What changed in this filing

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Item 2. Properties

2025-03-19 compared with 2024-03-22 · 113 added, 115 removed, 165 unchanged (58% of the section changed)

6 unchanged sentences

Samson Investment Company and ConocoPhillips Company in January 2011 and February 2011, respectively.

In August 2018,

the Sponsor purchased the Underlying Properties from Enduro and assumed all of Enduro’s obligations under the Trust Agreement

In August 2018, the

Sponsor purchased the Underlying Properties from Enduro and assumed all of Enduro’s obligations under the Trust Agreement

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

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As of December 31,

2023, the Sponsor held average working interests of approximately 19% and 15% and average net revenue interests of approximately 16%

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

The Underlying

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

Cawley, Gillespie & Associates, Inc.

(“Cawley Gillespie”), independent petroleum and geological engineers, estimated crude oil (including natural gas liquids)

and natural gas proved reserves of the Underlying Properties’

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

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

information becomes available.

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

the original estimates.

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

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

2024, the Sponsor held average working interests of approximately 19% and 15% and average net revenue interests of approximately 16% and

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

The Underlying Properties

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

Gillespie & Associates, Inc.

(“Cawley Gillespie”), independent petroleum and geological engineers, estimated

crude oil (including natural gas liquids) and natural gas proved reserves of the Underlying Properties’

full economic life and for

the Trust life as of December 31, 2024.

Numerous uncertainties are inherent in estimating reserve volumes and values, and the estimates

are subject to change as additional information becomes available.

The reserves actually recovered and the timing of production of the

reserves may vary significantly from the original estimates.

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

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

the Net Profits Interest.

The independent petroleum engineer’s report

as to the proved oil and natural gas reserves as of December 31, 2024 was prepared by Cawley Gillespie.

Cawley Gillespie, whose

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

The technical person

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

Profits Interest attributable to the Trust is W.

Cawley Gillespie, whose firm

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

The technical person at

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

Interest attributable to the Trust is W.

Todd Brooker.

Brooker has been a petroleum consultant for Cawley Gillespie

since 1992 and is currently the Senior Vice President.

Brooker has been a petroleum consultant for Cawley Gillespie since 1992

and is currently the Senior Vice President.

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

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

83462) and a graduate

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

concerning changes in net proved reserves attributable to the Trust, and the calculation of the standardized measure of the related discounted

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

The Sponsor has

not filed reserve estimates covering the Underlying Properties with any other federal authority or agency.

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reserve quantities and PV-10 attributable to the Trust and Underlying Properties as of December 31, 2024 and 2023:

Profits Interest

Trust Net Profits Interest

Underlying Properties

(in thousands)

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Proved Undeveloped

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

represents an approximate energy equivalent basis such that one Bbl of crude oil equals approximately

six Mcf of natural gas.

However, the value of oil and natural gas value and the value of

reserve volumes of oil and natural gas are often substantially different than the amount

implied by the Boe ratio.

is a non-GAAP financial measure and represents the present value of estimated future cash

inflows from proved crude oil and natural gas reserves, less future development and production

costs, discounted at 10% per annum to reflect timing of future cash inflows using the twelve-month

unweighted arithmetic average of the first-day-of-the-month commodity prices, after adjustment

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

of PV-10 is provided because it provides useful information to investors as it is widely

used by professional analysts and sophisticated investors when evaluating oil and gas companies.

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

of oil and natural gas reserves.

PV-10 is not intended to represent the current market value

of the estimated reserves of the Underlying Properties.

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

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

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

than the amount implied by the Boe ratio.

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

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

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

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

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

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

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

PV-10 is not intended

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

PV-10 differs from standardized measure

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

Please refer to the notes to the financial statements of the Trust included in this

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

Please refer to the notes to the financial

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

Reserve quantities and revenues for the Net Profits

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allocated to the Net Profits Interest.

Estimates of proved reserves were prepared in

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

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

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

Prices used in estimating reserves were as follows:

Estimates of proved reserves were prepared in accordance

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

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

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

in estimating reserves were as follows:

Oil (per Bbl)

1 unchanged sentence

Changes in Proved Undeveloped Reserves

the year ended December 31, 2023, proved undeveloped reserves of the Underlying Properties decreased 0.2 MMBoe primarily due to

the decrease in the estimated reserves for the booked, non-operated wells in Haynesville shale of Louisiana, partially offset

by the increase in the amount of booked, non-operated Wolfcamp shale wells in the Permian Basin.

The following is a summary of the changes

in quantities of proved undeveloped reserves for the Underlying Properties during the year ended December 31, 2023.

the year ended December 31, 2024, proved undeveloped reserves of the Underlying Properties decreased 0.2 MMBoe primarily due to the

decrease in the estimated reserves for the booked, non-operated wells in Haynesville shale of Louisiana, partially offset by the

increase in the amount of booked, non-operated Wolfcamp shale wells in the Permian Basin.

The following is a summary of the changes in

quantities of proved undeveloped reserves for the Underlying Properties during the year ended December 31, 2024.

Underlying Properties

Balance –

December 31, 2023

Revisions and

Revisions and Other

Balance –

December 31, 2024

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

(1) Reserves for natural gas liquids

are included as a component of oil reserves.

Producing Acreage and Well Counts

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Gross Wells (1)

Permian Basin

East Texas/North Louisiana

The Sponsor’s total producing wells include 2,682

non-operated wells.

(1) The Sponsor’s total producing

wells include 2,548 non-operated wells.

The following is a summary of the number of development

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

Year Ended December 31,

Permian Basin

1 unchanged sentence

Exploratory Wells:

Year Ended December 31,

East Texas/North Louisiana

Development Wells:

Exploratory Wells:

(1) Production

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

(1) Production of natural gas liquids

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

Major Producing Areas

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10,424 gross (2,840 net) acres in the East Texas/North Louisiana region across three fields:

the Elm Grove field, operated primarily

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

the Elm Grove field, operated primarily by

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

and the Kingston field, operated by EXCO Resources and Diversified

9 unchanged sentences

2024, 2023 and 2022.

Year Ended December 31,

Permian Basin

Oil Sales Volumes (Bbls)

Gas (1) Sales Volumes (Mcf)

Natural Gas (1) Sales Volumes (Mcf)

Total Sales Volumes (Boe)

5 unchanged sentences

Oil Sales Volumes (Bbls)

Gas (1) Sales Volumes (Mcf)

Natural Gas (1) Sales Volumes (Mcf)

Total Sales Volumes (Boe)

4 unchanged sentences

Oil Sales Volumes (Bbls)

Gas (1) Sales Volumes (Mcf)

Natural Gas (1) Sales Volumes (Mcf)

Total Sales Volumes (Boe)

3 unchanged sentences

Proved Reserves (MBoe)

(1) Production

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

(1) Production of natural gas liquids

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

Abandonment and Sale of Underlying Properties

10 unchanged sentences

any lease that accounts for no more than 0.25% of the total production from the Underlying Properties in the prior 12 months , 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 may be made only in connection with a sale by the Sponsor to a non-affiliate of the relevant

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

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.

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 may be made only in connection with a sale by the Sponsor to a non-affiliate of the relevant Underlying

Properties and are conditioned upon the Trust receiving an amount equal to the fair value to the Trust of such Net Profits Interest.

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

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To the extent that these burdens and obligations

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

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

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

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

The Sponsor’s interests in the oil and natural

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

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

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

predecessors in title;

variety of contractual obligations arising under operating agreements, farm-out agreements,

production sales contracts and other agreements that may affect the Underlying Properties

or their title;

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

liens securing unpaid suppliers and contractors and contractual liens under operating agreements

that are not yet delinquent or, if delinquent, are being contested in good faith by appropriate

unitization and communitization agreements, declarations and orders;

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

● conventional

rights of reassignment that obligate the Sponsor to reassign all or part of a property to

a third party if the Sponsor intends to release or abandon such property;

● preferential

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

or similar agreements;

● obligations

or duties affecting the Underlying Properties to any municipality or public authority with

respect to any franchise, grant, license or permit, and all applicable laws, rules, regulations

and orders of any governmental authority;

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

the Underlying Properties and also the interests held therein, including the Sponsor’s

interests and the Net Profits Interest.

The Sponsor has informed the Trustee that the

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

for similar properties.

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

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

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

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

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

agreements that may affect the Underlying Properties or their title;

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

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

faith by appropriate proceedings;

· pooling, unitization and communitization agreements, declarations and orders;

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

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

intends to release or abandon such property;

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

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

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

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

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

The Sponsor has informed the Trustee that the Sponsor

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

similar properties.

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

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

Interest or its value.

To give third parties notice of the Net Profits

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

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

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

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

law to place third parties on notice of the Conveyance.

In a bankruptcy of the Sponsor, to the extent

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

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

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

See “Risk Factors—Financial Risks—In

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

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

New Mexico”

In a bankruptcy of the Sponsor, to the extent Louisiana

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

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

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

See “Risk Factors—Financial Risks—In the event of

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

be treated as an unsecured creditor with respect to the Net Profits Interest attributable to properties in Louisiana and New Mexico”

in Part I, Item 1A of this Form 10-K.

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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 2. Properties