MARINE PETROLEUM TRUST
For the period ended Mar 31, 2024. Filed May 14, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2024 · Filed May 14, 2024
MARPS$4.21-1.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2023-12-31; filed 2024-02-14.
0001193125-24-035193
Item 2. Trustee’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-03-31; filed 2024-05-14.
0000950170-24-059356
Item 2. Trustee’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 53 previous paragraphs and 64 current paragraphs.
33 unchanged; 20 reworded; 11 added; 0 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 14 previous and 3 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (11)
Current report
political conditions worldwide, and in particular, political disruptions, terrorist activities, wars or other armed conflicts in oil producing regions, including the war in Ukraine and the Israel-Hamas war;
Current report
worldwide economic conditions;
Current report
weather conditions;
Current report
trade barriers;
Current report
public health concerns;
Current report
the supply and price of domestic and foreign crude oil or natural gas;
Current report
the level of consumer demand;
Current report
the price and availability of alternative fuels;
Current report
the proximity to, and capacity of, transportation facilities;
Current report
the effect of worldwide energy conservation measures; and
Current report
the nature and extent of governmental regulation and taxation.
Reworded paragraphs (20)
Previous wording
The Indenture (and MPC’s charter andby-laws) expressly prohibits the operation of any kind of trade or business. The Trust’s oil and natural gas properties are depleting assets that are not being replaced due to the prohibition against investments. These restrictions, along with other factors, allow the Trust to be treated as a grantor trust. As a grantor trust, all income and deductions for state and U.S. federal income tax purposes generally flow through to each individual unitholder. The State of Texas imposes a franchise tax, but the Trust does not believe that it is subject to the franchise tax because at least 90% of its income is from passive sources. Please see Marine’s Annual Report on Form 10-K for the fiscal year ended June 30, 2023 for further information. MPC is a taxable entity that pays state and U.S. federal income taxes and state franchise taxes. However, MPC’s income specifically excludes 98% of the oil and natural gas royalties collected by MPC, which are retained by and delivered to the Trust because of the Trust’s net profits interest.
Current wording
The Indenture (and MPC’s charter and by-laws) expressly prohibits the operation of any kind of trade or business. The Trust’s oil and natural gas properties are depleting assets that are not being replaced due to the prohibition against investments. These restrictions, along with other factors, allow the Trust to be treated as a grantor trust. As a grantor trust, all income and deductions for state and U.S. federal income tax purposes generally flow through to each individual unitholder. The State of Texas imposes a franchise tax, but the Trust does not believe that it is subject to the franchise tax because at least 90% of its income is from passive sources. Please see Marine’s Annual Report on Form 10-K for the fiscal year ended June 30, 2023 for further information. MPC is a taxable entity that pays state and U.S. federal income taxes and state franchise taxes. However, MPC’s income specifically excludes 98% of the oil and natural gas royalties collected by MPC, which are retained by and delivered to the Trust because of the Trust’s net profits interest.
Previous wording
Marine relies on public records for information regarding drilling and workover operations. The public records available up to the date of this report indicate that there was one new well completion made during the three months ended December 31, 2023 on leases in which Marine has an interest. As of February 1, 2024, public records also indicated that there were no new wells in the process of being drilled or recompleted on other leases in which Marine has an interest.
Current wording
Marine relies on public records for information regarding drilling and workover operations. The public records available up to the date of this report indicate that there were no new well completions made during the three months ended March 31, 2024 on leases in which Marine has an interest. As of May 1, 2024, public records also indicated that there were no wells in the process of being drilled or recompleted on other leases in which Marine has an interest.
Previous wording
In accordance with the Staff Accounting Bulletin Topic 12:E,Financial Statements of Royalty Trusts, Marine uses the modified cash basis method of accounting. Under this accounting method, royalty income is recorded when received, and distributions to unitholders are recorded when declared by the Trustee of the Trust. Expenses of Marine (including accounting, legal, other professional fees, trustees’ fees andout-of-pocket expenses) are recorded on an actual paid basis. Marine also reports distributable income instead of net income under the modified cash basis method of accounting. Cash reserves are permitted to be established by the Trustee for certain contingencies that would not be recorded under generally accepted accounting principles in the United States.
Current wording
In accordance with the Staff Accounting Bulletin Topic 12:E, Financial Statements of Royalty Trusts, Marine uses the modified cash basis method of accounting. Under this accounting method, royalty income is recorded when received, and distributions to unitholders are recorded when declared by the Trustee of the Trust. Expenses of Marine (including accounting, legal, other professional fees, trustees’ fees and out-of-pocket expenses) are recorded on an actual paid basis. Marine also reports distributable income instead of net income under the modified cash basis method of accounting. Cash reserves are permitted to be established by the Trustee for certain contingencies that would not be recorded under generally accepted accounting principles in the United States.
Previous wording
Marine did not have any changes in its critical accounting policies or estimates during the three and six months ended December 31, 2023. Please see Marine’s Annual Report on Form 10-K for the fiscal year ended June 30, 2023 for a detailed discussion of its critical accounting policies.
Current wording
Marine did not have any changes in its critical accounting policies or estimates during the three and nine months ended March 31, 2024. Please see Marine’s Annual Report on Form 10-K for the fiscal year ended June 30, 2023 for a detailed discussion of its critical accounting policies.
Previous wording
The volume of oil and natural gas produced and the selling prices of such oil and natural gas are the primary factors in calculating overriding royalty payments. Production is affected by the natural production decline of the producing wells, the number of new wells drilled and the number of existing wells that arere-worked and placed back in production on the leases. Production from existing wells is anticipated to decrease in the future due to normal well depletion. The operators do not provide Marine with information regarding future drilling orre-working operations that could impact the oil and natural gas production from the leases for which Marine has an overriding royalty interest.
Current wording
The volume of oil and natural gas produced and the selling prices of such oil and natural gas are the primary factors in calculating overriding royalty payments. Production is affected by the natural production decline of the producing wells, the number of new wells drilled and the number of existing wells that are re-worked and placed back in production on the leases. Production from existing wells is anticipated to decrease in the future due to normal well depletion. The operators do not provide Marine with information regarding future drilling or re-working operations that could impact the oil and natural gas production from the leases for which Marine has an overriding royalty interest.
Previous wording
During the six months ended December 31, 2023, the Trust realized approximately 99% of its royalty income from the sale of oil and approximately 1% of its royalty income from the sale of natural gas. During the six months ended December 31, 2022, the Trust realized approximately 94% of its royalty income from the sale of oil and approximately 6% of its royalty income from the sale of natural gas. Royalty income includes royalties from oil and natural gas received from producers.
Current wording
During the nine months ended March 31, 2024 the Trust realized approximately 99% of its royalty income from the sale of oil and approximately 1% of its royalty income from the sale of natural gas. During the nine months ended March 31, 2023, the Trust realized approximately 94% of its royalty income from the sale of oil and approximately 6% of its royalty income from the sale of natural gas. Royalty income includes royalties from oil and natural gas received from producers.
Previous wording
Distributable income per unit for the six months ended December 31, 2023 was $0.21 as compared to $0.45 for the comparable period in 2022. Distributions per unit also amounted to approximately $0.21 per unit for the six months ended December 31, 2023, a decrease from distributions of $0.51 per unit for the comparable period in 2022.
Current wording
Distributable income per unit for the nine months ended March 31, 2024 was $0.27 as compared to $0.56 for the comparable period in 2023. Distributions per unit also amounted to $0.31 per unit for the nine months ended March 31, 2024, a decrease from distributions of $0.67 per unit for the comparable period in 2023.
Previous wording
For the six months ended December 31, 2023, oil production decreased to 7,041 barrels (bbls) from 9,499 bbls and natural gas production decreased to 5,439 thousand cubic feet (mcf) from 7,738 mcf as compared to the comparable period in 2022. For the six months ended December 31, 2023, the average price realized for oil decreased to $75.71 per bbl as compared to the price of $100.65 realized for the comparable period in 2022 and the average price realized for natural gas (net of expenses) decreased to $1.31 per mcf as compared to the average price of $8.40 realized for the comparable period in 2022.
Current wording
For the nine months ended March 31, 2024, oil production decreased to 10,005 barrels (bbls) from 12,888 bbls and natural gas production decreased to 7,615 thousand cubic feet (mcf) from 9,652 mcf as compared to the comparable period in 2023. For the nine months ended March 31, 2024, the average price realized for oil decreased to $76.60 per bbl as compared to the price of $95.71 realized for the comparable period in 2023 and the average price realized for natural gas (net of expenses) decreased to $1.11 per mcf as compared to the average price of $7.89 realized for the comparable period in 2023.
Previous wording
Income from oil and natural gas royalties decreased to $249,200 during the three months ended December 31, 2023 from $425,321 realized for the comparable period in 2022. Royalties decreased for the three months ended December 31, 2023 as compared to the comparable period in 2022 primarily due to a decrease in the production and price of oil and natural gas.
Current wording
Income from oil and natural gas royalties decreased to $234,500 during the three months ended March 31, 2024 from $288,614 realized for the comparable period in 2023. Royalties decreased for the three months ended March 31, 2024 as compared to the comparable period in 2023 primarily due to a decrease in the production of oil, by a sharp decrease in the pricing of gas, and by a decrease in the pricing of oil.
Previous wording
Distributable income decreased to $199,238 for the three months ended December 31, 2023 from $378,969 realized for the comparable period in 2022.
Current wording
Distributable income decreased to $115,524 for the three months ended March 31, 2024 from $215,803 realized for the comparable period in 2023.
Previous wording
Income from oil royalties, for the three months ended December 31, 2023 decreased to $246,941 from $397,391 realized for the comparable period in 2022. The volume of oil sold in the three months ended December 31, 2023 decreased to 3,077 bbls from 4,311 bbls realized for the comparable period in 2022, and the average price realized for oil decreased to $80.25 per bbl for the three months ended December 31, 2023 from $92.18 per bbl realized for the comparable period in 2022.
Current wording
Income from oil royalties, for the three months ended March 31, 2024 decreased to $233,186 from $277,476 realized for the comparable period in 2023. The volume of oil sold in the three months ended March 31, 2024 decreased to 2,964 bbls from 3,390 bbls realized for the comparable period in 2023, and the average price realized for oil decreased to $78.67 per bbl for the three months ended March 31, 2024 from $81.85 per bbl realized for the comparable period in 2023.
Previous wording
Income from natural gas royalties (net of expenses), for the three months ended December 31, 2023 decreased to $2,259 from $27,931 for the comparable period in 2022. The volume of natural gas sold in the three months ended December 31, 2023 decreased to 2,291 mcf from 3,321 mcf realized for the comparable period in 2022, and the average price realized for natural gas (net of expenses) decreased to $0.99 per mcf for the three months ended December 31, 2023 from $8.41 per mcf realized for the comparable period in 2022.
Current wording
Income from natural gas royalties (net of expenses), for the three months ended March 31, 2024 decreased to $1,315 from $11,138 for the comparable period in 2023. The volume of natural gas sold in the three months ended March 31, 2024 increased to 2,176 mcf from 1,914 mcf realized for the comparable period in 2023, and the average price realized for natural gas (net of expenses) decreased to $0.60 per mcf for the three months ended March 31, 2024 from $5.82 per mcf realized for the comparable period in 2023.
Previous wording
General and administrative expenses increased to $63,676 for the three months ended December 31, 2023 from $56,160 for the comparable period of 2022, primarily due to the timing of payment of professional fees.
Current wording
General and administrative expenses increased to $132,046 for the three months ended March 31, 2024 from $84,804 for the comparable period of 2023, primarily due to the timing of payment of professional fees.
Previous wording
Results of Operations—Six Months Ended December 31, 2023 Compared to the Six Months Ended December 31, 2022
Current wording
Results of Operations—Nine Months Ended March 31, 2024 Compared to the Nine Months Ended March 31, 2023
Previous wording
Income from oil and natural gas royalties decreased to $540,221 during the six months ended December 31, 2023 from $1,021,040 realized for the comparable period in 2022. Royalties decreased for the six months ended December 31, 2022 primarily due to a decrease in the price and production of oil and natural gas.
Current wording
Income from oil and natural gas royalties decreased to $774,721 during the nine months ended March 31, 2024 from $1,309,654 realized for the comparable period in 2023. Royalties decreased for the nine months ended March 31, 2024 primarily due to a decrease in the price and production of oil and natural gas.
Previous wording
Distributable income decreased to $427,295 for the six months ended December 31, 2023 from $901,338 realized for the comparable period in 2022.
Current wording
Distributable income decreased to $542,819 for the nine months ended March 31, 2024 from $1,117,141 realized for the comparable period in 2023.
Previous wording
Income from oil royalties for the six months ended December 31, 2023 decreased to $533,109 from $956,030 realized for the comparable period in 2022. The volume of oil sold in the six months ended December 31, 2023 decreased to 7,041 bbls from 9,499 bbls realized for the comparable period in 2022, and the average price realized for oil decreased to $75.71 per bbl for the six months ended December 31, 2023 from $100.65 per bbl realized for the comparable period in 2022.
Current wording
Income from oil royalties for the nine months ended March 31, 2024 decreased to $766,295 from $1,233,506 realized for the comparable period in 2023. The volume of oil sold in the nine months ended March 31, 2024 decreased to 10,005 bbls from 12,888 bbls realized for the comparable period in 2023, and the average price realized for oil decreased to $76.60 per bbl for the nine months ended March 31, 2024 from $95.71 per bbl realized for the comparable period in 2023.
Previous wording
Income from natural gas royalties (net of expenses) for the six months ended December 31, 2023 decreased to $7,112 from $65,010 for the comparable period in 2022. The volume of natural gas sold in the six months ended December 31, 2023 decreased to 5,439 mcf from 7,738 mcf realized for the comparable period in 2022, and the average price realized for natural gas (net of expenses) decreased to $1.31 per mcf for the six months ended December 31, 2023 from $8.40 per mcf realized for the comparable period in 2022.
Current wording
Income from natural gas royalties (net of expenses) for the nine months ended March 31, 2024 decreased to $8,426 from $76,148 for the comparable period in 2023. The volume of natural gas sold in the nine months ended March 31, 2024 decreased to 7,615 mcf from 9,652 mcf realized for the comparable period in 2023, and the average price realized for natural gas (net of expenses) decreased to $1.11 per mcf for the nine months ended March 31, 2024 from $7.89 per mcf realized for the comparable period in 2023.
Previous wording
The following table presents the quantities of oil and natural gas sold and the average price realized for the six months ended December 31, 2023, and those realized for the comparable period in 2022.
Current wording
The following table presents the quantities of oil and natural gas sold and the average price realized for the nine months ended March 31, 2024, and those realized for the comparable period in 2023.
Previous wording
General and administrative expenses increased to $140,294 for the six months ended December 31, 2023 from $134,241 for the comparable period of 2022, primarily due to an increase in professional fees incurred due to the change in Trustee and timing of payment of professional expenses.
Current wording
General and administrative expenses increased to $272,340 for the nine months ended March 31, 2024 from $219,045 for the comparable period of 2023, primarily due to an increase in professional fees and investor services incurred.