What changed in this filing

/stocks — the workspaceLOADING

Item 5. Market for Registrant’s Common Equity

2025-03-19 compared with 2024-03-22 · 259 added, 272 removed, 217 unchanged (71% of the section changed)

Market for Registrant’s

Common Equity, Related Unitholder Matters and Issuer Purchases of Equity Securities.

Market for Registrant’s Common Equity, Related Unitholder Matters and Issuer Purchases of Equity Securities.

Trust Units trade on the New York Stock Exchange under the symbol “PVL.”

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Distributions

Each 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

Each 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

incurred expenses for that month.

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

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

monthly distributions payable on or before the tenth business day after the record date (or the next succeeding business day).

information on distributions to Trust unitholders, see Note 5 of the Notes to Financial Statements in Part II, Item 8 of this

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

distributions payable on or before the tenth business day after the record date (or the next succeeding business day).

For further information

on distributions to Trust unitholders, see Note 5 of the Notes to Financial Statements in Part II, Item 8 of this Form 10-K.

Equity Compensation Plans

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Purchases of Equity Securities

There were no purchases of Trust Units by the

Trust or any affiliated purchaser during the fourth quarter of 2023.

Trustee’s Discussion and

Analysis of Financial Condition and Results of Operations.

There were no purchases of Trust Units by the Trust

or any affiliated purchaser during the fourth quarter of 2024.

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

This discussion contains forward-looking statements.

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the last business day of each calendar month) on or before the tenth business day after the record date.

The Net Profits Interest is

entitled to a share of the profits from and after July 1, 2011 attributable to production occurring on or after June 1, 2011.

The amount of Trust revenues and cash distributions to Trust unitholders depends 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.

The Net Profits Interest is entitled

to a share of the profits from and after July 1, 2011 attributable to production occurring on or after June 1, 2011.

of Trust revenues and cash distributions to Trust unitholders depends on, among other things:

· 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

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The average NYMEX oil and natural gas prices experienced

significant volatility in 2023, with the average NYMEX oil price declining from $94.57 per Bbl in calendar year 2022 to $77.65 per Bbl

in calendar year 2023, a decline of 18%.

Meanwhile, the price range varied from a low of $66.74 per Bbl in March 2023 to a high

of $93.68 per Bbl in September 2023, before declining during the fourth quarter in response to increasing conflict in the Middle

Natural gas prices faced even greater challenges in 2023 after seeing some of the highest prices in prior years in 2022.

NYMEX natural gas price declined from $6.41 per MMBtu in calendar year 2022 to $2.54 per MMBtu in calendar year 2023, a decline of 60%.

Prices for natural gas experienced similar volatility, ranging from a low of $1.77 per MMBtu in June 2023 to a high of $3.77 per

MMBtu in January 2023.

The year-over-year decline in commodity prices also drove a significant reduction in third-party operator

drilling activity on the Underlying Properties, which led to a 45% decrease in development expenses for the production months of 2023

compared to 2022.

The Sponsor believes that the outlook for the

oil and gas industry remains mixed, with oil prices having ended 2023 within a range consistent with prior years, but with natural gas

prices currently facing levels generally below operator-targeted forward prices for capital deployment.

In addition, mergers and acquisitions

have continued to change the makeup of the companies deploying capital in the sector.

As larger public companies continue to acquire

smaller public companies and private operators, these larger companies are likely to react differently to commodity price volatility

than smaller operators have in historical cycles.

This merger and acquisition activity has also affected the operators of the Underlying

Properties, with several of the largest and/or most active operators for the Underlying Properties announcing merger events in 2023.

Nevertheless, the capital spending activity or operating performance for the Underlying Properties under new third-party operatorship

in the future may not be consistent with such activity or performance experienced under previous third-party operators in prior years.

discussed further under “—Sale of 2023 Divestiture Properties”

below, the Sponsor leveraged the volatility in commodity

prices to negotiate and subsequently close the sale of certain acreage and associated production in the Permian Basin that constituted

part of the Underlying Properties , generating $0.146920 per Trust Unit of distributable proceeds from properties that in the prior

three years had generated cumulative net profits of $0.00831 per Trust Unit.

Given the commodity price volatility as well as

the recent merger activity in the industry, the operators of the Underlying Properties continue to evaluate planned capital expenditures

Based on currently available information, the Sponsor anticipates 2024 capital expenditures on the Underlying Properties

to range from $5.0 million to $9.0 million, or $4.0 million to $7.2 million net to the Trust’s 80% Net Profits Interest.

This would represent a decrease from 2023 levels, partly due to lower projected natural gas prices, which could reduce capital activity

on the Haynesville area of the Underlying Properties, but somewhat offset by continued activity strength in the portion of the Underlying

Properties located in the Permian region.

The expected range is also wider compared to 2023 given the volatility and recent third-party

operator merger activity.

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

expenditures as they come due.

In addition to continued capital expenditure participation,

the Sponsor believes there could be further opportunity in 2024 for prospective divestitures, as operators of some of the Underlying

Properties look to consolidate non-operated interests and acreage given recent merger and acquisition activity in the industry.

continued volatility in 2024, with average oil prices relatively unchanged year-over-year but seeing lower highs than the prior year.

The average NYMEX oil price declined from $77.61 per Bbl in calendar year 2023 to $75.79 per Bbl in calendar year 2024, a decline of 2%.

Meanwhile, the price range varied from high of $86.91 per Bbl in April 2024 to a low of $65.75 per Bbl in September 2024.

second half of 2024 saw more muted prices as the U.S.

general election approached and macroeconomic concerns remained.

Natural gas prices

faced continued volatility as well, but ended the year higher compared to crude oil’s lower trajectory over the same period.

average NYMEX natural gas price declined from $2.66 per MMBtu in calendar year 2023 to $2.41 per MMBtu in calendar year 2024, a decline

Prices for natural gas saw some of the lowest levels ever on an inflation-adjusted basis in 2024, ranging from a low of $1.56

per MMBtu in March 2024 to a high of $3.95 per MMBtu in late December 2024, near the high for the year and among the highest

levels since December 2022.

Although average commodity prices declined for the year amid continued volatility, recorded third-party

operator drilling activity on the Underlying Properties increased materially, which contributed to a 202% increase in development expenses

for the production months of 2024 compared to 2023.

The increase in activity despite lower average prices s due in part to the nature

of the operators of the Underlying Properties, with a substantial majority of the capital expenditures being directed by large, public

operators, most of which are investment grade rated with longer-term capital planning cycles.

COERT believes that the outlook for the oil and

gas industry remains mixed, with oil prices having ended 2024 at the low end of the $65-90 per Bbl range experienced since August 2022

and with geopolitical and tariff concerns weighing further on the outlook for global demand.

However, the price of natural gas, which

is more regional given historical export constraints, rallied at the end of 2024 given a colder winter compared to recent years and an

expected expanding U.S.

LNG export capacity in the coming years.

In addition, mergers and acquisitions have continued to change the makeup

of the companies deploying capital in the sector over the last several years.

As larger public companies continue to acquire smaller public

companies and private operators, COERT believes that these larger companies are likely to react differently to commodity price volatility

than smaller operators have in historical cycles, as evidenced by the material increase in capital expenditures on the Underlying Properties

in 2024 despite lower year-over-year average prices.

Nevertheless, the capital spending activity or operating performance for the Underlying

Properties under new third-party operatorship in the future may not be consistent with such activity or performance experienced under

previous third-party operators in prior years.

Although the estimated 2025 capital spending budgets for operators of the Underlying Properties

are still to be determined, COERT has advised the Trustee that early indications suggest 2025 will see lower total spending than the elevated

levels of 2024.

Given forward commodity prices, changing ownership

between some of the operators of the Underlying Properties as well as an uncertain macroeconomic outlook, planned capital expenditures

during 2025 remain somewhat uncertain.

Based on currently available information, COERT anticipates 2025 capital expenditures on the Underlying

Properties to range from $7.0 million to $13.0 million, or $5.6 million to $10.4 million net to the Trust’s 80% Net Profits

This would represent a decrease from 2024 levels, partly due to lower projected oil prices, somewhat offset by possibly sustained

activity levels in the Haynesville area of the Underlying Properties given higher relative natural gas prices.

COERT indicates that it

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

addition to continued capital expenditure participation, COERT believes there could be further opportunity in 2025 for prospective divestitures

of some or all of the Underlying Properties, as operators of some of the Underlying Properties look to consolidate non-operated interests

and acreage given recent merger and acquisition activity in the industry.

Capex Drilling Activity Update

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

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

the Underlying Properties.

Working Interest

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

(in thousands)

Large Cap E&P 1

D&C New Drills

2 Producing, Awaiting First Revenues;

Large Cap E&P 2

Conventional Permian

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D&C New Drills

PE-Backed Private 1

D&C New Drills

6 Producing Awaiting Revenues

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Large Cap E&P 3

New Drills / Workovers

D&C New Drills

19 Pre Drills

Large Major Cap E&P 1

D&C New Drills

3 Drilling In-Process

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Sale of 2023 Divestiture Properties

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

“2023 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 2023

Divestiture Properties.

On August 9, 2023, the Sponsor completed the sale of the 2023 Divestiture Properties, and the Trustee, on

behalf of the Trust, reconveyed, terminated and released to the Sponsor the Net Profits Interest with respect to the 2023 Divestiture

The total proceeds received by the Sponsor from the sale of the 2023 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.

On September 20, 2023, the Trust announced

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

record on October 2, 2023, reflecting 50% of the Trust’s share of the net proceeds, after accounting for the Indemnification

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 “2023 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.

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 2023 Divestiture Properties.

On August 9, 2023, the Sponsor completed the sale of the 2023

Divestiture Properties, and the Trustee, on behalf of the Trust, reconveyed, terminated and released to the Sponsor the Net Profits Interest

with respect to the 2023 Divestiture Properties.

The total proceeds received by the Sponsor from the sale of the 2023 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.

September 20, 2023, the Trust announced a special cash distribution to Trust unitholders of $0.069670 per Trust Unit, payable on

October 13, 2023 to Trust 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.

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 Trust unitholders.

On November 6, 2023, the Trust announced

a special cash distribution to Trust unitholders of $0.077250 per Trust Unit, payable on November 22, 2023 to Trust 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).

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 Trust unitholders.

On November 6, 2023, the Trust announced a special cash distribution to Trust

unitholders of $0.077250 per Trust Unit, payable on November 22, 2023 to Trust 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 Trust unitholders.

On March 17, 2025, the Trust announced a special cash distribution to Trust unitholders of $0.008548 per Trust Unit,

payable on April 14, 2025 to Trust unitholders of record on March 31, 2025, reflecting the release of the Indemnification Escrow

Amount, together with interest, for a total of $282,072.

Results of Operations

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the distributions paid during the years ended December 31, 2024 and 2023.

Underlying Properties

Sales Volumes

Underlying Properties Sales Volumes

Average Price

Month of Distribution

Total—2024 (1)

Underlying Properties

Sales Volumes

Total—2023 (2)

(1) The year ended December 31, 2023 does not include sales volumes

for December as the Trust did not make a distribution in that month, as the Net Profits

Interest calculation for the corresponding production period was negative.

Computation of Income from Net Profits Interest Received by

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 newly issued

The Net Profits Interest entitles the Trust to receive 80% of the net profits from the sale and production of oil and natural

gas attributable to the Underlying Properties that are produced during the term of the Conveyance, which commenced on July 1, 2011.

The Trust’s Income from Net Profits Interest consists of monthly net profits attributable to the Net Profits Interest.

income for the years ended December 31, 2023 and 2022 were determined as shown in the following table:

(1) The table for the year ended December 31, 2024 does not separately display sales volumes for January, March, April and July because

the Trust did not pay a distribution with respect to those months, as the net profits interest calculation for each such period was negative.

(2) The year ended December 31, 2023 does not include sales volumes for December as the Trust did not make a distribution in

that month, as the Net Profits Interest calculation for the corresponding production period was negative.

Computation of Income from Net Profits Interest Received by the

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 newly issued Trust

The Net Profits Interest entitles the Trust to receive 80% of the net profits from the sale and production of oil and natural gas

attributable to the Underlying Properties that are produced during the term of the Conveyance, which commenced on July 1, 2011.

Trust’s Income from Net Profits Interest consists of monthly net profits attributable to the Net Profits Interest.

Net profits income

for the years ended December 31, 2024 and 2023 were determined as shown in the following table:

Year Ended December 31,

Gross profits:

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Development expenses

Gross proceeds

from sale/lease of undeveloped acreage

Net profits attributable to Underlying

Gross proceeds from sale/lease of undeveloped acreage

Net profits attributable to Underlying Properties

Percentage allocable to Net Profits Interest

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Capex Reserve –

Release (Holdback) for anticipated 2022-2023

capital expenditures

Trust general and administrative

expenses and cash withheld for expenses

Distributable income generated by properties

prior to divestiture

Release (Holdback) for anticipated 2023-2024 capital expenditures

COERT Loan Repayment

Trust general and administrative expenses and cash withheld for expenses

Distributable income generated by properties prior to divestiture

Income from sale of Net Profits Interest

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As reflected in the Net Profits Interest calculation

for November 2023, direct operating and development expenses exceeded revenues, thereby causing net profits attributable to the

Underlying Properties to be negative and resulting in a Net Profits Interest shortfall of approximately $1.2 million.

there was no distribution to Trust unitholders in the month of December 2023.

The shortfall of $1.2 million was carried forward

to be deducted from future net profits to be generated by the Underlying Properties, and the corresponding revenues and associated direct

operating and development expenses are excluded from the calculation of distributable income for the year ended December 31, 2023

detailed in the table above as well as the related sales volumes detailed below.

As a result, only eleven months of results are included

in the results for the year ended December 31, 2023.

for November 2023, direct operating and development expenses exceeded revenues, thereby causing net profits attributable to the Underlying

Properties to be negative and resulting in a Net Profits Interest shortfall of approximately $1.2 million.

As a result, there was

no distribution to Trust unitholders in the month of December 2023.

The shortfall of $1.2 million was carried forward to be deducted

from future net profits to be generated by the Underlying Properties, and the corresponding revenues and associated direct operating and

development expenses are excluded from the calculation of distributable income for the year ended December 31, 2023 detailed in the

table above as well as the related sales volumes detailed below.

As a result, only eleven months of results are included in the results

for the year ended December 31, 2023.

In 2024, net profits from

the Underlying Properties were positive, which eliminated the cumulative Net Profits Interest shortfall of $1.2 million and the cumulative

outstanding Sponsor advances to the Trust of $0.5 million.

Since the Net Profits Interest shortfall was eliminated in 2024, revenues

and the associated direct operating and development expenses for the last month of 2023 are included in the calculation of distributable

income detailed in the table above for the year ended December 31, 2024 and the related sales volumes are reflected in the table

The following table displays oil and natural gas

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distributions paid during the years ended December 31, 2024 and 2023:

Year Ended December 31,

Underlying Properties Sales Volumes:

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Average Prices:

NYMEX (applicable NPI period)

Oil prices realized

NYMEX (applicable NPI period) ($/Bbl)

Oil prices realized ($/Bbl)

Natural gas –

NYMEX (applicable

NPI period) ($/Mcf)

prices realized ($/Mcf)

NYMEX (applicable NPI period) ($/Mcf)

Natural gas prices realized ($/Mcf)

Years Ended December 31, 2024 and 2023

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for the year ended December 31, 2024 are calculated from the following:

sales related to oil produced from the Underlying Properties primarily from September 2022

through July 2023;

gas sales related to natural gas produced from the Underlying Properties primarily from August 2022

through June 2023;

operating and development expenses related to expenses and capital incurred primarily from

October 2022 to August 2023.

Net profits attributable to the Underlying Properties

for the year ended December 31, 2023 were $12.0 million compared to $20.2 million for the year ended December 31, 2022.

As discussed in “—Computation of Income from Net Profits Interest Received by the Trust”

above, no distribution was

made to Trust unitholders in December 2023 due to the Net Profits Interest shortfall.

Accordingly, under the modified cash basis

of accounting, the oil and natural gas sales, direct operating expenses and development expenses attributable to that period was not

included and instead will be included in the Trust’s results once the shortfall is recouped.

Therefore, several variances between

the periods are due to the inclusion of only eleven months of results in the year ended December 31, 2023 compared to twelve months

in the year ended December 31, 2022.

The $8.2 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 $10.0 million, primarily due to lower sales volumes, which decreased oil

sales by $5.1 million.

Oil sales volumes decreased 11% primarily due to the inclusion of

only eleven months of oil sales volumes in the year ended December 31, 2023.

The remaining

$4.9 million decrease in oil sales was due to lower realized sales prices.

The average oil

price received decreased 12% as a result of the corresponding decrease in the average NYMEX

oil price for the relevant production months.

gas sales decreased $6.9 million due to lower realized sales prices, which decreased natural

gas sales by $3.9 million.

The average natural gas price received decreased 27% as a result

of the corresponding decreases in the average NYMEX gas price for the relevant production

The remaining $3.0 million decrease in natural gas sales was due to lower sales volumes.

Natural gas sales volumes decreased 17% primarily due to the inclusion of only eleven months

of natural gas sales volumes in the year ended December 31, 2023.

operating expenses during the year ended December 31, 2023 were $22.1 million compared

to $21.9 million for the year ended December 31, 2022.

Approximately $1.4 million of

the 2023 expenses were attributable to a settlement between COERT 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

In May 2023, the Sponsor 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 expenses decreased from $3.3 million in 2022 to $1.7 million

in 2023 due to lower sales volumes and the inclusion of only eleven months of expenses in

the year ended December 31, 2023.

● Production,

ad valorem and other taxes decreased $1.8 million in 2023 compared to 2022, primarily due

to the decrease in realized sales prices, and lower sales volumes.

● Development

expenses decreased $5.4 million due to drilling and completion costs for drilling multiple

new wells in the Permian and Haynesville areas during 2022.

During the year ended December 31, 2022,

the Sponsor withheld from the net profits otherwise payable to the Trust a net aggregate of $1.0 million for the establishment of a cash

reserve for approved, future development expenses.

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

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

released as an incremental cash distribution in a future period.

This cash reserve for future development was fully released to the Trust

during the year ended 2023.

The Trust withheld $1.3 million and paid $0.9

million for general and administrative expenses during the year ended December 31, 2023.

Expenses paid during the period primarily

consisted of fees for the preparation of 2022 tax information for Trust unitholders, preparation of the Trust’s 2022 reserve report

and Annual Report on Form 10-K, 2022 financial statement audit fees, preparation of the Trust’s 2023 monthly press releases

and Quarterly Reports on Form 10-Q, Trustee fees, and New York Stock Exchange listing fees.

· oil sales related to oil produced from the Underlying Properties primarily from August 2023 through August 2024;

· natural gas sales related to natural gas produced from the Underlying Properties primarily from July 2023 through July 2024;

· direct operating and development expenses related to expenses and capital incurred primarily from September 2023 to September 2024.

profits attributable to the Underlying Properties for the year ended December 31, 2024 were $6.7 million compared to $12.0 million

for the year ended December 31, 2023.

2022, the Trust withheld $1.7 million and paid $0.8 million for general and administrative expenses.

As discussed in “—Computation of Income from Net Profits Interest Received

by the Trust”

above, no distribution was made to Trust unitholders in December 2023 due to the Net Profits Interest shortfall.

Accordingly, under the modified cash basis of accounting, the oil and natural gas sales, direct operating expenses and development expenses

attributable to the corresponding production period were excluded from the calculation of distributable income for the year ended December 31,

2023 and instead were included in the Trust’s results for the year ended December 31, 2024, once the shortfall was recouped.

Therefore, several variances between the periods are due to the inclusion of thirteen months of results in the year ended December 31,

2024 compared to eleven months in the year ended December 31, 2023.

The $5.3 million decrease in net profits attributable to the

Underlying Properties from the 2023 period to the 2024 period was primarily due to the following items:

· Oil sales increased $15.6 million, primarily due to an increase in produced volumes, which increased revenues by $15.4 million.

increase was primarily due to the several new Permian wells that either turned to sales or completed title work and thereby allowed production

attributable to prior periods to be released by the operators of the Underlying Properties.

Realized oil sales prices increased by less

than 1% in the 2024 period compared to the 2023 period, which increased revenues by $0.2 million.

· Natural gas sales increased $0.8 million due to higher produced sales volumes, which increased natural gas sales by $10.6 million.

The 46% decrease in realized prices resulted in a $9.6 million decrease in natural gas sales for the year ended December 31, 2024

compared to 2023.

· Lease operating expenses during the year ended December 31, 2024 were $26.8 million compared to $22.1 million during the year

ended December 31, 2023, an increase of $4.7 million.

Approximately $1.4 million of the 2023 expenses and approximately $1.4 million

of the 2024 expenses were attributable to a settlement between COERT 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

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.

The remaining increase in lease operating expenses in 2024 was

primarily due to several new drilled wells that came online during the year.

· Compression, gathering and transportation expenses increased from $1.7 million in 2023 to $3.8 million in 2024 due to higher

sales volumes and the inclusion of thirteen months of expenses in the year ended December 31, 2024.

· Production, ad valorem and other taxes increased $1.2 million in 2024 compared to 2023, primarily due to the increased produced volumes.

· Development expenses increased $13.6 million due to several drilling and completion costs for drilling multiple new wells in

the Permian and Haynesville areas during 2024.

During the year ended December 31, 2023, COERT

fully released the total cash reserve of $1.0 million that it had previously established for approved, future development expenses.

the year ended December 31, 2024, the Sponsor withheld from the net profits otherwise payable to the Trust a net aggregate total

of $1.0 million for the establishment of a cash reserve for approved, future development expenses.

This reserve was intended to fund an

expected increase in development expenses;

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

changes, amounts reserved but unspent would be released as an incremental cash distribution in a future period.

This cash reserve for

future development was fully released to the Trust in early 2025.

The Trust withheld $1.6 million and paid $1.0 million

for general and administrative expenses during the year ended December 31, 2024.

Expenses paid during the period primarily consisted

of fees for the preparation of 2023 tax information for Trust unitholders, preparation of the Trust’s 2023 reserve report and Annual

Report on Form 10-K, 2023 financial statement audit fees, preparation of the Trust’s 2024 monthly press releases and Quarterly

Reports on Form 10-Q, Trustee fees, and New York Stock Exchange listing fees.

For the year ended December 31, 2023, the Trust

withheld $1.3 million and paid $0.9 million for general and administrative expenses.

Liquidity and Capital Resources

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

In November 2021, the Trustee notified the

Sponsor of the Trustee’s intent to build a cash reserve for the payment of future known, anticipated or contingent expenses or

liabilities of the Trust.

From February 2022 through March 2023, the Trustee withheld $37,833, and commencing with the distribution

to Trust unitholders paid in April 2023 has been withholding and, in the future, intends to withhold $50,000, from the funds otherwise

available for distribution each month to gradually build a cash reserve of approximately $2.3 million.

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.

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.

of December 31, 2023, this cash reserve totaled $941,386.

In November 2021, the Trustee notified COERT

of the Trustee’s intent to build a cash reserve for the payment of future known, anticipated or contingent expenses or liabilities

of the Trust.

From February 2022 through March 2023, the Trustee withheld $37,833, and commencing with the distribution to Trust

unitholders paid in April 2023 has been withholding and, in the future, intends to withhold $50,000, from the funds otherwise available

for distribution each month to gradually build a cash reserve of approximately $2.3 million.

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.

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 December 31,

2024, this cash reserve totaled $1,241,386.

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

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thereof, although none of the Trustee, the Delaware Trustee or any affiliate thereof intends to lend funds to the Trust.

may also cause the Trust to mortgage its assets to secure payment of the indebtedness.

The Trustee may

also cause the Trust to mortgage its assets to secure payment of the indebtedness.

The terms of such indebtedness and security interest,

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which such entity would grant to a similarly situated commercial customer with whom it did not have a fiduciary relationship.

the Sponsor 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

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

Any loan made by the Sponsor 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 the Sponsor than those that would be obtained in an arm’s length transaction between the Sponsor 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 repaid.

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

The Trustee has no current plans to authorize the Trust to borrow money other than Sponsor advances to pay the Trust’s

monthly operating expenses.

At December 31, 2023 and 2022, the Trust held cash reserves of $1,394,697 and $922,913, respectively,

for future Trust expenses.

Since its formation, the Trust has not borrowed any funds other than Sponsor advances to pay the Trust’s

monthly operating expenses and no amounts have been drawn on the letter of credit.

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

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 repaid.

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

has no current plans to authorize the Trust to borrow money other than Sponsor advances to pay the Trust’s monthly operating expenses.

At December 31, 2024 and 2023, the Trust held cash reserves of $2,193,787 and $1,394,697, respectively, for future Trust expenses.

Since its formation, the Trust has not borrowed any funds other than Sponsor advances to pay the Trust’s monthly operating expenses

and no amounts have been drawn on the letter of credit.

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

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Assets, Liabilities and Trust Corpus until repaid.

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.

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.

Sponsor has not entered into any hedge contracts relating to oil and natural gas volumes produced from the Underlying Properties,

attributable to the Net Profits Interest for the years ended December 31, 2024 or 2023, and the terms of the Conveyance prohibit

the Sponsor from entering into new hedging arrangements burdening the Trust.

COERT from entering into new hedging arrangements burdening the Trust.

The Trust pays the Trustee an administrative fee

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The Trust also incurs, either directly or as a reimbursement

to the Trustee, legal, accounting, tax and engineering fees, printing costs and other expenses that are deducted by the Trust before

distributions are made to Trust unitholders.

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.

to the Trustee, legal, accounting, tax and engineering fees, printing costs and other expenses that are deducted by the Trust before distributions

are made to Trust unitholders.

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.

The Trust does not have any transactions, arrangements

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New Accounting Pronouncements

As the Trust’s financial statements are

prepared on the modified cash basis, most accounting pronouncements are not applicable to the Trust’s financial statements.

new accounting pronouncements have been adopted or issued that would impact the financial statements of the Trust.

As the Trust’s financial statements are prepared

on the modified cash basis, most accounting pronouncements are not applicable to the Trust’s financial statements.

No new accounting

pronouncements have been adopted or issued that would impact the financial statements of the Trust.

Critical Accounting Policies and Estimates

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Net Profits Interest calculation includes oil and natural gas revenues received.

Monthly operating expenses and capital expenditures

represent incurred expenses, and as a result, represent accrued expenses as well as expenses paid during the period.

Monthly operating expenses and capital expenditures represent

incurred expenses, and as a result, represent accrued expenses as well as expenses paid during the period.

The financial statements of the Trust are prepared

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(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

(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”);

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

While these statements differ

from financial statements prepared in accordance with GAAP, the modified cash basis of reporting revenues, expenses, and distributions

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

While these statements differ from

financial statements prepared in accordance with GAAP, the modified cash basis of reporting revenues, expenses, and distributions is considered

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

This comprehensive basis of accounting other than

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Under this disclosure, future cash inflows are computed by applying the average prices during

the 12-month period prior to fiscal year-end, determined as an unweighted arithmetic average of the first-day-of-the-month benchmark

price for each month within such period, unless prices are defined by contractual arrangements, excluding escalations based upon future

the 12-month period prior to fiscal year-end, determined as an unweighted arithmetic average of the first-day-of-the-month benchmark price

for each month within such period, unless prices are defined by contractual arrangements, excluding escalations based upon future conditions.

Future price changes are only considered to the extent provided by contractual arrangements in existence at year-end.

standardized measure of discounted future net cash flows is achieved by using a discount rate of 10% a year to reflect the timing of

future cash flows relating to proved oil and natural gas reserves.

Changes in any of these assumptions, including consideration of other

factors, could have a significant impact on the standardized measure.

The standardized measure does not necessarily result in an estimate

of the current fair market value of proved reserves.

The standardized

measure of discounted future net cash flows is achieved by using a discount rate of 10% a year to reflect the timing of future cash flows

relating to proved oil and natural gas reserves.

Changes in any of these assumptions, including consideration of other factors, could

have a significant impact on the standardized measure.

The standardized measure does not necessarily result in an estimate of the current

fair market value of proved reserves.

of Net Profits Interest.

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of the Notes to Financial Statements in Part II, Item 8 of this

Quantitative and Qualitative

Disclosures About Market Risk.

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-K

Item 5. Market for Registrant’s Common Equity