# Mesa Royalty Trust: Form 10-Q for the period ended Sep 30, 2025

- Company: [Mesa Royalty Trust](/companies/mtr.md) (CIK 313364)
- Form: 10-Q
- Filed: 2025-11-13
- Accepted by EDGAR: Nov 13, 2025, 21:13 ET
- Period: 2025-09-30
- Accession: 0001104659-25-111306
- Inline XBRL: no
- Main document: https://www.sec.gov/Archives/edgar/data/313364/000110465925111306/tm2524878-1_10q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/313364/000110465925111306/

## Management's discussion and analysis

As filed, 53,513 characters.

The following review of the financial condition and results of operations of Mesa Royalty Trust (the “Trust”) should be read in conjunction with the financial statements and notes thereto. The discussion of net production attributable to the Hugoton Royalty Properties and San Juan Basin Royalty Properties (as each is defined below) represents production volumes that are to a large extent hypothetical as the Trust does not own and is not entitled to any specific production volumes. Any discussion of “actual” production volumes represents the reported hydrocarbons that were produced from the properties in which the Trust has an overriding royalty interest. See Note 7 to the financial statements in the Trust’s Annual Report on Form 10-K for the year ended December 31, 2024.

The Trust was created on November 1, 1979 and is now governed by the Mesa Royalty Trust Indenture (as amended, the “Trust Indenture”). Through a series of conveyances, assignments, and acquisitions, the Trust currently owns an overriding royalty interest (the “Royalties”) equal to 11.44% of 90% of the Net Proceeds (as defined and described in an Overriding Royalty Conveyance dated as of November 1, 1979 (the “Conveyance”)) attributable to the specified interest in certain producing oil and gas properties located in the:

Hugoton field of Kansas (the “Hugoton Royalty Properties”);

San Juan Basin field of New Mexico (the “San Juan Basin — New Mexico Properties”); and

San Juan Basin field of Colorado (the “San Juan Basin — Colorado Properties”, and together with the San Juan Basin — New Mexico Properties, the “San Juan Basin Royalty Properties”, and together with the Hugoton Royalty Properties, the “Royalty Properties”).

Pursuant to past conveyances, Scout, Hilcorp, Simcoe and Red Willow are the operators of certain portions of the Hugoton Royalty Properties and San Juan Basin Royalty Properties (each of Scout, Hilcorp, Simcoe and Red Willow being a “Working Interest Owner”, and together, the “Working Interest Owners”). As used in this report, Scout refers to the current operator of the Hugoton Royalty Properties, Hilcorp refers to the current operator of the San Juan Basin — New Mexico Properties, and Simcoe and Red Willow refer to the current co-operators of certain tracts of land included in the San Juan Basin — Colorado Properties, unless otherwise indicated.

The Trust is a passive entity whose purposes are limited to: (1) converting the Royalties to cash, either by retaining them and collecting the proceeds of production (until production has ceased or the Royalties are otherwise terminated) or by selling or otherwise disposing of the Royalties; and (2) distributing such cash, net of amounts for payments of liabilities to the Trust, to the unitholders. The Trust has no sources of liquidity or capital resources other than the revenues, if any, attributable to the Royalties and interest on cash held by the Trustee as a reserve for liabilities or for distribution. The Trust does not undertake or control any capital projects or make capital expenditures. While the Trust’s royalty income is net of capital expenditures, these capital expenditures are controlled and paid by the Working Interests Owners, and the Trust receives royalty income net of these expenses. In addition, the Trust does not have any off-balance sheet arrangements or other contingent obligations.

The Trustee relies on the Working Interest Owners for all operating and financial information regarding the Royalty Properties, as reported in this Form 10-Q. The Royalty Properties are owned by the Working Interest Owners, who are independent from the Trust. Trust unitholders and the Trustee have no influence or control over the operation or development of the Royalty Properties, or any governance, management, business, financial, or strategic plans of the Working Interest Owners in relation to the Royalty Properties.

As described in the Trust’s Annual Report on Form 10 K for the year ended December 31, 2024, according to reserve estimates prepared by independent petroleum engineering consultants, volumes from certain Royalty Properties are not currently profitable enough to generate future Net Proceeds to the Trust, based on the assumptions made and the methodologies used at that time. For these properties, declining well performance coupled with low prices has rendered these wells uneconomic as of that time.

Net Proceeds and the Trust’s quarterly distributions are highly dependent upon the prices realized from the sale of natural gas. Natural gas prices can fluctuate widely in response to a variety of factors that are beyond the control of the Trust and the Working Interest Owners. The Trust’s royalty income and its distributions to unitholders are heavily influenced by the sale prices received from marketing of production, whether prices received by the Working Interest Owners are market prices or prices determined from time to time by contract. The trading price of the units is substantially related to commodity prices and the Trust’s royalty income.

### Note Regarding Forward-Looking Statements

This Form 10-Q includes “forward-looking statements” about the Trust and other matters discussed herein that are subject to risks and uncertainties that are intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact included in this document, including, without limitation, statements under “Trustee’s Discussion and Analysis of Financial Condition and Results of Operations,” including the Trust’s or any Working Interest Owner’s future financial position, status in any insolvency proceeding, business strategy, budgets, projected costs, political and regulatory matters, such as tax and environmental policy, climate regulations, expected market conditions and commodity pricing, interest rates, prices received by Working Interest Owners, plans and objectives, oil and natural gas prices, information relating to future distributions, statements regarding reconciliation and adjustment of estimated versus actual revenue and expense amounts, statements pertaining to future exploration and development activities and costs, estimates regarding production costs and expenses, estimates of cash flows, statements regarding the number of wells to be drilled and producing in future periods, and estimates regarding production and reserves, are forward-looking statements. Actual outcomes and results, which are substantially all outside of the Trust’s control, may differ materially from those projected.

Forward-looking statements are generally accompanied by words such as “estimate,” “project,” “predict,” “future,” “believe,” “expect,” “anticipate,” “potential,” “possibly,” “could,” “may,” “can,” “foresee,” “plan,” “goal,” “forecast,” “assume,” “target,” “should,” “intend” or other words that convey the uncertainty of future events or outcomes. These statements are based on certain assumptions made by the Trust in light of its experience and perception of historical trends, current conditions and expected future developments, as well as other factors the Trustee believes are appropriate under the circumstances. The Trustee relies on the Working Interest Owners for information regarding the Subject Interests (as defined herein in “*Note 1 — Trust Organization and Provisions”*), the Royalties, and the Working Interest Owners themselves.

Although the information provided by the Working Interest Owners provides a reasonable basis for the forward-looking statements contained herein, no assurance can be given that such expectations will prove to be correct. The Working Interest Owners alone control historical operating data, and handle receipt and payment of funds relating to the Royalty Properties and payments to the Trust for the related royalty. The Trustee cannot assure that errors or adjustments or expenses accrued by the Working Interest Owners, whether historical or future, will not affect future royalty income and distributions by the Trust. However, whether actual results and developments will conform with such expectations and predictions is subject to a number of risks and uncertainties, including the risk factors discussed in Part I, Item 1A of the Trust’s Annual Report on Form 10-K for the year ended December 31, 2024, and those set forth from time to time in the Trust’s filings with the Securities and Exchange Commission (the “SEC”), which could affect the future results of the energy industry in general, and the Trust and Working Interest Owners in particular, and could cause those results to differ materially from those expressed in such forward-looking statements. The actual results or developments anticipated may not be realized or, even if substantially realized, they may not have the expected consequences to or effects on the Working Interest Owners’ businesses and the Trust. Such statements are expressly qualified in their entirety by the risks and other factors discussed and are not guarantees of future performance. Actual results or developments may differ materially from those projected in such forward-looking statements. The Trust undertakes no obligation to publicly update or revise any forward-looking statements, except as required by applicable law.

### SUMMARY OF ROYALTY INCOME, PRODUCTION AND AVERAGE PRICES

### (Unaudited)

Royalty income is computed after deducting the Trust’s proportionate share of capital costs, operating costs and interest on any cost carryforward from the Trust’s proportionate share of “Gross Proceeds,” as defined in the Conveyance.

The Trust’s royalty income from the Royalty Properties and its distributions to unitholders are heavily influenced by commodity prices received by Working Interest Owners. Commodity prices may fluctuate widely in response to (i) relatively minor changes in the supply of and demand for oil and natural gas, (ii) market uncertainty and (iii) a variety of additional factors that are beyond the Trustee’s control. Royalty income may be based upon spot market prices or on prices determined by contract.

The following summary illustrates the net effect of the components of the actual royalty computation for the periods indicated.

| ​ ​ ​ | ​ ​ ​ | ​ ​ ​ | Three Months Ended September 30, 2025 Natural Gas | ​ | ​ | Natural Gas Liquids | ​ | ​ | Oil and Condensate | ​ ​ | ​ ​ | 2024 Natural Gas | ​ | ​ | Natural Gas Liquids | ​ | ​ | Oil and Condensate | ​ ​ ​ |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| The Trust’s proportionate share of Gross Proceeds (1)(5) | ​ | ​ | ​ $501,670 ​ | ​ | ​ | ​ $319,658 ​ | ​ | ​ | ​ $13,516 ​ | ​ | ​ | ​ $320,978 ​ | ​ | ​ | ​ $296,021 ​ | ​ | ​ | ​ $26,805 ​ | ​ |
| Less the Trust’s proportionate share of: | ​ | ​ | ​ ​ ​ ​ | ​ | ​ | ​ ​ ​ ​ | ​ | ​ | ​ ​ ​ ​ | ​ | ​ | ​ ​ ​ ​ | ​ | ​ | ​ ​ ​ ​ | ​ | ​ | ​ ​ ​ ​ | ​ |
| Capital costs recovered | ​ | ​ | ​ ​ (17,029) ​ | ​ | ​ | ​ ​ (14,463) ​ | ​ | ​ | ​ ​ (1,075) ​ | ​ | ​ | ​ ​ (2,918) ​ | ​ | ​ | ​ ​ (7,683) ​ | ​ | ​ | ​ ​ (1,038) ​ | ​ |
| Operating costs | ​ | ​ | ​ ​ (409,297) ​ | ​ | ​ | ​ ​ (251,508) ​ | ​ | ​ | ​ ​ (8,097) ​ | ​ | ​ | ​ ​ (362,332) ​ | ​ | ​ | ​ ​ (270,311) ​ | ​ | ​ | ​ ​ (19,553) ​ | ​ |
| Net Proceeds(2) | ​ | ​ | ​ $75,344 ​ | ​ | ​ | ​ $53,687 ​ | ​ | ​ | ​ $4,344 ​ | ​ | ​ | ​ $(44,272) ​ | ​ | ​ | ​ $18,027 ​ | ​ | ​ | ​ $6,214 ​ | ​ |
| Royalty income(2) | ​ | ​ | ​ $67,122 ​ | ​ | ​ | ​ $57,527 ​ | ​ | ​ | ​ $4,344 ​ | ​ | ​ | ​ $14,723 ​ | ​ | ​ | ​ $43,029 ​ | ​ | ​ | ​ $6,214 ​ | ​ |
| Average sales price | ​ | ​ | ​ $1.73 ​ | ​ | ​ | ​ $19.40 ​ | ​ | ​ | ​ $55.80 ​ | ​ | ​ | ​ $0.61 ​ | ​ | ​ | ​ $18.05 ​ | ​ | ​ | ​ $71.45 ​ | ​ |
| Average production costs(3) | ​ | ​ | ​ $10.97 ​ | ​ | ​ | ​ $89.70 ​ | ​ | ​ | ​ $117.82 ​ | ​ | ​ | ​ $15.06 ​ | ​ | ​ | ​ $116.59 ​ | ​ | ​ | ​ $236.75 ​ | ​ |
| **​** | **​** | **​** | **(Mcf)** | **​** | **​** | **(Bbls)** | **​** | **​** | **(Bbls)** | **​** | **​** | **(Mcf)** | **​** | **​** | **(Bbls)** | **​** | **​** | **(Bbls)** | **​** |
| Net production volumes attributable to the Royalty paid (4) | ​ | ​ | ​ ​ 38,877 ​ | ​ | ​ | ​ ​ 2,965 ​ | ​ | ​ | ​ ​ 78 ​ | ​ | ​ | ​ ​ 24,249 ​ | ​ | ​ | ​ ​ 2,384 ​ | ​ | ​ | ​ ​ 87 ​ | ​ |

14

| ​ ​ ​ | ​ ​ ​ | ​ ​ ​ | Nine Months Ended September 30, 2025 Natural Gas | ​ | ​ | Natural Gas Liquids | ​ | ​ | Oil and Condensate | ​ ​ | ​ ​ | 2024 Natural Gas | ​ | ​ | Natural Gas Liquids | ​ | ​ | Oil and Condensate | ​ ​ ​ |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| The Trust’s proportionate share of Gross Proceeds (1)(5) | ​ | ​ | ​ $1,662,019 ​ | ​ | ​ | ​ $826,242 ​ | ​ | ​ | ​ $46,238 ​ | ​ | ​ | ​ $1,504,638 ​ | ​ | ​ | ​ $917,827 ​ | ​ | ​ | ​ $51,131 ​ | ​ |
| Less the Trust’s proportionate share of: | ​ | ​ | ​ ​ ​ ​ | ​ | ​ | ​ ​ ​ ​ | ​ | ​ | ​ ​ ​ ​ | ​ | ​ | ​ ​ ​ ​ | ​ | ​ | ​ ​ ​ ​ | ​ | ​ | ​ ​ ​ ​ | ​ |
| Capital costs recovered | ​ | ​ | ​ ​ (52,556) ​ | ​ | ​ | ​ ​ (34,272) ​ | ​ | ​ | ​ ​ (3,232) ​ | ​ | ​ | ​ ​ (47,191) ​ | ​ | ​ | ​ ​ (40,295) ​ | ​ | ​ | ​ ​ (3,072) ​ | ​ |
| Operating costs | ​ | ​ | ​ ​ (1,428,278) ​ | ​ | ​ | ​ ​ (664,750) ​ | ​ | ​ | ​ ​ (26,209) ​ | ​ | ​ | ​ ​ (1,376,810) ​ | ​ | ​ | ​ ​ (739,321) ​ | ​ | ​ | ​ ​ (30,837) ​ | ​ |
| Net Proceeds(2) | ​ | ​ | ​ $181,185 ​ | ​ | ​ | ​ $127,220 ​ | ​ | ​ | ​ $16,797 ​ | ​ | ​ | ​ $80,637 ​ | ​ | ​ | ​ $138,211 ​ | ​ | ​ | ​ $17,222 ​ | ​ |
| Royalty income(2) | ​ | ​ | ​ $269,126 ​ | ​ | ​ | ​ $174,887 ​ | ​ | ​ | ​ $16,797 ​ | ​ | ​ | ​ $308,737 ​ | ​ | ​ | ​ $227,035 ​ | ​ | ​ | ​ $17,222 ​ | ​ |
| Average sales price | ​ | ​ | ​ $2.03 ​ | ​ | ​ | ​ $18.66 ​ | ​ | ​ | ​ $60.32 ​ | ​ | ​ | ​ $1.90 ​ | ​ | ​ | ​ $21.92 ​ | ​ | ​ | ​ $69.57 ​ | ​ |
| Average production costs(3) | ​ | ​ | ​ $11.15 ​ | ​ | ​ | ​ $74.58 ​ | ​ | ​ | ​ $105.72 ​ | ​ | ​ | ​ $8.74 ​ | ​ | ​ | ​ $75.27 ​ | ​ | ​ | ​ $136.98 ​ | ​ |
| **​** | **​** | **​** | **(Mcf)** | **​** | **​** | **(Bbls)** | **​** | **​** | **(Bbls)** | **​** | **​** | **(Mcf)** | **​** | **​** | **(Bbls)** | **​** | **​** | **(Bbls)** | **​** |
| Net production volumes attributable to the Royalty paid (4) | ​ | ​ | ​ ​ 132,809 ​ | ​ | ​ | ​ ​ 9,373 ​ | ​ | ​ | ​ ​ 278 ​ | ​ | ​ | ​ ​ 162,907 ​ | ​ | ​ | ​ ​ 10,358 ​ | ​ | ​ | ​ ​ 248 ​ | ​ |

(1)

Gross Proceeds from natural gas liquids attributable to each of the Hugoton Royalty Properties and San Juan Basin Royalty Properties are reported by the Working Interest Owners net of a volumetric in-kind processing fee retained by Scout and Hilcorp, respectively.

(2)

Royalty income is computed after deducting the Trust’s proportionate share of capital costs, operating costs and interest on any cost carryforward from the Trust’s proportionate share of Gross Proceeds. As a result of excess production costs incurred in one monthly operating period and then recovered in a subsequent monthly operating period, the royalty income paid to the Trust may not agree to the Trust’s royalty interest in the Net Proceeds (as defined in the Conveyance). The excess production costs are recoverable by the Working Interest Owners before any distribution of royalty income will be made to the Trust. See “Note 5 — Excess Production Costs” in the Notes to Financial Statements contained in Item 1 of this Form 10-Q. Also, as a result of royalty income reported by the Working Interest Owners in one quarterly operating period and received by the Trustee in a subsequent quarterly operating period, the royalty income paid to the Trust may not agree to the Trust’s royalty interest in the Net Proceeds.

(3)

Average production costs attributable to the Royalties are calculated as stated capital costs plus operating costs, divided by stated net production volumes attributable to the royalty paid. As noted above in footnote (2), production costs may be incurred in one operating period and then recovered in a subsequent operating period, which may cause royalty income paid to the Trust not to agree to the Trust’s royalty interest in the Net Proceeds.

(4)

Net production volumes attributable to the Royalties are determined by dividing royalty income by the average sales price received. Any differences noted are due to rounding.

(5)

Subject to adjustments to actual current production and costs to account for historical monthly reconciliations as they are completed. See Trustee’s Discussion and Analysis of Financial Condition and Results of Operations — *Operational Overview —* San Juan Basin Royalty Properties of this Form 10-Q.

### Three Months Ended September 30, 2025 and 2024

### Financial Review

| ​ ​ | ​ ​ | ​ ​ | Three Months Ended September 30, 2025 |  |  | ​ | ​ | 2024 |  |  | ​ ​ |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Royalty income | ​ | ​ | ​ | $128,993 | ​ | ​ | ​ | ​ | $63,966 | ​ | ​ |
| Other income | ​ | ​ | ​ | ​ — | ​ | ​ | ​ | ​ | ​ 17,347 | ​ | ​ |
| Interest income | ​ | ​ | ​ | ​ 21,156 | ​ | ​ | ​ | ​ | ​ 25,887 | ​ | ​ |
| General and administrative expense | ​ | ​ | ​ | ​ (61,255) | ​ | ​ | ​ | ​ | ​ (52,258) | ​ | ​ |
| Income available for distribution prior to cash reserves withheld for Trust expenses | ​ | ​ | ​ | ​ 88,894 | ​ | ​ | ​ | ​ | ​ 54,942 | ​ | ​ |
| Cash reserves withheld for Trust expenses | ​ | ​ | ​ | ​ — | ​ | ​ | ​ | ​ | ​ — | ​ | ​ |
| Distributable income | ​ | ​ | ​ | $88,894 | ​ | ​ | ​ | ​ | $54,942 | ​ | ​ |
| Distributable income per unit | ​ | ​ | ​ | $0.0477 | ​ | ​ | ​ | ​ | $0.0295 | ​ | ​ |
| Units outstanding | ​ | ​ | ​ | ​ 1,863,590 | ​ | ​ | ​ | ​ | ​ 1,863,590 | ​ | ​ |

*Royalty and Other Income.* The Trust’s royalty and other income was $128,993 for the quarter ended September 30, 2025, as compared to $81,313 for the quarter ended September 30, 2024. All of the royalty income received in the quarters ended September 30, 2025 and 2024 was from Hilcorp. The increase in royalty income was primarily a result of increases in pricing reported for natural gas and natural gas liquids, increases in net production for natural gas and natural gas liquids and a decrease in operating expenses for natural gas liquids and oil and condensate, offset in part by a decrease in pricing reported for oil and condensate, an increase in operating expense for natural gas and increases in capital expenditures for natural gas, natural gas liquids and oil and condensate for Hilcorp in the quarter ended September 30, 2025 as compared to the quarter ended September 30, 2024. In August 2024, Simcoe remitted proceeds of $17,347 to the Trust although the Trust remained in a deficit position with Simcoe as of the cash receipt date. The Trustee included these proceeds as Other Income and as an increase in the Contingent Reserve in the third quarter of 2024. However, upon further confirmation in the fourth quarter of 2024 the Trustee determined to include the proceeds as Royalty income and as a decrease in the Contingent reserve.

*Interest Income.* The Trust’s interest income for the quarters ended September 30, 2025 and 2024 was $21,156 and $25,887, respectively. In accordance with the Trust Indenture and as explained below, interest on cash on hand was paid at a rate equivalent to a 6.00% annualized return from January 1, 2025 through September 17, 2025 and a 5.75% annualized return from September 18, 2025 through September 30, 2025.

*General and Administrative Expense.* General and administrative expense was $61,255 and $52,258 for the three months ended September 30, 2025 and 2024, respectively. The Trustee’s fees are included in general and administrative expense.

For the quarter ended September 30, 2025, the Trustee was due $118,750 for its services. The Trust paid $108,288 of this amount to the Trustee, and $10,462 was allocated to offset against interest due to the Trust under the Trust Indenture. The Trust Indenture requires that cash being held by the Trustee earn interest at 1.5% below the prime rate, which would have yielded the Trust a 6.00% annualized return from January 1, 2025 through September 17, 2025 and a 5.75% annualized return from September 18, 2025 through September 30, 2025. However, due to the current interest rate environment, the Trustee was unable to obtain an account in which such an interest rate was available. In the event such an interest rate is unavailable in the future, the Trustee intends to allocate certain of its fees due to the Trust to meet the minimum interest rate payable under the Trust Indenture. In future periods the Trustee will continue to allocate a portion of the fees earned for its services to the Trust until all remaining interest due to the Trust is fully offset.

*Unreimbursed Expenses and the Contingent Reserve.* The Working Interest Owners partially reimburse the Trust each quarter for amounts paid in connection with the Trustee’s services. For the quarter ended September 30, 2025, the Trustee’s fees were $108,288 and the Working Interest Owners reimbursed a sum of $95,897 to the Trustee, which was the same amount reimbursed for the quarter ended September 30, 2024. As of September 30, 2025 and 2024, there were $2,652 and $0, respectively, of unreimbursed expenses.

The terms of the Trust Indenture provide, among other things, that the Trustee may establish cash reserves and borrow funds to pay liabilities of the Trust, and may pledge assets of the Trust to secure payment of the borrowings in accordance with the Trust Indenture. At any given time, the amount reserved for such future unknown contingent liabilities and expenses (such cumulative withholding being the “Contingent Reserve”) is included in cash and short-term investments. The Trustee utilizes the Contingent Reserve in its discretion in accordance with the Conveyance, and adjusts the balance of the Contingent Reserve as necessary when funds are added or removed. The net effects of such adjustments for the three months ended September 30, 2025 and 2024 resulted in the balance of the Contingent Reserve being equal to $1,927,792 as of September 30, 2025 and equal to $1,867,792 as of September 30, 2024. The Trustee intends to increase the Contingent Reserve to a total of $2.0 million.

*Distributable Income Available for Distribution.* The portion of the Trust’s distributable income available for distribution each period includes the royalty income received from the Working Interest Owners during such period, plus interest income earned to the date of distribution (if any) and increases or withdrawals from the Contingent Reserve (if any). Distributable income available for distribution for the quarter ended September 30, 2025 was $72,000, representing $0.0386 per unit, as compared to $10,314, representing $0.0055 per unit, for the quarter ended September 30, 2024. Based on 1,863,590 units outstanding for the quarters ended September 30, 2025 and 2024, respectively, the per unit distributions for each month in such periods were as follows:

| ​ | ​ | ​ | 2025 |  |  | ​ | ​ | 2024 |  |  | ​ |
| --- | --- | --- | --- | ---: | --- | --- | --- | --- | ---: | --- | --- |
| July | ​ | ​ | ​ | $0.0275 | ​ | ​ | ​ | ​ | $0.0018 | ​ | ​ |
| August | ​ | ​ | ​ | ​ 0.0094 | ​ | ​ | ​ | ​ | ​ — | ​ | ​ |
| September | ​ | ​ | ​ | ​ 0.0017 | ​ | ​ | ​ | ​ | ​ 0.0037 | ​ | ​ |
| ​ | ​ | ​ | ​ | $0.0386 | ​ | ​ | ​ | ​ | $0.0055 | ​ | ​ |

17

### Operational Review

#### Global Oil and Gas Market Impact in 2025

In 2025, announcements regarding changes in trade policies and practices, including the implementation of tariffs and proposed further tariffs, and responses globally, significantly affected global economic conditions. Continued uncertainty and policy changes by the governments of the U.S. and other countries could contribute to further market volatility and deteriorating or prolonged weakened economic conditions and declines in energy prices that may have an adverse effect on revenues and distributions by the Trust. The likelihood of the U.S. or its trading partners imposing new or reciprocal tariffs, export restrictions, or other forms of trade-related sanctions remains uncertain. The business of the Working Interest Owners may be adversely affected by the imposition of tariffs on imports and measures being taken to mitigate its impact. At this time, the full extent to which the tariffs and trade-related actions will negatively impact the global economy and the oil and gas industry is uncertain, but such actions could have a material adverse effect on the Working Interest Owners’ business and financial condition, which could have an adverse effect on Trust distributions.

Ongoing uncertainty across the global economy, including effects of the U.S. government shutdown, OPEC+ production plans, domestic economic growth, and Chinese economic growth create volatility that continues to affect the oil and gas industry and market prices. Oil prices have been impacted by certain actions by OPEC+, uneven global supply and demand trends, tariffs and trade policy, Russia’s invasion into Ukraine and hostilities and heightened geopolitical risks in the Middle East, among other factors. Global and domestic natural gas markets have experienced volatility due to macroeconomic conditions, infrastructure and logistical constraints, weather, and geopolitical issues, among other factors. If commodity prices for crude oil and natural gas fall or remain volatile, monthly distributions to unitholders could be substantially reduced or there may be no distributions in future periods. Inflationary pressures in the United States’ economy, trade related actions, high interest rates and global supply disruptions continue to affect the cost of labor and supplies. In addition, changes in economic conditions, including effects of the U.S. government shutdown, relatively high interest rates and lower global economic activity, could result in additional shifts in demand and supply for future periods. High levels of inflation and interest rates, uncertainty regarding tariffs and trade policy, and shipping and supply chain disruptions are expected to increase expenses for Working Interest Owners and are expected to have an adverse impact on royalty income during 2025.

#### Hugoton Royalty Properties

Natural gas and natural gas liquids production attributable to the Hugoton Royalty Properties accounted for none of the royalty income of the Trust during the third quarter of 2025 or 2024.

| ​ ​ | ​ ​ | ​ ​ | Three Months Ended September 30, 2025 |  |  | ​ | ​ | 2024 |  |  | ​ ​ |
| --- | --- | --- | --- | ---: | --- | --- | --- | --- | ---: | --- | --- |
| Royalty income attributable to Hugoton Royalty Properties | ​ | ​ | ​ | $— | ​ | ​ | ​ | ​ | $— | ​ | ​ |
| Operating costs attributable to Hugoton Royalty Properties | ​ | ​ | ​ | $397,736 | ​ | ​ | ​ | ​ | $397,776 | ​ | ​ |
| Capital expenditures attributable to Hugoton Royalty Properties | ​ | ​ | ​ | $(46) | ​ | ​ | ​ | ​ | $— | ​ | ​ |

*Royalty Income.* Royalty income attributable to the Hugoton Royalty Properties was $0 in both the third quarter of 2025 and in the third quarter of 2024. The lack of royalty income was primarily a result of actual expenses being greater than actual revenues for the three months ended September 30, 2025 and 2024, as reported by Scout. The Trust is engaged with Scout in reviewing the amount of Net Proceeds in past and current periods.

| ​ ​ ​ | ​ ​ ​ | ​ ​ ​ | Three Months Ended September 30, 2025 Natural Gas | ​ | ​ | Natural Gas Liquids | ​ | ​ | Oil and Condensate | ​ ​ | ​ ​ | 2024 Natural Gas | ​ | ​ | Natural Gas Liquids | ​ | ​ | Oil and Condensate | ​ ​ ​ |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Average sales price | ​ | ​ | ​ $3.59 ​ | ​ | ​ | ​ $24.72 ​ | ​ | ​ | ​ $— ​ | ​ | ​ | ​ $2.84 ​ | ​ | ​ | ​ $15.81 ​ | ​ | ​ | ​ $— ​ | ​ |
| **​** | **​** | **​** | **(Mcf)** | **​** | **​** | **(Bbls)** | **​** | **​** | **(Bbls)** | **​** | **​** | **(Mcf)** | **​** | **​** | **(Bbls)** | **​** | **​** | **(Bbls)** | **​** |
| Actual production volumes attributable to the Royalty paid for Hugoton Royalty Properties | ​ | ​ | ​ ​ 69,315 ​ | ​ | ​ | ​ ​ 5,565 ​ | ​ | ​ | ​ ​ — ​ | ​ | ​ | ​ ​ 76,225 ​ | ​ | ​ | ​ ​ 6,133 ​ | ​ | ​ | ​ ​ — ​ | ​ |
| Net production volumes attributable to the Royalty paid for Hugoton Royalty Properties | ​ | ​ | ​ ​ — ​ | ​ | ​ | ​ ​ — ​ | ​ | ​ | ​ ​ — ​ | ​ | ​ | ​ ​ — ​ | ​ | ​ | ​ ​ — ​ | ​ | ​ | ​ ​ — ​ | ​ |

*Average Sales Price.* Average sales prices per thousand cubic feet (“Mcf”) of natural gas and barrel (“Bbl”) for natural gas liquids for the Hugoton Royalty Properties are directly dependent on the prices Scout realizes for natural gas sold under short-term and multi-month contracts to multiple purchasers. Overall sales prices reported for natural gas from Hugoton Royalty Properties were higher for the three months ended September 30, 2025, as compared to the three months ended September 30, 2024.

#### San Juan Basin Royalty Properties

Royalty income from the San Juan Basin Royalty Properties is calculated and paid to the Trust on a state-by-state basis depending upon whether the property is located in Colorado or New Mexico. A majority of the royalty income from the San Juan Basin Royalty Properties is attributable to the San Juan Basin — New Mexico Properties.

### San Juan Basin — Colorado Properties

| ​ ​ | ​ ​ | ​ ​ | Three Months Ended September 30, 2025 |  |  | ​ | ​ | 2024 |  |  | ​ ​ |
| --- | --- | --- | --- | ---: | --- | --- | --- | --- | ---: | --- | --- |
| Royalty income attributable to San Juan Basin – Colorado Properties | ​ | ​ | ​ | $— | ​ | ​ | ​ | ​ | $— | ​ | ​ |
| Operating costs attributable to San Juan Basin – Colorado Properties | ​ | ​ | ​ | $22,661 | ​ | ​ | ​ | ​ | $29,402 | ​ | ​ |

*Royalty Income.* Royalty income attributable to the San Juan Basin — Colorado Royalty Properties was $0 in both the third quarter of 2025 and in the third quarter of 2024. The lack of royalty income for the three months ended September 30, 2025 was primarily a result of prior period adjustments related to joint interest billing amounts, reported by Simcoe in 2023, that were recovered by Simcoe by withholding the Net Proceeds that would otherwise be payable to the Trust in the quarter ended September 30, 2025. Because of these adjustments reported by Simcoe, the amounts of Net Proceeds reported during the three months ended September 30, 2025 for the San Juan Basin — Colorado Properties operated by Simcoe may not be representative of Net Proceeds that will be received in future quarters. The Trust is engaged with Simcoe in reviewing the amount of Net Proceeds in past and current periods.

| ​ ​ ​ | ​ ​ ​ | ​ ​ ​ | Three Months Ended September 30, 2025 Natural Gas | ​ | ​ | Natural Gas Liquids | ​ | ​ | Oil and Condensate | ​ ​ | ​ ​ | 2024 Natural Gas | ​ | ​ | Natural Gas Liquids | ​ | ​ | Oil and Condensate | ​ ​ ​ |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Average sales price(1) | ​ | ​ | ​ $0.72 ​ | ​ | ​ | ​ $— ​ | ​ | ​ | ​ $— ​ | ​ | ​ | ​ $0.47 ​ | ​ | ​ | ​ $0.66 ​ | ​ | ​ | ​ $— ​ | ​ |
| **​** | **​** | **​** | **(Mcf)** | **​** | **​** | **(Bbls)** | **​** | **​** | **(Bbls)** | **​** | **​** | **(Mcf)** | **​** | **​** | **(Bbls)** | **​** | **​** | **(Bbls)** | **​** |
| Actual production volumes attributable to the Royalty paid for San Juan Basin − Colorado Properties | ​ | ​ | ​ ​ 53,309 ​ | ​ | ​ | ​ ​ — ​ | ​ | ​ | ​ ​ — ​ | ​ | ​ | ​ ​ 61,274 ​ | ​ | ​ | ​ ​ 941 ​ | ​ | ​ | ​ ​ — ​ | ​ |
| Net production volumes attributable to the Royalty paid for San Juan Basin − Colorado Properties | ​ | ​ | ​ ​ — ​ | ​ | ​ | ​ ​ — ​ | ​ | ​ | ​ ​ — ​ | ​ | ​ | ​ ​ — ​ | ​ | ​ | ​ ​ — ​ | ​ | ​ | ​ ​ — ​ | ​ |

(1)

Per information provided by Simcoe, Simcoe pays royalty amounts on the same blended Weighted Average Sales Price (“WASP”) (fixed plus market) that Simcoe receives from their purchaser. WASP is defined as: for each delivery point, a price per MMBtu for each month equal to gas proceeds less transportation costs, divided by the total number of first of month baseload MMBtus of gas sold at such delivery point. Sales prices received by Simcoe may be lower than current market prices which may result in less than current market average gas prices received by the Trust.

### San Juan Basin — New Mexico Properties

| ​ ​ | ​ ​ | ​ ​ | Three Months Ended September 30, 2025 |  |  | ​ | ​ | 2024 |  |  | ​ ​ |
| --- | --- | --- | --- | ---: | --- | --- | --- | --- | ---: | --- | --- |
| Royalty income attributable to San Juan Basin – New Mexico Properties | ​ | ​ | ​ | $128,993 | ​ | ​ | ​ | ​ | $63,966 | ​ | ​ |
| Operating costs attributable to San Juan Basin – New Mexico Properties | ​ | ​ | ​ | $248,505 | ​ | ​ | ​ | ​ | $225,018 | ​ | ​ |
| Capital expenditures attributable to San Juan Basin – New Mexico Properties | ​ | ​ | ​ | $32,613 | ​ | ​ | ​ | ​ | $11,639 | ​ | ​ |

*Royalty Income.* Royalty income from the San Juan Basin — New Mexico Properties was $128,993 during the third quarter of 2025, as compared to royalty income of $63,966 during the third quarter of 2024, an increase of approximately $65,026. The increase in royalty income was primarily a result of increases in pricing reported for natural gas and natural gas liquids, increases in net production for natural gas and natural gas liquids and a decrease in operating expenses for natural gas liquids and oil and condensate, offset in part by a decrease in pricing reported for oil and condensate, an increase in operating expense for natural gas and increases in capital expenditures for natural gas, natural gas liquids and oil and condensate in the quarter ended September 30, 2025 as compared to the quarter ended September 30, 2024.

| ​ ​ ​ | ​ ​ ​ | ​ ​ ​ | Three Months Ended September 30, 2025 Natural Gas | ​ | ​ | Natural Gas Liquids | ​ | ​ | Oil and Condensate | ​ ​ | ​ ​ | 2024 Natural Gas | ​ | ​ | Natural Gas Liquids | ​ | ​ | Oil and Condensate | ​ ​ ​ |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Average sales price | ​ | ​ | ​ $1.73 ​ | ​ | ​ | ​ $19.40 ​ | ​ | ​ | ​ $55.80 ​ | ​ | ​ | ​ $0.61 ​ | ​ | ​ | ​ $18.05 ​ | ​ | ​ | ​ $71.45 ​ | ​ |
| **​** | **​** | **​** | **(Mcf)** | **​** | **​** | **(Bbls)** | **​** | **​** | **(Bbls)** | **​** | **​** | **(Mcf)** | **​** | **​** | **(Bbls)** | **​** | **​** | **(Bbls)** | **​** |
| Actual production volumes attributable to the Royalty paid for San Juan Basin — New Mexico Properties | ​ | ​ | ​ ​ 124,236 ​ | ​ | ​ | ​ ​ 9,386 ​ | ​ | ​ | ​ ​ 242 ​ | ​ | ​ | ​ ​ 124,138 ​ | ​ | ​ | ​ ​ 10,997 ​ | ​ | ​ | ​ ​ 375 ​ | ​ |
| Net production volumes attributable to the Royalty paid for San Juan Basin — New Mexico Properties | ​ | ​ | ​ ​ 38,877 ​ | ​ | ​ | ​ ​ 2,965 ​ | ​ | ​ | ​ ​ 78 ​ | ​ | ​ | ​ ​ 24,249 ​ | ​ | ​ | ​ ​ 2,384 ​ | ​ | ​ | ​ ​ 87 ​ | ​ |

In past periods, Hilcorp used estimates for revenues and expenses and made payments to the Trust based on those estimates. Hilcorp subsequently performed true-up reconciliations of those revenue and expense amounts which resulted in either charges to or credits for the Trust. The Trust recognized these amounts in accordance with the Trust’s modified cash basis of accounting. The Trust is engaged with Hilcorp in reviewing the amount of Net Proceeds in past and current periods.

Pursuant to the Trust Indenture, the Trust is not required to pay to Hilcorp any amounts that could be owed if the estimated revenue exceeded actual revenue amounts or estimated expenses were less than actual expense amounts in past periods. However, Hilcorp may recover such amounts by withholding a portion or all of the Net Proceeds that would otherwise be payable to the Trust in subsequent periods. This could result in a decrease in Net Proceeds paid to the Trust and could result in future material reductions in distributions to the Trust’s unitholders.

### Nine Months Ended September 30, 2025 and 2024

### Financial Review

| ​ ​ | ​ ​ | ​ ​ | Nine Months Ended September 30, 2025 |  |  | ​ | ​ | 2024 |  |  | ​ ​ |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Royalty income | ​ | ​ | ​ | $460,810 | ​ | ​ | ​ | ​ | $552,994 | ​ | ​ |
| Other income | ​ | ​ | ​ | ​ (432) | ​ | ​ | ​ | ​ | ​ 2,683 | ​ | ​ |
| Interest income | ​ | ​ | ​ | ​ 61,764 | ​ | ​ | ​ | ​ | ​ 74,532 | ​ | ​ |
| General and administrative expense | ​ | ​ | ​ | ​ (156,433) | ​ | ​ | ​ | ​ | ​ (157,587) | ​ | ​ |
| Income available for distribution prior to cash reserves withheld for Trust expenses | ​ | ​ | ​ | ​ 365,709 | ​ | ​ | ​ | ​ | ​ 472,622 | ​ | ​ |
| Cash reserves withheld for Trust expenses | ​ | ​ | ​ | ​ — | ​ | ​ | ​ | ​ | ​ (72,000) | ​ | ​ |
| Distributable income | ​ | ​ | ​ | $365,709 | ​ | ​ | ​ | ​ | $400,622 | ​ | ​ |
| Distributable income per unit | ​ | ​ | ​ | $0.1962 | ​ | ​ | ​ | ​ | $0.2150 | ​ | ​ |
| Units outstanding | ​ | ​ | ​ | ​ 1,863,590 | ​ | ​ | ​ | ​ | ​ 1,863,590 | ​ | ​ |

21

*Royalty and Other Income.* The Trust’s Royalty and other income was $460,378 for the nine months ended September 30, 2025, as compared to $555,678 for the nine months ended September 30, 2024. All of the Royalty income received in the nine months ended September 30, 2025 and 2024 was from Hilcorp. The decrease in Royalty income was primarily a result of decreases in pricing for natural gas liquids and oil and condensate, decreases in net production for natural gas and natural gas liquids, an increase in capital expenditures for natural gas, and an increase in operating expense for natural gas, offset in part by an increase in pricing for natural gas, a decrease in capital expenditures for natural gas liquids and decreases in operating expense for natural gas liquids and oil and condensate for Hilcorp, in the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024.

*Interest Income.* The Trust’s interest income for the nine months ended September 30, 2025 and 2024 was $61,764 and $74,532, respectively. In accordance with the Trust Indenture and as explained below, interest on cash on hand was paid at a rate equivalent to a 6.00% annualized return from January 1, 2025 through September 17, 2025 and a 5.75% annualized return from September 18, 2025 through September 30, 2025.

*General and Administrative Expense.* General and administrative expense was $156,433 and $157,587 for the nine months ended September 30, 2025 and 2024, respectively. The Trustee’s fees are included in general and administrative expense.

For the nine months ended September 30, 2025, the Trustee was due $356,250 for its services. The Trust paid $324,865 of this amount to the Trustee, and $31,385 was allocated to offset against interest due to the Trust under the Trust Indenture. The Trust Indenture requires that cash being held by the Trustee earn interest at 1.5% below the prime rate, which would have yielded the Trust a 6.00% annualized return from January 1, 2025 through September 17, 2025 and a 5.75% annualized return from September 18, 2025 through September 30, 2025. However, due to the current interest rate environment, the Trustee was unable to obtain an account in which such an interest rate was available. In the event such an interest rate is unavailable in the future, the Trustee intends to allocate certain of its fees due to the Trust to meet the minimum interest rate payable under the Trust Indenture. In future periods, the Trustee will continue to allocate a portion of the fees earned for its services to the Trust until all remaining interest due to the Trust is fully offset.

*Unreimbursed Expenses and the Contingent Reserve.* The Working Interest Owners partially reimburse the Trust each quarter for amounts paid in connection with the Trustee’s services. For the nine months ended September 30, 2025, the Trustee’s fees were $324,865 and the Working Interest Owners reimbursed a sum of $287,691 to the Trustee, which was the same amount reimbursed for the nine months ended September 30, 2024. As of each of the nine-month periods ended September 30, 2025 and 2024, there were $2,652 and $0, respectively, of unreimbursed expenses.

The terms of the Trust Indenture provide, among other things, that the Trustee may establish cash reserves and borrow funds to pay liabilities of the Trust, and may pledge assets of the Trust to secure payment of the borrowings in accordance with the Trust Indenture. At any given time, the amount reserved for such future unknown contingent liabilities and expenses (such cumulative withholding being the “Contingent Reserve”) is included in cash and short-term investments. The Trustee utilizes the Contingent Reserve in its discretion in accordance with the Conveyance, and adjusts the balance of the Contingent Reserve as necessary when funds are added or removed. The net effects of such adjustments for the nine months ended September 30, 2025 and 2024 resulted in the balance of the Contingent Reserve being equal to $1,927,792 as of September 30, 2025 and equal to $1,867,792 as of September 30, 2024. The Trustee intends to increase the Contingent Reserve to a total of $2.0 million.

*Distributable Income Available for Distribution.* The portion of the Trust’s distributable income available for distribution each period includes the Royalty income received from the Working Interest Owners during such period, plus interest income earned to the date of distribution (if any) and increases or withdrawals from the Contingent Reserve (if any). Distributable income available for distribution for the nine months ended September 30, 2025 was $309,943, representing $0.1663 per unit, as compared to $335,043, representing $0.1797 per unit, for the nine months ended September 30, 2024.

### Operational Review

#### Hugoton Royalty Properties

Natural gas and natural gas liquids production attributable to the Hugoton Royalty Properties accounted for none of the Royalty income of the Trust during the nine months ended September 30, 2025.

| ​ ​ | ​ ​ | ​ ​ | Nine Months Ended September 30, 2025 |  |  | ​ | ​ | 2024 |  |  | ​ ​ |
| --- | --- | --- | --- | ---: | --- | --- | --- | --- | ---: | --- | --- |
| Royalty income attributable to Hugoton Royalty Properties | ​ | ​ | ​ | $— | ​ | ​ | ​ | ​ | $— | ​ | ​ |
| Operating costs attributable to Hugoton Royalty Properties | ​ | ​ | ​ | $1,300,986 | ​ | ​ | ​ | ​ | $1,302,531 | ​ | ​ |
| Capital expenditures attributable to Hugoton Royalty Properties | ​ | ​ | ​ | $381 | ​ | ​ | ​ | ​ | $540 | ​ | ​ |

*Royalty Income.* Royalty income attributable to the Hugoton Royalty Properties was $0 for the nine months ended September 30, 2025 and for the nine months ended September 30, 2024. The lack of Royalty income was primarily a result of actual expenses being greater than actual revenues for the nine months ended September 30, 2025, as reported by Scout. The Trustee is engaged with Scout in reviewing the amount of Net Proceeds in past and current periods.

| ​ ​ ​ | ​ ​ ​ | ​ ​ ​ | Nine Months Ended September 30, 2025 Natural Gas | ​ | ​ | Natural Gas Liquids | ​ | ​ | Oil and Condensate | ​ ​ | ​ ​ | 2024 Natural Gas | ​ | ​ | Natural Gas Liquids | ​ | ​ | Oil and Condensate | ​ ​ ​ |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Average sales price | ​ | ​ | ​ $3.95 ​ | ​ | ​ | ​ $22.19 ​ | ​ | ​ | ​ $— ​ | ​ | ​ | ​ $3.05 ​ | ​ | ​ | ​ $16.13 ​ | ​ | ​ | ​ $— ​ | ​ |
| **​** | **​** | **​** | **(Mcf)** | **​** | **​** | **(Bbls)** | **​** | **​** | **(Bbls)** | **​** | **​** | **(Mcf)** | **​** | **​** | **(Bbls)** | **​** | **​** | **(Bbls)** | **​** |
| Actual production volumes attributable to the Royalty paid for Hugoton Royalty Properties | ​ | ​ | ​ ​ 205,088 ​ | ​ | ​ | ​ ​ 15,473 ​ | ​ | ​ | ​ ​ — ​ | ​ | ​ | ​ ​ 223,733 ​ | ​ | ​ | ​ ​ 18,576 ​ | ​ | ​ | ​ ​ — ​ | ​ |
| Net production volumes attributable to the Royalty paid for Hugoton Royalty Properties | ​ | ​ | ​ ​ — ​ | ​ | ​ | ​ ​ — ​ | ​ | ​ | ​ ​ — ​ | ​ | ​ | ​ ​ — ​ | ​ | ​ | ​ ​ — ​ | ​ | ​ | ​ ​ — ​ | ​ |

23

#### San Juan Basin Royalty Properties

### San Juan Basin — Colorado Properties

| ​ ​ | ​ ​ | ​ ​ | Nine Months Ended September 30, 2025 |  |  | ​ | ​ | 2024 |  |  | ​ ​ |
| --- | --- | --- | --- | ---: | --- | --- | --- | --- | ---: | --- | --- |
| Royalty income attributable to San Juan Basin – Colorado Properties | ​ | ​ | ​ | $— | ​ | ​ | ​ | ​ | $— | ​ | ​ |
| Operating costs attributable to San Juan Basin – Colorado Properties | ​ | ​ | ​ | $92,317 | ​ | ​ | ​ | ​ | $103,389 | ​ | ​ |

*Royalty Income.* Royalty income from the San Juan Basin — Colorado Royalty Properties was $0 for the nine months ended September 30, 2025, as compared to $0 during the same period in 2024. The lack of royalty income for the nine months ended September 30, 2025 was primarily a result of prior period adjustments related to joint interest billing amounts, reported by Simcoe in 2023, that were recovered by Simcoe by withholding the Net Proceeds that would otherwise be payable to the Trust in the nine months ended September 30, 2025. In September 2023, Simcoe informed the Trustee that the true-up previously performed by Simcoe for the periods of 2020 through 2022 included revenues only and did not include any true-up for joint interest billing amounts. In addition, in March 2025, Simcoe informed the Trustee that it is in the process of performing a true-up for periods from 2020 to 2024. The result is that the Trust remains in a deficit position with Simcoe as of the nine months ended September 30, 2025. Due to prior adjustments reported by Simcoe and the true-up for joint interest billing and other amounts, the amounts of Net Proceeds reported during the nine months ended September 30, 2025 for the San Juan Basin — Colorado Properties operated by Simcoe may not be representative of Net Proceeds that will be received in future quarters. The Trust is engaged with Simcoe in reviewing the amount of Net Proceeds in past and current periods.

| ​ ​ ​ | ​ ​ ​ | ​ ​ ​ | Nine Months Ended September 30, 2025 Natural Gas | ​ | ​ | Natural Gas Liquids | ​ | ​ | Oil and Condensate | ​ ​ | ​ ​ | 2024 Natural Gas | ​ | ​ | Natural Gas Liquids | ​ | ​ | Oil and Condensate | ​ ​ ​ |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Average sales price(1) | ​ | ​ | ​ $0.67 ​ | ​ | ​ | ​ $0.75 ​ | ​ | ​ | ​ $— ​ | ​ | ​ | ​ $0.56 ​ | ​ | ​ | ​ $0.67 ​ | ​ | ​ | ​ $— ​ | ​ |
| **​** | **​** | **​** | **(Mcf)** | **​** | **​** | **(Bbls)** | **​** | **​** | **(Bbls)** | **​** | **​** | **(Mcf)** | **​** | **​** | **(Bbls)** | **​** | **​** | **(Bbls)** | **​** |
| Actual production volumes attributable to the Royalty paid for San Juan Basin — Colorado Properties | ​ | ​ | ​ ​ 154,850 ​ | ​ | ​ | ​ ​ 898 ​ | ​ | ​ | ​ ​ — ​ | ​ | ​ | ​ ​ 188,944 ​ | ​ | ​ | ​ ​ 3,191 ​ | ​ | ​ | ​ ​ — ​ | ​ |
| Net production volumes attributable to the Royalty paid for San Juan Basin − Colorado Properties | ​ | ​ | ​ ​ — ​ | ​ | ​ | ​ ​ — ​ | ​ | ​ | ​ ​ — ​ | ​ | ​ | ​ ​ — ​ | ​ | ​ | ​ ​ — ​ | ​ | ​ | ​ ​ — ​ | ​ |

(1)

Per information provided by Simcoe, Simcoe pays working interest owners on the same blended Weighted Average Sales Price (“WASP”) (fixed plus market) that Simcoe receives from their purchaser. WASP is defined as: for each delivery point, a price per MMBtu for each month equal to gas proceeds less transportation costs, divided by the total number of first of month baseload MMBtus of gas sold at such delivery point. Sales prices received by Simcoe may be lower than current market prices which may result in less than current market average gas prices received by the Trust.

### San Juan Basin — New Mexico Properties

| ​ ​ | ​ ​ | ​ ​ | Nine Months Ended September 30, 2025 |  |  | ​ | ​ | 2024 |  |  | ​ ​ |
| --- | --- | --- | --- | ---: | --- | --- | --- | --- | ---: | --- | --- |
| Royalty income attributable to San Juan Basin – New Mexico Properties | ​ | ​ | ​ | $460,810 | ​ | ​ | ​ | ​ | $552,994 | ​ | ​ |
| Operating costs attributable to San Juan Basin – New Mexico Properties | ​ | ​ | ​ | $725,934 | ​ | ​ | ​ | ​ | $741,048 | ​ | ​ |
| Capital expenditures attributable to San Juan Basin – New Mexico Properties | ​ | ​ | ​ | $89,679 | ​ | ​ | ​ | ​ | $90,018 | ​ | ​ |

*Royalty Income.* Royalty income from the San Juan Basin — New Mexico Properties was $460,810 for the nine months ended September 30, 2025, as compared to $552,994 during the same period in 2024, a decrease of approximately 17%. The decrease in Royalty income was primarily a result of decreases in pricing for natural gas liquids and oil and condensate, decreases in net production for natural gas and natural gas liquids, and increases in operating expense for natural gas, offset in part by an increase in pricing for natural gas, a decrease in capital expenditures for natural gas liquids and decreases in operating expense for natural gas liquids and oil and condensate, in the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024.

| ​ ​ ​ | ​ ​ ​ | ​ ​ ​ | Nine Months Ended September 30, 2025 Natural Gas | ​ | ​ | Natural Gas Liquids | ​ | ​ | Oil and Condensate | ​ ​ | ​ ​ | 2024 Natural Gas | ​ | ​ | Natural Gas Liquids | ​ | ​ | Oil and Condensate | ​ ​ ​ |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Average sales price | ​ | ​ | ​ $2.03 ​ | ​ | ​ | ​ $18.66 ​ | ​ | ​ | ​ $60.32 ​ | ​ | ​ | ​ $1.90 ​ | ​ | ​ | ​ $21.92 ​ | ​ | ​ | ​ $69.57 ​ | ​ |
| **​** | **​** | **​** | **(Mcf)** | **​** | **​** | **(Bbls)** | **​** | **​** | **(Bbls)** | **​** | **​** | **(Mcf)** | **​** | **​** | **(Bbls)** | **​** | **​** | **(Bbls)** | **​** |
| Actual production volumes attributable to the Royalty paid for San Juan Basin − New Mexico Properties | ​ | ​ | ​ ​ 369,108 ​ | ​ | ​ | ​ ​ 25,845 ​ | ​ | ​ | ​ ​ 767 ​ | ​ | ​ | ​ ​ 378,301 ​ | ​ | ​ | ​ ​ 28,103 ​ | ​ | ​ | ​ ​ 735 ​ | ​ |
| Net production volumes attributable to the Royalty paid for San Juan Basin − New Mexico Properties | ​ | ​ | ​ ​ 132,809 ​ | ​ | ​ | ​ ​ 9,373 ​ | ​ | ​ | ​ ​ 278 ​ | ​ | ​ | ​ ​ 162,907 ​ | ​ | ​ | ​ ​ 10,358 ​ | ​ | ​ | ​ ​ 248 ​ | ​ |

#### Liquidity and Capital Resources

The Trustee, acting pursuant to the Trust Indenture, may withhold royalty income for future unknown contingent liabilities and expenses, such cumulative withholding referred to as the Contingent Reserve. The Trustee reserves the right to determine whether or not to increase or release cash reserves in future periods with respect to any reimbursement expenses. At any given time, the Contingent Reserve is included in cash and short-term investments.

The Trustee may establish and increase cash reserves as permitted by the Trust Indenture. The Trustee has evaluated the adequacy of the Contingent Reserve based on the likelihood of future regular receipts of royalty income from the Royalty Properties, volatility in commodity prices and other market conditions affecting royalty income, and the anticipated costs and expenses related to the future termination of the Trust. On the basis of this evaluation, the Trustee intends to increase the Contingent Reserve to a total of $2.0 million, which will reduce Net Proceeds available to the Trust and distributions to Trust unitholders. The amount and timing of the addition to the Contingent Reserve will be determined by the Trustee on a monthly basis and is expected to vary in future periods depending on circumstances at the time. The Trustee intends to continue to evaluate the adequacy of the Contingent Reserve and may at any time, without notice to the unitholders, increase or decrease the amount of the Contingent Reserve based on this ongoing evaluation. Future filings by the Trust with the SEC will include information regarding the Trustee’s evaluation of cash reserves and funding of the Contingent Reserve.

In recent periods, substantial accumulated excess production costs have decreased Trust income and distributions, and in some months resulted in no Trust distributions. There can be no assurance that the Trust will receive additional royalty income adequate to fund the Contingent Reserve and to provide sufficient liquidity for the Trust.

The Trust may be unable to pay future distributions to unitholders if future royalty income is less than the amount required to fund the increase in the Contingent Reserve. Even if the Trust receives payments for the Royalties during the remainder of 2025 and beyond, unitholders may not receive any material distributions during such periods, because the Trust would need to withhold funds to first add to the cash reserve before making distributions to unitholders.

See Note 6 to the Financial Statements (Unaudited) in Item 1 for a discussion of the Contingent Reserve.

## Controls and procedures

As filed, 3,855 characters.

*Evaluation of Disclosure Controls and Procedures.* The Trustee maintains disclosure controls and procedures designed to ensure that information required to be disclosed by the Trust in the reports that it files or submits under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and regulations. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed by the Trust in the reports that it files or submits under the Exchange Act is accumulated and communicated by the Working Interest Owners to The Bank of New York Mellon Trust Company, N.A., as Trustee of the Trust, and its employees who participate in the preparation of the Trust’s periodic reports as appropriate to allow timely decisions regarding required disclosure.

As of the end of the period covered by this report, the Trust officer acting on behalf of the Trustee responsible for the administration of the Trust conducted an evaluation of the Trustee’s disclosure controls and procedures. The officer acting on behalf of the Trustee concluded that the Trust’s disclosure controls and procedures were effective with respect to the Trustee and its employees.

Due to the contractual arrangements of (i) the Trust Indenture and (ii) the rights of the Trust under the Conveyance regarding information furnished by the Working Interest Owners, the Trustee relies on information provided by the Working Interest Owners, including (i) the status of litigation, (ii) historical operating data, plans for future operating and capital expenditures and reserve information, (iii) information relating to projected production, and (iv) conclusions regarding reserves by their internal reserve engineers or other experts in good faith. See Part II Item 1A. “Other Information — Risk Factors — Trust unitholders and the Trustee have no control over the operation or development of the Royalty Properties” and “The Trustee relies upon the Working Interest Owners for information regarding the Royalty Properties” in the Trust’s Annual Report on Form 10-K for the year ended December 31, 2024 for a description of certain risks relating to these arrangements and reliance, including filings such as this filing outside the time periods specified notwithstanding effective disclosure controls and procedures, of the Trustee regarding information under its control.

The officer acting on behalf of the Trustee has not conducted a separate evaluation of the disclosure controls and procedures with respect to information furnished by the Working Interest Owners. The Trustee notes that it is conducting an ongoing review of certain information and calculations by the Working Interest Owners. See “Trustee’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources” under Part II, Item 7 of the Trust’s Annual Report on Form 10-K for the year ended December 31, 2024 for information concerning controls and procedures with respect to the Royalties and information related to the Trustee’s review of certain information and calculations by the Working Interest Owners.

*Changes in Internal Control over Financial Reporting.* In connection with the evaluation by the Trustee of changes in internal control over financial reporting of the Trust that occurred during the Trust’s last fiscal quarter, no change in the Trust’s internal control over financial reporting was identified that has materially affected, or is reasonably likely to materially affect, the Trust’s internal control over financial reporting. The Trustee notes for purposes of clarification that it has no authority over, has not evaluated and makes no statement concerning the internal control over financial reporting of the Working Interest Owners.

## Risk factors

As filed, 368 characters.

For a discussion of the Trust’s potential risks and uncertainties, please see “Risk Factors” in Part I, Item 1A of the Trust’s Annual Report on Form 10-K for the year ended December 31, 2024, and disclosures set forth from time to time in the Trust’s filings with the SEC. During the quarter ended September 30, 2025, there was no material change in such risk factors.

Filed Nov 13, 2025.
Source: SEC EDGAR, the filing index for accession 0001104659-25-111306. Last ingested by Listed: Oct 24, 2026, 14:55 ET. No prices; not investment advice.