Gulf Coast Ultra Deep Royalty Trust

Previous wording

At March 31, 2025, HOGA owned interests in approximately 30 gas leases onshore in South Louisiana, covering approximately 7,023 gross acres (5,056 acres net to HOGA’s interests) associated with the onshore Highlander subject interest. As of March 31, 2025, the onshore Highlander subject interest had no production due to the shutting in and subsequent abandonment of the sole well producing from the onshore Highlander subject interest as discussed in “– Status of the Onshore Highlander Subject Interest ” below.

Current wording

At June 30, 2025, HOGA owned interests in approximately 65 gas leases onshore in South Louisiana, covering approximately 7,865 gross acres (5,365 acres net to HOGA’s interests) associated with the onshore Highlander subject interest. As of June 30, 2025, the onshore Highlander subject interest had no production due to the shutting in and subsequent abandonment of the sole well producing from the onshore Highlander subject interest as discussed in “– Status of the Onshore Highlander Subject Interest” below.

Previous wording

Pursuant to the Royalty Trust Agreement, the Depositor has agreed to pay annual trust expenses up to a maximum amount of $350,000, with no right of repayment or interest due, to the extent the Royalty Trust lacks sufficient funds to pay administrative expenses. On February 1, 2024, pursuant to this provision, the Depositor contributed approximately $166,000 for the payment of trust expenses incurred during the year ended December 31, 2023, and contributed the maximum of $350,000 for the payment of trust expenses incurred during the year ending December 31, 2024. On April 4, 2025, pursuant to this provision, the Depositor contributed $200,750 for the payment of trust expenses incurred during the quarter ended March 31, 2025.

Current wording

Pursuant to the Royalty Trust Agreement, the Depositor has agreed to pay annual trust expenses up to a maximum amount of $350,000, with no right of repayment or interest due, to the extent the Royalty Trust lacks sufficient funds to pay administrative expenses. On February 1, 2024, pursuant to this provision, the Depositor contributed approximately $166,000 for the payment of trust expenses incurred during the year ended December 31, 2023, and contributed the maximum of $350,000 for the payment of trust expenses incurred during the year ending December 31, 2024. On April 4, 2025, pursuant to this provision, the Depositor contributed $200,750 for the payment of trust expenses incurred during the first quarter of 2025. On May 15, 2025, the Depositor contributed $149,250 for the payment of trust expenses incurred during the second quarter of 2025, thereby reaching the maximum contribution amount of $350,000 for 2025.

Previous wording

In addition to such annual contributions, The Depositor has agreed to lend money, on an unsecured, interest-free basis, to the Royalty Trust to fund the Royalty Trust’s ordinary administrative expenses as set forth in the Royalty Trust Agreement. All funds the Trustee borrows to cover expenses or liabilities, whether from the Depositor or from any other source, must be repaid before the Royalty Trust unitholders will receive any distributions. The Trustee requested a loan from the Depositor in the amount of $200,000 on October 16, 2024. The Depositor funded the loan request with a check dated November 6, 2024.

Current wording

In addition to such annual contributions, the Depositor has agreed to lend money, on an unsecured, interest-free basis, to the Royalty Trust to fund the Royalty Trust’s ordinary administrative expenses as set forth in the Royalty Trust Agreement. All funds the Trustee borrows to cover the Royalty Trust’s expenses or liabilities, whether from the Depositor or from any other source, must be repaid before the Royalty Trust unitholders will receive any distributions. The Trustee requested a loan from the Depositor in the amount of $200,000 on October 16, 2024. The Depositor funded the loan request with a check dated November 6, 2024. The Depositor funded additional loan requests from the Trustee of $10,750 on May 16, 2025 and $42,469 on June 27, 2025. As of June 30, 2025, the Royalty Trust has an outstanding note payable to HOGA of $253,219.

Previous wording

In accordance with the terms of the master conveyance, royalties are paid to the Royalty Trust on the last day of the month following the month in which production payments are received by HOGA. The Royalty Trust did not receive royalties during the three-month periods ended March 31, 2025 and 2024.

Current wording

In accordance with the terms of the master conveyance, royalties are paid to the Royalty Trust on the last day of the month following the month in which production payments are received by HOGA. The Royalty Trust did not receive royalties during the three- and six-month periods ended June 30, 2025 and 2024.

Previous wording

Royalties received by the Royalty Trust must first be used to (i) satisfy Royalty Trust administrative expenses and (ii) reduce Royalty Trust indebtedness. As of March 31, 2025, the Royalty Trust has an outstanding note payable to HOGA of $200,000.

Current wording

Royalties received by the Royalty Trust must first be used to (i) satisfy Royalty Trust administrative expenses and (ii) reduce Royalty Trust indebtedness. As of June 30, 2025, the Royalty Trust has an outstanding note payable to HOGA of $253,219.

Previous wording

Commencing with the distribution to unitholders in the first quarter of 2022, the Royalty Trust withheld $8,750 from the funds otherwise available for distribution each quarter through the first quarter of 2023, with the intent of gradually building a cash reserve of approximately $350,000. As no proceeds were available for distribution in the first quarter of 2025, the Royalty Trust did not withhold any funds for the cash reserve. Unless another well is drilled on the onshore Highlander subject interest as discussed in “Overview – Status of the Onshore Highlander Subject Interest” above, the Royalty Trust does not intend to withhold funds for the cash reserve as the Royalty Trust does not expect to have any cash available to distribute to unitholders in future periods. This cash is reserved for the payment of future known, anticipated or contingent expenses or liabilities of the Royalty Trust. The Trustee may increase or decrease the targeted cash reserve amount at any time and may increase or decrease the rate at which it is withholding funds to build the cash reserve at any time, without advance notice to the unitholders. Cash held in reserve will be invested as required by the Royalty Trust Agreement. Any cash reserved in excess of the amount necessary to pay or provide for the payment of future known, anticipated or contingent expenses or liabilities eventually will be distributed to unitholders, together with interest earned on the funds.

Current wording

Commencing with the distribution to unitholders in the first quarter of 2022, the Royalty Trust withheld $8,750 from the funds otherwise available for distribution each quarter through the first quarter of 2023, with the intent of gradually building a cash reserve of approximately $350,000. As no proceeds were available for distribution in the first quarter of 2025, the Royalty Trust did not withhold any funds for the cash reserve. Unless another well is drilled on the onshore Highlander subject interest, as discussed in “Overview – Status of the Onshore Highlander Subject Interest” above, and produces hydrocarbons in commercial quantities, the Royalty Trust does not intend to withhold funds for the cash reserve as the Royalty Trust does not expect to have any cash available to distribute to unitholders in future periods. This cash is reserved for the payment of future known, anticipated or contingent expenses or liabilities of the Royalty Trust. The Trustee may increase or decrease the targeted cash reserve amount at any time and may increase or decrease the rate at which it is withholding funds to build the cash reserve at any time, without advance notice to the unitholders. Cash held in reserve will be invested as required by the Royalty Trust Agreement. Any cash reserved in excess of the amount necessary to pay or provide for the payment of future known, anticipated or contingent expenses or liabilities eventually will be distributed to unitholders, together with interest earned on the funds.

Previous wording

There was no distributable income during the three-month periods ended March 31, 2025 and 2024 due to the shutting in and subsequent abandonment of the sole well producing from the onshore Highlander subject interest as discussed in “Overview – Status of the Onshore Highlander Subject Interest” above. Any distribution in a particular period is not necessarily indicative of future distributions.

Current wording

There was no distributable income during the three- and six-month periods ended June 30, 2025 and 2024 due to the shutting in and subsequent abandonment of the sole well producing from the onshore Highlander subject interest as discussed in “Overview – Status of the Onshore Highlander Subject Interest” above. Any distribution in a particular period is not necessarily indicative of future distributions.

Previous wording

*Royalty Income.*In accordance with the terms of the master conveyance, during the three-month periods ended March 31, 2025 and 2024, the Royalty Trust did not receive royalty income, due to the shutting in and subsequent abandonment of the sole well producing from the onshore Highlander subject interest as discussed in “Overview – Status of the Onshore Highlander Subject Interest” above.

Current wording

*Royalty Income.*In accordance with the terms of the master conveyance, during the three- and six-month periods ended June 30, 2025 and 2024, the Royalty Trust did not receive royalty income, due to the shutting in and subsequent abandonment of the sole well producing from the onshore Highlander subject interest as discussed in “Overview – Status of the Onshore Highlander Subject Interest” above.

Previous wording

*Administrative Expenses.*Administrative expenses consist primarily of audit, legal and trustee expenses incurred in connection with the administration of the Royalty Trust. During the three-month periods ended March 31, 2025 and 2024, the Royalty Trust paid administrative expenses of $0 and $421,723, respectively. Administrative expenses were higher for the three-month period ended March 31, 2024, as compared to the corresponding 2025 period, primarily due to the Trust’s payment of fourth quarter 2023 administrative expenses in the first quarter of 2024 and deferring payment of first quarter 2025 administrative expenses until April 2025.

Current wording

*Administrative Expenses.*Administrative expenses consist primarily of audit, legal and trustee expenses incurred in connection with the administration of the Royalty Trust. During the three-month periods ended June 30, 2025 and 2024, the Royalty Trust paid administrative expenses of $399,348 and $156,042, respectively. During the six-month periods ended June 30, 2025 and 2024, the Royalty Trust paid administrative expenses of $399,348 and $577,765, respectively. Administrative expenses were higher for the three-month period ended June 30, 2025, as compared to the corresponding 2024 period, primarily due to the Royalty Trust’s payment of first quarter 2025 administrative expenses in the second quarter of 2025. Administrative expenses were lower for the six-month period ended June 30, 2025, as compared to the corresponding 2024 period, primarily due to the Royalty Trust’s payment of fourth quarter 2023 administrative expenses in the first quarter of 2024.

Previous wording

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act). Forward-looking statements are all statements other than statements of historical facts, such as any statements regarding the future financial condition of the Royalty Trust or the trading market for the royalty trust units, all statements regarding the plans of HOGA for the subject interests, the potential results of any drilling on the subject interests by the applicable operator, anticipated interests of HOGA and the Royalty Trust in any of the subject interests, HOGA’s geologic models and the nature of the geologic trend onshore in South Louisiana discussed in this Form 10-Q, the amount and date of quarterly distributions to Royalty Trust unitholders, expectations regarding the drilling of a new well on the Highlander subject interest, and statements regarding the Royalty Trust’s future income from the overriding royalty interests and future distributions to Royalty Trust unitholders and all statements regarding any belief or understanding of the nature or potential of the subject interests. The words “anticipates,” “may,” “can,” “plans,” “believes,” “estimates,” “expects,” “projects,” “intends,” “likely,” “will,” “should,” “to be,” “potential,” and any similar expressions and/or statements that are not historical facts are intended to identify those assertions as forward-looking statements.

Current wording

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act). Forward-looking statements are all statements other than statements of historical facts, such as any statements regarding the future financial condition of the Royalty Trust or the trading market for the royalty trust units, all statements regarding the plans of HOGA for the subject interests, the potential results of any drilling on the subject interests, anticipated interests of HOGA and the Royalty Trust in any of the subject interests, HOGA’s geologic models and the nature of the geologic trend onshore in South Louisiana discussed in this Form 10-Q, the amount and date of quarterly distributions to Royalty Trust unitholders, expectations regarding the drilling of a new well on the Highlander subject interest, and statements regarding the Royalty Trust’s future income from the overriding royalty interests and future distributions to Royalty Trust unitholders and all statements regarding any belief or understanding of the nature or potential of the subject interests. The words “anticipates,” “may,” “can,” “plans,” “believes,” “estimates,” “expects,” “projects,” “intends,” “likely,” “will,” “should,” “to be,” “potential,” and any similar expressions and/or statements that are not historical facts are intended to identify those assertions as forward-looking statements.