What changed in this filing

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Item 2. Properties

2022-03-25 compared with 2021-03-23 · 194 added, 197 removed, 93 unchanged (81% of the section changed)

4 unchanged sentences

include a portion of the assets in east Texas and north Louisiana acquired by Enduro from Denbury Resources Inc.

in December 2010,

and all of the assets in the Permian Basin of New Mexico and west Texas acquired by Enduro from Samson Investment Company and ConocoPhillips

in December 2010, and

all of the assets in the Permian Basin of New Mexico and west Texas acquired by Enduro from Samson Investment Company and ConocoPhillips

Company in January 2011 and February 2011, respectively.

In August 2018, the Sponsor purchased the Underlying Properties from Enduro

and assumed all of Enduro’s obligations under the Trust Agreement and other instruments to which Enduro and the Trustee were

In August 2018, the Sponsor purchased the Underlying Properties from Enduro and

assumed all of Enduro’s obligations under the Trust Agreement and other instruments to which Enduro and the Trustee were parties.

The Underlying Properties are divided into two geographic regions:

the Permian Basin region and East Texas/North Louisiana

As of December 31, 2020, the Underlying

Properties had proved reserves of 12.2 MMBoe with 83% and 96% of the volumes and PV-10 value, respectively, attributable to proved

developed reserves.

Substantially all of the 12.2 MMBoe of proved reserves, based on PV-10 value, were operated by third-party

the Permian Basin region and East Texas/North Louisiana region.

As of December 31, 2021, the Underlying Properties

had proved reserves of 12.5 MMBoe with 83% and 88% of the volumes and PV-10 value, respectively, attributable to proved developed reserves.

All of the 12.5 MMBoe of proved reserves, based on PV-10 value, were operated by third-party operators.

The Sponsor’s interests in the Underlying

Properties require the Sponsor to bear its proportionate share of the costs of development and operation of such properties.

of December 31, 2020, the Sponsor held average working interests of approximately 25% and 18% and average net revenue interests

of approximately 21% and 13% in the Underlying Properties located in the Permian Basin and East Texas/North Louisiana regions,

respectively.

The Underlying Properties are also burdened by non-cost bearing interests owned by third parties consisting primarily

of overriding royalty and royalty interests.

As of December 31,

2021, the Sponsor held average working interests of approximately 22% and 16% and average net revenue interests of approximately 18% and

12% in the Underlying Properties located in the Permian Basin and East Texas/North Louisiana regions, respectively.

The Underlying Properties

are also burdened by non-cost bearing interests owned by third parties consisting primarily of overriding royalty and royalty interests.

Cawley, Gillespie & Associates, Inc.

2 unchanged sentences

full economic life and for the Trust life as of December 31,

Numerous uncertainties are inherent in estimating reserve volumes and values, and the estimates are subject to change as

additional information becomes available.

The reserves actually recovered and the timing of production of the reserves may vary

significantly from the original estimates.

In addition, the reserves and net revenues attributable to the Net Profits Interest

include only 80% of the reserves attributable to the Underlying Properties that are expected to be produced within the term of

the Net Profits Interest.

The independent petroleum engineer’s

report as to the proved oil and natural gas reserves as of December 31, 2020 was prepared by Cawley Gillespie.

Cawley Gillespie,

whose firm registration number is F-693, was founded in 1961 and is a leader in the evaluation of oil and gas properties.

The technical

person at Cawley Gillespie primarily responsible for overseeing the reserve estimates with respect to the Underlying Properties

and the Net Profits Interest attributable to the Trust is W.

Numerous uncertainties are inherent in estimating reserve volumes and values, and the estimates are subject to change as additional

information becomes available.

The reserves actually recovered and the timing of production of the reserves may vary significantly from

the original estimates.

In addition, the reserves and net revenues attributable to the Net Profits Interest include only 80% of the reserves

attributable to the Underlying Properties that are expected to be produced within the term of the Net Profits Interest.

The independent petroleum engineer’s report

as to the proved oil and natural gas reserves as of December 31, 2021 was prepared by Cawley Gillespie.

Cawley Gillespie, whose firm

registration number is F-693, was founded in 1961 and is a leader in the evaluation of oil and gas properties.

The technical person at

Cawley Gillespie primarily responsible for overseeing the reserve estimates with respect to the Underlying Properties and the Net Profits

Interest attributable to the Trust is W.

Todd Brooker.

Brooker has been a petroleum consultant for

Cawley Gillespie since 1992 and is currently the Senior Vice President.

He is a registered professional engineer in the State of

Texas (license no.

83462) and a graduate of the University of Texas with a Bachelor of Science in Petroleum Engineering.

Information concerning changes in net proved

reserves attributable to the Trust, and the calculation of the standardized measure of the related discounted future net revenues

is contained in the notes to the financial statements of the Trust included in this Form 10-K.

The Sponsor has not filed reserve

estimates covering the Underlying Properties with any other federal authority or agency.

The following table summarizes the estimated

proved reserve quantities and PV-10 attributable to the Trust and Underlying Properties as of December 31, 2020 and 2019:

Brooker has been a petroleum consultant for Cawley Gillespie since 1992

and is currently the Senior Vice President.

He is a registered professional engineer in the State of Texas (license no.

83462) and a graduate

of the University of Texas with a Bachelor of Science in Petroleum Engineering.

Information concerning changes in net proved reserves

attributable to the Trust, and the calculation of the standardized measure of the related discounted future net revenues is contained

in the notes to the financial statements of the Trust included in this Form 10-K.

The Sponsor has not filed reserve estimates covering

the Underlying Properties with any other federal authority or agency.

The following table summarizes the estimated proved

reserve quantities and PV-10 attributable to the Trust and Underlying Properties as of December 31, 2021 and 2020:

Trust Net Profits Interest

8 unchanged sentences

Proved Undeveloped

(1) Reserves for natural gas liquids are immaterial and included as a component of oil reserves.

(2) Boe represents an approximate energy equivalent basis such that one Bbl of crude oil equals approximately six Mcf of natural

However, the value of oil and natural gas value and the value of reserve volumes of oil and natural gas are often substantially

different than the amount implied by the Boe ratio.

(3) PV-10 is a non-GAAP financial measure and represents the present value of estimated future cash inflows from proved crude oil

and natural gas reserves, less future development and production costs, discounted at 10% per annum to reflect timing of future

cash inflows using the twelve-month unweighted arithmetic average of the first-day-of-the-month commodity prices, after adjustment

for differentials in location and quality, for each of the preceding twelve months.

An estimate of PV-10 is provided because it

provides useful information to investors as it is widely used by professional analysts and sophisticated investors when evaluating

oil and gas companies.

PV-10 is considered relevant and useful for evaluating the relative monetary significance of oil and natural

gas reserves.

PV-10 is not intended to represent the current market value of the estimated reserves of the Underlying Properties.

PV-10 differs from standardized measure of discounted future net cash flows because it does not include the effect of future income

Please refer to the notes to the financial statements of the Trust included in this Form 10-K.

Reserve quantities and revenues for the

Net Profits Interest were estimated from projections of reserves and revenues attributable to the Underlying Properties.

the Trust has a defined Net Profits Interest, the Trust does not own a specific percentage of the oil and natural gas reserve quantities.

Accordingly, reserves allocated to the Trust pertaining to its 80% Net Profits Interest in the Underlying Properties have effectively

been reduced to reflect recovery of the Trust’s 80% portion of applicable production and development costs.

Because Trust

reserve quantities are determined using an allocation formula, any changes in actual or assumed prices or costs will result in

revisions to the estimated reserve quantities allocated to the Net Profits Interest.

Estimates of proved reserves were prepared

in accordance with guidelines prescribed by the SEC and the Financial Accounting Standards Board, which require that reserve estimates

be prepared under existing economic and operating conditions based upon an average of the NYMEX first-day-of-the-month commodity

price during the 12-month period ending on the balance sheet date with no provision for price and cost escalations except by contractual

arrangements.

Prices used in estimating reserves were as follows:

(1) Reserves for natural gas liquids are included as a component of oil reserves.

(2) Boe represents an approximate energy equivalent basis such that one Bbl of crude oil equals approximately six Mcf of natural gas.

However, the value of oil and natural gas value and the value of reserve volumes of oil and natural gas are often substantially different

than the amount implied by the Boe ratio.

(3) PV-10 is a non-GAAP financial measure and represents the present value of estimated future cash inflows from proved crude oil and

natural gas reserves, less future development and production costs, discounted at 10% per annum to reflect timing of future cash inflows

using the twelve-month unweighted arithmetic average of the first-day-of-the-month commodity prices, after adjustment for differentials

in location and quality, for each of the preceding twelve months.

An estimate of PV-10 is provided because it provides useful information

to investors as it is widely used by professional analysts and sophisticated investors when evaluating oil and gas companies.

considered relevant and useful for evaluating the relative monetary significance of oil and natural gas reserves.

PV-10 is not intended

to represent the current market value of the estimated reserves of the Underlying Properties.

PV-10 differs from standardized measure

of discounted future net cash flows because it does not include the effect of future income taxes.

Please refer to the notes to the financial

statements of the Trust included in this Form 10-K.

Reserve quantities and revenues for the Net Profits

Interest were estimated from projections of reserves and revenues attributable to the Underlying Properties.

Since the Trust has a defined

Net Profits Interest, the Trust does not own a specific percentage of the oil and natural gas reserve quantities.

Accordingly, reserves

allocated to the Trust pertaining to its 80% Net Profits Interest in the Underlying Properties have effectively been reduced to reflect

recovery of the Trust’s 80% portion of applicable production and development costs.

Because Trust reserve quantities are determined

using an allocation formula, any changes in actual or assumed prices or costs will result in revisions to the estimated reserve quantities

allocated to the Net Profits Interest.

Estimates of proved reserves were prepared in accordance

with guidelines prescribed by the SEC and the Financial Accounting Standards Board, which require that reserve estimates be prepared under

existing economic and operating conditions based upon an average of the NYMEX first-day-of-the-month commodity price during the 12-month

period ending on the balance sheet date with no provision for price and cost escalations except by contractual arrangements.

in estimating reserves were as follows:

Oil (per Bbl)

Natural gas (per MMBTU)

Natural gas (per Mcf)

Changes in Proved Undeveloped Reserves

During the year ended December 31, 2020,

proved undeveloped reserves of the Underlying Properties decreased 1.4 MMBoe due to decrease in the amount of booked, non-operated

Wolfcamp shale wells in the Permian Basin, partially offset by modest increases in the estimated reserves for the booked, non-operated

wells in Haynesville shale of Louisiana.

Compared to the year ended December 31, 2019, a decreased amount of proved undeveloped

gross wells were recognized in the reserves of the Underlying Properties when compared to the year ended December 31, 2020.

decrease in gross wells does not represent a reduction in undeveloped reserves potential, as these reserves are still part of the

Underlying Properties.

However, the reduction was estimated based on an updated market view of third-party operators’

activity given current oil price volatility.

The following is a summary of the changes in quantities of proved undeveloped reserves

for the Underlying Properties during the year ended December 31, 2020.

During the year ended December 31, 2021, proved

undeveloped reserves of the Underlying Properties increased 2.2 MMBoe due to the increase in the amount of booked, non-operated shale

wells in the Permian Basin, partially offset by modest decrease in the estimated reserves for the booked, non-operated wells in Haynesville

shale of Louisiana.

Compared to the year ended December 31, 2020, an increase in the amount of proved undeveloped gross wells were recognized

in the reserves of the Underlying Properties when compared to the year ended December 31, 2021.

The increase in gross wells reflects an

increase in timing of the development of undeveloped reserves potential in the Underlying Properties due to an increase in commodity prices

and planned capital expenditures by the operators of the Underlying Properties.

The slight reduction in natural gas reserves booked does

not reflect a decrease in the underlying reserves potential, as these reserves are still part of the Underlying Properties.

reduction was estimated based on an updated market view of third-party operators’

completion activity within the Haynesville given

the current third-party operator preference for oil-weighted capital expenditures over natural gas-weighted expenditures.

The following

is a summary of the changes in quantities of proved undeveloped reserves for the Underlying Properties during the year ended December

Underlying Properties

4 unchanged sentences

December 31, 2021

(1) Reserves for natural gas liquids are immaterial and included

as a component of oil reserves.

for natural gas liquids are included as a component of oil reserves.

Producing Acreage and Well Counts

For the following data, “gross”

refers to the total number of wells or acres in the Underlying Properties and “net”

refers to gross wells or acres

multiplied by the percentage working interest owned by the Sponsor and in turn attributable to the Underlying Properties.

the acreage comprising the Underlying Properties is held by production.

Although many 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.

The Underlying Properties are interests

in properties located in the Permian Basin of west Texas and New Mexico and in the East Texas/North Louisiana region.

The following

is a summary of the approximate acreage of the Underlying Properties at December 31, 2020:

to the total number of wells or acres in the Underlying Properties and “net”

refers to gross wells or acres multiplied by

the percentage working interest owned by the Sponsor and in turn attributable to the Underlying Properties.

All of the acreage comprising

the Underlying Properties is held by production.

Although many 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.

The Underlying Properties are interests in properties

located in the Permian Basin of west Texas and New Mexico and in the East Texas/North Louisiana region.

The following is a summary of

the approximate acreage of the Underlying Properties at December 31, 2021:

Permian Basin

East Texas/North Louisiana

The following is a summary of the producing

wells on the Underlying Properties as of December 31, 2020:

The following is a summary of the producing wells

on the Underlying Properties as of December 31, 2021:

Gross Wells (1)

3 unchanged sentences

(1) The Sponsor’s total producing wells include

operated wells and 3,395 non-operated wells.

The following is a summary of the number

of development and exploratory wells drilled on the Underlying Properties located in the Permian Basin and East Texas/North Louisiana

during the last three years:

3,395 non-operated wells.

The following is a summary of the number of development

and exploratory wells drilled on the Underlying Properties located in the Permian Basin and East Texas/North Louisiana during the last

Year Ended December 31,

6 unchanged sentences

Exploratory Wells:

(1) Production of natural gas liquids is immaterial and included

as a component of natural gas production.

(1) Production

of natural gas liquids is immaterial and included as a component of natural gas production.

Major Producing Areas

2 unchanged sentences

Based on the reserve reports, approximately 65%

58% of the future production from the Underlying Properties is expected to be oil and approximately 42% is expected to be natural

of the future production from the Underlying Properties is expected to be oil and approximately 35% is expected to be natural gas.

Permian Basin Region

The Permian Basin is one of the largest

and most prolific oil and natural gas producing basins in the United States.

The Underlying Properties in the Permian Basin contain

123,637 gross (36,580 net) acres in Texas and New Mexico.

The Permian Basin is one of the largest and most

prolific oil and natural gas producing basins in the United States.

The Underlying Properties in the Permian Basin contain 123,637 gross

(36,580 net) acres in Texas and New Mexico.

The largest fields in the Underlying Properties

are located primarily in the Permian Basin (measured by Boe reserves at December 31, 2021).

The largest field in the Permian Basin

region is the Lost Tank field, which individually accounts for more than 15 percent of the Underlying Properties reserves as of

December 31, 2020.

The largest field in the Permian Basin region

is the Eunice Monument field, which individually accounts for 15 percent of the Underlying Properties reserves as of December 31, 2021.

This unit produces from the Brushy Canyon and Wolfcamp formations at depths up to 8,500 feet.

Proved reserves

attributable to the Underlying Properties in the Lost Tank field were 2.6 MMBoe as of December 31, 2020.

This field is

operated by Occidental Petroleum.

Proved reserves attributable to the Underlying

Properties in the Eunice Monument field were 1.8 MMBoe as of December 31, 2021.

This field is operated by Apache Corporation

and Empire New Mexico.

East Texas/North Louisiana Region

The Underlying Properties contain interests

in 12,629 gross (4,899 net) acres in the East Texas/North Louisiana region across three fields:

the Elm Grove field, operated primarily

by Aethon Energy Operating, LLC and Comstock Oil & Gas, LLC;

the Kingston field, operated by EXCO Resources and Indigo Resources,

and the Stockman field, operated by COERT.

Substantially all proved reserves attributable to the Underlying Properties in

the East Texas/North Louisiana region are located in the Haynesville, Cotton Valley, and Hosston reservoirs of the Elm Grove and

Kingston fields.

Proved reserves attributable to the Underlying Properties in the Elm Grove and Kingston fields were 2.3 MMBoe

and 0.1 MMBoe, respectively, as of December 31, 2020.

The Underlying Properties contain interests in

12,629 gross (4,899 net) acres in the East Texas/North Louisiana region across three fields:

the Elm Grove field, operated primarily by

Aethon Energy Operating, LLC and Comstock Oil & Gas, LLC;

and the Kingston field, operated by EXCO Resources and Indigo Resources,

All proved reserves attributable to the Underlying Properties in the East Texas/North Louisiana region are located in the Haynesville,

Cotton Valley, and Hosston reservoirs of the Elm Grove and Kingston fields.

Proved reserves attributable to the Underlying Properties

in the Elm Grove and Kingston fields were 1.3 MMBoe and 0.3 MMBoe, respectively, as of December 31, 2021.

Production and Reserves

The following table shows the net production,

average sales price, average lease operating expense, and proved reserves as of year-end for the Underlying Properties located

in the Permian Basin of west Texas and New Mexico and in the East Texas/North Louisiana region, which relates to the amounts included

in the net profits calculation for the distributions paid during the years ended December 31, 2020, 2019 and 2018.

average sales price, average lease operating expense, and proved reserves as of year-end for the Underlying Properties located in the

Permian Basin of west Texas and New Mexico and in the East Texas/North Louisiana region, which relates to the amounts included in the

net profits calculation for the distributions paid during the years ended December 31, 2021, 2020 and 2019.

Year Ended December 31,

22 unchanged sentences

Proved Reserves (MBoe)

(1) Production of natural gas liquids is immaterial and

included as a component of natural gas production.

(1) Production

of natural gas liquids is immaterial and included as a component of natural gas production.

Abandonment and Sale of Underlying Properties

Each of the operators of the Underlying

Properties or any transferee has the right to abandon its interest in any well or property if it reasonably believes a well or

property ceases to produce or is not capable of producing in commercially paying quantities.

Upon termination of the lease, the

portion of the Net Profits Interest relating to the abandoned property will be extinguished.

The Sponsor 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.

Following the sale of all or any portion of the Underlying Properties, the purchaser will be bound by

the obligations of the Sponsor under the Trust Agreement and the Conveyance with respect to the portion sold.

In addition, the

Sponsor may, without the consent of the Trust unitholders, require the Trustee 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 the Sponsor to a non-affiliate

of the relevant Underlying Properties and are conditioned upon the Trust receiving an amount equal to the fair value to the Trust

of such Net Profits Interest.

In January 2019, the Sponsor sold two producing wells and associated acreage of the Underlying Properties

under this provision for a sale price of approximately $62,000, and the Trustee released such properties from the Net Profits Interest.

Each of the operators of the Underlying Properties

or any transferee has the right to abandon its interest in any well or property if it reasonably believes a well or property ceases to

produce or is not capable of producing in commercially paying quantities.

Upon termination of the lease, the portion of the Net Profits

Interest relating to the abandoned property will be extinguished.

The Sponsor 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.

Following the sale of all or any portion of the Underlying Properties, the purchaser will be bound by the obligations of the Sponsor under

the Trust Agreement and the Conveyance with respect to the portion sold.

In addition, the Sponsor may, without the consent of the Trust

unitholders, require the Trustee 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 the Sponsor to a non-affiliate of the relevant Underlying Properties and are conditioned upon

the Trust receiving an amount equal to the fair value to the Trust of such Net Profits Interest.

In September 2021, the Sponsor entered

into a lease arrangement with respect to a portion of the mineral rights relating to certain of the Underlying Properties located in Borden

County, Texas, for total estimated proceeds of $82,500 (approximately $63,000 net to the Trust’s 80% Net Profits Interest).

Title to Properties

The properties comprising the Underlying

Properties are or may be subject to one or more of the burdens and obligations described below.

To the extent that these burdens

and obligations affect the Sponsor’s rights to production or the value of production from the Underlying Properties, they

have been taken into account in calculating the Trust’s interests and in estimating the size and the value of the reserves

attributable to the Underlying Properties.

The Sponsor’s interests in the oil

and natural gas properties comprising the Underlying Properties are typically subject to one or more of the following:

The properties comprising the Underlying Properties

are or may be subject to one or more of the burdens and obligations described below.

To the extent that these burdens and obligations

affect the Sponsor’s rights to production or the value of production from the Underlying Properties, they have been taken into account

in calculating the Trust’s interests and in estimating the size and the value of the reserves attributable to the Underlying Properties.

The Sponsor’s interests in the oil and natural

gas properties comprising the Underlying Properties are typically subject to one or more of the following:

royalties and other burdens, express and implied, under oil and natural gas leases and other arrangements;

overriding royalties, production payments and similar interests and other burdens created by the Sponsor’s predecessors

a variety of contractual obligations arising under operating agreements, farm-out agreements, production sales contracts and

other agreements that may affect the Underlying Properties or their title;

liens that arise in the normal course of operations, such as those for unpaid taxes, statutory liens securing unpaid suppliers

and contractors and contractual liens under operating agreements that are not yet delinquent or, if delinquent, are being contested

in good faith by appropriate proceedings;

overriding royalties, production payments and similar interests and other burdens created by the Sponsor’s predecessors in title;

a variety of contractual obligations arising under operating agreements, farm-out agreements, production sales contracts and other

agreements that may affect the Underlying Properties or their title;

liens that arise in the normal course of operations, such as those for unpaid taxes, statutory liens securing unpaid suppliers and

contractors and contractual liens under operating agreements that are not yet delinquent or, if delinquent, are being contested in good

faith by appropriate proceedings;

pooling, unitization and communitization agreements, declarations and orders;

easements, restrictions, rights-of-way and other matters that commonly affect property;

conventional rights of reassignment that obligate the Sponsor to reassign all or part of a property to a third party if the

Sponsor intends to release or abandon such property;

conventional rights of reassignment that obligate the Sponsor to reassign all or part of a property to a third party if the Sponsor

intends to release or abandon such property;

preferential rights to purchase or similar agreements and required third party consents to assignments or similar agreements;

obligations or duties affecting the Underlying Properties to any municipality or public authority with respect to any franchise,

grant, license or permit, and all applicable laws, rules, regulations and orders of any governmental authority;

obligations or duties affecting the Underlying Properties to any municipality or public authority with respect to any franchise, grant,

license or permit, and all applicable laws, rules, regulations and orders of any governmental authority;

rights reserved to or vested in the appropriate governmental agency or authority to control or regulate the Underlying Properties

and also the interests held therein, including the Sponsor’s interests and the Net Profits Interest.

The Sponsor has informed the Trustee that

the Sponsor believes the burdens and obligations affecting the properties comprising the Underlying Properties are conventional

in the industry for similar properties.

The Sponsor has also informed the Trustee that the Sponsor believes the existing burdens

and obligations do not, in the aggregate, materially interfere with the use of the Underlying Properties and will not materially

adversely affect the Net Profits Interest or its value.

To give third parties notice of the Net

Profits Interest, Enduro recorded the Conveyance in Texas, Louisiana and New Mexico in the real property records in each Texas,

Louisiana or New Mexico county in which the Underlying Properties are located, or in such other public records of those states

as required under applicable law to place third parties on notice of the Conveyance.

In a bankruptcy of the Sponsor, to the extent

Louisiana or New Mexico law were held to be applicable, the Net Profits Interest might be considered an asset of the bankruptcy

estate and used to satisfy obligations to creditors of the Sponsor, in which case the Trust would be an unsecured creditor of the

Sponsor at risk of losing the entire value of the Net Profits Interest to senior creditors.

See “Risk Factors—In the

event of the bankruptcy of the Sponsor, if a court were to hold that the Net Profits Interest was part of the bankruptcy estate,

the Trust may be treated as an unsecured creditor with respect to the Net Profits Interest attributable to properties in Louisiana

and New Mexico”

in Item 1A of this Form 10-K.

The Sponsor believes that its title to the

Underlying Properties and the Trust’s title to the Net Profits Interest are each good and defensible in accordance with standards

generally accepted in the oil and gas industry, subject to such exceptions as are not so material to detract substantially from

the use or value of such Underlying Properties or Net Profits Interest.

Under the terms of the Conveyance creating the Net Profits

Interest, the Sponsor has provided a special warranty of title with respect to the Net Profits Interest, subject to the burdens

and obligations described in this section.

Please see “Risk Factors—The Trust Units may lose value as a result of title

deficiencies with respect to the Underlying Properties”

The Sponsor has informed the Trustee that the Sponsor

believes the burdens and obligations affecting the properties comprising the Underlying Properties are conventional in the industry for

similar properties.

The Sponsor has also informed the Trustee that the Sponsor believes the existing burdens and obligations do not, in

the aggregate, materially interfere with the use of the Underlying Properties and will not materially adversely affect the Net Profits

Interest or its value.

To give third parties notice of the Net Profits

Interest, Enduro recorded the Conveyance in Texas, Louisiana and New Mexico in the real property records in each Texas, Louisiana or New

Mexico county in which the Underlying Properties are located, or in such other public records of those states as required under applicable

law to place third parties on notice of the Conveyance.

In a bankruptcy of the Sponsor, to the extent Louisiana

or New Mexico law were held to be applicable, the Net Profits Interest might be considered an asset of the bankruptcy estate and used

to satisfy obligations to creditors of the Sponsor, in which case the Trust would be an unsecured creditor of the Sponsor at risk of losing

the entire value of the Net Profits Interest to senior creditors.

See “Risk Factors—In the event of the bankruptcy of the

Sponsor, if a court were to hold that the Net Profits Interest was part of the bankruptcy estate, the Trust may be treated as an unsecured

creditor with respect to the Net Profits Interest attributable to properties in Louisiana and New Mexico”

in Item 1A of this Form

The Sponsor believes that its title to the Underlying

Properties and the Trust’s title to the Net Profits Interest are each good and defensible in accordance with standards generally

accepted in the oil and gas industry, subject to such exceptions as are not so material to detract substantially from the use or value

of such Underlying Properties or Net Profits Interest.

Under the terms of the Conveyance creating the Net Profits Interest, the Sponsor

has provided a special warranty of title with respect to the Net Profits Interest, subject to the burdens and obligations described in

this section.

Please see “Risk Factors—Financial Risks—The Trust Units may lose value as a result of title deficiencies

with respect to the Underlying Properties”

in Item 1A of this Form 10-K.

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 2. Properties