NYSE: PRT

The Trust was created to acquire and hold the Net Profits Interest for the benefit of the Trust unitholders. The affairs of the Trust are managed by the Trustee. Neither Boaz Energy nor its successor, T2S, have any ability to manage the operations of the Trust, and, to the fullest extent permitted by law, does not owe any fiduciary duties to the Trust or the unitholders. The Delaware Trustee has only minimal rights and duties as are necessary to satisfy the requirements of the Delaware Statutory Trust Act.

The Trust’s purpose is to own the Net Profits Interest, to distribute to the Trust unitholders cash that the Trust receives in respect of the Net Profits Interest and to perform certain administrative functions in respect of the Net Profits Interest and the Trust units. Other than the foregoing activities, the Trust does not conduct any operations or activities. The Trust derives all or substantially all of its income and cash flow from the Net Profits Interest. The Trust has no employees.

The Trust makes monthly cash distributions of all of its monthly cash receipts, after deduction of fees and expenses for the administration of the Trust and any cash reserves, to holders of its Trust units as of the applicable record date, on or before the 10th business day after the record date. Distributions generally relate to sales from a one-month period.

The Conveyance

In connection with the closing of the initial public offering of Trust units and pursuant to the Conveyance of Net Profits Interest (the “Conveyance”) effective May 4, 2018, Boaz Energy conveyed the Net Profits Interest to the Trust in exchange for Trust units. The Net Profits Interest entitles the Trust to receive 80% of the net profits from the sale of oil and natural gas production from the Underlying Properties. The Net Profits Interest is passive in nature and neither the Trust nor the Trustee has any control over, or responsibility for, costs relating to the operation of the Underlying Properties.

The Underlying Properties consist of 31,354 gross (22,394 net) acres in the Permian Basin. The Permian Basin extends over 75,000 square miles in West Texas and Southeastern New Mexico. The Underlying Properties consist of the following four operating areas:

Permian Clearfork area – consists of 2,434 net acres on the Central Basin Platform of the Permian Basin in Hockley and Terry Counties, Texas.

Permian Abo area – consists of 1,667 net acres on the Central Basin Platform of the Permian Basin in Terry and Cochran Counties, Texas.

Permian Shelf area – consists of 14,390 net acres on the Eastern Shelf of the Permian Basin in Glasscock, Schleicher, Stonewall and Coke Counties, Texas.

Permian Platform area – consists of 3,903 net acres on the Central Basin Platform of the Permian Basin in Ward, Crane, Terry and Ector Counties, Texas.

A detailed description of the Underlying Properties is included under Item 2. Properties.

On January 13, 2025, the Trust announced that Boaz Energy and its affiliate Boaz Energy II Royalty, LLC entered into a Purchase and Sale Agreement on January 10, 2025 (the “Purchase and Sale Agreement”) with T2S Permian Acquisition II LLC, a Delaware limited liability company (the “Buyer” or “T2S”), with respect to the Underlying Properties.

Boaz Energy informed the Trust that, pursuant to the Purchase and Sale Agreement, Boaz Energy sold and conveyed (a) to T2S, all of Boaz Energy’s right, title and interest in and to the Underlying Properties (which shall remain burdened by the Net Profits Interest and subject to the Conveyance); and (b) to Ustx, LLC, all of Boaz Energy’s 4,884,861 Trust units representing beneficial interests in the Trust (the “Boaz Trust Units”).

Boaz Energy reported that the Purchase and Sale Agreement contained customary conditions to the parties’ obligations to consummate the closing of the transaction (the “Closing”). The Closing occurred on March 31, 2025. From and after the Closing, T2S has been the owner of the Underlying Properties (burdened by the Trust’s Net Profits Interest and subject to the Conveyance), T2S or an affiliate has been the operator of the Underlying Properties, and Ustx, LLC has been the owner of the Boaz Trust Units.

Computation of Net Profit

Net profits are computed monthly, and 80% of the aggregate net profits attributable to the sale of oil and natural gas production from the Underlying Properties received during each calendar month are paid to the Trust on or before the end of the following month.

“Gross profits” generally means the aggregate amount received by Boaz Energy or T2S from sales of oil and natural gas produced from the Underlying Properties subject to certain adjustments as described in the Conveyance. “Net profits” generally means gross profits less the costs and expenses for, among other things, drilling and development activities, production, operation, maintenance and abandonment operations, taxes, charges and assessments and insurance and, where applicable, losses, liabilities and damages, in each case as incurred by Boaz Energy or T2S and attributable to the Underlying Properties (as such items are reduced by any offset amounts, as described in the Conveyance).

The Trust is not liable to the owners of the Underlying Properties or the operators for any operating, capital or other costs or liabilities attributable to the Underlying Properties. In the event that the net profits for any computation period is a negative amount, the Trust will receive no payment for that period, and any such negative amount plus accrued interest will be deducted from gross profits in the following computation period for purposes of determining the net profits for that following computation period.

Gross profits and net profits are calculated on a cash basis, except that certain costs, primarily ad valorem taxes and expenditures of a material amount, may be determined on an accrual basis.

The Trustee is not obligated to return any cash received from the Net Profits Interest. Any overpayments made to the Trust by Boaz Energy or T2S due to adjustments to prior calculations of net profits or otherwise will reduce future amounts payable to the Trust until Boaz Energy or T2S recover the overpayments plus interest at a prime rate (as described in the Conveyance).

Boaz Energy and T2S must maintain books and records sufficient to determine the amounts payable for the Net Profits Interest to the Trust. Monthly and annually, Boaz Energy or T2S must deliver to the Trustee a statement of the computation of the net profits for each computation period. The annual computation must be audited. The Trustee has the right to inspect, review and audit the books and records maintained by Boaz Energy or T2S during normal business hours and upon reasonable notice.

Marketing and Customers

Pursuant to the terms of the Conveyance, Boaz Energy (and any successor operator) has the responsibility to market, or cause to be marketed, the oil and natural gas production attributable to the Net Profits Interest in the Underlying Properties.

During the year ended December 31, 2025, Boaz Energy, T2S, and other third-party operators of the Underlying Properties sold the oil produced from the Underlying Properties to third-party purchasers. Oil production from the Underlying Properties is typically transported by pipeline or truck from the field to the closest gathering facility or refinery. Boaz Energy sold, and T2S and other operators sell, the majority of the oil production from the Underlying Properties under contracts based on geographic location using market sensitive pricing. The price received by the operators for the oil production from the Underlying Properties is usually based on a regional price applied to equal daily quantities in the month of delivery that is then reduced for differentials based upon delivery location and oil quality.

All natural gas produced from the Underlying Properties is marketed and sold to third-party purchasers. In all cases, the contract price is based on a percentage of a published regional index price, after adjustments for Btu content, transportation and related charges. Natural gas production is typically transported by pipeline to the closest gathering facility. Natural gas that is processed to remove NGLs is done under a percentage of proceeds contract and the Trust’s percentage of those proceeds are included in the Net Profits Interest.

For the year ended December 31, 2025, T2S reported that Phillips 66, Plains All American Pipeline, Energy Transfer Partners, and Enterprise Crude Oil LLC accounted for 34.34%, 17.01%, 16.31%, and 14.69% respectively, of its total oil and natural gas revenues, and that no other purchaser accounted for 10% or more of the total revenue of the Underlying Properties. T2S does not believe that the loss of any of these parties as a purchaser of crude oil or natural gas production from the Underlying Properties would have a material impact on the business or operations of T2S or the Underlying Properties because of the large number of marketing firms and competitive nature of oil and gas purchasers in the Permian Basin. Oil and natural gas are currently sold to these four customers under short-term contracts at market prices.

Competition and Markets

The oil and natural gas industry is highly competitive. T2S competes with major oil and natural gas companies and independent oil and natural gas companies for oil and natural gas, equipment, personnel and markets for the sale of oil and natural gas. Many of these competitors are financially stronger than T2S, but even financially troubled competitors can affect the market because of their need to sell oil and natural gas at any price to attempt to maintain cash flow. Because T2S and the third-party operators of the Underlying Properties are subject to competitive conditions in the oil and natural gas industry, the Trust’s Net Profits Interest is indirectly subject to those same competitive conditions.

Oil and natural gas compete with other forms of energy available to customers, primarily based on price. These alternate forms of energy include electricity, coal and fuel oils. Changes in the availability or price of oil, natural gas or other forms of energy, as well as business conditions, conservation, legislation, regulations and the ability to convert to alternate fuels and other forms of energy may affect the demand for oil and natural gas.

All of the Trust’s assets are located in the United States. T2S and the third-party operators of the Underlying Properties sell the oil and natural gas produced from the Underlying Properties to third-party purchasers in the United States. Demand for natural gas generally is higher in the winter months, but otherwise seasonal factors do not directly affect the Trust.

Dissolution of the Trust

The Trust is not subject to any pre-set termination provisions based on a maximum volume of oil or natural gas to be produced or the passage of time. The Trust will dissolve upon the earliest to occur of the following:

the Trust, upon the approval of the holders of at least 75% of the outstanding Trust units, sells the Net Profits Interest;

the annual cash proceeds available for distribution to the Trust is less than $2.0 million for each of any two consecutive years;

the holders of at least 75% of the outstanding Trust units vote in favor of dissolution; or

the Trust is judicially dissolved.

Upon dissolution of the Trust, the Trustee is obligated to sell all of the Trust’s assets, either by private sale or public auction, and, after payment or the making of reasonable provision for payment of all liabilities of the Trust, distribute the net proceeds of the sale to the Trust unitholders.

Environmental Matters and Regulation

General. For purposes of the discussion in this section, the oil and natural gas production operations conducted on the Underlying Properties are the operations of Boaz Energy, through March 31, 2025, and T2S or its affiliates for all periods after March 31, 2025. Boaz Energy’s and T2S's oil and natural gas exploration and production operations are subject to stringent and comprehensive federal, regional, state and local laws and regulations governing the discharge of materials into the environment or otherwise relating to environmental protection. These laws and regulations may impose significant obligations on Boaz Energy’s and T2S's operations, including, but not limited to, requirements to:

obtain permits to conduct regulated activities;

limit or prohibit drilling activities on certain lands lying within wilderness, wetlands and other protected areas;

restrict the types, quantities and concentration of materials that can be released into the environment in the performance of drilling and production activities;

initiate investigatory and remedial measures to mitigate pollution from former or current operations, such as restoration of drilling pits and plugging of abandoned wells; and

apply specific health and safety criteria addressing worker protection.

Failure to comply with environmental laws and regulations may result in the assessment of administrative, civil and criminal sanctions, including monetary penalties, the imposition of strict, joint and several liability, investigatory and remedial obligations and the issuance of injunctions limiting or prohibiting some or all of the operations on the Underlying Properties. Moreover, these laws, rules and regulations may restrict the rate of oil, natural gas and NGL production below the rate that would otherwise be possible. The regulatory burden on the oil and natural gas industry increases the cost of doing business in the industry and consequently affects profitability. The trend in environmental regulation has been to place more restrictions and limitations on activities that may affect the environment, and thus, any changes in environmental laws and regulations or re-interpretation of enforcement policies that result in more stringent and costly construction, drilling, water management, completion, emission or discharge limits or waste handling, disposal or remediation obligations could increase the cost to T2S of developing the Underlying Properties. Moreover, accidental releases or spills may occur in the course of operations on the Underlying Properties, causing T2S to incur significant costs and liabilities as a result of such releases or spills, including any third-party claims for damage to property, natural resources or persons.

Increased costs or operating restrictions on the Underlying Properties as a result of compliance with or liability under environmental laws could result in reduced exploratory and production activities on the Underlying Properties and, as a result, distributable cash to the Trust unitholders. The following is a summary of certain existing environmental, health and safety laws and regulations, each as amended from time to time, to which operations on the Underlying Properties are subject.

Hazardous Substances and Waste Handling

The Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”) also known as the Superfund law, and comparable state laws impose liability without regard to fault or the legality of the original conduct on certain classes of persons, or “responsible parties,” who are considered to be responsible for the release or threatened release of a “hazardous substance” from a facility into the environment. Under CERCLA, these “responsible persons” may include the owner or operator of the site, the owner or operator of site at the time of disposal, any person who arranges for disposal at the site, and any person that transports hazardous substances to a site from which there is a release of hazardous substances. These responsible persons may be subject to strict, joint and several liability for the costs of cleaning up the hazardous substances that have been released into the environment, for damages to natural resources and for the costs of certain health studies. CERCLA also authorizes the EPA and, in some instances, third parties to act in response to threats to the public health or the environment and to seek to recover from responsible parties the costs they incur. It is not uncommon for neighboring landowners and other third-parties to file claims for personal injury and property damage allegedly caused by the hazardous substances released into the environment. On September 6, 2022, EPA designated two per- and polyfluoroalkyl substances (“PFAS”) as hazardous substances under CERCLA. PFAS chemicals are known as “forever chemicals” because of their persistence in the environment. PFAS have been widely used in industrial and commercial applications since the 1950s, including the oil and gas industry, and designation of certain PFAS as a CERCLA hazardous substances increases potential risks of incurring CERCLA liabilities where they have been historically used. In April 2023, EPA issued an Advance Notice of Proposed Rulemaking asking the public for input regarding potential future hazardous substance designations of PFAS under CERCLA, and in June 2023, EPA released a framework for addressing new and new uses of PFAS under the Toxic Substances Control Act (“TSCA”). U.S. EPA’s National Enforcement and Compliance Initiatives for the fiscal years 2024-2027 listed PFAS identification and characterization of the extent of PFAS contamination as one of the agency’s new initiatives.

The Resource Conservation and Recovery Act (“RCRA”) and comparable state laws control the management and disposal of hazardous and non-hazardous waste. These laws and regulations govern the generation, storage, treatment, transfer and disposal of wastes generated. Drilling fluids, produced waters and most of the other wastes associated with the exploration, development and production of oil, natural gas and NGLs, if properly handled, are currently exempt from regulation as hazardous waste under RCRA and, instead, are regulated under RCRA’s less stringent non-hazardous waste provisions, state laws or other federal laws. However, it is possible that certain oil, natural gas and NGL drilling and production wastes now classified as non-hazardous could be classified as hazardous wastes in the future. For example, in December 2016, the EPA and environmental groups entered into a consent decree to address the EPA’s alleged failure to timely assess its RCRA Subtitle D criteria regulations exempting certain exploration and production related oil, natural gas and NGL wastes from regulation as hazardous wastes under RCRA. The consent decree required the EPA to propose a rulemaking no later than March 15, 2019, for revision of certain Subtitle D criteria regulations pertaining to oil, natural gas and NGL wastes or to sign a determination that revision of the regulations is not necessary (which deadline was extended

to April 23, 2019, due to a lapse in appropriations). On April 23, 2019, EPA made a determination that revisions to the federal regulations for the management of exploration and production waste under Subtitle D of RCRA are not necessary and issued a report explaining the basis for its decision. In October 2023, EPA released a final rule that eliminated an exemption that allowed facilities to avoid reporting information on PFAS when those chemicals were used in small concentrations. In January 2024, the EPA announced the automatic addition of seven PFAS to the list of chemicals covered by the Toxics Release Inventory (TRI), consistent with the Fiscal Year 2020 National Defense Authorization Act, and in February 2024, EPA released two proposed regulations under RCRA, adding nine PFAS to the list of RCRA hazardous constituents. EPA stated it will continue to work to identify areas for regulatory improvements and to address emerging issues to ensure exploration and production wastes continue to be managed appropriately. Any future regulatory change due to emerging issues, a change in EPA determination, or otherwise could result in an increase in the costs to manage and dispose of wastes, which could increase the costs of T2S's operations.

Certain of the Underlying Properties have been used for oil and natural gas exploration and production for many years. Although the operators may have utilized operating and disposal practices that were standard in the industry at the time, petroleum hydrocarbons and wastes may have been disposed of or released on or under the Underlying Properties, or on or under other offsite locations where these petroleum hydrocarbons and wastes have been taken for recycling or disposal. The Underlying Properties and the petroleum hydrocarbons and wastes disposed or released thereon may be subject to CERCLA, RCRA and analogous state laws. Under such laws, the owner or operator could be required to remove or remediate previously disposed wastes, to clean up contaminated property and to perform remedial operations such as restoration of pits and plugging of abandoned wells to prevent future contamination or to pay some or all of the costs of any such action.

Water Discharges

The Federal Water Pollution Control Act, also known as the “Clean Water Act” (“CWA”) and analogous state laws impose restrictions and strict controls with respect to the discharge of pollutants, including spills and leaks of oil, into federal and state waters. The discharge of pollutants into regulated waters is prohibited, except in accordance with the terms of a permit issued by the EPA or an analogous state agency. Obtaining permits has the potential to delay the development of oil and natural gas projects. In addition, federal and state regulatory agencies can impose administrative, civil and criminal penalties for non-compliance with discharge permits or other requirements of the CWA and analogous state laws and regulations. On August 29, 2023, the EPA published a final rule clarifying the federal jurisdictional reach over waters of the United States (“WOTUS”) and conforming the definition of WOTUS with the U.S. Supreme Court’s interpretation in its Sackett v. EPA decision. The scope of jurisdiction under the CWA includes (a) waters (i) currently used, or that were used in the past, or may be susceptible to use in interstate or foreign commerce, including all waters which are subject to the ebb and flow of the tide; (ii) the territorial seas; or (iii) interstate waters, and (b) only wetlands that have a “continuous surface connection” with those traditional waters. “Continuous surface connection” means when there is no clear demarcation between traditional “waters” and wetlands, which is a narrower construction of applicable wetlands than years prior, thereby eliminating some of the wetlands previously covered. On March 12, 2025, EPA issued guidance on the proper implementation of “continuous surface connection” under the definition of WOTUS. The guidance narrows wetlands jurisdiction to waters adjacent to WOTUS, “which generally means traditional navigable waters, or a relatively permanent body of water connected to a traditional navigable water,” and to wetlands with a “continuous surface connection to a requisite covered water making it difficult to determine where the water ends and wetland begins.” In the wake of the Sackett decision, several states have developed their own wetlands policies or regulatory programs to address discharges to intra-state waters that may no longer be regulated as WOTUS. Texas has not enacted any new state-level laws to fill the regulatory gap created by the Sackett v. EPA ruling; the State continues to rely primarily on federal standards and voluntary state programs. Spill prevention, control and countermeasure plan requirements imposed under the CWA require appropriate containment berms and similar structures to help prevent the contamination of WOTUS in the event of a hydrocarbon tank spill, rupture or leak. In addition, the CWA and analogous state laws require individual permits or coverage under general permits for discharges of storm water runoff from certain types of facilities. The Oil Pollution Act of 1990, as amended, or “OPA,” amends the CWA and establishes strict liability and natural resource damages liability for unauthorized discharges of oil into WOTUS. OPA requires owners or operators of certain onshore facilities to prepare Facility Response Plans for responding to a worst-case discharge of oil into WOTUS. EPA and various states also impose permitting requirements for the disposal of produced water by underground injection. As these requirements increase and become more strict, they could result in an increase in the costs to manage and dispose of wastes, which could increase the costs of T2S's operations. As of March 2025, the EPA announced a major initiative to reconsider and revise 1970s-era wastewater regulations (effluent guidelines) for oil and gas extraction, aiming to lower production costs and promote the treatment and beneficial reuse of produced water.

Air Emissions

The CAA and comparable state laws restrict the emission of air pollutants from many sources through air emissions permitting programs and also impose various monitoring, testing, and reporting requirements. These laws and regulations may require T2S to obtain pre-approval for the construction or modification of certain projects or facilities expected to produce or significantly increase air emissions, obtain and strictly comply with stringent air permit requirements or incur development expenses to install and utilize

specific equipment or technologies to control emissions. For example, in June 2016 the EPA finalized rules regarding criteria for aggregating multiple small surface sites into a single source for air-quality permitting purposes applicable to the oil and gas industry. This rule could cause small facilities, on an aggregate basis, to be deemed a major source, thereby triggering more stringent air permitting processes and requirements. In addition, EPA, New Mexico, Texas and other states have begun to regulate through their New Source Performance Standards (“NSPS”) and other air emissions programs the emission of VOCs and methane from oil and gas production process equipment, storage tanks and produced water impoundments and other assets. These requirements could increase the costs of development and production on the Underlying Properties, potentially impairing the economic development of the Underlying Properties and reducing the amount of cash distributable to Trust unitholders. Obtaining permits has the potential to delay the development of oil and natural gas projects. Federal and state regulatory agencies may impose administrative, civil and criminal penalties for non-compliance with air permits or other requirements of the CAA and associated state laws and regulations. As particularly related to the CAA, the EPA’s National Enforcement and Compliance Initiatives for fiscal years 2024-2027, which were updated on August 17, 2023, continued some of its initiatives from fiscal year 2020-2023, including addressing hazardous air pollutant violations in communities already highly burdened with pollution impacts and to focus on chemical accident risk prevention under Section 112(r) of the CAA with a focus on anhydrous ammonia (mainly used as a fertilizer or a refrigerant) and hydrogen fluoride (used in petrochemical manufacturing). Reducing emissions from significant sources of volatile organic compounds (“VOC”) and hazardous air pollutants could lead to increased scrutiny of air emissions from oil and gas operations. Air toxin reporting is currently voluntary, but if it became mandatory, then there may be increased costs toT2S's operations. On October 16, 2024, EPA promulgated final amendments to the National Emission Standards for Hazardous Air Pollutants (“NESHAPs”) for oil and gas production facilities and for natural gas transmission and storage facilities to remove an affirmative defense based on emissions caused by malfunctions. These amendments could ultimately increase T2S's costs of compliance. On March 8, 2024, the EPA promulgated a final rule to reduce methane and other pollution from oil and natural gas operations. This rule requires the elimination of routine flaring of natural gas and could increase T2S's cost of compliance. The Biden EPA promulgated NSPS regulations OOOOb/c which were designed to slash methane and VOC emissions from the oil and gas industry. OOOOb targets new, modified, or reconstructed sources, while OOOOc sets guidelines for existing sources. On March 12, 2025, the Trump Administration announced it is reconsidering the NSPS Subpart OOOO b/c rules. As of late 2025, the EPA is actively rolling back and delaying compliance deadlines for the 2024 OOOOb/c methane regulations. A final rule effective December 3, 2025, extends deadlines for control devices, leaks, and storage vessels, aiming to cut industry compliance costs.

Climate Change

In response to findings that emissions of carbon dioxide, methane and other greenhouse gases (“GHGs”) present an endangerment to public health and the environment, ("Endangerment Finding") the EPA has adopted regulations under existing provisions of the CAA that, among other things, establish PSD, construction and Title V operating permit reviews for certain large stationary sources. On February 18, 2026, Trump’s EPA finalized the repeal of the Endangerment Finding, which previously established that GHGs endanger public health. This move is being challenged in court by a coalition of nearly 40 states and cities. President Trump’s 2025 executive orders, particularly EO 14154 “Unleashing American Energy,” aim to dismantle federal climate change actions, accelerate fossil fuel production, and reverse environmental regulations from previous administrations.

At the federal level, no comprehensive climate change legislation has been implemented to date. The EPA has, however, adopted rules under authority of the CAA that, among other things, establish Potential for Significant Deterioration (“PSD”) construction and Title V operating permit reviews for GHG emissions from certain large stationary sources that are also potential major sources of certain principal, or criteria, pollutant emissions. Under these regulations, facilities required to obtain PSD permits must meet “best available control technology” standards for those GHG emissions. In addition, the EPA has adopted rules requiring the monitoring and annual reporting of GHG emissions from certain petroleum and natural gas system sources in the U.S., including, among others, onshore and offshore production facilities, which include certain operations on the Underlying Properties. The EPA has expanded the GHG reporting requirements to all segments of the oil and natural gas industry, including gathering and boosting facilities as well as completions and workovers from hydraulically fractured oil wells.

Federal agencies also have begun directly regulating emissions of methane from oil and natural gas operations. For example, in June 2016, the EPA published New Source Performance Standards (“NSPS”), known as Subpart OOOOa, that requires certain new, modified or reconstructed facilities in the oil and natural gas sector to reduce these methane gas and volatile organic compound emissions. However, on August 28, 2019, the EPA published a notice of reconsideration proposing to rescind methane-specific requirements for new and modified oil and gas infrastructure, which drew legal challenges. Subsequently, on November 2, 2021, EPA released a proposed rule that would limit emissions of methane—a greenhouse gas—from facilities in the oil and gas sector. In November 2022, EPA published a supplemental proposed rule that will increase monitoring and mitigation requirements related to methane and VOC emissions from the oil and gas industry. The proposed regulations, once effective, would reach new and existing facilities in the production, gathering, processing, and transmission and storage segments. Notably, the Biden administration has made

addressing climate change a priority and is expected to take steps to reduce harmful air emissions, which could result in new efforts to set methane limits and otherwise regulate GHGs. On December 2, 2023, EPA issued a final rule to reduce emissions of methane and other harmful pollutants from oil and gas operations. The rule added new NSPS standards to reduce methane and VOCs from oil and gas operations and developed a new “super emitter” program. EPA has also proposed a new rule to establish a Waste Emission Charge that applies to methane emissions from certain oil and gas operations. On March 12, 2025, the Trump Administration announced it is reconsidering rules promulgated by the Biden Administration under NSPS Subpart OOOO b/c. As of late 2025, the EPA under the Trump administration is actively rolling back and delaying compliance deadlines for the 2024 OOOOb/c methane regulations. A final rule effective December 3, 2025, extends deadlines for control devices, leaks, and storage vessels, aiming to cut industry compliance costs.

Many states have adopted GHG emission reduction goals broadly and for specific industries, which provides for GHG regulation and limits on permitting that will affect the oil and gas industry, for example through moratoriums on drilling and limits on permitting.

On May 14, 2024, EPA promulgated its final Greenhouse Gas Reporting. The rule requires that certain sources report GHGs over 25,000 tons per year. On April 25, 2024, EPA promulgated subpart Y of the GHG reporting rule that applies to refineries. In March 2025, EPA announced that it was reconsidering the GHG reporting rule. The adoption of these regulations and implementation of any international, federal or state legislation or regulations that require reporting of GHGs or otherwise restrict or place a fee or charge on emissions of GHGs could result in increased compliance costs or additional operating restrictions for T2S and could have a material adverse effect on our business, financial condition and results of operations. The Trump administration has proposed rolling back the EPA's Greenhouse Gas Reporting Program (GHGRP) for most sectors while specifically postponing, until 2034, reporting requirements for the oil and gas industry. While statutory reporting under the IRA "waste emissions charge" remains in place, the broader, detailed reporting on methane and other greenhouse gases is largely being suspended. Notwithstanding potential risks related to climate change, the International Energy Agency estimates that oil and gas will continue to represent a major share of global energy use through 2040, and other private sector studies project continued growth in demand for the next two decades. However, recent activism directed at shifting funding away from companies with energy-related assets could result in limitations or restrictions on certain sources of funding for the energy sector. Moreover, activist shareholders have introduced proposals that may seek to force companies to adopt aggressive emission reduction targets or to shift away from more carbon-intensive activities. While we cannot predict the outcomes of such proposals, they could make it more difficult for T2S to engage in exploration and production activities, ultimately reducing distributable cash to Trust unitholders. Finally, many scientists have concluded that increasing concentrations of GHG in the atmosphere may produce climate changes that have significant physical effects, such as increased frequency and severity of storms, droughts, and floods and other climate events that could have an adverse effect on operations of the Underlying Properties and, as a result, the amount of cash distributable to Trust unitholders.

Hydraulic Fracturing Activities

T2S engages in hydraulic fracturing. Hydraulic fracturing is a common practice that is used to stimulate production of hydrocarbons from tight formations, including shales. The process involves the injection of water, sand and chemicals under pressure into formations to fracture the surrounding rock and stimulate production. Currently, hydraulic fracturing is generally exempt from regulation under the U.S. Safe Drinking Water Act’s Underground Injection Control program and is typically regulated by state oil and gas commissions or similar agencies.

However, several federal agencies have asserted regulatory authority over certain aspects of the process. For example, in June 2016, the EPA published an effluent limit guideline final rule prohibiting the discharge of wastewater from onshore unconventional oil and gas extraction facilities to publicly owned wastewater treatment plants. Additionally, in December 2016, the EPA released its final report on the potential impacts of hydraulic fracturing on drinking water resources. The final report concluded that “water cycle” activities associated with hydraulic fracturing may impact drinking water resources under certain limited circumstances. From time to time, legislation has been introduced, but not enacted, in Congress to provide for federal regulation of hydraulic fracturing and to require disclosure of the chemicals used in the hydraulic fracturing process. In the event that new federal restrictions relating to the hydraulic fracturing process are adopted in areas where we own mineral or royalty interests, or T2S may incur additional costs or permitting requirements to comply with such federal requirements that may be significant and that could result in added delays or curtailment in or T2S's pursuit of exploration, development or production activities, which would in turn reduce the oil, natural gas and NGLs produced from the Underlying Properties.

Moreover, some states and local governments have adopted, and other governmental entities are considering adopting, regulations that could impose more stringent permitting, disclosure and well-construction requirements on hydraulic fracturing operations, including states in which the Underlying Properties are located. For example, Texas has adopted regulations that impose new or more stringent permitting, disclosure, disposal and well construction requirements on hydraulic fracturing operations. States

could also elect to prohibit high volume hydraulic fracturing altogether. In addition to state laws, local land use restrictions, such as city ordinances, may restrict drilling in general and/or hydraulic fracturing in particular.

Increased regulation and attention given to the hydraulic fracturing process could lead to greater opposition to, and litigation concerning, oil, natural gas and NGL production activities using hydraulic fracturing techniques. Additional legislation or regulation could also lead to operational delays or increased operating costs for T2S in the production of oil, natural gas and NGLs, including from the developing shale plays, or could make it more difficult for T2S to perform hydraulic fracturing. The adoption of any federal, state or local laws or the implementation of regulations regarding hydraulic fracturing could potentially cause a decrease in T2S's completion of new oil and natural gas wells on the Underlying Properties and an associated decrease in the distributable cash in the Trust.

Endangered Species Act and Migratory Birds Treaty Act

In the United States, the Endangered Species Act (the “ESA”) restricts activities that may affect endangered or threatened species or their habitats. Similar protections are offered to migratory birds under the Migratory Bird Treaty Act (the “MBTA”). To the extent species that are listed under the ESA or similar state laws, or are protected under the MBTA, live in the areas where the Underlying Properties are located, T2S's abilities to conduct or expand operations on the Underlying Properties could be limited, or T2S could be forced to incur material additional costs. Moreover, T2S's ability to conduct drilling activities may be delayed, restricted or precluded in protected habitat areas or during certain seasons, such as breeding and nesting seasons.

In addition, as a result of one or more settlements approved by the U.S. Fish & Wildlife Service (the “FWS”), the FWS was required to make a determination on the listing of numerous other species as endangered or threatened under the ESA by the end of the FWS’ 2017 fiscal year. The agency missed the deadline, and the review is reportedly ongoing. On August 12, 2019, the FWS finalized a package of ESA regulatory revisions addressing standards for listing, delisting, and reclassification of species, consultation parameters, and protections for threatened species, changes which are expected to ease the path for development projects On June 22, 2023, the FWS proposed to revise the 2019 final rule regarding consultation, listing and reclassification of species and designations of critical habitat, and reinstatement of the “blanket” 4(d) rules that were withdrawn in 2019. The Trump administration has proposed significant revisions to the ESA to reduce regulatory burdens on land use, effectively rolling back Biden-era protections. Key changes include removing automatic protections for “threatened” species, allowing economic impact considerations in listing decisions, narrowing “critical habitat” definitions, and redefining “harm” to exclude habitat modification. The Trump administration has reinterpreted the Migratory Bird Treaty Act (MBTA) to only prohibit the intentional killing of birds, effectively eliminating liability for industries that accidentally or incidentally kill birds during operations. This policy change, rooted in a 2017 legal opinion and reinstated in 2025, exempts activities like oil spills or power line hazards from penalties, prioritizing energy production over unintentional habitat impact

The designation of previously unidentified endangered or threatened species could cause T2S's operations to become subject to operating restrictions or bans, and limit future development activity in affected areas. For example, the FWS officially listed the Dunes Sagebrush Lizard, whose habitat includes portions of the Permian Basin, as endangered in May 2024, prompting intense legal battles and renewed calls to review or revoke these protections, particularly from Texas officials, who argue the federal action restricts oil and gas development in the Permian Basin. Environmental groups are simultaneously moving to defend the listing against state lawsuits. When species are listed, the FWS and similar state agencies may designate critical or suitable habitat areas that they believe are necessary for the survival of threatened or endangered species. Such a designation could materially restrict use of or access to federal, state and private lands. To the extent species are listed under the ESA or similar state laws, or previously unprotected species are designated as threatened or endangered in areas where the Underlying Properties are located, operations on the Underlying Properties could incur increased costs arising from species protection measures and face delays or limitations with respect to production activities thereon.

Employee Health and Safety

Operations on the Underlying Properties are subject to a number of federal and state laws and regulations, including the federal Occupational Safety and Health Act, or “OSHA,” and comparable state statutes, whose purpose is to protect the health and safety of workers. In addition, the OSHA hazard communication standard, the EPA community right-to-know regulations under Title III of the federal Superfund Amendment and Reauthorization Act and comparable state statutes require that information be maintained concerning hazardous materials used or produced in operations and that this information be provided to employees, state and local government authorities and citizens.

Available Information

The Trust maintains a website at www.permrock.com. The SEC maintains an internet site that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC. The Trust’s filings under the Exchange Act are available on the website and are also available electronically from the website maintained by the SEC at www.sec.gov.