Legal Proceedings
−Removed: On December 18, 2023, the Trustee filed a complaint in the United States District Court for the Northern District of Texas against Blackbeard Operating, LLC ("Blackbeard"), the operator of the Waddell Ranch properties.
−Removed: Pursuant to the complaint, the Trustee sought to recover more than $15 million in damages to the Trust resulting from overhead costs and other expenses the Trustee alleged were impermissibly deducted from royalty payments to the Trust.
−Removed: On March 5, 2024, the lawsuit against Blackbeard was voluntarily dismissed without prejudice.
−Removed: On May 8, 2024, the Trustee filed a petition in the District Court of Tarrant County, Texas against Blackbeard seeking to recover more than $15 million in damages to the Trust resulting from overhead costs and other expenses the Trustee alleges were impermissibly deducted from royalty payments to the Trust, including among other things, incorrect overhead charges, application of overhead charges to non-producing wells, duplicate charges for services, materials, and utilities, as well as other expenses the Trustee alleges are ineligible charges for the 2020 to 2022 period.
−Removed: The Trustee’s petition was amended in September 2024 to add additional claims relating to the 2023 joint venture audit and production volumes, seeking damages of more than $25 million.
−Removed: On June 10, 2024, Blackbeard filed its original answer and counterclaim to the lawsuit.
−Removed: Included in Blackbeard's original answer and counterclaim are requests for declaratory judgment by the court that it may deduct certain disputed overhead charges from Trust royalty payments and that it may limit information it provides to the Trust to quarterly statements of the net proceeds computation and inspection of books and records during normal business hours.
−Removed: Discovery is ongoing, including on-site audits of the Waddell Ranch properties, engagement of and analyses by expert witnesses, and review of documents provided by Blackbeard.
−Removed: The District Court of Tarrant County has set a trial date of November 17, 2025, 8:30 a.m., Central Time.
+Added: On May 27, 2025, the Trustee announced that it had filed a Second Amended Petition in the District Court of Tarrant County, Texas in connection with its lawsuit against Blackbeard, the operator of properties in Waddell Ranch, in Crane County, Texas, in which the Trust holds a 75% net overriding royalty.
+Added: On May 8, 2024, the Trustee announced that it had initiated the lawsuit by filing a petition in the District Court of Tarrant County, Texas, and on June 10, 2024, Blackbeard filed its original answer and counterclaim to the lawsuit.
+Added: The trial date in the District Court of Tarrant County is scheduled for November 17, 2025, 8:30 a.m., Central Time.
+Added: Discovery is ongoing.
+Added: Under the Second Amended Petition, the Trustee seeks to recover more than $9 million in damages to the Trust it alleges result from Blackbeard’s failure to properly calculate and pay royalties due and owing to the Trust.
+Added: Specifically, the Trustee alleges that Blackbeard impermissibly calculated and deducted overhead costs, labor expenses, and saltwater disposal fees.
+Added: The Trustee also claims Blackbeard failed to pay on all volumes of oil, gas, and other minerals produced by Blackbeard from the relevant lands and failed to provide annual reports required by the Conveyance.
+Added: The claims relate to the April 2020 through December 2023 production months.
+Added: A joint venture audit of the 2024 production months is underway, and the Trustee reserved the right in the petition to bring any additional claims revealed by such audit.
+Added: Certain additional claims raised in the Trustee’s original and first amended petitions have been resolved through prior joint venture audits.
Except as described above, there are no material pending legal proceedings to which the Trust is a party or of which any of its property is the subject.
Risk factors relating to the Trust are contained in Item 1A of the Trust's Annual Report on Form 10-K for the fiscal year ended December 31, 2024.
−Removed: Except as set forth in such filing, no material change to such risk factors has occurred during the three months ended March 31, 2025.
+Added: Except as set forth in such filing, no material change to such risk factors has occurred during the six months ended June 30, 2025.
Items 2 through 4
1 unchanged sentence
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.