What changed in this filing

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Item 1A. Risk Factors

2023-03-23 compared with 2022-03-25 · 615 added, 611 removed, 474 unchanged (72% of the section changed)

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Summary of Risk Factors

The risk factors summarized and detailed below

could materially harm production from the Underlying Properties, operating results and/or the Trust’s financial condition, adversely

affect proceeds to the Trust and cash distributions to Trust unitholders, and/or cause the price of the Trust Units to decline.

are not all the risks the Trust faces, and other factors not presently known to the Trust or that the Trust currently believes are immaterial

may also affect the Trust if they occur.

These risks and uncertainties include, but are not limited

to, the following :

Prices of oil and natural gas fluctuate, and lower prices could reduce proceeds to the Trust and cash distributions to Trust unitholders;

The ongoing COVID-19 pandemic and related economic turmoil have affected and could continue to adversely affect proceeds to the Trust

and quarterly cash distributions to Trust unitholders;

Actual reserves and future production may be less than current estimates, which could reduce cash distributions by the Trust and the

value of the Trust Units;

The ability or willingness of OPEC and other oil exporting nations to set and maintain production levels has a significant impact

on oil and natural gas commodity prices, which could reduce the amount of cash available for distribution to Trust unitholders;

Third party operators are the operators of all of the wells on the Underlying Properties and, therefore, the Sponsor is not in a position

to control the timing of development efforts, the associated costs or the rate of production of the reserves on such properties;

Developing oil and natural gas wells and producing oil and natural gas are costly and high-risk activities with many uncertainties

that could adversely affect future production from the Underlying Properties;

Shortages of equipment, services and qualified personnel could increase costs of developing and operating the Underlying Properties

and result in a reduction in the amount of cash available for distribution to the Trust unitholders;

The generation of profits for distribution by the Trust depends in part on access to and operation of gathering, transportation and

processing facilities.

Any limitation in the availability of those facilities could interfere with sales of oil and natural gas production

from the Underlying Properties;

Adverse developments in Texas, Louisiana or New Mexico could adversely impact the results of operations and cash flows of the Underlying

Properties and reduce the amount of cash available for distributions to Trust unitholders;

The reserves attributable to the Underlying Properties are depleting assets and production from those

reserves will diminish over time.

Furthermore, the Trust is precluded from acquiring other oil and natural gas properties or net profits

interests to replace the depleting assets and production;

The amount of cash available for distribution by the Trust will be reduced by the amount of any costs

and expenses related to the Underlying Properties and other costs and expenses incurred by the Trust;

The Trust has established a cash reserve for contingent liabilities and to pay expenses in accordance

with the Trust Agreement, which would reduce net profits payable to the Trust and distributions to Trust unitholders;

The Sponsor’s ability to perform its obligations to the Trust could be limited by restrictions under

its debt agreements;

The bankruptcy of the Sponsor or any of the third-party operators could impede the operation of the wells

and the development of the proved undeveloped reserves;

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;

The Trust is passive in nature and neither the Trust nor the Trust unitholders have any ability to influence the Sponsor or control

the operations or development of the Underlying Properties;

The Sponsor may transfer all or a portion of the Underlying Properties at any time without Trust unitholder consent, subject to specified

Under certain circumstances, the Trustee must sell the Net Profits Interest and dissolve the Trust prior to the expected termination

of the Trust.

As a result, Trust unitholders may not recover their investment;

Conflicts of interest could arise between the Sponsor and its affiliates, on the one hand, and the Trust and the Trust unitholders,

on the other hand;

The Trust is administered by a Trustee who cannot be replaced except by a majority vote of the Trust unitholders at a special meeting

which may make it difficult for Trust unitholders to remove or replace the Trustee;

If the Trust cannot meet the New York Stock Exchange continued listing requirements, the NYSE may delist the Trust Units;

The trading price for the Trust Units may not reflect the value of the Net Profits Interest held by the Trust;

The operations of the Underlying Properties are subject to environmental laws and regulations that could adversely affect the cost,

manner or feasibility of conducting operations on them or result in significant costs and liabilities;

The operations on the Underlying Properties are subject to complex federal, state, local and other laws and regulations that could

adversely affect the cost, manner or feasibility of conducting operations on them or expose the operator to significant liabilities;

Climate change laws and regulations restricting emissions of “greenhouse gases”

could result in increased operating costs

and reduced demand for the oil and natural gas that the operators produce while the physical effects of climate change could disrupt their

production and cause them to incur significant costs in preparing for or responding to those effects;

Federal and state legislative and regulatory initiatives relating to hydraulic fracturing could result in increased costs and additional

operating restrictions or delays as well as adversely affect the services of the operators of the Underlying Properties;

Cyber-attacks or other failures in telecommunications or information technology systems could result in information theft, data corruption

and significant disruption of the Sponsor’s business operations;

If the IRS were to determine (and be sustained in that determination) that the Trust is not a “grantor trust”

federal income tax purposes, the Trust could be subject to more complex and costly tax reporting requirements that could reduce the amount

of cash available for distribution to Trust unitholders;

Unitholders are required to pay taxes on their share of the Trust’s income even if they do not receive any cash distributions

from the Trust.

risk factors summarized and detailed below could materially harm production from the Underlying Properties, operating results and/or

the Trust’s financial condition, adversely affect proceeds to the Trust and cash distributions to Trust unitholders, and/or cause

the price of the Trust Units to decline.

These are not all the risks the Trust faces, and other factors not presently known to the Trust

or that the Trust currently believes are immaterial may also affect the Trust if they occur.

risks and uncertainties include, but are not limited to, the following :

of oil and natural gas fluctuate, and lower prices could reduce proceeds to the Trust and

cash distributions to Trust unitholders;

reserves and future production may be less than current estimates, which could reduce cash

distributions by the Trust and the value of the Trust Units;

ability or willingness of OPEC and other oil exporting nations to set and maintain production

levels has a significant impact on oil and natural gas commodity prices, which could reduce

the amount of cash available for distribution to Trust unitholders;

party operators are the operators of all of the wells on the Underlying Properties and, therefore,

the Sponsor is not in a position to control the timing of development efforts, the associated

costs or the rate of production of the reserves on such properties;

oil and natural gas wells and producing oil and natural gas are costly and high-risk activities

with many uncertainties that could adversely affect future production from the Underlying

of equipment, services and qualified personnel could increase costs of developing and operating

the Underlying Properties and result in a reduction in the amount of cash available for distribution

to the Trust unitholders;

generation of profits for distribution by the Trust depends in part on access to and operation

of gathering, transportation and processing facilities.

Any limitation in the availability

of those facilities could interfere with sales of oil and natural gas production from the

Underlying Properties;

developments in Texas, Louisiana or New Mexico could adversely impact the results of operations

and cash flows of the Underlying Properties and reduce the amount of cash available for distributions

to Trust unitholders;

reserves attributable to the Underlying Properties are depleting assets and production from

those reserves will diminish over time.

Furthermore, the Trust is precluded from acquiring

other oil and natural gas properties or net profits interests to replace the depleting assets

and production;

amount of cash available for distribution by the Trust will be reduced by the amount of any

costs and expenses related to the Underlying Properties and other costs and expenses incurred

by the Trust;

Trust has established a cash reserve for contingent liabilities and to pay expenses in accordance

with the Trust Agreement, which would reduce net profits payable to the Trust and distributions

to Trust unitholders;

Sponsor’s ability to perform its obligations to the Trust could be limited by restrictions

under its debt agreements;

bankruptcy of the Sponsor or any of the third-party operators could impede the operation

of the wells and the development of the proved undeveloped reserves;

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

Trust is passive in nature and neither the Trust nor the Trust unitholders have any ability

to influence the Sponsor or control the operations or development of the Underlying Properties;

Sponsor may transfer all or a portion of the Underlying Properties at any time without Trust

unitholder consent, subject to specified limitations;

certain circumstances, the Trustee must sell the Net Profits Interest and dissolve the Trust

prior to the expected termination of the Trust.

As a result, Trust unitholders may not recover

their investment;

of interest could arise between the Sponsor and its affiliates, on the one hand, and the

Trust and the Trust unitholders, on the other hand;

Trust is administered by a Trustee who cannot be replaced except by a majority vote of the

Trust unitholders at a special meeting which may make it difficult for Trust unitholders

to remove or replace the Trustee;

the Trust cannot meet the New York Stock Exchange continued listing requirements, the NYSE

may delist the Trust Units;

trading price for the Trust Units may not reflect the value of the Net Profits Interest held

by the Trust;

operations of the Underlying Properties are subject to environmental laws and regulations

that could adversely affect the cost, manner or feasibility of conducting operations on them

or result in significant costs and liabilities;

operations on the Underlying Properties are subject to complex federal, state, local and

other laws and regulations that could adversely affect the cost, manner or feasibility of

conducting operations on them or expose the operator to significant liabilities;

change laws and regulations restricting emissions of “greenhouse gases”

result in increased operating costs and reduced demand for the oil and natural gas that the

operators produce while the physical effects of climate change could disrupt their production

and cause them to incur significant costs in preparing for or responding to those effects;

and state legislative and regulatory initiatives relating to hydraulic fracturing could result

in increased costs and additional operating restrictions or delays as well as adversely affect

the services of the operators of the Underlying Properties;

Cyber-attacks

or other failures in telecommunications or information technology systems could result in

information theft, data corruption and significant disruption of the Sponsor’s business

the IRS were to determine (and be sustained in that determination) that the Trust is not

a “grantor trust”

federal income tax purposes, the Trust could be subject

to more complex and costly tax reporting requirements that could reduce the amount of cash

available for distribution to Trust unitholders;

are required to pay taxes on their share of the Trust’s income even if they do not

receive any cash distributions from the Trust.

BUSINESS AND OPERATING RISKS

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among others:

domestic and foreign supply and perceptions of supply of oil and natural gas;

level of demand and perceptions of demand for oil and natural gas;

conditions or hostilities in oil and natural gas producing regions;

the outbreak of armed conflict between Russia and Ukraine and the potential destabilizing effect such conflict may pose for the European

continent or the global oil and gas markets;

future prices of oil and natural gas and other commodities;

conditions and seasonal trends;

technological

advances affecting energy consumption and energy supply;

regional, domestic and foreign supply and perceptions of supply

of oil and natural gas;

the level of demand and perceptions of demand for oil and natural

political conditions or hostilities in oil and natural gas producing

armed conflict between Russia and Ukraine and the potential destabilizing effect such conflict

may pose for the global oil and gas markets;

anticipated future prices of oil and natural gas and other commodities;

weather conditions and seasonal trends;

technological advances affecting energy consumption and energy

and worldwide economic conditions;

occurrence or threat of epidemic or pandemic diseases, such as the COVID-19 pandemic, or any government response to such occurrence or

price and availability of alternative fuels;

proximity, capacity, cost and availability of gathering and transportation facilities;

volatility and uncertainty of regional pricing differentials;

regulations and taxation;

conservation and environmental measures;

of force majeure.

Crude oil prices have been volatile over the

last two years in response to the economic effects of the COVID-19 pandemic and other factors affecting the global economy.

and natural gas prices will reduce profits to which the Trust is entitled, which will reduce the amount of each available for

distribution to Trust unitholders, and may ultimately reduce the amount of oil and natural gas that is economically viable to

produce from the Underlying Properties.

As a result, the operators of the Underlying Properties could determine during periods of

low commodity prices to shut-in or curtail production from wells on the Underlying Properties, or even plug and abandon marginal

wells that otherwise may have been allowed to continue to produce for a longer period under conditions of higher prices.

Specifically, an operator may abandon any well or property if it reasonably believes that the well or property can no longer produce

oil or natural gas in commercially paying quantities.

This could result in termination of the Net Profits Interest relating to the

abandoned well or property.

the occurrence or threat of epidemic or pandemic diseases, such as

the COVID-19 pandemic, or any government response to such occurrence or threat;

the price and availability of alternative fuels;

the proximity, capacity, cost and availability of gathering

and transportation facilities;

the volatility and uncertainty of regional pricing differentials;

governmental regulations and taxation;

energy conservation and environmental measures;

acts of force majeure.

These factors and the volatility of the energy

markets make it extremely difficult to predict future oil and natural gas price movements with any certainty.

Commodity prices displayed

dramatic volatility in 2020, when the COVID-19 pandemic and various governmental actions taken to mitigate the impact of COVID-19

resulted in an unprecedented decline in demand for oil and natural gas.

During 2020, the WTI spot price for oil briefly fell to a low

of negative $37.63 per barrel and the Henry Hub spot price reached a low of $1.33.

Although worldwide demand for oil and natural gas

recovered in 2021 and 2022, governmental responses to COVID-19 remain dynamic, with certain countries, such as China, continuing

to impose periodic lockdowns in response to rising case numbers.

To the extent strains or variants of COVID-19 resurge, or if other

epidemic or pandemic diseases or other public health event were to occur, the negative impact to global demand for oil and natural gas

could be material.

substantial or extended decline in oil or natural gas prices will reduce profits to which the Trust is entitled and therefore the

amount of cash available for distribution to Trust unitholders.

A prolonged period of low oil or natural gas prices may ultimately

reduce the amount of oil and natural gas that is economically viable to produce from the Underlying Properties.

As a result, the operators

of the Underlying Properties could determine during periods of low commodity prices to shut-in or curtail production from wells on the

Underlying Properties, or even plug and abandon marginal wells that otherwise may have been allowed to continue to produce for a longer

period under conditions of higher prices.

Specifically, an operator may abandon any well or property if it reasonably believes that the

well or property can no longer produce oil or natural gas in commercially paying quantities.

This could result in termination of the

Net Profits Interest relating to the abandoned well or property.

The Underlying Properties are sensitive to decreasing

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to changes in oil and natural gas prices.

The ongoing COVID-19

pandemic and related economic turmoil have affected and could continue to adversely affect proceeds to the Trust and quarterly cash distributions

to Trust unitholders.

The COVID-19 pandemic

and the measures put in place to address it have created significant volatility, uncertainty, and economic disruption since the first

quarter of 2020.

Over the course of the pandemic, public health officials have recommended or mandated certain precautions to mitigate

the spread of COVID-19, including quarantines, shelter-in-place orders and business and government shutdowns.

Although some of these limitations

and mandates have been relaxed in certain jurisdictions, others have been reinstated in areas that have experienced a resurgence of COVID-19

cases and there is no guarantee restrictions will not be reimposed in the future.

Despite the increased availability of vaccines in certain

jurisdictions, the COVID-19 pandemic may continue or worsen during the upcoming months, including as a result of the emergence of more

infectious variants of the virus, vaccine hesitancy or increased business and social activities, which may cause governmental authorities

to reinstate restrictions.

As a result, the ongoing impact of the COVID-19 pandemic remains uncertain and will depend on the severity,

location and duration of the effects and spread of the disease, the effectiveness and duration of actions taken by authorities

to contain the virus or treat its effect, the availability and effectiveness of vaccines or other treatments, and how quickly

and to what extent economic conditions improve.

Furthermore, the impact

of the pandemic has led to significant global economic contraction generally, and in the oil and gas industry in particular, which experienced

a significant downturn during 2020 and into 2021.

Since the beginning of 2020, the West Texas Intermediate spot price of crude oil has

ranged widely in response to the economic effects of the COVID-19 pandemic and other factors affecting the global economy.

Oil and natural

gas prices are expected to continue to be volatile, and the Trust cannot predict when prices will stabilize.

The Trust cannot predict

the full impact that COVID-19 or the significant disruption and volatility currently being experienced in the oil and natural gas markets

will have on the Sponsor’s business, financial condition and results of operations or on proceeds to the Trust and the Trust’s

reserves and quarterly cash distributions to Trust unitholders due to numerous uncertainties.

extent to which the COVID-19 pandemic negatively affects the operators of and production from the Underlying Properties

will depend on the severity, location and duration of the effects and spread of COVID-19, the actions undertaken by

federal, state and local governments and health officials to contain the virus or treat its effects, and how quickly and to what

extent economic conditions improve and normal business and operating conditions resume.

A prolonged period of low crude

oil and natural gas prices will adversely affect the operators of the Underlying Properties.

If commodity prices for crude oil

and natural gas remain volatile and below historical levels, monthly cash distributions to Trust unitholders will be substantially

lower than historical distributions, and in certain periods there may be no distribution to unitholders.

low oil and natural gas prices may ultimately reduce the amount of oil and natural gas that is economically viable to produce from

the Underlying Properties.

As a result, the operators of the Underlying Properties could determine during periods of low commodity

prices to shut-in or curtail production from wells on the Underlying Properties, or even plug and abandon marginal wells that

otherwise may have been allowed to continue to produce for a longer period under conditions of higher prices.

Specifically, an

operator may abandon any well or property if it reasonably believes that the well or property can no longer produce oil or natural

gas in commercially paying quantities, which could result in termination of the Net Profits Interest relating to the abandoned well

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.

ultimate impact of COVID-19 will depend on future developments, which are highly uncertain, difficult to predict and largely outside of

the Trust’s control, including, among others, the continued spread, duration and severity of the pandemic;

the occurrence, spread,

duration and severity of any subsequent variants of COVID-19;

the consequences of governmental and other measures designed to prevent

the spread of the virus;

the development of effective treatments;

actions taken by governmental authorities, the Sponsor’s customers

and other third parties;

workforce availability;

and the timing and extent to which normal economic and operating conditions resume.

the extent COVID-19 adversely affects production from the Underlying Properties or the business, results of operations and financial condition

of the operators of the Underlying Properties, it may also have the effect of heightening many of the other risks described in this Form

Actual reserves and future production may

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that include:

production from the area compared with production rates from other producing areas;

and natural gas prices, production levels, Btu content, production expenses, transportation costs, severance and excise taxes and development

assumed effect of expected governmental regulation and future tax rates.

historical production from the area compared with production

rates from other producing areas;

oil and natural gas prices, production levels, Btu content,

production expenses, transportation costs, severance and excise taxes and development expenses;

the assumed effect of expected governmental regulation and

future tax rates.

Changes in these assumptions and amounts of actual

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In addition, the quantities of recovered

reserves attributable to the Underlying Properties may decrease in the future as a result of future decreases in the price of oil or natural

reserves attributable to the Underlying Properties may decrease in the future as a result of future decreases in the price of oil or

The reserve report estimating the Trust’s

proved reserves, future production and income attributable to the Trust’s interests in the Underlying Properties as of December 31,

31, 2021 was prepared, in accordance with applicable regulations, using an average of the NYMEX first-day-of-the-month commodity price

during the 12-month period ending on December 31, 2021 as required by the SEC.

2022 was prepared, in accordance with applicable regulations, using an average of the NYMEX first-day-of-the-month commodity price during

the 12-month period ending on December 31, 2022 as required by the SEC.

The applicable prices for 2022 were $93.67 per Bbl of oil

and $6.358 per Mcf of natural gas.

The ability or willingness of OPEC and other

oil exporting nations to set and maintain production levels has a significant impact on oil and natural gas commodity prices, which could

reduce the amount of cash available for distribution to Trust unitholders.

intergovernmental organization that seeks to manage the price and supply of oil on the global energy market.

Actions taken by OPEC

members, including those taken alongside other oil exporting nations, have a significant impact on global oil supply and pricing.

For example, OPEC and certain other oil exporting nations have previously agreed to take measures, including production cuts, to

support crude oil prices There can be no assurance that OPEC members and other oil exporting nations will agree to future production

cuts or other actions to support and stabilize oil prices, nor can there be any assurance that they will not further reduce oil

prices or increase production.

Uncertainty regarding future actions to be taken by OPEC members or other oil exporting countries

could lead to a continuation in the volatility in the price of oil, which could adversely affect the financial condition and

economic performance of the operators of the underlying properties and may reduce the net proceeds to which the Trust is entitled,

which could materially reduce or completely eliminate the amount of cash available for distribution to Trust unitholders.

Third party operators are the operators of

all of the wells on the Underlying Properties and, therefore, the Sponsor is not in a position to control the timing of development efforts,

the associated costs or the rate of production of the reserves on such properties.

The ability or willingness of OPEC and

other oil exporting nations to set and maintain production levels has a significant impact on oil and natural gas commodity prices, which

could reduce the amount of cash available for distribution to Trust unitholders.

OPEC is an intergovernmental

organization that seeks to manage the price and supply of oil on the global energy market.

Actions taken by OPEC members, including those

taken alongside other oil exporting nations, have a significant impact on global oil supply and pricing.

For example, OPEC and certain

other oil exporting nations have previously agreed to take measures, including production cuts, to support crude oil prices There can

be no assurance that OPEC members and other oil exporting nations will agree to future production cuts or other actions to support and

stabilize oil prices, nor can there be any assurance that they will not further reduce oil prices or increase production.

regarding future actions to be taken by OPEC members or other oil exporting countries could lead to a continuation in the volatility

in the price of oil, which could adversely affect the financial condition and economic performance of the operators of the underlying

properties and may reduce the net proceeds to which the Trust is entitled, which could materially reduce or completely eliminate the

amount of cash available for distribution to Trust unitholders.

Third party operators are the operators

of all of the wells on the Underlying Properties and, therefore, the Sponsor is not in a position to control the timing of development

efforts, the associated costs or the rate of production of the reserves on such properties.

As of December 31, 2022, all of the wells

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control, including:

timing and amount of capital expenditures, which could be significantly more than anticipated;

availability of suitable drilling equipment, production and transportation infrastructure and qualified operating personnel;

third-party operators’

expertise, operating efficiency and financial resources;

of other participants in drilling wells;

selection of technology;

selection of counterparties for the sale of production;

rate of production of the reserves.

the timing and amount of capital expenditures, which could

be significantly more than anticipated;

the availability of suitable drilling equipment, production

and transportation infrastructure and qualified operating personnel;

the third-party operators’

expertise, operating efficiency

and financial resources;

approval of other participants in drilling wells;

the selection of technology;

the selection of counterparties for the sale of production;

the rate of production of the reserves.

The third-party operators may elect not to undertake

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capital expenditures and amounts available for distribution to Trust unitholders.

addition, disagreements may arise between one or more of the operators, on the one hand, and the Sponsor, on the other hand, regarding

the associated costs of the Underlying Properties for which the Sponsor may be responsible, a portion of which may be attributable to

the Trust, to the extent of the Trust’s interest in the Underlying Properties.

Such disagreements could result in litigation or

other legal proceedings, which could reduce cash available for distribution to Trust unitholders.

Developing oil and natural gas wells and

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that are available for distribution to Trust unitholders.

The process of developing oil and natural gas wells

and producing oil and natural gas on the Underlying Properties is subject to numerous risks beyond the Trust’s, the Sponsor’s

The process of developing oil and natural gas

wells and producing oil and natural gas on the Underlying Properties is subject to numerous risks beyond the Trust’s, the Sponsor’s

and the third party operators’

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The ability of the operators to carry

out operations or to finance planned development expenses could be materially and adversely affected by any factor that may curtail, delay,

reduce or cancel development and production, including:

in oil or natural gas prices;

imposed by or resulting from compliance with regulatory requirements, including permitting;

or unexpected geological formations;

of or delays in obtaining equipment and qualified personnel;

of available gathering facilities or delays in construction of gathering facilities;

of available capacity on interconnecting transmission pipelines;

malfunctions, failures or accidents;

operational events and drilling conditions;

limitations for oil or natural gas;

or cement failures;

or damaged drilling and service tools;

of drilling fluid circulation;

uncontrollable

flows of oil and natural gas, inert gas, water or drilling fluids;

and natural disasters;

environmental

hazards, such as oil and natural gas leaks, pipeline ruptures and discharges of toxic gases;

weather conditions;

or natural gas property title problems.

out operations or to finance planned development expenses could be materially and adversely affected by any factor that may curtail,

delay, reduce or cancel development and production, including:

reductions in oil or natural gas prices;

delays imposed by or resulting from compliance with regulatory

requirements, including permitting;

unusual or unexpected geological formations;

shortages of or delays in obtaining equipment and qualified

lack of available gathering facilities or delays in construction

of gathering facilities;

lack of available capacity on interconnecting transmission

equipment malfunctions, failures or accidents;

unexpected operational events and drilling conditions;

market limitations for oil or natural gas;

pipe or cement failures;

casing collapses;

lost or damaged drilling and service tools;

loss of drilling fluid circulation;

uncontrollable flows of oil and natural gas, inert gas, water

or drilling fluids;

fires and natural disasters;

environmental hazards, such as oil and natural gas leaks,

pipeline ruptures and discharges of toxic gases;

adverse weather conditions;

oil or natural gas property title problems.

If planned operations, including drilling of development

wells, are delayed or cancelled, or if existing wells or development wells experience production below anticipated levels due to one or

more of the foregoing factors or for any other reason, estimated future distributions to Trust unitholders may be reduced.

wells, are delayed or cancelled, or if existing wells or development wells experience production below anticipated levels due to one

or more of the foregoing factors or for any other reason, estimated future distributions to Trust unitholders may be reduced.

If an operator

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Shortages of equipment, services and qualified

personnel could increase costs of developing and operating the Underlying Properties and result in a reduction in the amount of cash available

for distribution to the Trust unitholders.

personnel could increase costs of developing and operating the Underlying Properties and result in a reduction in the amount of cash

available for distribution to the Trust unitholders.

The demand for qualified and experienced personnel

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factors also cause significant increases in costs for equipment, services and personnel.

Higher oil and natural gas prices generally stimulate

demand and result in increased prices for drilling rigs, crews and associated supplies, equipment and services.

Shortages of field personnel

and equipment or price increases could hinder the ability of the operators of the Underlying Properties to conduct the operations which

they currently have planned for the Underlying Properties, which would reduce the amount of cash received by the Trust and available for

distribution to the Trust unitholders.

Higher oil and natural gas prices generally

stimulate demand and result in increased prices for drilling rigs, crews and associated supplies, equipment and services.

field personnel and equipment or price increases could hinder the ability of the operators of the Underlying Properties to conduct the

operations which they currently have planned for the Underlying Properties, which would reduce the amount of cash received by the Trust

and available for distribution to the Trust unitholders.

The generation of profits for distribution

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availability of those facilities could interfere with sales of oil and natural gas production from the Underlying Properties.

The amount of oil and natural gas that may be produced

and sold from a well is subject to curtailment in certain circumstances, such as by reason of weather conditions, pipeline interruptions

The amount of oil and natural gas that may be

produced and sold from a well is subject to curtailment in certain circumstances, such as by reason of weather conditions, pipeline interruptions

due to scheduled and unscheduled maintenance, failure of tendered oil and natural gas to meet quality specifications of gathering lines

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In many cases, the

operators of the Underlying Properties receive only limited notice, if any, as to when production will be curtailed and the duration of

such curtailments.

operators of the Underlying Properties receive only limited notice, if any, as to when production will be curtailed and the duration

of such curtailments.

If the operators of the Underlying Properties are forced to reduce production due to such a curtailment, the revenues

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Due to the lack of diversification

in geographic location, adverse developments in exploration and production of oil and natural gas in any of these areas of operation could

have a significantly greater impact on the results of operations and cash flows of the Underlying Properties than if the operations were

more diversified.

in geographic location, adverse developments in exploration and production of oil and natural gas in any of these areas of operation

could have a significantly greater impact on the results of operations and cash flows of the Underlying Properties than if the operations

were more diversified.

FINANCIAL RISKS

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to the Sale Transaction that closed in August 2018.

The existence of a material title deficiency with respect to the Underlying Properties

could reduce the value of a property or render it worthless, thus adversely affecting the Net Profits Interest and the distributions to

Trust unitholders.

The Sponsor does not obtain title insurance covering mineral leaseholds, and the Sponsor’s failure to cure any

title defects may cause the Sponsor to lose its rights to production from the Underlying Properties.

If a material title problem were

to arise, profits available for distribution to Trust unitholders, and the value of the Trust Units, may be reduced.

The existence of a material title deficiency with respect to the Underlying

Properties could reduce the value of a property or render it worthless, thus adversely affecting the Net Profits Interest and the distributions

to Trust unitholders.

The Sponsor does not obtain title insurance covering mineral leaseholds, and the Sponsor’s failure to cure

any title defects may cause the Sponsor to lose its rights to production from the Underlying Properties.

If a material title problem

were to arise, profits available for distribution to Trust unitholders, and the value of the Trust Units, may be reduced.

The reserves attributable to the Underlying

Properties are depleting assets and production from those reserves will diminish over time.

Furthermore, the Trust is precluded from acquiring

other oil and natural gas properties or net profits interests to replace the depleting assets and production.

Therefore, proceeds to the

Trust and cash distributions to Trust unitholders will decrease over time.

The profits payable to the Trust attributable to

the Net Profits Interest are derived from the sale of production of oil and natural gas from the Underlying Properties.

The reserves attributable

to the Underlying Properties are depleting assets, which means that the reserves and the quantity of oil and natural gas produced from

the Underlying Properties will decline over time.

Furthermore, the Trust is precluded from

acquiring other oil and natural gas properties or net profits interests to replace the depleting assets and production.

Therefore, proceeds

to the Trust and cash distributions to Trust unitholders will decrease over time.

The profits payable to the Trust attributable

to the Net Profits Interest are derived from the sale of production of oil and natural gas from the Underlying Properties.

attributable to the Underlying Properties are depleting assets, which means that the reserves and the quantity of oil and natural gas

produced from the Underlying Properties will decline over time.

Future maintenance projects on the Underlying

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Neither the Sponsor

nor, to the Sponsor’s knowledge, the third-party operators have a contractual obligation to develop or otherwise pay

development expenses on the Underlying Properties in the future.

Furthermore, with respect to properties for which the Sponsor is

not designated as the operator, the Sponsor has limited control over the timing or amount of those development expenses.

also has the right to non-consent and not participate in the development expenses on properties for which it is not the operator, in

which case the Sponsor and the Trust will not receive the production resulting from such development expenses.

If the operators of

the Underlying Properties do not implement maintenance projects when warranted, the future rate of production decline of proved

reserves may be higher than the rate currently expected by the Sponsor or estimated in the reserve report.

nor, to the Sponsor’s knowledge, the third-party operators have a contractual obligation to develop or otherwise pay development

expenses on the Underlying Properties in the future.

Furthermore, with respect to properties for which the Sponsor is not designated

as the operator, the Sponsor has limited control over the timing or amount of those development expenses.

The Sponsor also has the right

to non-consent and not participate in the development expenses on properties for which it is not the operator, in which case the Sponsor

and the Trust will not receive the production resulting from such development expenses.

If the operators of the Underlying Properties

do not implement maintenance projects when warranted, the future rate of production decline of proved reserves may be higher than the

rate currently expected by the Sponsor or estimated in the reserve report.

The Trust Agreement provides that the Trust’s

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required or permitted by the terms of the Conveyance related to the Net Profits Interest.

As a result, the Trust is not permitted to acquire

other oil and natural gas properties or net profits interests to replace the depleting assets and production attributable to the Net Profits

As a result, the Trust is not permitted to

acquire other oil and natural gas properties or net profits interests to replace the depleting assets and production attributable to

the Net Profits Interest.

Because the net profits payable to the Trust are

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At that point the value of the Trust Units should be expected to be $0.

An increase in the differential between the

price realized by the Sponsor for oil or natural gas produced from the Underlying Properties and the NYMEX or other benchmark price of

oil or natural gas could reduce the profits to the Trust and, therefore, the cash distributions by the Trust and the value of Trust Units.

An increase in the differential between

the price realized by the Sponsor for oil or natural gas produced from the Underlying Properties and the NYMEX or other benchmark price

of oil or natural gas could reduce the profits to the Trust and, therefore, the cash distributions by the Trust and the value of Trust

The prices received for the Sponsor’s oil

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incurred by the Trust.

The Trust will indirectly bear an 80% share of

all costs and expenses related to the Underlying Properties, such as direct operating and development expenses, which will reduce the

amount of cash received by the Trust and thereafter distributable to Trust unitholders.

Accordingly, higher costs and expenses related

to the Underlying Properties will directly decrease the amount of cash received by the Trust in respect of its Net Profits Interest.

costs may not be indicative of future costs.

For example, the third-party operators may in the future propose additional drilling projects

that significantly increase the capital expenditures associated with the Underlying Properties, which could reduce cash available for

distribution by the Trust.

In addition, cash available for distribution by the Trust will be further reduced by the Trust’s general

and administrative expenses.

Trust will indirectly bear an 80% share of all costs and expenses related to the Underlying Properties, such as direct operating and

development expenses, which will reduce the amount of cash received by the Trust and thereafter distributable to Trust unitholders.

higher costs and expenses related to the Underlying Properties will directly decrease the amount of cash received by the Trust in respect

of its Net Profits Interest.

Historical costs may not be indicative of future costs.

For example, the third-party operators may in the

future propose additional drilling projects that significantly increase the capital expenditures associated with the Underlying Properties,

which could reduce cash available for distribution by the Trust.

During 2022, the Sponsor established a cash reserve for approved development

expenses by withholding funds from time to time from the net profits payable to the Trust.

The reserve is intended to fund an expected

increase in such 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.

As of December 31, 2022, this

cash reserve for development expenses was $1.0 million.

In addition, cash available for distribution by the Trust will be further reduced

by the Trust’s general and administrative expenses.

If direct operating and development expenses on

the Underlying Properties together with the other costs exceed gross profits of production from the Underlying Properties, the Trust will

not receive net profits from those properties until future gross profits from production exceed the total of the excess costs, plus accrued

interest at the prime rate.

If the Trust does not receive net profits pursuant to the Net Profits Interest, or if such net profits are

reduced, the Trust will not be able to distribute cash to the Trust unitholders, or such cash distributions will be reduced, respectively.

the Underlying Properties together with the other costs exceed gross profits of production from the Underlying Properties, the Trust

will not receive net profits from those properties until future gross profits from production exceed the total of the excess costs, plus

accrued interest at the prime rate.

If the Trust does not receive net profits pursuant to the Net Profits Interest, or if such net profits

are reduced, the Trust will not be able to distribute cash to the Trust unitholders, or such cash distributions will be reduced, respectively.

Development activities may not generate sufficient additional revenue to repay the costs.

The Trust has established

a cash reserve for contingent liabilities and to pay expenses in accordance with the Trust Agreement, which would reduce net profits payable

to the Trust and distributions to Trust unitholders.

a cash reserve for contingent liabilities and to pay expenses in accordance with the Trust Agreement, which would reduce net profits

payable to the Trust and distributions to Trust unitholders.

The Trust’s source

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Pursuant to the Trust Agreement, the Trust may establish a cash reserve through

the withholding of cash for contingent liabilities and to pay expenses, which will reduce the amount of cash otherwise available for distribution

to Trust unitholders.

the withholding of cash for contingent liabilities and to pay expenses, which will reduce the amount of cash otherwise available for

distribution to Trust unitholders.

In November 2021, the Trustee notified the

Sponsor that the Trustee intends to build a reserve for the payment of future known, anticipated or contingent expenses or

Commencing with the distribution paid to Trust unitholders in February 2022, the Trustee is withholding, and in the

future intends to withhold, $37,833 from the funds otherwise available for distribution each month to gradually build a cash reserve

of approximately $2.3 million.

This cash is reserved for the payment of future known, anticipated or contingent expenses or

liabilities of the Trust.

The Trustee may increase or decrease the targeted amount at any time, and may increase or decrease the

rate at which it is withholding funds to build the cash reserve at any time, without advance notice to the Trust unitholders.

Sponsor of the Trustee’s intent to build a cash reserve of approximately $2.3 million for the payment of future known, anticipated

or contingent expenses or liabilities of the Trust.

Since February 2022, the Trustee has been withholding $37,833, and in the future,

commencing with the distribution to Trust unitholders payable in April 2023, intends to withhold $50,000, from the funds otherwise

available for distribution each month to gradually build the reserve.

As of December 31, 2022, the cumulative cash reserve balance

was $390,497.

The Trustee may increase or decrease the targeted amount at any time, and may increase or decrease the rate at which it

is withholding funds to build the cash reserve at any time, without advance notice to the Trust unitholders.

The amount of cash available for distribution

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the excess liability coverage is in addition to and triggered if the general liability per occurrence limit is reached.

In addition, the

Sponsor maintains control of well insurance with per occurrence limits depending on the status of the well and deductibles consistent

the Sponsor maintains control of well insurance with per occurrence limits depending on the status of the well and deductibles consistent

with industry standards.

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result in a significant decrease in the amount of cash available for distribution by the Trust.

The Trust does not maintain any type of

insurance against any of the risks of conducting oil and gas exploration and production, hydraulic fracturing operations, or related activities.

The Sponsor’s ability to perform its

obligations to the Trust could be limited by restrictions under its debt agreements .

The Trust does not maintain any type

of insurance against any of the risks of conducting oil and gas exploration and production, hydraulic fracturing operations, or related

Sponsor’s ability to perform its obligations to the Trust could be limited by restrictions under its debt agreements .

The Sponsor has various contractual obligations

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its obligations to the Trust under the Trust Agreement or Conveyance, it could have a material adverse effect on the Trust.

The bankruptcy of the Sponsor or any of the

third-party operators could impede the operation of the wells and the development of the proved undeveloped reserves.

The value of the Net Profits Interest and the Trust’s

ultimate cash available for distribution is highly dependent on the financial condition of the operators of the Underlying Properties.

None of the operators of the Underlying Properties, including the Sponsor, has agreed with the Trust to maintain a certain net worth or

to be restricted by other similar covenants.

The bankruptcy of the Sponsor or any of

the third-party operators could impede the operation of the wells and the development of the proved undeveloped reserves.

The value of the Net Profits Interest and the

Trust’s ultimate cash available for distribution is highly dependent on the financial condition of the operators of the Underlying

None of the operators of the Underlying Properties, including the Sponsor, has agreed with the Trust to maintain a certain

net worth or to be restricted by other similar covenants.

The ability to develop and operate the Underlying

Properties depends on the future financial condition and economic performance and access to capital of the operators of those properties,

which in turn will depend upon the supply and demand for oil and natural gas, prevailing economic conditions and financial, business and

other factors, many of which are beyond the control of the Sponsor and the third party operators.

If the reduced demand for crude oil

in the global market as a result of the economic effects of the COVID-19 pandemic persists for the near future or longer, such factors

could have a negative impact on the financial condition and economic performance of one or more of the operators of the Underlying Properties.

The Sponsor is not a reporting company and is not required to file periodic reports with the SEC pursuant to the Exchange Act.

Trust unitholders do not have access to financial information about the Sponsor.

which in turn will depend upon the supply and demand for oil and natural gas, prevailing economic conditions and financial, business

and other factors, many of which are beyond the control of the Sponsor and the third party operators.

Reduced demand for crude oil in

the global market could have a negative impact on the financial condition and economic performance of one or more of the operators of

the Underlying Properties.

The Sponsor is not a reporting company and is not required to file periodic reports with the SEC pursuant

to the Exchange Act.

Therefore, Trust unitholders do not have access to financial information about the Sponsor.

In the event of any future bankruptcy of any operator

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and the operations of the affected wells.

The working interest owners may not be able to find a replacement driller or operator, and they

may not be able to enter into a new agreement with such replacement party on favorable terms within a reasonable period.

The working interest owners may not be able to find a replacement driller or operator, and

they may not be able to enter into a new agreement with such replacement party on favorable terms within a reasonable period.

such a bankruptcy may result in reduced production from the reserves and decreased distributions to Trust unitholders, and could adversely

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the Trust nor the Trust unitholders have any ability to influence the Sponsor or control the operations or development of the Underlying

The Trust Units are a passive investment that entitles

the Trust unitholder to only receive cash distributions from the Net Profits Interest.

Trust unitholders have no voting rights with respect

to the Sponsor and, therefore, have no managerial, contractual or other ability to influence the Sponsor’s or the third-party operators’

The Trust Units are a passive investment that

entitles the Trust unitholder to only receive cash distributions from the Net Profits Interest.

Trust unitholders have no voting rights

with respect to the Sponsor and, therefore, have no managerial, contractual or other ability to influence the Sponsor’s or the

third-party operators’

activities or the operations of the Underlying Properties.

Oil and natural gas properties are typically managed pursuant to an operating

agreement among the working interest owners of oil and natural gas properties.

Third party operators operate substantially all of the

wells on the Underlying Properties.

The typical operating agreement contains procedures whereby the owners of the working interests in

the property designate one of the interest owners to be the operator of the property.

Under these arrangements, the operator is typically

responsible for making all decisions relating to drilling activities, sale of production, compliance with regulatory requirements and

other matters that affect the property.

Oil and natural gas properties are typically

managed pursuant to an operating agreement among the working interest owners of oil and natural gas properties.

Third party operators

operate substantially all of the wells on the Underlying Properties.

The typical operating agreement contains procedures whereby the

owners of the working interests in the property designate one of the interest owners to be the operator of the property.

arrangements, the operator is typically responsible for making all decisions relating to drilling activities, sale of production, compliance

with regulatory requirements and other matters that affect the property.

The Sponsor may transfer all or a portion

of the Underlying Properties at any time without Trust unitholder consent, subject to specified limitations.

The Sponsor at any time may transfer all or

part of the Underlying Properties, subject to and burdened by the Net Profits Interest, and may, along with the third-party

operators, abandon individual wells or properties reasonably believed to be not economically viable.

Trust unitholders will not be

entitled to vote on any transfer or abandonment of the Underlying Properties, and the Trust will not receive any profits from any

such transfer, except in the limited circumstances when the Net Profits Interest is released in connection with such transfer, in

which case the Trust will receive an amount equal to the fair market value (net of sales costs) of the Net Profits Interest

Following any sale or transfer of any of the Underlying Properties, if the Net Profits Interest is not released in

connection with such sale or transfer, the Net Profits Interest will continue to burden the transferred property and net profits

attributable to such property will be calculated as part of the computation of net profits.

The Sponsor may delegate to the

transferee responsibility for all of the Sponsor’s obligations relating to the Net Profits Interest on the portion of the

Underlying Properties transferred.

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 0.25% or

less 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

an amount equal to the fair market value of such Net Profits Interest being treated as an offset amount against costs and expenses.

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).

The third-party operators and the Sponsor may enter

into farm-out, operating, participation and other similar agreements to develop the property without the consent or approval of the Trustee

or any Trust unitholder.

The Sponsor at any time may transfer all or part

of the Underlying Properties, subject to and burdened by the Net Profits Interest, and may, along with the third-party operators, abandon

individual wells or properties reasonably believed to be not economically viable.

Trust unitholders will not be entitled to vote on any

transfer or abandonment of the Underlying Properties, and the Trust will not receive any profits from any such transfer, except in the

limited circumstances when the Net Profits Interest is released in connection with such transfer, in which case the Trust will receive

an amount equal to the fair market value (net of sales costs) of the Net Profits Interest released.

Following any sale or transfer of

any of the Underlying Properties, if the Net Profits Interest is not released in connection with such sale or transfer, the Net Profits

Interest will continue to burden the transferred property and net profits attributable to such property will be calculated as part of

the computation of net profits.

The Sponsor may delegate to the transferee responsibility for all of the Sponsor’s obligations

relating to the Net Profits Interest on the portion of the Underlying Properties transferred.

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 0.25% or less 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 an amount equal to the fair market value of such Net Profits Interest being treated as an offset

amount against costs and expenses.

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).

The third-party operators and the Sponsor may

enter into farm-out, operating, participation and other similar agreements to develop the property without the consent or approval of

the Trustee or any Trust unitholder.

Under certain circumstances, the Trustee

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and dissolve the Trust if the holders of at least 75% of the outstanding Trust Units approve the sale or vote to dissolve the Trust.

Trustee must also sell the Net Profits Interest and dissolve the Trust if the annual cash proceeds received by the Trust attributable

The Trustee must also sell the Net Profits Interest and dissolve the Trust if the annual cash proceeds received by the Trust attributable

to the Net Profits Interest are less than $2 million for each of any two consecutive years.

The net profits of any such sale will be distributed

to the Trust unitholders.

The net profits of any such sale will be

distributed to the Trust unitholders.

Conflicts of interest could arise between

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As working interest owners in, and the operators

of certain wells on, the Underlying Properties, the Sponsor and its affiliates could have interests that conflict with the interests of

the Trust and the Trust unitholders.

of certain wells on, the Underlying Properties, the Sponsor and its affiliates could have interests that conflict with the interests

of the Trust and the Trust unitholders.

The Sponsor’s interests may conflict with those of the

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by the Trust in the future.

The Sponsor may sell some or all the Underlying Properties without

taking into consideration the interests of the Trust unitholders.

The Sponsor may sell some or all the Underlying Properties

without taking into consideration the interests of the Trust unitholders.

Such sales may not be in the best interests of the Trust unitholders.

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Price Requirement”).

Under NYSE rules, a company that is out of compliance with the Minimum Price Requirement has a cure period

of six months to regain compliance if it notifies the NYSE within 10 business days of receiving a deficiency notice of its intention to

cure the deficiency.

Under NYSE rules, a company that is out of compliance with the Minimum Price Requirement has a cure

period of six months to regain compliance if it notifies the NYSE within 10 business days of receiving a deficiency notice of its intention

to cure the deficiency.

A company may regain compliance if on the last trading day of any calendar month during the cure period the company

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on the last trading day of that month.

If at the expiration of the cure period, both a $1.00 closing share price on the last trading day

of the cure period and a $1.00 average closing share price over the 30-trading-day period ending on the last trading day of the cure period

are not attained, the NYSE will commence suspension and delisting procedures.

If delisted by the NYSE, a company’s shares may be

transferred to the over-the-counter (“OTC”) market, a significantly more limited market than the NYSE, which could affect

the market price, trading volume, liquidity and resale price of such shares.

Securities that trade on the OTC markets also typically experience

more volatility compared to securities that trade on a national securities exchange.

During the cure period, the company’s shares

would continue to trade on the NYSE, subject to compliance with other continued listing requirements.

If at the expiration of the cure period, both a $1.00 closing share price on the last trading

day of the cure period and a $1.00 average closing share price over the 30-trading-day period ending on the last trading day of the cure

period are not attained, the NYSE will commence suspension and delisting procedures.

If delisted by the NYSE, a company’s shares

may be transferred to the over-the-counter (“OTC”) market, a significantly more limited market than the NYSE, which could

affect the market price, trading volume, liquidity and resale price of such shares.

Securities that trade on the OTC markets also typically

experience more volatility compared to securities that trade on a national securities exchange.

During the cure period, the company’s

shares would continue to trade on the NYSE, subject to compliance with other continued listing requirements.

On September 25, 2020, the Trust received

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Neither the Trust nor the

Trustee has any control over the trading price of the Trust Units, nor does the Trust have the authority to cause a reverse split of the

units or to take similar action designed to affect the trading price of the units without a vote from the Trust unitholders.

the NYSE notified the Trust that the Trust had regained compliance with the Minimum Price Requirement as of February 26, 2021, it might

be unable to maintain compliance, and would again become subject to the NYSE delisting procedures.

The Sponsor may sell Trust Units in the public

or private markets, and such sales could have an adverse impact on the trading price of the Trust Units.

The Sponsor holds an aggregate of 8,600,000 Trust

The Sponsor may sell Trust Units in the public or private markets, and any such sales could have an adverse impact on the price

of the Trust Units.

The Trust has granted registration rights to the Sponsor, which, if exercised, would facilitate sales of Trust Units

by the Sponsor.

Trustee has any control over the trading price of the Trust Units, nor does the Trust have the authority to cause a reverse split of

the units or to take similar action designed to affect the trading price of the units without a vote from the Trust unitholders.

the NYSE notified the Trust that the Trust had regained compliance with the Minimum Price Requirement as of February 26, 2021, it

might be unable to maintain compliance, and would again become subject to the NYSE delisting procedures.

The Sponsor may sell Trust Units in the

public or private markets, and such sales could have an adverse impact on the trading price of the Trust Units.

of March 23, 2023, the Sponsor holds an aggregate of 7,517,942 Trust Units.

The Sponsor may sell Trust Units in the public or private

markets, and any such sales could have an adverse impact on the price of the Trust Units.

On June 22, 2022, pursuant to the

Registration Rights Agreement between the Trust and the Sponsor (as the assignee of Enduro in connection with the Sale Transaction),

the Trust filed a registration statement on Form S-3 registering the offering by the Sponsor of 8,600,000 Trust Units.

registration statement was declared effective on July 7, 2022.

Since then, the Sponsor has sold approximately 1.1 million Trust

Units under the Registration Statement pursuant to a Rule 10b5-1 plan adopted in accordance with Rule 10b5-1 of the Exchange

The trading price for the Trust Units may

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The amounts available for distribution

by the Trust vary in response to numerous factors outside the control of the Trust, including prevailing prices for sales of oil and natural

gas production from the Underlying Properties and the timing and amount of direct operating expenses and development expenses.

Consequently,

the market price for the Trust Units may not necessarily be indicative of the value that the Trust would realize if it sold the Net Profits

Interest to a third-party buyer.

In addition, the market price may not necessarily reflect the fact that since the assets of the Trust

are depleting assets, a portion of each cash distribution paid with respect to the Trust Units should be considered by investors as a

return of capital, with the remainder being considered as a return on investment.

As a result, distributions made to a Trust unitholder

over the life of these depleting assets may not equal or exceed the purchase price paid by the Trust unitholder.

by the Trust vary in response to numerous factors outside the control of the Trust, including prevailing prices for sales of oil and

natural gas production from the Underlying Properties and the timing and amount of direct operating expenses and development expenses.

Consequently, the market price for the Trust Units may not necessarily be indicative of the value that the Trust would realize if it

sold the Net Profits Interest to a third-party buyer.

In addition, the market price may not necessarily reflect the fact that since the

assets of the Trust are depleting assets, a portion of each cash distribution paid with respect to the Trust Units should be considered

by investors as a return of capital, with the remainder being considered as a return on investment.

As a result, distributions made to

a Trust unitholder over the life of these depleting assets may not equal or exceed the purchase price paid by the Trust unitholder.

Courts outside of Delaware may not recognize

the limited liability of the Trust unitholders provided under Delaware law.

Under the Delaware Statutory Trust Act, Trust unitholders

will be entitled to the same limitation of personal liability extended to stockholders of corporations for profit under the General Corporation

Law of the State of Delaware.

The courts in jurisdictions outside of Delaware, however, might not give effect to such limitation.

Under the Delaware Statutory Trust Act, Trust

unitholders will be entitled to the same limitation of personal liability extended to stockholders of corporations for profit under the

General Corporation Law of the State of Delaware.

The courts in jurisdictions outside of Delaware, however, might not give effect to

such limitation.

LEGAL, ENVIRONMENTAL AND REGULATORY RISKS

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and the imposition of substantial liabilities for pollution resulting from

For example, the EPA has published

regulations that impose more stringent emissions control requirements for oil and gas development and production operations, which

may require the Sponsor, its operators, or third-party contractors to incur additional expenses to control air emissions from

current operations and during new well developments by installing emissions control technologies and adhering to a variety of work

practice and other requirements.

In addition, in 2012 the EPA adopted federal New Source Performance Standards

(“NSPS”) that require the reduction of volatile organic compound emissions from certain fractured and refractured

natural gas wells for which well completion operations are conducted and further require that most wells use reduced emission

completions, also known as “green completions.”

These regulations also establish specific new requirements regarding

emissions from production-related wet seal and reciprocating compressors, and from pneumatic controllers and storage vessels.

June 2016, the EPA adopted the Methane Rule, which established requirements to control GHG emissions from oil and gas sources

that are constructed, modified, or reconstructed after September 18, 2015.

On November 15, 2021, the EPA published a proposed rule

that would establish emissions guidelines for the control of methane from existing oil and gas sources for the first time under the

The EPA intends to adopt the existing source emissions guidelines as a final rule by the end of 2022, which would then trigger

a requirement for states to develop rules that will make the federal emissions guidelines enforceable as state rules over a three-

to four-year period.

The ultimate fate of the proposed methane emissions guidelines for existing sources is unclear.

Nevertheless,

regulations promulgated under the CAA may require the Sponsor to incur development expenses to install and utilize specific

equipment, technologies, or work practices to control emissions from its operations, which could reduce the profits available to the

Trust and potentially impair the economic development of the Underlying Properties.

example, the EPA has published regulations that impose more stringent emissions control requirements for oil and gas development and

production operations, which may require the Sponsor, its operators, or third-party contractors to incur additional expenses to control

air emissions from current operations and during new well developments by installing emissions control technologies and adhering to a

variety of work practice and other requirements.

In addition, in 2012 the EPA adopted federal New Source Performance Standards (“NSPS”) that

require the reduction of volatile organic compound emissions from certain fractured and refractured natural gas wells for which well

completion operations are conducted and further require that most wells use reduced emission completions, also known as “green

completions.”

These regulations also establish specific new requirements regarding emissions from production-related wet seal and

reciprocating compressors, and from pneumatic controllers and storage vessels.

In June 2016 the EPA published a second NSPS

for oil and gas sources that requires operators to reduce volatile organic compound (and methane) emissions from certain oil and

gas facilities, including production, processing, transmission and storage activities, that are constructed, modified, or reconstructed

after September 18, 2015.

More recently, the EPA issued a November 15, 2021 proposal and a November 11, 2022 supplemental

proposal that would establish volatile organic compound and methane emissions standards for oil and gas sources that are constructed,

modified, or reconstructed after November 15, 2021, as well as a set of volatile organic compound and methane emissions guidelines

that would apply to existing oil and gas sources for the first time under the CAA.

The EPA plans to issue a final rule from the

pending proposal in 2023, which would then trigger a requirement for states to develop rules that will make the federal emissions

guidelines enforceable as state rules over a three- to four-year period.

The ultimate fate of the proposed methane emissions guidelines

for existing sources is unclear.

Nevertheless, regulations promulgated under the CAA may require the Sponsor to incur development expenses

to install and utilize specific equipment, technologies, or work practices to control emissions from its operations, which could reduce

the profits available to the Trust and potentially impair the economic development of the Underlying Properties.

Numerous governmental authorities, such as the

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release or contamination or whether the operations were in compliance with all applicable laws at the time those actions were taken.

parties, including the owners of properties upon which wells are drilled and facilities where petroleum hydrocarbons or wastes are taken

for reclamation or disposal, may also have the right to pursue legal actions to enforce compliance as well as to seek damages for non-compliance

with environmental laws and regulations or for personal injury or property damage.

In addition, the risk of accidental spills or releases

could expose the operators of the Underlying Properties to significant liabilities that could have a material adverse effect on the operators’

businesses, financial condition and results of operations and could reduce the amount of cash available for distribution to Trust unitholders.

Changes in environmental laws and regulations occur frequently, and any changes that result in more stringent or costly operational control

requirements or waste handling, storage, transport, disposal or cleanup requirements could require the operators of the Underlying Properties

to make significant expenditures to attain and maintain compliance and may otherwise have a material adverse effect on their results of

operations, competitive position or financial condition.

Private parties, including the owners of properties upon which wells are drilled and facilities where petroleum hydrocarbons or wastes

are taken for reclamation or disposal, may also have the right to pursue legal actions to enforce compliance as well as to seek damages

for non-compliance with environmental laws and regulations or for personal injury or property damage.

In addition, the risk of accidental

spills or releases could expose the operators of the Underlying Properties to significant liabilities that could have a material adverse

effect on the operators’

businesses, financial condition and results of operations and could reduce the amount of cash available

for distribution to Trust unitholders.

Changes in environmental laws and regulations occur frequently, and any changes that result in

more stringent or costly operational control requirements or waste handling, storage, transport, disposal or cleanup requirements could

require the operators of the Underlying Properties to make significant expenditures to attain and maintain compliance and may otherwise

have a material adverse effect on their results of operations, competitive position or financial condition.

The Trust will indirectly bear 80% of all costs

and expenses paid by the Sponsor, including those related to environmental compliance and liabilities associated with the Underlying Properties,

including costs and liabilities resulting from conditions that existed prior to the Sponsor’s acquisition of the Underlying Properties

unless such costs and expenses result from the operator’s negligence or misconduct.

In addition, as a result of the increased cost

of compliance, the operators of the Underlying Properties may decide to discontinue drilling.

and expenses paid by the Sponsor, including those related to environmental compliance and liabilities associated with the Underlying

Properties, including costs and liabilities resulting from conditions that existed prior to the Sponsor’s acquisition of the Underlying

Properties unless such costs and expenses result from the operator’s negligence or misconduct.

In addition, as a result of the

increased cost of compliance, the operators of the Underlying Properties may decide to discontinue drilling.

Neither the Sponsor nor the Trust is generally

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distribution to Trust unitholders.

The production and development operations on

the Underlying Properties are subject to complex and stringent laws and regulations.

To conduct their operations in compliance with

these laws and regulations, the operators of the Underlying Properties must obtain and maintain numerous permits, drilling bonds,

approvals and certificates from various federal, state and local governmental authorities and engage in extensive reporting.

operators of the Underlying Properties may incur substantial costs and experience delays in order to maintain compliance with these

existing laws and regulations, and the Trust will bear an 80% share of these costs.

The production and development operations on the

Underlying Properties are subject to complex and stringent laws and regulations.

To conduct their operations in compliance with these

laws and regulations, the operators of the Underlying Properties must obtain and maintain numerous permits, drilling bonds, approvals

and certificates from various federal, state and local governmental authorities and engage in extensive reporting.

The operators of the

Underlying Properties may incur substantial costs and experience delays in order to maintain compliance with these existing laws and

regulations, and the Trust will bear an 80% share of these costs.

In addition, the operators’

compliance may increase if existing laws and regulations are revised or reinterpreted, or if new laws and regulations become

applicable to their operations.

costs of compliance may increase

if existing laws and regulations are revised or reinterpreted, or if new laws and regulations become applicable to their operations.

Such costs could have a material adverse effect on the operators’

business, financial

condition and results of operations and reduce the amount of cash received by the Trust in respect of the Net Profits Interest.

operators of the Underlying Properties must also comply with laws and regulations prohibiting fraud and market manipulations in

energy markets.

To the extent the operators of the Underlying Properties are shippers on interstate pipelines, they must comply with

the tariffs of such pipelines and with federal policies related to the use of interstate capacity, and such compliance costs will be

borne in part by the Trust.

business, financial condition and results of operations and reduce

the amount of cash received by the Trust in respect of the Net Profits Interest.

The operators of the Underlying Properties must also

comply with laws and regulations prohibiting fraud and market manipulations in energy markets.

To the extent the operators of the Underlying

Properties are shippers on interstate pipelines, they must comply with the tariffs of such pipelines and with federal policies related

to the use of interstate capacity, and such compliance costs will be borne in part by the Trust.

Laws and regulations governing exploration and

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emissions of “greenhouse gases”

could result in increased operating costs and reduced demand for the oil and natural gas that

the operators produce while the physical effects of climate change could disrupt their production and cause them to incur significant

could result in increased operating costs and reduced demand for the oil and natural gas

that the operators produce while the physical effects of climate change could disrupt their production and cause them to incur significant

costs in preparing for or responding to those effects.

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to the warming of the Earth’s atmosphere and other climate changes.

Based on these findings, the agency has begun adopting and implementing

regulations that would restrict emissions of GHGs under existing provisions of the federal Clean Air Act.

The EPA has adopted rules that

regulate emissions of GHGs from certain large stationary sources under the Prevention of Significant Deterioration (“PSD”)

Based on these findings, the agency has begun adopting and

implementing regulations that would restrict emissions of GHGs under existing provisions of the federal Clean Air Act.

The EPA has adopted

rules that regulate emissions of GHGs from certain large stationary sources under the Prevention of Significant Deterioration (“PSD”)

and Title V operating permit reviews for GHG emissions from certain large stationary sources that already are potential major sources

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In June 2014, the U.S.

Supreme Court held that

GHG alone cannot trigger an obligation to obtain an air permit.

Supreme Court held

that GHG alone cannot trigger an obligation to obtain an air permit.

However, the Supreme Court upheld the EPA’s authority to regulate

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pollutant emissions must include a limit for GHG in their permit.

These EPA rules could affect the operations on the Underlying Properties

or the ability of the operators of the Underlying Properties to obtain air permits for new or modified facilities.

In June 2016, the EPA adopted the Methane Rule,

which established requirements to control GHG emissions from oil and gas sources that are constructed, modified, or reconstructed after

September 18, 2015.

On November 15, 2021, the EPA published a proposed rule that would establish emissions guidelines for the control

of methane from existing oil and gas sources for the first time under the CAA.

The EPA intends to adopt the existing source emissions

guidelines as a final rule by the end of 2022, which would then trigger a requirement for states to develop rules that will make the federal

emissions guidelines enforceable as state rules over a three- to four-year period.

The ultimate fate of the proposed methane emissions

guidelines and any related requirements for existing sources is unclear.

These EPA rules could affect the operations on the Underlying

Properties or the ability of the operators of the Underlying Properties to obtain air permits for new or modified facilities.

June 2016, the EPA adopted the Methane Rule, which established requirements to control GHG emissions from oil and gas sources that

are constructed, modified, or reconstructed after September 18, 2015 .

More recently, the EPA issued a November 15, 2021

proposal and a November 11, 2022 supplemental proposal that would establish volatile organic compound and methane emissions standards

for oil and gas sources that are constructed, modified, or reconstructed after November 15, 2021, as well as a set of volatile organic

compound and methane emissions guidelines that would apply to existing oil and gas sources for the first time under the CAA.

plans to issue a final rule from the pending proposal in 2023, which would then trigger a requirement for states to develop rules that

will make the federal emissions guidelines enforceable as state rules over a three- to four-year period.

The ultimate fate of the

proposed methane emissions guidelines for existing sources is unclear.

Nevertheless, regulations promulgated under the CAA may require

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In addition, in November 2016, the U.S.

of the Interior Bureau of Land Management (“BLM”) issued final rules to reduce methane emissions from venting, flaring, and

leaks during oil and gas operations on federal and tribal lands that are substantially similar to the EPA’s Methane Rule.

of the Interior Bureau of Land Management (“BLM”) issued final rules to reduce methane emissions from venting, flaring,

and leaks during oil and gas operations on federal and tribal lands that are substantially similar to the EPA’s Methane Rule.

on December 8, 2017, the BLM published a final rule to temporarily suspend or delay certain requirements contained in the November 2016

final rule until January 2019, including those requirements relating to venting, flaring and leakage from oil and gas production activities.

Further, in September 2018, the BLM published a final rule to revise or rescind certain provisions of the 2016 rule.

While the future

implementation of the EPA and BLM rules aimed at controlling GHG emissions from oil and natural gas sources remains uncertain, future

federal GHG regulations for the oil and gas industry remain a possibility given the long-term trend towards increasing regulation, and

the Underlying Properties may be subject to these requirements or become subject to them in the future.

More than one-third of the states have begun

taking actions to control and/or reduce emissions of GHGs, primarily through the planned development of GHG emission inventories and/or

regional GHG cap and trade programs.

Although most of the state-level initiatives have to date focused on large sources of GHG emissions,

such as coal-fired electric plants, it is possible that smaller sources of emissions could become subject to GHG emission limitations

or allowance purchase requirements in the future.

In addition, from time to time Congress has considered adopting legislation to reduce

emissions of greenhouse gases.

Any one of these climate change regulatory and legislative initiatives could have a material adverse effect

on the Sponsor’s business, capital expenditures, financial condition and results of operations.

final rule until January 2019, including those requirements relating to venting, flaring and leakage from oil and gas production

Further, in September 2018, the BLM published a final rule to revise or rescind certain provisions of the 2016

While the future implementation of the EPA and BLM rules aimed at controlling GHG emissions from oil and natural gas sources

remains uncertain, future federal GHG regulations for the oil and gas industry remain a possibility given the long-term trend towards

increasing regulation, and the Underlying Properties may be subject to these requirements or become subject to them in the future.

More than one-third of the states have begun taking

actions to control and/or reduce emissions of GHGs, primarily through the planned development of GHG emission inventories and/or regional

GHG cap and trade programs.

Although most of the state-level initiatives have to date focused on large sources of GHG emissions, such

as coal-fired electric plants, it is possible that smaller sources of emissions could become subject to GHG emission limitations or allowance

purchase requirements in the future.

In addition, from time to time Congress has considered adopting legislation to reduce emissions

of greenhouse gases.

Any one of these climate change regulatory and legislative initiatives could have a material adverse effect on the

Sponsor’s business, capital expenditures, financial condition and results of operations.

At the international level, the U.S.

international community at the 21st Conference of the Parties of the United Nations Framework Convention on Climate Change in Paris, France,

which resulted in an agreement intended to nationally determine their contributions and set greenhouse gas emission reduction goals every

five years beginning in 2020.

While the Agreement did not impose direct requirements on emitters, national plans to meet its pledge could

have resulted in new regulatory requirements.

In November 2019, however, plans were formally announced for the U.S.

to withdraw from the

Paris Agreement, and the U.S.’s withdrawal from the Paris Agreement took effect on November 4, 2020.

On January 20, 2021, President

Biden issued an executive order commencing the process to reenter the Paris Agreement, although the emissions pledges in connection with

that effort have not yet been updated.

international community at the 21st Conference of the Parties of the United Nations Framework Convention on Climate Change in Paris,

France, which resulted in an agreement intended to nationally determine their contributions and set greenhouse gas emission reduction

goals every five years beginning in 2020.

While the Agreement did not impose direct requirements on emitters, national plans to meet

its pledge could have resulted in new regulatory requirements.

In November 2019, however, plans were formally announced for the

to withdraw from the Paris Agreement, and the U.S.’s withdrawal from the Paris Agreement took effect on November 4, 2020.

On January 20, 2021, President Biden issued an executive order commencing the process to reenter the Paris Agreement, although the

emissions pledges in connection with that effort have not yet been updated.

formally rejoined the Paris Agreement in February 2021.

The Trust cannot predict whether

re-entry into the Paris Agreement or pledges made in connection therewith will result in new regulatory requirements or whether such requirements

will cause the Sponsor to incur material costs.

The Trust cannot predict whether re-entry into the Paris Agreement or pledges made in connection therewith will result in new regulatory

requirements or whether such requirements will cause the Sponsor to incur material costs.

In a separate executive order issued on January 20,

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orders, guidance documents, policies and any similar agency actions promulgated during the prior administration that may be inconsistent

with or present obstacles to the administration’s stated goals of protecting public health and the environment, and conserving national

monuments and refuges.

The executive order also established an Interagency Working Group on the Social Cost of Greenhouse Gases, which

is called on to, among other things, capture the full costs of greenhouse gas emissions, including the “social cost of carbon,”

with or present obstacles to the administration’s stated goals of protecting public health and the environment, and conserving

national monuments and refuges.

The executive order also established an Interagency Working Group on the Social Cost of Greenhouse Gases,

which is called on to, among other things, capture the full costs of greenhouse gas emissions, including the “social cost of carbon,”

“social cost of nitrous oxide”

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which are “the monetized damages associated

with incremental increased in greenhouse gas emissions,”

with incremental increases in greenhouse gas emissions,”

including “changes in net agricultural productivity, human health,

property damage from increased flood risk, and the value of ecosystem services.”

The adoption and implementation of

regulations imposing reporting obligations on, or limiting emissions of GHGs from, the Sponsor’s equipment and operations

could require the Sponsor to incur costs to reduce emissions of GHGs associated with its operations or could adversely affect demand

for the natural gas it produces.

Legislation or regulations that may be adopted to address climate change could also affect the

markets for the Sponsor’s products by making its products more or less desirable than competing sources of energy.

extent that its products are competing with higher GHG-emitting energy sources, the Sponsor’s products may become more

desirable in the market with more stringent limitations on GHG emissions.

To the extent that its products are competing with lower

GHG-emitting energy, the Sponsor’s products may become less desirable in the market with more stringent limitations on

greenhouse gas emissions.

The Sponsor cannot predict with any certainty at this time how these possibilities may affect its

In late 2022, the Working Group proposed to significantly

increase the social cost of carbon used in assessing the costs and benefits of government actions.

The adoption and implementation of regulations

imposing reporting obligations on, or limiting emissions of GHGs from, the Sponsor’s equipment and operations could require the

Sponsor to incur costs to reduce emissions of GHGs associated with its operations or could adversely affect demand for the natural gas

Legislation or regulations that may be adopted to address climate change could also affect the markets for the Sponsor’s

products by making its products more or less desirable than competing sources of energy.

To the extent that its products are competing

with higher GHG-emitting energy sources, the Sponsor’s products may become more desirable in the market with more stringent limitations

on GHG emissions.

To the extent that its products are competing with lower GHG-emitting energy, the Sponsor’s products may become

less desirable in the market with more stringent limitations on greenhouse gas emissions.

The Sponsor cannot predict with any certainty

at this time how these possibilities may affect its operations.

Because regulation of GHG emissions is relatively

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will impact the operators of the Underlying Properties and the Trust.

Finally, some scientists have concluded that increasing

concentrations of greenhouse gases in the Earth’s atmosphere may produce climate changes that have significant physical effects,

such as increased frequency and severity of storms, droughts and floods and other climatic events.

If any such effects were to occur,

they could have an adverse effect on the operators’

assets and operations and, consequently, may reduce profits attributable to

the Net Profits Interest and, as a result, the Trust’s cash available for distribution.

Additionally, energy needs could increase

or decrease as a result of extreme weather conditions, depending on the duration and magnitude of those conditions.

some scientists have concluded that increasing concentrations of greenhouse gases in the Earth’s atmosphere may produce climate

changes that have significant physical effects, such as increased frequency and severity of storms, droughts and floods and other climatic

If any such effects were to occur, they could have an adverse effect on the operators’

assets and operations and, consequently,

may reduce profits attributable to the Net Profits Interest and, as a result, the Trust’s cash available for distribution.

Additionally,

energy needs could increase or decrease as a result of extreme weather conditions, depending on the duration and magnitude of those conditions.

Federal and state legislative and regulatory

initiatives relating to hydraulic fracturing could result in increased costs and additional operating restrictions or delays as well as

adversely affect the services of the operators of the Underlying Properties.

initiatives relating to hydraulic fracturing could result in increased costs and additional operating restrictions or delays as well

as adversely affect the services of the operators of the Underlying Properties.

Hydraulic fracturing is an important and common

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EPA’s ability to fully assess the potential impacts to drinking water resources.

In 2012 the EPA adopted federal NSPS that require

the reduction of volatile organic compound emissions from certain fractured and refractured natural gas wells for which well completion

operations are conducted and further require that most wells use reduced emission completions, also known as “green completions.”

These regulations also establish specific new requirements regarding emissions from production-related wet seal and reciprocating compressors,

and from pneumatic controllers and storage vessels.

In June 2016, the EPA adopted the Methane Rule, which established requirements

to control GHG emissions from oil and gas sources that are constructed, modified, or reconstructed after September 18, 2015.

More recently,

on November 15, 2021, the EPA published a proposed rule that would establish emissions guidelines for the control of methane from existing

oil and gas sources for the first time under the CAA.

The EPA intends to adopt the existing source emissions guidelines as a final rule

by the end of 2022, which would then trigger a requirement for states to develop rules that will make the federal emissions guidelines

enforceable as state rules over a three- to four-year period The ultimate fate of the proposed methane emissions guidelines is unclear.

Nevertheless, regulations promulgated under the CAA may require the Sponsor to incur development expenses to install and utilize specific

equipment, technologies, or work practices to control emissions from its operations, which could reduce the profits available to the Trust

and potentially impair the economic development of the Underlying Properties.

Some states have adopted, and other states

are considering adopting, regulations that could restrict or impose additional requirements relating to hydraulic fracturing in

certain circumstances, including the disclosure of information regarding the substances used in the hydraulic fracturing process.

Such federal or state legislation could require the disclosure of chemical constituents used in the fracturing process to state or

federal regulatory authorities who could then make such information publicly available.

Disclosure of chemicals used in the

fracturing process could make it easier for third parties opposing hydraulic fracturing to initiate legal proceedings against

producers and service providers based on allegations that specific chemicals used in the fracturing process could adversely affect

In addition, if hydraulic fracturing is regulated at the federal level, the Sponsor’s and the third party

operators’

fracturing activities could become subject to additional permit requirements or operational restrictions and also

to associated permitting delays and potential increases in costs.

In December 2014, the Governor of New York announced that the

state would maintain its moratorium on hydraulic fracturing in the state.

Further, some local governments, including in Texas, have

imposed moratoria on drilling permits within city limits so that local ordinances may be reviewed to assess their adequacy to

address such activities.

Similar measures might be considered or implemented in the jurisdictions in which the Underlying Properties

If new laws or regulations that significantly restrict

or otherwise impact hydraulic fracturing are passed by Congress or adopted in Texas, Louisiana or New Mexico, such legal requirements

2012 the EPA adopted federal NSPS that require the reduction of volatile organic compound emissions from certain fractured and refractured

natural gas wells for which well completion operations are conducted and further require that most wells use reduced emission completions,

also known as “green completions.”

These regulations also establish specific new requirements regarding emissions from production-related

wet seal and reciprocating compressors, and from pneumatic controllers and storage vessels.

In June 2016, the EPA adopted

the Methane Rule, which established requirements to control GHG emissions from oil and gas sources that are constructed, modified, or

reconstructed after September 18, 2015.

More recently, on November 15, 2021, the EPA published a proposed rule that would

establish emissions guidelines for the control of methane from existing oil and gas sources for the first time under the CAA.

intends to adopt the existing source emissions guidelines as a final rule by the end of 2022, which would then trigger a requirement

for states to develop rules that will make the federal emissions guidelines enforceable as state rules over a three- to four-year

period The ultimate fate of the proposed methane emissions guidelines is unclear.

Nevertheless, regulations promulgated under the CAA

may require the Sponsor to incur development expenses to install and utilize specific equipment, technologies, or work practices to control

emissions from its operations, which could reduce the profits available to the Trust and potentially impair the economic development

of the Underlying Properties.

Some states have adopted, and other states are

considering adopting, regulations that could restrict or impose additional requirements relating to hydraulic fracturing in certain circumstances,

including the disclosure of information regarding the substances used in the hydraulic fracturing process.

Such federal or state legislation

could require the disclosure of chemical constituents used in the fracturing process to state or federal regulatory authorities who could

then make such information publicly available.

Disclosure of chemicals used in the fracturing process could make it easier for third

parties opposing hydraulic fracturing to initiate legal proceedings against producers and service providers based on allegations that

specific chemicals used in the fracturing process could adversely affect groundwater.

In addition, if hydraulic fracturing is regulated

at the federal level, the Sponsor’s and the third party operators’

fracturing activities could become subject to additional

permit requirements or operational restrictions and also to associated permitting delays and potential increases in costs.

In December 2014,

the Governor of New York announced that the state would maintain its moratorium on hydraulic fracturing in the state.

Further, some local

governments, including in Texas, have imposed moratoria on drilling permits within city limits so that local ordinances may be reviewed

to assess their adequacy to address such activities.

Similar measures might be considered or implemented in the jurisdictions in which

the Underlying Properties are located.

If new laws or regulations that significantly

restrict or otherwise impact hydraulic fracturing are passed by Congress or adopted in Texas, Louisiana or New Mexico, such legal requirements

could make it more difficult or costly for the Sponsor or the third party operators to perform hydraulic fracturing activities and thereby

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CYBERSECURITY RISKS

Cyber-attacks or other

failures in telecommunications or information technology systems could result in information theft, data corruption and significant disruption

of the Sponsor’s business operations.

In recent years, the Sponsor

has increasingly relied on information technology (“IT”) systems and networks in connection with its business activities,

including certain of its exploration, development and production activities.

the Sponsor relies on digital technology, including information

systems and related infrastructure, as well as cloud applications and services, to, among other things, estimate quantities of oil and

natural gas reserves, analyze seismic and drilling information, process and record financial and operating data and communicate with employees

and third parties.

As dependence on digital technologies has increased, cyber incidents, including deliberate attacks and attempts to

gain unauthorized access to computer systems and networks, have increased in frequency and sophistication.

These threats pose a risk to

the security of the Sponsor’s systems and networks, the confidentiality, availability and integrity of its data and the physical

security of its employees and assets.

Any cyber-attack could have a material adverse effect on the Sponsor’s reputation, competitive

position, business, financial condition and results of operations, and could have a material adverse effect on the Trust.

Cyber-attacks

or security breaches also could result in litigation or regulatory action, as well as significant additional expense to the Sponsor to

implement further data protection measures.

In addition to the risks presented

to the Sponsor’s systems and networks, cyber-attacks affecting oil and natural gas distribution systems maintained by third parties,

or the networks and infrastructure on which they rely, could delay or prevent delivery to markets.

A cyber-attack of this nature would

be outside the Sponsor’s ability to control, but could have a material adverse effect on the Sponsor’s business, financial

condition and results of operations, and could have a material adverse effect on the Trust.

Cyber-attacks or other

failures in telecommunications or IT systems could result in information theft, data corruption and significant disruption of the Trustee’s

The Trustee depends heavily upon

IT systems and networks in connection with its business activities.

Despite a variety of security measures implemented by the Trustee,

events such as the loss or theft of back-up tapes or other data storage media could occur, and the Trustee’s computer systems could

be subject to physical and electronic break-ins, cyber-attacks and similar disruptions from unauthorized tampering, including threats

that may come from external factors, such as governments, organized crime, hackers and third parties to whom certain functions are outsourced,

or may originate internally from within the respective companies.

Cyber-attacks or other failures in telecommunications

or information technology systems could result in information theft, data corruption and significant disruption of the Sponsor’s

business operations.

In recent years, the Sponsor has increasingly

relied on information technology (“IT”) systems and networks in connection with its business activities, including certain

of its exploration, development and production activities.

the Sponsor relies on digital technology, including information systems and

related infrastructure, as well as cloud applications and services, to, among other things, estimate quantities of oil and natural gas

reserves, analyze seismic and drilling information, process and record financial and operating data and communicate with employees and

third parties.

As dependence on digital technologies has increased, cyber incidents, including deliberate attacks and attempts to gain

unauthorized access to computer systems and networks, have increased in frequency and sophistication.

These threats pose a risk to the

security of the Sponsor’s systems and networks, the confidentiality, availability and integrity of its data and the physical security

of its employees and assets.

Any cyber-attack could have a material adverse effect on the Sponsor’s reputation, competitive position,

business, financial condition and results of operations, and could have a material adverse effect on the Trust.

Cyber-attacks or security

breaches also could result in litigation or regulatory action, as well as significant additional expense to the Sponsor to implement

further data protection measures.

In addition to the risks presented to the Sponsor’s

systems and networks, cyber-attacks affecting oil and natural gas distribution systems maintained by third parties, or the networks and

infrastructure on which they rely, could delay or prevent delivery to markets.

A cyber-attack of this nature would be outside the Sponsor’s

ability to control, but could have a material adverse effect on the Sponsor’s business, financial condition and results of operations,

and could have a material adverse effect on the Trust.

Cyber-attacks or other failures in telecommunications

or IT systems could result in information theft, data corruption and significant disruption of the Trustee’s operations.

The Trustee depends heavily upon IT systems and

networks in connection with its business activities.

Despite a variety of security measures implemented by the Trustee, events such as

the loss or theft of back-up tapes or other data storage media could occur, and the Trustee’s computer systems could be subject

to physical and electronic break-ins, cyber-attacks and similar disruptions from unauthorized tampering, including threats that may come

from external factors, such as governments, organized crime, hackers and third parties to whom certain functions are outsourced, or may

originate internally from within the respective companies.

If a cyber-attack were to occur, it could potentially

jeopardize the confidential, proprietary and other information processed and stored in, and transmitted through, the Trustee’s computer

systems and networks, or otherwise cause interruptions or malfunctions in the operations of the Trust, which could result in litigation,

increased costs and regulatory penalties.

Although steps are taken to prevent and detect such attacks, it is possible that a cyber incident

will not be discovered for some time after it occurs, which could increase exposure to these consequences.

jeopardize the confidential, proprietary and other information processed and stored in, and transmitted through, the Trustee’s

computer systems and networks, or otherwise cause interruptions or malfunctions in the operations of the Trust, which could result in

litigation, increased costs and regulatory penalties.

Although steps are taken to prevent and detect such attacks, it is possible that

a cyber incident will not be discovered for some time after it occurs, which could increase exposure to these consequences.

TAX RISKS RELATED TO THE TRUST UNITS

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is not a “grantor trust”

federal income tax purposes, the Trust could be subject to more complex and costly tax reporting

requirements that could reduce the amount of cash available for distribution to Trust unitholders.

federal income tax purposes, the Trust could be subject to more complex and costly tax

reporting requirements that could reduce the amount of cash available for distribution to Trust unitholders.

If the Trust were not treated as a grantor trust

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(including applicable penalties and interest) as a result of an audit.

These rules effectively would impose an entity level tax on the

Trust, and unitholders may have to bear the expense of the adjustment even if they were not Trust unitholders during the audited taxable

These rules effectively would impose an entity level tax

on the Trust, and unitholders may have to bear the expense of the adjustment even if they were not Trust unitholders during the audited

taxable year.

Neither the Sponsor nor the Trustee has requested

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Trust’s assets and receive the Trust’s income and are directly taxable thereon as if no Trust were in existence.

Trust generates taxable income that could be different in amount than the cash the Trust distributes, Trust unitholders are required to

the Trust generates taxable income that could be different in amount than the cash the Trust distributes, Trust unitholders are required

to pay any U.S.

federal income taxes and, in some cases, state and local income taxes on their share of the Trust’s taxable income

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in an increase in the administrative expense of the Trust in subsequent periods.

Trust unitholders should consult their tax advisors

as to the specific tax consequences of the ownership and disposition of the of the Trust Units, including the applicability and effect

Trust unitholders should consult their tax

advisors as to the specific tax consequences of the ownership and disposition of the of the Trust Units, including the applicability

and effect of U.S.

federal, state, local, and foreign income and other tax laws in light of their particular circumstances.

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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-K

Item 1A. Risk Factors