SAN JUAN BASIN ROYALTY TRUST

Previous wording

PNC Bank, National Association (“PNC Bank”), served as the previous Trustee of the Trust from October 8, 2021, through February 14, 2024. Effective February 15, 2024, Argent Trust Company, a Tennessee chartered trust company (“Argent”), became the Trustee of the Trust. The principal office of the Trust is 3838 Oak Lawn Avenue, Suite 1720, Dallas, Texas 75219 (telephone number (855) 588-7839). Argent Trust Company, as successor trustee of the Trust, is subject to the terms and conditions of the Indenture. The defined term “Trustee” as used herein shall refer to PNC Bank (which maintains its offices at 2200 Post Oak Blvd., Floor 18, Houston, TX 77056) for periods from October 8, 2021, until February 14, 2024, and shall refer to Argent Trust Company (which maintains its offices at 3838 Oak Lawn Ave, Suite 1720, Dallas, Texas 75219) for periods on and after February 15, 2024.

Current wording

(855) 588-7839). Argent Trust Company, as successor trustee of the Trust, is subject to the terms and conditions of the Indenture. The defined term “Trustee” as used herein shall refer to PNC Bank (which maintains its offices at 2200 Post Oak Blvd., Floor 18, Houston, TX 77056) for periods from October 8, 2021, until February 14, 2024, and shall refer to Argent Trust Company (which maintains its offices at 3838 Oak Lawn Ave, Suite 1720, Dallas, Texas 75219) for periods on and after February 15, 2024.

Previous wording

Hilcorp informed the Trust that its 2024 Plan will allocate approximately $25.0 million of the 2024 Plan’s budget toward two drilling projects in the Mancos formation. Approximately $8.0 million of the 2024 Plan’s budget will be allocated to 36 well recompletions and workovers scheduled to be completed in the Mesaverde and Fruitland Coal formations. Approximately $1.0 million of the 2024 Plan’s budget will be allocated to facilities projects related to natural gas compression. Hilcorp further informed the Trust that its planned project status for 2024 is subject to revision if Hilcorp revises its assumptions underlying the 2024 Plan, in which event the actual capital costs may vary from these estimates. Hilcorp informed the Trustee that during the six months ended June 30, 2024, seven workover wells were completed, two new wells are in progress, and six workover wells are in progress.

Current wording

Hilcorp informed the Trust that its 2024 Plan will allocate approximately $25.0 million of the 2024 Plan’s budget toward two drilling projects in the Mancos formation. Approximately $8.0 million of the 2024 Plan’s budget will be allocated to 36 well recompletions and workovers scheduled to be completed in the Mesaverde and Fruitland Coal formations. Approximately $1.0 million of the 2024 Plan’s budget will be allocated to facilities projects related to natural gas compression. Hilcorp further informed the Trust that its planned project status for 2024 is subject to revision if Hilcorp revises its assumptions underlying the 2024 Plan, in which event the actual capital costs may vary from these estimates. Hilcorp advised the Trustee that there were ten workover wells completed, two new wells in progress, and 11 workover wells in progress during the nine months ended September 30, 2024.

Previous wording

Factors that Affect Net Proceeds. Generally, Net Proceeds are affected by (a) disruptions caused by weather, particularly winter storms that disrupt access to the production fields, (b) the timing and size of Hilcorp’s capital expenditures, and other Production Costs, and(c) commodity prices.

Current wording

Factors that Affect Net Proceeds. Generally, Net Proceeds are affected by (a) disruptions caused by weather, particularly winter storms that disrupt access to the production fields, (b) the timing and size of Hilcorp’s capital expenditures, and other Production Costs, and (c) commodity prices.

Previous wording

Capital Expenditures. The timing and size of capital expenditures by Hilcorp may impact Net Proceeds. Hilcorp’s capital expenditures increased approximately $707,669, from $122,203 for the three months ended June 30, 2023, to $829,872 for the three months ended June 30, 2024. The increase in capital costs in the three-month period were primarily attributable to a substantially higher capital project spending budget for Hilcorp's 2024 plan as compared to 2023.

Current wording

Capital Expenditures. The timing and size of capital expenditures by Hilcorp have impacted and continue to impact Net Proceeds. Hilcorp’s capital expenditures increased for the three months and nine months ended September 30, 2024, by approximately $10,450,220 and $12,115,022, respectively. The increases in capital costs for the periods were primarily attributable to a substantially higher capital project spending budget for Hilcorp's 2024 Plan as compared to 2023.

Previous wording

Results of Operations – for the Three and Six Months Ended June 2024 and 2023

Current wording

Results of Operations – for the Three and Nine Months Ended September 30, 2024 and 2023

Previous wording

Royalty Income. Royalty Income consists of 75% of the monthly Net Proceeds attributable to the Royalty. Royalty Income for the three and six months ended June 30, 2024, and 2023 was determined as shown in the following table:

Current wording

Royalty Income. Royalty Income consists of 75% of the monthly Net Proceeds attributable to the Royalty. Royalty Income for the three and nine months ended September 30, 2024, and 2023 was determined as shown in the following table:

Previous wording

Revenue related to audit exceptions and associated interest.

Current wording

Revenue related to compliance audit exceptions and associated interest.

Previous wording

Production Costs exceeded Gross Proceeds by $1,655,045. The Conveyance provides that any excess production costs applicable to the Subject Interests over Gross Proceeds from such properties must be recovered from future Net Proceeds before Royalty Income is again paid to the Trust. The Trust is not obligated to reimburse Hilcorp for any excess Production Costs if future Gross Proceeds from the Subject Interests are insufficient to cover such costs.

Current wording

Production Costs exceeded Gross Proceeds by $10,294,620 for the three months ended September 30, 2024, and by $11,517,368 for the nine months ended September 30, 2024. The Conveyance provides that any excess production costs applicable to the Subject Interests over Gross Proceeds from such properties must be recovered from future Net Proceeds before Royalty Income is again paid to the Trust. The Trust is not obligated to reimburse Hilcorp for any excess Production Costs if future Gross Proceeds from the Subject Interests are insufficient to cover such costs.

Previous wording

The Royalty Income distributed to the Trust for the three and six months ended June 30, 2024, was lower than that distributed during the same period of 2023, due primarily to a decline in natural gas prices and an increase in production costs, including capital expenditures and lease operating expenses. The average natural gas price decreased from $3.69 per Mcf for the three months ended June 30, 2023, to $1.92 per Mcf for the three months ended June 30, 2024. The average natural gas price decreased from $7.19 per Mcf for the six month period ended June 30, 2023 to $2.56 per Mcf for the six month period ended June 30, 2024. Production of natural gas from the Subject Interests decreased from 5,613,332 Mcf for the three months ended June 30, 2023, to 5,457,753 Mcf for the three months ended June 30, 2024. Production of natural gas from the Subject Interests also decreased slightly from 11,476,831 Mcf for the six months ended June 30, 2023 to 11,052,771 Mcf for the six months ended June 30, 2024.

Current wording

The Royalty Income distributed to the Trust for the three and nine months ended September 30, 2024, was lower than that distributed during the same periods of 2023, due primarily to substantially higher capital project spending associated with Hilcorp's 2024 Plan. Additionally, Royalty Income was affected by a decline in natural gas prices and an increase in production costs, including capital expenditures and lease operating expenses. The average natural gas price decreased from $2.04 per Mcf for the three months ended September 30, 2023, to $1.49 per Mcf for the three months ended September 30, 2024. The average natural gas price decreased from $5.42 per Mcf for the nine months ended September 30, 2023 to $2.20 per Mcf for the nine months ended September 30, 2024. Production of natural gas from the Subject Interests decreased from 5,989,625 Mcf for the three months ended September 30, 2023, to 5,691,025 Mcf for the three months ended September 30, 2024. Production of natural gas from the Subject Interests also decreased slightly from 17,466,457 Mcf for the nine months ended September 30, 2023 to 16,743,796 Mcf for the nine months ended September 30, 2024.

Previous wording

Gross Proceeds from Subject Interests. Total Gross Proceeds decreased approximately $10.0 million, or 47.15%, for the three months ended June 30, 2024, compared to the three months ended June 30, 2023. Total Gross Proceeds decreased approximately $54.1 million or 64.7% for the six months ended June 30, 2024 compared to the same time period in 2023. The decrease was primarily due to lower natural gas prices.

Current wording

Gross Proceeds from Subject Interests. Total Gross Proceeds decreased approximately $5.4 million, or 36.8%, for the three months ended September 30, 2024, compared to the three months ended September 30, 2023. Total Gross Proceeds decreased approximately $59.5 million or 60.5% for the nine months ended September 30, 2024 compared to the same time period in 2023. The decreases were primarily due to lower natural gas prices and lower production volumes.

Previous wording

Capital Expenditures. The timing and size of capital expenditures by Hilcorp have and will continue to impact Net Proceeds. Hilcorp's capital expenditures increased approximately $707,669, or 479%, for the three months ended June 30, 2024, compared to the three months ended June 30, 2023, and increased approximately $1,664,804 or 968% for the six months ended June 30, 2024, compared to the same time period in 2023. The increase in capital costs in the three-month and six-month periods were primarily attributable to the significantly higher capital project spending budget for Hilcorp's 2024 Plan (as defined below), as compared to 2023.

Current wording

Capital Expenditures. The timing and size of capital expenditures by Hilcorp have and will continue to impact Net Proceeds. Hilcorp's capital expenditures increased approximately $10,450,220 for the three months ended September 30, 2024, compared to the three months ended September 30, 2023, and increased approximately $12,115,022 for the nine months ended September 30, 2024, compared to the same time period in 2023. The increase in capital costs in the three-month and nine-month periods were primarily attributable to the significantly higher capital project spending budget for Hilcorp's 2024 Plan (as defined below), as compared to the same periods in 2023.

Previous wording

On February 16, 2024, the Trust announced that Hilcorp had provided the Trust with its 2024 capital project plan for the Subject Interests (the “2024 Plan”), and Hilcorp has estimated its 2024 capital expenditures for the Subject Interests to be $36.0 million. This plan was updated on March 6, 2024, with a reduction of approximately $2.0 million, bringing the total estimate of 2024 capital expenditures to $34.0 million. Hilcorp informed the Trust that its 2024 Plan will allocate approximately $25.0 million of the 2024 Plan’s budget toward two drilling projects in the Mancos formation. Approximately $8.0 million of the 2024 Plan’s budget will be allocated to 36 well recompletions and workovers scheduled to be completed in the Mesaverde and Fruitland Coal formations. Approximately $1.0 million of the 2024 Plan’s budget will be allocated to facilities projects related to natural gas compression. Hilcorp further informed the Trust that its planned project status for 2024 is subject to revision if Hilcorp revises its assumptions underlying the 2024 Plan, in which event the actual capital costs may vary from these estimates. Hilcorp informed The Trustee that there were seven workover wells completed, two new wells in progress, and six workover wells in progress during the six months ended June 30, 2024.

Current wording

On February 16, 2024, the Trust announced that Hilcorp had provided the Trust with its 2024 capital project plan for the Subject Interests (the “2024 Plan”), and Hilcorp has estimated its 2024 capital expenditures for the Subject Interests to be $36.0 million. This 2024 Plan was updated on March 6, 2024, with a reduction of approximately $2.0 million, bringing the total estimate of 2024 capital expenditures to $34.0 million. Hilcorp informed the Trust that its 2024 Plan will allocate approximately $25.0 million of the 2024 Plan’s budget toward two drilling projects in the Mancos formation. Approximately $8.0 million of the 2024 Plan’s budget will be allocated to 36 well recompletions and workovers scheduled to be completed in the Mesaverde and Fruitland Coal formations. Approximately $1.0 million of the 2024 Plan’s budget will be allocated to facilities projects related to natural gas compression. Hilcorp further informed the Trust that its planned project status for 2024 is subject to revision if Hilcorp revises its assumptions underlying the 2024 Plan, in which event the actual capital costs may vary from these estimates. Hilcorp informed the Trustee that there were ten workover wells completed, two new wells in progress, and 11 workover wells in progress during the nine months ended September 30, 2024.

Previous wording

Severance Taxes. Aggregate severance taxes decreased approximately $1.2 million, or 47%, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023 and decreased approximately $5.7 million or 60% for the six months ended June 30, 2024 compared to the same time period during 2023. The decrease was primarily attributable to lower Gross Proceeds. Severance taxes represented approximately 13% of Gross Proceeds for the three months ended June 30, 2024 compared to approximately 12% for the same period of 2023. Severance taxes represented approximately 13% of Gross Proceeds for the six months ended June 30, 2024, compared to approximately 11% for the same period of 2023.

Current wording

Severance Taxes. Aggregate severance taxes decreased approximately $0.8 million, or 42%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023 and decreased approximately $6.5 million or 57% for the nine months ended September 30, 2024 compared to the same time period during 2023. The decrease was primarily attributable to lower Gross Proceeds. Severance taxes represented approximately 12% of Gross Proceeds for the three months ended September 30, 2024 compared to approximately 15% for the same period of 2023. Severance taxes represented approximately 13% of Gross Proceeds for the nine months ended September 30, 2024 and approximately 12% for the same period of 2023.

Previous wording

Lease Operating Expenses and Property Taxes. Lease operating expenses and property taxes increased $0.6 million or 7.37%, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. For the six months ended June 30, 2024, lease operating expenses and property taxes increased approximately $1.8 million or 13% compared to the six months ended June 30, 2023. As previously disclosed in the Trust’s filings, these costs (along with all revenue and costs) are the subject of the Trust’s ongoing comprehensive audit process by professional consultants and outside counsel to help evaluate compliance with the underlying operative Trust agreements and evaluate potential remedies in the event there is suspected non-compliance.

Current wording

Lease Operating Expenses and Property Taxes. Lease operating expenses and property taxes increased $1.0 million or 15.7%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. For the nine months ended September 30, 2024, lease operating expenses and property taxes increased approximately $2.8 million or 13.9% compared to the nine months ended September 30, 2023. As previously disclosed in the Trust’s filings, these costs (along with all revenue and costs) are the subject of the Trust’s ongoing comprehensive compliance audit process by professional consultants and outside counsel to help evaluate compliance with the underlying operative Trust agreements and evaluate potential remedies in the event there is suspected non-compliance.

Previous wording

Excess Production Costs. The Conveyance provides that any excess Production Costs applicable to the Subject Interests over the amount of Gross Proceeds from such properties must be recovered from future Net Proceeds before Royalty Income is again paid to the Trust. The Trust is not obligated to reimburse Hilcorp for any excess Production Costs if future Gross Proceeds from the Subject Interests are insufficient to cover such costs. For the three and six months ended June 30, 2024, Production Costs exceeded Gross Proceeds by approximately $1,655,0457 ($1,241,284 net to the Trust). There were no excess Production Costs for the three and six months ended June 30, 2023. These excess Production Costs are to be recovered in future periods when the Gross Proceeds exceed Production Costs for such period.

Current wording

Excess Production Costs. For the three and nine months ended September 30, 2024, Production Costs exceeded Gross Proceeds by $10,294,620 ($7,720,965 net to the Trust) and $11,517,368 ($8,638,026 net to the Trust), respectively. The cumulative balance of excess Production Costs as of September 30, 2024, was $11,517,368 ($8,638,026 net to the Trust). There were no excess Production Costs for the three and nine months ended September 30, 2023, and there was no cumulative balance of excess Production Costs as of September 30, 2023. The Conveyance provides that any excess Production Costs applicable to the Subject Interests over the amount of Gross Proceeds from such properties must be recovered from future Net Proceeds before Royalty Income is again paid to the Trust. The Trust is not obligated to reimburse Hilcorp for any excess Production Costs if future Gross Proceeds from the Subject Interests are insufficient to cover such costs. As such, the cumulative balance of excess Production Costs as of September 30, 2024, is to be recovered in future periods when the Gross Proceeds exceed Production Costs for such period.

Previous wording

Distributable Income. Distributable Income for the three and six months ended June 30, 2024, and 2023 was determined as shown in the following table:

Current wording

Distributable Income. Distributable Income for the three and nine months ended September 30, 2024, and 2023 was determined as shown in the following table:

Previous wording

Distributable Income decreased approximately 87% from $8.1 million ($0.173518 per Unit) for the three months ended June 30, 2023, to $1.1 million ($0.022864 per Unit) for the three months ended June 30, 2024. Distributable income decreased approximately 88% from $44.1 million (0.945289 per Unit) for the six-months period ended June 30, 2023 to $5.2 million ($0.110670 per Unit) for the same period in 2024. The decrease in Distributable Income was primarily attributable to a sharp decline in natural gas prices and increased capital expenditures.

Current wording

There was no Distributable Income for the three months ended September 30, 2024. This was a decrease from $3.9 million ($0.084685 per Unit) for the three months ended September 30, 2023. Distributable income decreased approximately 89% from $48.0 million (1.029974 per Unit) for the nine months ended September 30, 2023 to $5.2 million ($0.110670 per Unit) for the same period in 2024. The decrease in Distributable Income was primarily attributable to significantly increased capital expenditures and a sharp decline in natural gas prices.

Previous wording

Interest Income. Interest income decreased for the three and six months ended June 30, 2024, as compared to the same periods in 2023 primarily due to the decrease in Royalty Income.

Current wording

Interest Income. Interest income decreased for the three and nine months ended September 30, 2024, as compared to the same periods in 2023 primarily due to the decrease in Royalty Income.

Previous wording

General&Administrative Expenses. General and administrative expenses increased approximately 40% for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. For the six months ended June 30, 2024, general and administrative expenses increased approximately 47% compared to the six months ended June 30, 2023. The changes for the three and six-month periods were attributable to differences in timing of the receipt and payment of certain expenses by the Trust, as well as expenses in 2024 associated with the transition to Argent Bank as Trustee of the Trust.

Current wording

General&Administrative Expenses. General and administrative expenses decreased slightly by $6,255 (2%) for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. For the nine months ended September 30, 2024, general and administrative expenses increased by $792,057 (57.8%) compared to the nine months ended September 30, 2023 due to differences in timing of the receipt and payment of certain expenses by the Trust, as well as expenses in the first half of 2024 associated with the transition to Argent Bank as Trustee of the Trust.

Previous wording

Cash Reserves. Total cash reserves were $1.47 million as of June 30, 2024. The Trustee is authorized to determine, in its discretion, the amount of cash reserves needed to cover liabilities and contingencies of the Trust. The Trustee previously maintained a cash reserve in the amount of $1.0 million. However, to cover Trust Expenses during any period of revenue shortfall, which has resulted and could continue to result from lower commodity prices or increased capital expenditures under Hilcorp's 2024 project plan for the Subject Interests, the Trustee increased the cash reserves in March and April of 2024, such that total cash reserves were $1.8 million as of April 30, 2024. Cash reserves of $249,344 and $82,913, along with interest income, were utilized to pay the balance of Trust administrative expenses remaining (after applying interest income) for May and June 2024, respectively, when the Trust did not receive any Royalty Income. Prior to any distributions to Unitholders, the Trustee plans to replenish the cash reserves and continue to increase the cash reserves to $2.0 million.

Current wording

Cash Reserves. Total cash reserves were $1,099,699 as of September 30, 2024. The Trustee is authorized to determine, in its discretion, the amount of cash reserves needed to cover liabilities and contingencies of the Trust. The Trustee previously maintained a cash reserve in the amount of $1,000,000. However, to cover Trust Expenses during any period of revenue shortfall, which has resulted and could continue to result from lower commodity prices or increased capital expenditures under Hilcorp's 2024 project plan for the Subject Interests, the Trustee increased the cash reserves in March and April of 2024, such that total cash reserves were $1,800,000 as of April 30, 2024. Cash reserves of $700,581, along with interest income, were utilized to pay the balance of Trust administrative expenses remaining (after applying interest income) each month from May through September 2024, when the Trust did not receive any Royalty Income. Prior to any distributions to Unitholders, the Trustee plans to replenish the cash reserves and continue to increase the cash reserves to $2,000,000.

Previous wording

In each of May, June, and July 2024, the Trust did not receive any Royalty Income, and interest income received was insufficient to pay Trust liabilities. In the event the Trust does not receive Royalty Income from Hilcorp and interest income sufficient to pay its liabilities in future months, which is expected to occur given the significantly increased expenditures anticipated in Hilcorp's 2024 Plan, the Trust will draw upon the cash reserve amount or borrow funds against the Royalty to cover the Trust’s operating expenses until its cash reserve can be replenished from subsequent Royalty Income payments from Hilcorp.

Current wording

In each of July, August, and September 2024, the Trust did not receive any Royalty Income, and interest income received was insufficient to pay Trust liabilities. In the event the Trust does not receive Royalty Income from Hilcorp and interest income sufficient to pay its liabilities in future months, which is expected to occur given the significantly increased expenditures anticipated in Hilcorp's 2024 Plan, the Trust will continue to draw upon the cash reserves, and if needed, may borrow funds against the Royalty to cover the Trust’s operating expenses until such time as the Trust's cash reserve can be replenished from subsequent Royalty Income payments from Hilcorp.

Previous wording

Royalty Income for the three months ended June 30, 2024, is associated with natural gas and oil production during the period from February 2024 through April 2024. Royalty Income for the six months ended June 30, 2024, is associated with natural gas and oil production from the Subject Interests during the period from November 2023 through April 2024.

Current wording

Royalty Income for the three months ended September 30, 2024, is associated with natural gas and oil production during the period from May 2024 through July 2024. Royalty Income for the nine months ended September 30, 2024, is associated with natural gas and oil production from the Subject Interests during the period from November 2023 through July 2024.

Previous wording

Production of natural gas and oil and related average sales prices attributable to each of the Subject Interests and the Royalty for the six months ended June 30, 2024 and 2023 were as follows:

Current wording

Production of natural gas and oil and related average sales prices attributable to each of the Subject Interests and the Royalty for the nine months ended September 30, 2024 and 2023 were as follows:

Previous wording

Natural gas production volumes decreased for the Subject Interests and the Royalty by 155,579 Mcf (2.8%) and 2,684,070 Mcf (119.6%), respectively for the three months ended June 30, 2024, as compared to the same period in 2023. For the six months period ending June 30, 2024, natural gas production volumes decreased 424,061 Mcf (3.7%) for the Subject Interests and 4,659,813 Mcf (78.4%) for the Royalty compared to the same periods in 2023. Royalty volume is calculated using a formula determined by revenue less expenses. Excess production costs contributed to negative volumes for gas for the Royalty. The decrease in production volume was also affected by a natural decline in the producing properties, market conditions, and a decrease in demand. Natural gas production is also influenced by the line pressure of the natural gas gathering systems in the San Juan Basin.

Current wording

Natural gas production volumes decreased for the Subject Interests and the Royalty by 298,600 Mcf (5.0%) and 8,110,010 Mcf (568.6%), respectively for the three months ended September 30, 2024, as compared to the same period in 2023. For the nine months ended September 30, 2024, natural gas production volumes decreased 722,661 Mcf (4.1%) for the Subject Interests and 12,769,823 Mcf (173.2%) for the Royalty compared to the same periods in 2023. Royalty volume is calculated using a formula determined by revenue less expenses. Excess production costs contributed to negative volumes for gas for the Royalty. The decrease in production volume was also affected by a natural decline in the producing properties, market conditions, and a decrease in demand. Natural gas production is also influenced by the line pressure of the natural gas gathering systems in the San Juan Basin.

Previous wording

Oil production volumes decreased for the Subject Interests by 283 Bbls (3.1%) for three months ended June 30, 2024, as compared to the same period in 2023. Oil production volumes decreased for the Royalty by 300 Bbls (5.1%) for the three months ended June 30, 2024, as compared to the same period in 2023. For the six months period ending June 30, 2024, oil production volume decreased by 8,888 Bbls (60.4%) for the Subject Interests and 6,114 Bbls (65.9%) for the Royalty as compared to the same period in 2023. These changes generally resulted from changes in the demand for natural gas during the applicable time periods, natural gas inventory levels, availability of market conditions, and an increase in capital spending to generate production from new and existing wells.

Current wording

Oil production volumes decreased for the Subject Interests by 6,181 Bbls (35.7%) for the three months ended September 30, 2024, as compared to the same period in 2023. Oil production volumes decreased for the Royalty by 5,565 Bbls (46.3%) for the three months ended September 30, 2024, as compared to the same period in 2023. For the nine months ended September 30, 2024, oil production volume decreased by 6,247 Bbls (19.5%) for the Subject Interests and 6,087 Bbls (28.6%) for the Royalty as compared to the same period in 2023. These changes generally resulted from changes in the demand for natural gas during the applicable time periods, natural gas inventory levels, availability of market conditions, and an increase in capital spending to generate production from new and existing wells.

Previous wording

The average realized natural gas price per Mcf decreased for the three and six months ended June 30, 2024, as compared to the same periods in 2023. This decrease was primarily due to a decrease in the El Paso Natural Gas Company, San Juan Basin Index pricing.

Current wording

The average realized natural gas price per Mcf decreased for the three and nine months ended September 30, 2024, as compared to the same periods in 2023. This decrease was primarily due to a decrease in the El Paso Natural Gas Company, San Juan Basin Index pricing.

Previous wording

The average realized oil price per Bbl increased for the three and six months ended June 30, 2024 as compared to the same periods in 2023. This increase was primarily due to an increase in the WTI benchmark oil price.

Current wording

The average realized oil price per Bbl increased for the three and nine months ended September 30, 2024 as compared to the same periods in 2023. This increase was primarily due to an increase in the WTI benchmark oil price.