The following discussion of the Trust's financial condition and results of operations should be read in conjunction with the financial statements and notes thereto. The Trust's purpose is, in general, to hold the net profits interest, to distribute to the Trust unitholders cash that the Trust receives in respect of the net profits interest and to perform certain administrative functions in respect of the net profits interest and the Trust units. The Trust derives substantially all of its income and cash flows from the net profits interest. All information regarding operations has been provided to the Trustee by MV Partners.





Results of Operations

Results of Operations for the Quarters Ended September 30, 2022 and 2021

The cash received by the Trust from MV Partners during the quarter ended September 30, 2022 substantially represents the production by MV Partners from March 2022 through May 2022. The cash received by the Trust from MV Partners during the quarter ended September 30, 2021 substantially represents the production by MV Partners from March 2021 through May 2021. The revenues from oil production are typically received by MV Partners one month after production. The Trust's income from net profits interest before reserve adjustments increased $4,998,528 to $8,674,430 for the quarter ended September 30, 2022 from $3,675,902 for the quarter ended September 30, 2021. The increase was primarily due to a $6,248,160 increase in excess of revenues over direct operating expenses and lease equipment and development costs for the underlying properties to $10,843,038 from $4,594,878 for the same period in the prior year. These amounts were reduced by a Trust holdback for future expenses of $624,430 and $225,902 for the quarters ended September 30, 2022 and 2021, respectively. This increase of $398,528 is primarily the result of the Trustee's decision to build a cash reserve of approximately $1.265 million for the payment of future known, anticipated or contingent expenses or liabilities of the Trust, commencing with the distribution payable in the first quarter of 2022. The Trustee paid general and administrative expenses of $197,654 and $181,251 for the quarters ended September 30, 2022 and 2021, respectively. During the quarters ended September 30, 2022 and 2021, MV Partners did not withhold or release any dollar amounts due to the Trust from the previously established reserve for future capital expenditures. These factors resulted in distributable income for the quarter ended September 30, 2022 of $8,050,000, an increase of $4,600,000 from $3,450,000 for the quarter ended September 30, 2021.

The average price received for crude oil sold was $102.67 per Bbl and the average price received for natural gas sold was $5.00 per Mcf for the period from April 1, 2022 through June 30, 2022. The average price received for crude oil sold was $58.47 per Bbl and the average price received for natural gas sold was $2.36 per Mcf for the period from April 1, 2021 through June 30, 2021.

The overall production sales volumes attributable to the net profits interest for the oil and gas production collected during the period from April 1, 2022 through June 30, 2022 were 125,478 Bbls of oil, 5,880 Mcf of natural gas and 24 Bbls of natural gas liquids, for a total of 126,474 barrels of oil equivalent. The overall production sales volumes attributable to the net profits interest for the oil and gas production collected during the period from April 1, 2021 through June 30, 2021 were 131,830 Bbls of oil, 7,468 Mcf of natural gas and 17 Bbls of natural gas liquids, for a total of 133,086 barrels of oil equivalent.





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Results of Operations for the Nine Months Ended September 30, 2022 and 2021

The cash received by the Trust from MV Partners during the nine months ended September 30, 2022 substantially represents the production by MV Partners from September 2021 through May 2022. The cash received by the Trust from MV Partners during the nine months ended September 30, 2021 substantially represents the production by MV Partners from September 2020 through May 2021. The revenues from oil production are typically received by MV Partners one month after production. The Trust's income from net profits interest increased $11,376,688 to $19,001,716 for the nine months ended September 30, 2022 from $7,625,028 for the nine months ended September 30, 2021. The increase was primarily due to a $14,220,860 increase in excess of revenues over direct operating expenses and lease equipment and development costs for the underlying properties to $23,752,145 from $9,531,285 for the same period in the prior year. These amounts were reduced by a Trustee holdback for future expenses of $1,349,215 and $495,028 for the nine months ended September 30, 2022 and 2021, respectively. This increase is primarily the result of the Trustee's decision to build a cash reserve of approximately $1.265 million for the payment of future known, anticipated or contingent expenses or liabilities of the Trust, commencing with the distribution payable in the first quarter of 2022. The Trustee paid general and administrative expenses of $758,105 and $747,035 for the nine months ended September 30, 2022 and 2021, respectively. During the nine months ended September 30, 2022 and 2021, MV Partners did not withhold or release any dollar amounts due to the Trust from the previously established reserve for future capital expenditures. These factors resulted in distributable income for the nine months ended September 30, 2022 of $17,652,500, an increase of $10,522,500 from $7,130,000 for the nine months ended September 30, 2021.

The average price received for crude oil sold was $84.43 per Bbl and the average price received for natural gas sold was $4.77 per Mcf for the period from October 1, 2021 through June 30, 2022. The average price received for crude oil sold was $47.15 per Bbl and the average price received for natural gas sold was $2.05 per Mcf for the period from October 1, 2020 through June 30, 2021.

The overall production sales volumes attributable to the net profits interest for the oil and gas production collected during the period from October 1, 2021 through June 30, 2022 were 367,336 Bbls of oil, 21,179 Mcf of natural gas and 65 Bbls of natural gas liquids, for a total of 370,908 barrels of oil equivalent. The overall production sales volumes attributable to the net profits interest for the oil and gas production collected during the period from October 1, 2020 through June 30, 2021 were 388,307 Bbls of oil, 23,362 Mcf of natural gas and 64 Bbls of natural gas liquids, for a total of 392,242 barrels of oil equivalent.

Liquidity and Capital Resources

Other than Trust administrative expenses, including any reserves established by the Trustee for future liabilities, the Trust's only use of cash is for distributions to Trust unitholders. Administrative expenses include payments to the Trustee as well as an annual administrative fee to MV Partners pursuant to an administrative services agreement. Each quarter, the Trustee determines the amount of funds available for distribution. Available funds are the excess cash, if any, received by the Trust from the net profits interest and payments from other sources (such as interest earned on any amounts reserved by the Trustee) in that quarter, over the Trust's expenses paid for that quarter. Available funds are reduced by any cash the Trustee decides to hold as a reserve against future expenses. As of September 30, 2022, $888,257 was held by the Trustee as such a reserve.

The Trustee may cause the Trust to borrow funds required to pay expenses if the Trustee determines that the cash on hand and the cash to be received are insufficient to cover the Trust's expenses. If the Trust borrows funds, the Trust unitholders will not receive distributions until the borrowed funds are repaid. During the three and nine months ended September 30, 2022 and 2021, there were no such borrowings. MV Partners has provided a letter of credit in the amount of $1.8 million to the Trustee to protect the Trust against the risk that it does not have sufficient cash to pay future expenses.

As previously disclosed, the Trustee intends to build a reserve for the payment of future known, anticipated or contingent expenses or liabilities. The Trustee intends to withhold a portion of the proceeds otherwise available for distribution each quarter to gradually build a cash reserve to approximately $1.265 million. This amount is in addition to the $1.8 million letter of credit described above. The Trustee may increase or decrease the targeted amount at any time and may increase or decrease the rate at which it is withholding funds to build the cash reserve at any time, without advance notice to the unitholders. Cash held in reserve will be invested as required by the Trust Agreement. Any cash reserved in excess of the amount necessary to pay or provide for the payment of future known, anticipated or contingent expenses or liabilities eventually will be distributed to unitholders, together with interest earned on the funds. Through November 10, 2022, the Trustee has withheld a total of $737,919 from the proceeds otherwise available for distribution towards the building of the cash reserve described above.





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Income to the Trust from the net profits interest is based on the calculation and definitions of "gross proceeds" and "net proceeds" contained in the conveyance.

As substantially all of the underlying properties are located in mature fields, MV Partners does not expect future costs for the underlying properties to change significantly as compared to recent historical costs other than changes due to fluctuations in the general cost of oilfield services. MV Partners may establish a capital reserve of up to $1.0 million in the aggregate at any given time to reduce the impact on distributions of uneven capital expenditure timing. As of September 30, 2022, $1.0 million was held by MV Partners as a capital reserve.

The Trust does not have any transactions, arrangements or other relationships with unconsolidated entities or persons that could materially affect the Trust's liquidity or the availability of capital resources.

Note Regarding Forward-Looking Statements

This Form 10-Q includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). All statements other than statements of historical fact included in this Form 10-Q, including without limitation the statements under "Trustee's Discussion and Analysis of Financial Condition and Results of Operations" are forward-looking statements. Although MV Partners advised the Trust that it believes that the expectations reflected in the forward-looking statements contained herein are reasonable, no assurance can be given that such expectations will prove to have been correct. Important factors that could cause actual results to differ materially from expectations ("Cautionary Statements") are disclosed in this Form 10-Q and in the Trust's Annual Report on Form 10-K for the year ended December 31, 2021 (the "Form 10-K"), including under the section "Item 1A. Risk Factors". All subsequent written and oral forward-looking statements attributable to the Trust or persons acting on its behalf are expressly qualified in their entirety by the Cautionary Statements.

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