Pacific Coast Oil Trust has announced that it will not make a cash distribution to unitholders of record on September 30, 2026. The Trust reported that its calculation of net profits for July 2026 resulted in zero cash available for distribution.
The announcement comes as the Trust faces significant operational and financial headwinds. The Trustee, The Bank of New York Mellon Trust Company, N.A., stated that monthly payments from Pacific Coast Energy Company LP (PCEC) are insufficient to cover the Trust’s administrative expenses and outstanding debt to PCEC. Consequently, the likelihood of future distributions is described as extremely remote.
Financial results for the Developed Properties showed operating income of approximately $306,000, driven by revenues of about $2.5 million against lease operating expenses of roughly $2.2 million. However, the cumulative net profits deficit for these properties has grown to approximately $11.4 million. The average realized price for the Developed Properties was $68.00 per Boe.
The Trust also reported a shortfall of approximately $228,000 for the month. This deficit was created by monthly operating and services fees of about $119,000 payable to PCEC, combined with general and administrative expenses of roughly $167,000, which exceeded the $58,000 generated from the 7.5% overriding royalty interest on Remaining Properties.
Regarding the Trust’s dissolution, the filing notes that annual cash proceeds from Net Profits Interests and the Royalty Interest totaled less than $2.0 million for both 2020 and 2021. This triggers a provision in the Trust Agreement requiring the Trust to be dissolved and wound up. The Trust currently owes PCEC approximately $14.4 million, which includes amounts drawn from a letter of credit and loans under a promissory note, with interest accrued.
The Trustee is currently navigating litigation regarding these financial calculations. Shipyard Capital, LP and other plaintiffs filed a complaint in September 2026 alleging breach of contract and fiduciary duty related to PCEC’s deductions of asset retirement obligations. Additionally, a whistleblower lawsuit filed by a former PCEC employee was dismissed in September 2026 after a jury found in favor of PCEC.
