Pacific Coast Oil Trust

PCEC Operating and Services Fee.  Under the terms of the Operating and Services Agreement, dated as of May 8, 2012, by and between PCEC and the Trust (the “Operating and Services Agreement”), PCEC provides the Trust with certain operating and informational services relating to the Conveyed Interests in exchange for a monthly fee which is revised annually based on changes to the Consumer Price Index.  The monthly operating and services fee was $86,330 during the first quarter of 2015 and was $87,730 from April 1, 2015 through the end of the first quarter of 2016. On April 1, 2016, the monthly operating and services fee changed to $87,834. The Operating and Services Agreement will terminate upon the termination of the Conveyed Interests unless earlier terminated by mutual agreement of the Trustee and PCEC. During the three months ended September 30, 2016 and 2015, PCEC charged the Trust $263,502 and $263,190, respectively, for the operating and services fee. During the nine months ended September 30, 2016 and 2015, PCEC charged the Trust $789,987 and $782,568, respectively, for the operating and services fee. The Trust paid the operating and services fee in full for the month of January 2016. However, because the Trust did not have enough cash to pay the operating and services fee in full for the months of February 2016 and March 2016, the Trust made partial payments of  $55,977 for February and $26,392 for March. For the months of April, May, June, July, August, and September 2016, the Trust borrowed funds under a promissory note payable to PCEC dated February 25, 2016, and subsequently amended and restated on September 29, 2016 (as amended, the “Promissory Note”) in order to make payments of $87,730, $87,730, $87,834, $87,834, $87,834 ,and $87,834, respectively. All operating and services fees have been completely paid through September 30, 2016 as a part of the borrowings under the Promissory Note.

As previously disclosed in the Trust’s 2015 Annual Report, PCEC currently has permit applications pending to allow the drilling of an additional 96 steam injection wells on certain oil and natural gas properties located onshore in California in the Diatomite zone at Orcutt (the “Orcutt Hill Resource Enhancement Plan” or “OHREP”).  At a hearing on June 29, 2016, the Santa Barbara County Planning Commission (the “Planning Commission”) instructed its staff to prepare Findings for Denial, which the Planning Commission adopted by a 3-2 vote on July 13, 2016. On July 21, 2016, PCEC filed an appeal to the Santa Barbara County Board of Supervisors. On November 1, 2016, the Santa Barbara County Board of Supervisors heard PCEC’s appeal and voted 3-2 to deny the project, with the exception of approving permanent permits for the installation of seep cans on the Company’s Orcutt Hill property.  As a result of the Board of Supervisors’ decision, future cash flows associated with new permits for drilling in the Diatomite Zone at Orcutt, all of which would attributable to Remaining Properties, is uncertain.  At this time, PCEC has not filed any additional permits for drilling in the Diatomite Zone at Orcutt and is not able to provide an estimate for when or if additional permits will be submitted to Santa Barbara County for drilling in the Diatomite Zone at Orcutt.

Due to a temporary maintenance shutdown on the export line that transports natural gas out of West Pico, West Pico has had to temporarily shut in select wells to limit the amount of associated gas produced from oil production.  West Pico net production attributable to the Developed Properties prior to the maintenance shutdown was approximately 530 Boe/d (approximately 420 Boe/d net to the Trust).  During the shutdown months, which began in August and are expected to last through early November 2016, production is down by approximately 33%-50%.  During the shutdown months, West Pico is able to reduce certain operating expenses associated with the production from the shut in wells.  Following the return to service of the gas export line, West Pico is expected to return production to levels similar to those prior to the shutdown months.

Developed Properties — For the three months ended September 30, 2016, revenues exceeded direct operating expenses and development expenses from the Developed Properties by $2,153,607. For the three months ended September 30, 2015, revenues exceeded direct operating expenses and development expenses by $5,256,547.  The decrease is primarily attributable principally to lower oil prices and lower production in the three months ended September 30, 2016 compared to the three months ended September 30, 2015. Average realized prices decreased by $10.86 per Bbl, or 21%, and sales volumes decreased 41 MBoe, or 15%. Orcutt, Orcutt Diatomite, and West Pico all had decreased volumes for the three months ended September 30, 2016 versus the three months ended September 30, 2015. Total lease operating expenses included in the Net profits interest calculation during the quarter were $6,068,482  for the three months ended September 30, 2016 compared to $7,805,474 for the three months ended September 30, 2015. The decrease is primarily attributable to lower operating expenses and workover expenditures at Orcutt Field, Orcutt Diatomite, Sawtelle and West Pico, which resulted from lower fuel and utilities, chemicals, company labor, and workover expenditures. Total capital expenditures were approximately $507,361 for the three months ended September 30, 2016 compared to $317,647 for the three months ended September 30, 2015.  The increase is primarily due to DOGGR mandated injection casing repairs which began in 2016, as well as increased well work in the non-operated properties. Production and other taxes were approximately $839,947 for the three months ended September 30, 2016 compared to $889,332 for the three months ended September 30, 2015. Income from 80% Net profits interest for the three months ended September 30, 2016 was $1,722,886 compared to $4,205,238 of income for the three months ended September 30, 2015.  Since a Net profits interest deficit existed as a result of the lack of net profits on the Developed Properties from the Conveyed Interests during the production months of February through April, 2016, the Trust did not receive any net profits generated in the production

ended September 30, 2015. The decrease is primarily attributable to lower operating expenses due to decreased company labor; fuel and utilities and chemicals and decreased well services. Total capital expenditures were approximately $1,446,512 for the nine months ended September 30, 2016 compared to $2,565,283 for the nine months ended September 30, 2015.  The decrease is primarily due to to lower well-related work being completed at West Pico, the Orcutt Field, Orcutt Diatomite and Sawtelle . Production and other taxes were approximately $4,166,713 for the nine months ended September 30, 2016 compared to $2,767,964 for the nine months ended June 30, 2015. The increase in production and other taxes is primarily due to the County of Santa Barbara property tax settlement reached in March 2016. (see Note 8 to the Notes to Financial Statements). Income from 80% Net profits interest for the nine months ended September 30, 2016 was $37,165 as revenues exceeded operating expenses and capital expenditures compared to $9,938,348 of income for the nine months ended September 30, 2015.  Since a cumulative Net profits interest deficit existed on the Developed Properties, the Trust did not receive any net profits, as distributions of such Net profits interest may not be made until the cumulative Net profits interest deficit and the outstanding borrowings under the Promissory Note are recovered in full.  The outstanding borrowings under the Promissory Note, reflecting net increases in principal and interest amounts permitted thereunder since the initial execution of the Promissory Note, were $1,037,464 at September 30, 2016.