Business Context and Reporting Period
This Form 8-K Current Report was filed by PermRock Royalty Trust on May 3, 2018, covering events occurring on May 1, 2018. The filing announces the entry into a material definitive agreement regarding an initial public offering of trust units.
Key Financial Metrics and Transaction Details
- Offering Size: 6,250,000 Trust Units representing beneficial interests in the Trust.
- Offering Price: $17.00 per Trust Unit.
- Net Proceeds to Seller: $15.9375 per Trust Unit (net of underwriting discounts and commissions).
- Over-Allotment Option: Underwriters granted a 30-day option to purchase up to an additional 937,500 Trust Units.
- Trust Proceeds: The Trust will not receive any proceeds from the Offering; proceeds are received by Boaz Energy II, LLC.
- Underwriters: Wells Fargo Securities, LLC, Goldman Sachs & Co. LLC, and UBS Securities LLC.
Material Changes and Agreements
The primary material change is the execution of an Underwriting Agreement on May 1, 2018, between Boaz Energy II, LLC, the Trust, and the underwriters. This agreement facilitates the sale of the Trust Units. The filing notes that affiliates of certain underwriters are lenders under Boaz Energy's revolving credit facility, and an affiliate of Wells Fargo Securities acts as the administrative agent for that facility.
Guidance, Risks, and Contingencies
The filing does not provide forward-looking guidance, revenue projections, or management commentary regarding future performance. The document highlights standard risks associated with underwriting agreements, including indemnification obligations where the Trust and Boaz Energy agree to indemnify underwriters against certain liabilities under the Securities Act. The filing explicitly states that the description of the agreement is qualified by reference to the full text of the Underwriting Agreement filed as Exhibit 1.1.
Investor Verification Checklist
- Verify the final closing date and total number of units sold, including any exercise of the over-allotment option.
- Review the full Underwriting Agreement (Exhibit 1.1) for specific termination provisions and conditions to closing.
- Confirm the exact allocation of proceeds to Boaz Energy II, LLC versus the Trust.
- Examine the Prospectus (filed May 3, 2018) for detailed risk factors and the relationship between the underwriters and Boaz Energy's credit facilities.