Company: MTR
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001104659-25-029944
Chunk: 39

Company: MESA ROYALTY TRUST/TX
Filing Date: 2025-03-31
Form: 10-K
Item: Item 1A
Chunk 39
---
 the Royalty properties in which the Trust holds an interest.

Hydraulic fracturing is an important and commonly used process in the completion of unconventional natural gas wells in shale and coal formations, as well as tight conventional formations including many of those Royalty properties in which the Trust holds an interest. This process involves the injection of water, sand and chemicals under pressure into rock formations to stimulate natural gas production. Some states have adopted and others are considering legislation to restrict hydraulic fracturing. Several states including those where Royalty properties are located have adopted legislation requiring the public disclosure of hydraulic fracturing chemicals, which could make it easier for third parties opposing the hydraulic fracturing process to initiate legal proceedings based on allegations that specific chemicals used in the fracturing process could adversely affect groundwater. In addition, hydraulic fracturing requires large amounts of water. This water, along with any produced water, is often sent to injection wells for disposal. This activity has been associated with earthquakes and some states, particularly Oklahoma, have limited injection well activity. Any additional level of regulation could lead to operational delays or increased operating costs and could result in additional regulatory burdens that could make it more difficult to perform hydraulic fracturing and increase the Working Interest Owners’ costs of compliance and doing business and required disclosure without protection for trade secret or proprietary products could discourage service companies from using such products and as a result impact the degree to which some oil and gas wells may be efficiently and economically completed or brought into production.

RISKS RELATED TO OWNERSHIP OF THE TRUST’ S UNITS

The trading price of the units is substantially related to commodity prices and the Trust’s Royalty income. If the Trust’s Royalty income experiences a sustained decline, the Trust may be terminated. In addition, Royalty interests may be sold.

The trading price of the units is substantially related to commodity prices and the Trust’s Royalty income. The Trust will be terminated and the Trustee must sell all of the Royalty if holders of a majority of the units of beneficial interest of the Trust approve the sale or vote to terminate the Trust, or if the Trust’s Royalty income for each of two successive years is less than $250,000 per year. Following any such termination and liquidation, the Net Proceeds of any such sale will be distributed to the unitholders, and the unitholders will receive no further distributions from the Trust. The Trustee may also enter into one or more transactions, subject to any required unitholder approval, by which a portion of the Royalty is sold,