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Item 1. Financial Statements

2023-11-14 compared with 2023-08-14 · 164 added, 167 removed, 436 unchanged (43% of the section changed)

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opinion of the Trustee, all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the assets,

liabilities and Trust corpus of PermRock Royalty Trust at June 30, 2023, and December 31, 2022, and the distributable income and changes

in Trust corpus for the three- and six-month periods ended June 30, 2023, and June 30, 2022, have been included.

Distributable income

for such interim periods is not necessarily indicative of distributable income for the full year.

liabilities and Trust corpus of PermRock Royalty Trust at September 30, 2023, and December 31, 2022, and the distributable income and

changes in Trust corpus for the three- and nine-month periods ended September 30, 2023, and September 30, 2022, have been included.

Distributable

income for such interim periods is not necessarily indicative of distributable income for the full year.

PERMROCK ROYALTY TRUST

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and to provide for future liabilities of the Trust.

The accompanying notes to condensed financial statements

are an integral part of these financial statements.

PERMROCK ROYALTY TRUST

CONDENSED STATEMENTS OF DISTRIBUTABLE INCOME

Ended June 30,

Ended September 30,

Net profits income

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of the Trust.

(2) Based on 12,165,732 Trust units issued and outstanding as of August 14, 2023.

The accompanying notes to condensed financial statements

are an integral part of these financial statements.

(2) Based on 12,165,732 Trust units issued and outstanding as of November 14, 2023.

PERMROCK ROYALTY TRUST

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CORPUS (UNAUDITED)

September 30,

Trust corpus, beginning of period

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Trust corpus, end of period

The accompanying notes to condensed financial statements

are an integral part of these financial statements.

PERMROCK ROYALTY TRUST

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trust formed on November 22, 2017 under the Delaware Statutory Trust Act pursuant to a trust agreement dated November 22, 2017, as amended

and restated on May 4, 2018, by and among Boaz Energy II, LLC (“Boaz Energy”), as trustor, Simmons Bank, as trustee, and Wilmington

and restated on May 4, 2018, by and among Boaz Energy II, LLC (“Boaz Energy”), as trustor, Simmons Bank, trustee, and Wilmington

Trust, National Association, as Delaware Trustee (the “Delaware Trustee”) (such amended and restated trust agreement, as amended

to date, the “Trust Agreement”).

In accordance with the successor trustee provisions of the Trust Agreement, Argent Trust

Company, as successor trustee of the Trust, is subject to all terms and conditions of the Trust Agreement.

The defined term “Trustee”

as used herein shall refer to Simmons Bank (which maintains its offices at 2200 West 7th Street, Suite 210, P.O.

Box 470727, Fort Worth,

Texas 76147) for periods prior to December 30, 2022, and shall refer to Argent Trust Company (which maintains its offices at 3838 Oak

Lawn Ave., Suite 1720, Dallas, Texas 75219) for periods on and after December 30, 2022.

The Trust was created to acquire and hold the Net Profits Interest for the benefit of

the Trust unitholders.

In connection with the closing of the initial public offering of Trust units, on May 4, 2018, Boaz Energy conveyed

the Net Profits Interest to the Trust in exchange for Trust units pursuant to a conveyance agreement between Boaz Energy, the Trustee

and the Delaware Trustee (the “Conveyance”).

The Net Profits Interest represents an interest in the Underlying Properties.

The Net Profits Interest entitles the Trust to receive 80% of the net profits from the

sale of oil and natural gas production from the Underlying Properties.

The Net Profits Interest is passive in nature and neither the

Trust nor the Trustee has any control over, or responsibility for, costs relating to the operation of the Underlying Properties.

Trust has and will continue to make monthly cash distributions of all of its monthly cash receipts, after deduction of fees and expenses

In accordance with the successor trustee provisions of the Trust

Agreement, Argent Trust Company, as successor trustee of the Trust, is subject to all terms and conditions of the Trust Agreement.

defined term “Trustee”

as used herein shall refer to Simmons Bank (which maintains its offices at 2200 West 7th Street, Suite

Box 470727, Fort Worth, Texas 76147) for periods prior to December 30, 2022, and shall refer to Argent Trust Company (which

maintains its offices at 3838 Oak Lawn Ave., Suite 1720, Dallas, Texas 75219) for periods on and after December 30, 2022.

The Trust was created to acquire and hold the Net Profits Interest

for the benefit of the Trust unitholders.

In connection with the closing of the initial public offering of Trust units, on May 4, 2018,

Boaz Energy conveyed the Net Profits Interest to the Trust in exchange for Trust units pursuant to a conveyance agreement between Boaz

Energy, the Trustee and the Delaware Trustee (the “Conveyance”).

The Net Profits Interest represents an interest in the Underlying

The Net Profits Interest entitles the Trust to receive 80% of the

net profits from the sale of oil and natural gas production from the Underlying Properties.

The Net Profits Interest is passive in nature

and neither the Trust nor the Trustee has any control over, or responsibility for, costs relating to the operation of the Underlying Properties.

The Trust has and will continue to make monthly cash distributions of all of its monthly cash receipts, after deduction of fees and expenses

for the administration of the Trust and any cash reserves, to holders of its Trust units as of the applicable record date on or before

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Distributions generally relate to sales from a one-month period.

The Trustee may deposit funds awaiting distribution in an account with an FDIC-insured

or national bank, including the Trustee, if the interest paid to the Trust at least equals amounts paid by the Trustee on similar deposits,

and make other short-term investments with the funds distributed to the Trust.

In May 2018, Boaz Energy completed an initial public offering

of 6,250,000 of the 12,165,732 total Trust units outstanding, retaining ownership of 5,915,732 Trust units.

As of June 30, 2023, Boaz

The Trustee may deposit funds awaiting distribution in an account

with an FDIC-insured or national bank, including the Trustee, if the interest paid to the Trust at least equals amounts paid by the Trustee

on similar deposits, and make other short-term investments with the funds distributed to the Trust.

In May 2018, Boaz Energy completed an initial public offering of

6,250,000 of the 12,165,732 total Trust units outstanding, retaining ownership of 5,915,732 Trust units.

As of September 30, 2023, Boaz

Energy owned 5,066,674 Trust units of the 12,165,732 Trust units issued and outstanding.

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(primarily oil and natural gas sales), less direct operating expenses, overhead expenses, lease operating expenses, severance and ad valorem

taxes and development expenses of the Underlying Properties, multiplied by 80%, less any payments made or plus any payments received in

connection with the settlement of certain hedge contracts.

Cash distributions of the Trust are made based on the amount of cash received

by the Trust pursuant to terms of the Conveyance creating the Net Profits Interest.

taxes and development expenses of the Underlying Properties, multiplied by 80%.

Cash distributions of the Trust are made based on the

amount of cash received by the Trust pursuant to terms of the Conveyance creating the Net Profits Interest.

The financial statements of the Trust, as prepared on a modified

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Cash reserves

held by the Trustee for administrative expenses totaled $1,000,000 as of June 30, 2023, and December 31, 2022.

held by the Trustee for administrative expenses totaled $1,000,000 as of September 30, 2023.

Boaz Energy is entitled under the Conveyance to reserve up to $3.0

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was $1,478,157 net to the Trust.

As of June 30, 2023, the balance of funds held back to cover future capital expenses was $446,157 net

to the Trust.

As of September 30, 2023, the balance of funds held back to cover future capital expenses was $98,157

net to the Trust.

Distributions to Unitholders

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Based on 12,165,732 Trust units outstanding at each date listed

below, the per unit distributions during the quarter ended June 30, 2023, were as follows:

April 28, 2023

June 14, 2023

June 30, 2023

below, the per unit distributions during the quarter ended September 30, 2023, were as follows:

July 31, 2023

August 14, 2023

August 31, 2023

September 15, 2023

September 29, 2023

October 16, 2023

Related Party Transactions

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The Delaware Trustee’s annual fee

For 2023, the Trustee’s annual administrative fee is approximately $200,357, which is divided into twelve equal monthly

payments throughout the year.

The Trustee’s annual administrative fee increased at a rate of 3% per year for the first three years

of the Trust’s existence, increased at a rate of 2% in 2021 and 2022, and increased at a rate of 1% in 2023.

The Trustee’s

annual administrative fee will continue to increase at a rate of 1% per year until the 20th anniversary of the Trust’s formation

and then remain flat thereafter.

These costs of the Trust, which are included in administration expenses, are deducted by the Trust before

distributions are made to Trust unitholders.

For 2023, the Trustee’s annual administrative fee is $200,357, which is divided into twelve equal monthly payments throughout

The Trustee’s annual administrative fee increased at a rate of 3% per year for the first three years of the Trust’s

existence, increased at a rate of 2% in 2021 and 2022, and increased at a rate of 1% in 2023.

The Trustee’s annual administrative

fee will continue to increase at a rate of 1% per year until the 20th anniversary of the Trust’s formation and then remain flat

These costs of the Trust, which are included in administration expenses, are deducted by the Trust before distributions are

made to Trust unitholders.

Agreements with Boaz Energy .

On May 4, 2018, the Trust entered

into a registration rights agreement for the benefit of Boaz Energy and certain of its affiliates and transferees, pursuant to which

the Trust agreed to register the offering of the Trust units held by Boaz Energy and certain of its affiliates and permitted transferees

upon request by Boaz Energy.

into a registration rights agreement for the benefit of Boaz Energy and certain of its affiliates and transferees, pursuant to which the

Trust agreed to register the offering of the Trust units held by Boaz Energy and certain of its affiliates and permitted transferees upon

request by Boaz Energy.

The Trust filed a Registration Statement on Form S-3 on April 28, 2022 (the “Registration Statement”)

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on May 9, 2022.

As of June 30, 2023, Boaz Energy owned 5,171,032 Trust units of the 12,165,732 Trust units issued and outstanding.

As of September 30, 2023, Boaz Energy owned 5,066,674 Trust units of the 12,165,732 Trust units issued and outstanding.

Development Costs

Boaz Energy has advised the Trustee that the estimate for Boaz Energy’s

2023 capital budget for the Underlying Properties is $5.2 million, of which approximately $2.8 million had been expended as of June 30,

2023 capital budget for the Underlying Properties is $4.5 million, of which approximately $3.5 million had been expended as of September

Based on current oil and gas prices, Boaz anticipates continuing to participate in Crane and Glasscock counties non-operated

drilling and waterflood conformance work in Crane, Terry, Schleicher and Stonewall counties, as well as drilling one new operated well

in each of Crane and Coke counties sometime in 2023.

The majority of capital spent in 2023 to date has been on a well deepening

in the Abo Area.

The $5.2 million estimate is subject to change based on, among other things, changes in the price of oil and natural

gas, Boaz Energy’s actual capital requirements, the pace of regulatory approvals and the mix of projects.

drilling and waterflood conformance and work in Crane, Terry, Schleicher and Stonewall counties, as well as drilling one new operated

well in Crane County sometime in 2023.

The majority of capital spent in 2023 to date has been on a well deepening in the Abo Area.

The $4.5 million estimate is subject to change based on, among other things, changes in the price of oil and natural gas, Boaz Energy’s

actual capital requirements, the pace of regulatory approvals and the mix of projects.

Settlements and Litigation

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all parties of its intent to appeal the judgment to the Eighth Court of Appeals in El Paso County, Texas.

On October 26, 2023, the Eighth

Court of Appeals in El Paso County, Texas granted the plaintiff-appellant’s request for an extension of time to file its appellant

The plaintiff-appellant has until November 24, 2023, to file its appellant brief.

Subsequent Events

On July 21, 2023, the Trust declared a cash distribution of $0.039689

per Trust unit based upon production during the month of May 2023.

On October 20, 2023, the Trust declared a cash distribution of $0.040837

per Trust unit based upon production during the month of August 2023.

Sales Volumes

Trustee’s Discussion and Analysis of Financial Condition and

Results of Operations

Trustee’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis is intended to help the reader

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the effect of changes in commodity prices or alternative fuel prices;

the effects of armed conflict between Russia and Ukraine on global oil and gas markets;

the effects of armed conflict throughout the world on global oil and gas producing regions, countries, thoroughfares and the oil and

political and economic conditions in or affecting other oil and natural gas producing regions or countries;

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is entitled to a share of the profits from and after January 1, 2018 attributable to production occurring on or after such date.

Trust is not subject to any pre-set termination provisions based on a maximum volume of oil or natural gas to be produced or the passage

is not subject to any pre-set termination provisions based on a maximum volume of oil or natural gas to be produced or the passage of

The amount of Trust revenues and cash distributions to Trust unitholders depends on, among other things:

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Boaz Energy has advised the Trustee that the estimate for Boaz Energy’s

2023 capital budget for the Underlying Properties is $5.2 million, of which approximately $2.8 million had been expended as of June 30,

2023 capital budget for the Underlying Properties is $4.5 million, of which approximately $3.5 million had been expended as of September

Based on current oil and gas prices, Boaz anticipates continuing to participate in Crane and Glasscock counties non-operated

drilling and waterflood conformance work in Crane, Terry, Schleicher and Stonewall counties, as well as drilling one new operated well

in each of Crane and Coke counties sometime in 2023.

The majority of capital spent in 2023 to date has been on a well deepening

in the Abo Area.

The $5.2 million estimate is subject to change based on, among other things, changes in the price of oil and natural

gas, Boaz Energy’s actual capital requirements, the pace of regulatory approvals and the mix of projects.

drilling and waterflood conformance and work in Crane, Terry, Schleicher and Stonewall counties, as well as drilling one new operated

well in Crane County sometime in 2023.

The majority of capital spent in 2023 to date has been on a well deepening in the Abo Area.

The $4.5 million estimate is subject to change based on, among other things, changes in the price of oil and natural gas, Boaz Energy’s

actual capital requirements, the pace of regulatory approvals and the mix of projects.

RESULTS OF OPERATIONS

Distributable Income

Three Months Ended June 30, 2023

For the three months ended June 30, 2023, net profits income received

by the Trust was $1,573,745 compared to $3,497,371 for the same period of the prior year.

This decrease in net profits income was primarily

due to a decrease in sales volumes and lower oil and gas prices .

See “Computation of Income

from the Net Profits Interest Received by the Trust”

After considering interest income of $14,773 and

general and administrative expenditures of $351,427, distributable income for the three months ended June 30, 2023, was $1,237,091 ,

or $ 0.101686 per Trust unit.

For the three months ended June 30, 2022, total distributable income was $ 3,204,281 ,

263384 per unit.

Three Months Ended September 30, 2023

For the three months ended September 30, 2023, net profits income

received by the Trust was $1,691,590 compared to $3,530,590 for the same period of the prior year.

This decrease in net profits income

was primarily due to decreased oil and gas prices and sales volumes .

See “Computation of

Income from the Net Profits Interest Received by the Trust”

After considering interest income of $ 15,039

and general and administrative expenditures of $ 240,461, distributable income for the

three months ended September 30, 2023, was $1,466,168 , or $ 0.120516 per Trust unit.

For the three

months ended September 30, 2022, total distributable income was $ 3,355,009 , or $0.275774 per

Interest income was higher for the quarter

ended June 30, 2023, as compared to the prior year, due to higher interest rates.

General and administrative expenditures increased by

$57,377 for the three months ended June 30, 2023, as compared to the prior year, primarily due to the

timing of payments.

ended September 30, 2023, as compared to the prior year, due to higher interest rates.

General and administrative expenditures increased

by $ 59,689 for the three months ended September 30, 2023, as compared to the prior year,

primarily due to the timing of payments.

Pursuant to the Trust Agreement, as of May 31, 2019, the Trustee

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The Trustee did not retain any cash reserves during the three months

ended June 30, 2023 or June 30, 2022.

Total cash reserves were $1,000,000 as of June 30, 2023, and June 30, 2022.

ended September 30, 2023, or September 30, 2022.

Total cash reserves were $1,000,000 as of September 30, 2023, and September 30, 2022.

Based on 12,165,732 Trust units outstanding at each date listed

below, the per unit distributions during the quarter ended June 30, 2023, were as follows:

April 28, 2023

June 14, 2023

June 30, 2023

below, the per unit distributions during the quarter ended September 30, 2023, were as follows:

July 31, 2023

Six Months Ended June 30, 2023

For the six months ended June 30, 2023, net profits income received

by the Trust was $3,940,422 compared to $6,284,707 for the same period of the prior year.

This decrease in net profits income was primarily

due to a decrease in sales volumes and lower oil and gas prices .

August 14, 2023

August 31, 2023

September 15, 2023

September 29, 2023

October 16, 2023

Nine Months Ended September 30, 2023

For the nine months ended September 30, 2023, net profits income

received by the Trust was $5,632,011 compared to $9,815,297 for the same period of the prior year.

This decrease in net profits income

was primarily due to a decrease in oil and gas prices and sales volumes.

See “Computation of Income from the Net Profits Interest

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After considering interest income of $43,539 and general and administrative

expenditures of $528,545 , distributable income for the six months ended June 30, 2023, was $3,440,377, or $0.282792 per Trust unit.

For the six months ended June 30, 2022, total distributable income was $35,731,170, or $0.471091 per Trust unit.

Interest income increased for the six months ended June 30, 2023,

expenditures of $769,027 , distributable income for the nine months ended September 30, 2023, was $4,906,523, or $0.403307 per Trust

For the nine months ended September 30, 2022, total distributable income was $9,086,179, or $0.746867 per Trust unit.

Interest income increased for the nine months ended September 30,

2023, as compared to the prior year, due to higher interest rates.

General and administrative expenditures decreased by $25,989 for the six

months ended June 30, 2023, as compared to the prior year, primarily due to timing of payment of expenses.

General and administrative expenditures increased by $33,721 for the

nine months ended September 30, 2023, as compared to the prior year, primarily due to timing of payment of expenses.

Pursuant the terms of the Trust Agreement, the Trustee was authorized

to begin retaining cash reserves for administrative expenses in May of 2019.

The Trustee did not retain any cash reserves during the six

months ended June 30, 2023, or June 30, 2022.

Total cash reserves were $1,000,000 as of June 30, 2023, and December 31, 2022.

The Trustee did not retain any cash reserves during the nine

months ended September 30, 2023, or September 30, 2022.

Total cash reserves were $1,000,000 as of September 30, 2023, and September 30,

Computation of Income from the Net Profits Interest Received

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during the month in which the related net profits income is paid to the Trust.

Net profits income for the three months ended June 30,

2023, was based on production during the months of February 2023 through April 2023.

Net profits income for the three months ended September

30, 2023, was based on production during the months of May 2023 through July 2023.

Net profits income for the nine months ended September

30, 2023, was based on production during the months of November 2022 through July 2023.

The table below outlines the computation of income

from the Net Profits Interest received by the Trust for the three and six months ended June 30, 2023, and June 30, 2022:

June 30, 2023

June 30, 2022

June 30, 2023

June 30, 2022

from the Net Profits Interest received by the Trust for the three and nine months ended September 30, 2023, and September 30, 2022:

September 30, 2023

September 30, 2022

September 30, 2023

September 30, 2022

Underlying Properties sales volumes (1) :

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Net profits income received by the Trust

(1) Quarterly sales volumes are typically reported for a three-month period, and therefore sales volumes for the three months ended June

30, 2023, reflect production volumes for February 2023 through April 2023.

Sales volumes for the six months ended June 30, 2023, reflect

production volumes for November 2022 through April 2023.

(1) Quarterly sales volumes are typically reported for a three-month period, and therefore sales volumes for the three months ended September

30, 2023, reflect production volumes for May 2023 through July 2023.

Sales volumes for the nine months ended September 30, 2023, reflect

production volumes for November 2022 through July 2023.

(2) Sales volumes for natural gas include NGLs.

(3) Boaz Energy is entitled under the Conveyance to reserve up to $3.0 million from the net profits for certain future taxes and expenses.

As of June 30, 2023, Boaz had reserved $446,157 net to the Trust for future capital expenses.

As of September 30, 2023, Boaz had reserved $98,157 net to the Trust for future capital expenses.

Important factors used in calculating the Trust’s net profits

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Oil sales volumes decreased by 10,744 Bbls (12.3%) for the three

months ended June 30, 2023, as compared to the same period in 2022 and 14,243 Bbls (7.9%) for the six months ended June 30, 2023, as compared

to the same period in the prior year.

Boaz Energy reports the decrease was primarily due to a decrease in demand and a natural decline

in the producing properties.

months ended September 30, 2023, as compared to the same period in 2022 and 24,988 Bbls (9.4%) for the nine months ended September 30,

2023, as compared to the same period in 2022.

Boaz Energy reports this decrease was primarily due to a natural decline in the producing

properties and a decrease in demand.

Natural gas sales volumes decreased by 3,300 Mcf (3.3%) for the

three months ended June 30, 2023, as compared to the same period in 2022 and 11,390 Mcf (5.5%) for the six months ended June 30, 2023,

three months ended September 30, 2023, as compared to the same period in 2022 and 14,691 Mcf (4.8%) for the nine months ended September

30, 2023, as compared to the same period in the prior year.

Boaz Energy reports this decrease was primarily due to a decrease in demand and a natural

decline in the producing properties.

Boaz Energy reports this decrease was primarily due to a natural decline in

the producing properties and a decrease in demand.

The average realized oil price per Bbl decreased for the three and

six months ended June 30, 2023, as compared to the prior year periods primarily due to a decrease in the WTI benchmark oil price.

nine months ended September 30, 2023, as compared to the prior year periods primarily due to a decrease in the WTI benchmark oil price.

The average realized natural gas price per Mcf decreased for the

three and six months ended June 30, 2023, as compared to the prior year periods primarily due to a decrease in the Henry Hub benchmark

three and nine months ended September 30, 2023, as compared to the prior year periods primarily due to a decrease in the Henry Hub benchmark

price for natural gas.

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in the second quarter of 2022 and included in calculating the Trust’s June 2022 distributions to unitholders.

As of August 14, 2023, Boaz Energy has not provided notice to the

As of November 14, 2023, Boaz Energy has not provided notice to the

Trustee regarding a sale of any other of the Underlying Properties.

Direct Operating Expenses

Direct operating expenses decreased for the three and six months

ended June 30, 2023, as compared to the prior year periods primarily because of fewer projects to

return wells to production in 2023.

Direct operating expenses decreased for the three and nine months

ended September 30, 2023, as compared to the prior year periods primarily because there were fewer

projects to return marginal wells to production.

Lease Operating Expenses

Lease operating expenses decreased for the three months ended June 30, 2023, as compared

to the prior year period primarily because of fewer projects to return wells to production in 2023.

Lease operating expenses increased for the six months ended June 30, 2023, as compared to the prior

year period because of costs related to additional Permian Abo wells.

Lease operating expenses increased for the three and nine months ended September 30,

2023, as compared to the prior year periods because of an increase in pricing of materials .

Severance and ad Valorem Taxes

Severance and ad valorem taxes

decreased for the three months ended June 30, 2023, as compared to the same period of the prior year, primarily because of lower valuation

of Underlying Properties due to lower pricing.

Severance and ad valorem taxes increased for the six months ended June 30, 2023, as compared

to the same period of the prior year, primarily because of a tax refund received in the first quarter of 2022.

decreased for the three and nine months ended September 30, 2023, as compared to the prior year periods primarily because of lower revenues

and valuations of properties resulting from decreased oil prices.

Development Expenses Related to the Underlying Properties

Development expenses related

to the Underlying Properties decreased for the three and six months ended June 30, 2023, as compared to the prior year period because

of fewer capital projects.

to the Underlying Properties increased for the three months ended September 30, 2023, as compared to the prior year period as a result

of upgrades on wells in Coke County and Terry County, Texas .

Development expenses related

to the Underlying Properties decreased for the nine months ended September 30, 2023, as compared

to the prior year period due to costs associated with drilling a well in Crane County, Texas in 2022.

Other Expenses

Other expenses increased for the three and six months ended June 30, 2023, as compared to the

prior year period, primarily due to annual adjustments in overhead rates.

Other expenses increased for the three and nine months ended September 30, 2023, as compared to the prior year periods primarily due to

timing of receipt of audit bills for the Trust.

Capital Reserve

As of June 30, 2023, Boaz Energy had reserved $446,157 net to the

Trust for future capital expenses.

As of September 30, 2023, Boaz Energy had reserved $98,157 net to

the Trust for future capital expenses.

LIQUIDITY AND CAPITAL RESOURCES

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Cash reserves previously retained and currently held by the Trustee for future

administrative expenses total $1,000,000 as of June 30, 2023.

administrative expenses total $1,000,000 as of September 30, 2022.

Boaz Energy Capital Expenditure Budget

Boaz Energy has advised the Trustee that the estimate for Boaz Energy’s

2023 capital budget for the Underlying Properties is $5.2 million, of which approximately $2.8 million had been expended as of June 30,

2023 capital budget for the Underlying Properties is $4.5 million, of which approximately $3.5 million had been expended as of September

Based on current oil and gas prices, Boaz anticipates continuing to participate in Crane and Glasscock counties non-operated

drilling and waterflood conformance work in Crane, Terry, Schleicher and Stonewall counties, as well as drilling one new operated well

in each of Crane and Coke counties sometime in 2023.

The majority of capital spent in 2023 to date has been on a well deepening

in the Abo Area.

The $5.2 million estimate is subject to change based on, among other things, changes in the price of oil and natural

gas, Boaz Energy’s actual capital requirements, the pace of regulatory approvals and the mix of projects.

drilling and waterflood conformance and work in Crane, Terry, Schleicher and Stonewall counties, as well as drilling one new operated

well in Crane County sometime in 2023.

The majority of capital spent in 2023 to date has been on a well deepening in the Abo Area.

The $4.5 million estimate is subject to change based on, among other things, changes in the price of oil and natural gas, Boaz Energy’s

actual capital requirements, the pace of regulatory approvals and the mix of projects.

Distributions Declared After Quarter End

On July 21, 2023, the Trust declared a cash distribution of $0.039689

per Trust unit based upon production during the month of May 2023.

Subsequent Events

On October 20, 2023, the Trust declared a cash distribution of $0.040837

per Trust unit based upon production during the month of August 2023.

Underlying Sales Volumes

1 unchanged sentence

Off-Balance Sheet Arrangements

As of June 30, 2023, the Trust had no off-balance sheet arrangements.

As of September 30, 2023, the Trust had no off-balance sheet arrangements.

New Accounting Pronouncements

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements