Company: MNTR
Filing Date: 2025-08-13
Form Type: 10-Q
Source: 0001493152-25-011889
Chunk: 30

Company: Mentor Capital, Inc.
Filing Date: 2025-08-13
Form: 10-Q
Item: Item 1
Chunk 30
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                                            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 April 1, 2025.
                                            The Company estimates that the first royalty payment will be physically received by the Company
                                            on or around September 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 are 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
annually or if events or changes in circumstances indicate the asset may be significantly impaired. As of June 30, 2025, the total carrying
value of all royalty interests taken together was $1,335,143, which was calculated as the beginning balance of our royalty interests
of $1,369,899 less accumulated amortization of $34,756 at June 30, 2025. No indicators of impairment were identified during the three