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

PACIFIC COAST OIL TRUST (NYSE:ROYT) (the “Trust”), a royalty trust formed by Pacific Coast Energy Company LP (“PCEC”), announced today that there will be no cash distribution to the holders of its units of beneficial interest of record on April 16, 2020 based on the Trust’s calculation of net profits generated during February 2020 (the “current month”) as provided in the conveyance of net profits interests and overriding royalty interest. All information in this press release has been provided to the Trustee by PCEC.

The current month’s distribution calculation for the Developed Properties resulted in $0.6 million of revenues less direct operating expenses and development costs. Revenues from the Developed Properties were $2.9 million, lease operating expenses including property taxes were $2.0 million, and development costs were approximately $239,000. The average realized price for the Developed Properties was $54.64 per Boe in February, as compared to $61.40 per Boe in January. The cumulative net profits deficit amount for the Developed Properties, which reflects the deduction of the estimated asset retirement obligation (“ARO”) relating to the Developed Properties as discussed in last month’s press release and below under “Update on Estimated Asset Retirement Obligations” of approximately $25.8 million, decreased by approximately $0.5 million and was approximately $25.3 million for February.

The current month’s calculation included approximately $58,000 for the 7.5% overriding royalty interest on the Remaining Properties from Orcutt Diatomite and Orcutt Field. Average realized prices for the Remaining Properties were $50.37 per Boe in February, as compared $59.34 per Boe in January. The cumulative net profits deficit for the Remaining Properties, including the 7.5% overriding royalty interest payments and reflecting the deduction of the estimated ARO relating to the Remaining Properties as discussed below under “Update on Estimated Asset Retirement Obligations,” increased by approximately $7,300 and was approximately $3.3 million for February.

The monthly operating and services fee of approximately $93,000 payable to PCEC and Trust general and administrative expenses of $120,000, together exceeded the distribution of approximately $58,000 received from PCEC from the 7.5% overriding royalty interest on the Remaining Properties, creating a shortfall of approximately $155,000.

PCEC has provided the Trust with a $1 million letter of credit to be used by the Trust if its cash on hand (including available cash reserves) is not sufficient to pay ordinary course administrative expenses as they become due. Further, if the Trust requires more than the $1 million under the letter of credit to pay administrative expenses, PCEC may loan funds to the Trust necessary to pay such expenses. Any funds provided under the letter of credit or loaned by PCEC may only be used for the payment of current accounts or other obligations to trade creditors in connection with obtaining goods or services or for the payment of other accrued current liabilities arising in the ordinary course of the Trust’s business. The Trust will be drawing funds from the aforementioned letter of credit to pay the expected shortfall of approximately $155,000. The letter of credit will have $845,000 remaining of the $1 million after the Trust draw this month. In addition to the funds to be drawn from the letter of credit, the Trust has outstanding borrowings from PCEC of approximately $258,000 related to shortfalls from prior months. Consequently, no further distributions will be made to Trust unitholders until the indebtedness created by such amounts drawn or borrowed, including interest thereon, has been paid in full.