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Item 1. Financial Statements

2020-05-11 compared with 2019-11-12 · 263 added, 135 removed, 47 unchanged (89% of the section changed)

Financial Statements.

CONDENSED STATEMENTS OF DISTRIBUTABLE INCOME

CONDENSED STATEMENTS OF DISTRIBUTABLE

Three months ended

September 30,

Nine months ended

September 30,

Income from net profits interest

Cash on hand used for (withheld for) Trust expenses

Cash on hand used (withheld) for Trust expenses

General and administrative expenses(1)

Distributable income

Distributions per Trust unit (11,500,000 Trust units issued and outstanding at September 30, 2019 and 2018)

(1) Includes $49,952 and $24,015 paid to MV Partners, LLC during the three months ended September 30, 2019 and 2018, respectively, and $98,944 and $72,046 during the nine months ended September 30, 2019 and 2018, respectively.

Also includes $37,500 paid to The Bank of New York Mellon Trust Company, N.A.

during each of the three-month periods ended September 30, 2019 and 2018 and $112,500 during each of the nine-month periods ended September 30, 2019 and 2018.

CONDENSED STATEMENTS OF ASSETS AND TRUST CORPUS

September 30,

Distributions per Trust unit (11,500,000 Trust units issued and outstanding at March 31, 2020 and 2019)

(1) Includes $25,975 and $48,992 paid to MV Partners, LLC during the three months ended March 31, 2020 and 2019, respectively,

and $37,500 paid to The Bank of New York Mellon Trust Company, N.A.

during each of the three-month periods ended March 31,

2020 and 2019.

CONDENSED STATEMENTS OF ASSETS AND TRUST

Cash and cash equivalents

1 unchanged sentence

Accumulated amortization

Trust corpus, 11,500,000 Trust units issued and outstanding at September 30, 2019 and December 31, 2018

CONDENSED STATEMENTS OF CHANGES IN TRUST CORPUS

(38,655,209 )

(38,097,825 )

Trust corpus, 11,500,000 Trust units issued and outstanding at March 31, 2020 and December 31, 2019

CONDENSED STATEMENTS OF CHANGES IN TRUST

Three months ended

September 30,

Nine months ended

September 30,

Trust corpus, beginning of period

4 unchanged sentences

Trust corpus, end of period

The accompanying notes are an integral part of these condensed financial statements.

The accompanying notes are an integral part

of these condensed financial statements.

NOTES TO CONDENSED FINANCIAL STATEMENTS

Note 1—Organization of the Trust

MV Oil Trust (the Trust) is a statutory trust formed on August 3, 2006, under the Delaware Statutory Trust Act pursuant to a Trust Agreement (the Trust Agreement) among MV Partners, LLC, a Kansas limited liability company (MV Partners), as trustor, The Bank of New York Mellon Trust Company, N.A., as Trustee (the Trustee), and Wilmington Trust Company, as Delaware Trustee (the Delaware Trustee).

The Trust was created to acquire and hold a term net profits interest for the benefit of the Trust unitholders pursuant to a conveyance from MV Partners to the Trust.

The term net profits interest represents the right to receive 80% of the net proceeds (calculated as described below in Note 5) from production from the underlying properties (as defined below) (the net profits interest).

The net profits interest consists of MV Partners net interests in all of its oil and natural gas properties located in the Mid-Continent region in the states of Kansas and Colorado (the underlying properties).

The underlying properties include approximately 900 producing oil and gas wells.

The net profits interest is passive in nature, and the Trustee has no management control over and no responsibility relating to the operation of the underlying properties.

The net profits interest entitles the Trust to receive 80% of the net proceeds attributable to MV Partners interest from the sale of production from the underlying properties during the term of the Trust.

The net profits interest will terminate on the later to occur of (1) June 30, 2026 or (2) the time when 14.4 million barrels of oil equivalent (MMBoe) have been produced from the underlying properties and sold (which amount is the equivalent of 11.5 MMBoe with respect to the Trusts net profits interest), and the Trust will soon thereafter wind up its affairs and terminate.

The Trustee can authorize the Trust to borrow money to pay administrative or incidental expenses of the Trust that exceed cash held by the Trust.

The Trustee may authorize the Trust to borrow from the Trustee or the Delaware Trustee as a lender provided the terms of the loan are similar to the terms it would grant to a similarly situated commercial customer with whom it did not have a fiduciary relationship.

The Trustee may also deposit funds awaiting distribution in an account with itself and make other short-term investments with the funds distributed to the Trust.

MV Oil Trust (the “Trust”) is

a statutory trust formed on August 3, 2006, under the Delaware Statutory Trust Act pursuant to a Trust Agreement (the “Trust

Agreement”) among MV Partners, LLC, a Kansas limited liability company (“MV Partners”), as trustor, The Bank

of New York Mellon Trust Company, N.A., as Trustee (the “Trustee”), and Wilmington Trust Company, as Delaware Trustee

(the “Delaware Trustee”).

The Trust was created to acquire and hold

a term net profits interest for the benefit of the Trust unitholders pursuant to a conveyance from MV Partners to the Trust.

term net profits interest represents the right to receive 80% of the net proceeds (calculated as described below in Note 5) from

production from the underlying properties (as defined below) (the “net profits interest”).

The net profits interest

consists of MV Partners’ net interests in all of its oil and natural gas properties located in the Mid-Continent region in

the states of Kansas and Colorado (the “underlying properties”).

The underlying properties include approximately 900

producing oil and gas wells.

The net profits interest is passive in nature,

and the Trustee has no management control over and no responsibility relating to the operation of the underlying properties.

net profits interest entitles the Trust to receive 80% of the net proceeds attributable to MV Partners’ interest from the

sale of production from the underlying properties during the term of the Trust.

The net profits interest will terminate on the

later to occur of (1) June 30, 2026 or (2) the time when 14.4 million barrels of oil equivalent (“MMBoe”)

have been produced from the underlying properties and sold (which amount is the equivalent of 11.5 MMBoe with respect to the Trust’s

net profits interest), and the Trust will soon thereafter wind up its affairs and terminate.

The Trustee can authorize the Trust to borrow

money to pay administrative or incidental expenses of the Trust that exceed cash held by the Trust.

The Trustee may authorize the

Trust to borrow from the Trustee or the Delaware Trustee as a lender provided the terms of the loan are similar to the terms it

would grant to a similarly situated commercial customer with whom it did not have a fiduciary relationship.

The Trustee may also

deposit funds awaiting distribution in an account with itself and make other short-term investments with the funds distributed

to the Trust.

Note 2—Basis of Presentation

The accompanying Condensed Statement of Assets and Trust Corpus as of December 31, 2018, which has been derived from audited financial statements, and the unaudited interim condensed financial statements as of September 30, 2019 and for the three- and nine-month periods ended September 30, 2019 and September 30, 2018, have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the SEC).

Accordingly, certain information and note disclosures normally included in annual financial statements have been condensed or omitted pursuant to those rules and regulations.

The preparation of financial statements requires the Trust to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period.

The accompanying Condensed Statement of

Assets and Trust Corpus as of December 31, 2019, which has been derived from audited financial statements, and the unaudited

interim condensed financial statements as of March 31, 2020 and for the three months ended March 31, 2020 and March 31,

2019, have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”).

Accordingly, certain information and note disclosures normally included in annual financial statements have been condensed or omitted

pursuant to those rules and regulations.

The preparation of financial statements

requires the Trust to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure

of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during

the reporting period.

Actual results could differ from those estimates.

The Trustee believes such information includes all the disclosures necessary to make the information presented not misleading.

The information furnished reflects all adjustments that are, in the opinion of the Trustee, necessary for a fair presentation of the results of the interim period presented.

The financial information should be read in conjunction with the financial statements and notes thereto included in the Trusts Annual Report on Form 10-K for the year ended December 31, 2018.

The Trustee believes such information includes all the

disclosures necessary to make the information presented not misleading.

The information furnished reflects all adjustments that

are, in the opinion of the Trustee, necessary for a fair presentation of the results of the interim period presented.

The financial

information should be read in conjunction with the financial statements and notes thereto included in the Trust’s Annual

Report on Form 10-K for the year ended December 31, 2019.

Note 3—Trust Accounting Policies

The Trust uses the modified cash basis of accounting to report receipts of the net profits interest and payments of expenses incurred.

The net profits interest represents the right to receive revenues (oil, gas and natural gas liquid sales) less direct operating expenses (lease operating expenses, lease maintenance, lease overhead, and production and property taxes) and an adjustment for lease equipment costs and lease development expenses (which are capitalized in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (U.S.

The Trust uses the modified cash basis of

accounting to report receipts of the net profits interest and payments of expenses incurred.

The net profits interest represents

the right to receive revenues (oil, gas and natural gas liquid sales) less direct operating expenses (lease operating expenses,

lease maintenance, lease overhead, and production and property taxes) and an adjustment for lease equipment costs and lease development

expenses (which are capitalized in financial statements prepared in accordance with accounting principles generally accepted in

the United States of America (“U.S.

GAAP”)) of the underlying properties times 80%.

Actual cash receipts may vary due to timing delays of actual cash receipts from the property operators or purchasers and due to wellhead and pipeline volume balancing agreements or practices.

The actual cash distributions of the Trust will be made based on the terms of the conveyance that created the Trusts net profits interest.

Expenses of the Trust, which include accounting, engineering, legal and other professional fees, Trustee fees, an administrative fee paid to MV Partners and out-of-pocket expenses, are recognized when paid.

Actual cash receipts may vary due

to timing delays of actual cash receipts from the property operators or purchasers and due to wellhead and pipeline volume balancing

agreements or practices.

The actual cash distributions of the Trust will be made based on the terms of the conveyance that created

the Trust’s net profits interest.

Expenses of the Trust, which include accounting, engineering, legal and other professional

fees, Trustee fees, an administrative fee paid to MV Partners and out-of-pocket expenses, are recognized when paid.

GAAP, revenues and expenses would be recognized on an accrual basis.

Amortization of the investment in net profits interest is recorded on a unit-of-production method in the period in which the cash is received with respect to such production.

Such amortization does not reduce distributable income, rather it is charged directly to Trust Corpus.

Amortization of the investment in net profits interest is

recorded on a unit-of-production method in the period in which the cash is received with respect to such production.

Such amortization

does not reduce distributable income, rather it is charged directly to Trust Corpus.

This comprehensive basis of accounting other than U.S.

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

Investment in the net profits interest was recorded initially at the historical cost of MV Partners and is periodically assessed to determine whether its aggregate value has been impaired below its total capitalized cost based on the underlying properties.

The Trust will provide a write-down to its investment in the net profits interest if and when total capitalized costs, less accumulated amortization, exceed undiscounted future net revenues attributable to the proved oil and gas reserves of the underlying properties.

No new accounting pronouncements have been adopted or issued during the quarter ended September 30, 2019 that would impact the financial statements of the Trust.

corresponds to the accounting permitted for royalty trusts by the SEC as specified by Staff Accounting Bulletin Topic 12:E, Financial

Statements of Royalty Trusts.

Investment in the net profits interest was

recorded initially at the historical cost of MV Partners and is periodically assessed to determine whether its aggregate value

has been impaired below its total capitalized cost based on the underlying properties.

The Trust will provide a write-down to its

investment in the net profits interest if and when total capitalized costs, less accumulated amortization, exceed undiscounted

future net revenues attributable to the proved oil and gas reserves of the underlying properties.

No new accounting pronouncements have been

adopted or issued during the quarter ended March 31, 2020 that would impact the financial statements of the Trust.

Note 4—Investment in Net Profits Interest

The net profits interest was recorded at the historical cost of MV Partners on January 24, 2007, the date of conveyance of the net profits interest to the Trust, and was calculated as follows:

The net profits interest was recorded at

the historical cost of MV Partners on January 24, 2007, the date of conveyance of the net profits interest to the Trust, and

was calculated as follows:

Oil and gas properties

Accumulated depreciation and depletion

(40,468,762 )

Net property value to be conveyed

2 unchanged sentences

Three months ended

September 30,

Nine months ended

September 30,

Excess of revenues over direct operating expenses and lease equipment and development costs(1)

3 unchanged sentences

Income from net profits interest(3)

(1) Excess of revenues over direct operating expenses and lease equipment and development costs reflect expenses and costs incurred by MV Partners during the March through May production periods for the three months ended September 30, 2019 and 2018, respectively, and during each of the September through May production periods for the nine months ended September 30, 2019 and 2018, respectively.

Pursuant to the terms of the conveyance of the net profits interest, lease equipment and development costs are to be deducted when calculating the distributable income to the Trust.

(2) Pursuant to the terms of the conveyance of the net profits interest, MV Partners can reserve up to $1.0 million for future capital expenditures at any time.

During the three and nine months ended September 30, 2019, MV Partners did not withhold or release any dollar amounts due to the Trust.

During the three and nine months ended September 30, 2018, MV Partners did not withhold or release any dollar amounts due to the Trust.

The reserve balance was $1,000,000 at September 30, 2019 and 2018.

(1) Excess of revenues over direct operating expenses and lease equipment and development costs reflect expenses and costs incurred

by MV Partners during the September through November production period.

Pursuant to the terms of the conveyance of the

net profits interest, lease equipment and development costs are to be deducted when calculating the distributable income to the

(2) Pursuant to the terms of the conveyance of the net profits interest, MV Partners can reserve up to $1.0 million for future

capital expenditures at any time.

During the three months ended March 31, 2020 and March 31, 2019, MV Partners did not

withhold or release any dollar amounts due to the Trust.

The reserve balance was $1,000,000 at March 31, 2020 and 2019.

(3) The income from net profits interest is based upon the cash receipts from MV Partners for the oil and gas production.

The revenues from oil production are typically received by MV Partners one month after production;

thus, the cash received by the Trust during the three months ended September 30, 2019 substantially represents the production by MV Partners from March 2019 through May 2019 and the cash received by the Trust during the three months ended September 30, 2018 substantially represents the production by MV Partners from March 2018 through May 2018.

The cash received by the Trust during the nine months ended September 30, 2019 substantially represents the production by MV Partners from September 2018 through May 2019 and the cash received by the Trust during the nine months ended September 30, 2018 substantially represents the production by MV Partners from September 2017 through May 2018.

For the three and nine months ended September 30, 2019 and 2018, MV Purchasing, LLC, which is majority-owned by the indirect equity owners of MV Partners, purchased a majority of the production from the underlying properties.

Sales to MV Purchasing, LLC are under short-term arrangements, ranging from one to six months, using market-sensitive pricing.

from oil production are typically received by MV Partners one month after production;

thus, the cash received by the Trust during

the three months ended March 31, 2020 substantially represents the production by MV Partners from September 2019 through

November 2019, and the cash received by the Trust during the three months ended March 31, 2019 substantially represents

the production by MV Partners from September 2018 through November 2018.

For the three months ended March 31,

2020 and 2019, MV Purchasing, LLC, which is majority-owned by the indirect equity owners of MV Partners, purchased a majority of

the production from the underlying properties.

Sales to MV Purchasing, LLC are under short-term arrangements, ranging from one

to six months, using market-sensitive pricing.

Note 6—Income Taxes

The Trust is a Delaware statutory trust and is not required to pay federal or state income taxes.

Accordingly, no provision for federal or state income taxes has been made.

The Trust is a Delaware statutory trust

and is not required to pay federal or state income taxes.

Accordingly, no provision for federal or state income taxes has been

Note 7—Distributions to Unitholders

MV Partners makes quarterly payments of the net profits interest to the Trust.

The Trustee determines for each quarter the amount available for distribution to the Trust unitholders.

This distribution is expected to be made on or before the 25th day of the month following the end of each quarter to the Trust unitholders of record on the 15th day of the month following the end of each quarter (or the next succeeding business day).

Such amounts will be equal to the excess, if any, of the cash received by the Trust relating to the preceding quarter, over the expenses of the Trust paid during such quarter, subject to adjustments for changes made by the Trustee during such quarter in any cash reserves established for future expenses of the Trust.

The first quarterly distribution during 2019 was $3,622,500, or $0.315 per Trust unit, and was made on January 25, 2019 to Trust unitholders owning Trust units as of January 15, 2019.

Such distribution included the net proceeds attributable to the sale of production received by MV Partners from October 1, 2018 through December 31, 2018.

The second quarterly distribution during 2019 was $2,472,500, or $0.215 per Trust unit, and was made on April 25, 2019 to Trust unitholders owning Trust units as of April 15, 2019.

Such distribution included the net proceeds attributable to the sale of production received by MV Partners from January 1, 2019 through March 31, 2019.

The third quarterly distribution during 2019 was $3,507,500, or $0.305 per Trust unit, and was made on July 25, 2019 to Trust unitholders owning Trust units as of July 15, 2019.

Such distribution included the net proceeds of production collected by MV Partners from April 1, 2019 through June 30, 2019.

The first quarterly distribution during 2018 was $2,530,000, or $0.22 per Trust unit, and was made on January 25, 2018 to Trust unitholders owning Trust units as of January 15, 2018.

Such distribution included the net proceeds attributable to the sale of production received by MV Partners from October 1, 2017 through December 31, 2017.

The second quarterly distribution during 2018 was $4,197,500, or $0.365 per Trust unit, and was made on April 25, 2018 to Trust unitholders owning Trust units as of April 16, 2018.

Such distribution included the net proceeds attributable to the sale of production received by MV Partners from January 1, 2018 through March 31, 2018.

The third quarterly distribution during 2018 was $4,830,000, or $0.420 per Trust unit, and was made on July 25, 2018 to Trust unitholders owning Trust units as of July 16, 2018.

Such distribution included the net proceeds of production collected by MV Partners from April 1, 2018 through June 30, 2018.

MV Partners makes quarterly payments of

the net profits interest to the Trust.

The Trustee determines for each quarter the amount available for distribution to the Trust

This distribution is expected to be made on or before the 25th day of the month following the end of each quarter

to the Trust unitholders of record on the 15th day of the month following the end of each quarter (or the next succeeding business

Such amounts will be equal to the excess, if any, of the cash received by the Trust relating to the preceding quarter, over

the expenses of the Trust paid during such quarter, subject to adjustments for changes made by the Trustee during such quarter

in any cash reserves established for future expenses of the Trust.

The first quarterly distribution during

2020 was $2,185,000, or $0.190 per Trust unit, and was made on January 24, 2020 to Trust unitholders owning Trust units as

of January 15, 2020.

Such distribution included the net proceeds attributable to the sale of production received by MV Partners

from October 1, 2019 through December 31, 2019.

The first quarterly distribution during

2019 was $3,622,500, or $0.315 per Trust unit, and was made on January 25, 2019 to Trust unitholders owning Trust units as

of January 15, 2019.

Such distribution included the net proceeds attributable to the sale of production received by MV Partners

from October 1, 2018 through December 31, 2018.

Note 8—Advance for Trust Expenses

Under the terms of the Trust Agreement, the Trustee is allowed to borrow money to pay Trust expenses.

During the three months ended September 30, 2019 and 2018, there were no borrowings or amounts owed for money borrowed in previous quarters.

MV Partners has provided a letter of credit in the amount of $1.8 million to the Trustee to protect the Trust against the risk that it does not have sufficient cash to pay future expenses.

Under the terms of the Trust Agreement,

the Trustee is allowed to borrow money to pay Trust expenses.

During the three months ended March 31, 2020 and 2019, there

were no borrowings or amounts owed for money borrowed in previous quarters.

MV Partners has provided a letter of credit in the

amount of $1.8 million to the Trustee to protect the Trust against the risk that it does not have sufficient cash to pay future

Note 9—Subsequent Events

The fourth quarterly distribution during 2019 was $2,472,500, or $0.215 per Trust unit, and was made on October 25, 2019 to Trust unitholders owning Trust units as of October 15, 2019.

Such distribution included the net proceeds attributable to the sale of production received by MV Partners from July 1, 2019 through September 30, 2019.

Trustees Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion of the Trusts financial condition and results of operations should be read in conjunction with the financial statements and notes thereto.

The Trusts purpose is, in general, to hold the net profits interest, to distribute to the Trust unitholders cash that the Trust receives in respect of the net profits interest, and to perform certain administrative functions in respect of the net profits interest and the Trust units.

The second quarterly distribution during

2020 was $2,357,500, or $0.205 per Trust unit, and was made on April 24, 2020 to Trust unitholders owning Trust units as of

April 15, 2020.

Such distribution included the net proceeds attributable to the sale of production received by MV Partners

from January 1, 2020 through March 31, 2020.

West Texas Intermediate spot price of crude oil has dropped sharply since the beginning of 2020, from $61.18 per barrel

on January 2, 2020 to $12.34 per barrel on April 28, 2020, primarily attributable to the economic effects of the COVID-19

pandemic and the dispute over production levels between Russia and the members of the Organization of Petroleum Exporting Countries,

including Saudi Arabia, which resulted in an oversupply of crude oil and exacerbated the decline in crude oil prices.

prices for crude oil remain at reduced levels, subsequent distributions in 2020 will be substantially lower than historical distributions,

and in certain periods there may be no distribution to unitholders.

In light of the current uncertain economic environment, the

Trustee has withheld an amount from the second quarterly distribution that is estimated to be sufficient to pay Trust expenses

over the next twelve months.

Trustee’s Discussion and Analysis of Financial

Condition and Results of Operations.

The following discussion of the Trust’s

financial condition and results of operations should be read in conjunction with the financial statements and notes thereto.

Trust’s purpose is, in general, to hold the net profits interest, to distribute to the Trust unitholders cash that the Trust

receives in respect of the net profits interest, and to perform certain administrative functions in respect of the net profits

interest and the Trust units.

The Trust derives substantially all of its income and cash flows from the net profits interest.

All information regarding operations has been provided to the Trustee by MV Partners.

Results of Operations for the Quarters Ended September 30, 2019 and 2018

The cash received by the Trust from MV Partners during the quarter ended September 30, 2019 substantially represents the production by MV Partners from March 2019 through May 2019.

The cash received by the Trust from MV Partners during the quarter ended September 30, 2018 substantially represents the production by MV Partners from March 2018 through May 2018.

The revenues from oil production are typically received by MV Partners one month after production.

The Trusts income from net profits interest decreased $1,378,972 to $3,681,095 for the quarter ended September 30, 2019 from $5,060,067 for the quarter ended September 30, 2018.

The decrease was primarily due to a $1,723,715 decrease in excess of revenues over direct operating expenses and lease equipment and development costs for the underlying properties to $4,601,369 from $6,325,084 for the same period in the prior year.

These amounts were reduced by a Trust holdback for future expenses of $173,595 and $230,067 for the quarters ended September 30, 2019 and 2018, respectively.

The Trustee paid general and administrative expenses of $175,582 and $178,263 for the quarters ended September 30, 2019 and 2018, respectively.

During the quarters ended September 30, 2019 and 2018, MV Partners did not withhold or release any dollar amounts due to the Trust from the previously established reserve for future capital expenditures.

These factors resulted in distributable income for the quarter ended September 30, 2019 of $3,507,500, a decrease of $1,322,500 from $4,830,000 for the quarter ended September 30, 2018.

The average price received for crude oil sold was $56.08 per Bbl and the average price received for natural gas sold was $1.77 per Mcf for the period from April 1, 2019 through June 30, 2019.

The average price received for crude oil sold was $61.30 per Bbl and the average price received for natural gas sold was $2.31 per Mcf for the period from April 1, 2018 through June 30, 2018.

The overall production sales volumes attributable to the net profits interest for the oil and gas production collected during the period from April 1, 2019 through June 30, 2019 were 144,024 Bbls of oil, 6,973 Mcf of natural gas and 67 Bbls of natural gas liquids, for a total of 145,230 barrels of oil equivalent.

The overall production sales volumes attributable to the net profits interest for the oil and gas production collected during the period from April 1, 2018 through June 30, 2018 were 152,598 Bbls of oil, 12,023 Mcf of natural gas and 100 Bbls of natural gas liquids, for a total of 154,667 barrels of oil equivalent.

Results of Operations for the Nine Months Ended September 30, 2019 and 2018

The cash received by the Trust from MV Partners during the nine months ended September 30, 2019 substantially represents the production by MV Partners from September 2018 through May 2019.

The cash received by the Trust during the nine months ended September 30, 2018 substantially represents the production by MV Partners from September 2017 through May 2018.

information regarding operations has been provided to the Trustee by MV Partners.

recent outbreak of the novel form of coronavirus known as COVID-19 and its development into a global pandemic is

negatively impacting worldwide economic and commercial activity and financial markets, as well as global demand for crude oil

and natural gas.

The West Texas Intermediate spot price of crude oil has dropped sharply since the beginning of

2020, from $61.18 per barrel on January 2, 2020 to $12.34 per barrel on April 28, 2020, primarily attributable to the

economic effects of the COVID-19 pandemic and the dispute over production levels between Russia and the members of the

Organization of Petroleum Exporting Countries, including Saudi Arabia, which resulted in an oversupply of crude oil and

exacerbated the decline in crude oil prices.

COVID-19 and the responses by federal, state and local governmental

authorities to the pandemic have also resulted in significant business and operational disruptions, including business

closures, supply chain disruptions, travel restrictions, stay-at-home orders and limitations on the availability of

The full impact of COVID-19 is unknown and is rapidly evolving.

The extent to

which COVID-19 negatively impacts the operators of and production from the underlying properties will depend on the

severity, location and duration of the effects and spread of COVID-19, the actions undertaken by federal, state

and local governments and health officials to contain the virus or treat its effects, and how quickly and to what extent

economic conditions improve and normal business and operating conditions resume.

A prolonged period of low crude oil prices

would adversely affect the operators of the underlying properties.

If commodity prices for crude oil remain at reduced

levels, quarterly cash distributions to unitholders will be substantially lower than historical distributions, and in certain

periods there may be no distribution to unitholders.

Results of Operations

Results of Operations for the Quarters Ended March 31,

2020 and 2019

cash received by the Trust from MV Partners during the quarter ended March 31, 2020 substantially represents the production

by MV Partners from September 2019 through November 2019.

The cash received by the Trust from MV Partners during the

quarter ended March 31, 2019 substantially represents the production by MV Partners from September 2018 through November 2018.

The revenues from oil production are typically received by MV Partners one month after production.

The Trusts income from net profits interest decreased $2,055,783 to $10,149,126 for the nine months ended September 30, 2019 from $12,204,908 for the nine months ended September 30, 2018.

The decrease was primarily due to a $2,569,728 decrease in excess of revenues over direct operating expenses and lease equipment and development costs for the underlying properties to $12,686,407 from $15,256,135 for the same period in the prior year.

Additionally, the Trustee held back $546,625 for future expenses for the nine months ended September 30, 2019 and $647,408 for the nine months ended September 30, 2018.

The Trustee paid general and administrative expenses of $731,451 and $521,085 for the nine months ended September 30, 2019 and 2018, respectively.

During the nine months ended September 30, 2019 and 2018, MV Partners did not withhold or release any dollar amounts due to the Trust from the previously established reserve for future capital expenditures.

These factors resulted in distributable income for the nine months ended September 30, 2019 of $9,602,500, a decrease of $1,955,000 from $11,557,500 for the nine months ended September 30, 2018.

The average price received for crude oil sold was $54.60 per Bbl and the average price received for natural gas sold was $2.41 per Mcf for the period from October 1, 2018 through June 30, 2019.

The average price received for crude oil sold was $55.18 per Bbl and the average price received for natural gas sold was $2.32 per Mcf for the period from October 1, 2017 through June 30, 2018.

The overall production sales volumes attributable to the net profits interest for the oil and gas production collected during the period from October 1, 2018 through June 30, 2019 were 428,465 Bbls of oil, 24,536 Mcf of natural gas and 190 Bbls of natural gas liquids, for a total of 432,677 barrels of oil equivalent.

The overall production sales volumes attributable to the net profits interest for

the oil and gas production collected during the period from October 1, 2017 through June 30, 2018 were 450,143 Bbls of oil, 30,151 Mcf of natural gas and 252 Bbls of natural gas liquids, for a total of 455,332 barrels of oil equivalent.

The Trust’s income from

net profits interest decreased $1,393,292 to $2,426,155 for the quarter ended March 31, 2020 from $3,819,447 for the quarter

ended March 31, 2019.

The decrease was primarily due to a $1,741,616 decrease in excess of revenues over direct operating

expenses and lease equipment and development costs for the underlying properties to $3,032,693 from $4,774,309 for the prior period.

These amounts were reduced by a Trust holdback for future expenses of $241,155 and $196,947 for the quarters ended March 31,

2020 and 2019, respectively.

The Trustee paid general and administrative expenses of $215,158 and $391,323 for the quarters ended

March 31, 2020 and 2019, respectively.

During the quarters ended March 31, 2020 and 2019, MV Partners did not

withhold or release any dollar amounts due to the Trust from the previously established reserve for future capital expenditures.

These factors resulted in distributable income for the quarter ended March 31, 2020 of $2,185,000, a decrease of $1,437,500

from $3,622,500 for the quarter ended March 31, 2019.

The average price received for crude oil

sold was $51.34 per Bbl and the average price received for natural gas sold was $1.39 per Mcf for the period from October 1,

2019 through December 31, 2019.

The average price received for crude oil sold was $60.87 per Bbl and the average price received

for natural gas sold was $2.21 per Mcf for the period from October 1, 2018 through December 31, 2018.

The overall production sales volumes attributable

to the net profits interest for the oil and gas production collected during the period from October 1, 2019 through December 31,

2019 were 144,383 Bbls of oil, 5,762 Mcf of natural gas and 153 Bbls of natural gas liquids, for a total of 145,443 barrels of

oil equivalent.

The overall production sales volumes attributable to the net profits interest for the oil and gas production collected

during the period from October 1, 2018 through December 31, 2018 were 144,145 Bbls of oil, 10,126 Mcf of natural gas

and 95 Bbls of natural gas liquids, for a total of 145,894 barrels of oil equivalent.

Liquidity and Capital Resources

Other than Trust administrative expenses, including any reserves established by the Trustee for future liabilities, the Trusts only use of cash is for distributions to Trust unitholders.

Administrative expenses include payments to the Trustee as well as an annual administrative fee to MV Partners pursuant to an administrative services agreement.

Other than Trust administrative expenses,

including any reserves established by the Trustee for future liabilities, the Trust’s only use of cash is for distributions

to Trust unitholders.

Administrative expenses include payments to the Trustee as well as an annual administrative fee to MV Partners

pursuant to an administrative services agreement.

Each quarter, the Trustee determines the amount of funds available for distribution.

Available funds are the excess cash, if any, received by the Trust from the net profits interest and payments from other sources (such as interest earned on any amounts reserved by the Trustee) in that quarter, over the Trusts expenses paid for that quarter.

Available funds are the excess cash, if any, received by the Trust from the net profits interest and payments from other sources

(such as interest earned on any amounts reserved by the Trustee) in that quarter, over the Trust’s expenses paid for that

Available funds are reduced by any cash the Trustee decides to hold as a reserve against future expenses.

As of September 30, 2019, $71,000 was held by the Trustee as such a reserve.

The Trustee may cause the Trust to borrow funds required to pay expenses if the Trustee determines that the cash on hand and the cash to be received are insufficient to cover the Trusts expenses.

If the Trust borrows funds, the Trust unitholders will not receive distributions until the borrowed funds are repaid.

During the three and nine months ended September 30, 2019 and 2018, there were no such borrowings.

MV Partners has provided a letter of credit in the amount of $1.8 million to the Trustee to protect the Trust against the risk that it does not have sufficient cash to pay future expenses.

Income to the Trust from the net profits interest is based on the calculation and definitions of gross proceeds and net proceeds contained in the conveyance.

As substantially all of the underlying properties are located in mature fields, MV Partners does not expect future costs for the underlying properties to change significantly as compared to recent historical costs, other than changes due to fluctuations in the general cost of oilfield services.

MV Partners may establish a capital reserve of up to $1,000,000 in the aggregate at any given time to reduce the impact on distributions of uneven capital expenditure timing.

As of September 30, 2019, $1,000,000 was held by MV Partners as a capital reserve.

The Trust does not have any transactions, arrangements or other relationships with unconsolidated entities or persons that could materially affect the Trusts liquidity or the availability of capital resources.

As of March 31,

2020, $227,700 was held by the Trustee as such a reserve.

The Trustee may cause the Trust to borrow

funds required to pay expenses if the Trustee determines that the cash on hand and the cash to be received are insufficient to

cover the Trust’s expenses.

If the Trust borrows funds, the Trust unitholders will not receive distributions until the borrowed

funds are repaid.

During the quarters ended March 31, 2020 and 2019, there were no such borrowings.

MV Partners has provided

a letter of credit in the amount of $1.8 million to the Trustee to protect the Trust against the risk that it does not have sufficient

cash to pay future expenses.

Income to the Trust from the net profits

interest is based on the calculation and definitions of “gross proceeds” and “net proceeds” contained in

the conveyance.

As substantially all of the underlying properties

are located in mature fields, MV Partners does not expect future costs for the underlying properties to change significantly as

compared to recent historical costs other than changes due to fluctuations in the general cost of oilfield services.

may establish a capital reserve of up to $1,000,000 in the aggregate at any given time to reduce the impact on distributions of

uneven capital expenditure timing.

As of March 31, 2020, $1,000,000 was held by MV Partners as a capital reserve.

The Trust does not have any transactions,

arrangements or other relationships with unconsolidated entities or persons that could materially affect the Trust’s liquidity

or the availability of capital resources.

Note Regarding Forward-Looking Statements

This Form 10-Q includes 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.

All statements other than statements of historical fact included in this Form 10-Q, including without limitation the statements under Trustees Discussion and Analysis of Financial Condition and Results of Operations, are forward-looking statements.

Although MV Partners advised the Trust that it believes that the expectations reflected in the forward-looking statements contained herein are reasonable, no assurance can be given that such expectations will prove to have been correct.

Important factors that could cause actual results to differ materially from expectations (Cautionary Statements) are disclosed in this Form 10-Q and in the Trusts Annual Report on Form 10-K for the year ended December 31, 2018 (the Form 10-K), including under the section Item 1A.

This Form 10-Q includes “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”).

All statements other than statements of historical

fact included in this Form 10-Q, including without limitation the statements under “Trustee’s Discussion and Analysis

of Financial Condition and Results of Operations” are forward-looking statements.

Although MV Partners advised the Trust

that it believes that the expectations reflected in the forward-looking statements contained herein are reasonable, no assurance

can be given that such expectations will prove to have been correct.

Important factors that could cause actual results to differ

materially from expectations (“Cautionary Statements”) are disclosed in this Form 10-Q, including under the section

Risk Factors” in Part II of this Form 10-Q, and in the Trust’s Annual Report on Form 10-K for

the year ended December 31, 2019 (the “Form 10-K”), including under the section “Item 1A.

Risk Factors”.

All subsequent written and oral forward-looking statements attributable to the Trust or persons acting on its behalf are expressly qualified in their entirety by the Cautionary Statements.

Quantitative and Qualitative Disclosures About Market Risk.

The Trust is a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended, and is not required to provide the information under this item.

All subsequent written and oral forward-looking statements attributable to the Trust or persons acting on its behalf are expressly

qualified in their entirety by the Cautionary Statements.

Quantitative and Qualitative Disclosures About Market

The Trust is a smaller reporting company

as defined by Rule 12b-2 of the Exchange Act and is not required to provide the information under this Item.

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