Item 1. Legal Proceedings
Item 1. Legal Proceedings
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. 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. The trial date in the District Court of Tarrant County is scheduled for November 17, 2025, 8:30 a.m., Central Time. Discovery is ongoing.
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. Specifically, the Trustee alleges that Blackbeard impermissibly calculated and deducted overhead costs, labor expenses, and saltwater disposal fees. 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. The claims relate to the April 2020 through December 2023 production months. 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. 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.
Item 1A. Risk Factors
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. 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
Not applicable.
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