Item 2.
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Trustees Discussion and Analysis
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Forward Looking Information
Certain information included
in this report contains, and other materials filed or to be filed by the Trust with the Securities and Exchange Commission (as well as information included in oral statements or other written statements made or to be made by the Trust) may contain
or include, forward looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. Such forward looking statements may be or may concern,
among other things, capital expenditures, drilling activity, development activities, production efforts and volumes, hydrocarbon prices and the results thereof, and regulatory matters. Although the Trustee believes that the expectations reflected in
such forward-looking statements are reasonable, such expectations are subject to numerous risks and uncertainties and the Trustee can give no assurance that they will prove correct. There are many factors, none of which are within the Trustees
control, that may cause such expectations not to be realized, including, among other things, factors such as actual oil and gas prices and the recoverability of reserves, capital expenditures, general economic conditions, actions and policies of
petroleum-producing nations and other changes in the domestic and international energy markets. Such forward looking statements generally are accompanied by words such as estimate, expect, predict,
anticipate, goal, should, assume, believe, or other words that convey the uncertainty of future events or outcomes.
Three Months Ended March 31, 2019 Compared to Three Months Ended March 31, 2018
For the quarter ended March 31, 2019, royalty income received by the Trust amounted to $4,530,445 compared to royalty income of $9,719,305 during the
first quarter of 2018. The decrease in royalty income is primarily attributable to a decrease in oil and gas pricing and a decrease in production of oil and gas for the quarter ending March 31, 2019, as compared to the quarter ended
March 31, 2018. Average oil and gas prices were $44.47
and $3.38 for the quarter ending March 31, 2019 compared to $56.39
and $3.84 for the quarter ended March 31, 2018.
Interest income for the quarter ended March 31, 2019, was $7,158 compared to $5,476 during the first quarter of 2018. The increase in interest income is
primarily attributable to increased interest rates. Total expenses during the first quarter of 2019 amounted to $301,131 compared to $413,850 during the first quarter of 2018. The decrease in total expenses can be primarily attributed to decreased
expense for professional services and the timing of payment of expenses.
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