SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549



FORM 10-Q

ý

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2009o

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934FOR THE TRANSITION PERIOD
FROM                        TO


Commission file number 1-8432



MESA OFFSHORE TRUST(Exact name of Registrant as Specified in its Charter)

Texas(State of Incorporation
or Organization)

76-6004065(I.R.S. Employer
Identification No.)JPMorgan Chase Bank, N.A., Trustee
Institutional Trust Services
919 Congress Avenue
Austin, Texas(Address of Principal Executive Offices)

78701(Zip Code)


1-800-852-1422(Registrant's Telephone Number, Including Area Code)



Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past
90 days. Yes ý    No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to
be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files. Yes o    No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting
company. See the definitions of "large
accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer o

Accelerated filer o

Non-accelerated filer ý (Do not check if a smaller reporting company)

Smaller reporting company o


Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Act). Yes o    No ý

As of May 15, 200971,980,216 Units of Beneficial Interest were outstanding in Mesa Offshore Trust.



---





PART IFINANCIAL INFORMATION

Item 1.Financial Statements.

MESA OFFSHORE TRUST        STATEMENTS OF DISTRIBUTABLE INCOME        (Unaudited)

Three Months
Ended
March 31,2009

2008Royalty income

$
112,567

$
Interest income


21


General and administrative expenses


(112,588
)

Distributable income

$


$
Distributable income per unit

$


$



STATEMENT OF ASSETS, LIABILITIES AND TRUST CORPUS

March 31,
2009

December 31,
2008(Unaudited)ASSETSCash and short-term investments

$
111,606

$
69Net overriding royalty interest in oil and gas properties


380,905,000


380,905,000Less: accumulated amortization


(380,902,063
)

(380,902,063
)Total assets

$
114,543

$
3,006LIABILITIES AND TRUST CORPUSReserve for trust expenses

$
111,606

$
69Trust expense payable


93,622


270,595Interest payable


281,317


230,440Note payableJPMorgan


4,436,164


3,557,646Trust corpus (71,980,216 units of beneficial interest authorized and outstanding)


(4,808,166
)

(4,055,744
)Total liabilities and trust corpus

$
114,543

$
3,006


(The
accompanying notes are an integral part of these financial statements.)

2

---





MESA OFFSHORE TRUST        STATEMENTS OF CHANGES IN TRUST CORPUS        (Unaudited)

Three Months Ended
March 31,2009

2008Trust corpus, beginning of period

$
(4,055,744
)
$
(1,892,822
)Trust expenses payable


176,973


149,417Interest payable


(50,877
)

(46,710
)Note payableJPMorgan


(878,518
)

(804,604
)Trust corpus, end of period

$
(4,808,166
)
$
(2,594,719
)


(The
accompanying notes are an integral part of these financial statements.)

3

---





MESA OFFSHORE TRUST        NOTES TO FINANCIAL STATEMENTS        (Unaudited)

Note 1Trust Organization



The Mesa Offshore Trust (the "Trust") was created effective December 1, 1982. On that date, Mesa Petroleum Co.,
predecessor to Mesa Limited Partnership, which was the predecessor to MESA Inc., transferred to the Trust a 99.99% interest in the Mesa Offshore Royalty Partnership (the "Partnership"). The
Trust is an independent trust administered by JPMorgan Chase Bank, N.A., as trustee (the "Trustee"). JPMorgan Chase Bank, N.A., was formerly known as The Chase Manhattan Bank and is the
successor or "JPMorgan" by mergers to the original name of the Trustee, Texas Commerce Bank National Association.

JPMorgan
Chase & Co. and The Bank of New York Company ("BNY") announced in April 2006 an agreement pursuant to which BNY would acquire a portion of JPMorgan
Chase & Co.'s corporate trust business in exchange for BNY's consumer small business and middle market banking business. This transaction did not include any transfer by JPMorgan of its
obligations as Trustee of this Trust.



The Partnership was created to receive and hold a net overriding royalty interest (the "Royalty") in ten producing and nonproducing oil
and gas properties located in federal waters offshore Louisiana and Texas (the "Royalty Properties"). Mesa Inc. created the Royalty out of its
working interest in the Royalty Properties and transferred it to the Partnership. Until August 7, 1997, MESA Inc. owned and operated its assets through Mesa Operating Co. ("Mesa")
the operator and the managing general partner of the Royalty Properties. On August 7, 1997, MESA Inc. merged with and into Pioneer Natural Resources Company ("PNRC"), formerly a wholly
owned subsidiary of MESA Inc., and Parker & Parsley Petroleum Company merged with and into Pioneer Natural Resources USA, Inc. ("PNR") (successor to Mesa), a wholly owned
subsidiary of PNRC (collectively, the mergers are referred to herein as the "Merger"). Subsequent to the Merger, PNR owns and operates its assets through PNRC, and is also the managing general partner
of the Partnership. The Partnership is owned 99.99% by the Trust and 0.01% by PNR. PNR serves as the managing general partner of the Partnership. PNR receives no compensation for serving as managing
general partner other than the income it receives attributable to its interest in the Partnership.

Note 2Status of the Trust, Legal Proceedings, and Timing of Liquidation



The Mesa Offshore Trust Indenture (the "Trust Indenture") provides that the Trust will liquidate if the total amount of cash per year
received by the Trust falls below certain levels for each of three successive years.As a result of insufficient production on Royalty Properties nearing the end of their
estimated productive lives, Royalty income received by the Trust in 2002, 2003 and 2004 fell below the Termination Threshold prescribed by the Trust Indenture. The Trustee has
previously taken steps to begin the process of liquidating the Trust; however, the legal proceedings described herein directly challenged whether the Termination Threshold has in fact been met and
thus have affected the liquidation process. See "Timing of Liquidation" below in this Note. The Trustee, which has no authority or discretionary control over the timing of expenditures,
production or income on the Royalty Properties, has no control over the occurrence of the Termination Threshold or its consequences.

4

---



MESA OFFSHORE TRUST

NOTES TO FINANCIAL STATEMENTS (Continued)

(Unaudited)

Note 2Status of the Trust, Legal Proceedings, and Timing of Liquidation (Continued)



On April 11, 2005, MOSH Holding, L.P. ("MOSH") filed an Original Petition in the District Court of Travis County, Texas,
250th Judicial District, against PNRC; PNR (together with PNRC, "Pioneer"); Woodside Energy (USA), Inc. ("Woodside"); and JPMorgan, as Trustee of the Mesa Offshore Trust (Case
No. GN501113) (the "Lawsuit"). The Lawsuit is currently before the 334th Judicial District of Harris Country, Texas (the "Court"). MOSH's Original Petition alleged Pioneer and Woodside
are liable for various actions, including (1) a wrongful farmout by Pioneer to Woodside of the Brazos A-39 Lease, (2) a wrongful delay by Pioneer in producing the
Brazos A-39 Lease and the Midway #5 well drilled thereon, (3) fraudulent accounting practices by Pioneer, (4) breach of fiduciary duty by Pioneer, (5) aiding
and abetting breach of fiduciary duty by Woodside, (6) misapplication of Trust property by Pioneer, (7) conspiracy to misapply fiduciary property by Woodside and Pioneer,
(8) common law fraud by Pioneer, (9) gross negligence by Pioneer, and (10) breach of the conveyance agreement by Pioneer. As described below, MOSH later added claims against the
Trustee for (1) an accounting, and (2) breach of fiduciary duty. The remedies MOSH seeks include (a) reconstruing the Trust Indenture to determine that the Trust is not terminated
because there has or should have been production that would have generated revenues to extend the life of the Trust, (b) requiring the Trustee to pursue certain claims, or to allow MOSH to
pursue such claims, (c) setting aside any farmouts by Pioneer in which there have been conveyances to an alleged affiliate of Pioneer, (d) the removal of JPMorgan as Trustee,
(e) the return or forfeiture of compensation to JPMorgan, (f) monetary damages against Pioneer, Woodside and JPMorgan, and (g) unspecified exemplary damages against all
defendants.

MOSH's
Original Petition did not contain any claims against the Trustee, except to enjoin the Trustee from terminating the Trust during the pendency of the Lawsuit. In April 2005,
the Trustee entered into an agreement with MOSH whereby the Trustee would not sell the Trust assets without first giving MOSH 60-days written notice. This agreement allowed MOSH time to
obtain documents and discovery from Pioneer and Woodside, and allowed the Trustee time to investigate the claims asserted by MOSH against Pioneer and Woodside to determine if they had any merit and,
most importantly, whether the claims would benefit the Trust. During the six month period between April and October 2005, the Trustee conducted an independent investigation including: numerous
meetings and discussions with the parties; reviewing the relevant documents with the Trustee's counsel; employing independent reservoir engineers to evaluate the reserves in which the Trust has an
interest; engaging independent joint venture auditors to examine the accounting records of the operator, Pioneer, relating to revenues and expenses allocated to the Partnership's interests; and
obtaining from both MOSH and Pioneer their respective legal analyses of the challenged farmout.

Throughout
2005, the parties also anticipated that the Midway #5 well on the Brazos A-39 Lease that is the primary subject of the Lawsuit would go into
production. Given the vast discrepancy between the reserves claimed by MOSH and those projected by Pioneer for the Midway #5 well, actual production results would significantly impact the
Trustee's assessment of whether the Trust was better off with the cost-free override created by the Pioneer-Woodside farmout, or the prior cost-burdened net profits interest
that MOSH seeks to restore through the Lawsuit. Unfortunately, Hurricane Katrina struck the Gulf of Mexico in August 2005 and delayed the commencement of production until 2006.

Faced
with this post-Katrina situation in the fall of 2005, the Trustee urged all the parties to consent to a bifurcated trial of the farmout issue on an expedited basis. The
Trustee proposed to

5

---



MESA OFFSHORE TRUST

NOTES TO FINANCIAL STATEMENTS (Continued)

(Unaudited)

Note 2Status of the Trust, Legal Proceedings, and Timing of Liquidation (Continued)

MOSH
that if the Court determined that the farmout was not valid and that restoring the net profits interest would benefit the Trust, then the Trust would reimburse MOSH's reasonable attorneys' fees,
up to $100,000, and the Trustee would allow MOSH's counsel to represent the Trust in prosecuting the damages portion of the case. Conversely, if MOSH were to lose on the expedited determination of the
farmout issue, and in the absence of more evidence to support any ancillary claims, then MOSH would dismiss the other claims and would not be reimbursed, and the Trustee would move forward to
terminate the Trust.

Although
the Trustee, Pioneer, and Woodside all agreed to an expedited trial of the farmout issues, MOSH balked. Contrary to the assertions of MOSH and the Intervenor Plaintiffs, the
Trustee never agreed that the claims asserted by MOSH against Pioneer and Woodside "had merit"the Trustee simply stated that the farmout issue might merit immediate adjudication at that
time to determine if MOSH was legally correct.

When
MOSH refused to agree to an expedited and bifurcated trial as proposed by the Trustee, the Trustee informed MOSH that the Trustee's investigation of MOSH's allegations beyond the
farmout issues failed to convince the Trustee that pursuing those claims and incurring the related legal fees and expenses would benefit the Trust. Moreover, the Trustee informed MOSH that the
Trustee's independent joint venture auditors and reservoir engineers had not found any evidence to date to support any of MOSH's damage allegations. Therefore, the Trustee informed MOSH that the
Trustee's investigation indicated that the Trust was better off with the post-farmout cost-free overriding royalty interest than the pre-farmout
cost-burdened net profits interest, so the funding of MOSH's efforts to set aside the farmout with Trust funds would not be in the best interest of the Trust.

It
was at this point, in November 2005, in the midst of the Trustee's negotiations with MOSH to obtain an agreed resolution of MOSH's claims, that MOSH alleged for the first time
that the Trustee had a conflict of interest because of JPMorgan's long-standing lending relationship with Pioneer. Although it is clear under the Trust Indenture, the Texas Trust Act, and
relevant case law that
JPMorgan is not precluded, by holding the position of Trustee, from pursuing commercial banking activities not involving Trust funds, MOSH amended its petition and asserted claims against the Trustee
on November 28, 2005.

Although
it responded that MOSH's claims against the Trustee were meritless, to avoid any further assertion that the Trustee could not impartially evaluate MOSH's claims, on
November 30, 2005, JPMorgan announced its intention to resign as Trustee, effective January 31, 2006. On December 13, 2005, the lawsuit was transferred to the
334th Judicial District Court of Harris County, Texas. At a hearing on January 27, 2006 in the Harris County Court, the Court denied MOSH's motion for a temporary injunction to remove
JPMorgan as Trustee and appoint a principal of MOSH, Timothy Roberson, as a temporary Trustee. At the Court's suggestion, JPMorgan agreed to continue as Trustee, until such time as a substitute
trustee was found that fulfilled the qualifications of Trustee stated in the Trust Indenture. Since that hearing, none of the parties have identified a willing qualified successor Trustee that is not
also a lender under one of Pioneer's credit facilities (which status MOSH contends is an alleged conflict of interest).

On
December 8, 2006, Dagger-Spine Hedgehog Corporation ("Dagger-Spine") filed a petition to intervene in the Lawsuit as a Plaintiff, alleging claims virtually identical to MOSH.
Another group of

6

---



MESA OFFSHORE TRUST

NOTES TO FINANCIAL STATEMENTS (Continued)

(Unaudited)

Note 2Status of the Trust, Legal Proceedings, and Timing of Liquidation (Continued)

unit
holders, led by Keith A. Wiegand, (together with Dagger-Spine, the "Intervenors") also filed on March 9, 2007 a petition to intervene as plaintiffs in the Lawsuit, incorporating and
adopting the same claims asserted by MOSH. MOSH and the Intervenors are referred to hereinafter as the "Plaintiffs."

In
2006, after the Court denied MOSH's attempt to remove JPMorgan as Trustee, the parties pursued formal discovery in the Lawsuit. During this period, the Trustee continued to evaluate
the merits of the alleged claims against Pioneer and Woodside. A central allegation by MOSH and the Intervenors is that Pioneer and Woodside delayed the commencement of production from the well
drilled pursuant to the Pioneer-Woodside farmoutthe Midway #5 well on the Brazos A-39 Lease. However, Woodside and Pioneer witnesses gave sworn testimony in
depositions about the commercial and technical reasons for the delays in bringing the well on line. The well commenced production in April 2006. After production began, the Trustee instructed
its independent petroleum reserve engineers to evaluate how the production results and projected future production from the well might affect the value of the Trust's interests. The Trustee's
independent engineers determined that the initial production data from the well did not warrant a material change in prior assessments of the value of the Trust's assets.

Pioneer
subsequently reported to the Trustee that production from the well was suspended in July 2006 due to mercury contamination identified at downstream facilities where the
production from the well is commingled with production from other wells. An updated evaluation from the Trustee's independent petroleum reserve engineers estimated that revenues from future production
likely would not exceed the costs of drilling and completing the well. This confirmed that, if the Partnership's interest in the
underlying lease had remained, or was, a cost-burdened net profits interest, instead of the cost-free overriding royalty interest the Partnership held as a result of the
Pioneer-Woodside Farmout, the Partnership would not have received, or would not receive, any payments from this production, and the Trust accordingly would not have received any associated
distributions. Further, the production data did not support reserves of the size asserted by the Plaintiffs. The well resumed production in February 2007, but the well was shut in again on
April 18, 2007 due to an increase in hydrogen sulfide content coincidental with an increase in water production. Pioneer implemented a hydrogen sulfide contingency plan, which was required and
approved by the Mineral Management Service ("MMS"), including the installation of the necessary alarm and safety systems. The well was shut in October 4, 2008 after discovery of corrosion in
the production separator on the host platform. A replacement production separator was installed on the host platform. The well was returned to production on March 19, 2009.

Given
its conclusion that the Trust was better off with the post-farmout override, and hoping to the end this expensive litigation and liquidate the Trust per the Trust
Indenture, the Trustee reached a conditional settlement on January 26, 2007 with Pioneer and Woodside of the claims asserted by the Plaintiffs against Pioneer and Woodside. The conditional
settlement was set forth in the Mutual Release and Settlement Agreement dated as of January 26, 2007 (the "Pioneer/Woodside Settlement Agreement"). The Trustee filed a motion for approval of
the Pioneer/Woodside Settlement Agreement with the Court on January 30, 2007. The Trustee believed that the Pioneer/Woodside Settlement Agreement was in the best interest of the unit holders,
but the Plaintiffs opposed it, and on June 19, 2007, the Court issued an Order denying the Trustee's motion to approve the Pioneer/Woodside Settlement Agreement.

7

---



MESA OFFSHORE TRUST

NOTES TO FINANCIAL STATEMENTS (Continued)

(Unaudited)

Note 2Status of the Trust, Legal Proceedings, and Timing of Liquidation (Continued)

In
June and July 2007, Pioneer and Woodside filed motions with the Court that argued that the claims against them did not have merit as a matter of law. Pioneer's motion included an
argument that the Plaintiffs do not have the legal right to sue Pioneer because the claims belong to the Trust, not the beneficiaries of the Trust. On October 19, 2007, the Trustee offered to
assign to the Plaintiffs the Trust's claims against Pioneer and Woodside, but the plaintiffs rejected that offer. Through their counsel, the Plaintiffs and the Trustee also began negotiating a
resolution of the claims pending between them, and on October 26, 2007, the Trustee and the Plaintiffs informed the Court of an agreement in principle to settle.

On
December 3, 2007, the Trustee entered into a Settlement Agreement and Release with the Plaintiffs and additional Trust unit holders (the "Plaintiffs' Settlement Agreement").
Also on December 3, 2007, the Trustee and the Plaintiffs filed a Joint Motion for Approval of Settlement Agreement (the "Joint Motion"). In response to the Joint Motion, on December 21,
2007, Pioneer filed cross-claims against the Trustee seeking declaratory and injunctive relief to prevent certain aspects of the proposed settlement between the Trustee and the Plaintiffs. On
January 14, 2008, the Trustee filed an answer to Pioneer's cross-claims, in which the Trustee denied the cross-claims in their entirety, stated that they were baseless, and set forth numerous
affirmative defenses. On January 22, 2008, the Court issued an Order
denying the Joint Motion. As a result, the conditions precedent to the Plaintiffs' Settlement Agreement could not be satisfied, and the Plaintiffs' Settlement Agreement became null and void. In
addition to denying the Joint Motion, the Court also considered and denied in the same Order (i) the application by the Plaintiffs for the appointment of a temporary trustee and
(ii) Pioneer's application for a temporary restraining order. As a result of the Court's denial of the Joint Motion, and the Court's denial of the Plaintiffs' application for the appointment of
a temporary trustee, JPMorgan elected not to resign in order to avoid a vacancy, and continues to serve as Trustee. The Trustee continues to desire the appointment of a successor Trustee.

On
April 28, 2008, the Court issued a Docket Control Order, setting the trial date for December 8, 2008. On July 3, 2008, the Plaintiffs filed a Third Amended
Petition, seeking, among other things, to add claims against the Partnership (though its partners Pioneer and the Trustee) and JPMorgan in an individual capacity. By order dated July 3, 2008,
the Court denied Pioneer's pending motions for summary judgment, including Pioneer's challenge to Plaintiffs' standing. Pioneer then filed a petition for writ of mandamus to the Houston Fourteenth
Court of Appeals on July 22, 2008, seeking to reverse the trial courts' ruling on standing. On September 25, 2008, the Houston Fourteenth Court of Appeals denied Pioneer's petition for
writ of mandamus, and Pioneer filed a petition for writ of mandamus with the Supreme Court of Texas on October 1, 2008. On October 24, 2008, the group of unit holders led by
Keith A. Wiegand filed a Motion for Non-Suit Without Prejudice, and the Court granted the motion on October 24, 2008. Thus, all references herein to "Plaintiffs" after the
date of October 24, 2008 include only MOSH and Dagger-Spine. At a hearing before the Court on October 31, 2008, the Plaintiffs agreed to postpone the trial again, and the trial was
scheduled for April 13, 2009. The Supreme Court of Texas denied Pioneer's petition for writ of mandamus on November 21, 2008.

By
notice dated February 6, 2009, which the Trustee mailed to all unit holders of record on February 10, 2009, the Trustee announced that the Termination Threshold had been
met and that, as a result, it had instructed Pioneer to sell the oil and gas assets of the Partnership at public auction on March 18, 2009. In addition, the Trustee announced that the sale
would include all of Pioneer's

8

---



MESA OFFSHORE TRUST

NOTES TO FINANCIAL STATEMENTS (Continued)

(Unaudited)

Note 2Status of the Trust, Legal Proceedings, and Timing of Liquidation (Continued)

interests
in Brazos Block A-39. On March 3, 9, and 12, respectively, unit holders Gordon Stamper, Robert Miles, and Keith Wiegandformerly part of the group of
Intervenors led by Keith Wiegand (collectively, the "Individual Intervenors")filedpro semotions with the Court, requesting to intervene
in the Lawsuit. At the public auction on March 18, 2009, no bids were submitted, so the Trustee is considering its options under the Trust Indenture and in light of the pending litigation. On
March 25, 2009, Plaintiffs filed their Fourth Amended Original Petition, Application for Temporary Restraining Order, Temporary Injunction, Show Cause Order, and Permanent Injunction. On
April 15, 2009 and May 9, 2009, respectively, unit holders Michael Brown and Benjamin Ginter filed additional interventions.

On
April 27, 2009, the Trustee, on behalf of the Trust, entered into a Binding Settlement Agreement Term Sheet ("Term Sheet") with (1) the Plaintiffs, (2) Pioneer,
and (3) Woodside, summarizing the principal terms of a settlement in the Lawsuit. Pursuant to the provisions of the Term Sheet, and subject to certain conditions precedent therein and to be
included in a Final Settlement Agreement approved by the Court: (1) Pioneer will pay to the Trust $13 million and will sell and contribute to the
Trust any proceeds from the sale of all of its interests in the Brazos Block A-39 (the "Pioneer Settlement Interests"); (2) the Trustee will pay to the Trust
$5 million and will release all claims for and forgive repayment of the existing $5 million Demand Promissory Note (the "Credit Facility") provided by JPMorgan, as lender, to the Trust;
and (3) Woodside will pay to the Trust $1 million. Notwithstanding certain other releases, the Trustee will be permitted to use the remaining balance available under the Credit Facility
and any other Trust income to pay Trust liabilities and expenses as permitted under the Trust Indenture prior to the receipt and final distribution of any net settlement proceeds.

As
provided in the Term Sheet, each of the parties agreed to release any and all claims against the other parties that are, or could have been, asserted in the Lawsuit, including any
claims for reimbursement of attorney's fees or costs.

The
parties intend to enter into a Final Settlement Agreement, which will be submitted to the Court for final approval. As a condition precedent to the settlement, the Court must approve
and enter findings as part of the Agreed Final Judgment that all claims that were raised (or that could have been raised) against the defendants in the Lawsuit are owned by Plaintiffs, and/or the
Trust, and/or the Partnership; the Plaintiffs pursued the claims asserted in the Lawsuit on behalf of the Trust and/or the Partnership; the Plaintiffs and the Trustee have the authority to prosecute,
resolve, settle and release all released claims on behalf of the Trust, the Partnership and Plaintiffs; and the settlement is in the best interest of the Trust, its unit holders and the Partnership.
The Court's Agreed Final Judgment must be entered following a hearing for which notice is provided by the Trustee to all Trust unit holders in accordance with the notice provisions of the Trust
Indenture. If the Court does not approve the Final Settlement Agreement and enter an Agreed Final Judgment in accordance with the express terms set forth in the Term Sheet and the Final Settlement
Agreement, any of the parties may, in its sole discretion, withdraw from the settlement and the Term Sheet and the Final Settlement Agreement will become null and void.

After
a Final Settlement Agreement is approved and an Agreed Final Judgment is entered by the Court, the Trustee will direct Pioneer to sell the assets of the Partnership (the
"Partnership assets") (along with the Pioneer Settlement Interests), consistent with the terms contained in the Term Sheet

9

---



MESA OFFSHORE TRUST

NOTES TO FINANCIAL STATEMENTS (Continued)

(Unaudited)

Note 2Status of the Trust, Legal Proceedings, and Timing of Liquidation (Continued)

and
as approved by the Court, at public auction and any resulting sales proceeds will be remitted to the Trust as part of the wind-down process (the "Liquidation Process").

The
Partnership assets and the assets contributed to the Trust by Pioneer for sale pursuant to its tender letter of October 10, 2008 (hereafter referred to as "Pioneer Settlement
Interests") will be offered in two lots: (1) the West Delta 61 Lot; and (2) the Brazos A-39 Lot (together, the "Sales Lots"). The Plaintiffs have identified a
Qualified Bidder, MOSH, LLC, for each of the Sales Lots, which bidder must (1) place $375,000 for each Sales Lot, or $750,000 in the aggregate, into escrow within three business days
following the date an Agreed Final Judgment is entered by the Court approving the Final Settlement Agreement, and (2) with respect to the Brazos A-39 Lot, demonstrate its
qualification with the Mineral Management Service of the U.S. Department of the Interior to hold record title interest in and to operate offshore interests. The Qualified Bidder will have the
right to enter into Right of First Refusal Agreements with respect to the applicable Sales Lot, which would provide that in the event higher bids are obtained at public auction, the Qualified Bidder
would have the right, but not the obligation, to purchase the lot on the same terms as the highest bidder. If the Qualified Bidder fails to meet the applicable requirements or fails to timely exercise
its right of first refusal, the Right of First Refusal Agreements will be extinguished and the sales process can proceed with the other highest bidder(s) and any escrow sums will be returned to the
Qualified Bidder.

Payment
of settlement proceeds by Pioneer, JPMorgan and Woodside to the Trustee will be made once the Trustee receives the sales proceeds from the public auction. The settlement proceeds
will be placed into separate, interest-bearing, escrow accounts at JPMorgan and will not be distributed by the Trustee until after the Agreed Final Judgment becomes final and
non-appealable. Should the Agreed Final Judgment be reversed, the settlement proceeds will be returned to the respective defendants.

The
final distribution by the Trust of the proceeds (i.e., the settlement proceeds plus any sales proceeds from the public auction of the Partnership assets and the Pioneer
Settlement Interests) to Trust unit holders will be made only after the settlement proceeds have been remitted to the Trustee, and the Trustee has deducted any costs incurred for effecting the sale of
assets in the Liquidation Process and any other fees and expenses relating to the administration of the Trust after April 27, 2009. Counsel for the Plaintiffs also intend to request that the
Court award attorney's fees of one-third of the $19 million cash settlement, plus approximately $2 million in expenses incurred, before final distribution. The actual amount
awarded to the Plaintiffs' counsel will be approved by the Court. Accordingly, the final distribution of net settlement and sales proceeds by the Trust to its 71,980,216 outstanding units of
beneficial interest may be materially less than the gross settlement and sales proceeds.

The
Trustee expects to establish a future record date approved by the Court in the Agreed Final Judgment to serve as the date for holders of record entitled to final distribution as part
of the winding up of the Trust.

In
the event the Liquidation Process does not result in the sale of Pioneer's interests in Brazos Block A-39, Pioneer is entitled to dispose of such assets in any
manner it sees fit, including by way of example and without limitation, withdrawing from participation in and ownership in Brazos Block A-39 pursuant to the terms of the Offshore
Operating Agreement governing this property. In addition, if the Partnership's interests remain unsold and no buyer can be found after the completion of the public

10

---



MESA OFFSHORE TRUST

NOTES TO FINANCIAL STATEMENTS (Continued)

(Unaudited)

Note 2Status of the Trust, Legal Proceedings, and Timing of Liquidation (Continued)

auction,
Pioneer has the absolute right to cancel and/or extinguish such interest(s). Until the time of any sale or abandonment of the Partnership's assets, Pioneer, as managing general partner of the
Partnership, will continue to operate the Partnership's assets and distribute in the normal course any
net proceeds to the Trustee for the benefit of the Trust. Once the Final Settlement Agreement has been executed and a hearing set by the Court for final approval, at least thirty-days
notice will be provided by the Trustee to all unit holders of record. If the parties can finalize the Final Settlement Agreement in time for the Trustee to mail out the appropriate notice to the unit
holders of record, the hearing will be held on June 18, 2009 at 9:00 a.m. CST. While the Court considers the proposed settlement, the trial has been postponed until at least
September 7, 2009.

The
Trustee will make the full detail of the underlying data of the December 31, 2008 reserve report available for use in connection with the sale of the Partnership's Royalty
Properties as part of the Trust liquidation. For more information regarding the estimated remaining life of each of the Royalty Properties, the estimated future net revenues of the Royalty Properties
and information relating to farm-outs of interests on the Royalty Properties, see Item 1A. "Risk Factors" of the Form 10-K for the year ended December 31,
2008 and Note 8 in the Notes to Financial Statements included elsewhere in the Form 10-K. The final distribution to unit holders will be an amount net of funds required to
satisfy all Trust liabilities.



The Trust Indenture provides that the Trust will liquidate if the total amount of cash per year received by the Trust falls below
certain levels for each of three successive years.As a result of insufficient production on Royalty Properties nearing the end of their estimated productive lives, Royalty
income received by the Trust in 2002, 2003 and 2004 fell below the Termination Threshold prescribed by the Trust Indenture. The Trustee has previously taken steps to begin the
process of liquidating the Trust; however, the legal proceedings described herein directly challenged whether the Termination Threshold has in fact been met and thus have affected the liquidation
process. The Trustee, which has no authority or discretionary control over the timing of expenditures, production or income on the Royalty Properties, has no control over the occurrence of the
Termination Threshold or its consequences.

The
Trust Indenture provides the Trustee a two-year period during which it must sell all of the assets of the Partnership; however, the legal proceedings described herein
directly challenged whether the Termination Threshold has in fact been met and thus affected the liquidation process, such that the Trustee initially delayed the sale of the Partnership's oil and gas
assets in efforts to investigate and resolve the claims. Now, due to the continuation of the litigation into its fourth year, the related cost to the Trust, and the opportunity to realize greater
proceeds for the benefit of the Trust estate, the Trustee concluded that a public auction of the Partnership's oil and gas assets was in the best interest of the Trust at this time, and the Court
allowed a public auction of these assets to go forward yet, at the public auction on March 18, 2009, no bids were submitted. After a Final Settlement Agreement is approved and an Agreed Final
Judgment is entered by the Court, the Trustee will direct Pioneer to sell the Partnership assets (along with the Pioneer Settlement Interests), consistent with the terms contained in the Term Sheet
and as approved by the Court, at public auction and any resulting sales proceeds will be remitted to the Trust as part of the wind-down process. The Trust Indenture provides

11

---



MESA OFFSHORE TRUST

NOTES TO FINANCIAL STATEMENTS (Continued)

(Unaudited)

Note 2Status of the Trust, Legal Proceedings, and Timing of Liquidation (Continued)

that
such properties must be sold for cash and not for any other consideration. The Trustee expects that any future sale process will be open to any persons desiring to participate, but, the Qualified
Bidder identified by the Plaintiffs will have a right of first refusal on the terms and conditions described in the Term Sheet and in the Right of First Refusal Agreements. See "Legal
Proceedings" above. As is customary, access to information and participation in any future sale may be limited to persons who execute confidentiality agreements regarding information provided by the
working interest owners. The Trustee may also require bidders to identify themselves clearly and to represent or evidence sufficient financing in order to participate, as the Trustee expects payment
will be required promptly after the close of bidding without any financing conditions. Accordingly, the auction may not be a "public" auction in the sense that it may not be open to anyone who does
not satisfy these requirements.

Note 3Going Concern

The accompanying financial statements have been prepared assuming that the Trust will continue as a going concern. The Trust Indenture provides that the Trust will liquidate if the total
amount of cash per year received by the Trust falls below certain levels for each of three successive years. As a result of
insufficient production on Royalty Properties nearing the end of their estimated productive lives, Royalty income received by the Trust in 2002, 2003, and 2004 fell below the Termination Threshold
prescribed by the Trust Indenture. In 2005, the Trustee began procedures to liquidate the Trust's assets. Once the Trustee has liquidated all of the Trust's assets and has met all its obligations as
described in the Trust Indenture, the Trust will no longer be a viable entity. Due to the pending litigation, the Trustee cannot predict the timing of the sale of all or a portion of the assets of the
Partnership as part of the Trust Termination.

During
the two years ended December 31, 2008, the Trust incurred general and administrative expenses which exceeded Royalty and interest income and its available cash reserves,
due to the absence of royalty income and expenses incurred in connection with the ongoing litigation. As such, the Trustee was required to borrow money in accordance with the Trust Indenture to fund
Trust expenses. The Trustee entered into a Demand Promissory Note with JPMorgan on September 28, 2007, which was amended on December 3, 2007, for demand loans that may be advanced from
time to time in the principal amount of up to $3.0 million. The amendment provided for, among other provisions, an extension of the stated maturity date of the Loans made pursuant to the Demand
Promissory Note and the Amended and Restated Note until the earlier of (1) December 31, 2009, (2) 31 days after the Trust's receipt of any settlement proceeds, recovery or
judgment in connection with the Lawsuit, (3) final liquidation of the Trust's assets, or (4) the Settlement Agreement is not approved by the Court.

On
January 22, 2008, the court in which the lawsuit was pending issued an Order denying the Joint Motion for approval of the Settlement Agreement. According to the terms of the
Amended Promissory Note, the note matured on this date as a result of the denial, and all portions of the outstanding principal under this note together with accrued and unpaid interest became due, in
full. However, on August 25, 2008, in connection with the execution of the Second Amended and Restated Promissory Note, the definition of "Maturity Date" was amended to delete the test relating
to the failure of the Court to approve the prior Settlement Agreement. As a result, the due date of the Demand Promissory Note was not accelerated as a result of the order described above, however,
the maturity date remained

12

---



MESA OFFSHORE TRUST

NOTES TO FINANCIAL STATEMENTS (Continued)

(Unaudited)

Note 3Going Concern (Continued)

(1) December 31,
2009, (2) 31 days after the Trust's receipt of settlement proceeds, recovery or judgment in connection with the Lawsuit or (3) final liquidation of
the Trust's assets.

On
January 28, 2009, the Trustee executed and delivered to JPMorgan a Third Amended and Restated Promissory Note, dated as of January 12, 2009, increasing the principal
amount available for borrowing, subject to the terms of such note, to $5 million. As of March 31, 2009, the Trust had $4,436,164 in outstanding note payable to JPMorgan and $281,317 in
accrued and unpaid interest expense, leaving $563,836 available under this facility. Additionally, as of March 31, 2009, the Trust had $93,622 in unpaid trust expenses. Should the Trust fully
utilize the funds available under the Demand Promissory Note, the Trustee will attempt to borrow additional money. However, no assurance can be given that the Trustee will be able to borrow money on
terms the Trustee considers reasonable, or at all.

Currently,
the Trust does not have the cash resources available to repay the debt. This raises substantial doubt regarding the Trust's ability to continue as a going concern. The
accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Note 4Net Overriding Royalty Interest

The instruments conveying the Royalty to the Partnership provide that PNR will calculate and pay to the Partnership each month an amount equal to 90% of aggregate net proceeds for the
preceding month. Generally, net proceeds means the excess of the amounts received by PNR from sales of its share of oil and gas from the Royalty Properties (gross proceeds) over the operating and
capital costs incurred. Costs exceeding gross proceeds for any month are recovered by PNR, with interest thereon at the prime rate of the Bank of America plus one-half percent, out of
future gross proceeds prior to making further Royalty payments to the Partnership.

Amortization
of the Royalty, which is calculated on the basis of current Royalty income in relation to estimated future Royalty income, is charged directly to trust corpus since such
amounts do not affect distributable income.

Note 5Basis of Presentation

The accompanying unaudited financial information has been prepared by the Trustee in accordance with the instructions to Form 10-Q. JPMorgan was formerly known as The
Chase Manhattan Bank and is the successor by mergers to the original name of the Trustee, Texas Commerce Bank National Association. The Trustee believes such information includes all the disclosures
necessary to make the information presented not misleading. The information furnished reflects all adjustments which are, in the opinion of the Trustee, necessary for a fair presentation of the
results for the interim periods presented. The financial information should be read in conjunction with the financial statements and notes thereto included in the Trust's 2008 Annual Report on
Form 10-K.

13

---



MESA OFFSHORE TRUST

NOTES TO FINANCIAL STATEMENTS (Continued)

(Unaudited)

Note 5Basis of Presentation (Continued)

The
financial statements of the Trust do not include any adjustment as a result of the termination of the Trust as described in notes 1 and 2 and are prepared on the following
basis:



This
basis for reporting distributable income is considered to be the most meaningful because distributions to the unit holders for a month are based on net cash receipts for such month.
However, it will differ from the basis used for financial statements prepared in accordance with accounting principles generally accepted in the United States because, under such accounting
principles, royalty income for a month would be based on net proceeds from sales for such month without regard to when calculated or received and interest income for a month would be calculated only
through the end of such month, and accounting principles generally accepted in the United States would require a liquidation basis of accounting.

The
instruments conveying the Royalty provide that the working interest owner will calculate and pay the Partnership each month an amount equal to 90% of the net proceeds for the
preceding month. Generally, net proceeds means the excess of the amounts received by the working interest owner from sales of oil and gas from the Royalty Properties plus other cash receipts over
operating and capital costs incurred. Currently, PNR believes all major abandonment charges have been incurred. On December 18, 2008, PNR informed the Trustee that there is no longer a deficit
balance due for abandonment accrual for amounts expended and for projected future abandonment expenses for the properties in which the Trust has an interest.

During
the first quarter of 2009, the Trust received $112,567 in Royalty income; however, no Royalty income will be distributed to unit holders until the Trustee recoups Trust expenses
being paid from the reserve that the Trustee has established for anticipated future general and administrative expenses and any loans secured by the Trustee to pay Trust expenses are repaid in full.
As of March 31, 2009, $4.4 million will be recouped by the Trustee from future Royalty income before Trust distributions will resume. During the three months ended March 31, 2009
and 2008, the Trust had no distributable income. The reserve for Trust expenses and advances under the Demand Promissory Note with JPMorgan were used to pay $608,974 of the Trust's general and
administrative expenses of $702,596 for the three months ended March 31, 2009 and $270,595 of accrued expenses from 2008. As of March 31, 2009, the Trust had unpaid expenses of $93,622.
The reserve for Trust expenses and advances under the Demand Promissory Note with JPMorgan were used to pay $613,749 of the Trust's general and administrative expenses of $655,287 for the three months
ended March 31, 2008 and

14

---



MESA OFFSHORE TRUST

NOTES TO FINANCIAL STATEMENTS (Continued)

(Unaudited)

Note 5Basis of Presentation (Continued)

$190,955
of accrued expenses from 2007. The Trust had unpaid expenses of $41,538 as of March 31, 2008.

Below
is a summary of general and administrative expenses and the adjustments made to the reserve for Trust expenses:

Three Months Ended March 31,2009

2008General and administrative costs incurred during the period

$
702,596

$
655,287Expenses paid by JPMorgan for prior period


270,595


190,955(Deductions from) additions to reserve for Trust expenses


111,537


(100
)Total expenses paid by JPMorgan during current period


(878,518
)

(804,604
)Unpaid trust expenses


(93,622
)

(41,538
)General and administrative costs as reported

$
112,588

$



Note 6JPMorgan Demand Promissory Note

On September 28, 2007, the Trust entered into a Demand Promissory Note agreement with JPMorgan in order to cover portions of its operating expenses. The lender approved an
uncommitted line of credit to the Trust in a principal amount not to exceed $3 million. As part of the agreement, JPMorgan pays the expenses on behalf of the Trust. JPMorgan may decline to fund
any request of the Trust for borrowings at anytime, for any reason, including the event that JPMorgan has reason to believe that the Trust will not be able to satisfy its obligation to repay the
Demand Loans. Interest on the note is calculated at a rate per annum equal to Prime Rate plus two percent (2%), paid annually. The Demand Promissory Note is secured by a pledge of the Trust Estate, as
that term is defined in the Trust Indenture, including without limitation the 99.99% general partnership interest in the Mesa Offshore Royalty Partnership owned by the Trust, pursuant to a Pledge
Agreement dated September 29, 2007, as amended by the First Amendment to Pledge Agreement dated as of December 3, 2007, executed by the Trust for the benefit of the Lender. The Trust may
borrow amounts under this Note until such time as JPMorgan makes demand for payment in full or December 31, 2008, whichever is earlier.

On
December, 3, 2007, JPMorgan, individually and as lender, entered into an Amended and Restated Promissory Note with the Trust as borrower, to amend the Demand Promissory Note to
provide for, among other provisions, an extension of the stated maturity date of the Loans made pursuant to the Demand Promissory Note and the Amended and Restated Note until the earlier of
(1) December 31, 2009, (2) 31 days after the Trust's receipt of any settlement proceeds, recovery or judgment in connection with the Lawsuit, (3) final liquidation
of the Trust's assets, or (4) the Settlement Agreement is not approved by the Court. Additionally, the amendment provided that the Trust may continue to obtain loans under the note until the
maturity date, as long as the amount borrowed does not exceed $3 million and the loan is not in default. The amendment also provided that interest expense shall be due and payable on the
maturity date.

15

---



MESA OFFSHORE TRUST

NOTES TO FINANCIAL STATEMENTS (Continued)

(Unaudited)

Note 6JPMorgan Demand Promissory Note (Continued)

On
August 25, 2008, the Trustee executed an amended and restated Demand Note that among other things increased the aggregate principal amount available for borrowing to
$4.0 million and amended the definition of "Maturity Date" to delete the text relating to the failure of the Court to approve the prior Settlement Agreement.

On
January 28, 2009, the Trustee executed and delivered to the lender a Third Amended and Restated Promissory Note, dated as of January 12, 2009, increasing the principal
amount available for borrowing, subject to the terms of such note, to $5 million. On January 28, 2009, the Trust and JPMorgan Chase Bank, N.A. also entered into a Third Amendment
to Pledge Agreement, dated as of January 12, 2009, amending the definition of "Collateral" from the Second Amendment to the Pledge Agreement dated June 25, 2008 to include (1) all
issued and outstanding general partnership interests by the Trust in the Partnership, together with any cash or property received in exchange or in substitution for such interests (collectively, the
"Pledged Assets"), and any distributions received on such Pledged Assets or cash or property received upon any conversion or in exchange for such Pledged Assets; (2) all Additional Collateral
(as defined therein) owned by the Trust; (3) all deposit accounts in the name of the Trust; (4) any consideration received or due to the Trust; and (5) all proceeds of any and all
of the foregoing.

Interest
is payable at a base rate offered by JPMorgan as announced publicly at its principal office as its prime commercial lending rate, plus 2%. The rate effective as of
March 31, 2009 was a Prime Rate of 3.25%, plus 2% for a combined rate of 5.25%.

As
of March 31, 2009, there was outstanding $4,436,164 of principal advanced for payment of Trust expenses together with $281,317 of accrued and unpaid interest expense. At
March 31, 2009, the Trust had $563,836 available under this facility. Should the Trust fully utilize the funds available under the Demand Promissory Note, the Trustee will attempt to borrow
additional money. However, no assurance can be given that the Trustee will be able to borrow money on terms the Trustee considers reasonable
or at all. As noted below, JPMorgan has no further obligation to advance additional monies to the Trust.

Note 7Distributions to Unit holders

Under the terms of the Trust Indenture, the Trustee must distribute to the unit holders all cash receipts, after paying liabilities and providing for cash reserves as determined
necessary by the Trustee.

The
amounts distributed are determined on a monthly basis and are payable to unit holders of record as of the last business day of each month. However, cash distributions are made
quarterly in January, April, July and October, and include interest earned from the monthly record dates to the dates of distribution.

Note 8Federal Income Taxes

The Trustee reports on the basis that the Trust is a grantor trust. Based on its previous audit policy, the
Internal Revenue Service (the "IRS") is expected to concur with such action. No IRS ruling has been received or requested with respect to the Trust, however, and no court case has been decided
involving identical facts and circumstances. It is possible, therefore, that the IRS would assert upon audit that the Trust is taxable as a corporation and that a court might agree with such
assertion.

As
a grantor trust, the Trust will incur no federal income tax liability. In addition, it will incur little or no federal income tax liability if it is held to be a
non-grantor trust. If the Trust were held to be taxable as a corporation, it would have to pay tax on its net taxable income at the corporate rate.

16

---





Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations.

The following review of the Trust's financial condition and results of operations should be read in conjunction with the financial
statements and notes thereto.

Note Regarding Forward-Looking Statements

This Form 10-Q includes "forward-looking statements" within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts included in this Form 10-Q,
including without limitation the statements under "Management's Discussion and Analysis of Financial Condition and Results of Operations" are forward-looking statements. Although Pioneer has advised
the Trust that it believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct.
Important factors that could cause actual results to differ materially from expectations ("Cautionary Statements") are disclosed in this Form 10-Q, including, without limitation, in
conjunction with the forward-looking statements included in this Form 10-Q and in the Trust's Form 10-K for the year ended 2008, including under Item 1A.
"Risk Factors". All subsequent written and oral forward-looking statements attributable to the Trust or persons acting on its behalf are expressly qualified in their entirety by the Cautionary
Statements.

Financial Review

The amount of cash distributed by the Trust is dependent on, among other things, the sales prices and quantities of gas, crude oil,
condensate and natural gas liquids produced from the Royalty Properties and the quantities sold. Substantial uncertainties exist with regard to future gas and oil prices, which are subject to
fluctuations due to the regional supply and demand for natural gas and oil, production levels and other activities of the Organization of the Petroleum Exporting Countries ("OPEC") and other oil and
gas producers, weather, storage levels, industrial growth, conservation measures, competition and other variables.

Below
is a summary of Royalty income received on the Trust properties for the three months ended March 31, 2009 and 2008:

Three Months Ended
March 31,2009

2008Gross proceeds @ 90%

$
71,789

$
466,468Operating expenditures @ 90%


(3,078
)

(2,294
)Expense reserve @ 90%


0


Capital expenditures @ 90%





Net proceeds (deficit)


68,711


464,174Increase (decrease) in deficit


0


(464,174
)Net proceeds after deficit recovery(1)


68,711


Royalty Income (99.99%)

$
112,567

$



---

17

---



Below
is a summary of distributable income for the three months ended March 31, 2009 and 2008:

Three Months Ended
March 31,2009

2008Royalty income

$
112,567

$
Interest income


21


General and administrative expenses


(112,588
)

Distributable income

$


$
Distributable income per unit

$


$
Accumulated deficit (as of end of period)

$


$
(1,012,875
)


During
the first quarters of 2009 and 2008, the Trust had no distributable income. The reserve for Trust expenses and advances under the Demand Promissory Note with JPMorgan were used to
pay $608,974 of the Trust's general and administrative expenses of $702,596 for the three months ended March 31, 2009 and $270,595 of accrued expenses from 2008. As of March 31, 2009,
the Trust had unpaid expenses of $93,622. The reserve for Trust expenses and advances under the Demand and Promissory Note with JPMorgan were used to pay $613,749 of the Trust's general and
administrative expenses of $655,287 for
the three months ended March 31, 2008 and $190,955 of accrued expenses from 2007. The Trust had unpaid expenses of $41,538 as of March 31, 2008.

On
September 28, 2007 the Trust entered into a Demand Promissory Note with JPMorgan which was amended on December 3, 2007, August 25, 2008 and January 12,
2009, in which loans will be advanced by the lender from time to time not to exceed $5.0 million. This Demand Promissory Note will be used to pay any unpaid administrative expenses related to
the operation of the Trust. As of March 31, 2009, $4,436,164 has been advanced to the Trust to pay Trust expenses.

Below
is a summary of general and administrative expenses and the adjustments made to the reserve for Trust expenses:

Three Months Ended
March 31,2009

2008General and administrative costs incurred during the period

$
702,596

$
655,287Expenses paid by JPMorgan for prior period


270,595


190,955(Deductions from) additions to reserve for Trust expenses


111,537


(100
)Total expenses paid by JPMorgan during current period


(878,518
)

(804,604
)Unpaid trust expenses


(93,622
)

(41,538
)General and administrative costs as reported

$
112,588

$



General
and administrative expenses of the Trust incurred during the first quarter of 2009 increased $47,309 or 7% to $702,596 as compared to $655,287 for the same period in 2008. The
increase in general and administrative expenses in 2009 is primarily due to an increase in legal fees as a result of pending litigation and expenditures related to the anticipated sale of Trust
properties pursuant to the Trust's termination.

Operational Review

PNR has advised the Trust that during the first quarter of 2009 and 2008 its offshore gas production was marketed under
short-term contracts at spot market prices primarily to TOTAL S.A. and that it expects to continue to market its production under short-term contracts for the
foreseeable future. Spot market prices for natural gas in the first quarter of 2009 were generally lower than spot market prices in the first quarter of 2008.

18

---



The
amount of cash distributed by the Trust is dependent on, among other things, the sales prices and quantities of gas, crude oil and condensate produced from the Royalty Properties and
the quantities sold. Substantial uncertainties exist with regard to future gas and oil prices, which are subject to fluctuations due to the regional supply and demand for natural gas and oil,
production levels and other activities of the Organization of the Petroleum Exporting Countries ("OPEC") and other oil and gas producers, weather, storage levels, industrial growth, conservation
measures, competition and other variables.

Below
is an operational review of the remaining producing Trust properties:

Brazos A-7 and A-39

Three Months Ended
March 31,2009

2008Gross proceeds @ 90%

$
3,369

$
17,084Operating expenditures @ 90%


(3,078
)

(248
)Capital expenditures @ 90%





Net proceeds (deficit)

$
291

$
16,836


The
Brazos A-39 block continued to experience a decrease in natural gas production due to natural production decline. As of March 31, 2009, this block had one
well capable of producing, the Brazos A-39 #5 which was shut-in during the first quarter of 2007 due to the detection of mercury. The Brazos A-7
No. B-1 well, operated by Newfield, was no longer producing and abandoned in 2007. PNR previously entered into farmout agreements for the Partnership's interest in both of these
blocks so that two exploration prospects could be drilled and in which the Trust will retain an overriding royalty interest. The first prospect on Brazos A-7 was drilled during 2003
and was determined to be a dry hole. As such, the well was plugged and abandoned.

The
second exploration prospect, the Brazos A-39 #5 well, was drilled on Brazos A-39, which PNR announced as a discovery. A production test was
completed in 2005. PNR, the operator on this property, informed the Trustee that the lower horizon of the prospect was determined to be non-commercial, while the middle horizon in the Big
Hum 4 sand produced at 10,000 Mcf of gas per day during a seventeen hour flow test. This well came on line April 20, 2006. However, this well has been shut in from time to time since
then as the operator has encountered and addressed hydrogen sulfide issues. The well has also produced a carbon dioxide content that exceeds pipeline specifications. This higher content requires the
operator to mix production at the platform with production from other fields in order to transport the product. Production is being routed to the A-52C platform owned by Beryl Oil and Gas.
That platform is being operated by Arena, which is also serving as the contract operator for the Midway property. The well was shut in July 21, 2006 by Williams Pipeline due to reported
detection of mercury in the gas stream. Following the installation of vessels with mercury absorbing media and negotiation of the required agreements with the owner and operator of the
Brazos A-52C host platform, the well was returned to production on February 13, 2007. The well was shut-in on April 18, 2007 due to an increase in hydrogen
sulfide content coincidental with an increase in water production. Pioneer implemented a hydrogen sulfide contingency plan, which was required and approved by the Mineral Management Service ("MMS"),
including the installation of the necessary alarm and safety systems. The well was shut in October 4, 2008 after discovery of corrosion in the production separator on the host platform. A
replacement production separator was installed on the host platform. The well was returned to production on March 19, 2009. The well is currently producing at approximately 1.5 MM/D with a
gradually declining flowing tubing pressure. There can be no assurance regarding the longevity of the gas production on the 52C host platform. Blending with this gas is required to meet pipeline gas
quality specifications.

19

---



Under
the terms of a farmout agreement between PNR and Woodside, PNR farmed out to Woodside the undivided one-half interest previously burdened by the Partnership's net
profits interest, but expressly providing that the farmed out interest would not be subject to the Partnership's net profits interest. PNR reserved a 10% overriding royalty interest, proportionately
reduced to the interest conveyed, which interest, upon Woodside's recoupment of specified costs and expenses, would increase to 12.5%, proportionately reduced to the interest conveyed. The
Partnership's net profits interest burdens the overriding royalty interest reserved by PNR. PNR has informed the Trustee that it believes this process is consistent with the terms of the original
conveyance and with the handling of other farmout transactions involving lands burdened by the Partnership's net profits interest.

PNR
continues to own the undivided one-half interest not burdened by the Partnership's net profits interest and will participate in and operate the well as owner of that
undivided one-half interest (subject to an agreement with Woodside to grant Woodside such interest in PNR's remaining undivided one-half interest to equalize those parties'
participation in the well).

PNR
has noted to the Trustee that the farmout agreement with Woodside enabled the drilling costs of these prospects to be carried on the Partnership's interest in part by Woodside. PNR
further noted that the Partnership's net profits interest would not have entitled the Trust (through the Partnership) to payment until drilling costs and applicable interest were recovered, whereas
the overriding royalty interest retained under the farmout agreement entitles the Trust (through the Partnership) to payments prior to the recoupment of expenses incurred by Woodside and PNR. As noted
above, the first prospect on Brazos A-7 was determined to be a dry hole. Under the farmout agreement and related agreements, those drilling and abandonment costs have been born
entirely by PNR and Woodside and are not subject to recoupment from any proceeds otherwise payable to the Partnership or the Trust. Similarly, the Partnership's current interest in the "Midway"
prospect on Brazos A-39 will be entitled to payment prior to PNR's and Woodside's recovery of expenses for drilling, completion, sub-sea tie backs and other costs.

West Delta 61 and Other

Three Months Ended
March 31,2009

2008Gross proceeds @ 90%

$
68,420

$
449,384Operating expenditures @ 90%





(2,046
)Capital expenditures @ 90%





Net proceeds (deficit)

$
68,420

$
447,338


There
are currently four wells producing on this block, and their combined rate is 1.2 MMcf/day and 200 barrels of oil per day.

The
PNR-operated wells ceased production in 2002, and the wells were plugged and abandoned by year-end with the facilities being completely abandoned during 2003.
The only remaining wells on this block are in West Delta 61. PNR farmed out a portion of West Delta 61 to Stone Energy retaining a 12.5% (11.25% net to the Trust through the Partnership)
overriding royalty interest. Those properties were sold to Maritech Resources Inc. effective October 1, 2007. Maritech began accounting for the properties on February 1, 2008.

Capital Expenditures

PNR does not anticipate any significant capital expenditures on the Royalty Properties in the future. Due to the limited financial
capacity of the Trust, PNR has advised that it intends to farm out

20

---



the
Partnership's interest in the blocks it believes may be produced economically, retaining an overriding royalty interest for the Partnership.

Abandonment Expenditures

In 2006, PNR exhausted the $348,066 cash reserve established as of December 31, 2005. In the third quarter of 2006, PNR revised
their estimate of abandonment expenses incurred, but not recouped from the Partnership and expenses yet to be incurred for properties, in which the Partnership has an interest to approximately
$1.4 million. This revision was caused by increased work necessary because of damages caused by Hurricane Katrina, and increased day rates for labor due to the high demand for labor following
Hurricanes Katrina and Rita. As of March 31, 2008,
PNR had spent approximately $1.3 million of the $1.4 million estimate. Currently PNR believes all major abandonment charges have been incurred. On December 18, 2008, PNR informed
the Trustee that there is no longer a deficit balance due for abandonment accrual for amounts expended and for projected future abandonment expenses for the properties in which the Trust has an
interest.

Production and Price Review

Production volumes for natural gas decreased to 6,896 Mcf in the first quarter of 2009 as compared with 32,001 Mcf in the
first quarter of 2008. The average sales price received for natural gas in the first quarter of 2009 was $7.34 per Mcf as compared with $6.90 per Mcf in the first quarter of 2008. Crude oil,
condensate and natural gas liquids production volumes increased to 913 barrels in the first quarter of 2009 as compared to 2,727 barrels in the first quarter of 2008. The average sales
price in the first quarter of 2009 for crude oil, condensate and natural gas liquids was $80.48 per barrel as compared to $90.18 per barrel in the first quarter of 2008.

Termination of the Trust

The Trust Indenture provides that the Trust will liquidate if the total amount of cash per year received by the Trust falls below
certain levels for each of three successive years.As a result of insufficient production on Royalty Properties nearing the end of their estimated productive lives, Royalty
income received by the Trust in 2002, 2003 and 2004 fell below the Termination Threshold prescribed by the Trust Indenture. The Trustee has previously taken steps to begin the
process of liquidating the Trust; however, due to the pending Lawsuit that directly challenged whether the Termination Threshold has in fact been met, the Trustee cannot predict the timing of the sale
of all or a portion of the Royalty making up the assets of the Partnership as part of the Trust liquidation and termination. See "Timing of Liquidation" above in Note 2 of the
Notes to Financial Statements. The Trustee, which has no authority or discretionary control over the timing of expenditures, production or income on the Royalty Properties, has no control over the
occurrence of the Termination Threshold or its consequences.

The
Trust Indenture provides the Trustee a two-year period during which it must sell all of the assets of the Partnership; however, the legal proceedings described herein
directly challenged whether the Termination Threshold has in fact been met and thus affected the liquidation process, such that the Trustee initially delayed the sale of the Partnership's oil and gas
assets in efforts to investigate and resolve the claims. Now, due to the continuation of the litigation into its fourth year, the related cost to the Trust, and the opportunity to realize greater
proceeds for the benefit of the Trust estate, the Trustee concluded that a public auction of the Partnership's oil and gas assets was in the best interest of the Trust at this time, and the Court
allowed a public auction of these assets to go forward yet, at the public auction on March 18, 2009, no bids were submitted. After a Final Settlement Agreement is approved and an Agreed Final
Judgment is entered by the Court, the Trustee will direct Pioneer to sell the Partnership assets (along with the Pioneer Settlement Interests), consistent with the terms contained in the Term Sheet
and as approved by the Court, at public auction and any resulting sales

21

---



proceeds
will be remitted to the Trust as part of the wind-down process. The Trust Indenture provides that such properties must be sold for cash and not for any other consideration. The
Trustee expects that any future sale process will be open to any persons desiring to participate, but, the Qualified Bidder identified by the Plaintiffs will have a right of first refusal on the terms
and conditions described in the Term Sheet and in the Right of First Refusal Agreements. See "Legal Proceedings" below. As is customary, access to information and participation in any
future sale may be limited to persons who execute confidentiality agreements regarding information provided by the working interest owners. The Trustee may also require bidders to identify themselves
clearly and to represent or evidence sufficient financing in order to participate, as the Trustee expects payment will be required promptly after the close of bidding without any financing conditions.
Accordingly, the auction may not be a "public" auction in the sense that it may not be open to anyone who does not satisfy these requirements.

Assets and Liabilities in the Process of Liquidation

As a result of the triggering of the Termination Threshold effective January 1, 2005, the Trust is in the process of
liquidation. After a Final Settlement Agreement is approved and an Agreed Final Judgment is entered by the Court in the Lawsuit, the Trustee will direct Pioneer to sell the Partnership assets (along
with the Pioneer Settlement Interests), consistent with the terms contained in the Term Sheet and as approved by the Court, at public auction and any resulting sales proceeds will be remitted to the
Trust as part of the wind-down process. See "Legal Proceedings" below. The below table presents the assets of the Trust at their estimated fair value:

March 31, 2009ASSETSCash and short term investments

$
111,606Net overriding royalty interest in oil and gas properties


1,424,445Total assets

$
1,536,051LIABILITIESReserve for Trust expenses

$
111,606Trust expenses payable


93,622Interest Payable


281,317Note payableJPMorgan


4,436,164Total liabilities


4,922,709Net liabilities in process of liquidation

$
(3,386,658
)


The
net overriding royalty interest in oil and gas properties at March 31, 2009 reflect the Trustee's estimate of value (in the absence of third-party appraisals or evaluations)
based on the Trust's share of future net revenues from the net overriding royalty interest in the properties as of March 31, 2009. This estimate is based on the Trustee's current assessment of
the impact of selling existing assets based on current market conditions, and includes the following assumptions:



22

---





Legal Proceedings

On April 11, 2005, MOSH Holding, L.P. ("MOSH") filed an Original Petition in the District Court of Travis County, Texas,
250th Judicial District, against PNRC; PNR (together with PNRC, "Pioneer"); Woodside Energy (USA), Inc. ("Woodside"); and JPMorgan, as Trustee of the Mesa Offshore Trust (Case
No. GN501113) (the "Lawsuit"). The Lawsuit is currently before the 334th Judicial District of Harris Country, Texas (the "Court"). MOSH's Original Petition alleged Pioneer and Woodside
are liable for various actions, including (1) a wrongful farmout by Pioneer to Woodside of the Brazos A-39 Lease, (2) a wrongful delay by Pioneer in producing the
Brazos A-39 Lease and the Midway #5 well drilled thereon, (3) fraudulent accounting practices by Pioneer, (4) breach of fiduciary duty by Pioneer, (5) aiding
and abetting breach of fiduciary duty by Woodside, (6) misapplication of Trust property by Pioneer, (7) conspiracy to misapply fiduciary property by Woodside and Pioneer,
(8) common law fraud by Pioneer, (9) gross negligence by Pioneer, and (10) breach of the conveyance agreement by Pioneer. As described below, MOSH later added claims against the
Trustee for (1) an accounting, and (2) breach of fiduciary duty. The remedies MOSH seeks include (a) reconstruing the Trust Indenture to determine that the Trust is not terminated
because there has or should have been production that would have generated revenues to extend the life of the Trust, (b) requiring the Trustee to pursue certain claims, or to allow MOSH to
pursue such claims, (c) setting aside any farmouts by Pioneer in which there have been conveyances to an alleged affiliate of Pioneer, (d) the removal of JPMorgan as Trustee,
(e) the return or forfeiture of compensation to JPMorgan, (f) monetary damages against Pioneer, Woodside and JPMorgan, and (g) unspecified exemplary damages against all
defendants.

MOSH's
Original Petition did not contain any claims against the Trustee, except to enjoin the Trustee from terminating the Trust during the pendency of the Lawsuit. In April 2005, the
Trustee entered into an agreement with MOSH whereby the Trustee would not sell the Trust assets without first giving MOSH 60-days written notice. This agreement allowed MOSH time to obtain
documents and discovery from Pioneer and Woodside, and allowed the Trustee time to investigate the
claims asserted by MOSH against Pioneer and Woodside to determine if they had any merit and, most importantly, whether the claims would benefit the Trust. During the six month period between April and
October 2005, the Trustee conducted an independent investigation including: numerous meetings and discussions with the parties; reviewing the relevant documents with the Trustee's counsel; employing
independent reservoir engineers to evaluate the reserves in which the Trust has an interest; engaging independent joint venture auditors to examine the accounting records of the operator, Pioneer,
relating to revenues and expenses allocated to the Partnership's interests; and obtaining from both MOSH and Pioneer their respective legal analyses of the challenged farmout.

Throughout
2005, the parties also anticipated that the Midway #5 well on the Brazos A-39 Lease that is the primary subject of the Lawsuit would go into production.
Given the vast discrepancy between the reserves claimed by MOSH and those projected by Pioneer for the Midway #5 well, actual production results would significantly impact the Trustee's assessment of
whether the Trust was better off with the cost-free override created by the Pioneer-Woodside farmout, or the prior cost-burdened net profits interest that MOSH seeks to restore
through the Lawsuit. Unfortunately, Hurricane Katrina struck the Gulf of Mexico in August 2005 and delayed the commencement of production until 2006.

Faced
with this post-Katrina situation in the fall of 2005, the Trustee urged all the parties to consent to a bifurcated trial of the farmout issue on an expedited basis. The
Trustee proposed to MOSH that if the Court determined that the farmout was not valid and that restoring the net profits interest would benefit the Trust, then the Trust would reimburse MOSH's
reasonable attorneys' fees, up to $100,000, and the Trustee would allow MOSH's counsel to represent the Trust in prosecuting the

23

---



damages
portion of the case. Conversely, if MOSH were to lose on the expedited determination of the farmout issue, and in the absence of more evidence to support any ancillary claims, then MOSH would
dismiss the other claims and would not be reimbursed, and the Trustee would move forward to terminate the Trust.

Although
the Trustee, Pioneer, and Woodside all agreed to an expedited trial of the farmout issues, MOSH balked. Contrary to the assertions of MOSH and the Intervenor Plaintiffs, the
Trustee never agreed that the claims asserted by MOSH against Pioneer and Woodside "had merit"the Trustee simply stated that the farmout issue might merit immediate adjudication at that
time to determine if MOSH was legally correct.

When
MOSH refused to agree to an expedited and bifurcated trial as proposed by the Trustee, the Trustee informed MOSH that the Trustee's investigation of MOSH's allegations beyond the
farmout issues failed to convince the Trustee that pursuing those claims and incurring the related legal fees and expenses would benefit the Trust. Moreover, the Trustee informed MOSH that the
Trustee's independent joint venture auditors and reservoir engineers had not found any evidence to date to support any of MOSH's damage allegations. Therefore, the Trustee informed MOSH that the
Trustee's
investigation indicated that the Trust was better off with the post-farmout cost-free overriding royalty interest than the pre-farmout cost-burdened net
profits interest, so the funding of MOSH's efforts to set aside the farmout with Trust funds would not be in the best interest of the Trust.

It
was at this point, in November 2005, in the midst of the Trustee's negotiations with MOSH to obtain an agreed resolution of MOSH's claims, that MOSH alleged for the first time that
the Trustee had a conflict of interest because of JPMorgan's long-standing lending relationship with Pioneer. Although it is clear under the Trust Indenture, the Texas Trust Act, and
relevant case law that JPMorgan is not precluded, by holding the position of Trustee, from pursuing commercial banking activities not involving Trust funds, MOSH amended its petition and asserted
claims against the Trustee on November 28, 2005.

Although
it responded that MOSH's claims against the Trustee were meritless, to avoid any further assertion that the Trustee could not impartially evaluate MOSH's claims, on
November 30, 2005, JPMorgan announced its intention to resign as Trustee, effective January 31, 2006. On December 13, 2005, the lawsuit was transferred to the
334th Judicial District Court of Harris County, Texas. At a hearing on January 27, 2006 in the Harris County Court, the Court denied MOSH's motion for a temporary injunction to remove
JPMorgan as Trustee and appoint a principal of MOSH, Timothy Roberson, as a temporary Trustee. At the Court's suggestion, JPMorgan agreed to continue as Trustee, until such time as a substitute
trustee was found that fulfilled the qualifications of Trustee stated in the Trust Indenture. Since that hearing, none of the parties have identified a willing qualified successor Trustee that is not
also a lender under one of Pioneer's credit facilities (which status MOSH contends is an alleged conflict of interest).

On
December 8, 2006, Dagger-Spine Hedgehog Corporation ("Dagger-Spine") filed a petition to intervene in the Lawsuit as a Plaintiff, alleging claims virtually identical to MOSH.
Another group of unit holders, led by Keith A. Wiegand, (together with Dagger-Spine, the "Intervenors") also filed on March 9, 2007 a petition to intervene as plaintiffs in the Lawsuit,
incorporating and adopting the same claims asserted by MOSH. MOSH and the Intervenors are referred to hereinafter as the "Plaintiffs."

In
2006, after the Court denied MOSH's attempt to remove JPMorgan as Trustee, the parties pursued formal discovery in the Lawsuit. During this period, the Trustee continued to evaluate
the merits of the alleged claims against Pioneer and Woodside. A central allegation by MOSH and the Intervenors is that Pioneer and Woodside delayed the commencement of production from the well
drilled pursuant to the Pioneer-Woodside farmoutthe Midway #5 well on the Brazos A-39 Lease. However, Woodside and Pioneer witnesses gave sworn testimony in depositions
about the commercial and technical reasons for the delays in bringing the well on line. The well commenced production in

24

---



April
2006. After production began, the Trustee instructed its independent petroleum reserve engineers to evaluate how the production results and projected future production from the well might affect
the
value of the Trust's interests. The Trustee's independent engineers determined that the initial production data from the well did not warrant a material change in prior assessments of the value of the
Trust's assets.

Pioneer
subsequently reported to the Trustee that production from the well was suspended in July 2006 due to mercury contamination identified at downstream facilities where the
production from the well is commingled with production from other wells. An updated evaluation from the Trustee's independent petroleum reserve engineers estimated that revenues from future production
likely would not exceed the costs of drilling and completing the well. This confirmed that, if the Partnership's interest in the underlying lease had remained, or was, a cost-burdened net
profits interest, instead of the cost-free overriding royalty interest the Partnership held as a result of the Pioneer-Woodside Farmout, the Partnership would not have received, or would
not receive, any payments from this production, and the Trust accordingly would not have received any associated distributions. Further, the production data did not support reserves of the size
asserted by the Plaintiffs. The well resumed production in February 2007, but the well was shut in again on April 18, 2007 due to an increase in hydrogen sulfide content coincidental with an
increase in water production. Pioneer implemented a hydrogen sulfide contingency plan, which was required and approved by the Mineral Management Service ("MMS"), including the installation of the
necessary alarm and safety systems. The well was shut in October 4, 2008 after discovery of corrosion in the production separator on the host platform. A replacement production separator was
installed on the host platform. The well was returned to production on March 19, 2009.

Given
its conclusion that the Trust was better off with the post-farmout override, and hoping to the end this expensive litigation and liquidate the Trust per the Trust
Indenture, the Trustee reached a conditional settlement on January 26, 2007 with Pioneer and Woodside of the claims asserted by the Plaintiffs against Pioneer and Woodside. The conditional
settlement was set forth in the Mutual Release and Settlement Agreement dated as of January 26, 2007 (the "Pioneer/Woodside Settlement Agreement"). The Trustee filed a motion for approval of
the Pioneer/Woodside Settlement Agreement with the Court on January 30, 2007. The Trustee believed that the Pioneer/Woodside Settlement Agreement was in the best interest of the unit holders,
but the Plaintiffs opposed it, and on June 19, 2007, the Court issued an Order denying the Trustee's motion to approve the Pioneer/Woodside Settlement Agreement.

In
June and July 2007, Pioneer and Woodside filed motions with the Court that argued that the claims against them did not have merit as a matter of law. Pioneer's motion included an
argument that the Plaintiffs do not have the legal right to sue Pioneer because the claims belong to the Trust, not the beneficiaries of the Trust. On October 19, 2007, the Trustee offered to
assign to the Plaintiffs the Trust's claims against Pioneer and Woodside, but the plaintiffs rejected that offer. Through their counsel, the Plaintiffs and the Trustee also began negotiating a
resolution of the claims pending between them, and on October 26, 2007, the Trustee and the Plaintiffs informed the Court of an agreement in principle to settle.

On
December 3, 2007, the Trustee entered into a Settlement Agreement and Release with the Plaintiffs and additional Trust unit holders (the "Plaintiffs' Settlement Agreement").
Also on December 3, 2007, the Trustee and the Plaintiffs filed a Joint Motion for Approval of Settlement Agreement (the "Joint Motion"). In response to the Joint Motion, on December 21,
2007, Pioneer filed cross-claims against the Trustee seeking declaratory and injunctive relief to prevent certain aspects of the proposed settlement between the Trustee and the Plaintiffs. On
January 14, 2008, the Trustee filed an answer to Pioneer's cross-claims, in which the Trustee denied the cross-claims in their entirety, stated that they were baseless, and set forth numerous
affirmative defenses. On January 22, 2008, the Court issued an Order denying the Joint Motion. As a result, the conditions precedent to the Plaintiffs'

25

---



Settlement
Agreement could not be satisfied, and the Plaintiffs' Settlement Agreement became null and void. In addition to denying the Joint Motion, the Court also considered and denied in the same
Order (i) the application by the Plaintiffs for the appointment of a temporary trustee and (ii) Pioneer's application for a temporary restraining order. As a result of the Court's denial
of the Joint Motion, and the Court's denial of the Plaintiffs' application for the appointment of a temporary trustee, JPMorgan elected not to resign in order to avoid a vacancy, and continues to
serve as Trustee. The Trustee continues to desire the appointment of a successor Trustee.

On
April 28, 2008, the Court issued a Docket Control Order, setting the trial date for December 8, 2008. On July 3, 2008, the Plaintiffs filed a Third Amended
Petition, seeking, among other things, to add claims against the Partnership (though its partners Pioneer and the Trustee) and JPMorgan in an individual capacity. By order dated July 3, 2008,
the Court denied Pioneer's pending motions for summary judgment, including Pioneer's challenge to Plaintiffs' standing. Pioneer then filed a petition for writ of mandamus to the Houston Fourteenth
Court of Appeals on July 22, 2008, seeking to reverse the trial courts' ruling on standing. On September 25, 2008, the Houston Fourteenth Court of Appeals denied Pioneer's petition for
writ of mandamus, and Pioneer filed a petition for writ of mandamus with the Supreme Court of Texas on October 1, 2008. On October 24, 2008, the group of unit holders led by Keith A.
Wiegand filed a Motion for Non-Suit Without Prejudice, and the Court granted the motion on October 24, 2008. Thus, all references herein to "Plaintiffs" after the date of
October 24, 2008 include only MOSH and Dagger-Spine. At a hearing before the Court on October 31, 2008, the Plaintiffs agreed to postpone the trial again, and the trial was scheduled for
April 13, 2009. The Supreme Court of Texas denied Pioneer's petition for writ of mandamus on November 21, 2008.

By
notice dated February 6, 2009, which the Trustee mailed to all unit holders of record on February 10, 2009, the Trustee announced that the Termination Threshold had been
met and that, as a result, it had instructed Pioneer to sell the oil and gas assets of the Partnership at public auction on March 18, 2009. In addition, the Trustee announced that the sale
would include all of Pioneer's interests in Brazos Block A-39. On March 3, 9, and 12, respectively, unit holders Gordon Stamper, Robert Miles, and Keith
Wiegandformerly part of the group of Intervenors led by Keith Wiegand (collectively, the "Individual Intervenors")filedpro semotions with the Court, requesting to intervene in the Lawsuit. At the public auction on March 18, 2009, no bids were submitted, so the Trustee is considering its options under the Trust
Indenture and in light of the pending litigation. On March 25, 2009, Plaintiffs filed their Fourth Amended Original Petition, Application for Temporary Restraining Order, Temporary Injunction,
Show Cause Order, and Permanent Injunction. On April 15, 2009 and May 9, 2009, respectively, unit holders Michael Brown and Benjamin Ginter filed additional interventions.

On
April 27, 2009, the Trustee, on behalf of the Trust, entered into a Binding Settlement Agreement Term Sheet ("Term Sheet") with (1) the Plaintiffs, (2) Pioneer,
and (3) Woodside, summarizing the principal terms of a settlement in the Lawsuit. Pursuant to the provisions of the Term Sheet, and subject to certain conditions precedent therein and to be
included in a Final Settlement Agreement approved by the Court: (1) Pioneer will pay to the Trust $13 million and will sell and contribute to the Trust any proceeds from the sale of all
of its interests in the Brazos Block A-39 (the "Pioneer Settlement Interests"); (2) the Trustee will pay to the Trust $5 million and will release all claims for and
forgive repayment of the existing $5 million Demand Promissory Note (the "Credit Facility") provided by JPMorgan, as lender, to the Trust; and (3) Woodside will pay to the Trust
$1 million. Notwithstanding certain other releases, the Trustee will be permitted to use the remaining balance available under the Credit Facility and any other Trust income to pay Trust
liabilities and expenses as permitted under the Trust Indenture prior to the receipt and final distribution of any net settlement proceeds.

26

---



As
provided in the Term Sheet, each of the parties agreed to release any and all claims against the other parties that are, or could have been, asserted in the Lawsuit, including any
claims for reimbursement of attorney's fees or costs.

The
parties intend to enter into a Final Settlement Agreement, which will be submitted to the Court for final approval. As a condition precedent to the settlement, the Court must approve
and enter findings as part of the Agreed Final Judgment that all claims that were raised (or that could have been raised) against the defendants in the Lawsuit are owned by Plaintiffs, and/or the
Trust, and/or the Partnership; the Plaintiffs pursued the claims asserted in the Lawsuit on behalf of the Trust and/or the Partnership; the Plaintiffs and the Trustee have the authority to prosecute,
resolve, settle and release all released claims on behalf of the Trust, the Partnership and Plaintiffs; and the settlement is in the best interest of the Trust, its unit holders and the Partnership.
The Court's Agreed Final Judgment must be entered following a hearing for which notice is provided by the Trustee to all Trust unit holders in accordance with the notice provisions of the Trust
Indenture. If the Court does not approve the Final Settlement Agreement and enter an Agreed Final Judgment in accordance with the express terms set forth in the Term Sheet and the Final Settlement
Agreement, any of the parties may, in its sole discretion, withdraw from the settlement and the Term Sheet and the Final Settlement Agreement will become null and void.

After
a Final Settlement Agreement is approved and an Agreed Final Judgment is entered by the Court, the Trustee will direct Pioneer to sell the assets of the Partnership (the
"Partnership assets") (along with the Pioneer Settlement Interests), consistent with the terms contained in the Term Sheet and as approved by the Court, at public auction and any resulting sales
proceeds will be remitted to the Trust as part of the wind-down process (the "Liquidation Process").

The
Partnership assets and the assets contributed to the Trust by Pioneer for sale pursuant to its tender letter of October 10, 2008 (hereafter referred to as "Pioneer Settlement
Interests") will be offered in two lots: (1) the West Delta 61 Lot; and (2) the Brazos A-39 Lot (together, the "Sales Lots"). The Plaintiffs have identified a
Qualified Bidder, MOSH, LLC, for each of the Sales Lots, which bidder must (1) place $375,000 for each Sales Lot, or $750,000 in the aggregate, into escrow within three business days
following the date an Agreed Final Judgment is entered by the Court approving the Final Settlement Agreement, and (2) with respect to the Brazos A-39 Lot, demonstrate its
qualification with the Mineral Management Service of the U.S. Department of the Interior to hold record title interest in and to operate offshore interests. The Qualified Bidder will have the right to
enter into Right of First Refusal Agreements with respect to the applicable Sales Lot, which would provide that in the event higher bids are obtained at public auction, the Qualified Bidder would have
the right, but not the obligation, to purchase the lot on the same terms as the highest bidder. If the Qualified Bidder fails to meet the applicable requirements or fails to timely exercise its right
of first refusal, the Right of First Refusal Agreements will be extinguished and the sales process can proceed with the other highest bidder(s) and any escrow sums will be returned to the Qualified
Bidder.

Payment
of settlement proceeds by Pioneer, JPMorgan and Woodside to the Trustee will be made once the Trustee receives the sales proceeds from the public auction. The settlement proceeds
will be placed into separate, interest-bearing, escrow accounts at JPMorgan and will not be distributed by the Trustee until after the Agreed Final Judgment becomes final and
non-appealable. Should the Agreed Final Judgment be reversed, the settlement proceeds will be returned to the respective defendants.

The
final distribution by the Trust of the proceeds (i.e., the settlement proceeds plus any sales proceeds from the public auction of the Partnership assets and the Pioneer
Settlement Interests) to Trust unit holders will be made only after the settlement proceeds have been remitted to the Trustee, and the Trustee has deducted any costs incurred for effecting the sale of
assets in the Liquidation Process and any other fees and expenses relating to the administration of the Trust after April 27, 2009. Counsel for the Plaintiffs also intend to request that the
Court award attorney's fees of one-third of the

27

---



$19 million
cash settlement, plus approximately $2 million in expenses incurred, before final distribution. The actual amount awarded to the Plaintiffs' counsel will be approved by the
Court. Accordingly, the final distribution of net settlement and sales proceeds by the Trust to its 71,980,216 outstanding units of beneficial interest may be materially less than the gross settlement
and sales proceeds.

The
Trustee expects to establish a future record date approved by the Court in the Agreed Final Judgment to serve as the date for holders of record entitled to final distribution as part
of the winding up of the Trust.

In
the event the Liquidation Process does not result in the sale of Pioneer's interests in Brazos Block A-39, Pioneer is entitled to dispose of such assets in any
manner it sees fit, including by way of example and without limitation, withdrawing from participation in and ownership in Brazos Block A-39 pursuant to the terms of the Offshore
Operating Agreement governing this property. In addition, if the Partnership's interests remain unsold and no buyer can be found after the completion of the public auction, Pioneer has the absolute
right to cancel and/or extinguish such interest(s). Until the time of any sale or abandonment of the Partnership's assets, Pioneer, as managing general partner of the Partnership, will continue to
operate the Partnership's assets and distribute in the normal course any net proceeds to the Trustee for the benefit of the Trust. Once the Final Settlement Agreement has been executed and a hearing
set by the Court for final approval, at least thirty-days notice will be provided by the Trustee to all unit holders of record. If the parties can finalize the Final Settlement Agreement
in time for the Trustee to mail out the appropriate notice to the unit holders of record, the hearing will be held on June 18, 2009 at 9:00 a.m. CST. While the Court considers the
proposed settlement, the trial has been postponed until at least September 7, 2009.

The
Trustee will make the full detail of the underlying data of the December 31, 2008 reserve report available for use in connection with the sale of the Partnership's Royalty
Properties as part of the Trust liquidation. For more information regarding the estimated remaining life of each of the Royalty Properties, the estimated future net revenues of the Royalty Properties
and information relating to farm-outs of interests on the Royalty Properties, see Item 1A. "Risk Factors" of the Form 10-K for the year ended December 31,
2008 and Note 8 in the Notes to Financial Statements included elsewhere in the Form 10-K. The final distribution to unit holders will be an amount net of funds required to
satisfy all Trust liabilities.

Liquidity and Capital Resources

In accordance with the provisions of the Trust conveyance, generally all revenues received by the Trust, net of Trust administrative
expenses and any cash reserves established for the payment of contingent or future obligations of the Trust, are distributed currently to the unit holders. Based on the current general and
administrative expenditures being incurred in connection with the litigation and the absence of Royalty income, the Trustee was required to borrow money in accordance with the Trust Indenture to fund
Trust expenses. On September 28, 2007 the Trust entered into a Demand Promissory Note agreement with JPMorgan in order to cover portions of its operating expenses. The lender approved an
uncommitted line of credit to the Trust in a principal amount not to exceed $3 million. As part of that agreement, JPMorgan pays the expenses on behalf of the Trust. JPMorgan may decline to
fund any request of the Trust for borrowings at anytime, for any reason, including the event that JPMorgan has reason to believe that the Trust will not be able to satisfy its obligation to repay the
Demand Loans. Interest on the note is calculated at a rate per annum equal to Prime Rate plus two percent (2%), paid annually. The Demand Promissory Note is secured by a pledge of the Trust Estate, as
that term is defined in the Trust Indenture, including without limitation the 99.99% general partnership interest in the Mesa Offshore Royalty Partnership owned by the Trust, pursuant to a Pledge
Agreement dated September 29, 2007, as amended by the First Amendment to Pledge Agreement dated as of December 3, 2007, executed by the Trust for the benefit of the Lender. The Trust may

28

---



borrow
amounts under this Note until such time as JPMorgan makes demand for payment in full or December 31, 2008, whichever is earlier.

On
December, 3, 2007, JPMorgan, individually and as lender, entered into an Amended and Restated Promissory Note with the Trust as borrower, to amend the Demand Promissory Note to
provide for, among other provisions, an extension of the stated maturity date of the Loans made pursuant to the Demand Promissory Note and the Amended and Restated Note until the earlier of
(1) December 31, 2009, (2) 31 days after the Trust's receipt of any settlement proceeds, recovery or judgment in connection with the Lawsuit, (3) final liquidation
of the Trust's assets, or (4) the Settlement Agreement is not approved by the Court. Additionally, the amendment provided that the Trust may continue to obtain loans under the note until the
maturity date, as long as the amount borrowed does not exceed $3 million and the loan is not in default. The amendment also provided that interest expense shall be due and payable on the
maturity date. On August 25, 2008, the Trustee executed an amended and restated Demand Note that among other things increased the aggregate principal amount available for borrowing to
$4 million and amended the definition of "Maturity Date" to delete the text relating to the failure of the Court to approve the prior Settlement Agreement in the Lawsuit.

On
January 28, 2009, the Trustee executed and delivered to JPMorgan a Third Amended and Restated Promissory Note, dated as of January 12, 2009, increasing the principal
amount available for the borrowing, subject to the terms of such note, to $5 million.

As
of March 31, 2009, the Trust had $4,436,164 outstanding of principal advanced and $281,317 in accrued and unpaid interest expense, leaving $563,836 available under this
facility. Additionally, as of March 31, 2009, the Trust had $93,622 in unpaid trust expenses. Should the Trust fully utilize the funds available under the Demand Promissory Note, the Trustee
will attempt to borrow additional money. However, no assurance can be given that the Trustee will be able to borrow money on terms the Trustee considers reasonable, or at all. The Trust Indenture
prohibits the Trustee from making any distributions to unit holders until these loans are repaid in full.

The
Trust's source of cash is the Royalty income received from the Partnership's share of the net proceeds from the Royalty Properties. Reference is made to Note 8 in the Notes to
Financial Statement included in the Form 10-K for the year ended December 31, 2008.

Item 3.Quantitative and Qualitative Disclosures About Market Risk.

The Trust does not engage in any operations, and does not utilize market risk sensitive instruments, either for trading purposes or for
other than trading purposes. The Trust's monthly distributions are highly dependent upon the prices realized from the sale of natural gas. Natural gas prices can fluctuate widely on a
month-to-month basis in response to a variety of factors that are beyond the control of the Trust and the working interest owners. Factors that contribute to price fluctuation
include, among others:



29

---





Moreover,
government regulations, such as regulation of natural gas transportation and price controls, can affect product prices in the long term. See also the discussion of marketing by Pioneer
discussed in Item 2. "Management's Discussion and Analysis of Financial Condition and Results of OperationsOperational Review."

Item 4.Controls and Procedures.

Evaluation of Disclosure Controls and Procedures.The Trustee maintains disclosure controls and procedures designed to ensure that
information
required to be disclosed by the Trust in the reports that it files or submits under the Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods
specified in the SEC's rules and regulations. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed by the Trust is
accumulated and communicated by PNR, as the managing general partner of the Partnership, and the working interest owners to JPMorgan, as Trustee of the Trust, and its employees who participate in the
preparation of the Trust's periodic reports as appropriate to allow timely decisions regarding required disclosure.

As
of the end of the period covered by this report, the trust officer acting on behalf of the Trustee responsible for the administration of the Trust conducted an evaluation of the
Trust's disclosure controls and procedures. The officer acting on behalf of the Trustee concluded that the Trust's controls and procedures are effective.

Due
to the contractual arrangements of (i) the Trust Indenture, (ii) the Partnership Agreement and (iii) the rights of the Partnership under the Conveyance regarding
information furnished by the working interest owners, the Trustee relies on: (A) information provided by the working interest owners, including (i) the status of litigation,
(ii) historical operating data, plans for future operating and capital expenditures, reserve information, as well as (iii) information relating to projected production;
(B) information provided by the managing general partner of the Partnership that is collected by the managing general partner from the working interest owners; and (C) conclusions
regarding reserves by reserve engineers or other experts in good faith. See Item 1A. Risk Factors "None of the Trust nor its unit holders control the operation or development of
the Royalty Properties and have little influence over operation or development" and "The Trustee relies upon the working interest owners and managing general partner for information
regarding the Royalty Properties" in the Trust's Annual Report on Form 10-K for the year ended 2008 for a description of certain risks relating to these arrangements and reliance.

Changes in Internal Control over Financial Reporting.In connection with the evaluation by the Trustee of changes in internal control
over financial
reporting of the Trust that occurred during the Trust's last fiscal quarter, no change in the Trust's internal control over financial reporting was identified that has materially affected, or is
reasonably likely to materially affect, the Trust's internal control over financial reporting. The Trustee notes for purposes of clarification that it has no authority over, has not evaluated and
makes no statement concerning, the internal control over financial reporting of the working interest owners or the managing general partner of the Partnership.

30

---





PART II

Item 6.Exhibits

(Asterisk indicates exhibit previously filed with the Securities and Exchange Commission and incorporated herein by reference. JPMorgan
was formerly known as The Chase Manhattan Bank and is successor by mergers to the original name of the Trustee, Texas Commerce Bank National Association).

SEC File or
Registration
Number

Exhibit
Number4(a)*

Mesa Offshore Trust Indenture between Mesa Petroleum Co. and Texas Commerce Bank National Association, as Trustee, dated December 15, 1982


2-79673

10(gg)4(b)*

Overriding Royalty Conveyance between Mesa Petroleum Co. and Mesa Offshore Royalty Partnership, dated December 15, 1982


2-79673

10(hh)4(c)*

Partnership Agreement between Mesa Offshore Management Co. and Texas Commerce Bank National Association, as Trustee, dated December 15, 1982


2-79673

10(ii)4(d)*

Amendment to Partnership Agreement between Mesa Offshore Management Co., Texas Commerce Bank National Association, as Trustee, and Mesa Operating Limited Partnership, dated December 27, 1985 (Exhibit 4(d)
to Form 10-K for year ended December 31, 1992 of Mesa Offshore Trust)


1-8432

4(d)4(e)*

Amendment to Partnership Agreement between Texas Commerce Bank National Association, as Trustee and Mesa Operating dated as of January 5, 1994 (Exhibit 4(e) to Form 10-K for year ended December 31,
1993 of Mesa Offshore Trust)


1-8432

4(e)10(a)*

Third Amended and Restated Promissory Note, dated January 12, 2009, by and between Mesa Offshore Trust and JPMorgan Chase Bank, N.A. (Exhibit 10.1 to Form 8-K filed January 29, 2009 by Mesa Offshore
Trust)


1-8432

10.110(b)*

Third Amendment to Pledge Agreement, dated as of January 12, 2009, by and between Mesa Offshore Trust and JPMorgan Chase Bank, N.A. (Exhibit 10.2 to Form 8-K filed January 29, 2009 by Mesa Offshore
Trust)


1-8432

10.231

Certification furnished pursuant to Section 302 of the Sarbanes-Oxley Act of 200232

Certification furnished pursuant to Section 906 of the Sarbanes-Oxley Act of 2002


31

---





SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

MESA OFFSHORE TRUSTBy:

/s/JPMORGAN CHASE BANK, N.A.,as TrusteeBy:

/s/ MIKE ULRICH Mike UlrichVice PresidentThe Bank of New York Trust Company, N.A., as attorney-in-fact for the Trustee


Date:
May 15, 2009

The
Registrant, Mesa Offshore Trust, has no principal executive officer, principal financial officer, board of directors or persons performing similar functions. Accordingly, no
additional signatures are available and none have been provided.

32

---



QuickLinks