Company: MNTR
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001493152-25-021833
Chunk: 30

Company: Mentor Capital, Inc.
Filing Date: 2025-11-12
Form: 10-Q
Item: Item 1
Chunk 30
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alty payments owed to the Company commenced and were recognized effective
                                            April 1, 2025.

○As
                                            of March 31, 2025, Mentor Capital, Inc. purchased royalty interests of approximately 0.050099%
                                            in forty-one (41) producing oil and gas wells in the Permian Basin situated in Martin County,
                                            Texas from Maven Royalty 2, LP, a Delaware limited partnership, for $588,229. Prior to the
                                            Company’s purchase, average daily production in the last six months was approximately
                                            15,734 BBLs and 20,645 MCF. Transfer of title to all oil, gas, and associated liquid or liquefiable
                                            hydrocarbons, including royalty, overriding royalty, unit interest and mineral interests
                                            of whatever nature, in, on, and under that may be produced from or attributable to the property
                                            including royalty interests in the name of Mentor Capital, Inc. was recorded on April 9,
                                            2025 in Martin County, Texas by a certain Mineral and Royalty Deed effective April 1, 2025.
                                            Therefore, royalty payments owed to the Company commenced and were recognized on April 1,
                                            2025.

The
royalty interests entitle the Company to receive a proportional share of revenues generated from the production of hydrocarbons from
the underlying property, without incurring any operating or production costs. Working interest owners operating the wells will participate
in and bear the costs of operation and development.

The
Company’s ownership in various non-operating royalty interests that result in future economic benefit in the form of royalty payments
following production is classified as intangible assets in accordance with ASC 350, “Intangibles – Goodwill and Other.”
The Company determined that the royalty interests have an estimated useful life of ten years, which is not uncommon in the oil and gas
industry. Therefore, the acquisition purchase price and associated transaction costs of our royalty interests are amortized on a straight-line
basis over an estimated useful life of ten years. In contemplation of the purchase of oil and gas royalty interests, management studied
the historical production curves of the wells individually and in the aggregate, along with studying its estimated percentage of royalty
income based on historical royalty payments in alignment with the percentage it purchased. The Company’s royalty interests are
analyzed in comparison to net present value calculated using a 10% discount rate (“NPV10”) ceiling for impairment at least
ann