What changed in this filing

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Item 1. Financial Statements

2025-05-15 compared with 2024-11-14 · 198 added, 318 removed, 412 unchanged (56% of the section changed)

2 unchanged sentences

Statements of Assets, Liabilities and Trust

September 30,

Cash and cash equivalents

1 unchanged sentence

LIABILITIES AND TRUST CORPUS

Advances from Sponsor

Total liabilities

Trust corpus (33,000,000 units issued and outstanding)

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PERMIANVILLE ROYALTY TRUST

Statements of Distributable

Three Months Ended September 30,

Nine Months Ended September 30,

Income from net profits interest

Income from sale/lease of assets

Statements of Distributable Income

Three Months Ended March 31,

Interest and investment income

General and administrative expenses

Cash reserves withheld for Trust expenses

Cash reserves used for Trust expenses

Distributable income

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Statements of Changes in Trust Corpus

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Trust corpus, beginning of period

Cash reserves withheld for Trust expenses

Distributable income

Distributions to unitholders

Amortization of net profits interest

1 unchanged sentence

Distributable income per unit (33,000,000 units)

The accompanying notes are

an integral part of these financial statements.

PERMIANVILLE ROYALTY

The accompanying notes are an integral part

of these financial statements.

PERMIANVILLE ROYALTY TRUST

NOTES TO FINANCIAL STATEMENTS

TRUST ORGANIZATION AND PROVISIONS

TRUST ORGANIZATION AND

Permianville Royalty Trust (the “Trust”),

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to which Enduro and the Trustee were parties.

As of September 30, 2024, the Sponsor owned 7,363,961 Trust Units, or 22% of the issued

and outstanding Trust Units.

As of March 31, 2025, 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

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(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;

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

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passage of time;

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

however, 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;

PERMIANVILLE ROYALTY

NOTES TO FINANCIAL STATEMENTS

the annual cash proceeds received by the Trust attributable to the Net Profits Interest are less than $2 million for each of any two

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Corpus as of December 31, 2024, which has been derived from audited financial statements, and the unaudited interim financial statements

as of September 30, 2024 and for the three and nine months ended September 30, 2024 and 2023 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, 2023 (the “2023 Annual Report on Form 10-K”).

as of March 31, 2025 and for the three months ended March 31, 2025 and 2024 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, 2024 (the “2024 Annual Report on Form 10-K”).

In the opinion of the Trustee, the accompanying

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directly to the Trust corpus;

PERMIANVILLE ROYALTY

NOTES TO FINANCIAL STATEMENTS

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

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Any impairment is a direct charge to the Trust Corpus.

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 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;

The 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 with GAAP;

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;

and impairment is charged directly to the trust corpus.

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.

While these statements differ from financial statements

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

to the Trust unitholders are based on net cash receipts.

This comprehensive basis of accounting other than

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Statements of Royalty Trusts .

NET PROFITS INTEREST IN OIL AND NATURAL GAS PROPERTIES

NET PROFITS INTEREST

IN OIL AND NATURAL GAS PROPERTIES

The Net Profits Interest in oil and natural gas

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income of the Trust.

Accumulated amortization as of September 30, 2024 and December 31, 2023 was $309,327,359 and $302,693,874,

respectively.

Accumulated amortization as of March 31, 2025 and December 31, 2024 was $312,235,862 and $311,034,905, respectively.

The Net Profits Interest is periodically assessed

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While the Trust did not record an impairment during the three

and nine months ended September 30, 2024 or 2023, 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.

months ended March 31, 2025, 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

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the Trust rather than when distributed by the Trust.

PERMIANVILLE ROYALTY

NOTES TO FINANCIAL STATEMENTS

The deductions of the Trust consist of severance

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

PERMIANVILLE ROYALTY

NOTES TO FINANCIAL STATEMENTS

DISTRIBUTIONS TO UNITHOLDERS

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record date (generally the last business day of each calendar month) and are payable on or before the 10th business day after the record

The following table provides information regarding

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

Declaration Date

Nine Months Ended September 30, 2024:

July 18, 2024

July 31, 2024

August 14, 2024

August 16, 2024

August 30, 2024

September 16, 2024

Year to Date –

Nine Months Ended September 30, 2023:

December 16, 2022

December 30, 2022

January 17, 2023

January 18, 2023

January 31, 2023

February 14, 2023

February 17, 2023

February 28, 2023

March 13, 2023

March 16, 2023

March 31, 2023

April 14, 2023

April 17, 2023

April 28, 2023

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 –

the first six months of 2024, the Net Profits Interest generated positive income for several of the months in the period, which

reduced the cumulative Net Profits Interest shortfall of $1.2 million that existed as of December 31, 2023;

however, because direct

operating and development expenses exceeded revenues in March and April 2024, the Net Profits Interest shortfall was $3.9 million

as of June 30, 2024.

During the three months ended September 30, 2024, the Net Profits Interest generated positive income, which

eliminated the cumulative outstanding Net Profits Interest shortfall of $3.9 million that existed as of June 30, 2024.

In July 2024,

the remaining amount of the shortfall and advances to the Trust were fully repaid, resulting in a distribution to the unitholders in August 2024

and September 2024.

There was no Net Profits Interest shortfall as of September 30, 2024.

The Trust did not make any regular monthly distributions

to Trust unitholders during the three months ended March 31, 2025 or 2024 due to the existence of a Net Profits Interest shortfall during

During the three months ended March 31, 2025, direct

operating and development expenses exceeded cash receipts, leading to a shortfall of approximately $1.4 million as of March

31, 2025, which will be carried forward to be deducted from future net profits generated by the Underlying Properties.

As a result, there

were no net profits reported or distributed in the first three months of 2025.

During the three months ended March 31, 2024, the

Net Profits Interest generated positive income for the first two months in the period, which eliminated the cumulative Net Profits Interest

shortfall of $1.2 million that existed as of December 31, 2023.

In March 2024, however, direct operating and development expenses exceeded

revenues, thereby causing net profits attributable to the Underlying Properties to be negative and resulting in an approximately $1.2

million Net Profits Interest shortfall as of March 31, 2024, which was carried forward to be deducted from future net profits generated

by the Underlying Properties.

As a result, there were no net profits reported or distributed in the first three months of 2024.

On March 17, 2025, the Trustee declared a special

cash distribution of $0.008548 per Trust Unit, payable on April 14, 2025 to Trust unitholders of record on March 31, 2025.

cash distribution reflected the release of the $250,000 withheld from the net proceeds allocable to the Trust from the August 2023

sale by the Sponsor of certain oil and gas properties in the Permian Basin, which amount was intended to cover possible indemnification

obligations arising during the indemnification period following the closing of the sale.

Together with interest, the amount distributed

equated to $282,072.

Under the terms of the Trust Agreement, the Trust

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

During the three-

and nine-month periods ended September 30, 2024 and 2023, the Trust paid $50,000 and $150,000, respectively, to the Trustee and $0

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

SUBSEQUENT EVENTS

Distributions Paid or Declared

On September 16, 2024, the Trust declared

a distribution of $0.0140000 per unit to Trust unitholders of record as of September 30, 2024.

The distribution was paid to Trust

unitholders on October 15, 2024.

On October 18, 2024, the Trust declared a

distribution of $0.0150000 per unit to Trust unitholders of record as of October 31, 2024.

The distribution will be paid to Trust

unitholders on November 15, 2024.

During the three-month

periods ended March 31, 2025 and 2024, the Trust paid $50,000 to the Trustee and $2,010 and $0, respectively, to the Delaware Trustee

pursuant to the terms of the Trust Agreement.

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

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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,

2023 (the “2023 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 .

Condition and Results of Operations contained in the Trust’s Annual Report on Form 10-K for the year ended December 31, 2024 (the

“2024 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 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”

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.

Such statements may be influenced by factors

that could cause actual outcomes and results to differ materially from those projected.

Such expectations may not prove to have been correct.

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

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The following important factors, in addition to those

discussed elsewhere in this Form 10-Q, in the Trust’s 2023 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:

discussed elsewhere in this Form 10-Q, in the Trust’s 2024 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 occurrence or threat of epidemic or pandemic diseases or other public health event or any government response to such occurrence

the impact of geopolitical developments and tensions, war and uncertainty involving or in the geographical region of oil producing

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political or economic responses and counter-responses or otherwise by various global actors or the general effect on the global economy);

global economic conditions, such as a general slowdown in the global economy, supply chain disruptions, inflationary pressures, currency

fluctuations, changes in interest rates, and instability of financial institutions;

global economic conditions, such as a general slowdown in the global economy, trade barriers and tariffs, supply chain disruptions,

inflationary pressures, currency fluctuations, changes in interest rates, and instability of financial institutions;

the effects of actions by, or disputes among or between members of the Organization of Petroleum Exporting Countries (“OPEC”)

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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

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

Units as of the applicable record date (generally the last business day of each calendar month) on or before the 10 th business

day after the record date.

The Trust is required to make monthly cash

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

of Trust Units as of the applicable record date (generally the last business day of each calendar month) on or before the 10 th

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

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The Sponsor has indicated to the Trustee that development

activity on the Underlying Properties remained elevated through the nine-month period ended September 30, 2024, increasing over 150%

from the same period in 2023.

Some of this increase reflected prior period capital expenditures associated with 15 new Permian wells that

came online in the current period, for which production and revenues were attributable to prior periods.

While commodity prices remain

volatile, the majority of the capital expenditures for the Underlying Properties are associated with large cap, investment grade oil and

gas operators who tend to spend through periods of volatility.

Accordingly, although active rig counts within the Permian and Haynesville

regions declined during the first nine months of 2024, recent indications from operators of the Underlying Properties indicate that capital

expenditure activity for the Underlying Properties is expected to be relatively higher than the current industry level activity decline.

These indications remain subject to revision from the operators of the Underlying Properties, but in light of the current expectations

the Sponsor recently established a cash reserve for approved, future development expenses expected in the near-term.

Although the global economy remains volatile, reflecting,

among other factors, the current hostilities between Israel and Iran amid continued 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 development activity during the remainder of 2024, due in part to the previously discussed,

investment grade nature of the majority of the operators of the Underlying Properties.

The West Texas Intermediate spot price of crude

oil has improved from $71.89 per barrel on December 31, 2023 to $69.58 per barrel on October 31, 2024.

Natural gas prices have

declined year-over-year, with the Henry Hub spot price decreasing from $2.58 per MMBtu on December 31, 2023 to $1.82 per MMBtu on

October 31, 2024.

Given the significant increase in capital expenditures

for the first nine months of 2024, the Sponsor previously revised its 2024 capital spend outlook from the prior range of $5.0 million

to $9.0 million, or $4.0 million to $7.2 million net to the Trust’s Net Profits Interest, as detailed in the Trust’s 2023

Annual Report on Form 10-K, to $18.0 million to $23.0 million, or $14.4 million to $18.4 million net to the Trust’s Net Profits

Interest, as detailed in the Form 10-Q for the period ended June 30, 2024.

The Sponsor currently expects capital expenditures

for the year to be at the higher end of that guidance range.

The Sponsor expects the remaining anticipated capital expenditures in 2024

to be focused in both the Permian and Haynesville regions.

Despite lower natural gas prices, one of the operators of the Underlying Properties

in the Haynesville recently initiated a drilling program that is expected to turn to sales sometime in 2025.

Aside from that Haynesville

activity, the remaining natural gas directed expenditures are expected to remain more subdued until a further price recovery.

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

capital expenditures, particularly given volatile capital markets and an uncertain geopolitical situation.

Over the first nine months of 2024, the Sponsor

activity on the Underlying Properties remained elevated through the first three months of 2025, increasing over 130% from the same period

Most of the increase reflected continued capital expenditures by a super major oil conglomerate associated with Haynesville wells

that are expected to come online in the coming months.

Otherwise, the remaining capital expenditure outlook for the operators of the Underlying

Properties remains highly uncertain given current macroeconomic conditions.

Nevertheless, although commodity prices remain volatile, the

majority of the capital expenditures for the Underlying Properties are associated with large cap, investment-grade oil and gas operators

that tend to spend through periods of volatility.

Directionally, the Sponsor expects oil-directed capital expenditures in the Permian

basin to decline and gas-directed capital expenditures in the Haynesville to remain stable or perhaps even slightly increase, consistent

with the first quarter of 2025.

These indications remain subject to revision from the operators of the Underlying Properties;

in light of the current expectations, the Sponsor continues to maintain its previously established cash reserve for approved, future development

expenses expected in the near-term.

The Sponsor believes that the outlook for the oil

and gas industry has become increasingly complicated since the start of 2025, especially with the development of trade disputes and indications

that OPEC may increase oil production.

Oil prices have ranged from just over $80 per Bbl to as low as $57 per Bbl between December 2024

and May 2025, with several public oil and gas companies indicating that the volatility has affected their budget planning for the remainder

Natural gas prices have experienced similar volatility, ranging from a low of $2.93 per MMBtu to a high of $4.49 per MMBtu over

the same period, as previous forecasts of increasing demand for U.S.

liquified natural gas exports have been called into question given

the uncertain global trade environment.

Meanwhile, mergers and acquisitions continue to change the makeup of companies in the sector,

including one of the operators on the Underlying Properties.

The Sponsor believes that consolidation within the oil and gas sector could

lead to lower operating costs given economies of scale, but could also lead to more binary swings in capital spending, as more assets

and capital budgets are set by fewer operators than in years past.

Despite this volatility, given the significant

increase in capital expenditures during the first three months of 2025, the Sponsor is revising its 2025 capital spending outlook from

the prior range of $7.0 million to $13.0 million, or $5.6 million to $10.4 million net to the Trust’s Net Profits Interest, as detailed

in the Trust’s 2024 Annual Report on Form 10-K, to $10.0 million to $15.0 million, or $8.0 million to $12.0 million net to

the Trust’s Net Profits Interest.

The Sponsor expects the remaining anticipated capital expenditures in 2025 to be focused in the

Haynesville area, given relatively strong natural gas prices and ongoing capital expenditure projects in that region which began during

As in prior periods, the outlook for capital expenditures remains subject to change, as operators are expected to continue to reevaluate

their planned capital expenditures, particularly given volatile capital markets and an uncertain geopolitical situation.

Over the first three months of 2025, the Sponsor

continued to see a stabilization of inflationary pressures and operating costs that had been affecting the Underlying Properties in prior

periods on an aggregate basis, as seen in the continued decline in lease operating expenditures per barrel of oil equivalent for the nine

months ended September 30, 2024 compared to the same period in 2023.

This decline also benefited from the increased production from

newer wells that feature lower operating costs than some of the legacy wells on the Underlying Properties.

However, some legacy producing

properties of the Underlying Properties continue to experience operating cost and production issues consistent with late-life oil and

gas properties, and currently it is unclear if some of these legacy producing properties will be able to realize a return to prior period

operating costs and cash flow profile .

This continued decline in production from legacy properties

was offset by new production and revenue generated as a result of prior period capital expenditures that turned to sales during the nine-month

period ended September 30, 2024.

While the markets remain volatile and there remains an inherent delay in cash flows given the non-operated

nature of the Underlying Properties, the Sponsor indicates that it continues to have access to adequate capital and liquidity to fund

such operating and capital expenditures as they come due.

periods on an aggregate basis, as seen in the continued decline in lease operating expenditures per barrel of oil equivalent for the three

months ended March 31, 2025 compared to the same period in 2024.

The Sponsor indicates that this decline also benefited from the increased

production from newer wells that feature lower operating costs than some of the legacy wells on the Underlying Properties.

Nevertheless,

the Sponsor indicates that some legacy producing properties of the Underlying Properties continue to experience operating cost and production

issues consistent with late-life oil and gas properties, and currently it is unclear if some of these properties will be able to realize

a return to prior period operating costs and cash flow profile .

While the markets remain volatile

and there remains an inherent delay in cash flows given the non-operated nature of the Underlying Properties, the Sponsor indicates that

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

The Sponsor believes there could be further opportunity

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D&C New Drills

2 Producing, Awaiting First Revenues;

1 Drilling In-Process, 2 Pre Drills

Large Cap E&P 2

Conventional Permian

New Drills / Workovers

In-process/ Continual Program

Large Private E&P 1

D&C New Drills

4 Drilling In-Process

PE-Backed Private 1

D&C New Drills

4 Drilling In-Process

Large Cap E&P 4

D&C New Drills

4 Drilling In-Process

Large Cap E&P 4

D&C New Drills

19 Pre Drills

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D&C New Drills

In addition to the updated cumulative capital expenditures

reported above, the Sponsor has informed the Trustee that four wells in the Haynesville area operated by Large Cap E&P 4 began paying

revenues from first production during the three months ended September 30, 2024.

The other projects identified above are still in

process or awaiting first revenues, and the Sponsor expects a majority of those projects to be completed and to begin producing by early

3 Drilling In-Process

The projects identified above are still in process

or awaiting first revenues, and the Sponsor expects a majority of those projects to be completed and to begin producing during 2025.

Results of Operations

Three Months Ended September 30, 2024 Compared to Three Months

Ended September 30, 2023

Three Months Ended March 31, 2025 Compared to Three Months Ended

March 31, 2024

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,

Increase (Decrease)

Three Months Ended March 31,

Gross profits:

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Development expenses

Gross proceeds from sale of assets

Net (loss) profits

Percentage allocable to Net Profits Interest

Net profits allocable to Net Profits Interest

Negative Net Profits Carryforward

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

Repayment of COERT Loan

Distributable income

For the three months ended September 30, 2024,

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

shortfall of $3.9 million as of June 30, 2024 and the cumulative outstanding Sponsor advances to the Trust of $0.5 million.

The following table displays reported oil and natural

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

for distributions paid or payable during the three months ended September 30, 2024 and 2023:

Three Months Ended September 30,

During the three months ended March 31, 2025, direct

operating and development expenses exceeded cash receipts, leading to a shortfall of approximately $1.4 million as of March

31, 2025, which will be carried forward to be deducted from future net profits generated by the Underlying Properties.

As a result, there

were no net profits reported or distributed in the first three months of 2025.

During the three months ended March 31, 2024, the

Net Profits Interest generated positive income for the first two months in the period, which eliminated the cumulative Net Profits Interest

shortfall of $1.2 million that existed as of December 31, 2023.

In March 2024, direct operating and development expenses exceeded revenues,

thereby causing net profits attributable to the Underlying Properties to be negative and resulting in an approximately $1.2 million Net

Profits Interest shortfall as of March 31, 2024, which was carried forward to be deducted from future net profits generated by the Underlying

As a result, there were no net profits reported or distributed in the first three months of 2024.

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 or payable during the three months ended March 31, 2025 and 2024:

Three Months Ended March 31,

Underlying Properties Production Volumes:

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Natural gas prices realized ($/Mcf)

Net profits attributable to the Underlying Properties

for the three months ended September 30, 2024 were $7.9 million compared to $3.6 million for the three months ended September 30,

The $4.3 million increase 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 $3.1 million compared to the 2023 period, reflecting a $2.8 million increase due to higher produced volumes

and a $0.3 million increase due to higher realized prices.

Oil sales volumes increased 25% primarily due to the several new Permian wells

that either turned to sales or completed title work during the 2024 period and thereby allowed production attributable to prior periods

to be released by the respective operators.

The average oil price received increased 2% as a result of the corresponding increase in the

average NYMEX oil price for the relevant production months.

Net (loss) profits attributable to the Underlying

Properties for the three months ended March 31, 2025 were $(3.0) million compared to $0.2 million for the three months ended

March 31, 2024.

The $3.2 million decrease in net profits attributable to the Underlying Properties from the 2024 period to the

2025 period was primarily due to the following items:

Oil sales decreased $1.2 million compared to the 2024 period, reflecting a $0.1 million decrease due to lower produced volumes

and a $1.1 million decrease due to lower realized prices.

The average oil price received decreased 11% as a result of the corresponding

decrease in the average NYMEX oil price for the relevant production months.

Natural gas sales increased $0.4 million compared to the 2024 period, reflecting a $1.1 million increase due to higher produced volumes,

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

Lease operating expenses during the three months ended September 30, 2024 decreased $0.9 million compared to the three months

ended September 30, 2023.

Compression, gathering and transportation costs increased $0.4 million, primarily due to the new wells that came online during the

three months ended September 30, 2024.

Production, ad valorem and other taxes increased $0.1 million during the three months ended September 30, 2024 compared to the

three months ended September 30, 2023, due to the increase in oil and natural gas produced volumes.

Development expenses decreased $0.6 million in the 2024 period due to a decline in drilling and completion costs incurred as compared

to the same period in 2023.

For the three months ended September 30, 2024,

the Trust withheld $0.4 million and paid $0.1 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, insurance expense, Trustee fees, and New York Stock

Exchange listing fees.

For the three months ended September 30, 2023, the Trust withheld $0.4 million and paid $0.3 million for general

and administrative expenses.

Nine Months Ended September 30, 2024 Compared to Nine Months

Ended September 30, 2023

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:

Natural gas sales

Direct operating expenses:

Lease operating expenses

Compression, gathering and transportation

Production, ad valorem and other taxes

Development expenses

Gross proceeds from sale of assets

Percentage allocable to Net Profits Interest

Net profits allocable to Net Profits Interest

Sponsor reserve release for capital expenditures

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

Repayment of COERT Loan

Distributable income

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 or payable during the nine months ended September 30,

2024 and 2023:

Nine Months Ended September 30,

Underlying Properties Production Volumes:

Natural Gas (Mcf)

Combined (Boe)

Average Prices:

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

Oil prices realized ($/Bbl)

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

Natural gas prices realized ($/Mcf)

Net profits attributable to the Underlying Properties

for the nine months ended September 30, 2024 were $3.2 million compared to $11.4 million for the nine months ended September 30,

The $8.2 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 $10.2 million compared to the 2023 period, reflecting a $10.5 million increase in oil sales due to higher produced

volumes, partially offset by a $0.3 million decrease in oil sales due to lower realized prices.

Oil sales volumes increased 35% primarily

due to the several new Permian wells that either turned to sales or completed title work during the 2024 period and thereby allowed

production attributable to prior periods to be released by the respective operators.

The average oil price received decreased 1% as a

result of the corresponding increase in the average NYMEX oil price for the relevant production months.

Natural gas sales decreased $2.3 million compared to the 2023 period, reflecting a $5.7 million increase in sales primarily due

to a 59% increase in gas sales volumes, offset by an $8.0 million decrease in sales due to a 52% decline in realized gas prices.

Lease operating expenses during the nine months ended September 30, 2024 increased $2.8 million compared to the nine months ended

September 30, 2023.

Lease operating expenses during the three months ended March 31, 2025 decreased $1.9 million compared to the three months ended

March 31, 2024.

The 2024 period includes extra first expenses for several new Permian wells completed later in 2024.

Compression, gathering and transportation costs increased $0.4 million, primarily due to the new wells that came online during the

nine months ended September 30, 2024.

Production, ad valorem and other taxes increased $0.8 million during the nine months ended September 30, 2024 compared to the

nine months ended September 30, 2023, due to the increase in oil and natural gas produced volumes.

Development expenses increased $11.2 million in the 2024 period due to drilling and completion costs incurred in connection with the

drilling of multiple new wells in the Permian area.

For the nine months ended September 30, 2024,

the Trust withheld $0.5 million and paid $0.7 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, insurance expense, Trustee fees, and New York Stock

Exchange listing fees.

For the nine months ended September 30, 2023, the Trust withheld $1.2 million and paid $0.8 million for general

and administrative expenses.

three months ended March 31, 2025.

Production, ad valorem and other taxes decreased $0.2 million during the three months ended March 31, 2025 compared to the three

months ended March 31, 2024.

Development expenses increased $4.1 million during the three months ended March 31, 2025 compared to the same period in 2024,

due to an increase in drilling and completion costs incurred.

For the three months ended March 31, 2025, the

Trust withheld $0.0 million and paid $0.2 million for general and administrative expenses.

Expenses paid during the period primarily consisted

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

listing fees.

For the three months ended March 31, 2024, the Trust withheld $0.2 million and paid $0.2 million for general and administrative

Liquidity and Capital Resources

22 unchanged sentences

together with interest earned on the funds.

As of September 30, 2024, the Trustee has withheld $1,091,386 toward this cash reserve.

As of March 31, 2025, the Trustee has withheld $1,241,386 toward this cash reserve.

the cumulative Net Profits Interest shortfall, no amounts were withheld toward this cash reserve during the three months ended March 31,

If the Trustee determines that the cash on hand

22 unchanged sentences

the Trust to borrow any funds.

As of September 30, 2024 and December 31, 2023, including the aggregate amounts withheld as of

such dates toward the approximately $2.3 million cash reserve discussed above, the Trust had cash of $1,808,446 and $1,394,697, respectively,

to be used towards future Trust expenses.

Since its formation, the Trust has not borrowed any funds 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

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

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

At September 30, 2024 and December 31, 2023, there were no

outstanding advances.

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

As of March 31, 2025 and December 31, 2024, including the aggregate amounts withheld as of such dates toward

the approximately $2.3 million cash reserve discussed above, the Trust had cash of $2,216,799 and $2,193,787, respectively, to be

used towards future Trust expenses.

Since its formation, the Trust has not borrowed any funds and no amounts have been drawn on the letter

From time to time, if the Trust’s cash on

hand (including available cash reserves, if any) is not sufficient to pay the Trust’s ordinary course administrative expenses that

are due prior to the monthly payment to the Trust of proceeds from the Net Profits Interest, COERT may advance funds to the Trust to pay

such expenses.

At March 31, 2025 and December 31, 2024, there were outstanding advances of $398,568 and $150,000, respectively.

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

25 unchanged sentences

2024 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 nine months ended September 30,

were no material changes to the Trust’s critical accounting policies or estimates during the three months ended March 31, 2025.

Quantitative and Qualitative Disclosures About Market Risk.

2 unchanged sentences

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