MARINE PETROLEUM TRUST

Previous wording

Marine Petroleum Trust (the “Trust”) is a royalty trust that was created in 1956 under the laws of the State of Texas. Effective February 20, 2018, Simmons Bank became corporate trustee of the Trust (“Simmons”) as a result of a merger between Simmons Bank and Southwest Bank, the former corporate trustee of the Trust. On November 4, 2021, Simmons announced that it had entered into an agreement with Argent Trust Company, a Tennessee chartered trust company (the “Trustee”), pursuant to which Simmons would resign as trustee of the Trust and nominate Argent Trust Company as successor trustee of the Trust. The change in trustee from Simmons to Argent Trust Company was effective on December 30, 2022.

Current wording

The Trust is a royalty trust that was created in 1956 under the laws of the State of Texas. Effective February 20, 2018, Simmons Bank became corporate trustee of the Trust (“Simmons”) as a result of a merger between Simmons Bank and Southwest Bank, the former corporate trustee of the Trust. On November 4, 2021, Simmons announced that it had entered into an agreement with Argent Trust Company, a Tennessee chartered trust company (the “Trustee”), pursuant to which Simmons would resign as trustee of the Trust and nominate Argent Trust Company as successor trustee of the Trust. The change in trustee from Simmons to Argent Trust Company was effective on December 30, 2022.

Previous wording

The Trust’s wholly owned subsidiary, Marine Petroleum Corporation (“MPC,” and collectively with the Trust, “Marine”), holds title to interests in properties that are situated offshore of Louisiana because at the time the Trust was created, trusts could not hold these interests under Louisiana law. MPC is prohibited from engaging in a trade or business and only takes those actions that are necessary for the administration and liquidation of its properties.

Current wording

The Trust’s wholly owned subsidiary, MPC, holds title to interests in properties that are situated offshore of Louisiana because at the time the Trust was created, trusts could not hold these interests under Louisiana law. MPC is prohibited from engaging in a trade or business and only takes those actions that are necessary for the administration and liquidation of its properties.

Previous wording

The Trustee assumes that some units of beneficial interest are held by middlemen, as such term is broadly defined in U.S. Treasury Regulations (and includes custodians, nominees, certain joint owners and brokers holding an interest for a customer in street name). Therefore, the Trustee considers the Trust to be a widely held fixed investment trust (“WHFIT”) for U.S. federal income tax purposes. Accordingly, the Trust will provide tax information in accordance with applicable U.S. Treasury Regulations governing the information reporting requirements of the Trust as a WHFIT. The Trustee will provide the required information and the contact information for the Trustee is below:

Current wording

The Trustee assumes that some units of beneficial interest are held by middlemen, as such term is broadly defined in U.S. Treasury Regulations (and includes custodians, nominees, certain joint owners and brokers holding an interest for a customer in street name, collectively referred to herein as "middlemen"). Therefore, the Trustee considers the Trust to be a non-mortgage widely held fixed investment trust (“WHFIT”) for U.S. federal income tax purposes. Accordingly, Argent Trust Company, EIN: 62-1437218, is the representative of the Trust that will provide tax information in accordance with applicable U.S. Treasury Regulations governing the information reporting requirements of the Trust as a WHFIT. The Trustee will also post tax information at www.marps-marine.com and the contact information for the Trustee is below:

Previous wording

Each unitholder should consult its own tax advisor for compliance with U.S. federal income tax laws and regulations.

Current wording

Each unitholder should consult its own tax advisor regarding Trust tax compliance matters.

Previous 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.

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 for U.S. federal income tax purposes. A grantor trust is not subject to tax at the trust level. As a grantor trust, unitholders are taxed directly on their proportionate share of income, deduction and credit of the Trust consistent with each such unitholder's tax status and applicable facts as though no trust were in existence. 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 federal gross income is from passive sources. Please see Marine’s Annual Report on Form 10-K for the fiscal year ended June 30, 2024 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. Each unitholder should consult its own tax advisor regarding income and franchise tax requirements, if any, applicable to such person’s ownership of Trust units.

Previous wording

Marine holds an overriding royalty interest that is equal to three-fourths of one percent of the working interest and is calculated on the value at the well of any oil, natural gas or other minerals produced and sold from 55 leases covering 199,868 gross acres located in the Gulf of Mexico. Marine’s overriding royalty interest applies only to existing leases and does not apply to any new leases that the Interest Owners may acquire.

Current wording

Marine holds an overriding royalty interest that is equal to three-fourths of one percent of the working interest and is calculated on the value at the well of any oil, natural gas or other minerals produced and sold from 19 leases covering 87,326 gross acres located in the Gulf of Mexico. Marine’s overriding royalty interest applies only to existing leases and does not apply to any new leases that the Interest Owners may acquire.

Previous 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.

Current wording

Marine did not have any changes in its critical accounting policies or estimates during the three months ended September 30, 2024. Please see Marine’s Annual Report on Form 10-K for the fiscal year ended June 30, 2024 for a detailed discussion of its critical accounting policies.

Previous 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.

Current wording

During the three months ended September 30, 2024 the Trust realized approximately 92% of its royalty income from the sale of oil and approximately 8% of its royalty income from the sale of natural gas and natural gas liquids. During the three months ended September 30, 2023, the Trust realized approximately 97% of its royalty income from the sale of oil and approximately 3% of its royalty income from the sale of natural gas and natural gas liquids. Royalty income includes royalties from oil and natural gas received from producers.

Previous 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.

Current wording

Distributable income per unit for the three months ended September 30, 2024 was $0.12 as compared to $0.11 for the comparable period in 2023. Distributions per unit also amounted to $0.09 per unit for the three months ended September 30, 2024, a decrease from distributions of $0.12 per unit for the comparable period in 2023.

Previous 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.

Current wording

For the three months ended September 30, 2024, oil production decreased to 3,265 barrels (bbls) from 3,964 bbls. Natural gas volumes sold increased to 5,095 thousand cubic feet (mcf) from 3,148 mcf and natural gas liquids sold increased from 5,512 mcf to 8,437 mcf for the three months ended September 30, 2024 as compared to the same period in 2023. For the three months ended September 30, 2024, the average price realized for oil increased to $81.11 per barrel (bbl) as compared to the price of $72.19 per bbl realized for the comparable period in 2023. The average price realized for natural gas (net of expenses) increased to $3.02 per mcf as compared to the average price of $2.28 per mcf realized for the comparable period in 2023, and the average price realized for natural gas liquids (net of expenses) increased to $0.75 per mcf as compared to the average price of $0.51 per mcf realized for the comparable period in 2023.

Previous 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.

Current wording

Income from oil and natural gas royalties decreased to $286,498 during the three months ended September 30, 2024 from $291,021 realized for the comparable period in 2023. Royalties decreased for the three months ended September 30, 2024 as compared to the comparable period in 2023 primarily due to a decrease in the production of oil, partially offset by increases in the production of both natural gas and natural gas liquids, and by higher oil, natural gas, and natural gas liquids prices.

Previous 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.

Current wording

Income from oil royalties, for the three months ended September 30, 2024 decreased to $264,786 from $286,168 realized for the comparable period in 2023. The volume of oil sold in the three months ended September 30, 2024 decreased to 3,265 bbls from 3,964 bbls realized for the comparable period in 2023, and the average price realized for oil increased to $81.11 per bbl for the three months ended September 30, 2024 from $72.19 per bbl realized for the comparable period in 2023.

Previous 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.

Current wording

Income from natural gas royalties (net of expenses), for the three months ended September 30, 2024 increased to $15,362 from $3,964 for the comparable period in 2023. The volume of natural gas sold in the three months ended September 30, 2024 increased to 5,095 mcf from 3,148 mcf realized for the comparable period in 2023, and the average price realized for natural gas (net of expenses) increased to $3.02 per mcf for the three months ended September 30, 2024 from $2.28 per mcf realized for the comparable period in 2023.

Previous 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.

Current wording

Income from natural gas liquids royalties (net of expenses), for the three months ended September 30, 2024 increased to $6,350 from $1,375 for the comparable period in 2023. The volume of natural gas liquids sold in the three months ended September 30, 2024 increased to 8,437 mcf from 5,512 mcf realized for the comparable period in 2023, and the average price realized for natural gas liquids (net of expenses) increased to $0.75 per mcf for the three months ended September 30, 2024 from $0.51 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 three months ended March 31, 2024, and those realized for the comparable period in 2023.

Current wording

The three months ended September 30, 2023 has been revised to present the natural gas liquids separately from natural gas. In previous years, the natural gas liquids revenue was included with the natural gas revenue and the average price of natural gas was calculated using the combined revenue number but did not include the natural gas liquids quantities sold. The information in the table was revised for fiscal year 2023 to conform with the current year presentation to (i) provide natural gas liquids royalties, natural gas liquids quantities sold, and average sales price for natural gas liquids, (ii) update natural gas royalties to reflect the split from natural gas liquids royalties (the aggregate amount of natural gas royalties and natural gas liquids royalties is the same as previously reflected for fiscal year 2023 for natural gas royalties), and (iii) corrected average sales price for natural gas. This change does not impact the prior years' financial statements or distributable income. The following table presents the quantities of oil, natural gas, and natural gas liquids sold and the average price realized for the three months ended September 30, 2024, and those realized for the comparable period in 2023.

Previous 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.

Current wording

General and administrative expenses decreased to $68,640 for the three months ended September 30, 2024 from $76,618 for the comparable period of 2023, primarily due to the timing of payment of professional fees.

Previous wording

The statements discussed in this Quarterly Report on Form 10-Q regarding Marine’s future financial performance and results, and other statements that are not historical facts, are forward-looking statements as defined in Section 27A of the Securities Act of 1933, as amended and Section 21E of the Exchange Act. This report uses the words “anticipate,” “believe,” “budget,” “continue,” “estimate,” “expect,” “intend,” “may,” “plan,” or other similar words to identify forward-looking statements. You should read statements that contain these words carefully because they discuss future expectations, contain projections of Marine’s financial condition, and/or state other “forward-looking” information. Actual results may differ from expected results because of: reductions in price or demand for oil and natural gas, which might then lead to decreased production or impair Marine’s ability to make distributions; the impact of COVID-19 on future production and distributions; reductions in production due to the depletion of existing wells or disruptions in service, which may be caused by storm damage to production facilities, blowouts or other production accidents, or geological changes such as cratering of productive formations; changes in regulations; general economic conditions; actions and policies of petroleum-producing nations; other changes in domestic and international energy markets; the resignation of the Trustee; and the expiration, termination or release of leases subject to Marine’s interests. Additional risks are set forth in Marine’s Annual Report on Form 10-K for the fiscal year ended June 30, 2023. Events may occur in the future that Marine is unable to accurately predict or over which it has no control. If one or more of these uncertainties materialize, or if underlying assumptions prove incorrect, actual outcomes may vary materially from those forward-looking statements included in this Quarterly Report on Form 10-Q. Except as required by applicable securities laws, Marine does not undertake any obligation to update or revise any forward-looking statements.

Current wording

The statements discussed in this Quarterly Report on Form 10-Q regarding Marine’s future financial performance and results, and other statements that are not historical facts, are forward-looking statements as defined in 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"), which are intended to be covered by the safe harbor created thereby. This report uses the words “anticipate,” “believe,” “budget,” “continue,” “estimate,” “expect,” “intend,” “may,” “plan,” or other similar words to identify forward-looking statements. You should read statements that contain these words carefully because they discuss future expectations, contain projections of Marine’s financial condition, and/or state other “forward-looking” information. Actual results may differ from expected results because of factors, risks, and uncertainties including, but not limited to, the following: reductions in price or demand for oil and natural gas, which might then lead to decreased production or impair Marine’s ability to make distributions; the impact of public health concerns, such as COVID-19, on future production and distributions; reductions in production due to the depletion of existing wells or disruptions in service, which may be caused by storm damage to production facilities, blowouts or other production accidents, or geological changes such as cratering of productive formations; changes in regulations; general economic conditions; actions and policies of petroleum-producing nations; other changes in domestic and international energy markets; the resignation of the Trustee; and the expiration, termination or release of leases subject to Marine’s interests. Additional risks are set forth in Marine’s Annual Report on Form 10-K for the fiscal year ended June 30, 2024. Events may occur in the future that Marine is unable to accurately predict or over which it has no control. If one or more of these uncertainties materialize, or if underlying assumptions prove incorrect, actual outcomes may vary materially from those forward-looking statements included in this Quarterly Report on Form 10-Q. Except as required by applicable securities laws, Marine does not undertake any obligation to update or revise any forward-looking statements.