What changed in this filing

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Item 1. Financial Statements

2023-11-14 compared with 2023-08-14 · 484 added, 449 removed, 327 unchanged (74% of the section changed)

2 unchanged sentences

Statements of Assets, Liabilities and Trust

September 30,

Cash and cash equivalents

7 unchanged sentences

Statements of Distributable

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Income from net profits interest

2 unchanged sentences

General and administrative expenses

Cash reserves (withheld) used for Trust expenses

Cash reserves withheld for Trust expenses

Distributable income

4 unchanged sentences

Statements of Changes in Trust Corpus

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Trust corpus, beginning of period

Cash reserves withheld (used) for Trust expenses

Cash reserves withheld for Trust expenses

Distributable income

5 unchanged sentences

an integral part of these financial statements.

PERMIANVILLE ROYALTY TRUST

ROYALTY TRUST

NOTES TO FINANCIAL STATEMENTS

TRUST ORGANIZATION AND PROVISIONS

ORGANIZATION AND PROVISIONS

Permianville Royalty Trust (the “Trust”),

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

Agreement”) among Enduro Resource Partners LLC (“Enduro”), as trustor, The Bank of New York Mellon Trust Company, N.A.

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

The Trust was created to acquire and hold for

the benefit of the Trust unitholders a net profits interest representing the right to receive 80% of the net profits from the sale of

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

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

The properties in which the Trust

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

In connection with the closing of the initial

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

previously known as Enduro Royalty Trust, is a Delaware statutory trust formed in May 2011 pursuant to a trust agreement (as subsequently

amended and restated, the “Trust Agreement”) among Enduro Resource Partners LLC (“Enduro”), as trustor, The Bank

of New York Mellon Trust Company, N.A.

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

as Delaware Trustee.

The Trust was created to acquire and hold for the

benefit of the Trust unitholders a net profits interest representing the right to receive 80% of the net profits from the sale of oil

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

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

The properties in which the Trust holds

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

In connection with the closing of the initial public

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

interest in the Trust (the “Trust Units”).

4 unchanged sentences

to which Enduro and the Trustee were parties.

As of June 30, 2023, the Sponsor owned 7,517,942 Trust Units, or 23% of the issued

As of September 30, 2023, the Sponsor owned 7,363,961 Trust Units, or 22% of the issued

and outstanding Trust Units.

The Net Profits Interest is passive in nature

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

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

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

activity reasonably related to such ownership, including activities required or permitted

by the terms of the Conveyance of Net Profits Interest, dated effective as of July 1,

The Net Profits Interest is passive in nature and

neither the Trust nor the Trustee has any management control over or responsibility for costs relating to the operation of the Underlying

The Trust Agreement provides, among other provisions, that:

the Trust’s business activities are limited to owning the Net Profits Interest and any activity reasonably related to such ownership,

including activities required or permitted by the terms of the Conveyance of Net Profits Interest, dated effective as of July 1,

2011 (as supplemented and amended to date, the “Conveyance”).

As a result, the

Trust is not permitted to acquire other oil and natural gas properties or net profits interests

or otherwise to engage in activities beyond those necessary for the conservation and protection

of the Net Profits Interest;

Trust may dispose of all or any material part of the assets of the Trust (including the sale

of the Net Profits Interest) if approved by at least 75% of the outstanding Trust Units;

Sponsor may sell a divided or undivided portion of its interests in the Underlying Properties,

free from and unburdened by the Net Profits Interest, if approved by at least 50% of the

outstanding Trust Units at a meeting of Trust unitholders;

Trustee will make monthly cash distributions to unitholders (Note 5);

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

Trustee may authorize the Trust to borrow money to pay administrative or incidental expenses

of the Trust that exceed its cash on hand and available reserves.

No further distributions

will be made to Trust unitholders until such amounts borrowed are repaid;

Trust is not subject to any pre-set termination provisions based on a maximum volume of oil

or natural gas to be produced or the passage of time.

The Trust will dissolve upon the earliest

to occur of the following:

Trust, upon approval of the holders of at least 75% of the outstanding Trust Units, sells

the Net Profits Interest;

PERMIANVILLE ROYALTY TRUST

As a result, the Trust is not permitted to acquire other oil

and natural gas properties or net profits interests or otherwise to engage in activities beyond those necessary for the conservation and

protection of the Net Profits Interest;

the Trust may dispose of all or any material part of the assets of the Trust (including the sale of the Net Profits Interest) if approved

by at least 75% of the outstanding Trust Units;

the Sponsor may sell a divided or undivided portion of its interests in the Underlying Properties, free from and unburdened by the

Net Profits Interest, if approved by at least 50% of the outstanding Trust Units at a meeting of Trust unitholders;

the Trustee will make monthly cash distributions to unitholders (Note 5);

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

the Trustee may authorize the Trust to borrow money to pay administrative or incidental expenses of the Trust that exceed its cash

on hand and available reserves.

No further distributions will be made to Trust unitholders until such amounts borrowed are repaid;

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

passage of time.

The Trust will dissolve upon the earliest to occur of the following:

the Trust, upon approval of the holders of at least 75% of the outstanding Trust Units, sells the Net Profits Interest;

ROYALTY TRUST

NOTES TO FINANCIAL STATEMENTS

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;

holders of at least 75% of the outstanding Trust Units vote in favor of dissolution;

Trust is judicially dissolved.

BASIS OF PRESENTATION

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 holders of at least 75% of the outstanding Trust Units vote in favor of dissolution;

the Trust is judicially dissolved.

OF PRESENTATION

The Statement of Assets, Liabilities and Trust

Corpus as of December 31, 2022, which has been derived from audited financial statements, and the unaudited interim financial statements

as of June 30, 2023 and for the three and six months ended June 30, 2023 and 2022 have been prepared pursuant to the rules and

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

Accordingly, certain information and disclosures normally

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

Therefore, these

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

Report on Form 10-K for the fiscal year ended December 31, 2022 (the “2022 Annual Report on Form 10-K”).

as of September 30, 2023 and for the three and nine months ended September 30, 2023 and 2022 have been prepared pursuant to

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

Accordingly, certain information and disclosures

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

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

Annual Report on Form 10-K for the fiscal year ended December 31, 2022 (the “2022 Annual Report on Form 10-K”).

In the opinion of the Trustee, the accompanying

unaudited financial statements reflect all adjustments, consisting only of normal, recurring, that are necessary for a fair presentation

unaudited financial statements reflect all adjustments, consisting only of normal adjustments that are necessary for a fair presentation

of the interim periods presented and include all the disclosures necessary to make the information presented not misleading.

16 unchanged sentences

Monthly operating expenses

and capital expenditures represent estimated incurred expenses and, as a result, represent accrued expenses as well as expenses paid

during the period.

and capital expenditures represent estimated incurred expenses and, as a result, represent accrued expenses as well as expenses paid during

The financial statements of the Trust are prepared

on the following basis:

(a) Income from Net Profits Interest is recorded when distributions are

received by the Trust;

(a) Income from Net Profits Interest is recorded when distributions are received by the Trust;

(b) Distributions to Trust unitholders are recorded when paid by the Trust;

fees as well as accounting, engineering, legal, and other professional fees) are recorded

(d) Cash reserves for Trust expenses may be established by the Trustee for

certain future expenditures that would not be recorded as contingent liabilities under accounting

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

(e) Amortization of the Net Profits Interest in oil and natural gas properties

is calculated on a unit-of-production basis and is charged directly to the Trust corpus;

PERMIANVILLE ROYALTY TRUST

(c) Trust general and administrative expenses (which includes the Trustee’s fees as well as accounting, engineering, legal, and

other professional fees) are recorded when paid;

(d) Cash reserves for Trust expenses may be established by the Trustee for certain future expenditures that would not be recorded as contingent

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

(e) Amortization of the Net Profits Interest in oil and natural gas properties is calculated on a unit-of-production basis and is charged

directly to the Trust corpus;

ROYALTY TRUST

NOTES TO FINANCIAL STATEMENTS

(f) The Net Profits Interest in oil and natural gas properties is periodically

assessed whenever events or circumstances indicate that the aggregate value may have been

impaired below its total capitalized cost based on the Underlying Properties.

If an impairment

loss is indicated by the carrying amount of the assets exceeding the sum of the undiscounted

expected future net cash flows of the Net Profits Interest, then an impairment loss is recognized

for the amount by which the carrying amount of the asset exceeds its estimated fair value

(f) The Net Profits Interest in oil and natural gas properties is periodically assessed whenever events or circumstances indicate that

the aggregate value may have been impaired below its total capitalized cost based on the Underlying Properties.

If an impairment loss

is indicated by the carrying amount of the assets exceeding the sum of the undiscounted expected future net cash flows of the Net Profits

Interest, then an impairment loss is recognized for the amount by which the carrying amount of the asset exceeds its estimated fair value

determined using discounted cash flows.

1 unchanged sentence

financial statements of the Trust differ from financial statements prepared in accordance with GAAP because revenues are not accrued;

certain cash reserves may be established for contingencies which would not be accrued in financial statements prepared in accordance

certain cash reserves may be established for contingencies which would not be accrued in financial statements prepared in accordance with

general and administrative expenses are recorded when paid instead of when incurred;

amortization of the net profits interest

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

the Trust does not record a liability

or repay any overpayment received as these will be deducted from future payments;

amortization of the net profits interest calculated

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

the Trust does not record a liability or repay

any overpayment received as these will be deducted from future payments;

and impairment is charged directly to the trust corpus.

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

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

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

2 unchanged sentences

Statements of Royalty Trusts .

NET PROFITS INTEREST IN OIL AND NATURAL GAS PROPERTIES

PROFITS INTEREST IN OIL AND NATURAL GAS PROPERTIES

The Net Profits Interest in oil and natural gas

properties was recorded at its fair value on the date of conveyance.

Amortization of the Net Profits Interest in oil and natural gas

properties is calculated on a unit-of-production basis based on the Underlying Properties’

Amortization of the Net Profits Interest in oil and natural gas properties

is calculated on a unit-of-production basis based on the Underlying Properties’

production and reserves.

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

of proved reserves.

The reserves upon which

the amortization rate is based are quantity estimates that are subject to numerous uncertainties inherent in the estimation of proved

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

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

Downward revisions in proved reserves

may result in an increased rate of amortization.

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

distributable income of the Trust.

Accumulated amortization as of June 30, 2023 and December 31, 2022 was $299,725,266 and

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

Downward revisions in proved reserves may

result in an increased rate of amortization.

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

income of the Trust.

Accumulated amortization as of September 30, 2023 and December 31, 2022 was $301,325,633 and $297,449,526,

respectively.

2 unchanged sentences

Properties may be less than the carrying value of the Net Profits Interest.

While the Trust did not record an impairment during the six

months ended June 30, 2023 or 2022, future downward revisions in actual production volumes relative to current forecasts, higher

While the Trust did not record an impairment during the nine

months ended September 30, 2023 or 2022, future downward revisions in actual production volumes relative to current forecasts, higher

than expected operating costs, or lower than anticipated commodity prices could result in recognition of impairment in future periods.

Federal Income Taxes

For federal income tax purposes, the Trust is

a grantor trust and therefore is not subject to tax at the trust level.

Trust unitholders are treated as owning a direct interest in

the assets of the Trust, and each Trust unitholder is taxed directly on his or her pro rata share of the income and gain attributable

to the assets of the Trust and entitled to claim his or her pro rata share of the deductions and expenses attributable to the assets

of the Trust.

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

or accrued by the Trust rather than when distributed by the Trust.

PERMIANVILLE ROYALTY TRUST

On May 3, 2023, the Sponsor notified the Trustee

that the Sponsor had entered into an agreement to divest certain acreage and associated production in the Permian Basin (the “Divestiture

Properties”) that constituted part of the Underlying Properties and were therefore burdened by the Trust’s Net Profits Interest,

for a total purchase price of approximately $6.7 million.

On July 19, 2023, at a special meeting of Trust unitholders, the unitholders

approved the foregoing transaction and the release of the Trust’s Net Profits Interest in the Divestiture Properties.

2023, the Sponsor completed the sale of the Divestiture Properties.

The total proceeds received by the Sponsor from the sale of the Divestiture

Properties, after preliminary closing adjustments, were approximately $6.5 million, inclusive of the escrow funded by the buyer and

partial expense reimbursement associated with the proxy solicitation.

The Sponsor deducted the final transaction expenses from the sales

proceeds, along with an escrow amount of $250,000 to cover possible indemnification obligations under the purchase and sale agreement

(the “Indemnification Escrow Amount”), to arrive at final net proceeds, based upon the Trust’s Net Profits Interest.

ROYALTY TRUST

NOTES TO FINANCIAL STATEMENTS

On September 20, 2023, the Trust announced

a special cash distribution to Trust unitholders of $0.069670 per unit, payable on October 13, 2023 to unitholders of record on October 2,

Net Proceeds from sale of Divestiture Properties

Transaction expenses

Buyer proxy expense reimbursement

Net proceeds from sale of Divestiture Properties

Amount allocable to the Sponsor’s 20% interest

Net proceeds allocable to the Trust’s 80% Interest

Indemnification Escrow amount

Estimated Settlement Escrow amount

Initial Cash available for distribution by the Trust

Number of units

Initial special cash distribution per unit

The remaining 50% of the Trust’s share of

the net proceeds was temporarily retained by the Sponsor as a source of payment of the Trust’s proportionate share of any post-closing

purchase price adjustments, with any amount remaining (less any amounts in dispute) after such adjustments to be paid to the Trust within

five business days after finalization of the settlement statement and included in a distribution to unitholders.

See Note 7 –

Events for information regarding the second special cash distribution reflecting the remaining 50% of the Trust’s share of the

net proceeds.

Within 12 months after the closing of the sale, any remaining amount from the Indemnification Escrow Amount (less any

amounts in dispute) will be released to the Trust and included in a distribution to unitholders.

Federal Income Taxes

For federal income tax purposes, the Trust is a

grantor trust and therefore is not subject to tax at the trust level.

Trust unitholders are treated as owning a direct interest in the

assets of the Trust, and each Trust unitholder is taxed directly on his or her pro rata share of the income and gain attributable to the

assets of the Trust and entitled to claim his or her pro rata share of the deductions and expenses attributable to the assets of the Trust.

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

the Trust rather than when distributed by the Trust.

The deductions of the Trust consist of severance

taxes and administrative expenses.

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

constitutes “economic interests”

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

“economic interests”

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

Each unitholder is entitled

to amortize the cost of the Trust Units through cost depletion over the life of the Net Profits Interest or, if greater, through percentage

Each unitholder is entitled to amortize

the cost of the Trust Units through cost depletion over the life of the Net Profits Interest or, if greater, through percentage depletion.

Unlike cost depletion, percentage depletion is not limited to a unitholder’s depletable tax basis in the Trust Units.

Rather, a unitholder could be entitled to percentage depletion as long as the applicable Underlying Properties generate gross income.

unitholder could be entitled to percentage depletion as long as the applicable Underlying Properties generate gross income.

Some Trust Units are held by a middleman, as such

6 unchanged sentences

The Bank of New York Mellon Trust Company, N.A., 601 Travis, 16 th

Floor, Houston, Texas 77002, telephone number (512) 236-6545, is the representative of the Trust that will provide tax information

in accordance with applicable U.S.

Floor, Houston, Texas 77002, telephone number (512) 236-6545, is the representative of the Trust that will provide tax information in

accordance with applicable U.S.

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

information is also posted by the Trustee at www.permianvilleroyaltytrust.com .

Notwithstanding the foregoing, the middlemen holding

units on behalf of unitholders, and not the Trustee of the Trust, are solely responsible for complying with the information reporting

requirements under the U.S.

Treasury Regulations with respect to such units, including the issuance of IRS Forms 1099 and certain

written tax statements.

Unitholders whose units are held by middlemen should consult with such middlemen regarding the information that

will be reported to them by the middlemen with respect to the Trust Units.

Tax information

is also posted by the Trustee at www.permianvilleroyaltytrust.com .

Notwithstanding the foregoing, the middlemen holding units on

behalf of unitholders, and not the Trustee of the Trust, are solely responsible for complying with the information reporting requirements

under the U.S.

Treasury Regulations with respect to such units, including the issuance of IRS Forms 1099 and certain written tax

Unitholders whose units are held by middlemen should consult with such middlemen regarding the information that will be reported

to them by the middlemen with respect to the Trust Units.

ROYALTY TRUST

NOTES TO FINANCIAL STATEMENTS

The tax consequences to a unitholder of ownership

15 unchanged sentences

Texas imposes a franchise tax at a rate of 0.75% on gross

revenues less certain deductions for returns originally due on or after January 1, 2016, as specifically set forth in the Texas

franchise tax statutes.

revenues less certain deductions for returns originally due on or after January 1, 2016, as specifically set forth in the Texas franchise

tax statutes.

Entities subject to tax generally include trusts unless otherwise exempt.

Trusts that receive at least 90% of

their federal gross income from designated passive sources, including royalties from mineral properties and other income from other non-operating

mineral interests, and do not receive more than 10% of their income from operating an active trade or business, generally are exempt

from the Texas franchise tax as “passive entities.”

Although the Trust is intended to be exempt from Texas franchise tax

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

be required to include its portion of Trust net income in its own Texas franchise tax computation.

Each unitholder should consult his or her own

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

DISTRIBUTIONS TO UNITHOLDERS

Trusts that receive at least 90% of their federal

gross income from designated passive sources, including royalties from mineral properties and other income from other non-operating mineral

interests, and do not receive more than 10% of their income from operating an active trade or business, generally are exempt from the

Texas franchise tax as “passive entities.”

Although the Trust is intended to be exempt from Texas franchise tax at the trust

level as a passive entity, each unitholder that is considered a taxable entity under the Texas franchise tax would generally be required

to include its portion of Trust net income in its own Texas franchise tax computation.

Each unitholder should consult his or her own tax

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

DISTRIBUTIONS

TO UNITHOLDERS

month, the Trustee determines the amount of funds available for distribution to the Trust unitholders.

Available funds are the excess

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

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

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

No distributions will be made to Trust

unitholders until the indebtedness created by such amounts drawn or borrowed as advances to the Trust have been repaid in full.

Distributions

are made to the holders of Trust Units as of the applicable record date (generally the last business day of each calendar month) and

are payable on or before the 10th business day after the record date.

PERMIANVILLE ROYALTY TRUST

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

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

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

No distributions will be made to Trust unitholders

until the indebtedness created by such amounts drawn or borrowed as advances to the Trust have been repaid in full.

Distributions are

made to the holders of Trust Units as of the applicable record date (generally the last business day of each calendar month) and are payable

on or before the 10th business day after the record date.

ROYALTY TRUST

NOTES TO FINANCIAL STATEMENTS

2 unchanged sentences

Declaration Date

Six Months Ended June 30, 2023:

Nine Months Ended September 30, 2023:

December 16, 2022

13 unchanged sentences

June 14, 2023

June 16, 2023

June 30, 2023

July 14, 2023

July 17, 2023

July 31, 2023

August 14, 2023

August 18, 2023

August 31, 2023

September 15, 2023

Year to Date –

Six Months Ended June 30, 2022:

Nine Months Ended September 30, 2022:

December 17, 2021

13 unchanged sentences

June 14, 2022

June 17, 2022

June 30, 2022

July 15, 2022

July 18, 2022

July 29, 2022

August 12, 2022

August 18, 2022

August 31, 2022

September 15, 2022

Year to Date –

2 unchanged sentences

During each of the

three-and six-month periods ended June 30, 2023 and 2022, the Trust paid $100,000 to the Trustee and $0 to the Delaware Trustee

pursuant to the terms of the Trust Agreement.

SUBSEQUENT EVENTS

three- and nine-month periods ended September 30, 2023 and 2022, the Trust paid $50,000 and $150,000, respectively, to the Trustee

and $0 to the Delaware Trustee pursuant to the terms of the Trust Agreement.

Distributions Paid or Declared

On July 14, 2023, a distribution of $0.012500

per unit, which was declared on June 16, 2023, was paid to Trust unitholders of record as of June 30, 2023.

On July 17, 2023, the Trust declared a distribution

of $0.053500 per unit to Trust unitholders of record as of July 31, 2023.

The distribution will be paid to Trust unitholders on

August 14, 2023.

Non-producing Property Divestiture

In May 2023, the Sponsor sold approximately

$0.3 million in non-producing, non-cash flowing acreage to a private oil company, free and clear of the Net Profits Interest, as permitted

under the Trust Agreement.

The proceeds from this sale attributable to the Trust’s 80% Net Profits Interest, or approximately $240,000, will be included in

the distribution that will be paid to Trust unitholders on August 14, 2023.

PERMIANVILLE ROYALTY TRUST

NOTES TO FINANCIAL STATEMENTS

Sale of Divestiture Properties

May 3, 2023, the Sponsor notified the Trustee that the Sponsor had entered into an agreement to divest certain acreage and associated

production in the Permian Basin (the “Divestiture Properties”) that constituted part of the Underlying Properties and were

therefore burdened by the Trust’s Net Profits Interest, for a total purchase price of approximately $6.7 million.

2023, at a special meeting of Trust unitholders, the unitholders approved the foregoing transaction and the release of the Trust’s

Net Profits Interest in the Divestiture Properties.

On August 9, 2023, the Sponsor completed the sale of the Divestiture Properties.

The total proceeds received by the Sponsor from the Divestiture Properties, after preliminary closing adjustments, were approximately

$6.5 million, inclusive of the escrow funded by the buyer and partial expense reimbursement associated with the proxy solicitation.

The Sponsor will deduct final transaction expenses from the sales proceeds, along with an escrow amount of $250,000 to cover possible

indemnification obligations under the purchase and sale agreement (the “Indemnification Escrow Amount”), to arrive at final

net proceeds, based upon the Trust’s 80% Net Profits Interest.

The Sponsor will set a record date and the special distribution,

reflecting 50% of the Trust’s share of the net proceeds, will be paid to Trust unitholders on or before September 22, 2023.

The remaining 50% of the Trust’s share of the net proceeds will be temporarily retained by the Sponsor as a source of payment of

the Trust’s proportionate share of any post-closing purchase price adjustments, with any amount remaining (less any amounts in

dispute) after such adjustments to be paid to the Trust within five business days after finalization of the settlement statement (which

is expected to occur within 90 days following the closing of the sale) and included in a distribution to unitholders.

Within 12 months

after the closing of the sale, any remaining amount from the Indemnification Escrow Amount (less any amounts in dispute) will be released

to the Trust and included in a distribution to unitholders.

Trustee’s Discussion and Analysis of Financial Condition

and Results of Operations.

On October 13, 2023, a distribution of $0.003700

per unit, which was declared on September 18, 2023, was paid to Trust unitholders of record as of September 29, 2023.

On October 13, 2023, a special cash distribution

of $0.069670 per unit, which was declared on September 20, 2023, was paid to Trust unitholders of record as of October 2, 2023.

Please see Note 3 –

Net Profits Interest in Oil and Natural Gas Properties for additional information regarding the special

distribution.

On October 16, 2023, the Trust declared a

distribution of $0.006000 per unit to Trust unitholders of record as of September 29, 2023.

The distribution was paid to Trust unitholders

on November 13, 2023.

November 6, 2023, the Trust declared a special cash distribution of $0.077250 per unit to Trust unitholders of record as of November 16,

The distribution, which reflected the remaining 50% (net of the Indemnification Escrow Amount described in Note 3 –

Net Profits Interest in Oil and Natural Gas Properties ) of the Trust’s share of the net proceeds from the sale of the Divestiture

Properties, will be paid to Trust unitholders on November 22, 2023.

Please see Note 3 –

Net Profits Interest in Oil and

Natural Gas Properties for additional information regarding the special distribution.

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

References to the “Trust”

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

“Sponsor”

in this document

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

or the “Sponsor”

in this document refer to COERT Holdings 1 LLC.

References to “Enduro”

in this document refer to Enduro

Resource Partners LLC, the original sponsor of the Trust.

The following review of the Trust’s financial condition and results of

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

Analysis of Financial Condition and Results of Operations contained in the Trust’s 2022 Annual Report on Form 10-K.

The Trust’s

annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all other filings with the

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

in this document refer to Enduro Resource Partners

LLC, the original sponsor of the Trust.

The following review of the Trust’s financial condition and results of operations should

be read in conjunction with the financial statements and notes thereto, as well as Management’s Discussion and Analysis of Financial

Condition and Results of Operations contained in the Trust’s Annual Report on Form 10-K for the year ended December 31,

2022 (the “2022 Annual Report on Form 10-K”).

The Trust’s annual reports on Form 10-K, quarterly reports on

Form 10-Q, current reports on Form 8-K and all other filings with the SEC are available on the SEC’s website at www.sec.gov .

Forward-Looking Statements

This Form 10-Q includes “forward-looking

statements”

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

Exchange Act of 1934, as amended.

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

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

This Quarterly Report on Form 10-Q (this “Form 10-Q”)

includes “forward-looking statements”

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

Section 21E of the Securities Exchange Act of 1934, as amended.

All statements other than statements of historical fact included

in this Form 10-Q, including without limitation the statements under this “Trustee’s Discussion and Analysis of Financial

Condition and Results of Operations”

are forward-looking statements.

Such statements may be influenced by factors that could cause actual outcomes and results to differ materially

from those projected.

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

When used in this document, the

words “believes,”

Such statements may be influenced by factors that could cause

actual outcomes and results to differ materially from those projected.

No assurance can be given that such expectations will prove to

have been correct.

When used in this document, the words “believes,”

“expects,”

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“intends”

or similar expressions are intended

to identify such forward-looking statements.

The following important factors, in addition to those discussed elsewhere in this Form 10-Q,

in the Trust’s 2022 Annual Report on Form 10-K and the Trust’s other filings with the SEC could affect the future results

of the energy industry in general, and COERT and the Trust in particular, and could cause actual results to differ materially from those

expressed in such forward-looking statements:

associated with the drilling and operation of oil and natural gas wells;

amount of future direct operating expenses and development expenses;

health concerns, including the COVID-19 pandemic;

actions of the Organization of Petroleum Exporting Countries;

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

or similar expressions are intended to identify such forward-looking statements.

The following important factors, in addition to those

discussed elsewhere in this Form 10-Q, in the Trust’s 2022 Annual Report on Form 10-K and the Trust’s other filings

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

actual results to differ materially from those expressed in such forward-looking statements:

risks associated with the drilling and operation of oil and natural gas wells;

the amount of future direct operating expenses and development expenses;

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

the actions of the Organization of Petroleum Exporting Countries;

the armed conflicts between Russia and Ukraine and between Israel and Hamas and the potential destabilizing effects such conflicts

may pose for the global oil and gas markets;

effect of existing and future laws and regulatory actions;

effect of changes in commodity prices or alternative fuel prices;

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

of the Conveyance;

in the capital markets;

· changes in interest rates;

· competition

from others in the energy industry;

change and the potential impact on fossil fuels;

· uncertainty

of estimates of oil and natural gas reserves and production;

the effect of existing and future laws and regulatory actions;

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

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

conditions in the capital markets;

competition from others in the energy industry;

climate change and the potential impact on fossil fuels;

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

cost inflation.

You should not place undue reliance on these forward-looking

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or to reflect the occurrence of unanticipated events, unless the securities laws require the Trust to do so.

This Form 10-Q describes other important

factors that could cause actual results to differ materially from expectations of the Sponsor and the Trust.

All forward-looking statements

in this report and all subsequent written and oral forward-looking statements attributable to the Sponsor or the Trust or persons acting

This Form 10-Q describes other important factors

that could cause actual results to differ materially from expectations of the Sponsor and the Trust.

All forward-looking statements in

this report and all subsequent written and oral forward-looking statements attributable to the Sponsor or the Trust or persons acting

on behalf of the Sponsor or the Trust are expressly qualified in their entirety by such factors.

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disclaims any duty, to update these forward-looking statements.

Permianville Royalty Trust, a statutory trust

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

The Trust’s only asset and source of income

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

Underlying Properties.

The Net Profits Interest is passive in nature and neither the Trust nor the Trustee has any management control

over or responsibility for costs relating to the operation of the Underlying Properties.

Additionally, third parties operate substantially

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

associated costs, or the rate of production of the reserves.

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

The Trust’s

only asset and source of income is the net profits interest representing the right to receive 80% of the net profits from the sale

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

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

The properties in which the Trust

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

The Net Profits Interest is passive in nature

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

Additionally, third parties operate substantially all of the wells on the Underlying Properties and, therefore, the Sponsor

is not in a position to control the timing of development efforts, associated costs, or the rate of production of the reserves.

On August 31, 2018, COERT completed the acquisition

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

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

of the Trust (the “Trust Agreement”) and other instruments to which Enduro and the Trustee were parties.

The Trust is required to make monthly cash distributions

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on, among other things:

and natural gas sales prices;

of oil and natural gas produced and sold attributable to the Underlying Properties;

and development costs;

differentials;

reductions or suspensions of production;

amount and timing of Trust administrative expenses;

establishment, increase, or decrease of reserves for approved development expenses or future

liabilities of the Trust.

oil and natural gas sales prices;

volumes of oil and natural gas produced and sold attributable to the Underlying Properties;

production and development costs;

price differentials;

potential reductions or suspensions of production;

the amount and timing of Trust administrative expenses;

the establishment, increase, or decrease of reserves for approved development expenses or future liabilities of the Trust.

Generally, the Sponsor receives cash payment for

oil production 30 to 60 days after it is produced and for natural gas production 60 to 90 days after it is produced.

The overall outlook for development activity on

the Underlying Properties remained relatively stable during the first half of 2023, despite a year-over-year volatility in commodity

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

and the lingering effects of the COVID-19 pandemic, the Sponsor does not expect that these events will have a material impact on the

Underlying Properties or the expected 2023 development activity as detailed in the Trust’s 2022 Annual Report on Form 10-K,

aside from the effects of volatile commodity prices.

The West Texas Intermediate spot price of crude oil has modestly improved from $80.26

per barrel on December 30, 2022 to $82.82 per barrel on August 10, 2023.

Natural gas prices have declined year-over-year, with

the Henry Hub spot price decreasing from $3.52 per MMBtu on December 30, 2022 to $2.83 per MMBtu on August 10, 2023.

oil prices achieving greater stability in recent periods, the Sponsor currently expects an incremental increase in the previously

disclosed capital spending outlook, from the earlier range of $6.0 million to $9.0 million, or $4.8 million to $7.2 million net

to the Trust’s Net Profits Interest, to an updated range of $8.0 million to $12.0 million, or $6.4 million to $9.6 million net

to the Trust’s Net Profits Interest.

The increase in expected capital expenditures is driven primarily by greater activity in the

Permian basin by large-cap public operators, which compose the majority of the operators of the Underlying Properties.

Meanwhile, the

Sponsor continues to expect some moderation in the expected capital expenditure activity in the Haynesville portion of the Underlying

Properties, although any declines in this area would be at least partially offset by higher, oil-weighted Permian activity.

Nevertheless,

the outlook for capital expenditures remains subject to change, as operators are expected to continue to reevaluate their planned capital

expenditures, particularly to the extent commodity prices experience further volatility in the future.

Over the first half of 2023, the Sponsor has begun

to see a moderation in some of the inflationary pressures and supply chain bottlenecks that had been affecting the Underlying Properties.

Given the market volatility and recently increased capital expenditure activity levels, the Sponsor may establish a new cash reserve

for approved, future development expenses during 2023, similar to the cash reserve that the Sponsor had established in 2022.

indicates that it continues to have access to adequate capital and liquidity to fund such capital expenditures as they come due.

The Sponsor believes there could be further opportunity

in 2023 for prospective divestitures, as operators of some of the Underlying Properties look to acquire assets at compelling valuations

The development activity on the Underlying Properties

remained stable during the first nine months of 2023, despite year-over-year volatility in commodity prices.

Although the global economy

remains volatile, reflecting, among other factors, the current hostilities between Israel and Hamas amid increasing tensions in the Middle

East, the ongoing war between Russia and Ukraine and the lingering effects of the COVID-19 pandemic, the Sponsor does not expect that

these events will have a material impact on the Underlying Properties or the expected 2023 development activity as detailed in the Trust’s

2022 Annual Report on Form 10-K, aside from the effects of volatile commodity prices.

The West Texas Intermediate spot price of crude

oil has declined from $80.26 per barrel on December 30, 2022 to $77.17 per barrel on November 10, 2023.

prices have declined year-over-year, with the Henry Hub spot price decreasing from $3.52 per MMBtu on December 30, 2022 to $2.71

per MMBtu on November 10, 2023.

oil prices achieving greater stability in recent periods, the Sponsor continues to expect a higher level of capital spending in 2023,

at a range of $8.0 million to $12.0 million, or $6.4 million to $9.6 million net to the Trust’s Net Profits Interest, as

detailed in the Trust’s Quarterly Report on Form 10-Q for the period ended June 30, 2023.

The expected capital expenditures

continue to be driven primarily by greater activity in the Permian basin by large-cap public operators, which compose the majority of

the operators of the Underlying Properties.

Meanwhile, with the recent stabilization in natural gas prices, the Sponsor has seen a slight

recovery in future capital expenditures in the Haynesville portion of the Underlying Properties.

Nevertheless, the outlook for capital

expenditures remains subject to change, as operators are expected to continue to reevaluate their planned capital expenditures, particularly

to the extent commodity prices experience further volatility in the future.

Over the first nine months of 2023, the Sponsor

has seen a return of inflationary pressures and operating costs that had been affecting the Underlying Properties, in particular certain

of the legacy producing properties in the Permian that require produced water disposal.

Given the market volatility and recently increased

capital expenditure activity levels, the Sponsor may establish a new cash reserve for approved,

future development expenses during 2023 or expected expenses during 2024, similar to the cash reserve that the Sponsor had established

The Sponsor indicates that it continues to have access to adequate capital and liquidity to fund such capital expenditures as

they come due.

The recent sale of certain of the Underlying Properties

as discussed below under “—Sale of Divestiture Properties”

is expected to help reduce the operating cost profile and

future plugging and abandonment expenditures of the Underlying Properties.

The Sponsor believes there could be further opportunity in

2023 and 2024 for prospective divestitures, as operators of some of the Underlying Properties look to acquire assets at compelling valuations

against the backdrop of favorable oil prices compared to prior years.

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of certain notable capital projects recently undertaken on the Underlying Properties pursuant to the capital expenditure program described

All information has been provided by the Sponsor.

The following table is not intended to be a comprehensive

list reflecting all capital expenditures to date.

The table provides information regarding current projects that remain in process and

have not yet begun to generate revenues.

Additional information regarding producing wells drilled pursuant to the capital expenditure

program is provided following the table.

There can often be a several-month delay from

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

the non-operated nature of the Underlying Properties.

For example, as previously disclosed, in May 2023 three wells from one of

the larger, previously detailed drilling projects were finally converted to first revenues after a delay associated with the operator.

These wells began generating revenues in 2022, but the amounts were only finalized for non-operating partners in 2023.

The cash revenue

catch-up totaled approximately $3.7 million, or approximately $2.9 million net to the Trust’s Net Profits Interest, which

was reflected in the net profits interest calculation reported in July and will be included in the distribution that will be paid

to Trust unitholders on August 14, 2023.

In addition, there can often be a several-month delay from the time of capital expenditures

to the time of production and cash flows attributable to the Underlying Properties, especially given the non-operated nature of the Underlying

Cumulative Total

(in thousands)

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D&C New Drills

5 Producing, Awaiting First

2 Producing, Awaiting First Revenues;

3 Drilling In-Process/Pre Drill

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New Drills / Workovers

Continual Program

In-process/ Continual Program

Large Private E&P 1

D&C New Drills

PE-Backed Private 1

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D&C New Drills

4 Producing, Awaiting First

4 Producing, Awaiting First Revenues;

Large Cap E&P 3

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Private E&P 2

As reflected in the table above, the Sponsor indicates

that since the first quarter a new Haynesville project has commenced (Large Cap E&P 4).

In addition, as indicated above, three wells

in the Midland began paying revenues during the second quarter, and the same operator (Large Cap E&P 1) has begun to produce from

three wells that had been previously categorized as drilling in-process, in addition to adding one new pre-drill project.

one of the Haynesville wells drilled (Large Cap Major 1) has come online and began to generate first revenues in the second quarter.

For the other projects identified above that are still in process or awaiting first revenues, the Sponsor expects a majority to be completed

and to begin producing during 2023.

In addition to the updated cumulative capex spending

above and a new Haynesville project (Large Private E&P 1), three wells in the Midland operated by Large Cap E&P 1 began paying

revenues during the third quarter.

For the other projects identified above that are still in process or awaiting first revenues, the Sponsor

expects a majority to be completed and to begin producing during the remainder of 2023 and the first half of 2024.

Non-producing Property Divestiture

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under the Trust Agreement.

The proceeds from this sale attributable to the Trust’s 80% Net Profits Interest, or approximately $240,000, will be included in

the distribution that will be paid to Trust unitholders on August 14, 2023.

The proceeds from this sale attributable to the Trust’s Net Profits Interest were included in the distribution

that was paid to Trust unitholders on August 14, 2023.

Sale of Divestiture Properties

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On August 9, 2023, the Sponsor completed the sale of the Divestiture Properties.

The total proceeds received by the Sponsor from the Divestiture Properties, after preliminary closing adjustments, were approximately

The total proceeds received by the Sponsor from the sale of the Divestiture Properties, after preliminary closing adjustments, were approximately

$6.5 million, inclusive of the escrow funded by the buyer and partial expense reimbursement associated with the proxy solicitation.

The Sponsor will deduct final transaction expenses from the sales proceeds, along with an escrow amount of $250,000 to cover possible

The Sponsor deducted the final transaction expenses from the sales proceeds, along with an escrow amount of $250,000 to cover possible

indemnification obligations under the purchase and sale agreement (the “Indemnification Escrow Amount”), to arrive at final

net proceeds, based upon the Trust’s Net Profits Interest.

The Sponsor will set a record date and the special distribution,

reflecting 50% of the Trust’s share of the net proceeds, will be paid to Trust unitholders on or before September 22, 2023.

The remaining 50% of the Trust’s share of the net proceeds will be temporarily retained by the Sponsor as a source of payment of

the Trust’s proportionate share of any post-closing purchase price adjustments, with any amount remaining (less any amounts in

dispute) after such adjustments to be paid to the Trust within five business days after finalization of the settlement statement (which

is expected to occur within 90 days following the closing of the sale) and included in a distribution to unitholders.

Within 12 months

after the closing of the sale, any remaining amount from the Indemnification Escrow Amount (less any amounts in dispute) will be released

to the Trust and included in a distribution to unitholders.

On September 20, 2023, the Trust announced

a special cash distribution to Trust unitholders of $0.069670 per unit, payable on October 13, 2023 to unitholders of record on October 2,

2023, reflecting 50% of the Trust’s share of the net proceeds, after accounting for the Indemnification Escrow Amount.

As previously

disclosed, the remaining 50% of the Trust’s share of the net proceeds was temporarily retained by the Sponsor as a source of payment

of the Trust’s proportionate share of any post-closing purchase price adjustments, with any amount remaining (less any amounts in

dispute) after such adjustments to be paid to the Trust within five business days after finalization of the settlement statement and included

in a distribution to unitholders.

On November 6, 2023, the Trust announced a special cash distribution to Trust unitholders of $0.077250

per unit, payable on November 22, 2023 to unitholders of record on November 16, 2023, reflecting the remaining 50% of the Trust’s

share of the net proceeds (net of the Indemnification Escrow Amount).

Within 12 months after the closing of the sale, any remaining

amount from the Indemnification Escrow Amount (less any amounts in dispute) will be released to the Trust and included in a distribution

to unitholders.

Results of Operations

Three Months Ended June 30, 2023 Compared to Three Months

Ended June 30, 2022

The Trust’s net profits income consists

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

Three Months Ended September 30, 2023 Compared to Three Months

Ended September 30, 2022

The Trust’s net profits income consists of

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

Three Months Ended

September 30,

Gross profits:

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Development expenses

Gross proceeds from sale of assets

Percentage allocable to Net Profits Interest

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Sponsor reserve release for capital expenditures

Trust general and administrative expenses and cash withheld for expenses, net of interest and investment income

Trust general and administrative expenses and cash withheld for expenses net of interest income

Distributable income

The following table displays reported oil and

natural gas sales volumes and average prices from the Underlying Properties, representing the amounts included in the net profits calculation

for distributions paid during the three months ended June 30, 2023 and 2022:

Three Months Ended June 30,

The following table displays reported oil and natural

gas sales volumes and average prices from the Underlying Properties, representing the amounts included in the net profits calculation

for distributions paid during the three months ended September 30, 2023 and 2022:

Three Months Ended September 30,

Underlying Properties Production Volumes:

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Net profits attributable to the Underlying Properties

for the three months ended June 30, 2023 were $2.9 million compared to $5.3 million for the three months ended June 30,

for the three months ended September 30, 2023 were $3.6 million compared to $3.7 million for the three months ended September 30,

The $0.1 million decrease in net profits attributable to the Underlying Properties from the 2022 period to the 2023 period

was primarily due to the following items:

sales decreased $1.4 million due to lower realized prices and lower produced volumes.

2% decrease in realized oil sales prices in the 2023 period compared to the 2022 period caused

revenues to decline by $0.2 million, and lower produced volumes caused a $1.2 million decline

Oil sales volumes decreased 12% as a result of natural production declines.

gas sales decreased $1.5 million due to lower produced volumes and lower realized prices.

The 28% decrease in gas sales volumes and the 2% decrease in realized gas prices in the 2023

period compared to the 2022 period caused revenues to decline by $1.2 million and $0.7 million,

respectively.

operating expenses during the three months ended June 30, 2023 remained consistent with

the three months ended June 30, 2022 at $6.0 million.

· Compression,

gathering and transportation costs decreased $0.3 million, primarily due to the decrease

in natural gas volumes.

· Production,

ad valorem and other taxes decreased $0.4 million during the three months ended June 30,

2023 compared to the three months ended June 30, 2022, due to the decrease in oil and

natural gas produced volumes.

· Development

expenses increased $0.2 million in the 2023 period due to drilling and completion costs for

drilling multiple new wells in the Permian area in the 2023 period.

For the three months ended June 30, 2023,

Oil sales decreased $0.8 million primarily due to lower realized prices, which caused oil sales to decrease by $3.7 million.

The decrease in oil sales due to lower realized prices was partially offset by a $2.9 million increase in oil sales due to increased sales

The average oil price received decreased 25% as a result of the corresponding decrease in the average NYMEX oil price for the

relevant production months.

Oil sales volumes increased 24% primarily because the cash receipts for previously detailed drilling projects

were finally converted to first revenues after a delay associated with the operator.

Natural gas sales decreased $2.3 million primarily due to lower realized prices.

The 3% increase in gas sales volumes in the 2023

period compared to the 2022 period increased revenues by $0.1 million;

however, the 49% decrease in realized gas prices caused revenues

to decrease by $2.4 million.

Lease operating expenses during the three months ended September 30, 2023 increased $1.8 million compared to the three months

ended September 30, 2022.

Approximately $1.1 million of the increase was attributable to a settlement between the Sponsor and one

of the operators of the Underlying Properties relating to a dispute with respect to certain lease operating expenses from 2018 and 2019

that the operator had mistakenly coded for Enduro instead of COERT.

In May 2023, COERT and the operator agreed to settle the dispute

at a discounted amount, resulting in an incremental lease operating expense adjustment of approximately $0.4 million per month from June 2023

through December 2023, after which no additional amounts relating to the disputed expenses will be owed to the operator.

Compression, gathering and transportation costs decreased $0.3 million, primarily due to the decrease in natural gas prices.

Production, ad valorem and other taxes decreased $0.3 million during the three months ended September 30, 2023 compared to the

three months ended September 30, 2022, due to the decrease in oil and natural gas prices.

Development expenses decreased $3.9 million in the 2023 period due to higher drilling and completion costs in the 2022 period, related

to the drilling of multiple new wells in the Permian area.

For the three months ended September 30, 2023,

the Trust withheld $0.4 million and paid $0.3 million for general and administrative expenses.

Expenses paid during the period primarily

consisted of fees for the preparation of the Trust’s monthly press releases, Trustee fees, and New York Stock Exchange listing

For the three months ended June 30, 2022, the Trust withheld $0.4 million and paid $0.2 million for general and administrative

Six Months Ended June 30, 2023 Compared to Six Months Ended

June 30, 2022

The Trust’s net profits income consists

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

Six Months Ended

consisted of fees for the preparation of the Trust’s monthly press releases, Trustee fees, and New York Stock Exchange listing fees.

For the three months ended September 30, 2022, the Trust withheld $0.4 million and paid $0.2 million for general and administrative

Nine Months Ended September 30, 2023 Compared to Nine Months

Ended September 30, 2022

The Trust’s net profits income consists of

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

Nine Months Ended

September 30,

Gross profits:

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Sponsor reserve release for capital expenditures

Trust general and administrative expenses and cash withheld for expenses

Trust general and administrative expenses and cash withheld for expenses net of interest income

Distributable income

The following table displays reported oil and

natural gas sales volumes and average prices from the Underlying Properties, representing the amounts included in the net profits calculation

for distributions paid during the six months ended June 30, 2023 and 2022:

Six Months Ended

The following table displays reported oil and natural

gas sales volumes and average prices from the Underlying Properties, representing the amounts included in the net profits calculation

for distributions paid during the nine months ended September 30, 2023 and 2022:

Nine Months Ended

September 30,

Underlying Properties Production Volumes:

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Average Prices:

Oil - NYMEX (applicable NPI period) ($/Bbl)

NYMEX (applicable NPI period) ($/Bbl)

Oil prices realized ($/Bbl)

Natural gas - NYMEX (applicable NPI period) ($/Mcf)

Natural gas –

NYMEX (applicable NPI period) ($/Mcf)

Natural gas prices realized ($/Mcf)

Net profits attributable to the Underlying Properties

for the six months ended June 30, 2023 were $7.8 million compared to $9.5 million for the six months ended June 30, 2022.

The $1.7 million decrease in net profits attributable to the Underlying Properties from the 2023 period to the 2022 period was primarily

due to the following items:

sales decreased $1.0 million due to lower sales volumes, which caused oil sales to decrease

by $2.2 million.

The decrease in oil sales due to lower sales volumes was partially

offset by a $1.2 million increase in oil sales due to increased realized prices.

oil price received increased 7% as a result of the corresponding increase in the average

NYMEX oil price for the relevant production months.

Oil sales volumes decreased 11% as a

result of natural production declines.

gas sales decreased $0.7 million due to lower sales volumes, which decreased natural gas

sales by $1.7 million, partially offset by higher realized prices, which increased natural

gas sales by $1.0 million.

The average natural gas price received in the six months

ended June 30, 2023 increased 17% compared to the six months ended June 30, 2022

due to an increase in the average NYMEX natural gas price.

Natural gas volumes decreased

22% primarily as a result of payment timing differences and natural production declines.

operating expenses increased $0.5 million, primarily attributable to the increased number

of producing wells in the six months ended June 30, 2023 compared to the six months

ended June 30, 2022.

· Compression,

gathering and transportation costs decreased $0.9 million, primarily due to the decrease

in natural gas volumes.

· Production,

ad valorem and other taxes decreased $0.8 million during the six months ended June 30,

2023 compared to the six months ended June 30, 2022, due to the decrease in oil and

natural gas produced volumes.

· Development

expenses increased $0.9 million due to drilling and completion costs for drilling multiple

new wells in the Permian and Haynesville areas.

During the six months ended June 30, 2023,

COERT released the remaining $1.0 million from the cash reserve for future development expenses it had established in 2022 through the

withholding of net profits otherwise payable to the Trust.

For the six months ended June 30, 2023, the

Trust withheld $0.8 million and paid $0.5 million for general and administrative expenses.

for the nine months ended September 30, 2023 were $11.4 million compared to $13.2 million for the nine months ended September 30,

The $1.8 million decrease in net profits attributable to the Underlying Properties from the 2022 period to the 2023 period

was primarily due to the following items:

Oil sales decreased $1.8 million primarily due to lower realized prices.

The average oil price received decreased 6% primarily due

to a 7% decrease in the average NYMEX oil price for the relevant production months.

Natural gas sales decreased by $1.4 million due to lower realized prices and by $1.7 million due to lower produced volumes, for a

total decline of $3.1 million compared to the 2022 period.

The average natural gas price received decreased 12% primarily due to an 8%

decrease in the average NYMEX natural gas price for the relevant production months.

Lease operating expenses increased $2.3 million in the nine months ended September 30, 2023 compared to the nine months ended

September 30, 2022.

Approximately $1.1 million of the increase was attributable to the lease operating expense settlement between

COERT and one of the operators of the Underlying Properties as discussed above under “—Three Months Ended September 30,

2023 Compared to Three Months Ended September 30, 2022.”

Compression, gathering and transportation costs decreased $1.2 million, primarily due to the decrease in natural gas volumes.

Production, ad valorem and other taxes decreased $1.1 million during the nine months ended September 30, 2023 compared to the

nine months ended September 30, 2022, due to the decrease in oil and natural gas produced volumes.

Development expenses decreased $2.9 million due to higher drilling and completion costs during the 2022 period, related to the drilling

of multiple new wells in the Permian and Haynesville areas.

During the nine months ended September 30,

2023, COERT released the remaining $1.0 million from the cash reserve for future development expenses it had established in 2022 through

the withholding of net profits otherwise payable to the Trust.

For the nine months ended September 30, 2023,

the Trust withheld $1.2 million and paid $0.8 million for general and administrative expenses.

Expenses paid during the period primarily

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listing fees.

For the six months ended June 30, 2022, the Trust withheld $0.9 million and paid $0.4 million for general and administrative

For the nine months ended September 30, 2022, the Trust withheld $1.3 million and paid $0.6 million for general and

administrative expenses.

Liquidity and Capital Resources

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future liabilities of the Trust.

In February 2022, the Trustee began withholding $37,833 from the funds otherwise available for

distribution each month to gradually build a cash reserve of approximately $2.3 million for the payment of future known, anticipated

or contingent expenses or liabilities of the Trust.

Commencing with the distribution to Trust unitholders payable in April 2023,

the Trustee has been withholding, and in the future intends to withhold, $50,000 from the funds otherwise available for distribution

each month to gradually build the reserve.

The Trustee may increase or decrease the targeted cash reserve 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

Cash held in reserve will be invested as required by the Trust Agreement.

Any cash reserved in excess of the amount necessary

to pay or provide for the payment of future known, anticipated or contingent expenses or liabilities eventually will be distributed to

Trust unitholders, together with interest earned on the funds.

As of June 30, 2023, the Trustee has withheld $666,053 toward this

cash reserve.

In February 2022, the Trustee began withholding $37,833 from the funds otherwise available for distribution

each month to gradually build a cash reserve of approximately $2.3 million for the payment of future known, anticipated or contingent

expenses or liabilities of the Trust.

Commencing with the distribution to Trust unitholders payable in April 2023, the Trustee has

been withholding, and in the future intends to withhold, $50,000 from the funds otherwise available for distribution each month to gradually

build the reserve.

The Trustee may increase or decrease the targeted cash reserve 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.

in reserve will be invested as required by the Trust Agreement.

Any cash reserved in excess of the amount necessary to pay or provide

for the payment of future known, anticipated or contingent expenses or liabilities eventually will be distributed to Trust unitholders,

together with interest earned on the funds.

As of September 30, 2023, the Trustee has withheld $841,386 toward this cash reserve.

If the Trustee determines that the cash on hand

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In addition, COERT has provided the Trust

with a $1.2 million letter of credit to be used by the Trust if its cash on hand (including available cash reserves) is insufficient

to pay ordinary course administrative expenses.

Further, if the Trust requires more than the $1.2 million under the letter of credit

to pay administrative expenses, COERT has agreed to loan funds to the Trust necessary to pay such expenses.

Any loan made by COERT to

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

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

If the Trust borrows

funds or draws on the letter of credit, no further distributions will be made to Trust unitholders until such amounts borrowed or drawn

with a $1.2 million letter of credit to be used by the Trust if its cash on hand (including available cash reserves) is insufficient to

pay ordinary course administrative expenses.

Further, if the Trust requires more than the $1.2 million under the letter of credit to pay

administrative expenses, COERT has agreed to loan funds to the Trust necessary to pay such expenses.

Any loan made by COERT to the Trust

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

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

If the Trust borrows funds

or draws on the letter of credit, no further distributions will be made to Trust unitholders until such amounts borrowed or drawn are

Except for the foregoing, the Trust has no source of liquidity or capital resources.

The Trustee has no current plans to

authorize the Trust to borrow any funds.

As of June 30, 2023 and December 31, 2022, the Trust had cash of $1,240,033 and $922,913,

The Trustee has no current plans to authorize

the Trust to borrow any funds.

As of September 30, 2023 and December 31, 2022, the Trust had cash of $1,332,263 and $922,913,

respectively, to be used towards future Trust expenses.

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

At June 30, 2023 and December 31, 2022, there was no outstanding

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

Cash held by the Trustee as a reserve against

future liabilities or for distribution at the next distribution date may be held in a noninterest-bearing account or may be invested

· interest-bearing

obligations of the United States government;

market funds that invest only in United States government securities;

agreements secured by interest-bearing obligations of the United States government;

certificates of deposit.

At September 30, 2023 and December 31, 2022, there was no

outstanding balance.

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

Cash held by the Trustee as a reserve against future

liabilities or for distribution at the next distribution date may be held in a noninterest-bearing account or may be invested in:

interest-bearing obligations of the United States government;

money market funds that invest only in United States government securities;

repurchase agreements secured by interest-bearing obligations of the United States government;

bank certificates of deposit.

The Trust pays the Trustee an annual administrative

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The Trust also is responsible for paying other expenses incurred as a result of being a publicly traded

entity, including costs associated with annual and quarterly reports to Trust unitholders, tax return and Form 1099 preparation

and distribution, NYSE listing fees, independent auditor fees and registrar and transfer agent fees.

entity, including costs associated with annual and quarterly reports to Trust unitholders, tax return and Form 1099 preparation and

distribution, NYSE listing fees, independent auditor fees and registrar and transfer agent fees.

The Trust does not have any transactions, arrangements

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The Trust has no off-balance sheet arrangements.

The Trust has not guaranteed the debt of any other party, nor does the Trust have any other arrangements or relationships with other

entities that could potentially result in unconsolidated debt, losses or contingent obligations.

The Trust has not guaranteed the debt of any other party, nor does the Trust have any other arrangements or relationships with other entities

that could potentially result in unconsolidated debt, losses or contingent obligations.

Critical Accounting Policies and Estimates

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2022 Annual Report on Form 10-K for additional information regarding the Trust’s critical accounting policies and estimates.

There were no material changes to the Trust’s critical accounting policies or estimates during the three months ended June 30,

There were no material changes to the Trust’s critical accounting policies or estimates during the three months ended September 30,

Subsequent Events

Distributions Paid or Declared

On July 14, 2023, a distribution of $0.012500

per unit, which was declared on June 16, 2023, was paid to Trust unitholders of record as of June 30, 2023.

On July 17, 2023, the Trust declared a distribution

of $0.053500 per unit to unitholders of record as of July 31, 2023.

The distribution will be paid to unitholders on August 14,

Quantitative and Qualitative Disclosures About Market

On October 13, 2023, a distribution of $0.003700

per unit, which was declared on September 18, 2023, was paid to Trust unitholders of record as of September 29, 2023.

On October 13, 2023, a special cash distribution

of $0.069670 per unit, which was declared on September 20, 2023, was paid to Trust unitholders of record as of October 2, 2023.

Please see “Overview—Sale of Divestiture Properties”

above for additional information regarding the special distribution.

On October 16, 2023, the Trust declared a

distribution of $0.006000 per unit to Trust unitholders of record as of September 29, 2023.

The distribution was paid to Trust unitholders

on November 13, 2023.

November 6, 2023, the Trust declared a special cash distribution of $0.077250 per unit to Trust unitholders of record as of November 16,

The distribution, which reflected the remaining 50% (net of the Indemnification Escrow Amount described in “Overview—Sale

of Divestiture Properties”

above) of the Trust’s share of the net proceeds from the sale of the Divestiture Properties, will

be paid to Trust unitholders on November 22, 2023.

Please see “Overview—Sale of Divestiture Properties”

additional information regarding the special distribution.

Quantitative and Qualitative Disclosures About Market Risk.

As a “smaller reporting company”

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

What changed 10-Q

Item 1. Financial Statements