SAN JUAN BASIN ROYALTY TRUST

Previous wording

The amount of Gross Proceeds attributable to the Subject Interests depends on prevailing natural gas prices and, to a lesser extent, crude oil prices. As a result, commodity prices affect the amount of Royalty Income available for distribution to the Unit Holders. During 2024, the price of natural gas Gross Proceeds for production from the Subject Interests decreased from an average price for natural gas of $4.69 per Mcf in 2023 to $2.07 per Mcf in 2024. The price for oil Gross Proceeds increased from an average price of $66.34per Bbl in 2023 to $68.07 per Bbl in 2024.

Current wording

The amount of Gross Proceeds attributable to the Subject Interests depends on prevailing natural gas prices and, to a lesser extent, crude oil prices. As a result, commodity prices affect the amount of Royalty Income available for distribution to the Unit Holders. During 2025, the price of natural gas Gross Proceeds for production from the Subject Interests increased from an average price for natural gas of $2.07 per Mcf in 2024 to $2.53 per Mcf in 2025. The price for oil Gross Proceeds decreased from an average price of $68.07 per Bbl in 2024 to $55.94 per Bbl in 2025.

Previous wording

The amount of Gross Proceeds depends on the volumes of natural gas and oil produced from the Subject Interests. Under the terms of the Indenture, the Trust cannot acquire new natural gas and oil assets, and, as a result, Royalty Income is dependent on the natural gas and oil volumes attributable to the Subject Interests. Although Hilcorp and other operators of the Subject Interests may conduct drilling operations or well recompletions in the near term, the Subject Interests are depleting assets; Hilcorp has informed the Trust that it is unable to estimate the productive life of the Subject Interests. The reduction in proved reserve quantities is a common measure of depletion. Hilcorp’s (or a future operator’s) capital investments in the Subject Interests will affect the quantity of proved reserves and can offset any reduction in proved reserves. Lower commodity prices may also cause Hilcorp to reduce drilling operations, workover, and/or recompletions, thus reducing the volume of natural gas and oil produced from the Subject Interests. Hilcorp did not conduct any new drill projects within the Subject Interests in 2023 or 2022; however, it did conduct 20 recompletes and workovers in 2023.

Current wording

The amount of Gross Proceeds depends on the volumes of natural gas and oil produced from the Subject Interests. Under the terms of the Indenture, the Trust cannot acquire new natural gas and oil assets, and, as a result, Royalty Income is dependent on the natural gas and oil volumes attributable to the Subject Interests. Although Hilcorp and other operators of the Subject Interests may conduct drilling operations or well recompletions in the near term, the Subject Interests are depleting assets; Hilcorp has informed the Trust that it is unable to estimate the productive life of the Subject Interests. The reduction in proved reserve quantities is a common measure of depletion. Hilcorp’s (or a future operator’s) capital investments in the Subject Interests will affect the quantity of proved reserves and can offset any reduction in proved reserves. Lower commodity prices may also cause Hilcorp to reduce drilling operations, workover, and/or recompletions, thus reducing the volume of natural gas and oil produced from the Subject Interests. Hilcorp did not conduct any new drill projects within the Subject Interests in 2023; however, it did conduct 20 recompletes and workovers in 2023. In 2024, Hilcorp reported two new horizontal drilling projects, recompletions, workovers, and facilities projects related to natural gas compression and other facility projects. In 2025, Hilcorp reported completion of the two 2025 horizontal drilling projects, vertical drilling projects, recompletions, workovers, and facilities projects related to natural gas compression and other facility projects.

Previous wording

On February 13, 2025, the Trust announced that Hilcorp had provided the Trust with its 2025 capital project plan for the Subject Interests (the “2025 Plan”), and Hilcorp has estimated its 2025 capital expenditures for the Subject Interests to be approximately $9.0 million.

Current wording

On February 19, 2026, the Trust announced that Hilcorp had provided the Trust with its 2026 capital project plan for the Subject Interests (the “2026 Plan”), and Hilcorp has estimated its 2026 capital expenditures for the Subject Interests to be approximately $14.0 million.

Previous wording

Hilcorp informed the Trust that its 2025 Plan for the Subject Interests includes 29 projects. Approximately $4.0 million of the $9.0 million budget in the 2025 Plan will be allocated to seven new vertical drill projects, all completed in the Dakota/Mesa Verde formations. Approximately $4.5 million of the $9.0 million budget will be allocated to 22 projects for recompletions and workovers in the Fruitland Coal formation, and approximately $0.5 million of the $9.0 million budget will be allocated to facilities projects related to natural gas compression and other facility projects. Hilcorp further informed the Trust that its planned project status for 2025 is subject to revision if Hilcorp revises its assumptions underlying the 2025 Plan, and that actual capital costs may vary from these estimates.

Current wording

Hilcorp informed the Trust that its 2026 Plan for the Subject Interests includes 32 projects. Approximately $11.5 million of the $14.0 million budget in the 2026 Plan will be allocated to nine new vertical drill projects to be completed in the Mesaverde, Mancos, and Dakota formations and six new horizontal drill projects in the Mancos formation. Hilcorp also informed the Trust that costs associated with the six new horizontal drill projects include drilling costs only. Completion costs for the horizontal wells, are expected to be included in Hilcorp's 2027 capital plan for the Subject Interests, which is expected to be provided to the Trust sometime in the first quarter of 2027. Approximately $2.0 million of the $14.0 million budget included in the 2026 Plan will be allocated to 17 projects for recompletions and workovers in the Fruitland Coal and Pictured Cliffs formations, and approximately $0.5 million of the $14.0 million budget will be allocated to facilities projects related to natural gas compression and other facilities projects. Hilcorp further informed the Trust that its 2026 Plan is subject to revision if Hilcorp revises its assumptions underlying the 2026 Plan, and that actual capital costs may vary from these estimates.

Previous wording

The Trustee is authorized to determine in its discretion the amount of cash reserves needed to pay liabilities and contingencies of the Trust. Total cash reserves were $0.8 million and $1.0 million as of December 31, 2024, and December 31, 2023. The Trustee plans to increase the established amount of cash reserves to $2.0 million.

Current wording

The Trustee is authorized to determine in its discretion the amount of cash reserves needed to pay liabilities and contingencies of the Trust. Total cash reserves were $23 thousand and $0.8 million as of December 31, 2025, and December 31, 2024. The Trustee plans to increase the established amount of cash reserves to $2.0 million.

Previous wording

In 2024, Production Costs applicable to the Subject Interests exceeded the amount of Gross Proceeds from such properties, resulting in Excess Production Costs. Excess Production Costs must be recovered from future Net Proceeds before Royalty Income is again paid to the Trust. The balance of Excess Production Costs as of December 31, 2024, was $21,248,008 gross ($15,936,006 net to the Trust). As of March 21, 2025, the balance of Excess Production Costs was $21,739,947 gross ($16,304,960 net to the Trust).

Current wording

Net proceeds of $12,809,471 for the twelve months ended December 31, 2025, 75% of which would otherwise be payable to the Trust as Royalty Income, were applied to the balance of Excess Production Costs. The balance of cumulative Excess production Costs, as of December 31, 2025, was approximately $8,438,536 gross ($6,328,902 net to the Trust). 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

Gross Proceeds from Subject Interests. Gross Proceeds decreased $65.5 million, or 57.3%, to $48.9 million for the year ended December 31, 2024, as compared to $114.5 million for the year ended December 31, 2023. The decrease was due primarily to lower natural gas prices.

Current wording

Gross Proceeds from Subject Interests. Gross Proceeds increased $24.7 million, or 50.5%, to $73.6 million for the year ended December 31, 2025, as compared to $48.9 million for the year ended December 31, 2024. The increase was due primarily to production from the two new horizontal wells in the Mancos formation.

Previous wording

Capital Expenditures. The capital expenditures reported by Hilcorp for 2024 included amounts attributable to the capital budgets for prior years because capital expenditures are deducted in calculating Net Proceeds in the month they accrue, and projects within a given year’s budget often extend into subsequent years. Hilcorp’s capital expenditures incurred in November and December 2024 will be included in amounts reported next year for 2025 as capital expenditures are deducted in calculating Net Proceeds in the month they accrue, and projects within Hilcorp’s 2024 capital budget extended into early 2025. Further, with respect to any wells operated by third parties other than Hilcorp, Hilcorp’s share, if any, of capital expenditures for the year ended December 31, 2024, may not be paid until 2024 or later. For a summary of Hilcorp’s planned 2024 capital expenditures, see Liquidity and Capital Resources.

Current wording

Capital Expenditures. The capital expenditures reported by Hilcorp for 2025 included amounts attributable to the capital budgets for prior years because capital expenditures are deducted in calculating Net Proceeds in the month they accrue, and projects within a given year’s budget often extend into subsequent years. Hilcorp’s capital expenditures incurred in November and December 2024 are included in amounts reported for 2025 as capital expenditures are deducted in calculating Net Proceeds in the month they accrue, and projects within Hilcorp’s 2024 capital budget extended into early 2025. Further, with respect to any wells operated by third parties other than Hilcorp, Hilcorp’s share, if any, of capital expenditures for the year ended December 31, 2025, may not be paid until 2026 or later. For a summary of Hilcorp’s planned 2026 capital expenditures, see Liquidity and Capital Resources.

Previous wording

Capital expenditures increased approximately $21.7 million to $23.9 million for the year ended December 31, 2024, as compared to $2.2 million for the year ended December 31, 2023. Hilcorp allocated its 2024 capital spending primarily toward drilling two new horizontal wells.

Current wording

Capital expenditures decreased approximately $3.1 million to $20.8 million for the year ended December 31, 2025, as compared to $23.9 million for the year ended December 31, 2024. Hilcorp allocated its 2025 capital spending primarily towards completion of the two horizontal wells that were part of Hilcorp's 2024 capital budget, seven new vertical drill projects, 23 projects for recompletions and workovers, and facilities projects related to natural gas compression and other facilities projects.

Previous wording

Severance Taxes. Aggregate severance taxes decreased $7.8 million to $6.1 million for the year ended December 31, 2024, as compared to $13.9 million for the year ended December 31, 2023. The decrease was primarily attributable to lower revenue in 2024.

Current wording

Severance Taxes. Aggregate severance taxes increased $0.5 million to $6.6 million for the year ended December 31, 2025, as compared to $6.1 million for the year ended December 31, 2024. The increase was primarily attributable to higher revenue in 2025.

Previous wording

Lease Operating Expenses and Property Taxes. Lease operating expenses and property taxes increased $3.5 million, or 12.7%, to $30.8 million for the year ended December 31, 2024, as compared to $27.3 million for the year ended December 31, 2023. Monthly lease operating expenses of the Subject Interests, including property taxes, in 2024 averaged approximately $2.6 million, compared to $2.3 million in 2023. The increase is primarily due to repairs, maintenance, recompletes, and workovers.

Current wording

Lease Operating Expenses and Property Taxes. Lease operating expenses and property taxes increased $2.6 million, or 8.3%, to $33.4 million for the year ended December 31, 2025, as compared to $30.8 million for the year ended December 31, 2024. Monthly lease operating expenses of the Subject Interests, including property taxes, in 2025 averaged approximately $2.8 million, compared to $2.6 million in 2024. The increase is primarily due to repairs, maintenance, recompletes, and workovers.

Previous wording

Excess Production Costs. For the year ended December 31, 2024, Production Costs exceeded Gross Proceeds by $21,248,008 ($15,936,006 net to the trust). The cumulative balance of Excess Production Costs as of December 31, 2024 was$21,248,008 ($15,936,006 net to the trust). There were no Excess Production Costs for the year ended December 31, 2023 and there was no cumulative balance of Excess Production Costs as of December 31, 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 December 31, 2024, is to be recovered in future periods when the Gross Proceeds exceed Production Costs for such period.

Current wording

Excess Production Costs. For the year ended December 31, 2025, net proceeds of $12,809,471, 75% of which amount would otherwise have been payable to the Trust as Royalty Income, were applied to the balance of Excess Production Costs accrued as a result of Hilcorp's drilling of two new horizontal wells in 2024. The balance of cumulative Excess Production Costs, as of December 31, 2025, was approximately $8,438,536 gross ($6,328,902 net to the Trust). 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. For the year ended December 31, 2024, Production Costs exceeded Gross Proceeds by $21,248,008 ($15,936,006 net to the Trust) such that the cumulative balance of Excess Production Costs as of December 31, 2024 was $21,248,008 ($15,936,006 net to the Trust).

Previous wording

(1) This amount reflects net cash reserve activity in 2024. Total cash reserves available to pay administrative expenses were $760,919 as of December 31, 2024. 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 $1,039,081, along with interest income, were then utilized to pay the balance of Trust administrative expenses remaining (after applying interest income) each month from May through December 2024, when the Trust did not receive any Royalty Income.

Current wording

(1) This amount reflects net cash reserve activity in 2025. Total cash reserves available to pay administrative expenses were $760,919 as of December 31, 2025. Cash reserves of $1,015,906, along with interest income, were then utilized to pay the balance of Trust administrative expenses remaining (after applying interest income) each month from December 2024 through May 2025, when the Trust did not receive any Royalty Income. From May 2025 through December 2025, cash reserves were utilized to pay interest on the Line of Credit.

Previous wording

Distributable Income decreased $46.5 million to $5.2 million ($0.110671 per Unit) for the year ended December 31, 2024, as compared to $51.6 million ($1.107901 per Unit) for the year ended December 31, 2023. The decrease in Distributable Income from 2023 to 2024 was primarily attributable to significantly increased capital expenditures and a decline in natural gas prices.

Current wording

Distributable Income decreased $5.5 million to -$387.8 thousand (-$0.008320 per Unit) for the year ended December 31, 2025, as compared to $5.2 million ($0.110671 per Unit) for the year ended December 31, 2024. The decrease in Distributable Income from 2024 to 2025 was primarily attributable to significantly increased capital expenditures associated with the two horizontal wells drilled in 2024.

Previous wording

General & Administrative Expenses. General and administrative expenses increased $0.36 million to $2.11 million for the year ended December 31, 2024, as compared to $1.75 million for the year ended December 31, 2023. The increase was primarily attributable to differences in timing in 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.

Current wording

General & Administrative Expenses. General and administrative expenses decreased $0.98 million to $1.14 million for the year ended December 31, 2025, as compared to $2.11 million for the year ended December 31, 2024. The decrease was primarily attributable to decreasing Trust expenses such as printing and publishing, differences in timing in 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

The Trust’s principal source of liquidity and capital is Royalty Income. The Trust’s distribution of income to Unit Holders is funded by Royalty Income after payment of Trust expenses. The Trust is not liable for any production costs or liabilities attributable to the Royalty. If at any time the Trust receives more than the amount due under the Royalty, it is not obligated to return such overpayment, but the amounts payable to it for any subsequent period are reduced by such amount, plus interest, at a rate specified in the Conveyance. If the Trustee determines that the Trust does not have sufficient funds to pay its liabilities, the Trustee may borrow funds on behalf of the Trust, in which case no distributions will be made to Unit Holders until such borrowings are repaid in full. The Trustee may not sell or dispose of any part of the assets of the Trust without the affirmative vote of the Unit Holders of 75% of all the Units outstanding; however, the Trustee may sell up to 1% of the value of the Royalty (as determined pursuant to the Indenture) during any 12-month period without the consent of the Unit Holders.

Current wording

The Trust’s principal source of liquidity and capital is Royalty Income. The Trust’s distribution of income to Unit Holders is funded by Royalty Income after payment of Trust expenses. The Trust is not liable for any Production Costs or liabilities attributable to the Royalty. If at any time the Trust receives more than the amount due under the Royalty, it is not obligated to return such overpayment, but the amounts payable to it for any subsequent period are reduced by such amount, plus interest, at a rate specified in the Conveyance. If the Trustee determines that the Trust does not have sufficient funds to pay its liabilities, the Trustee may borrow funds on behalf of the Trust, in which case no distributions will be made to Unit Holders until such borrowings are repaid in full. The Trustee may not sell or dispose of any part of the assets of the Trust without the affirmative vote of the Unit Holders of 75% of all of the Units outstanding; however, the Trustee may sell up to 1% of the value of the Royalty (as determined pursuant to the Indenture) during any 12-month period without the consent of the Unit Holders.

Previous wording

In each of the months from May 2024 through December 2024, the Trust did not receive any Royalty Income, and interest income received was insufficient to pay Trust liabilities. Since the Trust did not receive Royalty Income from Hilcorp and interest income was insufficient to pay the Trust’s liabilities during the period from May 2024 through December 2024, the Trust was able to use cash reserves to pay the Trust’s liabilities. The Trust expects to continue to draw on cash reserves for all Trust liabilities not covered by interest income until such time as the Trust begins receiving Royalty Income again. The Trust is permitted to borrow funds against the Royalty to cover the Trust’s operating expenses until such time as the Trust extinguishes the balance of Excess Production Costs incurred in 2024 and receives sufficient Royalty Income to replenished cash reserves. The cash reserve balance was $760,919 on December 31,

Current wording

In each of the months from May 2024 through December 2025, the Trust did not receive any Royalty Income, and interest income received was insufficient to pay Trust liabilities. Since the Trust did not receive Royalty Income from Hilcorp and interest income was insufficient to pay the Trust’s liabilities during the period from May 2024 through June 2025, the Trust was able to use cash reserves to pay the Trust’s liabilities from May 2024 through May 2025. As of December 31, 2025, the balance of cash reserves was $23,298.

Previous wording

The anticipated deficit in income to pay the Trust’s liabilities described above raises substantial doubt about the Trust’s ability to continue as a going concern within one year after issuance date of the financial statements. The Trustee, on behalf of the Trust, is currently evaluating commercial lending options available to the Trust to cover the Trust’s liabilities once cash reserves are depleted.

Current wording

The anticipated deficit in income to pay the Trust’s liabilities described above raises substantial doubt about the Trust’s ability to continue as a going concern within one year after issuance date of the financial statements.

Previous wording

Cash Reserves. Total cash reserves were $760,919 as of December 31, 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 capital expenditures under Hilcorp's 2025 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 $1,039,080, along with interest income, were utilized to pay the balance of Trust administrative expenses remaining (after applying interest income) each month from May through December 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.

Current wording

Cash Reserves. Total cash reserves were $23,298 as of December 31, 2025. 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 and 2025 project plans for the Subject Interests, the Trustee increased the cash reserves in 2024, such that total cash reserves were $1,800,000 as of April 30, 2024. In each of the months from May 2024 through December 2025, the Trust did not receive any Royalty Income, and interest income received was insufficient to pay Trust liabilities. Due to these circumstances, the Trust used cash reserves to pay the Trust’s liabilities that interest income did not cover from May 2024 through May 2025. From June through December 2025, cash reserves were used to pay interest on the Line of Credit (as defined below). As a result, cash reserves were $23,298 as of December 31, 2025. 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

On February 13, 2025, the Trust announced that Hilcorp had provided the Trust with its 2025 capital project plan for the Subject Interests (the “2025 Plan”), and Hilcorp has estimated its 2025 capital expenditures for the Subject Interests to be $9.0 million.

Current wording

On February 19, 2026, the Trust announced that Hilcorp had provided the Trust with its 2026 capital project plan for the Subject Interests (the “2026 Plan”), and Hilcorp has estimated its 2026 capital expenditures for the Subject Interests to be approximately $14.0 million.

Previous wording

Hilcorp informed the Trust that its 2025 Plan for the Subject Interests includes 29 projects. Approximately $4.0 million of the $9.0 million budget in the 2025 Plan will be allocated to seven new vertical drill projects, all completed in the Dakota/Mesa Verde formations. Approximately $4.5 million of the $9.0 million budget will be allocated to 22 projects for recompletions and workovers in the Fruitland Coal formation, and approximately $0.5 million of the $9.0 million budget will be allocated to facilities projects related to natural gas compression and other facility projects. Hilcorp further informed the Trust that its planned project status for 2025 is subject to revision if Hilcorp revises its assumptions underlying the 2025 Plan, and that actual capital costs may vary from these estimates.

Current wording

Hilcorp informed the Trust that its 2026 Plan for the Subject Interests includes 32 projects. Approximately $11.5 million of the $14.0 million budget in the 2026 Plan will be allocated to nine new vertical drill projects to be completed in the Mesaverde, Mancos, and Dakota formations and six new horizontal drill projects in the Mancos formation. Hilcorp also informed the Trust that costs associated with the six new horizontal drill projects include drilling costs only. Completion costs for the horizontal wells are expected to be included in Hilcorp’s 2027 capital plan for the Subject Interests, which is expected to be provided to the Trust sometime in the first quarter of 2027. Approximately $2.0 million of the $14.0 million budget included in the 2026 Plan will be allocated to 17 projects for recompletions and workovers in the Fruitland Coal and Pictured Cliffs formations, and approximately $0.5 million of the $14.0 million budget will be allocated to facilities projects related to natural gas compression and other facilities projects. Hilcorp further informed the Trust that its 2026 Plan is subject to revision if Hilcorp revises its assumptions underlying the 2026 Plan, and that actual capital costs may vary from these estimates.

Previous wording

As of December 31, 2024, the Trust had no obligations or commitments to make future contractual payments other than the trustee fee payable to the Trustee. Under the Indenture, the Trustee is entitled to an administrative fee for its administrative services and the preparation of quarterly and annual statements, computed as (i) 1/20 of 1% of the first $100.0 million of the annual gross revenue of the Trust, and 1/30 of 1% of the annual gross revenue of the Trust in excess of $100 million and (ii) the Trustee’s standard hourly rates for time in excess of 300 hours annually. The minimum administrative fee due under items (i) and (ii) is $36,000 per year. Administrative fees paid to the Trustee were $120,108 and $90,815 for the years ended December 31, 2024 and 2023, respectively.

Current wording

As of December 31, 2025, the Trust had no obligations or commitments to make future contractual payments other than the trustee fee payable to the Trustee. Under the Indenture, the Trustee is entitled to an administrative fee for its administrative services and the preparation of quarterly and annual statements, computed as (i) 1/20 of 1% of the first $100.0 million of the annual gross revenue of the Trust, and 1/30 of 1% of the annual gross revenue of the Trust in excess of $100 million and (ii) the Trustee’s standard hourly rates for time in excess of 300 hours annually. The minimum administrative fee due under items (i) and (ii) is $36,000 per year. Administrative fees paid to the Trustee were $119,029 and $120,108 for the years ended December 31, 2025 and 2024, respectively.

Previous wording

For the three months ended December 31, 2024, there was no Distributable Income. This is a decrease from $3.6 million ($0.077927 per Unit) in Distributable Income for the three months ended December 31, 2023. The decrease in Distributable Income in the fourth quarter of 2024 compared to the fourth quarter of 2023 was due primarily to substantially higher capital project spending associated with Hilcorp's 2024 capital plan.

Current wording

For the three months ended December 31, 2025 and 2024, there was no Distributable Income. This is primarily attributable to costs associated to Hilcorp's 2024 project plan of developing two new horizontal wells.

Previous wording

The average price of gas decreased in the fourth quarter of 2024 compared to the same period of 2023 by $0.87 per Mcf. The average price per barrel of oil during the fourth quarter of 2024 was $7.35 lower than the price during the fourth quarter of 2023.

Current wording

The average price of gas increased in the fourth quarter of 2025 compared to the same period of 2024 by $0.49 per Mcf. The average price per barrel of oil during the fourth quarter of 2025 was $10.82 lower than the price during the fourth quarter of 2024.

Previous wording

Capital costs for the fourth quarter of 2024 totaled approximately $11.5 million as compared to approximately $1.6 million in the fourth quarter of 2023. The increased capital costs in the fourth quarter of 2024 were primarily due to costs associated with the two horizontal wells drilled as part of Hilcorp's 2024 development plan.

Current wording

Capital costs for the fourth quarter of 2025 totaled approximately $315 thousand as compared to approximately $11.5 million in the fourth quarter of 2024. The decreased capital costs in the fourth quarter of 2025 were primarily due to the lower costs associated with Hilcorp's 2025 development plan.

Previous wording

Monthly lease operating expenses for the fourth quarter of 2024 averaged $7.5 million per month compared to $2.3 million per month in the fourth quarter of 2023. Lease operating expenses were higher in the fourth quarter of 2024 than for the fourth quarter of 2023 due primarily to repairs and maintenance in preparation for winter 2023 and non-operated joint interest billing actualizations.

Current wording

Monthly lease operating expenses for the fourth quarter of 2025 averaged $3.0 million per month compared to $7.5 million per month in the fourth quarter of 2024. Lease operating expenses were higher in the fourth quarter of 2025 than for the fourth quarter of 2024 due primarily to increased company labor costs, higher expenditures related to authorization for expediture projects, higher overhead, and increased compressor rental charges.