959)\n(1,200,956)\n\nTrust corpus, end of period\n$38,045,707\n$42,509,676\n\nDistributions per unit (33,000,000 units)\n$0.043000\n$–\n\nThe accompanying notes are\nan integral part of these financial statements.\n\n4\n\n**PERMIANVILLE ROYALTY\nTRUST**\n\n**NOTES TO FINANCIAL STATEMENTS**\n\n**(unaudited)**\n\n**1.****TRUST ORGANIZATION AND PROVISIONS**\n\nPermianville Royalty Trust (the “Trust”),\npreviously known as Enduro Royalty Trust, is a Delaware statutory trust formed in May 2011 pursuant to a trust agreement (as subsequently\namended and restated, the “Trust Agreement”) among Enduro Resource Partners LLC (“Enduro”), as trustor, The Bank\nof New York Mellon Trust Company, N.A. (the “Trustee”), as trustee, and Wilmington Trust Company (the “Delaware Trustee”),\nas Delaware Trustee.\n\nThe Trust was created to acquire and hold for the\nbenefit of the Trust unitholders a net profits interest representing the right to receive 80% of the net profits from the sale of oil\nand natural gas production from certain properties in the states of Texas, Louisiana and New Mexico held by Enduro as of the date of the\nconveyance of the net profits interest to the Trust (the “Net Profits Interest”). The properties in which the Trust holds\nthe Net Profits Interest are referred to as the “Underlying Properties.”\n\nIn connection with the closing of the initial public\noffering in November 2011, Enduro contributed the Net Profits Interest to the Trust in exchange for 33,000,000 units of beneficial\ninterest in the Trust (the “Trust Units”). On August 31, 2018, COERT Holdings 1 LLC (“COERT” or the “Sponsor”)\nacquired from Enduro the Underlying Properties and all of the outstanding Trust Units owned by Enduro (the “Sale Transaction”).\nIn connection with the Sale Transaction, COERT assumed all of Enduro’s obligations under the Trust Agreement and other instruments\nto which Enduro and the Trustee were parties. As of March 31, 2026, the Sponsor owned 7,363,961 Trust Units, or 22% of the issued\nand outstanding Trust Units.\n\nThe Net Profits Interest is passive in nature and\nneither the Trust nor the Trustee has any management control over or responsibility for costs relating to the operation of the Underlying\nProperties. The Trust Agreement provides, among other provisions, that:\n\n·the Trust’s business activities are limited to owning the Net Profits\nInterest and any activity reasonably related to such ownership, including activities required or permitted by the terms of the Conveyance\nof Net Profits Interest, dated effective as of July 1, 2011 (as supplemented and amended to date, the “Conveyance”).\nAs a result, the Trust is not permitted to acquire other oil and natural gas properties or net profits interests or otherwise to engage\nin activities beyond those necessary for the conservation and protection of the Net Profits Interest;\n\n·the Trust may dispose of all or any material part of the assets of the Trust\n(including the sale of the Net Profits Interest) if approved by at least 75% of the outstanding Trust Units;\n\n·the Sponsor may sell a divided or undivided portion of its interests in the\nUnderlying Properties, free from and unburdened by the Net Profits Interest, if approved by at least 50% of the outstanding Trust Units\nat a meeting of Trust unitholders;\n\n·the Trustee will make monthly cash distributions to unitholders (Note 5);\n\n·the Trustee may create a cash reserve to pay for future liabilities of the\nTrust;\n\n·the Trustee may authorize the Trust to borrow money to pay administrative\nor incidental expenses of the Trust that exceed its cash on hand and available reserves. No further distributions will be made to Trust\nunitholders until such amounts borrowed are repaid; and\n\n·the Trust is not subject to any pre-set termination provisions based on a\nmaximum volume of oil or natural gas to be produced or the passage of time; however, the Trust will dissolve upon the earliest to occur\nof the following:\n\n·the Trust, upon approval of the holders of at least 75% of the outstanding\nTrust Units, sells the Net Profits Interest;\n\n5\n\n·the annual cash proceeds received by the Trust attributable to the Net Profits\nInterest are less than $2 million for each of any two consecutive years;\n\n·the holders of at least 75% of the outstanding Trust Units vote in favor\nof dissolution; or\n\n·the Trust is judicially dissolved.\n\n**2.****BASIS OF PRESENTATION**\n\nThe Statement of Assets, Liabilities and Trust\nCorpus as of December 31, 2025, which has been derived from audited financial statements, and the unaudited interim financial statements\nas of March 31, 2026 and for the three months ended March 31, 2026 and 2025 have been prepared pursuant to the rules and\nregulations of the Securities and Exchange Commission (“SEC”). Accordingly, certain information and disclosures normally included\nin annual financial statements have been condensed or omitted pursuant to those rules and regulations. Therefore, these financial\nstatements should be read in conjunction with the financial statements and notes thereto included in the Trust’s Annual Report on\nForm 10-K for the fiscal year ended December 31, 2025 (the “2025 Annual Report on Form 10-K”).\n\nIn the opinion of the Trustee, the accompanying\nunaudited financial statements reflect all adjustments, consisting only of normal adjustments that are necessary for a fair presentation\nof the interim periods presented and include all the disclosures necessary to make the information presented not misleading. These interim\nresults are not necessarily indicative of results for a full year.\n\nThe preparation of financial statements requires\nthe Trustee to make estimates and assumptions that affect reported amounts of assets and liabilities and the reported amounts of revenues\nand expenses during the reporting period. Although the Trustee believes that these estimates are reasonable, actual results could differ\nfrom those estimates.\n\nThe Trust uses the modified cash basis of accounting\nto report Trust receipts of income from the Net Profits Interest and payments of expenses incurred. The Net Profits Interest represents\nthe right to receive revenues (oil and natural gas sales), less direct operating expenses (lease operating expenses and production and\nproperty taxes) and development expenses of the Underlying Properties, multiplied by 80%. Cash distributions of the Trust are made based\non the amount of cash received by the Trust pursuant to terms of the Conveyance creating the Net Profits Interest.\n\nUnder the terms of the Conveyance, the monthly\nNet Profits Interest calculation includes oil and natural gas revenues received during the relevant month. Monthly operating expenses\nand capital expenditures represent estimated incurred expenses and, as a result, represent accrued expenses as well as expenses paid during\nthe period.\n\nThe financial statements of the Trust are prepared\non the following basis:\n\n(a)Income from Net Profits Interest is recorded when distributions are received by the Trust;\n\n(b)Distributions to Trust unitholders are recorded when paid by the Trust;\n\n(c)Trust general and administrative expenses (which includes the Trustee’s fees as well as accounting, engineering, legal, and\nother professional fees) are recorded when paid;\n\n(d)Cash reserves for Trust expenses may be established by the Trustee for certain future expenditures that would not be recorded as contingent\nliabilities under accounting principles generally accepted in the United States of America (“GAAP”);\n\n(e)Amortization of the Net Profits Interest in oil and natural gas properties is calculated on a unit-of-production basis and is charged\ndirectly to the Trust corpus; and\n\n6\n\n(f)The Net Profits Interest in oil and natural gas properties is periodically assessed whenever events or circumstances indicate that\nthe aggregate value may have been impaired below its total capitalized cost based on the Underlying Properties. If an impairment loss\nis indicated by the carrying amount of the assets exceeding the sum of the undiscounted expected future net cash flows of the Net Profits\nInterest, then an impairment loss is recognized for the amount by which the carrying amount of the asset exceeds its estimated fair value\ndetermined using discounted cash flows. Any impairment is a direct charge to the Trust Corpus.\n\nThe financial statements of the Trust differ from\nfinancial statements prepared in accordance with GAAP because revenues are not accrued; certain cash reserves may be established for contingencies\nwhich would not be accrued in financial statements prepared in accordance with GAAP; general and administrative expenses are recorded\nwhen paid instead of when incurred; amortization of the net profits interest calculated on a unit-of-production basis is charged directly\nto Trust Corpus instead of as an expense; the Trust does not record a liability or repay any overpayment received as these will be deducted\nfrom future payments; and impairment is charged directly to the Trust Corpus. While these statements differ from financial statements\nprepared in accordance with GAAP, the modified cash basis of reporting is considered to be the most meaningful because monthly distributions\nto the Trust unitholders are based on net cash receipts.\n\nThis comprehensive basis of accounting other than\nGAAP corresponds to the accounting permitted for royalty trusts by the SEC as specified by Staff Accounting Bulletin Topic 12:E, *Financial\nStatements of Royalty Trusts*.\n\n**3.****NET PROFITS INTEREST IN OIL AND NATURAL GAS PROPERTIES**\n\nThe Net Profits Interest in oil and natural gas\nproperties was recorded at its fair value on the date of conveyance. Amortization of the Net Profits Interest in oil and natural gas properties\nis calculated on a unit-of-production basis based on the Underlying Properties’ production and reserves. The reserves upon which\nthe amortization rate is based are quantity estimates that are subject to numerous uncertainties inherent in the estimation of proved\nreserves. The volumes considered to be commercially recoverable fluctuate with changes in commodity prices and operating costs. These\nestimates are expected to change as additional information becomes available in the future. Downward revisions in proved reserves may\nresult in an increased rate of amortization. Amortization is charged directly to the Trust corpus balance and does not affect the distributable\nincome of the Trust. Accumulated amortization as of March 31, 2026 and December 31, 2025 was $318,068,024 and $316,693,065,\nrespectively.\n\nThe Net Profits Interest is periodically assessed\nfor impairment whenever events or circumstances indicate that the current fair value based on expected future cash flows of the Underlying\nProperties may be less than the carrying value of the Net Profits Interest. While the Trust did not record an impairment during the three\nmonths ended March 31, 2026 or 2025, future downward revisions in actual production volumes relative to current forecasts, higher\nthan expected operating costs, or lower than anticipated commodity prices could result in recognition of impairment in future periods.\n\n**4.****INCOME TAXES**\n\n**Federal Income Taxes**\n\nFor federal income tax purposes, the Trust is a\ngrantor trust and therefore is not subject to tax at the trust level. Trust unitholders are treated as owning a direct interest in the\nassets 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\nassets 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.\nThe 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\nthe Trust rather than when distributed by the Trust.\n\nThe deductions of the Trust consist of severance\ntaxes and administrative expenses. In addition, each unitholder is entitled to depletion deductions because the Net Profits Interest constitutes\n“economic interests” in oil and natural gas properties for federal income tax purposes. Each unitholder is entitled to amortize\nthe cost of the Trust Units through cost depletion over the life of the Net Profits Interest or, if greater, through percentage depletion.\nUnlike cost depletion, percentage depletion is not limited to a unitholder’s depletable tax basis in the Trust Units. Rather, a\nunitholder could be entitled to percentage depletion as long as the applicable Underlying Properties generate gross income.\n\n7\n\nSome Trust Units are held by a middleman, as such\nterm is broadly defined in U.S. Treasury Regulations (and includes custodians, nominees, certain joint owners, and brokers holding an\ninterest for a custodian in street name). Therefore, the Trustee considers the Trust to be a non-mortgage widely held fixed investment\ntrust (“WHFIT”) for U.S. federal income tax purposes. The Bank of New York Mellon Trust Company, N.A., 601 Travis, 16th\nFloor, Houston, Texas 77002, telephone number (512) 236-6545, is the representative of the Trust that will provide tax information in\naccordance with applicable U.S. Treasury Regulations governing the information reporting requirements of the Trust as a WHFIT. Tax information\nis also posted by the Trustee at *www.permianvilleroyaltytrust.com*. Notwithstanding the foregoing, the middlemen holding units on\nbehalf of unitholders, and not the Trustee of the Trust, are solely responsible for complying with the information reporting requirements\nunder the U.S. Treasury Regulations with respect to such units, including the issuance of IRS Forms 1099 and certain written tax\nstatements. Unitholders whose units are held by middlemen should consult with such middlemen regarding the information that will be reported\nto them by the middlemen with respect to the Trust Units.\n\nThe tax consequences to a unitholder of ownership\nof Trust Units will depend in part on the unitholder’s tax circumstances. Unitholders should consult their tax advisors about the\nfederal tax consequences relating to owning the Trust Units.\n\n**State Taxes**\n\nThe Trust’s revenues are from sources in\nthe states of Louisiana, New Mexico, and Texas. Because it distributes all of its net income to unitholders, the Trust is not taxed at\nthe trust level in Louisiana or New Mexico. Although the Trust does not owe tax, the Trustee is required to file a return with Louisiana\nreflecting the income and deductions of the Trust attributable to properties located in that state. Presently, Louisiana and New Mexico\ntax nonresident income from real property located within that state. Louisiana and New Mexico impose a corporate income tax which may\napply to unitholders organized as corporations.\n\nTexas does not impose a state income tax, so the\nTrust’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\nrevenues less certain deductions for returns originally due on or after January 1, 2016, as specifically set forth in the Texas franchise\ntax statutes. Entities subject to tax generally include trusts unless otherwise exempt. Trusts that receive at least 90% of their federal\ngross income from designated passive sources, including royalties from mineral properties and other income from other non-operating mineral\ninterests, and do not receive more than 10% of their income from operating an active trade or business, generally are exempt from the\nTexas franchise tax as “passive entities.” Although the Trust is intended to be exempt from Texas franchise tax at the trust\nlevel as a passive entity, each unitholder that is considered a taxable entity under the Texas franchise tax would generally be required\nto include its portion of Trust net income in its own Texas franchise tax computation.\n\nEach unitholder should consult his or her own tax\nadvisor regarding state tax requirements, if any, applicable to such person’s ownership of Trust Units.\n\n**5.****DISTRIBUTIONS TO UNITHOLDERS**\n\nEach month, the Trustee determines the amount of\nfunds available for distribution to the Trust unitholders. Available funds are the excess cash, if any, received by the Trust from the\nNet Profits Interest and other sources (such as interest earned on any amounts reserved by the Trustee) that month, over the Trust’s\nliabilities for that month, subject to adjustments for changes made by the Trustee during the month in any cash reserves established for\nfuture liabilities of the Trust. No distributions will be made to Trust unitholders until the indebtedness created by such amounts drawn\nor borrowed as advances to the Trust have been repaid in full. Distributions are made to the holders of Trust Units as of the applicable\nrecord date (generally the last business day of each calendar month) and are payable on or before the 10th business day after the record\ndate.\n\n8\n\nThe following table provides information regarding\nthe Trust’s distributions per unit paid during the periods indicated:\n\nDistribution\n\nDeclaration Date\nRecord Date\nPayment Date\nper Unit\n\nThree Months Ended March 31, 2026:\n\nDecember 19, 2025\nDecember 31, 2025\nJanuary 15, 2026\n0.023000\n\nJanuary 20, 2026\nJanuary 30, 2026\nFebruary 13, 2026\n0.015000\n\nFebruary 18, 2026\nMarch 2, 2026\nMarch 13, 2026\n0.005000\n\nYear to Date – 2026\n\n$0.043000\n\nThree Months Ended March 31, 2025:\n\nYear to Date – 2025\n\n$–\n\nDuring the three months ended March 31, 2025,\ndirect operating and development expenses exceeded cash receipts, leading to a Net Profits Interest shortfall of approximately $1.4 million\nas of March 31, 2025, which was carried forward to be deducted from future net profits generated by the Underlying Properties. As\na result, there were no net profits reported or distributed in the first three months of 2025.\n\n**6.****TRUSTEE FEES**\n\nUnder the terms of the Trust Agreement, the Trust\npays 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\nthree-month periods ended March 31, 2026 and 2025, the Trust paid $50,000 to the Trustee and $2,010 to the Delaware Trustee pursuant\nto the terms of the Trust Agreement.\n\n**7.****SUBSEQUENT EVENTS**\n\n**Distributions Paid or Declared**\n\nOn April 14, 2026, a\ndistribution of $0.010000 per unit, which was declared on March 16, 2026, was paid to Trust unitholders of record as of March 31,\n2026.\n\nOn April 17, 2026, the\nTrust declared a distribution of $0.010000 per unit to unitholders of record as of April 30, 2026. The distribution is expected to\nbe paid to unitholders on May 15, 2026.\n\n9"}