What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-11-14 compared with 2024-08-14 · 118 added, 124 removed, 379 unchanged (39% of the section changed)

2 unchanged sentences

OF ASSETS, LIABILITIES AND TRUST CORPUS

September 30,

Operating cash

1 unchanged sentence

LIABILITIES AND TRUST CORPUS

Reserve liability

Trust corpus (230,172,696 royalty trust units authorized, issued and outstanding as of June 30, 2024 and December 31, 2023)

Reserve fund liability

Trust corpus (230,172,696 royalty trust units authorized, issued and outstanding as of September 30, 2024 and December 31, 2023)

Total liabilities and trust corpus

3 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Royalty income

1 unchanged sentence

Administrative expenses

Income in excess of administrative expenses (administrative expenses in excess of income) (Note 4)

Administrative expenses in excess of income (Note 4)

Distributable income (Note 4)

5 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Trust corpus, beginning of period

2 unchanged sentences

Impairment of subject interests

Income in excess of administrative expenses (administrative expenses in excess of income)

Administrative expenses in excess of income

Distributions paid

11 unchanged sentences

Statements of Royalty Trusts .

accompanying unaudited financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all

required information and disclosures.

Therefore, this information should be read in conjunction with the Royalty Trust’s financial

statements and notes contained in its annual report on Form 10-K for the year ended December 31, 2023 (the 2023 Form 10-K).

The information

furnished herein reflects all adjustments that are, in the opinion of The Bank of New York Mellon Trust Company, N.A.

(the Trustee),

necessary for a fair statement of the results for the interim periods reported.

All such adjustments are, in the opinion of the Trustee,

of a normal recurring nature.

Operating results for the three and six-month periods ended June 30, 2024, are not necessarily indicative

of the results that may be expected for the year ending December 31, 2024.

accompanying unaudited financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include

all required information and disclosures.

Therefore, this information should be read in conjunction with the Royalty Trust’s

financial statements and notes contained in its annual report on Form 10-K for the year ended December 31, 2023 (the 2023 Form

The information furnished herein reflects all adjustments that are, in the opinion of The Bank of New York Mellon Trust

Company, N.A.

(the Trustee), necessary for a fair statement of the results for the interim periods reported.

All such adjustments

are, in the opinion of the Trustee, of a normal recurring nature.

Operating results for the three- and nine-month periods ended

September 30, 2024, are not necessarily indicative of the results that may be expected for the year ending December 31,

Royalty Trust was created to hold a 5 percent gross overriding royalty interest (collectively, the overriding royalty interests) in future

30 unchanged sentences

charges related to production volumes associated with the onshore Highlander subject interest reduced the carrying value of the overriding

royalty interests by $0 and $21,780 during the three- and six-month periods ended June 30, 2024 and 2023, respectively.

royalty interests by $0 and $21,780 during the three- and nine-month periods ended September 30, 2024 and 2023, respectively.

Oil & Gas Assets LLC (HOGA) has a 72 percent working interest and an approximate 48 percent net revenue interest in the onshore Highlander

19 unchanged sentences

does not expect to have any cash available to distribute to Royalty Trust unitholders in future periods.

HOGA has not informed the Trustee

of any definitive plans to drill a new well on the Highlander subject interest.

Neither the Trustee nor the Royalty Trust unitholders

has any right to control or influence operations of the subject interest.

Royalty Trust fully impaired the carrying value of the onshore Highlander subject interest by $308,071 during the quarter ended March

3 unchanged sentences

Highlander subject interest as of March 31, 2023 as an impairment loss.

Accumulated amortization was $6,756,701 at June 30, 2024 and

December 31, 2023.

Accumulated amortization was $6,756,701 at September 30, 2024

and December 31, 2023.

RELATED PARTY TRANSACTIONS

1 unchanged sentence

following the month in which production payments are received by HOGA.

The Royalty Trust received royalties of $0 and $14,331 during

the three-month periods ended June 30, 2024 and 2023, respectively.

The Royalty Trust did not receive royalties during the three- and

nine-month periods ended September 30, 2024 and the three-month period ended September 30, 2023.

The Royalty Trust received royalties

of $401,278 during the three-month period ended September 30 2023.

Royalties received by the Royalty Trust must first be used to (i)

1 unchanged sentence

The Royalty Trust had no indebtedness outstanding

as of June 30, 2024 and December 31, 2023.

as of September 30, 2024 and December 31, 2023.

quarter, the Trustee will determine the amount of funds available for distribution to the Royalty Trust unitholders.

3 unchanged sentences

Available funds will be reduced by any cash the Trustee reserves against future liabilities.

As of June 30, 2024, the Trustee has established a minimum cash reserve of $302,500.

The minimum cash reserve is not reflective of the

Royalty Trust’s operating cash balance as of June 30, 2024 and December 31, 2023.

As of September 30, 2024, the Trustee has established a minimum cash reserve of $302,500.

The minimum cash reserve is not reflective

of the Royalty Trust’s operating cash balance as of September 30, 2024 and December 31, 2023.

with the distribution to unitholders in the first quarter of 2022, the Royalty Trust withheld $8,750 from the funds otherwise available

for distribution each quarter through the first quarter of 2023, with the intent of gradually building a cash reserve of approximately

As no proceeds were available for distribution in the three- and six-month periods ended June 30, 2024, the Royalty Trust did

not withhold any funds for the cash reserve.

Unless a new well is drilled on the onshore Highlander subject interest as discussed in

Note 2 above, the Royalty Trust does not intend to withhold funds for the cash reserve in the future, as the Royalty Trust does not expect

to have any cash available to distribute to unitholders in future periods.

This cash is reserved for the payment of future known, anticipated

or contingent expenses or liabilities of the Royalty Trust.

The Trustee may increase or decrease the targeted cash reserve amount at

any time, and may increase or decrease the rate at which it withholds funds to build the cash reserve at any time, without advance notice

to the unitholders.

Cash held in reserve will be invested as required by the amended and restated royalty trust agreement governing the

Royalty Trust (the royalty trust agreement).

Any cash reserved in excess of the amount necessary to pay or provide for the payment of

future known, anticipated or contingent expenses or liabilities eventually will be distributed to unitholders, together with interest

As no proceeds were available for distribution in the three- and nine-month periods ended September 30, 2024, the Royalty Trust

did not withhold any funds for the cash reserve.

Unless a new well is drilled on the onshore Highlander subject interest as discussed

in Note 2 above, the Royalty Trust does not intend to withhold funds for the cash reserve in the future, as the Royalty Trust does not

expect to have any cash available to distribute to unitholders in future periods.

This cash is reserved for the payment of future known,

anticipated or contingent expenses or liabilities of the Royalty Trust.

The Trustee may increase or decrease the targeted cash reserve

amount at any time and may increase or decrease the rate at which it withholds funds to build the cash reserve at any time, without advance

notice to the unitholders.

Cash held in reserve will be invested as required by the amended and restated royalty trust agreement governing

the Royalty Trust (the royalty trust agreement).

Any cash reserved in excess of the amount necessary to pay or provide for the payment

of future known, anticipated or contingent expenses or liabilities eventually will be distributed to unitholders, together with interest

earned on the funds.

14 unchanged sentences

No loans or repayments were made during the quarters

ended June 30, 2024 or December 31, 2023, and no loans were outstanding as of June 30, 2024 or December 31, 2023.

ended September 30, 2024 or December 31, 2023, and no loans were outstanding as of September 30, 2024 or December 31, 2023.

to the royalty trust agreement, FCX agreed to provide and maintain a $1.0 million stand-by reserve account or an equivalent letter of

8 unchanged sentences

of Assets, Liabilities and Trust Corpus.

The Royalty Trust used $14,280 and $1,820 on February 1 and April 1, 2024, respectively, from

the reserve account to pay administrative expenses to the Trustee, which is included in the administrative expenses in the accompanying

Statements of Distributable Income.

As of June 30, 2024, FCX had not requested a reduction of the reserve account.

During the three- and nine-month periods ended September 30, 2024, the Royalty Trust used $84,282

and $100,382, respectively, from the reserve account to pay administrative expenses to the Trustee, which is included in the administrative

expenses in the accompanying Statements of Distributable Income.

As of September 30, 2024, FCX had not requested a reduction of the reserve

Administration.

10 unchanged sentences

DISTRIBUTIONS

gas sales volumes (measured in thousands of cubic feet, or Mcf), average sales price and net cash proceeds available for distribution

for the three and six-month periods ended June 30, 2024 and 2023, are set forth in the table below.

Three Months Ended

Six Months Ended

were no distributions for the three- and nine-month periods ended September 30, 2024, and the three-month period ended September 30, 2023.

Natural gas sales volumes (measured in thousands of cubic feet, or Mcf), average sales price and net cash proceeds available for distribution

for the nine-month period ended September 30, 2023, are set forth in the table below.

Nine Months Ended

September 30,

Natural gas sales volumes (Mcf)

5 unchanged sentences

Administrative expenses

Income in excess of administrative expenses (administrative expenses in excess of income)

Administrative expenses in excess of income

Income available for distribution

1 unchanged sentence

Net cash proceeds available for distribution

summary of quarterly per unit distributions for the three- and six-month periods ended June 30, 2024 and 2023, is set forth in the table

summary of quarterly per unit distributions for the three- and nine-month periods ended September 30, 2023 and 2024, is set forth in the table

Per Unit Amount

4 unchanged sentences

SUBSEQUENT EVENTS

Royalty Trust evaluated all other events subsequent to June 30, 2024, and through the date the Royalty Trust’s financial statements

were issued, and determined that all events or transactions occurring during this period requiring recognition or disclosure were appropriately

addressed in these financial statements.

The Trustee requested a loan from FCX in the amount of $200,000 on October 16, 2024.

FCX funded the loan request with a check dated November

Trustee’s Discussion and Analysis of Financial Condition and Results of Operations .

73 unchanged sentences

subject interest to HOGA.

At June 30, 2024, HOGA owned interests in gas leases onshore in South Louisiana, covering approximately 9,000

gross acres associated with the onshore Highlander subject interest.

Whether or not HOGA maintains the acreage associated with the onshore

Highlander subject interest is determined by HOGA’s current and future plans and other outside factors, over which the Royalty

Trust has no control.

As of June 30, 2024, the onshore Highlander subject interest had no production, as HOGA had commenced operations

to permanently plug and abandon the well in early March 2024.

As of September 30, 2024, the onshore Highlander subject interest had no production, as HOGA had commenced operations to permanently plug and abandon the well

in early March 2024, and all the previously

owned leases associated with the Highlander subject interest in South Louisiana have terminated due to lack of production associated

with the acreage.

Whether or not HOGA renews any of the acreage associated with the onshore Highlander subject interest is determined

by HOGA’s current and future plans and other outside factors, over which the Royalty Trust has no control.

of the Onshore Highlander Subject Interest

15 unchanged sentences

to distribute to Royalty Trust unitholders in future periods.

HOGA has not informed the Trustee of any definitive plans to drill a new

well on the Highlander subject interest.

Neither the Trustee nor the Royalty Trust unitholders has any right to control or influence

operations of the subject interest.

AND CAPITAL RESOURCES

9 unchanged sentences

receive any distributions.

No loans or repayments were made during the quarters ended June 30, 2024 or December 31, 2023, and no loans

were outstanding as of June 30, 2024 or December 31, 2023.

No loans or repayments were made during the quarters ended September 30, 2024 or December 31, 2023, and no

loans were outstanding as of September 30, 2024 or December 31, 2023.

The Trustee requested a loan from FCX in the amount of $200,000

on October 16, 2024.

FCX funded the loan request with a check dated November 6, 2024.

to the royalty trust agreement, FCX agreed to provide and maintain a $1.0 million stand-by reserve account or an equivalent letter of

8 unchanged sentences

of Assets, Liabilities and Trust Corpus.

The Royalty Trust used $14,280 and $1,820 on February 1 and April 1, 2024, respectively, from

the reserve account to pay administrative expenses to the Trustee, which is included in the administrative expenses in the accompanying

Statements of Distributable Income.

As of June 30, 2024, FCX had not requested a reduction of the reserve account.

During the three- and nine-month periods ended September 30, 2024, the Royalty Trust used $84,282

and $100,382, respectively, 2024 from the reserve account to pay administrative expenses to the Trustee, which is included in the administrative

expenses in the accompanying Statements of Distributable Income.

As of September 30, 2024, FCX had not requested a reduction of the reserve

connection with the completion of the Highlander Sale, HOGA assumed all administrative and reporting responsibilities with respect to

the Royalty Trust, including those described in Article III of the royalty trust agreement.

accordance with the terms of the master conveyance, royalties are paid to the Royalty Trust on the last day of the month following the

month in which production payments are received by HOGA.

The Royalty Trust received royalties of $0 and $14,331 during the three-month

periods ended June 30, 2024 and 2023, respectively.

accordance with the terms of the master conveyance, royalties are paid to the Royalty Trust on the last day of the month following

the month in which production payments are received by HOGA.

The Royalty Trust did not receive royalties during the three- and

nine-month periods ended September 30, 2024 and the three-month period ended September 30, 2023.

The Royalty Trust received royalties of $401,278 during the nine-month period ended September

received by the Royalty Trust must first be used to (i) satisfy Royalty Trust administrative expenses and (ii) reduce Royalty Trust indebtedness.

The Royalty Trust had no indebtedness outstanding as of June 30, 2024 and December 31, 2023.

The Royalty Trust had no indebtedness outstanding as of September 30, 2024 and December 31, 2023.

quarter, the Trustee will determine the amount of funds available for distribution to the Royalty Trust unitholders.

4 unchanged sentences

future liabilities.

As of June 30, 2024, the Trustee has established a minimum cash reserve of $302,500.

The minimum cash reserve is

not reflective of the Royalty Trust’s operating cash balance as of June 30, 2024 and December 31, 2023.

As of September 30, 2024, the Trustee has established a minimum cash reserve of $302,500.

The minimum cash reserve

is not reflective of the Royalty Trust’s operating cash balance as of September 30, 2024 and December 31, 2023.

with the distribution to unitholders in the first quarter of 2022, the Royalty Trust withheld $8,750 from the funds otherwise available

for distribution each quarter through the first quarter of 2023, with the intent of gradually building a cash reserve of approximately

As no proceeds were available for distribution in the second quarter of 2024, the Royalty Trust did not withhold any funds

for the cash reserve.

As no proceeds were available for distribution in the third quarter of 2024, the Royalty Trust did not withhold any funds for

the cash reserve.

Unless another well is drilled on the onshore Highlander subject interest as discussion “Overview –

Status of the Onshore Highlander Subject Interest”

above, the Royalty Trust does not intend to withhold funds for the cash reserve

as the Royalty Trust does not expect to have any cash available to distribute to unitholders in future periods.

This cash is reserved

for the payment of future known, anticipated or contingent expenses or liabilities of the Royalty Trust.

The Trustee may increase or

decrease the targeted cash reserve amount at any time, and may increase or decrease the rate at which it is withholding funds to build

the cash reserve at any time, without advance notice to the unitholders.

Cash held in reserve will be invested as required by the royalty

trust agreement.

Any cash reserved in excess of the amount necessary to pay or provide for the payment of future known, anticipated or

contingent expenses or liabilities eventually will be distributed to unitholders, together with interest earned on the funds.

was no distributable income during the three-month periods ended June 30, 2024 and 2023.

Any distribution in a particular period is not

necessarily indicative of future distributions.

of the Onshore Highlander Subject Interest”

above, the Royalty Trust does not intend to withhold funds for the cash reserve as

the Royalty Trust does not expect to have any cash available to distribute to unitholders in future periods.

This cash is reserved for

the payment of future known, anticipated or contingent expenses or liabilities of the Royalty Trust.

The Trustee may increase or decrease

the targeted cash reserve amount at any time and may increase or decrease the rate at which it is withholding funds to build the cash

reserve at any time, without advance notice to the unitholders.

Cash held in reserve will be invested as required by the royalty trust

Any cash reserved in excess of the amount necessary to pay or provide for the payment of future known, anticipated or contingent

expenses or liabilities eventually will be distributed to unitholders, together with interest earned on the funds.

was no distributable income during the three-month periods ended September 30, 2024 and 2023.

Any distribution in a particular period

is not necessarily indicative of future distributions.

As previously disclosed, the sole well producing from the onshore Highlander subject

16 unchanged sentences

and accordingly, does not expect to have any cash available to distribute to Royalty Trust unitholders in future periods.

informed the Trustee of any definitive plans to drill a new well on the Highlander subject interest.

Neither the Trustee nor the Royalty

Trust unitholders has any right to control or influence operations of the subject interest.

Royalty Trust’s only other sources of liquidity are mandatory annual contributions, any loans and the required standby reserve

8 unchanged sentences

OF OPERATIONS

In accordance with the terms of the master conveyance, during the three-month period ended June 30, 2024, the Royalty Trust

did not receive royalty income.

During the three-month period ended June 30, 2023, the Royalty Trust received royalties of $14,331 related

to 14,231 Mcf of natural gas production attributable to the onshore Highlander subject interest with average post-production costs of

$1.43 per Mcf and an average sales price of $2.43 per Mcf.

During the six-month period ended June 30, 2024, the

Royalty Trust did not receive royalty income.

During the six-month period ended June 30, 2023, the Royalty Trust received royalties of

$401,278 related to 101,352 Mcf of natural gas production attributable to the onshore Highlander subject interest with average post-production

costs of $0.67 per Mcf and an average sales price of $4.63 per Mcf.

Royalty income was lower during the three- and six-month periods ended

June 30, 2024, as compared to the corresponding 2023 periods, primarily due to lower production resulting from the operational issues

relating to the sole well producing from the Highlander subject interest and ultimately the shutting in of the well.

In accordance with the terms of the master conveyance, during the three-month periods ended September 30, 2024 and 2023,

the Royalty Trust did not receive royalty income.

During the nine-month period ended September 30, 2024, the Royalty Trust did not receive

royalty income.

During the nine-month period ended September 30, 2023, the Royalty Trust received royalties of $401,278 related to 101,352

Mcf of natural gas production attributable to the onshore Highlander subject interest with average post-production costs of $0.67 per

Mcf and an average sales price of $4.63 per Mcf.

income was lower during the three- and nine-month periods ended September 30, 2024, as compared to the corresponding 2023 periods, primarily

due to lower production resulting from the operational issues relating to the sole well producing from the Highlander subject interest

and ultimately the shutting in of the well.

Administrative

1 unchanged sentence

of the Royalty Trust.

During the three-month periods ended June 30, 2024 and 2023, the Royalty Trust paid administrative expenses of

$156,042 and $171,714, respectively.

During the six-month periods ended June 30, 2024 and 2023, the Royalty Trust paid administrative expenses of

$577,765 and $361,390, respectively.

Administrative expenses were lower for the six-month period ended June 30, 2024, as compared

to the corresponding 2023 period, primarily due to the Trust’s payment of fourth quarter 2023 administrative expenses in the first

quarter of 2024.

During the three-month periods ended September 30, 2024 and 2023, the Royalty Trust paid administrative expenses

of $84,282 and $108,432, respectively.

During the nine-month periods ended September 30, 2024 and 2023, the Royalty Trust paid administrative

expenses of $662,047 and $469,822, respectively.

Administrative expenses were higher for the nine-month period ended September 30, 2024,

as compared to the corresponding 2023 period, primarily due to the Trust’s payment of fourth quarter 2023 administrative expenses

in the first quarter of 2024.

ACCOUNTING STANDARDS

59 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements