What changed in this filing

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Item 1. Financial Statements

2026-08-13 compared with 2026-05-13 · 119 added, 96 removed, 420 unchanged (34% of the section changed)

2 unchanged sentences

OF ASSETS, LIABILITIES AND TRUST CORPUS

fund cash and short-term investments

AND TRUST CORPUS

Operating cash

Reserve fund cash and

short-term investments

LIABILITIES AND TRUST

Reserve fund liability

Payable to HOGA

corpus (230,172,696 royalty trust units authorized, issued and

as of March 31, 2026 and December 31, 2025)

liabilities and trust corpus

Note Payable to HOGA

Trust corpus (230,172,696 royalty trust units

authorized, issued and

outstanding as of June 30, 2026 and December

Total liabilities and

accompanying notes are an integral part of these financial statements.

1 unchanged sentence

OF DISTRIBUTABLE INCOME (Unaudited)

income and other

Three Months Ended

Six Months Ended

Interest income and other

Administrative expenses

Administrative

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

Distributable

expenses in excess of income

Distributable income

trust units outstanding at end of period

2 unchanged sentences

OF CHANGES IN TRUST CORPUS (Unaudited)

corpus, beginning of period

Contributions

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

corpus, end of period

Three Months Ended

Six Months Ended

Trust corpus, beginning of period

Trust Contributions

Administrative

expenses in excess of income

Trust corpus, end of period

accompanying notes are an integral part of these financial statements.

19 unchanged sentences

of a normal recurring nature.

Operating results for the three-month period ended March 31, 2026, are not necessarily indicative of the

results that may be expected for the year ending December 31, 2026.

Operating results for the three- and six-month periods ended June 30, 2026, are not necessarily indicative

of the results that may be expected for the year ending December 31, 2026.

are recorded in royalty income on the statements of distributable income when received under the modified cash basis of accounting.

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onshore Highlander subject interest is the only subject interest in which the Royalty Trust holds an overriding royalty interest.

were no amortization charges related to production volumes associated with the onshore Highlander subject interest during the three-month

periods ended March 31, 2026 and 2025, as the Royalty Trust fully impaired the carrying value of the onshore Highlander subject interest

during the year ended December 31, 2023.

were no amortization charges related to production volumes associated with the onshore Highlander subject interest during the three-

and six-month periods ended June 30, 2026 and 2025, as the Royalty Trust fully impaired the carrying value of the onshore Highlander

subject interest during the year ended December 31, 2023.

has a 72 percent working interest and an approximate 48 percent net revenue interest in the onshore Highlander subject interest.

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HOGA previously informed the

Trustee that a new well on the onshore Highlander subject interest was spudded on January 30, 2025 and recently reported that the well

had reached total depth of 30,862 feet on February 17, 2026;

Trustee that a new well on the onshore Highlander subject interest was spudded on January 30, 2025 and has reported that the well had

reached total depth of 30,862 feet on February 17, 2026;

however, the future production status of this well remains unknown.

5 unchanged sentences

recognized the remaining carrying value of the onshore Highlander subject interest as of March 31, 2023 as an impairment loss.

amortization was $6,756,701 at March 31, 2026 and December 31, 2025.

amortization was $6,756,701 at June 30, 2026 and December 31, 2025.

RELATED PARTY TRANSACTIONS

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

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

periods ended March 31, 2026 and 2025.

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

expenses and (ii) reduce Royalty Trust indebtedness.

As of March 31, 2026, the outstanding note payable to HOGA was $416,489.

As a result, distributions will be made to Royalty Trust unitholders

only when royalties received less administrative expenses incurred and repayment of any indebtedness exceeds the minimum cash reserve.

The Royalty Trust did not receive royalties during the three-

and six-month periods ended June 30, 2026 and 2025.

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

Trust administrative expenses and (ii) reduce Royalty Trust indebtedness.

As of June 30, 2026, the outstanding note payable to HOGA was

As a result, distributions will be made to Royalty Trust unitholders only when royalties received less administrative expenses

incurred and repayment of any indebtedness exceeds the minimum cash reserve.

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 March 31, 2026, the Trustee has established a minimum cash reserve of $302,500.

As of June 30, 2026, 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 March 31, 2026 and December 31, 2025.

Royalty Trust’s operating cash balance as of June 30, 2026 and December 31, 2025.

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-month period ended March 31, 2026, 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 3 above,

and produces hydrocarbons in commercial quantities, 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 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.

For additional

information regarding distributions to Royalty Trust unitholders, see Note 5.

As no proceeds were available for distribution in the three- or six-month periods ended June 30, 2026, 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 3 above, and produces hydrocarbons in commercial quantities, 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.

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

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.

additional information regarding distributions to Royalty Trust unitholders, see Note 5.

of Administrative Expenses.

3 unchanged sentences

Pursuant to this provision, on January 12, 2026, HOGA contributed

$28,923 for fourth quarter 2025 administrative expenses, and on March 2, 2026, HOGA contributed $86,988 for fourth quarter 2025 and first

quarter 2026 administrative expenses, all of which funds were applied toward the Depositor Annual Expense Cap for 2026.

year, HOGA contributed the maximum of $350,000 for the payment of trust expenses incurred during the year ended December 31, 2025.

$28,923 for fourth quarter 2025 administrative expenses;

on March 2, 2026, HOGA contributed $86,988 for fourth quarter 2025 and first

quarter 2026 administrative expenses;

and on May 12, 2026, HOGA contributed $234,089 for first quarter 2026 administrative expenses,

thereby reaching the Depositor Annual Expense Cap for 2026.

HOGA contributed the maximum of $350,000 for the payment of trust expenses

incurred during the year ended December 31, 2025.

addition to such annual contributions, the Depositor has agreed to lend money, on an unsecured, interest-free basis, to the Royalty Trust

5 unchanged sentences

set forth below:

of March 31, 2026, the Royalty Trust has an outstanding note payable to HOGA of $416,489.

November 6, 2024

June 27, 2025

July 31, 2025

September 26, 2025

November 7, 2025

June 12, 2026

Total at June 30, 2026

of June 30, 2026, the Royalty Trust has an outstanding note payable to HOGA of $459,587.

to the Royalty Trust Agreement, the Depositor agreed to provide and maintain a $1.0 million stand-by reserve account or an equivalent

9 unchanged sentences

in the stand-by reserve account to HOGA, and HOGA assumed the responsibility to maintain the stand-by reserve account from FCX.

Trust did not use any funds from the reserve account to pay administrative expenses during the three-month period ended March 31, 2026.

As of March 31, 2026, the Depositor had not requested a reduction of the reserve account.

Trust did not use any funds from the reserve account to pay administrative expenses during the three- and six-month periods ended June

As of June 30, 2026, the Depositor had not requested a reduction of the reserve account.

Administration.

9 unchanged sentences

DISTRIBUTIONS

was no distributable income for the three-month periods ended March 31, 2026 and 2025 and therefore there were no distributions during

those periods.

was no distributable income for the three- and six-month periods ended June 30, 2026 and 2025 and therefore there were no distributions

during those periods.

CONTINGENCIES AND OTHER COMMITMENTS

1 unchanged sentence

SUBSEQUENT EVENTS

May 12, 2026, HOGA contributed $234,089, representing the remaining portion of the Depositor Annual Expense Cap for 2026, and loaned

$18,696 to the Royalty Trust, in each case for the payment of administrative expenses.

were no subsequent events occurring after the end of the second quarter through the filing date of this Form 10-Q.

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

79 unchanged sentences

Trust by the depositor under the Royalty Trust Agreement, if HOGA were to be unable to fully perform such obligations in the future.

March 31, 2026, HOGA owned interests in approximately 152 gas leases onshore in South Louisiana, covering approximately 9,000 gross acres

June 30, 2026, HOGA owned interests in approximately 154 gas leases onshore in South Louisiana, covering approximately 9,000 gross acres

(6,480 acres net to HOGA’s interests) associated with the onshore Highlander subject interest.

As of March 31, 2026, the onshore

As of June 30, 2026, the onshore

Highlander subject interest had no production due to the shutting in and subsequent abandonment of the sole well producing from the onshore

21 unchanged sentences

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

previously informed the Trustee that a new well on the onshore Highlander subject interest was spudded on January 30, 2025 and recently

reported that the well had reached total depth of 30,862 feet on February 17, 2026;

however, the future production status of this well

remains unknown.

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

previously informed the Trustee that a new well on the onshore Highlander subject interest was spudded on January 30, 2025 and has reported

that the well had reached total depth of 30,862 feet on February 17, 2026;

however, the future production status of this well remains

Neither the Trustee nor the Royalty Trust unitholders has any right to control or influence operations of the subject interest.

AND CAPITAL RESOURCES

3 unchanged sentences

Pursuant to this provision, on January 12, 2026, HOGA contributed $28,923 for fourth quarter 2025 administrative

expenses, and on March 2, 2026, HOGA contributed $86,988 for fourth quarter 2025 and first quarter 2026 administrative expenses, all

of which funds were applied toward the Depositor Annual Expense Cap for 2026.

In the prior year, HOGA contributed the maximum of $350,000

for the payment of trust expenses incurred during the year ended December 31, 2025.

on March 2, 2026, HOGA contributed $86,988 for fourth quarter 2025 and first quarter 2026 administrative expenses;

12, 2026, HOGA contributed $234,089 for first quarter 2026 administrative expenses, thereby reaching the Depositor Annual Expense Cap

In the prior year, HOGA contributed the maximum of $350,000 for the payment of trust expenses incurred during the year ended

December 31, 2025.

addition to such annual contributions, the Depositor has agreed to lend money, on an unsecured, interest-free basis, to the Royalty Trust

5 unchanged sentences

amounts on the dates set forth below:

of March 31, 2026, the Royalty Trust has an outstanding note payable to HOGA of $416,489.

November 6, 2024

June 27, 2025

July 31, 2025

September 26, 2025

November 7, 2025

June 12, 2026

Total at June 30, 2026

of June 30, 2026, the Royalty Trust has an outstanding note payable to HOGA of $459,587.

to the Royalty Trust Agreement, the Depositor agreed to provide and maintain a $1.0 million stand-by reserve account or an equivalent

7 unchanged sentences

the accompanying Statements of Assets, Liabilities and Trust Corpus.

As of March 31, 2026, the Depositor had not requested a reduction

As of June 30, 2026, the Depositor had not requested a reduction

of the reserve account.

1 unchanged sentence

month in which production payments are received by HOGA.

The Royalty Trust did not receive royalties during the three-month periods ended

March 31, 2026 and 2025.

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

periods ended June 30, 2026 and 2025.

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

As of March 31, 2026, the Royalty Trust has an outstanding note payable to HOGA of $416,489.

As of June 30, 2026, the Royalty Trust has an outstanding note payable to HOGA of $459,587.

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

Available funds

will equal the excess cash received by the Royalty Trust from the royalty interests and other sources during that quarter over the Royalty

Trust’s liabilities for that quarter.

Available funds will be reduced by any cash the Trustee decides to hold as a reserve against

future liabilities.

As of March 31, 2026 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 March 31, 2026 and 2025.

Distributions will be made to Royalty

Trust unitholders only when royalties received less administrative expenses incurred and repayment of any indebtedness exceeds the minimum

cash reserve.

will equal the excess cash received by the Royalty Trust from the royalty interests and other sources during that quarter over the

Royalty Trust’s liabilities for that quarter.

Available funds will be reduced by any cash the Trustee decides to hold as a

reserve against future liabilities.

As of June 30, 2026 the Trustee has established a minimum cash reserve of $302,500.

cash reserve is not reflective of the Royalty Trust’s operating cash balance as of June 30, 2026 and December 31, 2025.

Distributions will be made to Royalty Trust unitholders only when royalties received less administrative expenses incurred and

repayment of any indebtedness exceeds the minimum cash reserve.

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 first quarter of 2026, the Royalty Trust did not withhold any funds for

the cash reserve.

As no proceeds were available for distribution in the second quarter of 2026, the Royalty Trust did not withhold any funds

for the cash reserve.

Unless another well is drilled on the onshore Highlander subject interest, as discussed in “Overview –

11 unchanged sentences

together with interest earned on the funds.

was no distributable income during the three-month periods ended March 31, 2026 and 2025 due to the shutting in and subsequent abandonment

of the sole well producing from the onshore Highlander subject interest as discussed in “Overview –

Status of the Onshore

Highlander Subject Interest”

Any distribution in a particular period is not necessarily indicative of future distributions.

was no distributable income during the three- and six-month periods ended June 30, 2026 and 2025 due to the shutting in and subsequent

abandonment of the sole well producing from the onshore Highlander subject interest as discussed in “Overview –

the Onshore Highlander Subject Interest”

Any distribution in a particular period is not necessarily indicative of future

distributions.

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 periods ended March 31, 2026 and 2025, the

Royalty Trust did not receive royalty income, due to the shutting in and subsequent abandonment of the sole well producing from the onshore

Highlander subject interest as discussed in “Overview –

In accordance with the terms of the master conveyance, during the three- and six-month periods ended June 30, 2026 and 2025,

the Royalty Trust did not receive royalty income, due to the shutting in and subsequent abandonment of the sole well producing from the

onshore Highlander subject interest as discussed in “Overview –

Status of the Onshore Highlander Subject Interest”

2 unchanged sentences

of the Royalty Trust.

During the three-month periods ended March 31, 2026 and 2025, the Royalty Trust paid administrative expenses of

During the three-month periods ended June 30, 2026 and 2025, the Royalty Trust paid administrative expenses of

$294,972 and $399,348, respectively.

Administrative expenses were lower during the three-month period ended March 31, 2025 as compared to the

corresponding 2026 period, primarily because the Royalty Trust deferred payment of first quarter 2025 administrative expenses to the

second quarter of 2025.

During the six-month periods ended June 30, 2026 and 2025, the Royalty Trust paid administrative

expenses of $410,883 and $399,348, respectively.

Administrative expenses were lower during the three-month period ended June 30, 2026

as compared to the corresponding 2025 period, primarily because the Royalty Trust deferred payment of first quarter 2025 administrative

expenses to the second quarter of 2025.

ACCOUNTING STANDARDS

61 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