SAN JUAN BASIN ROYALTY TRUST

Previous wording

Pursuant to the Net Overriding Royalty Conveyance effective November 1, 1980, Southland conveyed the Royalty that burdens the Subject Interests in properties located in the San Juan Basin of northwestern New Mexico to the Trust. Subsequent to the Conveyance of the Royalty, through a series of sales, assignments and mergers, Southland’s successor became Hilcorp, which acquired the Subject Interests from Burlington Resources Oil & Gas Company LP (“Burlington”), an indirect wholly-owned subsidiary of ConocoPhillips, on July 31, 2017.

Current wording

Pursuant to the Net Overriding Royalty Conveyance effective November 1, 1980, Southland conveyed the Royalty that burdens the Subject Interests in properties located in the San Juan Basin of northwestern New Mexico to the Trust. Subsequent to the Conveyance of the Royalty, through a series of sales, assignments and mergers, Southland’s successor became Hilcorp, which acquired the Subject

Previous wording

The amount of Gross Proceeds also 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

Current wording

The amount of Gross Proceeds also 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 reduce the volume of natural gas and oil produced from the Subject Interests by Hilcorp.

Previous 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 of 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. As of March 31, 2026, Hilcorp has spent $0.76 million of the $9.0 million budgeted under the 2026 Plan.

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 was initially 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 of 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

Capital Expenditures. The timing and size of capital expenditures by Hilcorp have impacted and continue to impact Net Proceeds. Hilcorp’s capital expenditures decreased approximately $13,288,790, from $14,047,360 for the three months ended March 31, 2025 to $758,570 for the three months ended March 31, 2026. The decrease in capital costs for the period was primarily attributable to a lower capital project spending budget for Hilcorp's 2025 plan.

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 were $3,274,424 and $4,032,994 for the three and six months ended June 30, 2026, respectively. This reflects an increase of $764,797 for the three months ended June 30, 2026 and a decrease of $12,523,993 for the six months ended June 30, 2026, when compared to the same periods in 2025. The decrease for the six months ended June 30, 2026 was due to the lower capital expense budget for 2026 and the completion of the two new horizontal wells under Hilcorp’s 2024 plan during the first quarter of 2025.

Previous wording

Excess Production Costs. Excess Production Costs (“Excess Production Costs”) occur when Production Costs (including capital expenditures and lease operating expenses) exceed the Gross Proceeds for a certain period. In 2024, Excess Production Costs accrued due to significant lease operating expenses and capital expenditures associated with Hilcorp San Juan L.P. (“Hilcorp”) drilling of two new horizonal wells. As of December 31, 2025, the balance of Excess Production Costs was $8,438,536 gross ($6,328,902 net to the Trust). As of March 31, 2025, the balance of Excess Production Costs was $6,186,819 ($4,640,115 net to the Trust). Hilcorp will not pay Royalty Income to the Trust, and no cash distributions will be made by the Trust until the balance of Excess Production Costs is extinguished. Further, no cash distribution will be made by the Trust until all Trust liabilities are paid in full, and the Trust’s cash reserves are replenished.

Current wording

Excess Production Costs. Excess Production Costs occur when Production Costs and capital expenditures exceed the Gross Proceeds for a certain period. Excess Production Costs accrued due to significant lease operating expenses and capital expenditures associated with Hilcorp's drilling of two new horizontal wells. From January 1, 2025 through March 31, 2026, net proceeds of $15,061,188, which amount would otherwise have been payable to the Trust as royalty income, were applied to the balance of the Excess Production Costs. The balance of cumulative Excess Production Costs, as of March 31, 2026, was approximately $6,186,819 ($4,640,115 net to the Trust). As of June 30, 2026, the balance of cumulative Excess Production Costs was $9,258,749 ($6,944,062 net to the Trust), an increase of $3,071,930 ($2,303,948 net to the Trust). Hilcorp will not pay Royalty Income to the Trust, and no cash distributions will be made by the Trust until the balance of Excess Production Costs is extinguished, Trust liabilities are paid in full, and the Trust’s cash reserves are replenished.

Previous wording

Hilcorp has multiple gas purchase agreements that set forth the prices it will receive for the natural gas and oil produced from the Subject Interests. There is a differential in the prices reflected in the market indices and the prices received and reported because the prices received and reported vary by purchase agreement, and they are determined after deducting gathering, processing, and marketing costs for both gas and natural gas liquids. These purchase agreements and costs are subject to a comprehensive audit process by professional accountants and consultants.

Current wording

Hilcorp has multiple purchase agreements that set forth the prices it will receive for the natural gas and oil produced from the Subject Interests. There is a differential in the prices reflected in the market indices and the prices received and reported because the prices received and reported vary by purchase agreement, and they are determined after deducting gathering, processing, and marketing costs for both gas and natural gas liquids. These purchase agreements and costs are subject to a comprehensive audit process by professional accountants and consultants.

Previous wording

Results of Operations – for the Three Months Ended March 31, 2025 and 2024

Current wording

Results of Operations – for the Three and Six Months Ended June 30, 2026 and 2025

Previous wording

Royalty Income. Royalty Income consists of 75% of the monthly Net Proceeds attributable to the Royalty. Royalty Income for the three months ended March 31, 2026, and 2025 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 six months ended June 30, 2026, and 2025 was determined as shown in the following table:

Previous wording

Excess Production Costs. For the three months ended March 31, 2026, net proceeds of $2,251,717, which amount would otherwise have been payable to the Trust as royalty income, were applied to the balance of the Excess Production Costs. The Conveyance provides that Excess Production Costs 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 March 31, 2026, is to be recovered in future periods when the Gross Proceeds exceed Production Costs for such period. The balance of Excess Production Costs as of March 31, 2025 was $6,186,819 ($4,640,115 net to the Trust).

Current wording

The balance of Excess Production Costs for the three months ended June 30, 2026 increased $3,071,930 and $820,214 for the three and six months ended June 30, 2026, respectively, bringing the balance to $9,258,749 ($6,944,062 net to the Trust) as of June 30, 2026. 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

There was no Royalty Income distributed to the Trust for the three months ended March 31, 2026 and 2025, due primarily to substantially higher capital project spending associated with Hilcorp's drilling of two new horizontal wells in 2024. Additionally, Royalty Income was affected by continued low natural gas prices and an increase in lease operating expenses. The average natural gas price decreased from $2.99 per Mcf for the three months ended March 31, 2025, to $2.85 per Mcf for the three months ended March 31, 2026. Production of natural gas from the Subject Interests decreased from 7,620,893 Mcf for the three months ended March 31, 2025, to 6,351,787 Mcf for the three months ended March 31, 2026.

Current wording

There was no Royalty Income distributed to the Trust for the three months ended June 30, 2026 and 2025. The average natural gas price decreased from $2.68 per Mcf for the three months ended June 30, 2025, to $1.70 per Mcf for the three months ended June 30, 2026. The average natural gas price also decreased from $2.87 per Mcf for the six months ended June 30, 2025 to $2.29 per Mcf for the six months ended June 30, 2026. Production of natural gas from the Subject Interests decreased from 7,085,582 Mcf for the three months ended June 30, 2025, to 6,034,995 Mcf for the three months ended June 30, 2026. Production of natural gas from the Subject

Previous wording

Gross Proceeds from Subject Interests. Total Gross Proceeds decreased approximately $8.6 million, or 36.3%, for the three months ended March 31, 2026, compared to the three months ended March 31, 2025. The decreases were primarily due to a leveling of production volumes from the two new horizontal wells Hilcorp drilled in 2024 and a prior period adjustment of $3.5 million.

Current wording

Gross Proceeds from Subject Interests. Total Gross Proceeds decreased approximately $8.3 million, or 43.0%, for the three months ended June 30, 2026, compared to the three months ended June 30, 2025. Total Gross Proceeds decreased approximately $17.0 million or 39.3% for the six months ended June 30, 2026 compared to the same time period in 2025. The decreases were primarily due to lower natural gas pricing.

Previous 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.

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 estimated its 2026 capital expenditures for the Subject Interests to be approximately $14.0 million.

Previous 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 of 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. As of March 31, 2026, Hilcorp has spent $0.76 million of the $9.0 million budgeted under the 2026 Plan.

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 of 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

Severance Taxes. Aggregate severance taxes decreased approximately $0.3 million, or 15%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The decrease was primarily attributable to the decrease in the price of gas. Severance taxes represented approximately 12% of Gross Proceeds for the three months ended March 31, 2026 compared to approximately 9% for the same period of 2025.

Current wording

Severance Taxes. Aggregate severance taxes decreased approximately $0.3 million, or 19.7%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025 and decreased approximately $0.7 million or 17.2% for the six months ended June 30, 2026 compared to the same time period during 2025. The decrease was primarily attributable to lower Gross Proceeds. Severance taxes represented approximately 11.8% of Gross Proceeds for the three months ended June 30, 2026 compared to approximately 8.4% for the same period of 2025. Severance taxes represented approximately 12.1% of Gross Proceeds for the six months ended June 30, 2026 and approximately 8.9% for the same period of 2025.

Previous wording

Lease Operating Expenses and Property Taxes. Lease operating expenses and property taxes increased $2.26 million or 28.4%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025.

Current wording

Lease Operating Expenses and Property Taxes. Lease operating expenses and property taxes increased $1.2 million or 14.6%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. For the six months ended June 30, 2026, lease operating expenses and property taxes increased approximately $3.5 million or 21.4% compared to the six months ended June 30, 2025.

Previous wording

For the three months ended March 31, 2026, net proceeds of $2,251,717, which amount would otherwise have been payable to the Trust as royalty income, were applied to the balance of the Excess Production Costs. The Conveyance provides that Excess Production Costs 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. The balance of Excess Production Costs as of March 31, 2025 was $6,186,819 ($4,640,115 net to the Trust).

Current wording

Excess Production Costs. For the three months ended June 30, 2026, Excess Production Costs of $3,071,930 ($2,303,948 net to the Trust) were added to the previous balance of $6,186,819 ($4,640,115 net to the Trust). The Conveyance provides that Excess Production Costs 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 June 30, 2026 was $9,258,749 ($6,944,062 net to the Trust).

Previous wording

Distributable Income. Distributable Income for the three months ended March 31, 2026, and 2025 was determined as shown in the following table:

Current wording

Distributable Income. Distributable Income for the three and six months ended June 30, 2026, and 2025 was determined as shown in the following table:

Previous wording

Interest Income. Interest income decreased for the three months ended March 31, 2026, as compared to the same periods in 2025 primarily due to the lack of Royalty Income and the reduction in cash reserves held by the Trustee.

Current wording

Interest Income. Interest income decreased for the three and six months ended June 30, 2026, as compared to the same periods in 2025 primarily due to the lack of Royalty Income and the reduction in cash reserves held by the Trustee.

Previous wording

General&Administrative Expenses. General and administrative expenses decreased by $138,812 (27%) for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The decrease was primarily attributable to decreasing Trust expenses such as printing and publishing, and differences in timing of the receipt and payment of certain expenses by the Trust.

Current wording

General&Administrative Expenses. General and administrative expenses decreased by $192,774 (49.3%) for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. For the six months ended June 30, 2026, general and administrative expenses decreased by $331,586 (36.5%) compared to the six months ended June 30, 2025 primarily due to differences in the timing of the receipt and payment of certain Trust expenses.

Previous wording

Cash Reserves. Total cash reserves were $14,380 as of March 31, 2026. 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 had cash reserves of $1,800,000 as of April 30, 2024. Cash reserves of $1,541,479, along with interest income, were utilized to pay the balance of Trust administrative expenses remaining (after applying interest income) each month from May 2024 through March 2025, when the Trust did not receive any Royalty Income. From June 2025 through March 2026, cash reserves were used to pay interest on the Line of Credit. Prior to any distributions to Unit Holders, the Trustee plans to replenish the cash reserves and continue to increase the cash reserves to at least $2,000,000.

Current wording

Cash Reserves. Total cash reserves were $4,019 as of June 30, 2026. 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 had cash reserves of $1,800,000 as of April 30, 2024. Cash reserves of $1,541,479, along with interest income, were utilized to pay the balance of Trust administrative expenses remaining (after applying interest income) each month from May 2024 through March 2025, when the Trust did not receive any Royalty Income. From June 2025 through May 2026, cash reserves were used to pay interest on the Line of Credit. Prior to any distributions to Unit Holders, the Trustee plans to replenish the cash reserves and continue to increase the cash reserves to at least $2,000,000.

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 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 March 31, 2026, the balance of cash reserves held by the Trust to cover Trust liabilities was $14,380.

Current wording

In each of the months from May 2024 through June 2026, 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 2026, the Trust was able to use cash reserves to pay the Trust’s liabilities from May 2024 through May 2025. As of June 30, 2026, the balance of cash reserves was $4,019.

Previous wording

Funds from the Line of Credit were utilized to pay Trust administrative expenses, net of interest earned on Trust cash accounts, from June 2025 through March 2026. As of March 31, 2026, the outstanding balance on the Line of Credit was $750,514. Cash reserves were utilized to pay interest accrued on the Line of Credit for the months of July 2025 through March 2026, such that the balance of cash reserves maintained by the Trust is currently $14,380.

Current wording

Funds from the Line of Credit were utilized to pay Trust administrative expenses, net of interest earned on Trust cash accounts, from June 2025 through June 2026 and to pay interest on the Line of Credit in June 2026. Cash reserves were utilized to pay interest accrued on the Line of Credit for the months of July 2025 through May 2026. As of June 30, 2026, the outstanding balance on the Line of Credit was $944,471 and the balance of cash reserves maintained by the Trust is currently $4,019.

Previous wording

Royalty Income for the three months ended March 31, 2026, is associated with natural gas and oil production during the period from November 2025 through January 2026. Royalty Income for the three months ended March 31, 2025, is associated with natural gas and oil production from the Subject Interests during the period from November 2024 through January 2025.

Current wording

Royalty Income, if any, for the three months ended June 30, 2026, is associated with natural gas and oil production during the period from February 2026 through April 2026. Royalty Income, if any, for the six months ended June 30, 2026, is associated with natural gas and oil production from the Subject Interests during the period from November 2025 through April 2026.

Previous wording

Natural gas production volumes decreased for the Subject Interests by 1,269,106 Mcf (17%) and increased for the Royalty by 3,141,219 (193%), respectively for the three months ended March 31, 2026, as compared to the same period in 2025. Royalty volume is calculated using a formula determined by revenue less expenses. Excess production costs contributed to negative volumes for gas for the Royalty in 2025. The decrease in production volume for the Subject Interests is attributed to the leveling of production from the two new horizontal wells that Hilcorp drilled in 2024. 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 1,050,587 Mcf (14.8%) and 4,115,257 Mcf (237.6%), respectively, for the three months ended June 30, 2026, as compared to the same period in 2025. For the six months ended June 30, 2026, natural gas production volumes decreased by 2,319,693 Mcf (15.8%) for the Subject Interests and decreased by 630,999 Mcf (264.4%) for the Royalty compared to the same period in 2025. Royalty volume is calculated using a formula determined by revenue less expenses. Excess Production Costs contributed to the decrease in natural gas production volumes and negative volumes 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 increased for the Subject Interests and Royalty by 1,358 Bbls (16.3%) and 2,199 Bbls (68.7%), respectively for the three months ended March 31, 2026, as compared to the same period in 2025. These changes generally resulted from changes in demand and market conditions.

Current wording

Oil production volumes increased for the Subject Interests by 2,903 Bbls (37.9%) for the three months ended June 30, 2026, as compared to the same period in 2025. Oil production volumes increased for the Royalty by 1,723 Bbls (37.1%) for the three months ended June 30, 2026, as compared to the same period in 2025. For the six months ended June 30, 2026, oil production volume increased by 4,260 Bbls (26.7%) for the Subject Interests and 3,922 Bbls (50.0%) for the Royalty as compared to the same period in 2025. These changes generally resulted from changes in the demand for natural gas and oil during the applicable time periods, natural gas and oil 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 months ended March 31, 2026, as compared to the same periods in 2025. 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 six months ended June 30, 2026, as compared to the same periods in 2025. 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 decreased for the three months ended March 31, 2026 as compared to the same periods in 2025. This increase was primarily due to an decrease in the WTI benchmark oil price.

Current wording

The average realized oil price per Bbl increased for the three and six months ended June 30, 2026 as compared to the same periods in 2025. This increase was primarily due to an increase in the WTI benchmark oil price.