Pacific Coast Oil Trust announces no cash distribution for March 2025, citing insufficient net profits. Trust facing financial challenges and possible dissolution.
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| Pacific Coast Oil Trust reports no distribution for March 2025 due to insufficient profits and financial difficulties. Ongoing investigations into legal issues complicate matters. Image: PCOT |
Houston, Texas — March 29, 2025:
Pacific Coast Oil Trust (PCE), based in Houston, Texas, announced on March 28, 2025, that it would not be distributing cash to unit holders for March 2025 due to insufficient net profits. The decision stems from the trust’s inability to meet its administrative expenses and obligations to Pacific Coast Energy Company LP (PCEC).
In its monthly financial report for January 2025, the Trust reported operating income of approximately $0.7 million from the Developed Properties, with revenues of around $2.8 million. However, costs related to property taxes, lease operations, and other expenses amounted to over $2.1 million, leaving a deficit. Despite a slight reduction in the net profits deficit for the Developed Properties—from $19.2 million to $19.1 million—the financial situation remains unsustainable.
Furthermore, the Trust’s income from the 7.5% overriding royalty interest in the Remaining Properties was approximately $57,000, with average realized prices for oil decreasing slightly from $64.11 per barrel to $62.08 per barrel. The cumulative net profits deficit for these properties also remains high, decreasing marginally from $164,000 to $161,000.
Due to a significant shortfall in revenue, including operating fees and administrative expenses totaling over $313,000, the Trust faces a financial gap of approximately $256,000. This financial strain is exacerbated by ongoing legal challenges. A terminated employee’s lawsuit, alleging retaliation for whistleblowing and improper asset retirement reporting, remains unresolved. Although the court dismissed some claims, the legal proceedings are still ongoing, further complicating the trust's financial situation.
In light of the ongoing financial strain, including two consecutive years of annual cash proceeds under $2 million, the Trust has moved toward dissolution in accordance with its governing agreement. With no foreseeable distributions in the near future, the likelihood of payouts to unit holders is extremely remote.
As the trust’s financial and legal issues unfold, the dissolution process continues, signaling an uncertain future for Pacific Coast Oil Trust and its stakeholders.