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Item 8. Financial Statements and Supplementary Data

2023-03-01 compared with 2022-03-30 · 152 added, 151 removed, 240 unchanged (56% of the section changed)

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Unit Holders of Permian Basin Royalty Trust and Simmons Bank, Trustee

To the Unit Holders of Permian Basin Royalty Trust and Argent Trust Company, Trustee

Opinion on the Financial Statements

We have audited the

accompanying statements of assets, liabilities and trust corpus of the Permian Basin Royalty Trust (the Trust) as of December 31, 2021 and 2020, and the related statements of distributable income and changes in trust corpus for each of the

three years in the period ended December 31, 2021 and the related notes (collectively referred to as the financial statements).

In our opinion, the financial statements present fairly, in all material respects, the assets, liabilities, and

trust corpus of the Trust as of December 31, 2021 and 2020, and the distributable income and changes in trust corpus for each of the three years in the period ended December 31, 2021, in conformity with the modified cash basis of

accompanying statements of assets, liabilities and trust corpus ofPermian Basin Royalty Trust (the Trust) as of December 31, 2022 and 2021, and the related statements of distributable income and changes in trust corpus for each of the three

years in the period ended December 31, 2022, and the related notes (collectively referred to as the financial statements).

In our opinion, the financial statements present fairly, in all material respects, the assets, liabilities,

and trust corpus of the Trust as of December 31, 2022 and 2021, and the distributable income and changes in trust corpus for each of the three years in the period ended December 31, 2022, in conformity with the modified cash basis of

accounting, which is a comprehensive basis of accounting other than accounting principles generally accepted in the United States of America.

described in Note 2 to the financial statements, these financial statements were prepared on a modified cash basis of accounting, which is a comprehensive basis of accounting other than accounting principles generally accepted in the United States

also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)(PCAOB), the Trusts internal control over financial reporting as of December 31, 2022, based on criteria

established in 2013 Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and our report dated March 1, 2023 expressed an unqualified opinion thereon.

As described in Note 2 to the financial statements, these financial statements were prepared on a modified cash basis of accounting, which is a

comprehensive basis of accounting other than accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial

statements are the responsibility of the Trustee.

Our responsibility is to express an opinion on these financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United

States) (PCAOB) and are required to be independent with respect to the Trust in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable

assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Trust is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Trusts internal control over financial reporting.

we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements,

whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included

evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

These financial statements are the responsibility of the Trustee.

Our responsibility is to express an opinion on these financial statements based on our

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Trust in accordance with the U.S.

federal securities laws and the

applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards

of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing

procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the

amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by the Trustee, as well as evaluating the overall presentation of the financial statements.

believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

Critical audit matters are matters

arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and

(2) involved our especially challenging, subjective, or complex judgments.

We determined that there are no critical audit matters.

/s/ WEAVER AND TIDWELL,

We have served as the Trusts auditor since 2016.

Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be

communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

We determined that there are

no critical audit matters.

/s/ WEAVER AND TIDWELL, L.L.P.

served as the Trusts auditor since 2016.

Dallas, Texas

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SFNC merged Southwest Bank with Simmons Bank effective February 20, 2018.

The defined term Trustee as used herein shall refer to Bank of America N.A.

for periods prior to August 29,

2014, and shall refer to Southwest Bank for periods from August 29, 2014 through February 19, 2018 and shall refer to Simmons Bank for periods on and after February 20, 2018.

On November 4, 2021, Simmons Bank announced that it has entered into an agreement with Argent Trust Company, a Tennessee chartered trust company

(Argent), pursuant to which Simmons Bank will be resigning as

trustee of the Trust and will nominate Argent as successor trustee of the Trust.

The Trustees resignation as trustee, and Argents appointment as successor trustee, are subject to

certain conditions set forth in the agreement, including approval by the Unit holders of the Trust and of certain other trusts of which Simmons Bank acts as trustee (or a court) of (i) Argents appointment as successor trustee and

(ii) any amendments to the indenture of the Trust and the trust agreements and indentures of the other trusts necessary to permit Argent to serve as successor trustee.

On November 4,

2021, Simmons Bank announced that it had entered into an agreement with Argent Trust Company, a Tennessee chartered trust company (Argent), pursuant to which Simmons Bank would be resigning as trustee of the Trust and would nominate

Argent as successor trustee of the Trust.

The effective date of Simmons Banks resignation and Argents appointment as successor trustee was December 30, 2022.

The defined term Trustee as used herein shall refer to Bank of

for periods prior to August 29, 2014, shall refer to Southwest Bank for periods from August 29, 2014 through

February 19, 2018, shall refer to Simmons Bank for periods from February 20, 2018 through December 29, 2022, and shall refer to Argent for periods on and after December 30,

The terms of the Trust Indenture provide, among other things, that:

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Actual results may differ from such estimates.

The Trustee routinely reviews its royalty interests in oil and gas properties for impairment whenever events or circumstances indicate that the carrying

amount of an asset may not be recoverable.

If an impairment event occurs and it is determined that the carrying value of the Trusts royalty interests may not be recoverable, an impairment will be recognized as measured by the amount by which

the carrying amount of the royalty interests exceeds the fair value of these assets, which would likely be measured by discounting projected cash flows.

There was no impairment of the assets as of December 31, 2021.

Contingencies

routinely reviews its royalty interests in oil and gas properties for impairment whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable.

If an impairment event occurs and it is determined that the

carrying value of the Trusts royalty interests may not be recoverable, an impairment will be recognized

as measured by the amount by which the carrying amount of the royalty interests exceeds the fair value of these assets, which would likely be measured by discounting projected cash flows.

was no impairment of the assets as of December 31, 2022.

Contingencies

related to the Underlying Properties that are unfavorably resolved would generally be reflected by the Trust as reductions to future royalty income payments to the Trust with corresponding reductions to cash distributions to Unit holders.

Distributable Income Per Unit

Basic distributable income per Unit is computed by dividing distributable income by the weighted average of Units outstanding.

Contingencies related to the Underlying Properties that are unfavorably resolved would generally be reflected by the Trust as reductions to future

royalty income payments to the Trust with corresponding reductions to cash distributions to Unit holders.

Distributable Income Per

Unit assuming dilution is computed by dividing distributable income by the weighted average number of Units and equivalent Units outstanding.

Basic distributable income per Unit is computed by dividing distributable income by the weighted average of Units outstanding.

Distributable income per Unit assuming dilution is computed by dividing distributable income by the weighted average number of Units and equivalent Units outstanding.

The Trust had no equivalent Units outstanding for any period presented.

Therefore, basic distributable

income per Unit and distributable income per Unit assuming dilution are the same.

basic distributable income per Unit and distributable income per Unit assuming dilution are the same.

New Accounting Pronouncements

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at the trust level.

The Unit holders are considered to own the Trusts income and

principal as though no trust were in existence.

The income of the Trust is deemed to have been received or accrued by each Unit holder at the time such income is received or accrued by the Trust

and not when distributed by the Trust.

The Unit holders are considered to own the Trusts income and principal as though no trust were in existence.

The income of the Trust is deemed to have been received or accrued by each Unit holder at the time such income is

received or accrued by the Trust and not when distributed by the Trust.

The Trust has on file technical advice memoranda confirming the tax treatment described above.

Units are held by middlemen, as such term is broadly defined in U.S.

Treasury Regulations (and includes custodians, nominees, certain joint owners, and brokers holding an interest for a customer in street name, collectively referred to herein as

middlemen).

Therefore, the Trustee considers the Trust to be a non-mortgage widely held fixed investment trust (WHFIT) for U.S.

Some Trust Units are held by middlemen, as such term is broadly defined in U.S.

Treasury Regulations (and includes custodians, nominees, certain joint

owners, and brokers holding an interest for a customer in street name, collectively

referred to herein as middlemen).

Therefore, the Trustee considers the Trust to be a non-mortgage widely held fixed investment trust

(WHFIT) for U.S.

federal income tax purposes.

Simmons Bank, EIN:

71-0162300, 2911 Turtle Creek Boulevard, Suite 850, Dallas, Texas 75219, telephone number (855) 588-7839, email address

trustee@pbt-permian.com, is the representative of the Trust that will provide tax information in accordance with applicable U.S.

Treasury Regulations governing the information reporting requirements of the

Trust as a WHFIT.

Argent Trust Company, EIN:

62-1437218, 2911 Turtle Creek Boulevard, Suite 850, Dallas, Texas 75219, telephone number (855) 588-7839, email address trustee@pbt-permian.com, is the representative of the Trust that will provide tax information in accordance with applicable U.S.

Treasury Regulations

governing the information reporting requirements of the Trust as a WHFIT.

Tax information is also posted by the Trustee at www.pbt-permian.com.

Notwithstanding the foregoing, the middlemen holding Trust Units on behalf of Unit holders, and not the Trustee of

the Trust, are solely responsible for complying with the information reporting requirements under the U.S.

Treasury Regulations with respect to such Trust Units, including the issuance of IRS Forms 1099 and certain written tax statements.

holders 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.

Notwithstanding the foregoing, the middlemen holding Trust Units

on behalf of Unit holders, and not the Trustee of the Trust, are solely responsible for complying with the information reporting requirements under the U.S.

Treasury Regulations with respect to such Trust Units, including the issuance of IRS Forms

1099 and certain written tax statements.

Unit holders 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.

Because the Trust is a grantor trust for federal tax purposes, each Unit holder is taxed directly on his proportionate share of income, deductions and

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of the Trust in subsequent periods.

The deductions of the Trust consist of severance taxes and administrative expenses.

The deductions of the Trust consist of severance taxes and administration expenses.

In addition, each Unit

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Each Unit holder is entitled to amortize the cost of the Units through cost

depletion over the life of the Royalties or, if greater, through percentage depletion equal to 15 percent of gross income, limited to 100% of the net income from such royalty.

Unlike cost depletion, percentage depletion is not limited to a Unit

holders depletable tax basis in the Units.

depletion over the life of the Royalties or, if greater, through percentage depletion equal to 15 percent of gross income attributable to the Royalties, limited to 100% of the net income from such Royalties.

Unlike cost depletion, percentage

depletion is not limited to a Unit holders depletable tax basis in the Units.

Rather, a Unit holder is entitled to a percentage depletion deduction as long as the applicable Underlying Properties generate gross income.

Percentage depletion is allowed on proven properties

acquired after October 11, 1990.

For Units acquired after such date, Unit holders should compute both percentage depletion and cost depletion from each property and claim the larger amount as a deduction on their income tax returns.

Unit holders must maintain records of their adjusted basis in their Trust Units (generally his cost less prior depletion deductions), make adjustments

for depletion deductions to such basis, and use the adjusted basis for the computation of gain or loss on the disposition of the Trust Units.

taxpayer disposes of any Section 1254 property (certain oil, gas, geothermal or other mineral property), and if the adjusted basis of such property includes adjustments for deductions for depletion under Section 611 of the

Internal Revenue Code (the Code), the taxpayer generally must recapture the amount deducted for depletion as ordinary income (to the extent of gain realized on such disposition).

This depletion recapture rule applies to any disposition

of property that was placed in service by the taxpayer after December 31, 1986.

Detailed rules set forth

in Sections 1.1254-1 through 1.1254-6 of the U.S.

Treasury Regulations govern dispositions of property after

March 13, 1995.

The Internal Revenue Service likely will take the position that a Unit holder who purchases a Unit subsequent to December 31, 1986 must recapture depletion upon the disposition of that Unit.

Percentage depletion is

allowed on proven properties acquired after October 11, 1990.

For Units acquired after such date, Unit holders should compute both percentage depletion and cost depletion from each property and claim the larger amount as a deduction on their

income tax returns.

Unit holders must maintain records of their adjusted basis in their Trust Units (generally the Unit holders cost less

prior depletion deductions), make adjustments for depletion deductions to such basis, and use the adjusted basis for the computation of gain or loss on the disposition of the Trust Units.

If a taxpayer disposes of any Section 1254 property (certain oil, gas, geothermal or other mineral property), and if the adjusted basis

of such property includes adjustments for deductions for depletion under Section 611 of the Internal Revenue Code (the Code), the taxpayer generally must recapture the amount deducted for depletion as ordinary income (to the extent

of gain realized on such disposition).

This depletion recapture rule applies to any disposition of property that was placed in service by the taxpayer after December 31, 1986.

Detailed rules set forth in Sections

1.1254-1 through 1.1254-6 of the U.S.

Treasury Regulations govern dispositions of property after March 13, 1995.

The Internal Revenue Service likely will take the

position that a Unit holder who purchases a Unit subsequent to December 31, 1986 must recapture depletion upon the disposition of that Unit.

Individuals may incur expenses in connection with the acquisition or ownership of Trust Units.

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tax years beginning after December 31, 2017 and before January 1, 2026, miscellaneous itemized deductions are not allowed.

classification of the Trusts income for purposes of the passive loss rules may be important to a Unit holder.

Royalty income generally is treated as portfolio income and does not offset passive losses.

Therefore, in general, Unit holders

should not consider the taxable income from the Trust to be passive income in determining net passive income or loss.

The classification of the Trusts income for purposes of the passive loss rules may be important

to a Unit holder.

Interest and royalty income attributable to ownership of Trust Units and any gain on the sale thereof are generally considered portfolio income and not income from a passive activity, to the extent a Unit holder

acquires and holds Trust Units as an investment and not in the ordinary course of a trade or business.

Therefore, in general, interest and royalty income attributable to ownership of Trust Units may not be offset by losses from any passive

Unit holders should consult their tax advisor for further information.

Unit holders of record will continue to receive an individualized tax information letter for each of the quarters ending March 31, June 30 and

September 30, 2021, and for the year ending December 31, 2021.

Unit holders owning Units in the name of a nominee may obtain monthly tax information from the Trustee upon request.

See discussion above regarding certain reporting

requirements imposed upon middlemen under U.S.

Unit holders of record will continue to receive an

individualized tax information letter for each of the quarters ending March 31, June 30 and September 30, 2022, and for the year ending December 31, 2022.

Unit holders owning Units in the name of a nominee may obtain monthly tax

information from the Trustee upon request.

See discussion above regarding certain reporting requirements imposed upon middlemen under U.S.

Treasury Regulations because the Trust is considered a WHIFT for federal income tax purposes.

the TCJA, for tax years beginning after December 31, 2018 and before January 1, 2026, the highest marginal U.S.

federal income tax rate applicable to ordinary income of individuals is 37%, and the highest marginal U.S.

federal income tax

rate applicable to long-term capital gains (generally, gains from the sale or exchange of certain investment assets held for more than one year) and qualified dividends of individuals is 20%.

Under the TCJA, for such tax years, personal exemptions

and miscellaneous itemized deductions are not allowed.

Under the TCJA, for tax years beginning after December 31, 2017 and before January 1, 2026, the highest marginal U.S.

federal income tax rate

applicable to ordinary income of individuals is 37%, and the highest marginal U.S.

federal income tax rate applicable to long-term capital gains (generally, gains from the sale or exchange of certain investment assets held for more than one year)

and qualified dividends of individuals is 20%.

Under the TCJA, for such tax years, personal exemptions and miscellaneous itemized deductions are not allowed.

For such tax years, the U.S.

federal income tax rate applicable to corporations is 21%, and such rate applies to both ordinary income and capital gains.

Section 1411 of the Code imposes a 3.8% Medicare tax on certain investment income earned by individuals, estates, and trusts.

For these purposes,

investment income generally will include a Unit holders allocable share of the Trusts interest and royalty income plus the gain recognized from a sale of Trust Units.

In the case of an individual, the tax is imposed on the lesser of

(i) the individuals net investment income from all investments, or (ii) the amount by which the individuals modified adjusted gross income exceeds specified threshold levels depending on such individuals federal income

tax filing status.

In the case of an estate or trust, the tax is imposed on the lesser of (i) undistributed net investment income, or (ii) the excess adjusted gross income over the dollar amount at which the highest income tax bracket

applicable to an estate or trust begins.

The Tax consequences to a Unit holder of the acquisition, ownership or disposition of Units will depend in

part on the Unit holders tax circumstances.

Unit holders should consult their tax advisor regarding the federal tax consequences relating to acquiring, owning or disposing the Units in the Trust.

Pursuant to the Foreign Account Tax Compliance Act (commonly referred to as FATCA), distributions from the Trust to foreign financial

institutions and certain other non-financial foreign entities may be subject to U.S.

federal income tax rate applicable to corporations is 21%, and

such rate applies to both ordinary income and capital gains.

Section 1411 of the Code imposes a 3.8% Medicare tax on certain investment income

earned by individuals, estates, and trusts.

For these purposes, investment income generally will include a Unit holders allocable share of the Trusts interest and royalty income plus the gain recognized from a sale of Trust Units.

case of an individual, the tax is imposed on the lesser of (i) the individuals net investment income from all investments, or (ii) the amount by which the individuals modified adjusted gross income exceeds specified threshold

levels depending on such individuals federal income tax filing status.

In the case of an estate or trust, the tax is imposed on the lesser of (i) undistributed net investment income, or (ii) the excess adjusted gross income over the

dollar amount at which the highest income tax bracket applicable to an estate or trust begins.

Pursuant to the Foreign Account Tax Compliance Act

(commonly referred to as FATCA), distributions from the Trust to foreign financial institutions and certain other non-financial foreign entities may be subject to U.S.

withholding taxes.

Specifically, certain withholdable payments (including certain royalties,

interest and other gains or income from U.S.

sources) made to a foreign financial institution or non-financial foreign entity will generally be subject to the withholding tax unless the foreign financial

institution or non-financial foreign entity complies with certain information reporting, withholding, identification, certification and related requirements imposed by FATCA.

Foreign financial institutions

located in jurisdictions that have an intergovernmental agreement with the United States governing FATCA may be subject to different rules.

Treasury Department issued guidance providing that the FATCA withholding rules described above generally apply to qualifying payments made after June 30, 2014.

Foreign Unit holders are encouraged to consult

their own tax advisors regarding the possible implications of these withholding provisions on their investment in Trust Units.

Specifically, certain withholdable payments (including certain royalties, interest and other gains or income from U.S.

sources) made to a foreign financial institution or

non-financial foreign entity will generally be subject to the withholding tax unless the foreign financial institution or non-financial foreign entity complies with

certain information reporting, withholding, identification, certification and related requirements imposed by FATCA.

Foreign financial institutions located in jurisdictions that have an intergovernmental agreement with the United States governing

FATCA may be subject to different rules.

The Treasury Department issued guidance providing that the FATCA withholding rules described above

generally apply to qualifying payments made after June 30, 2014.

Foreign Unit holders are encouraged to consult their own tax advisor regarding the possible implications of these withholding provisions on their investment in Trust Units.

The foregoing summary is not exhaustive and does not purport to be complete.

Many other provisions of the federal income tax laws may affect individual

Unit holders.

The federal income tax consequences to a Unit holder of the acquisition, ownership or disposition of Units will depend in part on the Unit holders tax circumstances.

Unit holders should consult their tax advisor regarding all

Trust tax compliance matters.

Proved Oil and Gas Reserves (Unaudited)

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regarding estimates of the proved oil and gas reserves attributable to the Trust are based on reports prepared by Cawley, Gillespie & Associates, Inc., independent petroleum engineering consultants.

Estimates were prepared in accordance

with the guidelines established by the FASB and the Securities and Exchange Commission.

Certain information required by this guidance is not presented because that information is not applicable to the Trust due to its passive nature.

Oil and gas reserve quantities (all located in the United States) are estimates based on information available at the time of their preparation.

estimates are subject to change as additional information becomes available.

Reserves actually recovered, and the timing of the production of those reserves, may differ substantially from original estimates.

The following schedule presents changes

in the Trusts total proved reserves (in thousands):

Estimates were prepared

in accordance with the guidelines established by the FASB and the Securities and Exchange Commission.

Certain information required by this guidance is not presented because that information is

not applicable to the Trust due to its passive nature.

Oil and gas reserve quantities (all located in the United States) are estimates based on

information available at the time of their preparation.

Such estimates are subject to change as additional information becomes available.

Reserves actually recovered, and the timing of the production of those reserves, may differ substantially from

original estimates.

The following schedule presents changes in the Trusts total proved reserves (in thousands):

January 1, 2020

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December 31, 2022

Estimated quantities of proved developed reserves of oil and gas as of the dates indicated were as follows (in

Estimated quantities of proved developed reserves of oil and gas as of the dates indicated were as follows

(in thousands):

Proved Developed Reserves:

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quantities attributable to the Trust.

Information presented is based upon valuation of proved reserves by using discounted cash flows based upon average oil and gas prices ($66.56 per bbl and $3.60 per Mcf, respectively) during the 12-month period prior to the fiscal year-end, determined as an

unweighted arithmetic average of the

first-day-of-the-month price for each month within such period, unless prices are defined

by contractual arrangements, excluding escalations based upon future conditions and severance and ad valorem taxes, if any, and economic conditions, discounted at the required rate of 10 percent.

As the Trust is not subject to taxation at the

trust level, no provision for income taxes has been made in the following disclosure.

Information presented is based upon valuation of proved reserves by using discounted cash flows based upon average oil and gas prices ($93.67 per bbl and $6.36 per Mcf, respectively) during the 12-month period prior to the fiscal year-end, determined as an unweighted arithmetic average of the first-day-of-the-month price for each month within such period, unless prices are defined by contractual arrangements, excluding escalations based upon future

conditions and severance and ad valorem taxes, if any, and economic conditions, discounted at the required rate of 10 percent.

As the Trust is not subject to taxation at the trust level, no provision for income taxes has been made in the

following disclosure.

Trust prices may differ from posted NYMEX prices due to differences in product quality and property location.

The impact of changes in current prices on reserves

could vary significantly from year to year.

Accordingly, the information presented below should not be viewed as an estimate of the fair market value of the Trusts oil and gas properties nor should it be viewed as indicative of any trends.

The impact of changes in current prices on reserves could vary

significantly from year to year.

Accordingly, the information presented below should not be viewed as an estimate of the fair market value of the Trusts oil and gas properties nor should it

be viewed as indicative of any trends.

Future net cash inflows

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adjustment of the respective standardized measure of discounted future net cash flows.

As of March 15, 2022, NYMEX posted oil prices were approximately $96.44 per barrel, which compared to the posted price of $66.56 per barrel, used to

calculate the worth of future net revenue of the Trusts proved developed reserves, would result in a larger standardized measure of discounted future net cash flows for oil.

As of March 15 , 2022, NYMEX posted gas prices were $4.46

As of February 24, 2023, NYMEX posted oil prices were approximately $76.45 per barrel, which compared to the posted price of $93.67 per barrel, used to

calculate the worth of future net revenue of the Trusts proved developed reserves, would result in a smaller standardized measure of discounted future net cash flows for oil.

As of February 22 , 2023, NYMEX posted gas prices were

$2.07 per million British thermal units.

The use of such price, as compared to the posted price of $3.65 per million British thermal units, used to calculate the future net revenue of the Trusts proved developed reserves would result in a larger

standardized measure of discounted future net cash flows for gas.

The use of such price, as compared to the posted price of $6.36 per million British thermal units, used to calculate the future net revenue of the Trusts proved developed reserves would result in a

smaller standardized measure of discounted future net cash flows for gas.

Quarterly Schedule of Distributable Income (Unaudited)

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March 14, 2023

March 14, 2022

April 14, 2022

Changes in and Disagreements with Accountants on Accounting and Financial

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

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 8. Financial Statements and Supplementary Data