What changed in this filing

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Item 1. Financial Statements

2022-08-09 compared with 2022-05-10 · 144 added, 84 removed, 211 unchanged (52% of the section changed)

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Three months ended

Six months ended

Income from net profits interest

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Distributable income

Distributions per Trust unit (11,500,000 Trust units issued and outstanding at March 31, 2021 and 2020)

Includes $28,095 and $52,989 paid to MV Partners, LLC during the three months ended March 31, 2022 and 2021, 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, 2022 and 2021.

Distributions per Trust unit (11,500,000 Trust units issued and outstanding at June 30, 2022 and 2021)

Includes $28,095 and $27,014 paid to MV Partners, LLC during the three months ended June 30, 2022 and 2021, respectively, and $56,189 and $80,003 during the six months ended June 30, 2022 and 2021, respectively.

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

during each of the three months ended June 30, 2022 and 2021 and $75,000 during each of the six months ended June 30, 2022 and 2021.

CONDENSED STATEMENTS OF ASSETS AND TRUST CORPUS

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(42,771,353 )

Trust corpus, 11,500,000 Trust units issued and outstanding at March 31, 2022 and December 31, 2021

Trust corpus, 11,500,000 Trust units issued and outstanding at June 30, 2022 and December 31, 2021

CONDENSED STATEMENTS OF CHANGES IN TRUST CORPUS

Three months ended

Six months ended

Trust corpus, beginning of period

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these condensed financial statements.

NOTES TO CONDENSED FINANCIAL STATEMENTS

NOTES TO CONDENSED FINANCIAL

Note 1—Organization of the Trust

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thereafter wind up its affairs and terminate.

As of March 31, 2022, cumulatively, since inception, the Trust has received payment

As of June 30, 2022, cumulatively, since inception, the Trust has received payment

for 80% of the net proceeds attributable to MV Partners’

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and Trust Corpus as of December 31, 2021, which has been derived from audited financial statements, and the unaudited interim condensed

financial statements as of March 31, 2022 and for the three months ended March 31, 2022 and March 31, 2021, 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

financial statements as of June 30, 2022 and for the three and six months ended June 30, 2022 and June 30, 2021, 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

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 revenues and expenses during the reporting period.

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.

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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.

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%.

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No new accounting pronouncements were adopted or

issued during the quarter ended March 31, 2022 that would impact the financial statements of the Trust.

issued during the quarter ended June 30, 2022 that would impact the financial statements of the Trust.

Note 4—Investment in Net Profits Interest

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Three months ended

Six months ended

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

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Income from net profits interest(3)

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 Trust.

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, 2022 and March 31, 2021, MV Partners did not withhold or release any dollar amounts due to the Trust.

The reserve balance was $1,000,000 at March 31, 2022 and 2021.

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

MV Partners during the December through February production periods for the three months ended June 30, 2022 and 2021,

respectively, and during each of the September through February production periods for the six months ended June 30, 2022

and 2021, 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 six months ended June 30, 2022 and 2021, MV Partners did not withhold or release any

dollar amounts due to the Trust.

The reserve balance was $1,000,000 at June 30, 2022 and 2021.

(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 March 31, 2022 substantially represents the production by MV Partners from September 2021 through November 2021, and the cash received by the Trust during the three months ended March 31, 2021 substantially represents the production by MV Partners from September 2020 through November 2020.

For the three months ended March 31, 2022

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 June 30, 2022 substantially represents the production by MV Partners from December 2021 through February 2022,

and the cash received by the Trust during the three months ended June 30, 2021 substantially represents the production by MV Partners

from December 2020 through February 2021.

The cash received by the Trust during the six months ended June 30, 2022 substantially

represents the production by MV Partners from September 2021 through February 2022, and the cash received by the Trust during

the six months ended June 30, 2021 substantially represents the production by MV Partners from September 2020 through February 2021.

For the three and six months ended June 30,

2022 and 2021, MV Purchasing, LLC, which is majority-owned by the indirect equity owners of MV Partners, purchased a majority of the production

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of the Trust.

The Trustee intends to build a cash reserve of approximately $1.265 million for the payment of future known, anticipated

or contingent expenses or liabilities, commencing with the distribution payable in the first quarter of 2022.

The Trustee may increase

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

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

As previously disclosed, the Trustee intends to build a cash reserve of approximately $1.265 million for the payment of

future known, anticipated or contingent expenses or liabilities.

The Trustee may increase or decrease the targeted amount at any time,

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

the unitholders.

Cash held in reserve will be invested as required by the Trust Agreement.

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

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

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.

The first quarterly distribution during 2022 was

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the building of the cash reserve described above.

The second quarterly distribution during 2022 was

$4,887,500, or $0.425 per Trust unit, and was made on April 25, 2022 to Trust unitholders owning Trust units as of April 18,

Such distribution included the net proceeds attributable to the sale of production received by MV Partners from January 1,

2022 through March 31, 2022.

The Trustee withheld $105,417 from the net proceeds otherwise available for distribution towards the

building of the cash reserve described above.

The first quarterly distribution during 2021 was

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2020 through December 31, 2020.

The second quarterly distribution during 2021 was

$2,415,000, or $0.210 per Trust unit, and was made on April 23, 2021 to Trust unitholders owning Trust units as of April 15,

Such distribution included the net proceeds of production collected by MV Partners from January 1, 2021 through March 31,

Note 8—Advance for Trust Expenses

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is allowed to borrow money to pay Trust expenses.

During the three months ended March 31, 2022 and 2021, there were no borrowings

During the three months ended June 30, 2022 and 2021, there were no borrowings

or amounts owed for money borrowed in previous quarters.

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Note 9—Subsequent Events

The second quarterly distribution during 2022 was

$4,887,500, or $0.425 per Trust unit, and was made on April 25, 2022 to Trust unitholders owning Trust units as of April 18,

Such distribution included the net proceeds attributable to the sale of production received by MV Partners from January 1,

2022 through March 31, 2022.

The Trustee withheld $105,417 from the net proceeds otherwise available for distribution towards the

building of the cash reserve described in Note 7.

The third quarterly distribution during 2022 was

$8,050,000, or $0.700 per Trust unit, and was made on July 25, 2022 to Trust unitholders owning Trust units as of July 15, 2022.

Such distribution included the net proceeds of production collected by MV Partners from April 1, 2022 through June 30, 2022.

The Trustee withheld $421,668 from the net proceeds otherwise available for distribution towards the building of the cash reserve described

Trustee’s Discussion and Analysis of Financial Condition

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Results of Operations

Results of Operations for the Quarters Ended March 31, 2022

Results of Operations for the Quarters Ended June 30, 2022

The cash received by the Trust from MV Partners

during the quarter ended March 31, 2022 substantially represents the production by MV Partners from September 2021 through November 2021.

The cash received by the Trust from MV Partners during the quarter ended March 31, 2021 substantially represents the production by

MV Partners from September 2020 through November 2020.

during the quarter ended June 30, 2022 substantially represents the production by MV Partners from December 2021 through February 2022.

The cash received by the Trust from MV Partners during the quarter ended June 30, 2021 substantially represents the production

by MV Partners from December 2020 through February 2021.

The revenues from oil production are typically received by MV Partners

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The Trust’s income from net profits interest increased $2,620,231 to $5,242,605 for the quarter ended

March 31, 2022 from $1,326,752 for the quarter ended March 31, 2021.

The increase was primarily due to a $4,697,411 increase

in excess of revenues over direct operating expenses and lease equipment and development costs for the underlying properties to $6,355,851

June 30, 2022 from $2,622,374 for the quarter ended June 30, 2021.

The increase was primarily due to a $3,275,289 increase in

excess of revenues over direct operating expenses and lease equipment and development costs for the underlying properties to $6,553,256

from $3,277,967 for the same period in the prior year.

These amounts were reduced by a Trust holdback for current expenses of $264,264

and $61,752 for the quarters ended March 31, 2022 and 2021, respectively, and a Trustee holdback for future estimated expenses of

$105,417 for the quarter ended March 31, 2022.

The Trustee paid general and administrative expenses of $331,621 and $405,752 for

the quarters ended March 31, 2022 and 2021, respectively.

During the quarters ended March 31, 2022 and 2021, 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, 2022 of $4,715,000, an increase of $3,450,000 from

$1,265,000 for the quarter ended March 31, 2021.

These amounts were reduced by a Trustee holdback for future expenses of $355,105

and $207,374 for the quarters ended June 30, 2022 and 2021, respectively.

This increase of $147,731 is primarily the result of the

Trustee’s decision to build a cash reserve of approximately $1.265 million for the payment of future known, anticipated or contingent

expenses or liabilities of the Trust, commencing with the distribution payable in the first quarter of 2022.

The Trustee paid general

and administrative expenses of $228,829 and $160,032 for the quarters ended June 30, 2022 and 2021, respectively.

During the quarters

ended June 30, 2022 and 2021, 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 June 30, 2022 of $4,887,500,

an increase of $2,472,500 from $2,415,000 for the quarter ended June 30, 2021.

The average price received for crude oil sold was

$77.53 per Bbl and the average price received for natural gas sold was $5.31 per Mcf for the period from January 1, 2022 through

March 31, 2022.

The average price received for crude oil sold was $47.51 per Bbl and the average price received for natural gas sold

was $2.18 per Mcf for the period from January 1, 2021 through March 31, 2021.

The overall production sales volumes attributable

to the net profits interest for the oil and gas production collected during the period from January 1, 2022 through March 31,

2022 were 114,429 Bbls of oil, 6,996 Mcf of natural gas and 24 Bbls of natural gas liquids, for a total of 115,610 barrels of oil

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

the period from January 1, 2021 through March 31, 2021 were 124,275 Bbls of oil, 8,798 Mcf of natural gas and 24 Bbls of

natural gas liquids, for a total of 125,757 barrels of oil equivalent.

Results of Operations for the Six Months Ended June 30, 2022

The cash received by the Trust from MV Partners

during the six months ended June 30, 2022 substantially represents the production by MV Partners from September 2021 through

February 2022.

The cash received by the Trust from MV Partners during the six months ended June 30, 2021 substantially represents

the production by MV Partners from September 2020 through February 2021.

The revenues from oil production are typically received

by MV Partners one month after production.

The Trust’s income from net profits interest increased $6,378,159 to $10,327,285 for

the six months ended June 30, 2022 from $3,949,126 for the six months ended June 30, 2021.

The increase was primarily due to

a $7,972,700 increase in excess of revenues over direct operating expenses and lease equipment and development costs for the underlying

properties to $12,909,107 from $4,936,407 for the same period in the prior year.

These amounts were reduced by a Trustee holdback for

future expenses of $724,785 and $269,126 for the six months ended June 30, 2022 and 2021, respectively.

This increase of $455,659

is primarily the result of the Trustee’s decision to build a cash reserve of approximately $1.265 million for the payment of future

known, anticipated or contingent expenses or liabilities of the Trust, commencing with the distribution payable in the first quarter of

The Trustee paid general and administrative expenses of $560,450 and $565,784 for the six months ended June 30, 2022 and 2021,

respectively.

During the six months ended June 30, 2022 and 2021, 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 six months ended June 30, 2022 of $9,602,500, an increase of $5,922,500 from $3,680,000 for the six months ended June 30,

The average price received for crude oil sold was

$74.97 per Bbl and the average price received for natural gas sold was $4.68 per Mcf for the period from October 1, 2021 through

December 31, 2021.

The average price received for crude oil sold was $35.54 per Bbl and the average price received for natural gas

sold was $1.58 per Mcf for the period from October 1, 2020 through December 31, 2020.

March 31, 2022.

The average price received for crude oil sold was $41.34 per Bbl and the average price received for natural gas sold

was $1.91 per Mcf for the period from October 1, 2020 through March 31, 2021.

The overall production sales volumes attributable

to the net profits interest for the oil and gas production collected during the period from October 1, 2021 through December 31,

2021 were 127,429 Bbls of oil, 8,304 Mcf of natural gas and 17 Bbls of natural gas liquids, for a total of 128,824 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, 2020 through December 31, 2020 were 132,202 Bbls of oil, 7,096 Mcf of natural gas and 23 Bbls of natural gas

liquids, for a total of 133,399 barrels of oil equivalent.

to the net profits interest for the oil and gas production collected during the period from October 1, 2021 through March 31,

2022 were 241,858 Bbls of oil, 15,300 Mcf of natural gas and 41 Bbls of natural gas liquids, for a total of 244,434 barrels of oil

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

the period from October 1, 2020 through March 31, 2021 were 256,477 Bbls of oil, 15,894 Mcf of natural gas and 47 Bbls

of natural gas liquids, for a total of 259,156 barrels of oil equivalent

Liquidity and Capital Resources

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the Trustee decides to hold as a reserve against future expenses.

As of March 31, 2022, $335,200 was held by the Trustee as such

As of June 30, 2022, $461,481 was held by the Trustee as such a

The Trustee may cause the Trust to borrow funds

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

the quarters ended March 31, 2021 and 2020, 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.

In November 2021, the Trustee notified MV

Partners that the Trustee intends to build a reserve for the payment of future known, anticipated or contingent expenses or liabilities,

commencing with the distribution payable in the first quarter of 2022.

The Trustee intends to withhold a portion of the proceeds otherwise

available for distribution each quarter to gradually build a cash reserve to approximately $1.265 million.

This amount is in addition

to the $1.8 million letter of credit described above.

The Trustee may increase or decrease the targeted amount at any time, and may increase

or decrease the rate at which it is withholding funds to build the cash reserve at any time, without advance notice to the unitholders.

Cash held in reserve will be invested as required by the Trust Agreement.

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

provide for the payment of future known, anticipated or contingent expenses or liabilities eventually will be distributed to unitholders,

together with interest earned on the funds.

The Trustee withheld $105,417 from the proceeds otherwise available for distribution through

March 31, 2022 towards the building of the cash reserve described above.

the three and six months ended June 30, 2022 and 2021, 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

previously disclosed, the Trustee intends to build a reserve for the payment of future known, anticipated or contingent expenses

or liabilities.

The Trustee intends to withhold a portion of the proceeds otherwise available for distribution each quarter to gradually

build a cash reserve to approximately $1.265 million.

This amount is in addition to the $1.8 million letter of credit described above.

The Trustee may increase or decrease the targeted amount at any time, and may increase or decrease the rate at which it is withholding

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

Cash held in reserve will be invested as required

by the Trust Agreement.

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

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

August 9, 2022, the Trustee has withheld a total of $632,502 from the proceeds otherwise available for distribution towards the building

of the cash reserve described above.

Income to the Trust from the net profits interest

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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

As of March 31, 2022, $1,000,000 was held by MV Partners as a capital reserve.

As of June 30, 2022, $1,000,000 was held by MV Partners as a capital reserve.

The Trust does not have any transactions, arrangements

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Important factors that could cause actual results to differ materially from expectations (“Cautionary Statements”)

are disclosed in the Trust’s Annual Report on Form 10-K for the year ended December 31, 2021 (the “Form 10-K”),

including under the section “Item 1A.

are disclosed in this Form 10-Q and in the Trust’s Annual Report on Form 10-K for the year ended December 31, 2021

(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.

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.

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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