Pacific Coast Oil Trust (PINX: ROYTL)

Tax Information

Trust Overview

Pacific Coast Oil Trust is a Delaware statutory perpetual trust formed by Pacific Coast Energy Company LP (“PCEC”) through a conveyance of interests in California onshore oil properties located in the Santa Maria and Los Angeles Basins. PCEC owns the underlying properties from which these net profits interests were conveyed. The underlying properties consist of (i) proved developed reserves, referred to as the “Developed Properties,” and (ii) all other development potential on the underlying properties, referred to as the “Remaining Properties”.

Production from the Developed Properties that will be attributable to the trust is produced from wells that, because they have already been drilled, require limited additional capital expenditures. As a result, the Developed Properties are projected to have positive net profits immediately upon conveyance to the trust. Production from the Remaining Properties that will be attributable to the trust will require capital expenditures for the drilling of wells and installation of infrastructure. PCEC will supply required capital on behalf of the trust during this period; however, because the costs initially incurred will exceed gross proceeds, the Remaining Properties will have negative net profits during the drilling and development period. During this period of negative net profits, instead of being paid net profits, the trust will be paid a 7.5% overriding royalty on the portion of the Remaining Properties located on PCEC’s Orcutt properties. Once revenues from the Remaining Properties have paid back PCEC for the cumulative costs it has advanced on behalf of the trust, then the net profits interests on the Remaining Properties will be paid out in place of the royalty interests, as described below. We refer to the net profits interests and royalty interest conveyed to the trust as the “Net Profits Interests” and “Royalty Interest,” respectively. These interests, which we refer to collectively as the “Conveyed Interests,” entitle the trust to receive the following:

Developed Properties

-       80% of the net profits from the sale of oil and natural gas production from the Developed Properties.

Remaining Properties

-     7.5% of the proceeds (free of any production or development costs but bearing the proportionate share of production and property taxes and post-production costs) attributable to the sale of all oil and natural gas production from the Remaining Properties located on PCEC’s Orcutt properties, including but not limited to PCEC’s interest in such production, which we refer to as the “Royalty Interest Proceeds,” or

-       25% of the net profits from the sale of oil and natural gas production from all of the Remaining Properties.

Net profits are calculated separately for the Developed Properties and the Remaining Properties. The trust will make cash distributions of all its monthly cash receipts, after deduction of fees and expenses for the administration of the trust, at month-end to unitholders of record within ten business days.

Pacific Coast Oil Trust is a New York Stock Exchange-listed entity, with Units trading under the symbol "ROYT”. The current trustee of the trust is The Bank of New York Mellon Trust Company, N.A.

Properties Overview

Orcutt Hill Website

ROYT - Final Prospectus