What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2021-09-24 compared with 2020-09-28 · 92 added, 120 removed, 81 unchanged (72% of the section changed)

23 unchanged sentences

Hooper, Simmons Bank, 2911 Turtle Creek Blvd., Suite 850, Dallas, Texas, 75219.

SELECTED FINANCIAL DATA

The following table summarizes selected financial information that has been derived from Marines audited consolidated financial

You should read the information set forth below in conjunction with Item 7.

Trustees Discussion and Analysis of Financial Condition and Results of Operations and the consolidated financial statements and notes

thereto included elsewhere in this Annual Report on Form 10-K.

Fiscal Year Ended June 30,

(Dollars in thousands, except per unit amounts)

Consolidated Statements of Distributable Income Selected Data:

Oil and natural gas royalties

Oil and natural gas royalties from affiliate

Interest and other income

General and administrative

Federal income taxes of subsidiary

Distributable income

Distributions to unitholders

Distributable income per unit

Distributions per unit

Consolidated Statements of Assets, Liabilities and Trust Corpus Selected Data:

TRUSTEES DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Critical Accounting Policies .

The financial statements of Marine have been prepared on the modified cash basis

method and are not intended to present Marines financial position and results of operations in conformity with GAAP.

The financial statements of Marine have been prepared on the modified cash

basis method and are not intended to present Marines financial position and results of operations in conformity with GAAP.

Under the modified cash basis method:

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Depletion is not recorded.

This comprehensive basis of accounting corresponds to the accounting principles permitted for royalty trusts by the SEC as specified by Staff

Accounting Bulletin Topic 12:E, Financial Statements of Royalty Trusts.

The preparation of financial statements in conformity with the

modified cash basis method of accounting requires the Trustee to make various estimates and assumptions that affect the reported amount of liabilities at the date of the financial statements and the reported amount of expenses during the reporting

This comprehensive basis of accounting corresponds to the accounting principles permitted

for royalty trusts by the SEC as specified by Staff Accounting Bulletin Topic 12:E, Financial Statements of Royalty Trusts.

preparation of financial statements in conformity with the modified cash basis method of accounting requires the Trustee to make various estimates and assumptions that affect the reported amount of liabilities at the date of the financial statements

and the reported amount of expenses during the reporting period.

Actual results may differ from such estimates.

Revenue Recognition .

In May 2014, the FASB issued updated guidance for

recognizing revenue from contracts with customers.

This update amends the existing accounting standards for revenue recognition and is based on the principle that revenue should be recognized to depict the transfer of goods and services to a

customer at an amount that reflects the consideration a company expects to receive in exchange for those goods or services and revenue streams related solely to oil and gas royalties.

The Trust adopted the disclosure standards of this update, as

required, beginning with the first quarter of fiscal year 2019.

The adoption of this standard has not had a significant impact on its financial statements due to the modified cash basis of reporting used by the Trust.

Effective October 19, 2017, Simmons First National Corporation (SFNC) completed its acquisition of First Texas BHC, Inc., the

parent company of Southwest Bank.

Recognition .

In May 2014, the FASB issued updated guidance for recognizing revenue from contracts with customers.

This update amends the existing accounting standards for revenue recognition and is based on the principle that revenue should be

recognized to depict the transfer of goods and services to a customer at an amount that reflects the consideration a company expects to receive in exchange for those goods or services and revenue streams related solely to oil and gas royalties.

Trust adopted the disclosure standards of this update, as required, beginning with the first quarter of fiscal year 2019.

The adoption of this standard has not had a significant impact on its financial statements due to the modified cash basis of

reporting used by the Trust.

Effective October 19, 2017, Simmons First National Corporation (SFNC) completed its

acquisition of First Texas BHC, Inc., the parent company of Southwest Bank.

SFNC is the parent of Simmons Bank.

SFNC merged Southwest Bank, the former corporate Trustee of the Trust, with Simmons Bank effective February 20, 2018.

The defined term Trustee as used herein

shall refer to Southwest Bank for periods through February 19, 2018 and to Simmons Bank for periods on and after February 20, 2018.

term Trustee as used herein shall refer to Southwest Bank for periods through February 19, 2018 and to Simmons Bank for periods on and after February 20, 2018.

Results of Operations.

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oil and natural gas sold without reduction for any of the expenses of production.

Value at the

well for oil means the sellers selling price at its receiving point onshore, less the cost of transportation from the offshore lease to the onshore receiving point.

Value at the

well for natural gas means the selling price less the cost of compression, dehydration and transportation from the lease to the delivery point of the pipeline transporting the product to market.

In general, value at the well is determined on

the basis of the selling price of oil, natural gas and other minerals produced, saved and sold, or at wellhead prices determined by industry standards, where the selling price does not reflect value at the well.

In the event an agreement is not

arms-length in nature, the value is based upon current market prices.

Value at the well for oil means the sellers selling price at its receiving point onshore, less the cost of transportation from the offshore lease to

the onshore receiving point.

Value at the well for natural gas means the selling price less the cost of compression, dehydration and transportation from the lease to the delivery point of the pipeline transporting the product to market.

In general, value at the well is determined on the basis of the selling price of oil, natural gas and other minerals produced, saved and sold, or at wellhead prices determined by industry standards, where the selling price does not reflect value at

In the event an agreement is not arms-length in nature, the value is based upon current market prices.

Summary Review.

In general, Marine receives royalties two

months after oil production and three months after natural gas production.

In general, Marine receives royalties two months after oil production and three months after natural gas production.

The June 2021 distribution of $0.03 per unit increased from the March 2021 distribution of $0.02 per unit.

As disclosed in a press release dated August 21, 2020, the

September 2020 distribution of $0.04 per unit will be a decrease from the June 2020 distribution of $0.10 per unit.

distributable income for fiscal 2020 amounted to $574,110, or $0.29 per unit, as compared to $634,072 or $0.32 per unit, in fiscal 2019, and $661,919, or $0.33 per unit, in fiscal 2018.

Distributions to unitholders are calculated and paid out net of

reserve for future expenses, which are estimated by the Trustee on a quarterly basis.

These results also include income from the

Trusts interest in Tidelands, which amounted to $0 for fiscal 2020, $0 for fiscal 2019 and $56 for fiscal 2018.

Income from Tidelands contributed approximately 0% of Marines royalty income for fiscal 2020 and fiscal 2019, as compared to

0.01% of Marines royalty income in fiscal 2018.

The following table shows the number of wells drilled or recompleted on leases in

which Marine has an interest (including its interest in Tidelands) and the number of active wells at the end of each of the past three fiscal years.

As disclosed in a press

release dated August 20, 2021, the September 2021 distribution of $0.06 per unit will be an increase from the June 2021 distribution of $0.03 per unit.

Marines distributable income for fiscal 2021 amounted to $161,580, or $0.08 per unit, as compared to $574,110 or $0.29 per unit, in

fiscal 2020, and $634,072, or $0.32 per unit, in fiscal 2019.

Distributions to unitholders are calculated and paid out net of reserve for future expenses, which are estimated by the Trustee on a quarterly basis.

There was no income from the Trusts interest in Tidelands for fiscal 2021, 2020 and 2019.

The following table shows the number of wells drilled or recompleted on leases in which

Marine has an interest and the number of active wells at the end of each of the past three fiscal years.

Fiscal Year Ended June 30,

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The following table and related discussion and analysis shows the royalty income, the net quantities sold, and

the average price received for oil and natural gas during fiscal 2020, 2019 and 2018, excluding the Trusts interest in Tidelands.

the average price received for oil and natural gas during fiscal 2021, 2020 and 2019.

Fiscal Year Ended June 30,

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During fiscal 2021, Marine received approximately 94% of

its royalty income from the sale of oil and 11% of its royalty income from the sale of natural gas, as compared to approximately 91% of its royalty income from the sale of oil and 9% of its royalty income from the sale of natural gas

in fiscal year 2019.

Income from oil and natural gas royalties in fiscal 2020 decreased approximately 8% from fiscal 2019, primarily due to a decrease in prices realized for oil and natural gas,

offset in part by an increase in production of oil and natural gas.

Revenue from oil royalties amounted to $691,915 in fiscal 2020, a

decrease from the $761,232 realized in fiscal 2019.

its royalty income from the sale of oil and 6% of its royalty income from the sale of natural gas, as compared to approximately 89% of its royalty income from the sale of oil and 11% of its royalty income from the sale of natural gas in fiscal year

Income from oil and natural gas royalties in fiscal 2021 decreased approximately 50% from fiscal 2020, primarily due to a decrease in prices realized for oil in addition to a decrease in production of oil and natural gas resulting from a

shutdown of production.

Revenue from oil royalties amounted to $362,751 in fiscal 2021, a decrease from the $691,915 realized in

The average price realized for a barrel of oil decreased to $39.93 in fiscal 2021 from the $54.79 realized in fiscal 2020.

In fiscal 2020, oil production increased to 12,628 bbls from the

11,382 bbls produced in fiscal 2019.

Revenue from natural gas royalties amounted to $81,913 in fiscal 2020, an increase from the $77,881

realized in fiscal 2019.

In fiscal 2020, the average price per mcf of natural gas decreased to $2.44 from the $3.52 realized in fiscal 2019.

In fiscal 2020, natural gas production increased to 33,639 mcf from the 22,147 mcf produced in fiscal 2019.

General and administrative expenses for fiscal 2020 amounted to $214,075, a decrease from the $226,471 recorded in fiscal 2019,

due to a decrease in professional fees, transfer agent fees and printing expenses.

In fiscal 2021, oil production decreased to 9,085 bbls from the 12,628 bbls produced in fiscal 2020.

Revenue from natural gas royalties amounted to $23,905 in fiscal 2021, a decrease from the $81,913 realized in fiscal 2020.

In fiscal 2021,

the average price per mcf of natural gas increased to $2.80 from the $2.44 realized in fiscal 2020.

In fiscal 2021, natural gas production decreased to 8,539 mcf from the 33,639 mcf produced in fiscal 2020.

General and administrative expenses for fiscal 2021 amounted to $225,237, an increase from the $214,075 recorded in fiscal 2020, due to

an increase in professional fees, transfer agent fees and printing expenses.

Fiscal Year 2020 Compared to Fiscal Year 2019 .

During fiscal 2019, Marine received approximately 91% of its royalty income from the sale of oil and 9% of its royalty income from the sale of natural gas, as compared to approximately 93% of its royalty income from the sale of oil and 7% of its

royalty income from the sale of natural gas in fiscal 2018.

Income from oil and natural gas royalties in fiscal 2019 decreased approximately 3% from fiscal 2018, primarily due to a decrease in production of oil and offset in part by an increase in

prices realized for oil and natural gas and the production of natural gas.

Revenue from oil royalties amounted to $761,232 in fiscal

2019, a decrease from the $798,650 realized in fiscal 2018.

The average price realized for a barrel of oil increased to $66.85 in fiscal 2019 from the $50.76 realized in fiscal 2018.

In fiscal 2019, oil production decreased to 11,382 bbls from the

15,138 bbls produced in fiscal 2018.

fiscal 2020, Marine received approximately 89% of its royalty income from the sale of oil and 11% of its royalty income from the sale of natural gas, as compared to approximately 91% of its royalty income from the sale of oil and 9% of its royalty

income from the sale of natural gas in fiscal year 2019.

Income from oil and natural gas royalties in fiscal 2020 decreased approximately 8% from fiscal 2019, primarily due to a decrease in prices realized for oil and natural gas, offset in part by

an increase in production of oil and natural gas.

Revenue from oil royalties amounted to $691,915 in fiscal 2020, a decrease from the

$761,232 realized in fiscal 2019.

The average price realized for a barrel of oil decreased to $54.79 in fiscal 2020 from the $66.85 realized in fiscal 2019.

In fiscal 2020, oil production increased to 12,628 bbls from the 11,382 bbls produced

in fiscal 2019.

Revenue from natural gas royalties amounted to $81,913 in fiscal 2020, an increase from the

$77,881 realized in fiscal 2019.

In fiscal 2019, the average price per mcf of natural gas increased to $3.52 from the $3.10 realized in fiscal 2018.

In fiscal 2019, natural gas production increased to 22,147 mcf from the 20,664 mcf produced in fiscal 2018.

General and administrative expenses for fiscal 2019 amounted to $226,471, an increase from the $210,723 recorded in fiscal 2018, due to

an increase in professional fees and printing expenses.

In fiscal 2020, the average price per mcf of natural gas decreased to $2.44 from the $3.52 realized in fiscal 2019.

In fiscal 2020, natural gas production increased to 33,639 mcf from the 22,147 mcf produced in

General and administrative expenses for fiscal 2020 amounted to $214,075, a decrease from the $226,471 recorded in

fiscal 2019, due to a decrease in professional fees, transfer agent fees and printing expenses.

Capital Resources and Liquidity .

The Trusts Indenture (and the

charter and by-laws of MPC) expressly prohibits the operation of any kind of trade or business.

Due to the limited purpose of the Trust as stated in the Trusts Indenture, there is no requirement for

The Trusts Indenture (and the charter and by-laws of MPC) expressly prohibits the operation of any kind of trade or business.

Due to the limited purpose of the Trust as stated in the Trusts

Indenture, there is no requirement for capital.

Its only obligation is to distribute to unitholders the distributable income actually collected.

As an administrator of oil and

natural gas royalty properties, the Trust collects income monthly, pays expenses of administration and disburses all distributable income collected to its unitholders each quarter, less an amount reserved for accrued liabilities and estimated future

Because all of Marines revenues are invested in liquid funds pending distribution, Marine does not experience liquidity problems.

Marines oil and natural gas properties are depleting assets and are not being replaced due to the prohibition against these investments.

As an administrator of oil and natural gas royalty properties, the Trust collects income monthly, pays expenses of administration and

disburses all distributable income collected to its unitholders each quarter, less an amount reserved for accrued liabilities and estimated future expenses.

Because all of Marines revenues are invested in liquid funds pending distribution,

Marine does not experience liquidity problems.

Marines oil and natural gas properties are depleting assets and are not being

replaced due to the prohibition against these investments.

These restrictions, along with other factors, allow the Trust to be treated as a non-taxable grantor trust for U.S.

Federal income tax purposes.

Accordingly, all of Marines income and deductions should

flow through to its unitholders on a proportionate basis.

Accordingly, all of Marines income and deductions should flow through to its unitholders on a proportionate basis.

MPC will owe U.S.

Federal (and state) income taxes with respect to its income after deducting statutory depletion.

MPCs income specifically excludes 98% of oil and natural gas

royalties collected by MPC, which are retained by and delivered to the Trust in respect of the Trusts net profits interest.

Trust does not currently have any long term contractual obligations, other than the obligation to make distributions to unitholders pursuant to the Indenture.

The Trust does not maintain any off-balance sheet

arrangements within the meaning of Item 303 of Regulation S-K.

Federal (and state) income taxes with respect to its income after deducting statutory

MPCs income specifically excludes 98% of oil and natural gas royalties collected by MPC, which are retained by and delivered to the Trust in respect of the Trusts net profits interest.

The Trust does not currently have any long-term contractual obligations, other than the obligation to make distributions to unitholders

pursuant to the Indenture.

The Trust does not maintain any off-balance sheet arrangements within the meaning of Item 303 of Regulation S-K.

Forward-Looking Statements .

The statements discussed in this Annual Report on

Form 10-K regarding Marines future financial performance and results of operations, and other statements that are not historical facts, are forward-looking statements as defined in 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).

Marine uses the words may, expect, anticipate, estimate,

believe, continue, intend, plan, budget, or other similar words to identify forward-looking statements.

The statements discussed in this Annual Report on Form 10-K

regarding Marines future financial performance and results of operations, and other statements that are not historical facts, are forward-looking statements as defined in 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).

Marine uses the words may, expect, anticipate, estimate, believe, continue,

intend, plan, budget, or other similar words to identify forward-looking statements.

All forward-looking statements speak only as of the date on which they are made.

should read statements that contain these words carefully because they discuss future expectations, contain projections of Marines financial condition, and/or state other forward-looking information.

Actual results may differ from

expected results because of factors, risks and uncertainties including, but not limited to, the following:

reductions in prices or demand for oil and natural gas, due to, for example, the COVID-19 pandemic or

the oversupply of crude oil driven by a dispute between members of OPEC and Russia, which might then lead to decreased production or impair Marines ability to make distributions;

reductions in production due to the depletion of existing wells

or disruptions in service, which may be caused by storm damage to production facilities, blowouts or other production accidents, or geological changes such as cratering of productive formations;

You should read statements that contain these

words carefully because they discuss future expectations, contain projections of Marines financial condition, and/or state other forward-looking information.

Actual results may differ from expected results because of factors, risks

and uncertainties including, but not limited to, the following:

reductions in prices or demand for oil and natural gas, due to, for example, the COVID-19 pandemic, which might then lead to decreased production

or impair Marines ability to make distributions;

reductions in production due to the depletion of existing wells or disruptions in service, which may be caused by storm damage to production facilities, blowouts or other production accidents,

or geological changes such as cratering of productive formations;

changes in regulations;

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other changes in domestic and international energy markets;

the resignation of the Trustee;

the resignation

of the Trustee;

and the expiration, termination or release of leases subject to Marines interests.

occur in the future that Marine is unable to accurately predict, or over which it has no control.

If one or more of these uncertainties as well as other risks of which we are not aware materialize, or if underlying assumptions prove incorrect,

actual outcomes may vary materially from those contained in the forward-looking statements included in this Annual Report on Form 10-K.

Marine has an Internet website and has made available its Annual Reports on Form

10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to such reports, filed or furnished pursuant to

Section 13(a) or 15(d) of the Exchange Act, at www.marps-marine.com.

Each of these reports will be posted on this website as soon as reasonably practicable after such report is electronically filed with or furnished to the SEC.

Events may occur in the future that Marine is unable to accurately predict, or over which it has no control.

If one or more of these

uncertainties as well as other risks of which we are not aware materialize, or if underlying assumptions prove incorrect, actual outcomes may vary materially from those contained in the forward-looking statements included in this Annual Report on

Marine has an Internet website and has made available its

Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to such reports, filed

or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, at www.marps-marine.com.

Each of these reports will be posted on this website as soon as reasonably practicable after such report is electronically filed with or furnished to

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-K

Item 5. Market for Registrant’s Common Equity