CHESAPEAKE GRANITE WASH TRUST 10-K/A

ITEM 9A. Controls and Procedures Evaluation of Disclosure Controls and Procedures. The Trust’s disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), are designed to ensure that the information required to be disclosed by the Trust in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed by the Trust is accumulated and communicated by Chesapeake to The Bank of New York Mellon Trust Company, N.A., as the Trustee of the Trust, and its employees who participate in the preparation of the Trust’s periodic reports as appropriate to allow timely decisions regarding required disclosure. Due to the nature of the Trust as a passive entity and in light of the contractual arrangements pursuant to which the Trust was created, including the provisions of (a) the Trust Agreement, (b) the administrative services agreement, (c) the development agreement and (d) the conveyances granting the Royalty Interests, the Trust’s disclosure controls and procedures necessarily rely on (i) information provided by Chesapeake, including information relating to results of operations, the status of drilling of the Development Wells, the costs and revenues attributable to the Trust’s interests under the conveyance and other operating and historical data, plans for future operating and capital expenditures, reserve information, information relating to projected production, and other information relating to the status and results of operations of the underlying properties and the Royalty Interests, and (ii) conclusions and reports regarding reserves by the Trust’s independent reserve engineers. Although the Trustee does rely on Chesapeake to perform certain functions and to provide certain information that impact the Trust’s financial statements, the Trustee remains responsible for evaluating, as appropriate, the Trust’s disclosure controls and procedures as well as its internal control over financial reporting. In connection with the preparation of this Form 10-K/A as of and for the year ended December 31, 2019, the Vice President of the Trustee evaluated the effectiveness of the design and operation of the Trust's disclosure controls and procedures pursuant to Exchange Act Rule 13a-15(b). Based on her evaluation, as of December 31, 2019 she concluded that the Trust's disclosure controls and procedures were not effective at the reasonable assurance level due to erroneously concluding the Trust was a smaller reporting company in its previously filed Annual Report on Form 10-K. This Form 10-K/A is to correct the Trust's status as an Other Reporting Company and to include disclosures required of an Other Reporting Company. Trustee’s Report on Internal Control over Financial Reporting. The Trustee is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). The Trust’s internal control over financial reporting is a process designed under the supervision of the Trustee to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Trust’s financial statements for external purposes in accordance with the modified cash basis of accounting, which is a comprehensive basis of accounting other than generally accepted accounting principles. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies or procedures may deteriorate. As of December 31, 2019, the Trustee assessed the effectiveness of the Trust's internal control over financial reporting based on the criteria described in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on that assessment, the Trustee concluded that the Trust’s internal control over financial reporting was effective as of December 31, 2019 based on those criteria. Changes in Internal Control over Financial Reporting. There were no changes in internal controls over financial reporting that occurred during the quarter ended December 31, 2019 that have materially affected, or are reasonably likely to materially affect, the internal control over financial reporting. ITEM 9B. Other Information None. 58 PART III ITEM 10. Directors, Executive Officers and Corporate Governance The Trust has no directors or executive officers. The Trustee is a corporate trustee that may be removed by the affirmative vote of the holders of not less than a majority of the outstanding Trust units at a meeting at which a quorum is present. Section 16(a) Beneficial Ownership Reporting Compliance Section 16(a) of the Exchange Act requires the holders of more than 10 percent of the Trust units to file with the SEC reports regarding their ownership and changes in ownership of the Trust units. The Trustee is not aware of any 10 percent unitholder having failed to comply with all Section 16(a) filing requirements in 2019. In making these statements, the Trustee has relied upon examination of the copies of documents, to the extent there were any, provided to the Trust. Audit Committee and Nominating Committee Because the Trust does not have a board of directors, it does not have an audit committee, an audit committee financial expert or a nominating committee. Code of Ethics The Trust does not have a principal executive officer, principal financial officer, principal accounting officer or controller and, therefore, has not adopted a code of ethics applicable to such persons. However, employees of the Trustee must comply with the Trustee's code of ethics. ITEM 11. Executive Compensation During the year ended December 31, 2019 , 2018 and 2017 the Trustee received an administrative fee of $184,160, $180,551 and $175,000 from the Trust, respectively. The Trust does not have any executive officers, directors or employees. Because the Trust does not have a board of directors, it does not have a compensation committee . ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Unitholder Matters (a) Security Ownership of Certain Beneficial Owners Based on filings with the SEC, the Trustee is not aware of any holders of 5% or more of the units except as set forth below. The following information has been obtained from filings with the SEC on Schedule 13D. Beneficial Owner Trust Units Beneficially Owned Percent of Class Chesapeake Energy Corporation (1) 23,750,000 Common Units 50.8% ________________________________________________ (1) Chesapeake Energy Corporation, located at 6100 North Western Avenue, Oklahoma City, Oklahoma 73118, is the ultimate parent company of Chesapeake Exploration, L.L.C., which is the owner of the common units reported in the table above. Chesapeake may be deemed to beneficially own the common units owned by Chesapeake Exploration, L.L.C. Chesapeake has an investment committee consisting of Robert D. ("Doug") Lawler, Domenic J. ("Nick") Dell'Osso, Jr. and Sarika Agarwala that exercises voting and investment control with respect to Chesapeake's common units. (b) Security Ownership of Management Not Applicable (c) Changes in Control 59 The registrant knows of no arrangement, including any pledge by any person of securities of the registrant or its parent, the operation of which may at a subsequent date result in a change of control of the registrant. ITEM 13. Certain Relationships and Related Transactions and Director Independence Under the terms of the Trust Agreement, the Trust pays an annual administrative fee to the Trustee of $175,000 (which may be adjusted beginning on January 1, 2015), paid in four quarterly installments and billed in arrears. As of December 31, 2019 , a 1.9% inflation adjustment had been made for the 2019 calendar year. As the Trust uses the modified cash basis of accounting, general and administrative expenses in the Trust's statements of distributable income for the years ended December 31, 2019 , 2018 and 2017 include $184,160, $180,551 and $175,000 for administrative fees paid to the Trustee, respectively. Administrative Services Agreement On November 16, 2011, the Trust entered into an administrative services agreement with Chesapeake, effective July 1, 2011, pursuant to which Chesapeake provides the Trust with certain accounting, tax preparation, bookkeeping and information services related to the Royalty Interests and the registration rights agreement. In return for the services provided by Chesapeake under the administrative services agreement, the Trust pays Chesapeake, on a quarterly basis, a total annual fee of $200,000, which will remain fixed for the life of the Trust. Chesapeake will also be entitled to receive reimbursement for its actual out-of-pocket fees, costs and expenses incurred in connection with the provision of any of the services under the agreement. The administrative services agreement will terminate upon the earliest to occur of (a) the date the Trust shall have been wound up in accordance with the Trust Agreement, (b) the date that all of the Royalty Interests have been terminated or are no longer held by the Trust, (c) with respect to services to be provided with respect to any Underlying Properties being transferred by Chesapeake, the date that either Chesapeake or the Trustee may designate by delivering 90-days prior written notice, provided that Chesapeake's drilling obligation has been completed and the transferee of such Underlying Properties assumes responsibility to perform the services in place of Chesapeake or (d) a date mutually agreed upon by Chesapeake and the Trustee. Registration Rights Agreement On November 16, 2011, the Trust entered into a registration rights agreement for the benefit of Chesapeake and certain of its affiliates (each, a “holder”). Pursuant to the registration rights agreement, the Trust agreed, for the benefit of each holder, to register the Trust units held by each such holder for resale under the Securities Act. Specifically, the Trust agrees: • subject to certain lock-up restrictions, to use its reasonable best efforts to file a registration statement, including, if so requested, a shelf registration statement, with the SEC as promptly as practicable following receipt of a notice requesting the filing of a registration statement from holders representing a majority of the then outstanding registrable trust units; • to use its reasonable best efforts to cause the registration statement or shelf registration statement to be declared effective under the Securities Act as promptly as practicable after the filing thereof; and • to continuously maintain the effectiveness of the registration statement under the Securities Act for 90 days (or for three years if a shelf registration statement is requested) after the effectiveness thereof or until the Trust units covered by the registration statement have been sold pursuant to such registration statement or until all registrable Trust units: • have been sold pursuant to Rule 144 under the Securities Act if the transferee thereof does not receive “restricted securities;” • have been sold in a private transaction in which the transferor's rights under the registration rights agreement are not assigned to the transferee of the Trust units; or • become eligible for resale pursuant to Rule 144 (or any similar rule then in effect under the Securities Act). The holders will have the right to require the Trust to file no more than five registration statements in aggregate. 60 In connection with the preparation and filing of any registration statement, Chesapeake will bear all costs and expenses incidental to any registration statement, excluding certain internal expenses of the Trust, which will be borne by the Trust, and any underwriting discounts and commissions, which will be borne by the seller of the Trust units. Development Agreement On November 16, 2011, the Trust entered into a development agreement with Chesapeake, effective July 1, 2011, that obligated Chesapeake to drill, cause to be drilled or participate as a non-operator in the drilling of the Development Wells on or prior to June 30, 2016. Additionally, based on Chesapeake’s assessment of the ability of a Development Well to produce in paying quantities, Chesapeake was obligated to either complete and tie into production or plug and abandon each Development Well. Chesapeake also agreed not to drill and complete, or permit any other person within its control to drill and complete, any well in the AMI other than the Development Wells until Chesapeake met its obligation to drill the Development Wells. As of June 30, 2016, Chesapeake had fulfilled its drilling obligation under the development agreement. In drilling the Development Wells, Chesapeake was required to adhere to the Reasonably Prudent Operator Standard. Where Chesapeake did not operate the Underlying Properties, Chesapeake was required to use commercially reasonable efforts to exercise its contractual rights to cause the operators of such Underlying Properties to adhere to the Reasonably Prudent Operator Standard. Following the drilling of each Development Well, Chesapeake was obligated to attempt to complete each such well that reasonably appeared to Chesapeake, acting in accordance with the Reasonably Prudent Operator Standard, to be capable of producing in quantities sufficient to pay drilling, completion, equipping and operating costs. Following successful completion of such wells, Chesapeake was obligated to equip such wells for production and connect such wells to a gathering line, pipeline or other storage or marketing facility and commence production. If Chesapeake was unable to successfully complete a Development Well, Chesapeake was obligated to plug and abandon such well to the extent required by law. The Trust was not responsible for any costs related to drilling of the Development Wells and is not responsible for any other operating or capital costs of the Underlying Properties, and Chesapeake was not permitted to drill or complete any well in the Colony Granite Wash formation on lease acreage included within the AMI for its own account until it had satisfied its drilling obligation. For the life of the Trust, Chesapeake will not be permitted to drill or complete any well that will have a perforated segment within 600 feet of any perforated interval of any Development Well or Producing Well. ITEM 14. Principal Accountant Fees and Services Estimated fees for services performed by PricewaterhouseCoopers LLP for the years ended December 31, 2019 and 2018, are as follows: Years Ended December 31, 2019 2018 Audit Fees (1) $ 240,000 $ 240,000 Tax Fees 282,937 342,662 Total $ 522,937 $ 582,662 _____________________________________________________________________ (1) Fees for audit services in 2019 and 2018 include fees for the reviews of the Trust's quarterly financial statements. As a modified cash basis entity, the Trust expenses these fees when paid. As referenced in Item 10, Directors, Executive Officers and Corporate Governance, above, the Trust has no audit committee, and as a result, has no audit committee pre-approval policy with respect to fees paid to PricewaterhouseCoopers LLP. 61 PART IV ITEM 15. Exhibits and Financial Statement Schedules ____________________________________________ (a) The following financial statements, financial statement schedules and exhibits are filed as a part of this report: 1. Financial Statements . Chesapeake Granite Wash Trust's financial statements are included in Item 8 of Part II of this report. 2. Financial Statement Schedules . No financial statement schedules are applicable or required. 3. Exhibits. The exhibits listed below in the Index of Exhibits are filed, furnished or incorporated by reference pursuant to the requirements of Item 601 of Regulation S-K. INDEX OF EXHIBITS Incorporated by Reference Exhibit Number Exhibit Description Form SEC File Number Exhibit Filing Date Filed Herewith or Furnished 3.1 Certificate of Trust of Chesapeake Granite Wash Trust. S-1 333-175395 3.1 7/7/2011 3.2 Amended and Restated Trust Agreement, dated as of November 16, 2011, by and among Chesapeake Energy Corporation, Chesapeake Exploration, L.L.C., The Bank of New York Mellon Trust Company, N.A., as Trustee, and The Corporation Trust Company, as Delaware Trustee. 8-K 001-35343 3.1 11/21/2011 4.1# Description of Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934. 10.1 Perpetual Overriding Royalty Interest Conveyance (PDP), dated as of November 16, 2011, by and between Chesapeake Exploration, L.L.C. and Chesapeake Granite Wash Trust. 8-K 001-35343 10.1 11/21/2011 10.2 Perpetual Overriding Royalty Interest Conveyance (PUD), dated as of November 16, 2011, by and between Chesapeake Exploration, L.L.C. and Chesapeake Granite Wash Trust. 8-K 001-35343 10.2 11/21/2011 10.3 Term Overriding Royalty Interest Conveyance (PDP), dated as of November 16, 2011, by and between Chesapeake Exploration, L.L.C. and Chesapeake E&P Holding Corporation. 8-K 001-35343 10.3 11/21/2011 10.4 Term Overriding Royalty Interest Conveyance (PUD), dated as of November 16, 2011, by and between Chesapeake Exploration, L.L.C. and Chesapeake E&P Holding Corporation. 8-K 001-35343 10.4 11/21/2011 10.5 Assignment of Term Overriding Royalty Interests, dated as of November 16, 2011, by and between Chesapeake E&P Holding Corporation and Chesapeake Granite Wash Trust. 8-K 001-35343 10.5 11/21/2011 62 Incorporated by Reference Exhibit Number Exhibit Description Form SEC File Number Exhibit Filing Date Filed Herewith or Furnished 10.6 Administrative Services Agreement, dated as of November 16, 2011, by and between Chesapeake Energy Corporation and Chesapeake Granite Wash Trust. 8-K 001-35343 10.6 11/21/2011 10.7 Development Agreement, dated as of November 16, 2011, by and among Chesapeake Energy Corporation, Chesapeake Exploration, L.L.C. and Chesapeake Granite Wash Trust. 8-K 001-35343 10.7 11/21/2011 10.8 Registration Rights Agreement, dated as of November 16, 2011, by and among Chesapeake Energy Corporation, Chesapeake Exploration, L.L.C. and Chesapeake Granite Wash Trust. 8-K 001-35343 10.9 11/21/2011 31.1# Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 - Trustee's Vice President. 31.2 Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 - Trustee's Vice President. X 32.1# Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 - Trustee's Vice President 32.2 Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 - Trustee's Vice President X 99.1# Report of Software Integrated Solutions, Division of Schlumberger Technology Corporation. # Previously filed with the Original 10-K Filing. ITEM 16. Form 10-K Summary None. 63 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Date: May 14, 2020 CHESAPEAKE GRANITE WASH TRUST By: THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., Trustee By: /s/ Sarah Newell Sarah Newell Vice President The registrant, Chesapeake Granite Wash Trust, has no principal executive officer, principal financial officer, board of directors or persons performing similar functions. Accordingly, no additional signatures are available, and none have been provided. In signing the report above, the Trustee does not imply that it has performed any such function or that such function exists pursuant to the terms of the Trust Agreement under which it serves.