Pacific Coast Oil Trust Announces There Will Be No April Cash Distribution - Seite 3

Based on PCEC’s estimate of its ARO attributable to the Net Profits Interest, deductions relating to estimated ARO are likely to eliminate the likelihood of significant distributions to Trust unitholders for the next several years, as previously disclosed in the Trust’s Current Report on Form 8-K filed on November 13, 2019.

As described in more detail in the Trust’s filings with the SEC, the Trust will terminate if the annual cash distributions received by the Trust from the Net Profits Interest and Royalty Interest total less than $2.0 million for each of any two consecutive calendar years. PCEC is deducting estimated ARO, thereby reducing the amounts payable to the Trust unless significant market changes were to occur; therefore, it appears likely that total distributions to the Trust will total less than $2.0 million in each of 2020 and 2021. The Trust may also be terminated by other events as described in the Trust’s filings with the SEC.

COVID-19 Update

On March 11, 2020, the World Health Organization characterized the outbreak of a strain of novel coronavirus (“COVID-19”) as a pandemic, which has resulted in the implementation of a series of public health and emergency measures to combat the spread of the virus. COVID-19 has resulted in widespread and localized health crises that adversely affect general commercial activity, the economies and financial markets of many countries and localities, as well as global demand for oil and natural gas. COVID-19 has also resulted in significant business and operational disruptions, including business closures, disruptions to supply chains, travel restrictions and limitations on the availability of workforces. The duration and impact of COVID-19 is unknown at this time and it is not possible to reliably estimate the impact that these developments will have on future periods.

Overview of Trust Structure

Pacific Coast Oil Trust is a Delaware statutory trust formed by PCEC to own interests in certain oil and gas properties in the Santa Maria Basin and the Los Angeles Basin in California (the “Underlying Properties”). The Underlying Properties and the Trust’s net profits and royalty interests are described in the Trust’s filings with the SEC. As described in the Trust’s filings with the SEC, the amount of any periodic distributions is expected to fluctuate, depending on the proceeds received by the Trust as a result of actual production volumes, oil and gas prices, development expenses, and the amount and timing of the Trust’s administrative expenses, among other factors. For additional information on the Trust, please visit www.pacificcoastoiltrust.com.