What changed in this filing

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Item 1. Business

2024-03-20 compared with 2023-03-16 · 151 added, 145 removed, 446 unchanged (40% of the section changed)

MV Oil Trust, which we refer to herein as the “trust,” was formed in August 2006 by MV Partners, LLC, which we refer to herein as “MV Partners.” Much of the information disclosed herein has been provided to the trust by MV Partners, including information associated with the underlying properties such as production and well counts, major producing areas, customer relationships, competition, marketing and post-production services, and certain information on which reserve data is based.

The trust is a statutory trust created under the Delaware Statutory Trust Act.

The business and affairs of the trust are managed by The Bank of New York Mellon Trust Company, N.A., as trustee.

MV Oil Trust (the “Trust”) was formed in August 2006 by MV Partners, LLC (“MV Partners”).

Much of the information disclosed in this Form 10-K has been provided to the Trust by MV Partners, including information associated with the underlying properties (as defined below) such as production and well counts, major producing areas, customer relationships, competition, marketing and post-production services, and certain information on which reserve data is based.

The Trust is a statutory trust created under the Delaware Statutory Trust Act pursuant to a Trust Agreement (as subsequently amended and restated, the “Trust Agreement”) among 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 does not have any employees, and the business and affairs of the Trust are managed by the Trustee.

The Trust maintains its offices at the office of the Trustee, at 601 Travis Street, Floor 16, Houston, Texas 77002.

The telephone number of the Trustee is 1-855-802-1094.

In addition, Wilmington Trust Company acts as the Delaware trustee of the trust.

The Delaware Trustee has only minimal rights and duties as are necessary to satisfy the requirements of the Delaware Statutory Trust Act.

The trust does not have any employees, and the business and affairs of the trust are managed by the trustee.

The trustee does not maintain a website for filings by the trust with the Securities and Exchange Commission, which we refer to herein as the “SEC.” Electronic filings by the trust with the SEC are available free of charge through the SEC’s website at www.sec.gov and at http://mvo.q4web.com/home/default.aspx.

On January 24, 2007, MV Partners and the trust completed an initial public offering of units of beneficial interest in the trust, which we refer to herein as the “trust units.” In connection with the completion of the initial public offering of trust units, on January 24, 2007, MV Partners conveyed a term net profits interest to the trust that represents the right to receive 80% of the net proceeds (calculated as described below) from all of MV Partners’ interests in oil and natural gas properties as of January 24, 2007, which is referred to herein as the “net profits interest.” These properties are located in the Mid-Continent region in the States of Kansas and Colorado.

MV Partners’ net interests in such properties, after deduction of all royalties and other burdens on production thereon as of January 24, 2007, is referred to herein as the “underlying properties.” As of December 31, 2022, the underlying properties produced predominantly oil from approximately 860 wells, and the projected reserve life of the underlying properties was over 44 years.

Based on the summary prepared by Cawley, Gillespie & Associates, Inc., independent petroleum and geological engineers, which we refer to herein as “CG&A,” of its reserve report as of December 31, 2022 for the trust, which is summarized herein under “— Description of the Underlying Properties — Reserves” and is referred to herein as the “reserve report,” the net profits interest would entitle the trust to receive net proceeds from the sale of production of not less than 11.5 MMBoe of proved reserves during the term of the trust, calculated as 80% of the proved reserves attributable to the underlying properties expected to be produced during the term of the trust.

The Trustee does not maintain a website for filings by the Trust with the Securities and Exchange Commission (the “SEC”).

Electronic filings by the Trust with the SEC are available free of charge through the SEC’s website at www.sec.gov and at http://mvo.q4web.com/home/default.aspx.

On January 24, 2007, MV Partners and the Trust completed an initial public offering of units of beneficial interest in the Trust (the “Trust Units”).

In connection with the completion of the initial public offering of Trust Units, on January 24, 2007, MV Partners conveyed a term net profits interest to the Trust that represents the right to receive 80% of the net proceeds (calculated as described below) from all of MV Partners’ interests in oil and natural gas properties as of January 24, 2007 (the “net profits interest”), pursuant to the Conveyance of net profits interest dated as of January 24, 2007 (the “Conveyance”).

These properties are located in the Mid-Continent region in the States of Kansas and Colorado.

MV Partners’ net interests in such properties, after deduction of all royalties and other burdens on production thereon as of January 24, 2007, are referred to in this Form 10-K as the “underlying properties.” As of December 31, 2023, the underlying properties produced predominantly oil from approximately 850 wells, and the projected reserve life of the underlying properties was over 35 years.

Based on the summary prepared by Cawley, Gillespie & Associates, Inc., independent petroleum and geological engineers (“CG&A”), of its reserve report as of December 31, 2023 for the Trust, which is summarized herein under “— Description of the Underlying Properties — Reserves” and is referred to herein as the “reserve report,” the net profits interest would entitle the Trust to receive net proceeds from the sale of production of not less than 11.5 MMBoe of proved reserves during the term of the Trust, calculated as 80% of the proved reserves attributable to the underlying properties expected to be produced during the term of the Trust.

Of these reserves, approximately 98% were classified as proved developed producing reserves as of December 31, 2023.

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As of December 31, 2023, cumulatively, since inception, the Trust has received payment for approximately 11.3 MMBoe of the Trust’s 11.5 MMBoe interest.

The gross proceeds used to calculate the net profits interest is based on prices realized for oil, natural gas and natural gas liquids attributable to the underlying properties for each calendar quarter during the term of the net profits interest.

In calculating the net proceeds used to calculate the net profits interest, MV Partners deducts from the gross proceeds from the underlying properties all lease operating expenses, maintenance expenses and capital expenditures (including the cost of workovers and recompletions, drilling costs and development costs), amounts that may be reserved for

future expenditures (which reserve amounts may not exceed $1.0 million in the aggregate at any given time), post-production costs and production and property taxes paid by MV Partners.

The gross proceeds used to calculate the net proceeds payable to the Trust are based on prices realized for oil, natural gas and natural gas liquids attributable to the underlying properties for each calendar quarter during the term of the net profits interest.

In calculating the net proceeds, MV Partners deducts from the

gross proceeds from the underlying properties all lease operating expenses, maintenance expenses and capital expenditures (including the cost of workovers and recompletions, drilling costs and development costs), amounts that may be reserved for future expenditures (which reserve amounts may not exceed $1.0 million in the aggregate at any given time), post-production costs and production and property taxes paid by MV Partners.

Net proceeds payable to the Trust depend upon production quantities, sales prices of oil, natural gas and natural gas liquids, and costs to develop and produce the oil, natural gas and natural gas liquids.

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The business and affairs of the Trust are managed by the Trustee, and MV Partners and its affiliates have no ability to manage or influence the operations of the Trust.

The underlying properties, for which MV Partners is designated as the operator, are currently operated on a contract operator basis by Vess Oil Corporation, which we refer to herein as “Vess Oil,” and Murfin Drilling Company, Inc., which we refer to herein as “Murfin Drilling,” each of which is an affiliate of MV Energy, LLC, which we refer to herein as “MV Energy,” the sole manager of MV Partners.

The underlying properties, for which MV Partners is designated as the operator, are currently operated on a contract operator basis by Vess Oil Corporation (“Vess Oil”) and Murfin Drilling Company, Inc.

(“Murfin Drilling”), each of which is an affiliate of MV Energy, LLC (“MV Energy”), the sole manager of MV Partners.

MV Partners does not, as a matter of course, make public projections as to future sales, earnings or other results relating to the underlying properties.

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Each Trust Unit is a unit of beneficial interest in the Trust and is entitled to receive cash distributions from the Trust on a pro rata basis.

Each trust unitholder has the same rights regarding each of his trust units as every other trust unitholder has regarding his units.

Each Trust unitholder has the same rights regarding each of his or her Trust Units as every other Trust unitholder has regarding his or her Trust Units.

The Trust Units are in book-entry form only and are not represented by certificates.

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Quarterly cash distributions during the term of the Trust are made by the Trustee on or before the 25 th day of the month following the end of each quarter to the Trust unitholders of record on the 15 th day of the month following the end of each quarter (or the next succeeding business day).

Unless otherwise advised by counsel or the Internal Revenue Service, which we refer to herein as the “IRS,” the trustee will treat the income and expenses of the trust for each quarter as belonging to the trust unitholders of record on the quarterly record date.

Unless otherwise advised by counsel or the Internal Revenue Service (the “IRS”), the Trustee will treat the income and expenses of the Trust for each quarter as belonging to the Trust unitholders of record on the quarterly record date.

For federal income tax purposes, Trust unitholders must take into account items of income, gain, loss, deduction and credit consistent with their methods of accounting and without regard to the taxable year or accounting method employed by the Trust and without regard to the quarter in which the Trust makes distributions related to those items to the Trust unitholders.

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For example, the Trustee could establish a reserve in one quarter using funds that would be included in income in the quarter in which the reserve is created but may not result in a tax deduction or a distribution until a later quarter or possibly in a later taxable year.

Similarly, the trustee could also make a payment in one quarter that would be amortized for income tax purposes over several quarters.

the Trustee could also make a payment in one quarter that would be amortized for income tax purposes over several quarters.

See “— Federal Income Tax Matters.”

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The Trustee files all required Trust federal and state income tax and information returns.

The trustee prepares and provides the tax information that trust unitholders need to correctly report their share of the

income and deductions of the trust.

The Trustee prepares and provides the tax information that Trust unitholders need to correctly report their share of the income and deductions of the Trust.

The Trustee also causes to be prepared and filed reports required to be filed under the Exchange Act and by the rules of any securities exchange or quotation system on which the Trust Units are listed or admitted to trading, and also causes the Trust to comply with the provisions of the Sarbanes-Oxley Act of 2002, including but not limited to, by establishing, evaluating and maintaining a system of internal control over financial reporting in compliance with the requirements of Section 404 thereof.

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The Trustee or Trust unitholders owning at least 10% of the outstanding Trust Units may call meetings of Trust unitholders.

The trust is responsible for all costs associated with calling a meeting of trust unitholders unless such meeting is called by the trust unitholders, in which case the trust unitholders are responsible for all costs associated with calling such meeting of trust unitholders.

Meetings must be held in such location as is designated by the trustee in the notice of such meeting.

The Trust is responsible for all costs associated with calling a meeting of Trust unitholders unless such meeting is called by Trust unitholders, in which case the Trust unitholders calling the meeting are responsible for all such costs.

Meetings must be held in such location as is the Trustee designates in the notice of such meeting.

The Trustee must send written notice of the time and place of the meeting and the matters to be acted upon to all of the Trust unitholders at least 20 days and not more than 60 days before the meeting.

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approve the sale of all or any material part of the assets of the Trust.

In addition, certain amendments to the trust agreement may be made by the trustee without approval of the trust unitholders.

In addition, the Trustee may make certain amendments to the Trust Agreement without approval of the Trust unitholders.

The Trustee must consent before all or any part of the Trust assets can be sold except in connection with the dissolution of the Trust or limited sales directed by MV Partners in conjunction with its sale of underlying properties.

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Sale of the Net Profits Interest

The trust will remain in existence until shortly after the liquidation date, which is the later to occur of (1) June 30, 2026, or (2) the time when 14.4 MMBoe have been produced from the underlying properties and sold (which amount is the equivalent of 11.5 MMBoe in respect of the trust’s right to receive 80% of the net proceeds from the underlying properties pursuant to the net profits interest).

The Trust will remain in existence until shortly after the liquidation date, which is the later to occur of (1) June 30, 2026, or (2) the time when 14.4 MMBoe have been produced from the underlying properties and sold (which amount is the equivalent of 11.5 MMBoe in respect of the Trust’s right to receive 80% of the

net proceeds from the underlying properties pursuant to the net profits interest).

The net profits interest will terminate on the liquidation date, at which point the Trust will dissolve and commence winding up its business and affairs.

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The following information summarizes the material information contained in the Conveyance related to the computation of the net proceeds.

For more detailed provisions concerning the net profits interest, please see the conveyance, which is referenced as an exhibit to this Form 10-K.

For more detailed provisions concerning the net profits interest, please see the Conveyance, which is included as an exhibit to this Form 10-K.

Net Profits Interest

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at the option of MV Partners (or any subsequent owner of the underlying properties), amounts reserved for approved exploration, development, maintenance or operating expenditures, including well drilling, recompletion and workover costs, which amounts will at no time exceed $1.0 million in the aggregate, and will be subject to the limitations described below.

During each twelve-month period beginning on the later to occur of (1) June 30, 2023 and (2) the time when 13.2 MMBoe have been produced from the underlying properties and sold (which is the equivalent of 10.6 MMBoe in respect of the net profits interest), which we refer to herein, in either case, as the “Capital Expenditure Limitation Date,” the sum of the capital expenditures and amounts reserved for approved capital expenditure projects for such twelve-month period may not exceed the Average Annual Capital Expenditure Amount.

During each twelve-month period beginning on June 30, 2023 (the “Capital Expenditure Limitation Date”), the sum of the capital expenditures and amounts reserved for approved capital expenditure projects for such twelve-month period may not exceed the Average Annual Capital Expenditure Amount.

The “Average Annual Capital Expenditure Amount” means the quotient of (x) the sum of the capital expenditures and amounts reserved for approved capital expenditure projects with respect to the three twelve month periods ending on the Capital Expenditure Limitation Date, divided by (y) three.

Commencing on the Capital Expenditure Limitation Date, and each anniversary of the Capital Expenditure Limitation Date thereafter, the Average Annual Capital Expenditure Amount will be increased by 2.5% to account for expected increased costs due to inflation.

The Average Annual Capital Expenditure Amount for the twelve-month period ending June 30, 2024 is $2,223,892.

As is customary in the oil and natural gas industry, MV Partners pays an overhead fee to Vess Oil and Murfin Drilling to operate the underlying properties on behalf of MV Partners.

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The fee is adjusted annually and will increase or decrease each year based on changes in the year-end index of average weekly earnings of crude petroleum and natural gas workers.

In the event that the net proceeds for any computation period is a negative amount, the trust will receive no payment for that period, and any such negative amount plus accrued interest at the prime rate will be deducted from gross proceeds in the following computation period for purposes of determining the net proceeds for that following computation period.

If the net proceeds for any computation period is a negative amount, the Trust will receive no payment for that period, and any such negative amount plus accrued interest at the prime rate will be deducted from gross proceeds in the following computation period for purposes of determining the net proceeds for that following computation period.

Gross proceeds and net proceeds are calculated on a cash receipts and cash disbursements basis.

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Following a sale or transfer, the underlying properties will continue to be subject to the net profits interest, and the net proceeds attributable to the transferred property will be calculated as part of the computation of net proceeds described in this Form 10-K.

In addition, MV Partners may, without the consent of the trust unitholders, require the trust to release the net profits interest associated with any lease that accounts for less than or equal to 0.25% of the total production from the underlying properties in the prior 12 months and provided that the net profits interest covered by such releases cannot exceed, during any 12-month period, an aggregate fair market value to the trust of $500,000.

These releases will be made only in connection with a sale by MV Partners of the relevant underlying properties and are conditioned upon the trust receiving an amount equal to the fair market value to the trust of such net profits interest.

In addition, MV Partners may, without the consent of the Trust unitholders, require the Trust to release the net profits interest associated with any lease that accounts for less no more than 0.25% of the total production from the underlying properties in the prior 12 months and provided that the net profits interest covered by such releases cannot exceed, during any 12-month period, an aggregate fair market value to the Trust of $500,000.

These releases will be made only in connection with a sale by MV Partners to a non-affiliate of the relevant underlying properties and are conditioned upon the Trust receiving an amount equal to the fair market value to the Trust of such net profits interest.

Any net sales proceeds paid to the Trust are distributable to Trust unitholders for the quarter in which they are received.

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The following is a summary of certain federal income tax matters that may be relevant to Trust unitholders.

This summary is based upon current provisions of the Internal Revenue Code of 1986, as amended, which we refer to herein as the “Code,” existing and proposed Treasury regulations thereunder and current administrative rulings and court decisions, all of which are subject to changes or different interpretation at any time, possibly with retroactive effect.

This summary is based upon current provisions of the Internal Revenue Code of 1986, as amended (the “Code”), existing and proposed Treasury regulations thereunder and current administrative rulings and court decisions, all of which are subject to changes or different interpretation at any time, possibly with retroactive effect.

No attempt has been made in the following summary to comment on all federal income tax matters affecting the Trust or the Trust unitholders.

The summary is limited to Trust unitholders who are individual citizens or residents of the United States.

Accordingly, the following summary has limited application to domestic corporations and persons subject to specialized federal income tax treatment.

Accordingly, the following summary has limited application to domestic corporations and persons

subject to specialized federal income tax treatment.

Each Trust unitholder should consult his or her own tax advisor with respect to his or her particular circumstances.

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Notwithstanding the foregoing, the middlemen holding Trust Units on behalf of Trust unitholders, and not the Trustee of the Trust, are solely responsible for complying with the information reporting requirements under the Treasury regulations with respect to such Trust Units, including the issuance of IRS Forms 1099 and certain written tax statements.

Trust unitholders whose trust units are held by middlemen should consult with such middlemen regarding the information that will be reported to them by the middlemen with respect to the trust units.

Trust unitholders whose Trust Units are held by middlemen should consult with

such middlemen regarding the information that will be reported to them by the middlemen with respect to the Trust Units.

Any generic tax information provided by the Trustee of the Trust is intended to be used only to assist Trust unitholders in the preparation of their federal and state income tax returns.

Available Trust Tax Information

In compliance with the reporting requirements for WHFITs and the dissemination of trust tax reporting information, the trustee provides a generic tax information reporting booklet that is intended to be used only to assist unitholders in the preparation of their 2022 federal and state income tax returns.

In compliance with the reporting requirements for WHFITs and the dissemination of Trust tax reporting information, the Trustee provides a generic tax information reporting booklet that is intended to be used only to assist Trust unitholders in the preparation of their 2023 federal and state income tax returns.

The projected payment schedule for the net profits interest is included with the tax information booklet.

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Estimates of the proved oil and gas reserves attributable to the Trust as of December 31, 2021, 2022 and 2023 are based on reports prepared by CG&A.

CG&A has been in business since 1961 and serves many

organizations and individuals in the petroleum industry, including owners and operators of oil and gas properties, exploration groups, planners, and professionals in investment and finance.

CG&A has been in business since 1961 and serves many organizations and individuals in the petroleum industry, including owners and operators of oil and gas properties, exploration groups, planners, and professionals in investment and finance.

One of the principal businesses of CG&A is providing detailed assessment of producing reservoirs.

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MV Partners has not filed reserve estimates covering the underlying properties with any other federal authority or agency.

The following table summarizes the changes in estimated proved reserves of the trust for the periods indicated.

Amounts reflect sales volumes produced during the applicable year regardless whether royalty payments thereon have been remitted to the trust by MV Partners.

The following table summarizes the changes in estimated proved reserves attributable to the Trust for the periods indicated.

Amounts reflect sales volumes produced during the applicable year regardless of whether royalty payments thereon have been remitted to the Trust by MV Partners.

Proved Reserves:

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Proved undeveloped reserves converted to proved developed reserves by drilling

Additional proved undeveloped reserves added

Additional proved undeveloped reserves added during 2021

Proved undeveloped reserves removed from drilling plan

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Proved undeveloped reserves converted to proved developed reserves by drilling

Additional proved undeveloped reserves added

Proved undeveloped reserves removed from

drilling plan

Additional proved undeveloped reserves added during 2022

Proved undeveloped reserves removed from drilling plan

Revisions of previous estimates

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Proved undeveloped reserves converted to proved developed reserves by drilling

Additional proved undeveloped reserves added

Proved undeveloped reserves removed from

drilling plan

Additional proved undeveloped reserves added during 2023

Proved undeveloped reserves removed from drilling plan

Revisions of previous estimates

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The estimates of proved reserves have not been filed with or included in reports to any federal authority or agency.

The discounted cash flow value shown in the table is not intended to represent the current market value of the trust’s estimated oil and natural gas reserves.

The discounted cash flow value shown in the table is not intended to represent the current market value of the estimated oil and natural gas reserves attributable to the Trust’s interests.

Non-Producing

(dollars in thousands)

Non-Producing

(dollars in thousands)

Severance Taxes

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The accuracy of any reserve estimate is a function of the quality of available data and engineering, and estimates may justify revisions based on the results of drilling, testing, and production activities.

Accordingly, reserve estimates are inherently imprecise and should not be construed as representing

the actual quantities of future production or cash flows to be realized from oil and natural gas properties or the fair market value of such properties.

Accordingly, reserve estimates are inherently imprecise and should not be construed as representing the actual quantities of future production or cash flows to be realized from oil and natural gas properties or the fair market value of such properties.

Producing Acreage and Well Counts

For the following data, “gross” refers to the total wells or acres in which MV Partners owns a working interest and “net” refers to gross wells or acres multiplied by the percentage working interest owned by MV Partners.

Although many of MV Partners’ wells produce both oil and natural gas, a well is categorized as an oil well or a natural gas well based upon the ratio of oil to natural gas production.

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MV Partners continues to develop further proved undeveloped reserves pursuant to its planned development and workover program.

See “Trustee’s Discussion and Analysis of Financial Condition and Results of Operations — Planned Development and Workover Program.”

Trustee’s Discussion and Analysis of Financial Condition and Results of Operations — Planned Development and Workover Program.”

The following table shows the average sales prices per Bbl of oil and Mcf of natural gas produced and the production costs and production and property taxes per Boe for the underlying properties.

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Vess Oil has maintained constant activity in these fields to increase production.

Vess Oil plans to drill additional infill developmental wells in the Arbuckle, Lansing-Kansas City, Simpson and Whitecloud intervals in the El Dorado area during the next five years.

Vess Oil also plans to maintain its annual recompletion and workover program over the next five years.

Vess Oil plans to maintain its annual recompletion and workover program over the next five years.

Vess Oil has commenced a waterflood program to enhance production from the Whitecloud formation.

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Murfin Drilling operates the leases held by MV Partners in the Trapp, Hansen and Ray Fields.

Murfin Drilling has informed the trustee that it plans to drill and workover and recomplete additional wells, including acid stimulations, over the next five years.

Murfin Drilling has informed the Trustee that it plans to workover and recomplete additional wells, including acid stimulations, over the next five years.

Marketing and Post-Production Services

Pursuant to the terms of the conveyance that created the net profits interest, MV Partners has the responsibility to market, or cause to be marketed, the oil, natural gas and natural gas liquid production attributable to the underlying properties.

The terms of the conveyance that created the net profits interest do not permit MV Partners to charge any marketing fee when determining the net proceeds upon which the net profits interest is calculated.

Pursuant to the terms of the Conveyance, MV Partners has the responsibility to market, or cause to be marketed, the oil, natural gas and natural gas liquid production attributable to the underlying properties.

The terms of the Conveyance do not permit MV Partners to charge any marketing fee when determining the net proceeds upon which the net profits interest is calculated.

As a result, the net proceeds to the Trust from the sales of oil, natural gas and natural gas liquid production from the underlying properties are determined based on the same price that MV Partners receives for oil, natural gas and natural gas liquid production attributable to MV Partners’ remaining interest in the underlying properties.

Vess Oil and Murfin Drilling, as contract operators, generally sell production from the underlying properties to several purchasers, including MV Purchasing, LLC, which we refer to herein as “MV Purchasing,” under short-term arrangements using market sensitive pricing.

Vess Oil and Murfin Drilling, as contract operators, generally sell production from the underlying properties to several purchasers, including MV Purchasing, LLC (“MV Purchasing”), under short-term arrangements using market-sensitive pricing.

MV Purchasing is majority-owned by the indirect equity owners of MV Partners.

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Two purchasers, including MV Purchasing, have been purchasing substantially all of the crude oil production, and a substantial portion of the crude oil production may continue be acquired by one or more single purchasers.

For the years ended December 31,

2020, 2021 and 2022, MV Purchasing purchased 73%, 73% and 74%, respectively, of the production sold from the underlying properties.

For the years ended December 31, 2021, 2022 and 2023, MV Purchasing purchased 73%, 74% and 73%, respectively, of the production sold from the underlying properties.

MV Partners does not believe that loss of any of these parties as a purchaser would have a material adverse impact on the business of MV Partners, as substitute purchasers are generally available;

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MV Partners sells the majority of the oil production from the underlying properties under short-term arrangements using market sensitive pricing.

The price received by MV Partners for the oil production from the underlying properties is usually based on the NYMEX price applied to equal daily quantities on the month of delivery, which price is then reduced for differentials based upon delivery location and oil quality.

The price received by MV Partners for the oil production from the underlying properties is usually based on the NYMEX price applied to equal daily

quantities on the month of delivery, which price is then reduced for differentials based upon delivery location and oil quality.

The average differential for oil production during the years ended December 31, 2021, 2022 and 2023 was $4.52, $4.17 and $4.13 per barrel, respectively.

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MV Partners generally may sell all or a portion of its interests in the underlying properties, subject to and burdened by the net profits interest, without the consent of the Trust unitholders.

In addition, MV Partners may, without the consent of the Trust unitholders, require the Trust to release the net profits interest associated with any lease that accounts for no more than 0.25% of the total production from the underlying properties in the prior 12 months and provided that the net profits interest covered by such releases cannot exceed, during any 12-month period, an aggregate fair market value to the Trust of $500,000.

Any net sales proceeds paid to the Trust are distributable to Trust unitholders for the quarter in which they are received.

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At the time of its acquisition of the underlying properties, MV Partners believes that it undertook a thorough title examination of the underlying properties.

MV Partners has recorded the conveyance of the net profits interest in the real property records in each Kansas County where the properties are located.

MV Partners has recorded the Conveyance in the real property records in each Kansas County where the properties are located.

MV Partners has informed the Trustee that MV Partners believes that the delivery and recording of the Conveyance constituted fully conveyed and vested property interests in the Trust under Kansas law.

Although no assurance can be given, MV Partners has informed the trustee that MV Partners believes that, if, during the term of the trust, MV Partners becomes involved as a debtor in a bankruptcy proceeding, the conveyance of the net profits interest, as vested and recorded property interests, cannot be avoided by a bankruptcy trustee.

Although no assurance can be given, MV Partners has informed the Trustee that MV Partners believes that, if, during the term of the Trust, MV Partners becomes involved as a debtor in a bankruptcy proceeding, the Conveyance, as vested and recorded property interests, cannot be avoided by a bankruptcy Trustee.

If in such a proceeding a determination were made that the Conveyance constitutes an executory contract and the net profits interest is not a fully conveyed property interest under the laws of Kansas, and if such contract were not to be assumed in a bankruptcy proceeding involving MV Partners, the Trust would be treated as an unsecured creditor of MV Partners with respect to such net profits interest in the pending bankruptcy proceeding.

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MV Partners has informed the Trustee that MV Partners believes that it is possible that the net profits interest for the underlying properties located in Colorado may not be treated as a real property interest under the laws of Colorado.

MV Partners has recorded the conveyance of the net profits interest in the real property records of Colorado in accordance with local recording acts.

MV Partners has recorded the Conveyance in the real property records of Colorado in accordance with local recording acts.

MV Partners has informed the Trustee that MV Partners believes that if, during the term of the Trust, MV Partners becomes involved as a debtor in a bankruptcy proceeding, the net profits interest relating to the underlying properties located in Colorado should be treated as a fully conveyed personal property interest under the laws of Colorado.

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These alternate forms of energy include electricity, coal and fuel oils.

Changes in the availability or price of oil, natural gas or other forms of energy, as well as business conditions, conservation, legislation, regulations and the ability to convert to alternate fuels and other forms of energy may affect the demand for oil and natural gas.

Changes in the availability or

price of oil, natural gas or other forms of energy, as well as business conditions, conservation, legislation, regulations and the ability to convert to alternate fuels and other forms of energy may affect the demand for oil and natural gas.

Future price fluctuations for oil, natural gas and natural gas liquids will directly impact Trust distributions, estimates of reserves attributable to the Trust’s interests and estimated and actual future net revenues to the Trust.

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In general, interstate oil pipeline rates must be just and reasonable and may not be unduly discriminatory or confer any undue preference upon any shipper.

Rates generally

are cost-based, although settlement rates agreed to by all shippers are permitted and market-based rates may be permitted in certain circumstances.

Rates generally are cost-based, although settlement rates agreed to by all shippers are permitted and market-based rates may be permitted in certain circumstances.

Although the price at which MV Partners sells oil, natural gas and natural gas liquids is not currently subject to federal rate regulation and, for the most part, is not subject to state regulation, with regard to physical sales of natural gas and oil, MV Partners is required to observe anti-market manipulation laws and related regulations enforced by the FERC and/or the Commodity Futures Trading Commission and the Federal Trade Commission.

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The following is a summary of the existing laws, rules and regulations to which the operations of the underlying properties are subject that are material to the operation of the underlying properties.

Waste Handling.

The Resource Conservation and Recovery Act, or “RCRA,” and comparable state statutes, regulate the generation, storage, treatment, transportation, disposal and cleanup of hazardous and non-hazardous wastes.

Under the auspices of the federal Environmental Protection Agency, or the “EPA,” the individual states administer some or all of the provisions of RCRA, sometimes in conjunction with their own, more stringent requirements.

Drilling fluids, produced waters and most of the other wastes associated with the exploration, development and production of crude oil or natural gas are currently regulated under RCRA as non-hazardous wastes.

Nevertheless, it is possible that these wastes could be classified as hazardous wastes in the future.

For example, in December 2016, the EPA and environmental groups entered into a consent decree to address the EPA’s alleged failure to timely assess its RCRA Subtitle D criteria regulations exempting certain exploration and production-related oil and natural gas wastes from regulation as hazardous wastes under RCRA.

The consent decree required the EPA to propose a rulemaking no later than March 15, 2019 for revision of certain Subtitle D criteria regulations pertaining to oil and natural gas wastes or to sign a determination that revision of the regulations is not necessary.

The EPA fulfilled its

obligation under the consent decree by issuing a determination on April 23, 2019 that revisions to existing RCRA Subtitle D regulations governing oil and natural gas wastes are not necessary, along with a report supporting that determination.

Any future change in the exclusion for such wastes could potentially result in an increase in the cost of managing and disposing of those wastes.

Comprehensive Environmental Response, Compensation and Liability Act.

The Comprehensive Environmental Response, Compensation and Liability Act, or “CERCLA,” also known as the Superfund law, and comparable state laws impose liability without regard to fault or the legality of the original conduct on certain classes of persons who are considered to be jointly and severally responsible for the release of a “hazardous substance” into the environment.

Hazardous Substances and Wastes.

The Comprehensive Environmental Response, Compensation, and Liability Act, as amended (“CERCLA”), also known as the Superfund law, and comparable state laws impose liability without regard to fault or the legality of the original conduct on certain classes of persons who are considered to be jointly and severally responsible for the release of a “hazardous substance” into the environment.

These persons include current and prior owners or operators of the site where the release occurred and entities that disposed or arranged for the disposal of the hazardous substances found at the site.

Under CERCLA, these “responsible persons” may be liable for the costs of cleaning up the hazardous substances that have been released into the environment, for damages to natural resources, and for the costs of certain health studies.

CERCLA also authorizes the EPA and, in some instances, third parties to act in response to threats to the public health or the environment and then to seek to recover from the responsible classes of persons the costs they incur.

CERCLA also authorizes the U.S.

Environmental Protection Agency (“EPA”) and, in some instances, third parties to act in response to threats to the public health or the environment and then to seek to recover from the responsible classes of persons the costs they incur.

It is not uncommon for neighboring landowners and other third parties to file claims for personal injury and property damage allegedly caused by the release of hazardous substances or other pollutants into the environment.

The underlying properties may have been used for oil and natural gas exploration and production for many years.

Although MV Partners believes that it has utilized operating and waste disposal practices that were standard in the industry at the time, hazardous substances, wastes or hydrocarbons may have been disposed of or released on or under the properties, or on or under other locations, including off-site locations, where such substances have been taken for treatment or disposal.

In addition, the underlying properties may have been operated by third parties or by previous owners or operators whose treatment and disposal or release of hazardous substances, wastes or hydrocarbons was not under MV Partners’ control.

These properties and the substances disposed or released on them may be subject to CERCLA, RCRA and analogous state laws.

Although petroleum, natural gas, and natural gas liquids are excluded from the definition of “hazardous substance” under CERCLA, MV Partners handles materials in the course of its operations that may be regulated as CERCLA hazardous substances, despite the so-called “petroleum exclusion.”

MV Partners also generates solid and hazardous wastes that are subject to the requirements of the Resource Conservation and Recovery Act, as amended (“RCRA”), and comparable state statutes.

RCRA imposes strict requirements on the generation, storage, treatment, transportation and disposal of hazardous wastes.

In the course of its operations, MV Partners generates petroleum hydrocarbon wastes and ordinary industrial wastes that may be classified as hazardous wastes under RCRA and comparable state laws.

Drilling fluids, produced waters, and most of the other wastes associated with the exploration, production, and development of crude oil or natural gas are currently regulated under RCRA as non-hazardous wastes.

While many exploration and production wastes are exempt from regulation as hazardous waste, these wastes are generally subject to non-hazardous waste regulation under RCRA and applicable state regulations.

Many state governments have specific regulations and guidance for exploration and production wastes, including the wastes associated with hydraulic fracturing activities.

MV Partners currently owns or leases, and in the past may have owned or leased, properties that have been used for numerous years to explore and produce oil and natural gas.

Although MV Partners may have utilized operating and disposal practices that were standard in the industry at the time, hydrocarbons and wastes may have been disposed of or released at or from the properties owned or leased by MV Partners or at or from the other locations where these hydrocarbons and wastes have been taken for treatment or disposal.

In addition, certain of these properties have been operated by third parties whose treatment and disposal or release of hydrocarbons and wastes was not under MV Partners’ control.

These properties and wastes disposed thereon may give rise to liability under CERCLA, RCRA and analogous state laws.

Under these laws, MV Partners could be required to investigate, remove or remediate previously disposed wastes, to clean up contaminated property and to perform response actions to prevent future contamination.

Water Discharges.

The federal Clean Water Act, or “CWA,” and analogous state laws impose restrictions and strict controls regarding the discharge of pollutants into waters of the United States and waters of the state, respectively.

Pursuant to the CWA and analogous state laws, permits must be obtained to discharge pollutants into state waters or waters of the United States.

Any such discharge of pollutants into regulated waters must be performed in accordance with the terms of the permit issued by the EPA or the analogous state agency.

The federal Clean Water Act (“CWA”) and analogous state laws impose restrictions and strict controls on the discharge of pollutants into “waters of the United States” and waters within the scope of state law, respectively.

Pursuant to the CWA and applicable state laws, permits must be obtained to discharge pollutants into regulated waters.

Any such discharge of pollutants into regulated waters must be performed in accordance with the terms of the permit issued by the EPA or the applicable state agency or both.

The discharge of wastewater from most onshore oil and gas activities exploration and production activities is currently prohibited east of the 98 th meridian.

Additionally, in June 2016, the EPA issued a final rule implementing wastewater pretreatment standards that prohibit onshore unconventional oil and natural gas extraction facilities from sending wastewater directly to publicly owned treatment works, or “POTW.” Unconventional extraction facilities are in certain circumstances allowed by federal regulations to send wastewater to an off-site private centralized wastewater treatment, or “CWT,” facility in most circumstances.

Unconventional extraction facilities are in certain circumstances allowed by federal regulations to send wastewater to an off-site private centralized wastewater treatment (“CWT”) facility in most circumstances.

CWT facilities can either discharge treated water directly to surface waters or send it to a POTW.

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The discharge of dredge and fill material in waters of the United States, including wetlands, is also prohibited unless authorized by a permit issued under CWA Section 404 by the U.S.

Army Corps of Engineers, or “USACE.” CWA Section 401 provides that the applicant for an individual Section 404 USACE permit for the discharge of dredge and fill material must notify the state in which the discharge will occur and provide an opportunity for the state to determine if the discharge will comply with the state’s approved water quality program.

Army Corps of Engineers (“USACE”).

CWA Section 401 provides that the applicant for a Section 404 USACE permit for the discharge of dredge and fill material must seek a Section 401 water quality certification by applying to the state in which the discharge will occur for the state to determine if the discharge will comply with the state’s approved water quality program.

In some instances, this process could result in a delay in issuance of the permit, more stringent permit requirements, or denial of the permit.

How the EPA and the USACE define “waters of the United States,” or “WOTUS,” which defines the extent of geographic jurisdiction under the CWA, can impact MV Partners’ regulatory and permitting obligations under the CWA.

In 2023, the EPA and the USACE issued a final rule, or the “2023 rule,” that is described by the EPA and the USACE as following the 1986 regulations as modified by subsequent U.S.

How the EPA and the USACE define “waters of the United States” (“WOTUS”), which defines the extent of geographic jurisdiction under the CWA, can impact MV Partners’ regulatory and permitting obligations under the CWA.

In 2023, the EPA and the USACE issued a final rule (the “2023 rule”) that is described by the EPA and the USACE as following the 1986 regulations as modified by subsequent U.S.

Supreme Court decisions and guidance issued by the EPA and USACE interpreting the decisions.

The 2023 rule is already subject to litigation, including motions for preliminary injunctions to prevent the 2023 rule from going into effect.

One issue raised in the litigation is that a U.S.

Supreme Court decision in the Sackett II case is expected in mid-2023 and will likely address the definition of wetlands in the 2023 rule.

MV Partners’ regulatory obligations and permitting costs will continue to be subject to remaining uncertainty around the definition of WOTUS and the scope of CWA regulation, given the pending litigation over the 2023 rule and expected Supreme Court decision.

USACE Nationwide Permits, or “NWPs,” are a streamlined form of permitting used to authorize development activities with minimal individual or cumulative adverse effects in wetlands or other waters of the United States under the CWA and/or Rivers and Harbors Act.

Shortly thereafter, the Supreme Court issued its decision in Sackett II which overturned a substantial portion of the basis for the 2023 Rule.

USACE and the EPA subsequently amended the 2023 rule and excluded a number of types of wetlands and streams from CWA jurisdiction, but the rule is subject to litigation regarding the sufficiency of the agencies’ interpretation of the Sackett II decision.

USACE Nationwide Permits (“NWPs”) are a streamlined form of permitting used to authorize activities related to development activities with minimal individual or cumulative adverse effects in wetlands or other waters of the United States under the CWA.

Some NWPs are also used to authorize activities that impact traditional navigable waters under the Rivers and Harbors Act.

The current administration has stated an intention to re-visit NWP 12, which is used to authorize regulated impacts related to construction of oil and gas pipelines, through notice and comment rulemaking before its current expiration date of February 2026.

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Revisions to NWP 12 by USACE or an adverse decision in Washington, D.C.

may restrict or remove the ability to use NWP 12 to permit regulated impacts, resulting in the need to apply for a more time-consuming individual permit.

may restrict or remove the

ability to use NWP 12 to permit regulated impacts, resulting in the need to apply for a more time-consuming individual permit.

This could result in additional cost and time for permitting projects.

The Oil Pollution Act of 1990, or the “OPA,” as amended, which amends the CWA, establishes standards for prevention, containment and cleanup of oil spills into waters of the United States.

The Oil Pollution Act of 1990, as amended (“OPA”), which amends the CWA, establishes standards for prevention, containment and cleanup of oil spills into waters of the United States.

The OPA requires measures to be taken to prevent the accidental discharge of oil into waters of the United States from onshore production facilities.

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proof of financial responsibility to cover environmental cleanup and restoration costs that could be incurred in connection with an oil spill;

and the development and implementation of spill prevention, control and countermeasure, or “SPCC,” plans to prevent and respond to oil spills.

and the development and implementation of spill prevention, control and countermeasure (“SPCC”) plans to prevent and respond to oil spills.

The OPA also subjects owners and operators of facilities to strict, joint and several liability for all containment and cleanup costs and certain other damages arising from a spill.

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Air Emissions.

The federal Clean Air Act, or “CAA,” and comparable state laws, regulate emissions of various air pollutants through air emissions permitting programs and the imposition of other requirements.

In addition, the EPA has developed, and continues to develop, stringent regulations governing emissions of toxic air pollutants at specified sources and has recently proposed rules that define the terms used to determine whether a source is considered to be a major source under the CAA.

Federal and state regulatory agencies can impose administrative, civil and criminal penalties for non-compliance with air permits or other requirements of the CAA and associated state laws and regulations.

The Clean Air Act, as amended (“CAA”), and comparable state laws and regulations restrict the emission of air pollutants from many sources and also impose various monitoring and reporting requirements.

These laws and regulations may require MV Partners to obtain pre approval for the construction or modification of certain projects or facilities expected to produce or significantly increase air emissions, and to comply with stringent air permit or regulatory requirements or utilize specific equipment or technologies to control emissions.

Obtaining permits has the potential to delay the development of MV Partners’ properties.

The EPA has established pollution control standards for oil and gas sources under the CAA.

In 2012, the EPA adopted federal New Source Performance Standards, or “NSPS,” that require the reduction of volatile organic compound emissions from certain fractured and refractured natural gas wells for which well completion operations are conducted and further require that most wells use reduced emission completions, also known as “green completions.” These regulations also establish specific new requirements regarding emissions from production-related wet seal and reciprocating compressors, and from pneumatic controllers and storage vessels.

In June 2016, the EPA published a second NSPS for oil and gas sources that requires operators to reduce volatile organic compound (and methane) emissions from certain oil and gas facilities, including production, processing, transmission and storage activities, that are constructed, modified, or reconstructed after September 18, 2015.

More recently, the EPA issued a November 15, 2021 proposal and a November 11, 2022 supplemental proposal that would establish volatile organic compound and methane emissions standards for oil and gas sources that are constructed, modified, or reconstructed after November 15, 2021, as well as a set of volatile organic compound and methane emissions guidelines that would apply to existing oil and gas sources for the first time under the CAA.

The EPA plans to issue a final rule from the pending proposal in 2023.

The EPA is also charged with establishing National Ambient Air Quality Standards, or “NAAQS,” the implementation of which can indirectly impact MV Partners’ operations.

In 2012 and 2016, the EPA adopted federal New Source Performance Standards (“NSPS”) that require the reduction of volatile organic compound and sulfur dioxide emissions from certain fractured and refractured natural gas wells for which well completion operations are conducted and further require that most wells use reduced emission completions, also known as “green completions.” These regulations also establish specific requirements regarding emissions from production-related wet seal and reciprocating compressors, pumps, and from pneumatic controllers and storage vessels, and for equipment leaks.

These NSPS apply to sources that are newly constructed or modified after the rules’ applicability dates.

More recently, in December 2023 the EPA adopted a final rule that will directly regulate volatile organic compound and methane emissions from oil and gas sources constructed or modified after December 2022 and will require reductions in both pollutants through its regulation of flaring, compressors, pumps, storage vessels, process controllers, well completions and liquids unloading, and equipment leaks.

Additionally, the EPA for the first time adopted emissions guidelines that will apply to existing oil and gas sources and that require reductions in volatile organic compound and methane emissions that are largely equivalent to the requirements for new sources.

The existing source emissions guidelines are to be implemented through state plans, with expected compliance dates for existing sources arriving in 2029.

The EPA is also charged with establishing National Ambient Air Quality Standards (“NAAQS”), the implementation of which can indirectly impact MV Partners’ operations.

The CAA directs the EPA to review each NAAQS every five years to ensure that the standards are protective of public health and welfare.

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In December 2020, the EPA published a final rule that retained without revision the 2015 NAAQS ozone standard.

The current administration will have an opportunity to revisit the ozone NAAQS.

State or federal implementation of the NAAQS could result in stricter permitting or regulatory requirements, delay or prohibit MV Partners’ ability to obtain such permits, and result in increased expenditures for pollution control equipment, the costs of which could be significant.

More recently, however, in February 2024, the EPA announced a final rule that will lower the annual standard for fine particulate matter from 12 micrograms per cubic meter to 9 micrograms per cubic meter.

Although MV Partners may be required to incur certain capital expenditures during the next few years for air pollution control equipment or other air emissions-related issues, at this time MV Partners does not expect that such requirements will have a material adverse effect on its operations.

Climate Change.

There has been support in various regions of the country for legislation that requires reductions in greenhouse gas emissions, and some states have already adopted legislation addressing greenhouse gas emissions from various sources, primarily power plants.

In response to findings that emissions of carbon dioxide, methane and other greenhouse gases, or “GHGs,” may present an endangerment to public health and the environment, the EPA has issued regulations to restrict emissions of greenhouse gases under existing provisions of the CAA.

These regulations include limits on tailpipe emissions from motor vehicles, preconstruction and operating permit requirements for certain large stationary sources, and methane emissions standards for certain new, modified and reconstructed oil and gas sources.

In response to findings that emissions of carbon dioxide, methane and other greenhouse gases (“GHGs”) may present an endangerment to public health and the environment, the EPA

has issued regulations to restrict emissions of greenhouse gases under existing provisions of the CAA.

The EPA also has adopted rules requiring the reporting of GHG emissions from specified large greenhouse gas emission sources in the United States, as well as certain onshore oil and natural gas production facilities, on an annual basis.

In December 2015, the EPA finalized rules that added new sources to the scope of its GHG monitoring and reporting rule.

These new sources include gathering and boosting facilities.

The revisions also include the addition of well identification reporting requirements for certain facilities.

In addition, in June 2016 the EPA published a final rule that requires operators to reduce methane emissions from certain oil and gas facilities, including production, processing, transmission and storage activities, that are constructed, modified, or reconstructed after September 18, 2015, or the “Methane Rule.” More recently, the EPA issued a November 15, 2021 proposal and a November 11, 2022 supplemental proposal that would establish volatile organic compound and methane emissions standards for oil and gas sources that are constructed, modified, or reconstructed after November 15, 2021, as well as a set of volatile organic compound and methane emissions guidelines that would apply to existing oil and gas sources for the first time under the CAA.

The EPA plans to issue a final rule from the pending proposal in 2023, which would then trigger a requirement for states to develop rules that will make the federal emissions guidelines enforceable as state rules over a three- to four-year period.

The ultimate fate of the proposed GHG control requirements for existing oil and gas sources is unclear.

Nevertheless, regulations promulgated under the CAA may require MV Partners to incur development expenses to install and utilize specific equipment, technologies, or work practices to control methane emissions from its operations.

Laws, regulations, treaties or international agreements related to greenhouse gases and climate change, including incentives to conserve energy or use alternative energy sources, could have a negative impact on the future operations of MV Partners if such laws, regulations, treaties or international agreements reduce the worldwide demand for oil and natural gas or otherwise result in reduced economic activity generally.

More recently, activists concerned about the potential effects of climate change have pressured financial institutions and other sources of capital to restrict investment in oil and gas activities which could make it more difficult to secure funding for oil and gas exploration and production.

In addition to potential impacts on MV Partners’ operations directly or indirectly resulting from climate-change legislation or regulations, MV Partners’ operations also could be negatively affected by climate-change related physical changes or changes in weather patterns including drought and severe storms.

At this time, it is not possible to estimate accurately how potential future laws or regulations addressing GHG emissions would impact the operations of MV Partners.

At the international level, the U.S.

joined the international community at the 21st Conference of the Parties of the United Nations Framework Convention on Climate Change in Paris, France, which resulted in an agreement intended to nationally determine their contributions and set greenhouse gas emission reduction goals every five years beginning in 2020.

While the Agreement did not impose direct requirements on emitters, national plans to meet its pledge could have resulted in new regulatory requirements.

In November 2019, however, plans were formally announced for the U.S.

to withdraw from the Paris Agreement,

and the U.S.’s withdrawal from the Paris Agreement took effect on November 4, 2020.

On January 20, 2021, President Biden issued an executive order commencing the process to reenter the Paris Agreement, although the emissions pledges in connection with that effort have not yet been updated.

formally rejoined the Paris Agreement in February 2021.

The trust cannot predict whether re-entry into the Paris Agreement or pledges made in connection therewith will result in new regulatory requirements or whether such requirements will cause MV Partners to incur material costs.

In a separate executive order issued on January 20, 2021, President Biden asked the heads of all executive departments and agencies to review and take action to address any federal regulations, orders, guidance documents, policies and any similar agency actions promulgated during the prior administration that may be inconsistent with or present obstacles to the administration’s stated goals of protecting public health and the environment, and conserving national monuments and refuges.

The executive order also established an Interagency Working Group on the Social Cost of Greenhouse Gases, or the “Working Group,” which is called on to, among other things, capture the full costs of greenhouse gas emissions, including the “social cost of carbon,” “social cost of nitrous oxide” and “social cost of methane,” which are “the monetized damages associated with incremental increases in greenhouse gas emissions,” including “changes in net agricultural productivity, human health, property damage from increased flood risk, and the value of ecosystem services.” In late 2022, the Working Group proposed to significantly increase the social cost of carbon used in assessing the costs and benefits of government actions.

In addition, the EPA has recently proposed rules to implement the mandatory Waste Emissions Charge set forth in the Inflation Reduction Act of 2022 (the “IRA”), which will charge a fee based on the methane emissions from applicable facilities in the oil and gas sector starting in 2024.

The EPA has established pollution control standards for oil and gas sources under the CAA.

In 2012 and 2016, the EPA adopted federal New Source Performance Standards (“NSPS”) that require the reduction of volatile organic compound and sulfur dioxide emissions from certain fractured and refractured natural gas wells for which well completion operations are conducted and further require that most wells use reduced emission completions, also known as “green completions.” These regulations also establish specific requirements limiting emissions from production-related wet seal and reciprocating compressors, pumps, and from pneumatic controllers and storage vessels, and for equipment leaks.

These NSPS apply to sources that are newly constructed or modified after the rules’ applicability dates.

More recently, in December 2023 the EPA adopted a final rule that will directly regulate volatile organic compound and methane emissions from new oil and gas sources and will require further reductions in emissions through its regulation of flaring, compressors, pumps, storage vessels, process controllers, well completions and liquids unloading, and equipment leaks.

At the same time, the EPA adopted emissions guidelines that will apply to existing oil and gas sources and that require reductions in volatile organic compound and methane emissions that are largely equivalent to the requirements for new sources.

The existing source emissions guidelines are to be implemented through state plans, with expected compliance dates for existing sources arriving in 2029.

The IRA included new Clean Air Act section 136(c) directing the EPA to collect the Waste Emissions Charge from facilities in the oil and gas sector that report more than 25,000 tons of carbon dioxide equivalent emissions in a calendar year.

The charge will first apply to methane emissions from calendar year 2024.

The charge is determined by comparing actual reported methane emissions to statutorily established “methane intensity figures” that are based on gas production or throughput, with a charge assessed for every ton of methane emissions that exceeds the facility’s allowable emissions based on the applicable methane intensity figure.

The charge will be $900 per ton for 2024 emissions and will increase to $1,200 and then $1,500 per ton in subsequent years.

The program includes key exemptions, most notably a regulatory compliance exemption that applies to and exempts the emissions from facilities that are subject to and in complete compliance with EPA’s new or existing source methane requirements.

The EPA proposed new rules to implement the Waste Emissions Charge program in January 2024.

Additionally, more than one third of the states have begun taking actions to control and/or reduce emissions of GHGs, primarily through the planned development of GHG emission inventories and/or regional GHG cap and trade programs.

Although most of the state level initiatives have to date focused on large sources of GHG emissions, such as coal fired electric plants, it is possible that smaller sources of emissions could become subject to GHG emission limitations or allowance purchase requirements in the future.

In addition, from time to time Congress has considered adopting legislation to reduce emissions of greenhouse gases.

Any one of these climate change regulatory and legislative initiatives could have a material adverse effect on MV Partners’ business, capital expenditures, financial condition and results of operations .

The adoption and implementation of regulations imposing reporting obligations on, or limiting emissions of GHGs from, MV Partners’ equipment and operations could require MV Partners to incur costs to reduce emissions of GHGs associated with its operations or could adversely affect demand for the oil and natural gas it produces.

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To the extent that its products are competing with higher GHG-emitting energy sources, MV Partners’ products may become more desirable in the market with more stringent limitations on GHG emissions.

To the extent that its products are competing with lower GHG-emitting energy, MV Partners’ products may become less desirable in the market with more stringent limitations on greenhouse gas emissions.

To the extent that its products are competing with lower GHG-emitting

energy, MV Partners’ products may become less desirable in the market with more stringent limitations on greenhouse gas emissions.

MV Partners cannot predict with any certainty at this time how these possibilities may affect its operations.

The operations of the underlying properties are not adversely impacted by the current state and local climate change initiatives and, at this time, it is not possible to accurately estimate how potential future laws or regulations addressing greenhouse gas emissions would impact the operations of the properties.

Finally, some scientists have theorized that increasing concentrations of GHGs in the Earth’s atmosphere may produce climate changes that have significant physical effects, such as increased frequency and severity of storms, droughts, and floods and other climatic events.

If any such significant physical effects were to occur, they could have an adverse effect on MV Partners’ assets and operations and cause MV Partners to incur costs in preparing for and responding to them.

Additionally, energy needs could increase or decrease as a result of extreme weather conditions, depending on the duration and magnitude of those conditions.

Endangered Species Act.

The federal Endangered Species Act, or “ESA,” restricts or prohibits activities that may affect endangered and threatened species or their habitats.

If endangered species are located in areas of the underlying properties where seismic surveys, development activities or abandonment operations may be conducted, the work could be prohibited or delayed or expensive mitigation may be required.

The federal Endangered Species Act, as amended (“ESA”), prohibits taking of listed endangered, and in some cases threatened, species.

Under the ESA, federal agencies are obligated to consult with the U.S.

Fish and Wildlife Service or National Marine Fisheries Service if an agency’s actions, including permit actions, may affect listed species or designated critical habitat.

If endangered species are located in areas of the Underlying Properties where seismic surveys, development activities or abandonment operations may be conducted, the work could be prohibited or delayed or expensive mitigation may be required, depending on the implications for protected species and designated critical habitat.

On August 27, 2019, the U.S.

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In January 2021, President Biden issued an Executive Order announcing that the new administration would initiate a review of the 2019 amendments to the ESA rules.

The Biden Administration has rescinded one of the rules adopted by the prior administration, dealing with critical habitat, and has stated its intention to revise other rules, but that has not yet occurred.

The Biden Administration has rescinded one of the rules adopted by the prior administration, dealing with critical habitat, and has issued a proposed rule that would make significant changes to the federal consultation process.

That rule is expected to be finalized by the Biden Administration.

Changes to these rules could make a federal review process occasioned by the application for permits, rights of way, or leases more complex.

Designation of new species as threatened or endangered could cause MV Partners to incur additional costs arising from species protection measures, could result in limitations on activities, and could require a more complex regulatory compliance process.

While some of MV Partners’ facilities or leased acreage may be located in areas that are designated as habitat for endangered or threatened species, MV Partners believes that it is in substantial compliance with the ESA.

In addition, designation of new species as threatened or endangered could cause MV Partners to incur additional costs arising from species protection measures, could result in limitations on activities, and could require a more complex regulatory compliance process.

National Environmental Policy Act.

The National Environmental Policy Act, or “NEPA,” requires the federal government to undertake an environmental review prior to making a decision on most proposed federal actions — such as permits, leases, and rights-of-way.

The Trump Administration significantly revised the regulations implementing NEPA in 2020 in an effort to make the review process more efficient and

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more narrowly tailored to the agency’s specific action.

The National Environmental Policy Act (“NEPA”) requires the federal government to undertake an environmental review prior to making a decision on most proposed federal actions — such as permits, leases, and rights-of-way.

The Trump Administration significantly revised the regulations implementing NEPA in 2020 in an effort to make the review process more efficient and more narrowly tailored to the agency’s specific action.

The Biden Administration undertook an initial revision to the NEPA regulations which were finalized in 2022, essentially reverting to the pre-2020 rule language for a few elements of the rules.

The White House Council on Environmental Quality, or “CEQ,” is expected to publish a round-two rulemaking in early 2023 that will make more significant revisions to the Trump-era rule.

In addition, in early 2023 CEQ issued guidance to the federal agencies on how agencies should consider greenhouse gas emissions and climate impacts in the course of their reviews under NEPA.

The 2022 regulatory changes may not have a significant impact on federal reviews related to MV Partners actions because the Trump Administration rule was never fully implemented by the agencies;

however, the 2023 CEQ guidance may increase agency review times as may future regulatory changes.

In 2023, the Biden Administration issued a second proposed rule that would make significant changes to the Trump Administration regulations.

The proposed rule is expected to be finalized in April 2024.

In addition, in early 2023 the White House Council on Environmental Quality issued Guidance to the federal agencies on how agencies should consider greenhouse gas emissions and climate impacts in the course of their reviews under NEPA.

Although the Trump Administration regulations were never fully implemented, the Biden Administration changes may have a meaningful impact on federal reviews related to MV Partners, especially as those reviews relate to climate and environmental justice.

OSHA and Other Laws and Regulation.

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However, there is no assurance that the passage of more stringent laws or regulations in the future will not have a negative impact on the operations of the underlying properties and cash distributions to Trust unitholders.

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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-K

Item 1. Business