What changed in this filing

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Item 1. Financial Statements

2023-05-09 compared with 2022-11-10 · 67 added, 66 removed, 179 unchanged (43% of the section changed)

2 unchanged sentences

STATEMENTS OF ASSETS, LIABILITIES AND TRUST CORPUS

September 30, December 31,

March 31, December 31,

ASSETS (unaudited) (audited)

6 unchanged sentences

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

outstanding as of September 30, 2022 and December 31, 2021) 1,297,616 1,219,756

outstanding as of March 31, 2023 and December 31, 2022) 499,830 1,245,494

Total liabilities and trust corpus $ 1,575,878 $ 2,310,845

2 unchanged sentences

STATEMENTS OF DISTRIBUTABLE INCOME (Unaudited)

Three Months Ended Nine Months Ended,

September 30, September 30,

2022 2021 2022 2021

Three Months Ended

Royalty income $ 386,947 $ 451,030

8 unchanged sentences

STATEMENTS OF CHANGES IN TRUST CORPUS (Unaudited)

Three Months Ended Nine Months Ended,

September 30, September 30,

2022 2021 2022 2021

Three Months Ended

Trust corpus, beginning of period $ 1,245,494 $ 1,219,756

Amortization of overriding royalty interests in subject interests (21,780) (38,121)

Impairment of subject interests (308,071) —

Income in excess of administrative expenses 206,081 266,880

13 unchanged sentences

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, 2022, are not necessarily indicative of the results that may be expected for the year ending December 31, 2022.

Operating results for the three-month period ended March 31, 2023, are not necessarily indicative of the results that may be expected for the year ending December 31, 2023.

The Royalty Trust was created to hold a 5% gross overriding royalty interest (collectively, the overriding royalty interests) in future production from specified Inboard Lower Tertiary/Cretaceous exploration prospects, located in the shallow waters of the Gulf of Mexico and onshore in South Louisiana that existed as of December 5, 2012 (collectively, the subject interests).

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

Significant accounting policies are consistent with Note 1 - Summary of Significant Accounting Policies in Part II, Item VIII of the 2022 Form 10-K.

The Royalty Trust evaluates the carrying values of the overriding royalty interests in the subject interests for impairment if conditions indicate that potential uncertainty exists regarding the Royalty Trust’s ability to recover its recorded amounts related to the overriding royalty interests.

Indications of potential impairment with respect to the overriding royalty interests can include, among other things, subject interest lease expirations, reductions in estimated reserve quantities or resource potential, changes in estimated future oil and natural gas prices, exploration costs, and/or drilling plans, and other matters that arise that could negatively impact the carrying values of the overriding royalty interests.

If an impairment event occurs and it is determined that the carrying value of the Royalty Trust's overriding royalty interests in the subject interests may not be recoverable, an impairment will be recognized as measured by the amount by which the carrying amount of the overriding royalty interests in the subject interests exceeds the fair value of these assets, which would be measured by discounting projected cash flows.

The related impairment amounts are recorded as a reduction to the overriding royalty interest with an offsetting reduction to the Trust Corpus in the period such impairment is determined.

Impairment of the carrying values of the overriding royalty interests in the subject interests involves a significant amount of judgment and may be subject to changes over time based on drilling plans and results, geophysical evaluations, the assignment of proved natural gas reserves, availability of capital and other factors.

Fair value accounting guidance includes a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value.

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 inputs) and the lowest priority to unobservable inputs (Level 3).

When indicators of impairment are present and it is determined that the carrying value of the Royalty Trust's overriding royalty interests in the subject interests exceeds the estimated undiscounted cash flows of the subject interest, fair value estimates utilized in the impairment assessment are determined based on inputs not observable in the market and thus represent Level 3 measurements.

OVERRIDING ROYALTY INTERESTS

The onshore Highlander subject interest is the only producing subject interest in which the Royalty Trust holds an overriding royalty interest, and began commercial production on February 25, 2015.

Prior to this date there had been no commercial production of hydrocarbons from any of the subject interests.

Amortization charges related to production volumes associated with the onshore Highlander subject interest reduced the carrying value of the overriding royalty interests by $34,634 and $108,101 during the three- and nine-month periods ended September 30, 2022, respectively, and $36,955 and $112,231 during the three- and nine-month periods ended September 30, 2021, respectively.

Accumulated amortization was $6,401,494 and $6,293,393 at September 30, 2022, and December 31, 2021, respectively.

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

Amortization charges related to production volumes associated with the onshore Highlander subject interest reduced the carrying value of the overriding royalty interests by $21,780 and $38,121 during the three-month periods ended March 31, 2023 and 2022, respectively.

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

1 unchanged sentence

HOGA is the operator of the onshore Highlander subject interest.

As previously disclosed, the sole well producing from the onshore Highlander subject interest experienced an operational issue on January 19, 2023, resulting in substantial amounts of water entering the well, which caused a shut in of the well before production resumed at significantly reduced levels.

Following an evaluation by HOGA’s field operations team, HOGA determined that it would be necessary to commence operations to control the water production, in expectation of eventually initiating “kill” operations on the well.

HOGA recently has informed the Trustee that the well was shut in effective March 31, 2023 and production from the well has ceased.

HOGA currently is evaluating its options with respect to the well.

Unless the operational issues with the well can be rectified, the well is redrilled or another well is drilled on the onshore Highlander subject interest, the Royalty Trust does not expect to receive any income attributable to its overriding royalty interests and accordingly, does not expect to have any cash available to distribute to Royalty Trust unitholders in future periods.

The Trust fully impaired the carrying value of the onshore Highlander subject interest by $308,071 during the three-month period ended March 31, 2023.

Accumulated amortization was $6,756,701 and $6,426,850 at March 31, 2023 and December 31, 2022, respectively.

The Trust determined the fair value of the onshore Highlander subject interest to be zero using Level 3 measurements under the fair value hierarchy of ASC 820 Fair Value Measurement .

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

RELATED PARTY TRANSACTIONS

1 unchanged sentence

In 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 $791,065 and $1,767,784 during the three- and nine-month periods ended September 30, 2022, respectively, and $134,631 and $586,196 during the three- and nine-month periods ended September 30, 2021, respectively.

The Royalty Trust received royalties of $386,947 and $451,030 during the three-month periods ended March 31, 2023 and 2022, respectively.

Royalties 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 September 30, 2022.

The Royalty Trust had no indebtedness outstanding as of March 31, 2023 and December 31, 2022.

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

1 unchanged sentence

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

As of September 30, 2022, the Trustee has established a minimum cash reserve of $285,000.

Commencing with the distribution to unitholders in the first quarter of 2022, the Trust has been withholding, and in the future intends to withhold, $8,750 from the funds otherwise available for distribution each quarter to gradually

build a cash reserve of approximately $350,000.

As of March 31, 2023, the Trustee has established a minimum cash reserve of $302,500.

This cash is reserved for the payment of future known, anticipated or contingent expenses or liabilities of the Trust.

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(FCX) has agreed to pay annual trust expenses up to a maximum amount of $350,000, with no right of repayment or interest due, to the extent the Royalty Trust lacks sufficient funds to pay administrative expenses.

No such contributions were made during the three- and nine-month periods ended September 30, 2022 or 2021.

No such contributions were made during the three-month periods ended March 31, 2023 or 2022.

In addition to such annual contributions, FCX has agreed to lend money, on an unsecured, interest-free basis, to the Royalty Trust to fund the Royalty Trust's ordinary administrative expenses as set forth in the royalty trust agreement.

No loans were outstanding at September 30, 2022 or December 31, 2021.

No loans were outstanding at March 31, 2023 or December 31, 2022.

Pursuant to the royalty trust agreement, FCX agreed to provide and maintain a $1.0 million stand-by reserve account or an equivalent letter of credit for the benefit of the Royalty Trust to enable the Trustee to draw on such reserve account or letter of credit to pay obligations of the Royalty Trust if its funds are inadequate to pay its obligations at any time.

Currently, with the consent of the Trustee, FCX may reduce the reserve account or substitute a letter of credit with a different face amount for the original letter of credit or any substitute letter of credit.

Currently, with the consent of the Trustee, FCX may reduce the reserve account or

substitute a letter of credit with a different face amount for the original letter of credit or any substitute letter of credit.

In connection with this arrangement, FCX provided $1.0 million to the Royalty Trust.

The $1.0 million, plus interest collected thereon, is reflected as reserve fund cash, with a corresponding reserve fund liability in the accompanying Statements of Assets, Liabilities and Trust Corpus.

As of September 30, 2022, the Royalty Trust had not drawn any funds from the reserve account, and FCX had not requested a reduction of such reserve account.

As of March 31, 2023, the Royalty Trust had not drawn any funds from the reserve account, and FCX had not requested a reduction of such reserve account.

Administration.

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The Trustee has a lien on the Royalty Trust’s assets to secure payment of its compensation and any indemnification expenses and other amounts to which it is entitled under the royalty trust agreement.

Royalty Trust Units Held by FCX and HOGA.

At September 30, 2022, the Royalty Trust had 230,172,696 royalty trust units outstanding, HOGA held 31,143,150 royalty trust units, and FCX, through its indirect wholly owned subsidiary McMoRan, held 31,143,149 royalty trust units.

FCX and HOGA each hold 13.5% of the outstanding royalty trust units.

DISTRIBUTIONS

Natural 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 nine-month periods ended September 30, 2022 and 2021, are set forth in the table below.

Three Months Ended Nine Months Ended,

September 30, September 30,

2022 2021 2022 2021

Natural gas sales volumes (measured in thousands of cubic feet, or Mcf), average sales price and net cash proceeds available for distribution for the three-month periods ended March 31, 2023 and 2022, are set forth in the table below.

Three Months Ended

Natural gas sales volumes (Mcf) 87,121 115,517

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Net cash proceeds available for distribution $ 197,331 $ 258,130

A summary of quarterly per unit distributions for the three-month periods ended March 31, 2022 and 2021, the three-month periods ended June 30, 2022 and 2021, and the three-month periods ended September 30, 2022 and 2021, is set forth in the table below.

A summary of quarterly per unit distributions for the three-month periods ended March 31, 2023 and 2022, is set forth in the table below.

Amount Per Unit Amount Record Date Payment Date Amount Per Unit Amount Record Date Payment Date

$ 197,331 $0.000857 4/28/2023 5/12/2023 $ 258,130 $0.001121 4/29/2022 5/13/2022

$ 305,382 $0.001327 7/29/2022 8/12/2022 $ 47,999 $0.000209 7/30/2021 8/13/2021

$ 657,410 $0.002856 10/28/2022 11/14/2022 $ 29,304 $0.000127 10/29/2021 11/12/2021

These distributions are not necessarily indicative of future distributions.

2 unchanged sentences

SUBSEQUENT EVENTS

On October 14, 2022, the Royalty Trust declared a cash distribution of $0.002856 per unit payable on November 14, 2022, to Royalty Trust unitholders of record on October 28, 2022.

On April 14, 2023, the Royalty Trust declared a cash distribution of $0.000857 per unit payable on May 12, 2023, to Royalty Trust unitholders of record on April 28, 2023.

For additional information, see Note 4.

The Royalty Trust evaluated all other events subsequent to September 30, 2022, 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.

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

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The information below has been furnished to the Trustee by Highlander Oil & Gas Assets LLC (HOGA).

COVID-19 Pandemic and Market Conditions Update

The COVID-19 pandemic and related economic repercussions have created significant volatility, uncertainty, and turmoil in the oil and natural gas industry.

As the global economy continues to recover from the effects of the COVID-19 pandemic, economic indicators have continued to strengthen.

However, the economy has begun to experience elevated inflation levels as a result of global supply and demand imbalances and current geopolitical events.

Inflationary pressures and labor shortages could result in increases to the Royalty Trust’s operating costs and the current increase in natural gas prices may not be sustained for any significant period of time.

Business Overview

12 unchanged sentences

In connection with the merger, on June 3, 2013, (1) FCX, as depositor, McMoRan, as grantor, the Trustee and the Delaware Trustee entered into the amended and restated royalty trust agreement to govern the Royalty Trust and the respective rights and obligations of FCX, the Trustee, the Delaware Trustee, and the Royalty Trust unitholders with respect to the Royalty Trust (the royalty trust agreement);

and (2) McMoRan, as grantor, and the Royalty Trust, as grantee, entered into the master conveyance of overriding royalty interests (the master conveyance) pursuant to which McMoRan conveyed to the Royalty Trust the overriding royalty interests in future production from the subject

Other than (a) its formation, (b) its receipt of contributions and loans from FCX for administrative and other expenses as provided for in the royalty trust agreement, (c) its payment of such administrative and other expenses, (d) its repayment of loans from FCX, (e) its receipt of the conveyance of the overriding royalty interests from McMoRan pursuant to the master conveyance, (f) its receipt of royalties from McMoRan and HOGA, and (g) its cash distributions to Royalty Trust unitholders, the Royalty Trust has not conducted any activities.

Other than (a) its formation, (b) its receipt of contributions and loans from FCX for administrative and other expenses as provided for in the royalty trust agreement, (c) its payment of such administrative and other expenses, (d) its repayment of loans from FCX, (e) its receipt of the conveyance of the overriding royalty interests from McMoRan pursuant to the master conveyance, (f) its receipt of royalties from McMoRan and HOGA, and (g) its cash distributions to Royalty Trust unitholders, if any, the Royalty Trust has not conducted any activities.

The Trustee has no involvement with, control over, or responsibility for, any aspect of any operations on or relating to the subject interests.

3 unchanged sentences

As of September 30, 2022, only the onshore Highlander subject interest had established commercial production.

As of March 31, 2023, only the onshore Highlander subject interest had established commercial production.

On February 5, 2019, McMoRan completed the sale of all of its rights, title and interest in and to the onshore Highlander subject interest pursuant to a purchase and sale agreement with HOGA (the Highlander Sale).

5 unchanged sentences

In connection with the Highlander Sale, McMoRan sold its interests in substantially all of its oil and gas leases associated with the Highlander subject interest to HOGA.

At September 30, 2022, HOGA owned interests in approximately 131 gas leases onshore in South Louisiana, covering approximately 9,000 gross acres (6,476 acres net to HOGA's interest) associated with the onshore Highlander subject interest.

McMoRan has informed the Trustee that it has no plans to pursue, has relinquished, has allowed to expire or has sold all of its subject interests.

At March 31, 2023, HOGA owned interests in approximately 131 gas leases onshore in South Louisiana, covering approximately 9,000 gross acres (6,476 acres net to HOGA's interest) 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, over which the Royalty Trust has no control.

Status of the Onshore Highlander Subject Interest

HOGA recently has informed the Trustee that the well was shut in effective March 31, 2023 and production from the well has ceased.

LIQUIDITY AND CAPITAL RESOURCES

Pursuant to the royalty trust agreement, FCX has agreed to pay annual trust expenses up to a maximum amount of $350,000, with no right of repayment or interest due, to the extent the Royalty Trust lacks sufficient funds to pay administrative expenses.

No such contributions by FCX were made during the three- and nine-month periods ended September 30, 2022 or 2021.

No such contributions by FCX were made during the three-month periods ended March 31, 2023 or 2022.

No loans were outstanding as of September 30, 2022, or December 31, 2021.

No loans were outstanding as of March 31, 2023, or December 31, 2022.

All funds the Trustee borrows to cover expenses or liabilities, whether from FCX or from any other source, must be repaid before the Royalty Trust unitholders receive any distributions.

3 unchanged sentences

The $1.0 million, plus interest collected thereon, is held in reserve fund cash.

As of September 30, 2022, the Royalty Trust had not drawn any funds from the reserve account, and FCX had not requested a reduction of such reserve account.

As of March 31, 2023, the Royalty Trust had not drawn any funds from the reserve account, and FCX had not requested a reduction of such reserve account.

In 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.

In 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 $791,065 and $1,767,784 during the three- and nine-month periods ended September 30, 2022,

respectively, and $134,631 and $586,196 during the three- and nine-month periods ended September 30, 2021, respectively.

The Royalty Trust received royalties of $386,947 and $451,030 during the three-month periods ended March 31, 2023 and 2022, respectively.

Royalties 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 September 30, 2022.

The Royalty Trust had no indebtedness outstanding as of March 31, 2023 and December 31, 2022.

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

1 unchanged sentence

Available funds will be reduced by any cash the trustee decides to hold as a reserve against future liabilities.

As of September 30, 2022, the Trustee has established a minimum cash reserve of $285,000.

As of March 31, 2023, the Trustee has established a minimum cash reserve of $302,500.

3 unchanged sentences

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.

Distributable income totaled $657,410 and $1,220,922 during the three- and nine-month periods ended September 30, 2022, respectively, and $29,304 and $109,892 during the three- and nine-month periods ended September 30, 2021, respectively.

On October 14, 2022, the Royalty Trust declared a cash distribution of $0.002856 per unit payable on November 14, 2022, to Royalty Trust unitholders of record on October 28, 2022.

These distributions are not necessarily indicative of future distributions.

Distributable income totaled $197,331 and $258,130 during the three-month periods ended March 31, 2023 and 2022, respectively.

On April 14, 2023, the Royalty Trust declared a cash distribution of $0.000857 per unit payable on May 12, 2023, to Royalty Trust unitholders of record on April 28, 2023.

These distributions are not necessarily indicative of future distributions, particularly in light of the shutting in of the sole well producing from the Highlander subject interest, as discussed above, and the cessation of production from the well, effective March 31, 2023.

HOGA currently is evaluating its options with respect to the well.

The Royalty Trust's only other sources of liquidity are mandatory annual contributions, any loans and the required standby reserve account or letter of credit from FCX.

5 unchanged sentences

Royalty Income.

In accordance with the terms of the master conveyance, during the three-month period ended September 30, 2022, the Royalty Trust received royalties of $791,065 related to 104,953 thousand cubic feet (Mcf) of natural gas production with average post-production costs of $0.43 per Mcf and an average sales price of $7.97 per Mcf.

During the three-month period ended September 30, 2021, the Royalty Trust received royalties of $134,631 related to 52,667 Mcf of natural gas production attributable to the onshore Highlander subject interest with average post-production costs of $0.45 per Mcf and an average sales price of $3.01 per Mcf.

During the nine-month period ended September 30, 2022, the Royalty Trust received royalties of $1,767,784 related to 327,580 Mcf of natural gas production attributable to the onshore Highlander subject interest with average post-production costs of $0.41 per Mcf and an average sales price of $5.80 per Mcf.

During the nine-month period ended September 30, 2021, the Royalty Trust received royalties of $586,196 related to 240,857 Mcf of natural gas production attributable to the onshore Highlander subject interest with average post-production costs of $0.42 per Mcf and an average sales price of $2.85 per Mcf.

Royalty income was higher during the three- and nine-month periods ended September 30, 2022, as compared to the corresponding 2021 periods, primarily due to higher natural gas prices and higher production.

In accordance with the terms of the master conveyance, during the three-month period ended March 31, 2023, the Royalty Trust received royalties of $386,947 related to 87,121 thousand cubic feet (Mcf) of natural gas production with average post-production costs of $0.54 per Mcf and an average sales price of $4.98 per Mcf.

During the three-month period ended March 31, 2022, the Royalty Trust received royalties of $451,030 related to 115,517 Mcf of natural gas production attributable to the onshore Highlander subject interest with average post-production costs of $0.40 per Mcf and an average sales price of $4.30 per Mcf.

Royalty income was lower during the three-month period ended March 31, 2023, as compared to the corresponding 2022 period, primarily due to lower production, partially offset by higher natural gas prices.

Administrative Expenses.

Administrative expenses consist primarily of audit, legal and trustee expenses incurred in connection with the administration of the Royalty Trust.

During the three-month periods ended September 30, 2022 and 2021, the Royalty Trust paid administrative expenses of $127,201 and $105,335, respectively.

Administrative

expenses were higher for the three-month period ended September 30, 2022, as compared to the corresponding 2021 period, primarily due to inflation and the timing of payments for professional services.

During the nine-month periods ended September 30, 2022 and 2021, the Royalty Trust paid administrative expenses of $523,291 and $476,328, respectively.

Administrative expenses were higher for the nine-month period ended September 30, 2022, as compared to the corresponding 2021 period, primarily due to inflation and the timing of payments for professional services.

During the three-month periods ended March 31, 2023 and

2022, the Royalty Trust paid administrative expenses of $189,676 and $184,167, respectively.

Administrative expenses were higher for the three-month period ended March 31, 2023, as compared to the corresponding 2022 period, primarily due to the timing of payments for professional services.

NEW ACCOUNTING STANDARDS

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This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act).

Forward-looking statements are all statements other than statements of historical facts, such as any statements regarding the future financial condition of the Royalty Trust or the trading market for the royalty trust units, all statements regarding the respective plans of McMoRan or HOGA for the subject interests, the potential results of any drilling on the subject interests by the applicable operator, anticipated interests of McMoRan or HOGA and the Royalty Trust in any of the subject interests, HOGA's geologic models and the nature of the geologic trend onshore in South Louisiana discussed in this Form 10-Q, the amount and date of quarterly distributions to Royalty Trust unitholders, and all statements regarding any belief or understanding of the nature or potential of the subject interests.

Forward-looking statements are all statements other than statements of historical facts, such as any statements regarding the future financial condition of the Royalty Trust or the trading market for the royalty trust units, all statements regarding the respective plans of McMoRan or HOGA for the subject interests, the potential results of any drilling on the subject interests by the applicable operator, anticipated interests of McMoRan or HOGA and the Royalty Trust in any of the subject interests, HOGA's geologic models and the nature of the geologic trend onshore in South Louisiana discussed in this Form 10-Q, the amount and date of quarterly distributions to Royalty Trust unitholders, expectations regarding the repair or redrill of the well on the Highlander subject interest, the drilling of another well on the Highlander subject interest, and statements regarding the Trust’s future income from the overriding royalty interests and future distributions to Trust unitholders and all statements regarding any belief or understanding of the nature or potential of the subject interests.

The words “anticipates,” “may,” “can,” “plans,” “believes,” “estimates,” “expects,” “projects,” “intends,” “likely,” “will,” “should,” “to be,” “potential,” and any similar expressions and/or statements that are not historical facts are intended to identify those assertions as forward-looking statements.

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the amount of cash received or expected to be received by the Trustee from the underlying subject interests on or prior to a record date for a quarterly cash distributions;

the economic effects of the COVID-19 pandemic and federal, state and local governmental actions in response to the pandemic;

the cost and timing of repairs or redrilling of the damaged well on the Highlander subject interest;

and other factors described in Part I, Item 1A.

6 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