What changed in this filing

/stocks — the workspaceLOADING

Item 4. Controls and Procedures

2021-11-15 compared with 2021-08-16 · 34 added, 16 removed, 21 unchanged (70% of the section changed)

12 unchanged sentences

advise the Trustee in its review and compilation of this information for inclusion in this Quarterly Report on Form 10-Q and the other periodic reports provided by the Trust to the SEC.

Despite the Trusts internal controls and procedures ensuring the accuracy of the

Trusts reporting based upon the financial information received from Hilcorp, Hilcorps process of reconciling actual revenue and severance taxes to previously reported estimates are still occurring and being reported in 2021.

Hilcorp informed the Trust that due to Hilcorps transition to a new accounting system, the February, March and April 2021 production months were based on estimated production, estimated prices and estimated costs utilizing historical trends.

Thus, distributions to the Trust from Hilcorp in any given month may be subject to adjustment based upon prior months true-ups and rebooking, plus interest.

Hilcorp notified the Trust that as of the date

of this Quarterly Report, Hilcorp anticipates that it will adjust the previously reported production and financial information for the production months of January 2021 through April 2021 for operated wells and November 2020 through April 2021 for non-operated wells and, therefore, possibly adjust future distributions of net proceeds to reflect such rebooking and true-ups plus interest on such amounts (as required by

the Conveyance) to the extent an under- or over-payment has occurred.

The Trustee has evaluated the Trusts internal disclosure

controls and procedures as of June 30, 2021, and has concluded that such disclosure controls and procedures are effective, at the reasonable assurance level (as such term is used in Rule

13a-15(f) of the Exchange Act), to ensure that material information received from Hilcorp is gathered on a timely basis to be included in the Trusts periodic reports and recorded, processed, summarized

and reported within the time periods specified in the SECs rules and forms.

Additionally, during the three months ended

June 30, 2021, there were no changes in the Trusts internal control over financial reporting (as such term is used in Rule 13a-15(f) of the Exchange Act) that materially affected, or are reasonably

likely to materially affect, the Trusts internal control over financial reporting.

Because the Trust does not have, nor does the Indenture provide for, officers, a board of directors or an independent audit committee, the Trustee has reviewed

neither the Trusts disclosure controls and procedures nor the Trusts internal control over financial reporting in concert with management, a board of directors or an independent audit committee.

Despite the Trusts internal controls and procedures ensuring the accuracy of the Trusts reporting based upon the financial

information received from Hilcorp, Hilcorps process of reconciling actual revenue and severance taxes to previously reported estimates are still occurring and being reported in 2021.

Thus, distributions to the Trust from Hilcorp in any given

month may be subject to adjustment based upon prior months true-ups and rebooking, plus interest.

In addition, Hilcorp informed the Trust that due to Hilcorps transition to a new accounting system

beginning in March 2021, revenue and severance tax categories for the February through May 2021 production months were based on estimates utilizing historical trends.

Revenue and severance tax for the May, June and July 2021 production months were trued-up in August and September 2021.

Hilcorp informed the Trust that it will complete the process of truing-up, accounting for and reporting to the Trust the operated

revenue and severance tax computations for the April 2021 production month by the end of 2021.

At this time the amount of these true-ups is unknown.

The Trustee will coordinate with Hilcorp on the timing of

any further true-ups and will communicate that timing to Unit holders.

Lease operating expenses and capital costs for the January through April 2021 production

months were based on estimates, but the lease operating expenses and capital costs for May 2021 were based on actual costs.

Both Lease operating expense and capital costs for the January through May 2021 production months were trued-up in July 2021.

Due to excess production costs in June 2021, the Trust did not declare a distribution in August 2021.

Hilcorp also confirmed that it continues to work on its actualization and accounting of the operated revenue and severance tax computations

for the production month of April 2021 (the remaining 2021 production month that was based on estimates) and will notify the Trust promptly upon completion of such actualization and accounting by the end of 2021.

Hilcorp further informed the Trust

that it believes that the April 2021 true-up and adjustment may result in changes to future distributions of net proceeds to the Trust that reflect such rebooking and

true-ups plus interest on such amounts (as required by the Conveyance) to the extent an underpayment to the Trust has occurred.

Hilcorp has confirmed that it will continue to waive interest to the extent there

were any overpayments to the Trust based on true-ups in 2021.

The Trustee continues to engage

with Hilcorp regarding its ongoing accounting and reporting to the Trust, and the Trusts third-party compliance auditors continue to audit all payments made by Hilcorp to the Trust, including adjustments,

true-ups, and recoupments.

The Trustee continues to consult with outside counsel to review the rights of the Trust with respect to these matters and to evaluate any available potential legal remedies.

The Trustee has evaluated the Trusts internal disclosure controls and procedures as of September 30, 2021, and has concluded that

such disclosure controls and procedures are effective, at the reasonable assurance level (as such term is used in Rule 13a-15(f) of the Exchange Act), to ensure that material information received

from Hilcorp is gathered on a timely basis to be included in the Trusts periodic reports and recorded, processed, summarized and reported within the time periods specified in the SECs rules and forms.

Additionally, during the three months ended September 30, 2021, there were no changes in the Trusts internal control over financial

reporting (as such term is used in Rule 13a-15(f) of the Exchange Act) that materially affected, or are reasonably likely to materially affect, the Trusts internal control over financial reporting.

Because the Trust does not have, nor does the Indenture provide for, officers, a board of directors or an independent audit committee, the Trustee has reviewed neither the Trusts disclosure controls and procedures nor the Trusts internal

control over financial reporting in concert with management, a board of directors or an independent audit committee.

OTHER INFORMATION

7 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 4. Controls and Procedures