PVL 10-K & 10-Q changes, risk factors and insider trading

The Underlying Properties are sensitive to decreasing commodity prices. The commodity price sensitivity is due to a variety of factors that vary from well to well, including the costs associated with water handling and disposal, chemicals, surface equipment maintenance, downhole casing repairs and reservoir pressure maintenance activities that are necessary to maintain production. As a result, decreasing commodity prices may cause the expenses of certain wells to exceed the well’s revenue, in which case the operator may decide to shut-in the well or plug and abandon the well. This scenario could reduce future cash distributions to Trust unitholders. Sustained lower prices of oil and natural gas also could negatively affect the price of the Trust Units and the qualification of the Trust Units to remain listed on the New York Stock Exchange. See “—Risks Related to Ownership of the Trust Units—If the Trust cannot meet the New York Stock Exchange continued listing requirements, the NYSE may delist the Trust Units.”

The value of the Trust Units and the amount of future cash distributions to the Trust unitholders will depend upon, among other things, the accuracy of the oil and natural gas reserves and future production estimated to be attributable to the Trust’s interest in the Underlying Properties. The Trust’s reserve quantities and net profits income are based on estimates of reserve quantities and net profits income for the Underlying Properties. See “Reserves” in Item 2 of this report for a discussion of the method of allocating proved reserves to the Underlying Properties and the Net Profits Interest. It is not possible to measure underground accumulations of oil and natural gas in an exact way, and estimating reserves is inherently uncertain. Ultimately, actual production and revenues from the Underlying Properties could be materially lower than estimates. Furthermore, direct operating expenses and development expenses relating to the Underlying Properties could be substantially higher than current estimates. Petroleum engineers are required to make subjective estimates of underground accumulations of oil and natural gas based on factors and assumptions that include:

OPEC is an intergovernmental organization that seeks to manage the price and supply of oil on the global energy market. Actions taken by OPEC members, including those taken alongside other oil exporting nations, such as Russia, have a significant impact on global oil supply and pricing. For example, OPEC and certain other oil exporting nations, such as Russia, have previously agreed to take measures, including production cuts, to support crude oil pricesprices. OPEC members and other oil exporting nations might not agree to future production cuts or other actions to support and stabilize oil prices, and they may not reduce oil prices or increase production in the future. Uncertainty regarding future actions that OPEC members or other oil exporting countries may take could lead to continued volatility in the price of oil, which could adversely affect the financial condition and economic performance of the operators of the Underlying Properties and may reduce the net proceeds to which the Trust is entitled, which could materially reduce or completely eliminate the amount of cash available for distribution to Trust unitholders.unitholders for an unknown period of time.

The Trust Units are a passive investment that entitles the Trust unitholders to only receive cash distributions derived from the Net Profits Interest. Trust unitholders have no voting rights with respect to the Sponsor and, therefore, have no managerial, contractual or other ability to influence the Sponsor’s or the third-party operators’ activities or the operations of the Underlying Properties. Oil and natural gas properties are typically managed pursuant to an operating agreement among the working interest owners of oil and natural gas properties. ThirdAs partyof operatorsDecember operate31, substantially 2025, all of the wells on the Underlying Properties.Properties were operated by third-party operators. The typical operating agreement contains procedures whereby the owners of the working interests in the property designate one of the interest owners to be the operator of the property. Under these arrangements, the operator is typically responsible for making all decisions relating to drilling activities, sale of production, compliance with regulatory requirements and other matters that affect the property. Neither the Trustee nor the Trust unitholders have any contractual ability to influence or control the field operations of, sale of oil or natural gas from, or any future development of, the Underlying Properties. The current operators developing the Underlying Properties are under no obligations to continue operations on the Underlying Properties. Neither the Trustee nor the Trust unitholders have the right to replace an operator.

In addition, the Sponsor may, without the consent of the Trust unitholders, require the Trustee to release the Net Profits Interest associated with any lease that accounts for no more than 0.25% of the total production from the Underlying Properties in the prior 12 months, provided that the Net Profits Interest covered by such releases cannot exceed, during any 12-month period, an aggregate fair market value to the Trust of $500,000. These releases may be made only in connection with a sale by the Sponsor to a non-affiliate of the relevant Underlying Properties and are conditioned upon an amount equal to the fair market value of such Net Profits Interest being treated as an offset amount against costs and expenses. For example, in MaySeptember 2023,2025, the Sponsor sold approximately $0.3$0.4 million in non-producing, non-cash flowing acreage to a private oil company, free and clear of the Net Profits Interest, as permitted under the Trust Agreement.

As of March 18,23, 2025,2026, the Sponsor holds an aggregate of 7,363,961 Trust Units. The Sponsor may sell Trust Units in the public or private markets, and any such sales could have an adverse impact on the price of the Trust Units. On June 22, 2022, pursuant to the Registration Rights Agreement between the Trust and the Sponsor, the Trust filed a registration statement on Form S-3 registering the offering by the Sponsor of 8,600,000 Trust Units. TheSince the registration statement was declared effective on July 7, 2022. Since then,2022, the Sponsor has sold approximately 1.2 million Trust Units under the Registration Statement pursuant to a Rule 10b5-1 trading plan adopted in accordance with Rule 10b5-1 of the Exchange Act.

InThe responseTrump Administration’s efforts to itsroll back 2009federal findingregulation of greenhouse gases (“GHGs”) represent a significant shift in federal climate policy, though the ultimate impact of those efforts on the Sponsor is unclear. In 2009, the EPA found that emissions of carbon dioxide, methane and other greenhouse gases (“GHGs”) may present an endangerment to public health and the environment, theenvironment EPAand hassubsequently issued regulations to restrict emissions of greenhouse gases under existing provisions of the CAA. These regulations include limits on tailpipe emissions from motor vehicles, preconstruction and operating permit requirements for certain large stationary sources, and methane emissions standards for certain new, modified and reconstructed oil and gas sources – as well as the EPA’s methane emissions guidelines for existing oil and gas sources that were adopted in 2024. The EPA also has adopted rules requiring the reporting of GHG emissions from specified large greenhouse gas emission sources in the United States, as well as certain onshore oil and natural gas production facilities, on an annual basis. Shortly after President Trump took office in January 2025, the federal government embarked on a series of changes relating to climate policy and regulation. On January 20, 2025, President Trump announced the withdrawal of the United States from the Paris Climate Agreement. In July 2025, the EPA issued a proposed rule to rescind the 2009 GHG endangerment finding that provided a basis for GHG regulation under the CAA. In September 2025, the EPA proposed to rescind the GHG reporting program for sectors other than the oil and gas sector, while proposing to suspend GHG reporting requirements for the oil and gas sector until 2034. In February 2026, the EPA adopted a final rule repealing its prior endangerment finding, which opens the door for the EPA to repeal its GHG rules for the oil and gas sector.

The EPA has established GHGmethane standards for oil and and gas sources under the CAA based on itsthe now-repealed GHG endangerment finding. In 2024, the EPA adopted a final rule that will directly regulate volatile organic compound and methane emissions from new oil and gas sources and will require further emissions reductions through its regulation of flaring, compressors, pumps, storage vessels, process controllers, well completions and liquids unloading, and equipment leaks. At the same time, the EPA adopted emissions guidelines that will apply to existing oil and gas sources and that require reductions in volatile organic compound and methane emissions that are largely equivalent to the requirements for new sources. The existing source emissions guidelines are to be implemented through state plans, with expected compliance dates for existing sources arriving in 2029. 2029.In 2025, however, the EPA extended certain compliance deadlines for both new and existing sources, and the 2026 endangerment finding repeal provides a basis for undoing the oil and gas methane standards, though the fact that the oil and gas standards address both methane and volatile organic compounds, which are regulated independently of the EPA’s authority to regulate GHGs, may limit the impact of future changes to the methane standards that currently apply to oil and gas sources.

The Inflation Reduction Act of 2022 (“IRA”) included new CAA section 136(c) directing the EPA to collect the Waste Emissions Charge (“WEC”) from facilities in the oil and gas sector that report more than 25,000 tons of carbon dioxide equivalent emissions in a calendar year. The charge will first apply to methane emissions from calendar year 2024. The charge is determined by comparing actual reported methane emissions to statutorily established “methane intensity figures” that are based on gas production or throughput, with a charge assessed for every ton of methane emissions that exceeds the facility’s allowable emissions based on the applicable methane intensity figure. The charge will be $900 per ton for 2024 emissions and will increase to $1,200 and then $1,500 per ton in subsequent years. The program includes key exemptions, most notably a regulatory compliance exemption that applies to and exempts the emissions from facilities that are subject to and in complete compliance with the EPA’s new or existing source methane requirements. The EPA adopted new rules to implement implement the WEC program in November 2024; however, the fate of the WEC and the EPA rules implementing the WEC is unclear. In FebruaryMarch 2025, President theTrump Unitedsigned Stateslegislation House of Representatives and Senate both passed resolutions to repealrepealing the EPA’s 2024 WEC rules under the Congressional Review ActAct. (“CRA”),The repeal of the EPA’s WEC rules did not eliminate the statutory requirement to pay the WEC, but it eliminated the rules established by the EPA to determine the WEC due, the payment mechanism, and onany Marchpayment 14,deadlines. 2025The PresidentU.S. Trump signed the resolution repealing those rules under the CRA. In addition, the United States House of Representatives and SenateCongress may be considering amendment or repeal of certain portions of the IRA, including the statutory provisions establishing the WEC.

Additionally,Meanwhile, more than one-third of the states have have begun taking actions to control and/or reduce emissions of GHGs, primarily through the planned development of GHG emission inventories and/or regional GHG cap and trade programs. Although most of the state-level initiatives have to date focused on large sources of GHG emissions, such as coal-fired electric plants, it is possible that smaller sources of emissions could become subject to GHG emission limitations or allowance purchase requirements in the future. For example, the states of Colorado and New Mexico have adopted rules regulating GHGs from the oil and gas industry that are based on the federal standards. In addition, Congress may consider adopting legislation to reduce emissions of greenhouse gases. Any one of these climate change regulatory and legislative initiatives could have a material adverse effect on the Sponsor’s business, capital expenditures, financial condition and results of operations.

In addition, new and emergingfuture regulatory initiatives in the U.S. related to climate change disclosure or reporting could adversely affect the Trust. In March 2024, the SEC issued a final rule regarding the enhancement and standardization of mandatory climate-related disclosures for investors. The final rule mandates extensive disclosure of climate-related data, risks, and opportunities, including financial impacts, physical and transition risks, related governance and strategy and greenhouse gas emissions, for certain public companies. Compliance with the final rule may result in increased legal, accounting and financial compliance costs, make some activities more difficult, time-consuming and costly, and place strain on the personnel, systems and resources of the Sponsor or the Trust or both. The SEC’s climate disclosure requirementsrule maywas changechallenged underin thecourt, and Trump Administration.in InMarch February 2025, the acting SEC Chair issued a statement that2025 the SEC would not defend the 2024 disclosure rule in court andannounced that theit SEChad wouldvoted revisitto end its defense of the 2024 rule. The outcome of that litigation or separate rule changes made by the SEC’s reviewSEC may result in changes to SECclimate-related climate-related disclosure requirements, but the outcome of that review is uncertain.requirements. Even in the absence of federal requirements, however, some states have adopted climate disclosure laws or rules that are not affected by the SEC’s review. Compliance with the federal or state disclosure rules may result in increased legal, accounting and financial compliance costs, make some activities more difficult, time-consuming and costly, and place strain on the personnel, systems and resources of the Sponsor or the Trust or both.

In recent years, the Sponsor has increasingly relied on information technology (“IT”) systems and networks in connection with its business activities, including certain of its exploration, development and production activities. The Sponsor relies on digital technology, including information systems and related infrastructure, as well as cloud applications and services, to, among other things, estimate quantities of oil and natural gas reserves, analyze seismic and drilling information, process and record financial and operating data and communicate with employees and third parties. As dependence on digital technologies has increased, cyber incidents, including deliberate attacks and attempts to gain unauthorized access to computer systems and networks, have increased in frequency and sophistication. These threats pose a risk to the security of the Sponsor’s systems and networks, the confidentiality, availability and integrity of its data and the physical security of its employees and assets. This risk is exacerbated with the advancement of technologies like artificial intelligence, which malicious third parties are using to create new, sophisticated and more frequent attacks. Furthermore, geopolitical tensions or conflicts, such as the ongoing wars in Ukraine and in the Persian Gulf, may further heighten the risk of cybersecurity attacks. Any cyber-attack could have a material adverse effect on the Sponsor’s reputation, competitive position, business, financial condition and results of operations, and could have a material adverse effect on the Trust. Cyber-attacks or security breaches also could result in litigation or regulatory action, as well as significant additional expense to the Sponsor to implement further data protection measures.

In addition to the risks presented to the Sponsor’s systems and networks, cyber-attacks affecting oil and natural gas distribution systems maintained by third parties, or the networks and infrastructure on which they rely, could delay or prevent delivery to markets. A cyber-attack of this nature would be outside the Sponsor’s ability to control,control but could have a material adverse effect on the Sponsor’s business, financial condition and results of operations, and could have a material adverse effect on the Trust.

The Sponsor has indicated to the Trustee that although development activity on the Underlying Properties throughis expected to continue at its elevated pace for the first three monthsremainder of 2026the decreasedyear. overNevertheless, the 50%commodity mix and forward outlook for that development activity remains highly uncertain, even when compared to prior periods, given the samesignificant period volatility in 2025,commodity prices and in the currentactivity levelplans publicly announced by operators of in-progress drilling not yet billed to the Underlying Properties suggests that the forward outlook and indicatedProperties. activity from operators appears to be improving. The Sponsor believes that the activity outlook for the remainder of the year willhas likelyshifted to include not only the previously disclosed be weighted towards natural gas drilling in the Haynesville, similarbut oil-directed activity that has increased in response to lastthe year,higher ascrude oil prices seen thus far in the2026 approximatelycompared 48%to increase2025. inThe Sponsor expects that natural gas production forfrom the Underlying PropertiesProperties, forwhich increased 71% in the first three monthshalf of 2026 compared to the same period of 2025, will continue to grow, albeit at more moderated levels. Although the Sponsor expects that oil production from the Underlying Properties, which declined 9% in 2025.the six-month period ended June 30, 2026 compared to the same period of 2025, may improve slightly given known oil-directed capital expenditures, oil production is likely to remain at reduced levels. Given the indicated activity outlook from thepublic superoperators majoras oilwell andas gassome operatorprivate of the Underlying Properties responsible for much of the recent Haynesville activity,operators, the Sponsor has maintained a cash reserve for near-term capital expenditures, consistent with prior periods in which material future capital expenditure obligations have been expected. As of MarchJune 31,30, 2026, the cash reserve balance was $0.9$1.8 million. At the beginning of the year, based on publicly announced budgets from various operators of the Underlying Properties, oil-weighted capital expenditures were expected to decrease year-over-year. However, based on more recent public announcements, prior estimated capital expenditures could increase but remain subject to substantial volatility given current macro events. As in prior periods, future capital expenditure expectations expectations remain subject to revision from the operators of the Underlying Properties.

The Sponsor believes that the outlook for the oil oil and gas industry has improved comparedcontinues to earlyimprove. second quarter of 2025, as recent macroRecent events such as the Persian Gulf conflict have increased commodityoil price forecastsforecasts, and emphasizedwhile underscoring the importance of North American-based oil and gas operations. Since the start of the year,2026, oil prices have ranged from a low of $56 per Bbl to as high as $113 per Bbl, while natural gas prices also have also experienced volatility, ranging from a low of $2.52 per MMBtu to a high of $7.46 per MMBtu over the same period. AlthoughUnlike oil, average natural gas prices atexperienced a decline in the end of the firstsecond quarter of 2026 werecompared lower than atto the endstart of the firstyear; quarterhowever, ofthe 2025,Sponsor expects the observed rig count and activity levels, as estimated by industry analysts continue analysts, to remain elevated given the forecast for increasing natural gas demand from the buildout of datacentersdata centers and the AI ecosystem that are expected to require both renewable energy sources and natural gas-powered electricity generation. Meanwhile, the Sponsor continues to believe that consolidation within the oil and gas sector could lead to lower operating costs given economies of scale, but could also lead to more binary swings in capital spending, as more assets and capital budgets are set by fewer operators than in years past.

Despite this volatility, given the pace of capital expenditures during the first threesix months of 2026,2026 and the known in-process activity of certain operators of the Underlying Properties, the Sponsor is reaffirming its 2026 capital spending outlook of $9.0 million to $15.0 million, or $7.2 million to $12.0 million net to the Trust’s Net Profits Interest, but currently expects those expenditures to trend toward the higher end of the range given current expectations and guidance from the operators of the Underlying Properties.Interest. The Sponsor expects a majority of the remaining anticipated capital expenditures in 2026 to be focused on the Haynesville area, given known projects currently in process. The Sponsor believes that any further increases to the expected capital expenditure budget likely would come from oil-weighted projects by operators in the Permian region adding near-term activity in response to the recent oil price increases driven by the ongoing Persian Gulf conflict.area. As in prior periods, however, the outlook for capital expenditures remains subject to change, as operators operators are expected to continue to reevaluate their planned capital expenditures, particularly given volatile capital markets and an uncertain uncertain geopolitical situation.

Over the first threesix months of 2026, the Sponsor continued to see a reduction in operating costs on a per unit basis for the Underlying Properties compared to prior periods, due in part to the higher total production for the first quartersix months of 2026 compared to the same period last year.year, in addition to the shift in production mix towards a higher weighting of natural gas compared to oil production. The Sponsor indicates that this increase in production has come predominately from natural gas production growth in the Haynesville region, which generally features lower operating costs compared to legacy production areas within the Underlying Properties. The Sponsor expects this trend to continue given the near-term outlook for natural natural-gas-weightedgas-weighted capital expenditure activity.activity, but could moderate in the coming quarters to the extent that the operators of the Underlying Properties shift spending away from natural gas and toward oil production. According to the Sponsor, this decline in operating costs per unit has been partially offset by ongoing operational issues and cost overruns at some of the legacy, marginal oil-weighted assets on the Underlying Properties, whichProperties. theThe Sponsor indicates it is continuing to proactively address these issues through joint interest billing audits among other avenues afforded to non-operating working interest partners.

The projects identified above are still in process or awaiting first revenues, and the Sponsor expects a majority of thosethe projects that are in the process of drilling or pre-drilling to be completed and to begin producing during the second half of 2026.2026 and the first half of 2027.

Three Months Ended MarchJune 31,30, 2026 Compared to Three Months Ended MarchJune 31,30, 2025

The following table displays reported oil and natural natural gas sales volumes and average prices from the Underlying Properties, representing the amounts included in the net profits calculation for distributions paid or payable during the three months ended MarchJune 31,30, 2026 and 2025:

Net profits attributable to the Underlying Properties for the three months ended MarchJune 31,30, 2026 were $1.3$3.5 million compared to a net profits deficit of $3.0$1.9 million for the three months ended MarchJune 31, 30, 2025. The $4.3$1.5 million increase in net profits attributable to the Underlying Properties from the 2025 period to the 2026 period was primarily due to the following items:

For the three months ended MarchJune 31,30, 2026, the Trust withheld $0.5 million and paid $0.1$0.5 million for general and administrative expenses. Expenses paid during the period primarily consisted of fees for the preparation of the Trust’s monthly press releases, insurance expense, Trustee fees, and New York Stock Exchange listing fees. For the three months ended MarchJune 31,30, 2025, the Trust withheld $0.0 million and paid $0.2$0.3 million for general and administrative expenses.

The Trustee may create a cash reserve to pay for future liabilities of the Trust. In February 2022, the Trustee began withholding $37,833 from the funds otherwise available for distribution distribution each month to gradually build a cash reserve of approximately $2.3 million for the payment of future known, anticipated or contingent expenses or liabilities of the Trust. Commencing with the distribution to Trust unitholders payable in April 2023, the Trustee has been withholding, and in the future intends to withhold, $50,000 from the funds otherwise available for distribution each month to gradually build the reserve. 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 Trust unitholders. Cash held in reserve will be invested as required by the 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 Trust unitholders, together with interest earned on the funds. As of MarchJune 31,30, 2026, the Trustee has withheld $1,692,534$1,842,534 toward this cash reserve.

If the Trustee determines that the cash on hand and the cash to be received are, or will be, insufficient to cover the Trust’s liabilities, the Trustee may authorize the Trust to borrow money to pay administrative or incidental expenses of the Trust that exceed cash held by the Trust. The Trustee may authorize the Trust to borrow from any person, including the Trustee or the Delaware Trustee or an affiliate thereof, although none of the Trustee, the Delaware Trustee or any affiliate thereof intends to lend funds to the Trust. The Trustee may also cause the Trust to mortgage its assets to secure payment of the indebtedness. The terms of such indebtedness and security interest, if funds were to be loaned by the entity serving as Trustee or Delaware Trustee or an affiliate thereof, would be similar to the terms which such entity would grant to a similarly situated commercial customer with whom it did not have a fiduciary relationship. In addition, COERT has provided the Trust with a $1.2 million letter of credit to be used by the Trust if its cash on hand (including available cash reserves) is insufficient to to pay ordinary course administrative expenses. Further, if the Trust requires more than the $1.2 million under the letter of credit to pay administrative expenses, COERT has agreed to loan funds to the Trust necessary to pay such expenses. Any loan made by COERT to the Trust would be evidenced by a written promissory note, be on an unsecured basis, and have terms that are no less favorable to COERT than those that would be obtained in an arm’s length transaction between COERT and an unaffiliated third party. If the Trust borrows funds funds or draws on the letter of credit, no further distributions will be made to Trust unitholders until such amounts borrowed or drawn are are repaid. Except for the foregoing, the Trust has no source of liquidity or capital resources. The Trustee has no current plans to authorize authorize the Trust to borrow any funds. As of MarchJune 31,30, 2026 and December 31, 2025, including the aggregate amounts withheld as of such dates toward the approximately $2.3 million cash reserve discussed above, the Trust had cash of $3,186,425$3,346,992 and $2,733,791, respectively, respectively, to be used towards future Trust expenses. Since its formation, the Trust has not borrowed any funds and no amounts have been drawn on the letter of credit.

From time to time, if the Trust’s cash on hand (including available cash reserves, if any) is not sufficient to pay the Trust’s ordinary course administrative expenses that are due prior to the monthly payment to the Trust of proceeds from the Net Profits Interest, COERT may advance funds to the Trust to pay pay such expenses. At MarchJune 31,30, 2026 and December 31, 2025, there were no outstanding advances. Any advances to the Trust will be be carried forward to be repaid out of future net profits generated by the Underlying Properties.

Please read “Item 7. Trustee’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates” of the Trust’s 2025 Annual Report on Form 10-K for additional information regarding the Trust’s critical accounting policies and estimates. There were no material changes to the Trust’s critical accounting policies or estimates during the threesix months ended MarchJune 31,30, 2026.