What changed in this filing

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Item 1. Financial Statements

2022-11-14 compared with 2022-08-15 · 281 added, 267 removed, 422 unchanged (56% of the section changed)

Financial Statements.

PERMIANVILLE ROYALTY

PERMIANVILLE ROYALTY TRUST

Statements of Assets, Liabilities and Trust

September 30,

Cash and cash equivalents

7 unchanged sentences

Statements of Distributable

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Income from net profits interest

9 unchanged sentences

Statements of Changes in Trust Corpus

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Trust corpus, beginning of period

10 unchanged sentences

Permianville Royalty Trust

(the “Trust”), previously known as Enduro Royalty Trust, is a Delaware statutory trust formed in May 2011 pursuant to

a trust agreement (the “Trust Agreement”) among Enduro Resource Partners LLC (“Enduro”), as trustor, The Bank

(the “Trust”), previously known as Enduro Royalty Trust, is a Delaware statutory trust formed in May 2011 pursuant to

a trust agreement (the “Trust Agreement”) among Enduro Resource Partners LLC (“Enduro”), as trustor, The Bank

of New York Mellon Trust Company, N.A.

(the “Trustee”), as trustee, and Wilmington Trust Company (the “Delaware Trustee”),

as Delaware Trustee.

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from the sale of oil and natural gas production from certain properties in the states of Texas, Louisiana and New Mexico held by Enduro

as of the date of the conveyance of the net profits interest to the Trust (the “Net Profits Interest”).

The properties in

which the Trust holds the Net Profits Interest are referred to as the “Underlying Properties.”

In connection with the closing

of the initial public offering in November 2011, Enduro contributed the Net Profits Interest to the Trust in exchange for 33,000,000

units of beneficial interest in the Trust (the “Trust Units”).

On August 31, 2018, COERT Holdings 1 LLC (“COERT”

or the “Sponsor”) acquired from Enduro the Underlying Properties and all of the outstanding Trust Units owned by Enduro (the

“Sale Transaction”).

In connection with the Sale Transaction, COERT assumed all of Enduro’s obligations under the Trust

units of beneficial interest in the Trust (the “Trust Units”).

On August 31, 2018, COERT Holdings 1 LLC (“COERT”

or the “Sponsor”) acquired from Enduro the Underlying Properties and all of the outstanding Trust Units owned by Enduro (the

“Sale Transaction”).

In connection with the Sale Transaction, COERT assumed all of Enduro’s obligations under the Trust

Agreement and other instruments to which Enduro and the Trustee were parties.

As of June 30, 2022, the Sponsor owned 8,600,000 Trust

Units, or 26% of the issued and outstanding Trust Units.

As of September 30, 2022, the Sponsor owned 8,546,594

Trust Units, or 26% of the issued and outstanding Trust Units.

The Net Profits Interest

2 unchanged sentences

The Amended and Restated Trust Agreement provides, among other provisions, that:

the Trust’s business activities are limited to owning the Net Profits Interest and any activity

reasonably related to such ownership, including activities required or permitted by the terms of the Conveyance of Net Profits Interest,

dated effective as of July 1, 2011 (as supplemented and amended to date, the “Conveyance”).

As a result, the Trust is

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Liabilities and Trust Corpus as of December 31, 2021, which has been derived from audited financial statements, and the unaudited

interim financial statements as of June 30, 2022 and for the three and six months ended June 30, 2022 and 2021 have been prepared

pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”).

Accordingly, certain information

and disclosures normally included in annual financial statements have been condensed or omitted pursuant to those rules and regulations.

Therefore, these financial statements should be read in conjunction with the financial statements and notes thereto included in the Trust’s

Annual Report on Form 10-K for the fiscal year ended December 31, 2021 (the “2021 Annual Report on Form 10-K”).

interim financial statements as of September 30, 2022 and for the three and nine months ended September 30, 2022 and 2021 have

been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”).

Accordingly, certain

information and disclosures normally included in annual financial statements have been condensed or omitted pursuant to those rules and

Therefore, these financial statements should be read in conjunction with the financial statements and notes thereto included

in the Trust’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 (the “2021 Annual Report on

In the opinion of the Trustee,

27 unchanged sentences

administrative expenses (which includes the Trustee’s fees as well as accounting, engineering, legal, and other professional fees)

are recorded when paid;

1 unchanged sentence

Trust expenses may be established by the Trustee for certain future expenditures that would not be recorded as contingent liabilities

under accounting principles generally accepted in the United States of America (“GAAP”);

(e) Amortization of

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and amortization of the net profits interest

calculated on a unit-of-production basis is charged directly to trust corpus instead of as an expense.

While these statements differ from

financial statements prepared in accordance with GAAP, the modified cash basis of reporting is considered to be the most meaningful because

monthly distributions to the Trust unitholders are based on net cash receipts.

calculated on a unit-of-production basis and any impairment recorded is charged directly to trust corpus instead of as an expense.

these statements differ from financial statements prepared in accordance with GAAP, the modified cash basis of reporting is considered

to be the most meaningful because monthly distributions to the Trust unitholders are based on net cash receipts.

This comprehensive basis

2 unchanged sentences

PROFITS INTEREST IN OIL AND NATURAL GAS PROPERTIES

Net Profits Interest in oil and natural gas properties was recorded at its fair value on the date of conveyance.

Amortization of the

Net Profits Interest in oil and natural gas properties is calculated on a unit-of-production basis based on the Underlying Properties’

production and reserves.

The reserves upon which the amortization rate is based are quantity estimates that are subject to numerous uncertainties

inherent in the estimation of proved reserves.

The volumes considered to be commercially recoverable fluctuate with changes in commodity

prices and operating costs.

The Net Profits Interest in

oil and natural gas properties was recorded at its fair value on the date of conveyance.

Amortization of the Net Profits Interest in oil

and natural gas properties is calculated on a unit-of-production basis based on the Underlying Properties’ production and reserves.

The reserves upon which the amortization rate is based are quantity estimates that are subject to numerous uncertainties inherent in the

estimation of proved reserves.

The volumes considered to be commercially recoverable fluctuate with changes in commodity prices and operating

These estimates are expected to change as additional information becomes available in the future.

revisions in proved reserves may result in an increased rate of amortization.

Amortization is charged directly to the Trust corpus balance

and does not affect the distributable income of the Trust.

Accumulated amortization as of June 30, 2022 and December 31, 2021

was $294,777,918 and $291,965,506, respectively.

Downward revisions in proved

reserves may result in an increased rate of amortization.

Amortization is charged directly to the Trust corpus balance and does not affect

the distributable income of the Trust.

Accumulated amortization as of September 30, 2022 and December 31, 2021 was $296,249,377

and $291,965,506, respectively.

The Net Profits Interest is

2 unchanged sentences

While the Trust did not record an

impairment during the six months ended June 30, 2022 or 2021, future downward revisions in actual production volumes relative to

current forecasts, higher than expected operating costs, or lower than anticipated commodity prices could result in recognition of impairment

in future periods.

impairment during the three or nine months ended September 30, 2022 or 2021, future downward revisions in actual production volumes

relative to current forecasts, higher than expected operating costs, or lower than anticipated commodity prices could result in recognition

of impairment in future periods.

Federal Income Taxes

9 unchanged sentences

In addition, each unitholder is entitled to depletion deductions because the Net

Profits Interest constitutes “economic interests”

in oil and natural gas properties for federal income tax purposes.

Profits Interest constitutes “economic interests” in oil and natural gas properties for federal income tax purposes.

unitholder is entitled to amortize the cost of the Trust Units through cost depletion over the life of the Net Profits Interest or, if

greater, through percentage depletion.

Unlike cost depletion, percentage depletion is not limited to a unitholder’s depletable tax

basis in the Trust Units.

6 unchanged sentences

Therefore, the Trustee considers the Trust to be a non-mortgage widely

held fixed investment trust (“WHFIT”) for U.S.

federal income tax purposes.

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The tax consequences to a

unitholder of ownership of Trust Units will depend in part on the unitholder’s tax circumstances.

Unitholders should consult their

tax advisors about the federal tax consequences relating to owning the Trust Units.

The Trust’s revenues

are from sources in the states of Louisiana, New Mexico, and Texas.

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Texas does not impose a state

income tax, so the Trust’s income is not subject to income tax at the trust level in Texas.

Texas imposes a franchise tax at a rate

5 unchanged sentences

from other non-operating mineral interests, and do not receive more than 10% of their income from operating an active trade or business,

generally are exempt from the Texas franchise tax as “passive entities.”

Although the Trust is intended to be exempt from

generally are exempt from the Texas franchise tax as “passive entities.” Although the Trust is intended to be exempt from

Texas franchise tax at the trust level as a passive entity, each unitholder that is considered a taxable entity under the Texas franchise

1 unchanged sentence

Each unitholder should consult

his or her own tax advisor regarding state tax requirements, if any, applicable to such person’s ownership of Trust Units.

DISTRIBUTIONS

3 unchanged sentences

cash, if any, received by the Trust from the Net Profits Interest and other sources (such as interest earned on any amounts reserved by

the Trustee) that month, over the Trust’s liabilities for that month, subject to adjustments for changes made by the Trustee during

the month in any cash reserves established for future liabilities of the Trust.

5 unchanged sentences

The following table provides

information regarding the Trust’s distributions per unit paid during the periods indicated:

Declaration Date

Six Months Ended June 30, 2022:

Nine Months Ended September 30, 2022:

December 17, 2021

13 unchanged sentences

June 14, 2022

June 17, 2022

June 30, 2022

July 15, 2022

July 18, 2022

July 29, 2022

August 12, 2022

August 18, 2022

August 31, 2022

September 15, 2022

Year to Date –

Six Months Ended June 30, 2021:

Nine Months Ended September 30, 2021:

August 16, 2021

August 31, 2022

September 15, 2021

Year to Date –

the six months ended June 30, 2021, the Net Profits Interest generated positive income for each month in the period, which

reduced the cumulative outstanding Net Profits Interest shortfall from $1.7 million as of December 31, 2020 to approximately $0.5

million as of June 30, 2021.

As a result, there were no net profits reported or distributed in the first six months of 2021.

Distributions

to the Trust resumed once the cumulative outstanding Net Profits Interest shortfall of approximately $0.5 million and outstanding administrative

advances to the Trust of $0.8 million as of June 30, 2021 were eliminated.

These balances were carried forward to be deducted from

future net profits generated by the Underlying Properties.

In August 2021, the remaining amount of the shortfall and advances to

the Trust were fully repaid, resulting in a positive distribution to the unitholders in September 2021.

During the nine months ended

September 30, 2021, the Net Profits Interest generated positive income for each month in the period, which eliminated the cumulative

outstanding Net Profits Interest shortfall of $1.7 million that existed as of December 31, 2020.

In August 2021, the remaining

amount of the shortfall and advances to the Trust were fully repaid, resulting in a positive distribution to the unitholders in September 2021.

Under the terms of the Trust

Agreement, the Trust pays an administrative fee of $200,000 per year to the Trustee and an annual fee of $2,000 to the Delaware Trustee.

During each of the three- and six-month periods ended June 30, 2022 and 2021, the Trust paid $100,000 to the Trustee and $0 to the

Delaware Trustee pursuant to the terms of the Trust Agreement.

During each of the three- and nine-month periods ended September 30, 2022 and 2021, the Trust paid $150,000 to the Trustee and $0

to the Delaware Trustee pursuant to the terms of the Trust Agreement.

Distributions Paid or Declared

On July 15, 2022, a distribution

of $0.045000 per unit, which was declared on June 17, 2022, was paid to Trust unitholders of record as of June 30, 2022.

On July 18, 2022, the

Trust declared a distribution of $0.021500 per unit to unitholders of record as of July 29, 2022.

The distribution was paid to unitholders

on August 12, 2022.

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

References to the “Trust”

in this document refer to Permianville Royalty Trust, previously known as Enduro Royalty Trust, while references to “COERT”

or the “Sponsor”

in this document refer to COERT Holdings 1 LLC.

References to “Enduro”

in this document refer

On October 17, 2022,

a distribution of $0.050500 per unit, which was declared on September 16, 2022, was paid to Trust unitholders of record as of September 30,

On October 17, 2022,

the Trust declared a distribution of $0.051000 per unit to unitholders of record as of October 31, 2022.

The distribution was paid

to unitholders on November 14, 2022.

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

References to the “Trust”

in this document refer to Permianville Royalty Trust, previously known as Enduro Royalty Trust, while references to “COERT”

or the “Sponsor” in this document refer to COERT Holdings 1 LLC.

References to “Enduro” in this document refer

to Enduro Resource Partners LLC, the original sponsor of the Trust.

The following review of the Trust’s financial condition and

results of operations should be read in conjunction with the financial statements and notes thereto, as well as Management’s Discussion

and Analysis of Financial Condition and Results of Operations contained in the Trust’s 2021 Annual Report on Form 10-K.

Trust’s annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all other filings

with the SEC are available on the SEC’s website at www.sec.gov .

The following review of the Trust’s financial condition and

results of operations should be read in conjunction with the financial statements and notes thereto, as well as Management’s Discussion

and Analysis of Financial Condition and Results of Operations contained in the Trust’s 2021 Annual Report on Form 10-K.

Trust’s annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all other filings

with the SEC are available on the SEC’s website at www.sec.gov .

Forward-Looking Statements

This Form 10-Q includes

“forward-looking statements”

within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E

“forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E

of the Securities Exchange Act of 1934, as amended.

All statements other than statements of historical fact included in this Form 10-Q,

including without limitation the statements under this “Trustee’s Discussion and Analysis of Financial Condition and Results

of Operations”

are forward-looking statements.

including without limitation the statements under this “Trustee’s Discussion and Analysis of Financial Condition and Results

of Operations” are forward-looking statements.

Such statements may be influenced by factors that could cause actual outcomes and

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No assurance can be given that such expectations will prove to have been correct.

used in this document, the words “believes,”

“expects,”

“anticipates,”

“intends”

used in this document, the words “believes,” “expects,” “anticipates,” “intends” or similar

expressions are intended to identify such forward-looking statements.

The following important factors, in addition to those discussed

elsewhere in this Form 10-Q, in the Trust’s 2021 Annual Report on Form 10-K and the Trust’s other filings with the

SEC could affect the future results of the energy industry in general, and COERT and the Trust in particular, and could cause actual results

2 unchanged sentences

the amount of future direct operating expenses and development expenses;

the effect, impact, potential duration or other implications of the novel strain of coronavirus (“COVID-19”) pandemic;

the actions of the Organization of Petroleum Exporting Countries;

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

the prohibition on the Trust’s entry into any new hedging arrangements under the terms of the Conveyance;

conditions in the capital markets;

competition from others in the energy industry;

climate change and its potential impact on demand for fossil fuels;

uncertainty of estimates of oil and natural gas reserves and production;

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a statutory trust created in May 2011, completed its initial public offering in November 2011.

The Trust’s only asset

and source of income is the Net Profits Interest, which entitles the Trust to receive 80% of the net profits from oil and natural gas

6 unchanged sentences

On August 31, 2018,

COERT completed the acquisition from Enduro of the Underlying Properties and all of the outstanding Trust Units owned by Enduro (the “Sale

Transaction”).

In connection with the Sale Transaction, COERT assumed all of Enduro’s obligations under the Amended and Restated

COERT completed the acquisition from Enduro of the Underlying Properties and all of the outstanding Trust Units owned by Enduro (the “Sale

Transaction”).

In connection with the Sale Transaction, COERT assumed all of Enduro’s obligations under the Amended and Restated

Trust Agreement of the Trust and other instruments to which Enduro and the Trustee were parties.

The Trust is required to

make monthly cash distributions of substantially all of its monthly cash receipts, after deducting the Trust’s administrative expenses,

to the holders of Trust Units as of the applicable record date (generally the last business day of each calendar month) on or before the

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The outlook for development

activity for the Underlying Properties continued to improve during the second quarter of 2022, following the rise in commodity prices

and operator activity seen in the second half of 2021 and into the start of 2022.

While the global economy remains volatile following

the outbreak of the armed conflict between Russia and Ukraine and given the lingering effects of the COVID-19 pandemic, the Sponsor does

not expect the impact to the Underlying Properties and the 2022 development activity to be material, aside from the effects of volatile

activity for the Underlying Properties remained positive during the third quarter of 2022, despite the quarter-over-quarter decline in

commodity prices.

While the global economy remains volatile, reflecting, among other factors, the armed conflict between Russia and Ukraine

and lingering effects of the COVID-19 pandemic, the Sponsor does not expect such factors to have a material impact on the Underlying Properties

and the 2022 development activity, although volatile commodity prices and inflation are affecting third-party operators, and those effects

could be material.

The West Texas Intermediate spot price of crude oil has increased materially from $76.99 per barrel on December 31,

2021 to $92.51 per barrel on August 9, 2022.

Natural gas prices have shown greater volatility and have increased at an even higher

rate than crude oil prices, with the Henry Hub spot price increasing from $3.66 per MMBTU on December 31, 2021 to $7.76 per MMBTU

on August 9, 2022.

While lingering effects of the COVID-19 pandemic remain, most recently in the form of oilfield service inflationary

pressures and supply chain bottlenecks, operators of the Underlying Properties have continued to increase their spending activity.

due to the current heightened market volatility and global macroeconomic uncertainty, it remains difficult to reliably estimate the ultimate

impact of these conflicting market drivers against an overall supportive commodity price environment.

If commodity prices for crude oil

and natural gas remain volatile and inflationary trends continue, monthly cash distributions to unitholders could vary greatly and possibly

be lower than historical distributions.

The Sponsor previously announced

an anticipated 2022 capital expenditures program between $6 million to $8 million attributable to the Underlying Properties, or $4.8

million to $6.4 million net to the Trust’s 80% Net Profits Interest.

At the current pace, the Sponsor now expects the 2022 cash

capital expenditures to be at the high end of that range and possibly exceeding that range, based on recent drilling proposals received

from operators of the Underlying Properties for projects that are expected to take place in 2022.

account for this increased activity level, the Sponsor has established a cash reserve for approved, future development expenses this year.

In addition, the Sponsor maintains significant liquidity and financial flexibility to respond to the operational and capital spending

changes of the operators of the Underlying Properties.

The Sponsor will continue to monitor and possibly participate in future, to be

announced capital projects in 2022 as operators continue to increase capital ependitures to levels beyond that of recent years in response

to current commodity prices.

2021 to $85.70 per barrel on November 9, 2022.

Natural gas prices continue to show greater volatility and have increased and subsequently

decreased at an even higher rate than crude oil prices, with the Henry Hub spot price increasing from $3.66 per MMBTU on December 31,

2021 to $3.99 per MMBTU on November 9, 2022, while reaching a year-to-date high of $9.82 per MMBTU on August 22, 2022.

recent oilfield service inflationary pressures and supply chain bottlenecks, operators of the Underlying Properties have continued their

spending activity.

However, due to the current heightened market volatility and global macroeconomic uncertainty, it remains difficult

to reliably estimate the ultimate impact of these conflicting market drivers against an overall supportive commodity price environment.

If commodity prices for crude oil and natural gas remain volatile and inflationary trends continue, monthly cash distributions to unitholders

could vary greatly and possibly be lower than historical distributions.

As previously disclosed, the Sponsor now expects

that the 2022 capital expenditure program will be between $10 million and $15 million attributable to the Underlying Properties, or between

$8 million and $12 million net to the Trust’s 80% Net Profits Interest.

This represents an increase from the previously expected

capital expenditure program of $6 million to $8 million, or $4.8 million to $6.4 million net to the Trust’s 80% Net Profits Interest.

To account for this increased activity level, the Sponsor has established a cash reserve for approved,

future development expenses this year.

This reserve is intended to fund the expected increase in development expenses;

if those expenses are ultimately delayed or are less than expected, or if the outlook changes, amounts reserved but unspent will be released

as an incremental cash distribution in a future period.

In addition, the Sponsor maintains

significant liquidity and financial flexibility to respond to the operational and capital spending changes of the operators of the Underlying

The Sponsor will continue to monitor and possibly participate in future, to-be-announced capital projects in 2022, to the

extent operator capital expenditures remain elevated compared to recent years in response to current commodity prices.

Capex Drilling Activity Update

Presented below is a summary

of the current status of certain notable capital projects recently undertaken on the Underlying Properties pursuant to the capital

expenditure program described above.

Since the last summary of 2022 capital projects included in the Trust’s September 2022

monthly cash distribution announcement, various operators of the Underlying Properties, have commenced eight new projects, and several

projects that had been identified as awaiting first revenues have begun producing.

The Sponsor expects that the cost of these new projects,

together with the other projects undertaken since the beginning of this year, will be within the range of the previously updated 2022

capital expenditure program, although total capital expenditures in 2022 ultimately could be at the higher end of the range disclosed

The following table is

not intended to be a comprehensive list reflecting all capital expenditures to date.

In addition, there can often be a several-month

delay from the time of capital expenditures to the time of production and cash flows attributable to the Underlying Properties, especially

given the non-operated nature of the Underlying Properties.

Underlying Properties

Working Interest

Large Cap Major

D&C New Drills

1 Drilled, Awaiting

Large Cap E&P 1

D&C New Drills

5 Producing, Awaiting First

Large Cap E&P 2

New Drills / Workovers

Continual Program

Large Private E&P

Producing, Awaiting First

PE-Backed Private 1

D&C New Drills

PE-Backed Private 2

D&C New Drills

3 Producing, Awaiting First

PE-Backed Private 3

D&C New Drills

Drilling In-Process

New Drills / Workovers

The Sponsor expects some of these projects to be

completed and to begin producing before year-end, while others are expected to be completed and to begin producing during 2023.

Results of Operations

Three Months Ended June 30, 2022 Compared

to Three Months Ended June 30, 2021

The Trust’s net profits

Three Months Ended September 30, 2022

Compared to Three Months Ended September 30, 2021

The Trust’s net profits

income consists of monthly net profits attributable to the Net Profits Interest, which was determined as shown in the following table:

Three Months Ended

Increase (Decrease)

September 30,

Gross profits:

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Net profits allocable to Net Profits Interest

Sponsor reserve for capital expenditures

Sponsor reserve release for capital expenditures

Trust general and administrative expenses and cash withheld for expenses

Sponsor loan repayment

Net profits allocable to Net Profits Interest Shortfall

Distributable income

Cumulative Net Profits Interest Shortfall

the three months ended June 30, 2021, the Net Profits Interest generated positive income for each month in the period, which

reduced the cumulative Net Profits Interest shortfall from $1.3 million as of March 31, 2021 to approximately $0.5 million as of

June 30, 2021.

Due to the continuing Net Profits Interest shortfall, there were no net profits reported or distributed in the three

months ended June 30, 2021.

Distributions to the Trust resumed once the cumulative outstanding Net Profits Interest shortfall of

approximately $0.5 million and outstanding administrative advances to the Trust of $0.8 million as of June 30, 2021 were eliminated.

These balances were carried forward to be deducted from future net profits generated by the Underlying Properties.

In August 2021,

the remaining amount of the shortfall and advances to the Trust were fully repaid, resulting in a positive distribution to the unitholders

in September 2021.

For the three months ended

September 30, 2021, the Net Profits Interest generated positive income for each month in the period, which eliminated the cumulative

Net Profits Interest shortfall of $0.5 million as of June 30, 2021 and the cumulative outstanding Sponsor advances to the Trust of

$0.8 million.

The following table displays

reported oil and natural gas sales volumes and average prices from the Underlying Properties, representing the amounts included in the

net profits calculation for distributions paid during the three months ended June 30, 2022 and 2021:

Three Months Ended June 30,

net profits calculation for distributions paid during the three months ended September 30, 2022 and 2021:

Three Months Ended

September 30,

Underlying Properties Production Volumes:

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Net profits attributable

to the Underlying Properties for the three months ended June 30, 2022 were $5.3 million compared to $1.0 million for the three months

ended June 30, 2021.

The $4.3 million increase in net profits attributable to the Underlying Properties from the 2021 period

to the 2022 period was primarily due to the following items:

· Oil sales increased $3.6 million due to higher realized prices, which caused oil sales to increase by

$3.8 million.

This increase was offset by reduced sales volumes, which reduced oil sales by $0.2 million.

The average oil price received

increased 62% primarily due to a 56% increase in the average NYMEX oil price for the relevant production months.

Oil sales volumes decreased

3% as a result of natural production declines.

· Natural gas sales increased $2.2 million due to higher realized prices, which increased natural gas sales

by $2.3 million.

This increase was offset by reduced sales volumes, which reduced gas sales by $0.1 million.

The average natural gas price

received increased 117% primarily due to a 105% increase in the average NYMEX natural gas price for the relevant production months.

to the Underlying Properties for the three months ended September 30, 2022 were $3.0 million compared to $1.9 million for the three

months ended September 30, 2021.

The $1.1 million increase in net profits attributable to the Underlying Properties from the

2021 period to the 2022 period was primarily due to the following items:

Oil sales increased $5.1 million, due to higher realized prices and higher produced volumes.

The 69% increase

in realized oil sales prices in the 2022 period compared to the 2021 period increased revenues by $5.0 million, and higher produced volumes

increased revenues by $0.1 million.

Natural gas sales increased $2.6 million due to higher produced volumes and higher realized prices.

93% increase in realized gas prices and 13% increase in gas sales volumes in the 2022 period compared to the 2021 period decreased revenues

by $2.3 million and $0.3 million, respectively.

Lease operating expenses increased $0.4 million, primarily attributable to the increased number of producing

wells in the quarter ended June 30, 2022 compared to the quarter ended June 30, 2021.

wells in the quarter ended September 30, 2022 compared to the quarter ended September 30, 2021.

Compression, gathering and transportation costs increased $0.2 million, primarily due to the increase

in natural gas sales.

· Production, ad valorem and other taxes increased $0.2 million during the three months ended June 30,

2022 compared to the three months ended June 30, 2021, due to the increase in oil and natural gas sales.

in natural gas volumes.

Production, ad valorem and other taxes increased $0.4 million during the three months ended September 30,

2022 compared to the three months ended September 30, 2021, due to the increase in oil and natural gas sales.

Development expenses increased $5.3 million due to drilling and completion costs for drilling multiple

new wells in the Permian and Haynseville Area.

new wells in the Permian and Haynesville areas.

During the three months ended

June 30, 2022, COERT withheld from the net profits otherwise payable to the Trust an aggregate of $1.15 million for the establishment

of a cash reserve for approved, future development expenses.

This reserve is intended to fund an expected increase in development expenses;

however, if those expenses are ultimately delayed or are less than expected, or if the outlook changes, amounts reserved but unspent will

be released as an incremental cash distribution in a future period.

No amounts were withheld for such a reserve during the three months

ended June 30, 2021.

September 30, 2022, COERT withheld from the net profits otherwise payable to the Trust an aggregate of $0.5 million and released

$0.9 million, with $0.7 million remaining for approved, future development expenses.

This reserve is intended to fund an expected increase

in development expenses;

however, if those expenses are ultimately delayed or are less than expected, or if the outlook changes, amounts

reserved but unspent will be released as an incremental cash distribution in a future period.

For the three months ended

June 30, 2022, the Trust withheld $0.4 million and paid $0.2 million for general and administrative expenses.

Expenses paid during

the period primarily consisted of fees for the preparation of the Trust’s monthly press releases, financial statement audit fees,

and Trustee fees.

For the three months ended June 30, 2021, the Trust withheld $0.0 million and paid $0.2 million for general and

administrative expenses.

Six Months Ended June 30, 2022 Compared

to Six Months Ended June 30, 2021

The Trust’s net profits

September 30, 2022, the Trust withheld $0.4 million and paid $0.2 million for general and administrative expenses.

Expenses paid

during the period primarily consisted of fees for the preparation of the Trust’s monthly press releases, financial statement audit

fees, and Trustee fees.

For the three months ended September 30, 2021, the Trust withheld $0.2 million and paid $0.2 million for

general and administrative expenses.

Nine Months Ended September 30, 2022 Compared

to Nine Months Ended September 30, 2021

The Trust’s net profits

income consists of monthly net profits attributable to the Net Profits Interest, which was determined as shown in the following table:

Nine Months Ended

September 30,

Gross profits:

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Trust general and administrative expenses and cash withheld for expenses

Sponsor loan repayment

Net profits allocable to Net Profits Interest Shortfall

Distributable income

Cumulative Net Profits Interest Shortfall

the six months ended June 30, 2021, the Net Profits Interest generated positive income for each month in the period, which

reduced the cumulative Net Profits Interest shortfall from $1.7 million as of December 31, 2020 to approximately $0.5 million as

of June 30, 2021.

Due to the continuing Net Profits Interest shortfall, there were no net profits reported or distributed in the

six months ended June 30, 2021.

Distributions to the Trust resumed once the cumulative outstanding Net Profits Interest shortfall

of approximately $0.5 million and outstanding administrative advances to the Trust of $0.8 million as of June 30, 2021 were eliminated.

These balances were carried forward to be deducted from future net profits generated by the Underlying Properties.

In August 2021,

the remaining amount of the shortfall and advances to the Trust were fully repaid, resulting in a positive distribution to the unitholders

in September 2021.

For the nine months ended

September 30, 2021, the Net Profits Interest generated positive income for each month in the period, which eliminated the cumulative

Net Profits Interest shortfall of $1.7 million as of December 31, 2020 and the cumulative outstanding Sponsor advances to the Trust

of $0.8 million.

The following table displays

reported oil and natural gas sales volumes and average prices from the Underlying Properties, representing the amounts included in the

net profits calculation for distributions paid during the six months ended June 30, 2022 and 2021:

Six Months Ended June 30,

net profits calculation for distributions paid during the nine months ended September 30, 2022 and 2021:

Nine Months Ended September 30,

Underlying Properties Production Volumes:

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Net profits attributable

to the Underlying Properties for the six months ended June 30, 2022 were $9.5 million compared to $1.5 million for the six months

ended June 30, 2021.

As a result of the aggregate Net Profits Interest shortfall, the Trust did not make any distributions to unitholders

during the first half of 2021.

The $8.0 million increase in net profits attributable to the Underlying Properties from the 2021 period

to the 2022 period was primarily due to the following items:

· Oil sales increased $7.9 million due to higher realized prices, which caused oil sales to increase by

$8.6 million.

This increase was offset by reduced sales volumes, which reduced oil sales by $0.7 million.

The average oil price received

increased 79% primarily due to a 71% increase in the average NYMEX oil price for the relevant production months.

Oil sales volumes decreased

6% as a result of natural production declines.

to the Underlying Properties for the nine months ended September 30, 2022 were $10.5 million compared to $3.1 million for the nine

months ended September 30, 2021.

As a result of the cumulative Net Profits Interest shortfall, there was only one distribution to

unitholders during the first nine months of 2021.

The $7.4 million increase in net profits attributable to the Underlying Properties from

the 2021 period to the 2022 period was primarily due to the following items:

Oil sales increased $13.0 million primarily due to higher realized prices.

The increase in realized prices

that led to higher sales of $13.7 million was partially offset by lower sales volumes, which reduced oil sales by $0.7 million.

oil price received increased 76% primarily due to a 70% increase in the average NYMEX oil price for the relevant production months.

sales volumes decreased 4% as a result of natural production declines.

Natural gas sales increased $7.3 million due to higher realized prices and produced volumes, which increased

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Lease operating expenses increased $2.0 million, primarily attributable to the increased number of producing

wells in the quarter ended June 30, 2022 compared to the quarter ended June 30, 2021.

wells in the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021.

Compression, gathering and transportation costs increased $0.6 million, primarily due to the increase

in natural gas production.

· Production, ad valorem and other taxes increased $0.5 million during the three months ended June 30,

2022 compared to the three months ended June 30, 2021, due to the increase in oil and natural gas sales.

Production, ad valorem and other taxes increased $0.9 million during the nine months ended September 30,

2022 compared to the nine months ended September 30, 2021, due to the increase in oil and natural gas sales.

Development expenses increased $7.6 million due to drilling and completion costs for drilling multiple

new wells in the Permian and Haynseville Area.

During the six months ended June 30, 2022,

COERT withheld from the net profits otherwise payable to the Trust an aggregate of $1.15 million for the establishment of a cash reserve

for approved, future development expenses.

new wells in the Permian and Haynesville areas.

During the nine months ended September 30,

2022, COERT withheld from the net profits otherwise payable to the Trust an aggregate of $0.7 million for the establishment of a cash

reserve for approved, future development expenses.

This reserve is intended to fund an expected increase in development expenses;

those expenses are ultimately delayed or are less than expected, or if the outlook changes, amounts reserved but unspent will be released

if those expenses are ultimately delayed or are less than expected, or if the outlook changes, amounts reserved but unspent will be released

as an incremental cash distribution in a future period.

No amounts were withheld for such a reserve during the six months ended June 30,

For the first half of 2022, the Trust withheld

For the first nine months of 2022, the Trust withheld

$1.3 million and paid $0.6 million for general and administrative expenses.

Expenses paid during the period primarily consisted of fees

for the preparation of the Trust’s monthly press releases, financial statement audit fees, and Trustee fees.

For the six months

ended June 30, 2021, the Trust withheld $0.0 million and paid $0.5 million for general and administrative expenses.

for the preparation of the Trust’s monthly press releases, financial statement audit fees, and Trustee fees.

For the nine months

ended September 30, 2021, the Trust withheld $0.2 million and paid $0.7 million for general and administrative expenses.

Liquidity and Capital Resources

The Trust’s principal

sources of liquidity are cash flow generated from the Net Profits Interest and borrowing capacity under the letter of credit described

Other than Trust administrative expenses, including any reserves established by the Trustee for future liabilities, the Trust’s

only use of cash is for distributions to Trust unitholders.

Available funds are the excess cash, if any, received by the Trust from the

Net Profits Interest and other sources (such as interest earned on any amounts reserved by the Trustee) in any given month, over the Trust’s

expenses paid for that month.

Available funds are reduced by any cash the Trustee determines to hold as a reserve against future expenses.

principal sources of liquidity are cash flow generated from the Net Profits Interest and borrowing capacity under the letter of

credit described below.

Other than Trust administrative expenses, including any reserves established by the Trustee for future

liabilities, the Trust’s only use of cash is for distributions to Trust unitholders.

Available funds are the excess cash, if

any, received by the Trust from the Net Profits Interest and other sources (such as interest earned on any amounts reserved by the

Trustee) in any given month, over the Trust’s expenses paid for that month.

Available funds are reduced by any cash the

Trustee determines to hold as a reserve against future expenses.

Trustee may create a cash reserve to pay for future liabilities of the Trust.

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If the Trustee determines

that the cash on hand and the cash to be received are, or will be, insufficient to cover the Trust’s liabilities, the Trustee may

authorize the Trust to borrow money to pay administrative or incidental expenses of the Trust that exceed cash held by the Trust.

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Trust would be evidenced by a written promissory note, be on an unsecured basis, and have terms that are no less favorable to COERT than

those that would be obtained in an arm’s length transaction between COERT and an unaffiliated third party.

If the Trust borrows

3 unchanged sentences

the Trust to borrow any funds.

As of June 30, 2022 and December 31, 2021, the Trust had cash of $532,308 and $67,116, respectively,

As of September 30, 2022 and December 31, 2021, the Trust had cash of $720,501 and $67,116, respectively,

to be used towards future Trust expenses.

1 unchanged sentence

the letter of credit.

time to time, if the Trust’s cash on hand (including available cash reserves, if any) is not sufficient to pay the Trust’s

ordinary course administrative expenses that are due prior to the monthly payment to the Trust of proceeds from the Net Profits Interest,

COERT may advance funds to the Trust to pay such expenses.

At June 30, 2022 and December 31, 2021, there was no outstanding

Any advances to the Trust will be carried forward to be repaid out of future net profits generated by the Underlying Properties.

At September 30, 2022 and December 31, 2021, there was no

outstanding balance.

Any advances to the Trust will be carried forward to be repaid out of future net profits generated by the Underlying

Cash held by the Trustee

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The Trust does not have any

transactions, arrangements or other relationships with unconsolidated entities or persons that could materially affect the Trust’s

liquidity or the availability of capital resources.

Distributions Declared After Quarter End

On July 18, 2022, the

Trust declared a distribution of $0.021500 per unit to unitholders of record as of July 29, 2022.

The distribution was paid to unitholders

on August 12, 2022.

Off-Balance Sheet Arrangements

4 unchanged sentences

Critical Accounting Policies and Estimates

Please read “Item 7.

Trustee’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates”

of the Trust’s 2021 Annual Report on Form 10-K for additional information regarding the Trust’s critical accounting policies

Please read “Item 7.

Trustee’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates”

of the Trust’s 2021 Annual Report on Form 10-K for additional information regarding the Trust’s critical accounting policies

and estimates.

There were no material changes to the Trust’s critical accounting policies or estimates during the three months ended

June 30, 2022.

There were no material changes to the Trust’s critical accounting policies or estimates during the three months ended

September 30, 2022.

Subsequent Events

Distributions Paid or Declared

On July 15, 2022, a distribution

of $0.045000 per unit, which was declared on June 17, 2022, was paid to Trust unitholders of record as of June 30, 2022.

On July 18, 2022, the

Trust declared a distribution of $0.021500 per unit to unitholders of record as of July 29, 2022.

The distribution was paid to unitholders

on August 12, 2022.

On October 17, 2022,

a distribution of $0.050500 per unit, which was declared on September 16, 2022, was paid to Trust unitholders of record as of September 30,

On October 17, 2022,

the Trust declared a distribution of $0.051000 per unit to unitholders of record as of October 31, 2022.

The distribution was paid

to unitholders on November 14, 2022.

Quantitative and Qualitative Disclosures About Market Risk.

As a “smaller reporting

company”

as defined in Item 10(f)(1) of Regulation S-K, the Trust is not required to provide information required by this Item.

As a “smaller reporting

company” as defined in Item 10(f)(1) of Regulation S-K, the Trust is not required to provide information required by this Item.

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