MARINE PETROLEUM TRUST

(1)

Trust Organization and Summary of Significant Accounting Policies

(a)

General

Marine Petroleum Trust (the “Trust”) was established on June 1, 1956 with the transfer of property to the Trust consisting of certain contract rights, units of beneficial interest and common stock in exchange for units of beneficial interest in the Trust. The contract rights entitled the Trust to receive an overriding royalty interest in oil, natural gas and other mineral leasehold interests acquired by Gulf Oil Corporation, now Chevron U.S.A., Inc. (“Chevron”), a subsidiary of Chevron Corporation, which interests are now predominately held by its assignees, including Arena Energy, LP, in certain areas of the Gulf of America (formerly known as the Gulf of Mexico) prior to January 1, 1980. Effective December 30, 2022, Argent Trust Company, a Tennessee chartered trust company (the “Trustee”) became corporate trustee of the Trust.

The Trust must distribute to its unitholders all cash accumulated each quarter, less an amount reserved for accrued liabilities and estimated future expenses. The Trust and its subsidiary cannot engage in a trade or business. Funds held by Marine Petroleum Corporation, a wholly owned subsidiary of the Trust, (“MPC,” and collectively with the Trust, “Marine”) pending distribution to the Trust are invested in U.S. Treasury and agency bonds.

The unitholders assigned their contract rights offshore of Louisiana to MPC reserving a 98% net profits interest to themselves. The net profits interest contract was transferred to the Trust along with the other properties. The Trust is authorized to pay expenses of MPC should it be necessary.

The Trust is to continue until June 1, 2041, or until such later date as holders of the units owning a majority of the outstanding units may designate, but in any event, not more than 20 years from such designation. However, the unitholders owning eighty percent (80%) or more of the outstanding units may terminate the Trust on any date.

(b)

Principles of Consolidation

The consolidated financial statements include the Trust and its wholly owned subsidiary, MPC. All material intercompany accounts and transactions have been eliminated upon consolidation.

(c)

Producing Oil and Gas Properties

At the time the Trust was established, no determinable market value was available for the assets transferred to the Trust; consequently, nominal values were assigned. Accordingly, no allowance for depletion has been included. All income from oil and natural gas royalties relate to proved developed oil and natural gas reserves.

(d)

U.S. Federal Income Taxes

No provision has been made for U.S. federal income taxes on the Trust’s income since such taxes are the liability of the unitholders.

U.S. federal income taxes have been provided on the income of MPC (which specifically excludes the 98% net profits interest to be retained by and delivered to the Trust), after deducting statutory depletion (if available). MPC uses the cash method of reporting for U.S. federal income taxes.

The primary difference between the actual tax expense of MPC and the expected tax expense is due to the fact that only 2% of MPC’s income (i.e., excluding the 98% net profits interest retained by, and delivered to, the Trust) is subject to U.S. federal income tax.

Tax positions taken by the Trust related to the Trust’s pass-through status for federal and applicable state income tax purposes have been reviewed, and the Trustee is of the opinion that material positions taken would more likely than not be sustained upon an examination. In accordance with the Trust’s basis of accounting discussed in Note 2, the Trust would only recognize the impact of tax positions that were not upheld at the time of payment. As of June 30, 2026, the Trust’s tax years 2019 through 2025 remain subject to examination.

MPC recognizes interest and penalties related to unrecognized tax benefits in income tax expense.

(e)

Credit Risk Concentration and Cash Equivalents

Financial instruments which potentially subject Marine to concentrations of credit risk are primarily investments in cash equivalents, U.S. Treasury and agency bonds. The Trust and MPC place their cash investments with financial institutions or companies that the Trustee considers credit worthy and limit the amount of credit exposure from any one financial institution.

Marine had cash and cash equivalents of $950,667 and $921,520 at June 30, 2026 and 2025, respectively, which consisted of cash deposits, U.S. Treasury and agency bonds and money market accounts.

(f)

Use of Estimates

The preparation of financial statements in conformity with the modified cash basis method of accounting requires the Trustee to make various estimates and assumptions that affect the reported amount of liabilities at the date of the financial statements and the reported amount of expenses during the reporting period. Actual results may differ from such estimates.

(g)

Distributable Income per Unit and Distributions

Distributable income per unit is determined by dividing distributable income by the number of units of beneficial interest outstanding during the period. Distributions to unitholders are calculated and paid out net of reserve for future expenses, which are estimated by the Trustee on a quarterly basis.

(h)

Significant Royalty Sources

Percent of royalty revenue received by Marine from producers is summarized as follows:

(1) Percent of royalty revenue received from Chevron USA, Inc. during the periods indicated was less than 1%.

(2)

Basis of Accounting

The financial statements of Marine have been prepared on the modified cash basis method and are not intended to present financial position and results of operations in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Under the modified cash basis method:

•

Royalty income is recognized when received by Marine.

•

Marine’s expenses (which include accounting, legal, and other professional fees, Trustees’ fees and out-of-pocket expenses) are recorded on an actual paid basis. Reserves for liabilities that are contingent or uncertain in amount may also be established if considered necessary.

•

Distributions to unitholders are recognized when declared by the Trustee of the Trust.

The financial statements of Marine differ from financial statements prepared in conformity with GAAP because of the following:

•

Royalty income is recognized in the month received rather than in the month of production.

•

Reserves may be established for contingencies that would not be recorded under GAAP.

•

Expenses are recorded in the month paid rather than in the month incurred.

•

Depletion is not recorded.

This comprehensive basis of accounting corresponds to the accounting principles permitted for royalty trusts by the Securities and Exchange Commission (the “SEC”), as specified by Staff Accounting Bulletin Topic 12:E, Financial Statements of Royalty Trusts.

New Accounting Pronouncements. There are no new pronouncements that are expected to have a significant impact on the Trust’s financial statements.

(3)

Supplemental Information Relating to Oil and Gas Reserves (Unaudited)

Oil and natural gas reserve information relating to Marine’s royalty interests is not presented because such information is not available to Marine. Marine’s share of oil, natural gas, and natural gas liquids sold for its royalty interests and Marine’s equity in oil, natural gas and natural gas liquids sold were as follows:

Gas volumes, reported in thousand cubic feet (“Mcf”), are converted to barrel of oil equivalent (“BOE”) at a ratio of six Mcf of gas to one bbl of oil.

(4)

Texas Franchise Tax

Texas imposes a franchise tax that applies to most business entities that are formed or qualified to do business, or which are otherwise doing business, in Texas. Under the Texas franchise tax, a 0.75% tax is imposed for reports due in 2026 on each taxable entity’s taxable margin that is apportioned to Texas. Taxable margin is generally defined as revenues less certain costs. Taxable entities include most entities that provide owners with limited liability protection, including trusts. There are certain exemptions from the franchise tax, including exclusions for certain “passive entities” that satisfy specified statutory requirements as described below and entities with total revenues below a specified threshold.

Under the Texas franchise tax, “passive entities” include trusts that meet the following requirements: (a) the trust cannot be a business trust within the meaning of U.S. Treasury Regulation section 301.7701-4(b); (b) at least 90% of the trust’s income for the taxable year must be derived from passive sources (e.g., royalties, bonuses, delay rental income from mineral properties, dividends, interest, and net gains from the sale of securities); and (c) no more than 10% of the trust’s income for the taxable year can be derived from an active trade or business (e.g., rent and certain income received by a non-operator under a joint operating agreement pursuant to which the operator is the member of an affiliated group that includes such non-operator). An entity will determine on an annual basis whether it meets the requirements to be treated as a “passive entity” for the Texas franchise tax. The Trustee believes that all or substantially all of the income of the Trust currently is passive, as it consists of royalty income from the sale of oil and natural gas, dividends and interest income. Thus, the Trust anticipates that it will be a passive entity in the tax year ending in 2024. Subject to any change in the sources of income derived by the Trust or any change in the Indenture, the Trust expects that it will continue to qualify as a passive entity that is not subject to the Texas franchise tax.

If the Trust is exempt from the Texas franchise tax as a passive entity, each unitholder that is subject to the Texas franchise tax as a taxable entity under the Texas Tax Code should generally include its share of the Trust’s revenue in its franchise tax computation. The Texas franchise tax does not apply to natural persons.

In the event the Trust does not qualify as a passive entity, it would not be required to pay any tax and is not considered to owe any Texas franchise tax for any period in which its annualized total revenue is less than or equal to a certain threshold. For reports due on or after January 1, 2026 and before January 1, 2027, this no tax due threshold is $2,650,000. MPC is a taxable entity for Texas franchise tax purposes but has historically not owed any amounts under the Texas franchise tax because its annualized revenues have not exceeded the applicable no tax due threshold.

Each unitholder is urged to consult its own tax advisor regarding the requirements for filing state tax returns.

(5)

Trustee Fees

Trustee fees for the years ending June 30, 2026 and June 30, 2025 were $28,000.

(6)

Subsequent Events

Subsequent events were evaluated through the issuance date of the financial statements. Subsequent to June 30, 2026, the Trust declared a distribution on August 21, 2026 of $0.10 per Unit outstanding payable on September 28, 2026 to Unitholders of record on August 31, 2026.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

(The registrant has no directors or executive officers.)