Mesa Royalty Trust (MTR) risk factors, FY2025 10-K

Mesa Royalty Trust's FY2025 10-K, filed Mar 30, 2026, lists 7 risk factors. Against the prior year's 27: 7 new, 27 dropped.

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Risk factors listed
70 groups
New this year
7vs 27 last year
Dropped
27since the prior 10-K
Substantially reworded
0of those kept
Section length
2k wordsItem 1A

What the changes say

  • The trust operates without directors, executive officers, or employees, relying entirely on a corporate trustee and information from working interest owners.

What changed since the prior 10-K

New

  • New

    Directors, Executive Officers and Corporate Governance

  • New

    There are no directors or executive officers of the Trust. The Trustee is a corporate trustee which may be removed by the affirmative vote of the holders of a majority of the outstanding units at a meeting of the holders of units of beneficial interest of the Trust at which a quorum is present

    The Trust has no officers, directors, or code of ethics of its own, relying instead on the corporate trustee's governance.

  • New

    Section 16(a) Beneficial Ownership Reporting Compliance

    Only unitholders owning over 10 percent must file ownership reports under Section 16(a), and the trust lacks its own insider trading policy.

  • New

    Security Ownership of Certain Beneficial Owners

  • New

    ​ ​ ​ ​ 265,388(1) ​ ​ ​ ​ ​ 14.2% ​ ​

    A. Gile & Co. LLC beneficially owned 265,388 units, representing a 14.2% stake in the Trust.

  • New

    The Trust does not have an audit committee. Any pre-approval and approval of all services performed by the principal auditor or any other professional services firms and related fees are granted by the Trustee

    KPMG LLP billed the Trust total professional fees of $669,000 for 2025 and $661,236 for 2024, without an audit committee.

  • New

    ​ ​ ​ $ 669,000 ​ ​ ​ ​ $ 661,236 ​ ​

    Working interest owners reimburse the Trust for approximately 88.56% of general and administrative expenses, including tax and audit services.

Dropped

  • DroppedBUSINESS AND OPERATIONAL RISKS

    Oil and natural gas prices fluctuate due to a number of factors, and declines in commodity prices will reduce Net Proceeds available to the Trust and distributions to Trust unitholders

    Commodity price fluctuations reduce net proceeds and distributions.

  • DroppedBUSINESS AND OPERATIONAL RISKS

    Moreover, government regulations, such as regulation of natural gas transportation, regulation of greenhouse gas and other emissions associated with fossil fuel combustion, and price controls, can affect product prices in the long-term

    Government regulations and historical crude oil price volatility impact long-term prices.

  • DroppedBUSINESS AND OPERATIONAL RISKS

    Increased production and development costs for the Royalty have resulted in substantial accumulated excess production costs, which will result in decreased Trust distributions, and in some periods may result in no Trust distributions

    Increased production and development costs create excess costs, reducing distributions.

  • DroppedBUSINESS AND OPERATIONAL RISKS

    Trust assets are depleting assets and, if the Working Interest Owners or other operators of the Royalty Properties do not perform additional development projects, the assets may deplete faster than expected

    Trust assets are depleting assets requiring maintenance and development projects.

  • DroppedBUSINESS AND OPERATIONAL RISKS

    Trust reserve estimates depend on many assumptions that may prove to be inaccurate, which could cause both estimated reserves and estimated future revenues to be too high or too low

    Reserve estimates depend on uncertain assumptions affecting future revenues.

  • DroppedBUSINESS AND OPERATIONAL RISKS

    Changes in these factors and assumptions can materially change reserve estimates and future net revenue estimates

    Reserve allocation methods are complicated because the trust holds a royalty interest.

  • DroppedBUSINESS AND OPERATIONAL RISKS

    The quantities of reserves attributable to the Royalty Properties and the Royalty interest decreased in 2024 and may decrease in the future as a result of decreases in the price of oil, natural gas or natural gas liquids or other factors

    Reserves decreased in 2024 and rely on Miller and Lents estimates.

  • DroppedBUSINESS AND OPERATIONAL RISKS

    Certain Royalty Properties are not currently profitable and may not generate future net proceeds to the Trust

    Certain royalty properties are currently unprofitable due to low prices and high costs.

  • DroppedBUSINESS AND OPERATIONAL RISKS

    Operating risks for the Working Interest Owners’ interests in the Royalty Properties can adversely affect Trust distributions

    Operational risks and hazards affect working interest owners and distributions.

  • DroppedBUSINESS AND OPERATIONAL RISKS

    Trust unitholders and the Trustee have no influence or control over the operation or development of the Royalty Properties

    Unitholders and the Trustee have no control over underlying property operations.

  • DroppedBUSINESS AND OPERATIONAL RISKS

    The Trustee relies upon the Working Interests Owners for information regarding the Royalty Properties

    The Trustee relies entirely on working interest owners for operating and financial data.

  • DroppedBUSINESS AND OPERATIONAL RISKS

    The owner of any Royalty Property may abandon any property, terminating the related Royalty

    Working interest owners may transfer or abandon property without unitholder votes.

  • DroppedBUSINESS AND OPERATIONAL RISKS

    Terrorism and continued hostilities across the world could decrease Trust distributions or the market price of the units of beneficial interest of the Trust

  • DroppedBUSINESS AND OPERATIONAL RISKS

    Cyber-attacks or other failures in telecommunications or information technology systems could result in information theft, data corruption and significant disruption of the business operations of the Working Interest Owners

  • DroppedBUSINESS AND OPERATIONAL RISKS

    Cyber-attacks or other failures in telecommunications or IT systems could result in information theft, data corruption and significant disruption of the Trustee’s operations

  • DroppedLEGAL, ENVIRONMENTAL AND REGULATORY RISKS

    The Working Interest Owners are subject to extensive governmental regulation

  • DroppedLEGAL, ENVIRONMENTAL AND REGULATORY RISKS

    The Working Interest Owners’ operations are subject to environmental, health and safety laws and regulations that may expose the Working Interest Owners to penalties, damages or costs of remediation or compliance which could adversely affect Trust distributions

  • DroppedLEGAL, ENVIRONMENTAL AND REGULATORY RISKS

    Please read “Business — Regulation and Prices — Environmental Matters” under Item 1 of this Form 10-K for more information on the environmental laws and government regulations that may be applicable to the Working Interest Owners’ operations

  • DroppedLEGAL, ENVIRONMENTAL AND REGULATORY RISKS

    Climate change legislation or regulations restricting or regulating emissions of greenhouse gases could result in increased operating and administrative costs and could adversely affect Trust distributions

  • DroppedLEGAL, ENVIRONMENTAL AND REGULATORY RISKS

    Federal and state legislation and regulatory initiatives relating to hydraulic fracturing could result in increased costs and additional operating restrictions or delays on the Royalty properties in which the Trust holds an interest

  • DroppedRISKS RELATED TO OWNERSHIP OF THE TRUST’S UNITS

    Unitholders have limited voting rights

  • DroppedRISKS RELATED TO OWNERSHIP OF THE TRUST’S UNITS

    Unitholders have limited ability to enforce the Trust’s rights against the current or future owners of the Royalty Properties

  • DroppedRISKS RELATED TO OWNERSHIP OF THE TRUST’S UNITS

    The limited liability of the Trust unitholders is uncertain

  • DroppedRISKS RELATED TO OWNERSHIP OF THE TRUST’S UNITS

    The Trust has established a cash reserve for contingent liabilities and to pay expenses in accordance with the Trust Indenture and intends to increase such Contingent Reserve from $1.0 million to a total of $2.0 million, which will reduce Net Proceeds available to the Trust and distributions to Trust unitholders

  • DroppedRISKS RELATED TO OWNERSHIP OF THE TRUST’S UNITS

    The future financial condition of Working Interest Owners or other operators of the underlying properties could impede the operation of wells

  • DroppedRISKS RELATED TO OWNERSHIP OF THE TRUST’S UNITS

    Financial information of the Trust is not prepared in accordance with U.S. GAAP

  • DroppedRISKS RELATED TO OWNERSHIP OF THE TRUST’S UNITS

    Working Interest Owners may estimate the revenue or expense components of Net Proceeds, which may result in future adjustments and may adversely affect future distributions to unitholders

All 7 risk factors

Headings as the filing states them, in filing order.

Other

  1. 01Directors, Executive Officers and Corporate GovernanceNew
  2. 02There are no directors or executive officers of the Trust. The Trustee is a corporate trustee which may be removed by the affirmative vote of the holders of a majority of the outstanding units at a meeting of the holders of units of beneficial interest of the Trust at which a quorum is presentNew
  3. 03Section 16(a) Beneficial Ownership Reporting ComplianceNew
  4. 04Security Ownership of Certain Beneficial OwnersNew
  5. 05​ ​ ​ ​ 265,388(1) ​ ​ ​ ​ ​ 14.2% ​ ​New
  6. 06The Trust does not have an audit committee. Any pre-approval and approval of all services performed by the principal auditor or any other professional services firms and related fees are granted by the TrusteeNew
  7. 07​ ​ ​ $ 669,000 ​ ​ ​ ​ $ 661,236 ​ ​New

Other Mesa Royalty Trust 10-Ks

  • FY2024 10-K risk factors
    27 risks

    Mesa Royalty Trust depends entirely on third-party working interest owners for operational control, reserve estimates, and financial reporting. Commodity price volatility, increasing production costs, and depleting assets directly threaten quarterly distributions. Strict environmental regulations and climate change initiatives create significant compliance and operating cost risks.

    Filed Mar 31, 2025

About this page

The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.