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Item 1. Financial Statements

2026-05-15 compared with 2025-11-14 · 154 added, 277 removed, 491 unchanged (47% of the section changed)

2 unchanged sentences

Statements of Assets, Liabilities and Trust

September 30,

Cash and cash equivalents

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LIABILITIES AND TRUST CORPUS

Advances from Sponsor

Total liabilities

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

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these financial statements.

PERMIANVILLE ROYALTY

PERMIANVILLE ROYALTY TRUST

Statements of Distributable

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Income from net profits interest

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General and administrative expenses

Cash reserves withheld for Trust expenses

Cash reserves (withheld) 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

Cash reserves withheld (used) for Trust expenses

Distributable income

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an integral part of these financial statements.

PERMIANVILLE ROYALTY TRUST

PERMIANVILLE ROYALTY

NOTES TO FINANCIAL STATEMENTS

ORGANIZATION AND PROVISIONS

TRUST ORGANIZATION AND PROVISIONS

Permianville Royalty Trust (the “Trust”),

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to which Enduro and the Trustee were parties.

As of September 30, 2025, the Sponsor owned 7,363,961 Trust Units, or 22% of the issued

As of March 31, 2026, the Sponsor owned 7,363,961 Trust Units, or 22% of the issued

and outstanding Trust Units.

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the Trust is judicially dissolved.

OF PRESENTATION

BASIS OF PRESENTATION

The Statement of Assets, Liabilities and Trust

Corpus as of December 31, 2025, which has been derived from audited financial statements, and the unaudited interim financial statements

as of September 30, 2025 and for the three and nine months ended September 30, 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.

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”).

as of March 31, 2026 and for the three months ended March 31, 2026 and 2025 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, 2025 (the “2025 Annual Report on Form 10-K”).

In the opinion of the Trustee, the accompanying

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Statements of Royalty Trusts .

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, 2025 and December 31, 2024 was $314,976,575 and $311,034,905,

Accumulated amortization as of March 31, 2026 and December 31, 2025 was $318,068,024 and $316,693,065,

respectively.

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While the Trust did not record an impairment during the three

and nine months ended September 30, 2025 or 2024, 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, 2026 or 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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advisor regarding state tax requirements, if any, applicable to such person’s ownership of Trust Units.

DISTRIBUTIONS

TO UNITHOLDERS

DISTRIBUTIONS TO UNITHOLDERS

Each month, the Trustee determines the amount of

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Declaration Date

Nine Months Ended September 30, 2025:

March 17, 2025 (Special Distribution)

Three Months Ended March 31, 2026:

December 19, 2025

December 31, 2025

January 15, 2026

January 20, 2026

January 30, 2026

February 13, 2026

February 18, 2026

March 2, 2026

April 14, 2025

August 18, 2025

August 29, 2025

September 15, 2025

March 13, 2026

Year to 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

Three Months Ended March 31, 2025:

Year to Date –

During the first six months of 2025, the Net Profits

Interest generated positive income, which eliminated the cumulative Net Profits Interest shortfall of $1.4 million that existed as of

March 31, 2025;

however, no distributions were made to Trust unitholders during the first half of the year because of outstanding

advances from the Sponsor to the Trust for the payment of administrative expenses, which totaled $0.6 million as of June 30, 2025.

In August 2025, the remaining amount of the shortfall and advances to the Trust were fully repaid, resulting in a distribution to

the unitholders in September 2025.

There was no Net Profits Interest shortfall as of September 30, 2025.

During 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, and in July 2024, the remaining amount of the

shortfall and advances to the Trust were fully repaid, resulting in distributions to the unitholders in August 2024 and September 2024.

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

On March 17, 2025, the Trustee declared a

special cash distribution of $0.008548 per Trust Unit, which was paid on April 14, 2025 to Trust unitholders of record on March 31,

The special 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 natural 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.

During the three months ended March 31, 2025,

direct operating and development expenses exceeded cash receipts, leading to a Net Profits Interest shortfall of approximately $1.4 million

as of March 31, 2025, which was carried forward to be deducted from future net profits generated by the Underlying Properties.

a result, there were no net profits reported or distributed in the first three months of 2025.

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, 2025 and 2024, the Trust paid $50,000 and $150,000, respectively, to the Trustee and $0

and $2,010, respectively, to the Delaware Trustee pursuant to the terms of the Trust Agreement.

During each of the

three-month periods ended March 31, 2026 and 2025, the Trust paid $50,000 to the Trustee and $2,010 to the Delaware Trustee pursuant

to the terms of the Trust Agreement.

SUBSEQUENT EVENTS

Distributions Paid or Declared

On October 15, 2025,

a distribution of $0.023000 per unit, which was declared on September 18, 2025, was paid to Trust unitholders of record as of September 30,

On October 17, 2025,

the Trust declared a distribution of $0.030000 per unit to unitholders of record as of October 31, 2025.

The distribution is expected

to be paid to unitholders on November 14, 2025.

On April 14, 2026, a

distribution of $0.010000 per unit, which was declared on March 16, 2026, was paid to Trust unitholders of record as of March 31,

On April 17, 2026, the

Trust declared a distribution of $0.010000 per unit to unitholders of record as of April 30, 2026.

The distribution is expected to

be paid to unitholders on May 15, 2026.

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

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Such expectations may not prove to have been correct.

in this document, the words “believes,”

in this document, the words “will,”

“plans,”

“believes,”

“expects,”

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“intends”

expressions are intended to identify such forward-looking statements.

The following important factors, in addition to those discussed

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

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

The following important factors,

in addition to those discussed elsewhere in this Form 10-Q, in the Trust’s 2025 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;

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the impact of geopolitical developments and tensions, war and uncertainty

involving or in the geographical region of oil producing countries (including the ongoing armed conflicts between Russia and Ukraine and

between Israel and Iran and its proxies and any related political or economic responses and counter-responses or otherwise by various

global actors or the general effect on the global economy);

involving or in the geographical region of oil producing countries (including the ongoing wars in Ukraine and the Persian Gulf and any

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

global economic conditions, such as a general slowdown in the global economy,

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The Sponsor has indicated to the Trustee that although

development activity on the Underlying Properties through the first nine months of 2025 decreased compared to the same period in 2024,

it remained above the historical average for the Underlying Properties.

Year-to-year activity declined primarily because the first nine

months of 2024 reflected the inclusion of a material amount of prior period production from certain Permian wells that had been delayed

due to pending title work completed during the 2024 period, resulting in higher levels of spending attributed to the 2024 period compared

to the 2025 period.

The Sponsor reports that most of the continued capital expenditures on the Underlying Properties during 2025 have

been associated with work undertaken by a super major oil conglomerate and the completion of three wells in the Haynesville region.

three wells were turned to revenue collection during the third quarter of 2025, which contributed to the full repayment of the Net Profits

Interest shortfall that existed at June 30, 2025.

These wells are currently performing above the Sponsor’s original expectations;

meanwhile, the Sponsor reports that the same super major operator has indicated that it intends to drill three additional wells in the

Haynesville region.

Given this expected increase in capital expenditures for natural gas wells, the Sponsor has elected to establish a

cash reserve for near-term capital expenditures, consistent with prior periods in which material future capital expenditure obligations

were expected.

As of September 30, 2025, the cash reserve balance was $0.3 million.

Otherwise, the Sponsor believes the remaining

capital expenditure outlook for the operators of the Underlying Properties remains uncertain, and likely below prior period spending levels

for oil-weighted properties, given current macroeconomic conditions.

As in prior periods, future capital expenditure expectations remain

subject to revision from the operators of the Underlying Properties.

development activity on the Underlying Properties through the first three months of 2026 decreased over 50% compared to the same period

in 2025, the current level of in-progress drilling not yet billed to the Underlying Properties suggests that the forward outlook and indicated

activity from operators appears to be improving.

The Sponsor believes that the activity outlook for the remainder of the year will likely

be weighted towards natural gas drilling in the Haynesville, similar to last year, as seen in the approximately 48% increase in natural

gas production for the Underlying Properties for the first three months of 2026 compared to the same period in 2025.

Given the indicated

activity outlook from the super major oil and gas operator of the Underlying Properties responsible for much of the recent Haynesville

activity, the Sponsor has maintained a cash reserve for near-term capital expenditures, consistent with prior periods in which material

future capital expenditure obligations have been expected.

As of March 31, 2026, the cash reserve balance was $0.9 million.

beginning of the year, based on publicly announced budgets from various operators of the Underlying Properties, oil-weighted capital expenditures

were expected to decrease year-over-year.

However, based on more recent public announcements, prior estimated capital expenditures could

increase but remain subject to substantial volatility given current macro events.

As in prior periods, future capital expenditure expectations

remain subject to revision from the operators of the Underlying Properties.

The Sponsor believes that the outlook for the oil

and gas industry remains mixed, given the volatility experienced since April 2025, although industry conditions during the third

quarter of 2025 were relatively more stable compared to the second quarter.

Subsequent to quarter end, OPEC recently guided to a pause

in further production increases in 2026, somewhat stabilizing forward oil prices.

Oil prices have ranged from just over $80 per Bbl to

as low as $57 per Bbl between December 2024 and October 2025, with several public oil and gas companies indicating that the

volatility has affected their budget planning for the remainder of 2025.

Natural gas prices have experienced similar volatility, ranging

from a low of $2.70 per MMBtu to a high of $4.49 per MMBtu over the same period, as forward prices have recently increased along with

forecasts of increasing energy demand from data centers and other technology-driven electric power users, a significant portion of which

is forecasted to be provided by natural gas-powered generation in the coming years.

Meanwhile, mergers and acquisitions continue to change

the makeup of companies in the sector, with another operator on the Underlying Properties having completed an acquisition during 2025,

potentially altering the future capital spending on the Underlying Properties.

The Sponsor continues to believe 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 continued elevated

capital expenditures during the first nine months of 2025, the Sponsor is revising its previous 2025 capital spending outlook of $10.0

million to $15.0 million, or $8.0 million to $12.0 million net to the Trust’s Net Profits Interest, to $12.0 million to $17.0 million,

or $9.6 million to $13.6 million net to the Trust’s Net Profits Interest.

The Sponsor expects a majority of the remaining anticipated

capital expenditures in 2025 to be focused on the Haynesville area, given relatively higher industry rig counts in that region compared

to last year and the declining Permian rig count thus far in 2025.

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 nine months of 2025, the Sponsor

continued to see a reduction in operating costs, on an aggregate basis, for the Underlying Properties compared to prior periods, as seen

in the continued decline in lease operating expenditures per barrel of oil equivalent for the nine months ended September 30, 2025

compared to the same period in 2024.

The Sponsor indicates that the recent observed decline in per unit operating expenses on the Underlying

Properties has been driven by a new operator that acquired a large, legacy property in 2024.

The Sponsor indicates that this operator

has a reputation for prudent operating at a lower cost compared to other, larger public companies.

and gas industry has improved compared to early second quarter of 2025, as recent macro events such as the Persian Gulf conflict have

increased commodity price forecasts and emphasized the importance of North American-based oil and gas operations.

Since the start of the

year, oil prices have ranged from a low of $56 per Bbl to as high as $113 per Bbl, while natural gas prices have also experienced volatility,

ranging from a low of $2.52 per MMBtu to a high of $7.46 per MMBtu over the same period.

Although natural gas prices at the end of the

first quarter of 2026 were lower than at the end of the first quarter of 2025, industry analysts continue to forecast increasing demand

from the buildout of datacenters and the AI ecosystem that are expected to require both renewable energy sources and natural gas-powered

electricity generation.

Meanwhile, the Sponsor continues to believe 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 pace of capital

expenditures during the first three months of 2026, the Sponsor is reaffirming its 2026 capital spending outlook of $9.0 million to $15.0

million, or $7.2 million to $12.0 million net to the Trust’s Net Profits Interest, but currently expects those expenditures to trend

toward the higher end of the range given current expectations and guidance from the operators of the Underlying Properties.

expects a majority of the remaining anticipated capital expenditures in 2026 to be focused on the Haynesville area, given known projects

currently in process.

The Sponsor believes that any further increases to the expected capital expenditure budget likely would come from

oil-weighted projects by operators in the Permian region adding near-term activity in response to the recent oil price increases driven

by the ongoing Persian Gulf conflict.

As in prior periods, however, 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 2026, the Sponsor

continued to see a reduction in operating costs on a per unit basis for the Underlying Properties compared to prior periods, due in part

to the higher total production for the first quarter of 2026 compared to the same period last year.

The Sponsor indicates that this increase

in production has come predominately from natural gas production growth in the Haynesville region, which generally features lower operating

costs compared to legacy production areas within the Underlying Properties.

The Sponsor expects this trend to continue given the near-term

outlook for natural-gas-weighted capital expenditure activity.

According to the Sponsor, this decline in operating costs per unit has

been partially offset by ongoing operational issues and cost overruns at some of the legacy, marginal oil-weighted assets on the Underlying

Properties, which the Sponsor indicates it is continuing to proactively address through joint interest billing audits among other avenues

afforded to non-operating working interest partners.

the commodity markets remain volatile, and there remains an inherent delay in cash flows given the non-operated nature of the Underlying

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expenditures as they come due.

The Sponsor believes further opportunities could

arise in the coming quarters for potential divestitures and/or leasing of some or all of the Underlying Properties, subject to the Trust’s

Net Profits Interest, as certain operators of the Underlying Properties look to acquire assets, particularly in the Permian and Haynesville

Furthermore, the Sponsor believes additional opportunities could arise in the coming quarters for

potential divestitures and/or leasing of some or all of the Underlying Properties, subject to the Trust’s Net Profits Interest,

as certain operators of the Underlying Properties may look to acquire assets.

Capex Drilling Activity Update

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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

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D&C New Drills

6 Drilling in Process

Large Cap E&P 3

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19 Pre Drills

Large Cap E&P 4

D&C New Drills

Large Super Major 1

D&C New Drills

3 Drilling in Process

PE-Backed Private 1

D&C New Drills

2 Producing awaiting first revenue

PE-Backed Private 2

D&C New Drills

7 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 the first

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

half of 2026.

Small Asset Sale

In September 2025, as permitted under Section 3.02(c) of

the Trust Agreement, the Sponsor sold a non-producing, partial Permian acreage stake, free from and unburdened by the Trust’s Net

Profits Interest, to a private equity-funded buyer for total cash proceeds of $0.4 million, or approximately $20,000 per undeveloped acre.

The sale proceeds attributable to the Net Profits Interest will be included in the November 2025 Net Profits Interest calculation

reflecting the proceeds from production received in September 2025.

Results of Operations

Three Months Ended September 30, 2025 Compared to Three Months

Ended September 30, 2024

Three Months Ended March 31, 2026 Compared to Three Months

Ended March 31, 2025

The Trust’s net profits income consists of

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Three Months Ended

September 30,

Gross profits:

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Net profits allocable to Net Profits Interest

Negative Net Profits Carryforward

Capex Reserve –

Release for anticipated 2025-2026 capital expenditures

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

Repayment of Sponsor Loan

Distributable income

For the three months ended September 30, 2025,

the Net Profits Interest generated positive income, which eliminated the cumulative outstanding Sponsor advances to the Trust of $0.6

million that existed as of June 30, 2025.

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 and the cumulative outstanding Sponsor advances to the Trust of $0.5 million that existed as of June 30,

During the three months ended March 31, 2025,

direct operating and development expenses exceeded cash receipts, leading to a Net Profits Interest shortfall of approximately $1.4 million

as of March 31, 2025, which was carried forward to be deducted from future net profits generated by the Underlying Properties.

a result, there were no net profits reported or distributed in the first three months of 2025.

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, 2025 and 2024:

Three Months Ended September 30,

for distributions paid or payable during the three months ended March 31, 2026 and 2025:

Three Months Ended March 31,

Underlying Properties Production Volumes:

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Net profits attributable to the Underlying Properties

for the three months ended September 30, 2025 were $1.6 million compared to $7.9 million for the three months ended September 30,

The $6.2 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:

for the three months ended March 31, 2026 were $1.3 million compared to a net profits deficit of $3.0 million for the three

months ended March 31, 2025.

The $4.3 million increase in net profits attributable to the Underlying Properties from the 2025

period to the 2026 period was primarily due to the following items:

Oil sales decreased $2.3 million due to lower produced volumes and lower

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The 9% reduction in produced volumes decreased revenues by $0.8 million.

This decrease was primarily due to the effect

of the 15 new Permian wells that either turned to sales or completed title work in the 2024 period, thereby allowing production attributable

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

Realized oil sales prices decreased 20% in the 2025 period

compared to the 2024 period, which decreased revenues by $1.7 million.

Natural gas sales increased $2.0 million compared to the 2024 period, reflecting

a $2.4 million increase due to higher realized prices, partially offset by a $0.4 million decrease due to lower produced volumes.

average natural gas price received increased 16% primarily due to the increase in the average realized natural gas price for the relevant

production months.

Lease operating expenses during the three months ended September 30,

2025 decreased $0.2 million compared to the three months ended September 30, 2024.

Compression, gathering and transportation costs increased $0.4 million, primarily

due to the increase in natural gas realized prices during the three months ended September 30, 2025.

Production, ad valorem and other taxes decreased $0.4 million during the

three months ended September 30, 2025 compared to the three months ended September 30, 2024.

Development expenses increased $0.5 million during the three months ended

September 30, 2025 compared to the same period in 2024.

For the three months ended September 30, 2025,

the Trust withheld $0.2 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 September 30, 2024, the Trust withheld $0.4 million and paid $0.1 million for general

and administrative expenses.

Nine Months Ended September 30, 2025 Compared to Nine Months

Ended September 30, 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:

Nine Months Ended September 30,

Increase (Decrease)

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

Release of Escrow

Income from Net Profits Interest

Repayment of Sponsor Loan

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

Distributable income

During the first six months of 2025, the Net Profits

Interest generated positive income, which eliminated the cumulative Net Profits Interest shortfall of $1.4 million that existed as of

March 31, 2025;

however, no distributions were made to Trust unitholders during the first half of the year because of outstanding

advances from the Sponsor to the Trust for the payment of administrative expenses, which totaled $0.6 million as of June 30, 2025.

In August 2025, the remaining amount of the shortfall and advances to the Trust were fully repaid, resulting in a distribution to

the unitholders in September 2025.

There was no Net Profits Interest shortfall as of September 30, 2025.

During 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, and in July 2024, the remaining amount of the

shortfall and advances to the Trust were fully repaid, resulting in distributions to the unitholders in August 2024 and September 2024.

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

On March 17, 2025, the Trustee declared a

special cash distribution of $0.008548 per Trust Unit, which was paid on April 14, 2025 to Trust unitholders of record on March 31,

The special 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 natural 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.

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 nine months ended September 30, 2025 and 2024:

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, 2025 were $0.6 million compared to $3.2 million for the nine months ended September 30,

The $2.6 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 $17.0 million due to lower produced volumes and lower

realized prices.

The 35% decrease in produced volumes decreased revenues by $14.1 million.

This decrease was primarily due to the effect

of the 15 new Permian wells that either turned to sales or completed title work in the 2024 period, thereby allowing production attributable

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

Realized oil sales prices decreased 11% in the 2025 period

compared to the 2024 period, which increased revenues by $2.9 million.

Realized oil sales prices decreased 20% in the

2026 period compared to the 2025 period, which decreased revenues by $1.5 million.

Natural gas sales increased $2.8 million compared to the 2025 period, reflecting

a $0.9 million increase due to higher produced volumes, and a $2.1 million increase due to higher realized prices.

The average natural

gas price received increased 25% primarily due to the decrease in the average realized natural gas price for the relevant production months.

Lease operating expenses during the nine months ended September 30,

2025 decreased $5.7 million compared to the nine months ended September 30, 2024.

a $1.8 million increase due to higher realized prices.

The 48% increase in produced volumes increased revenues by $1.0 million.

natural gas price received increased 59% primarily due to the increase in the average realized natural gas price for the relevant production

Lease operating expenses during the three months ended March 31, 2026

decreased $0.1 million compared to the three months ended March 31, 2025.

Compression, gathering and transportation costs increased $1.2 million, primarily

due to the increase in natural gas production during the nine months ended September 30, 2025.

Production, ad valorem and other taxes decreased $1.2 million during the

nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.

Development expenses decreased $5.5 million during the nine months ended

September 30, 2025 compared to the same period in 2024, due to a decrease in drilling and completion costs incurred.

For the nine months ended September 30, 2025,

due to higher sales volumes from three new Haynesville wells included in the three months ended March 31, 2026 compared to the three

months ended March 31, 2025.

Production, ad valorem and other taxes remained consistent at $0.7 million

during the three months ended March 31, 2026 compared to the three months ended March 31, 2025.

Development expenses decreased $4.9 million during the three months ended

March 31, 2026 compared to the same period in 2025.

For the three months ended March 31, 2026,

the Trust withheld $0.5 million and paid $0.1 million for general and administrative expenses.

2 unchanged sentences

Exchange listing fees.

For the nine months ended September 30, 2024, the Trust withheld $0.5 million and paid $0.7 million for general

For the three months ended March 31, 2025, the Trust withheld $0.0 million and paid $0.2 million for general

and administrative expenses.

23 unchanged sentences

together with interest earned on the funds.

As of September 30, 2025, the Trustee has withheld $1,392,534 toward this cash reserve.

As of March 31, 2026, the Trustee has withheld $1,692,534 toward this cash reserve.

If the Trustee determines that the cash on hand

22 unchanged sentences

the Trust to borrow any funds.

As of September 30, 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 $2,343,809 and $2,193,787, respectively,

As of March 31, 2026 and December 31, 2025, including the aggregate amounts withheld as of such

dates toward the approximately $2.3 million cash reserve discussed above, the Trust had cash of $3,186,425 and $2,733,791, respectively,

to be used towards future Trust expenses.

5 unchanged sentences

such expenses.

At September 30, 2025 and December 31, 2024, there were outstanding advances of $0 and $150,000, respectively.

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

At March 31, 2026 and December 31, 2025, 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 Properties.

Cash held by the Trustee as a reserve against future

26 unchanged sentences

2025 Annual Report on Form 10-K for additional information regarding the Trust’s critical accounting policies and estimates.

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

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

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