30 added · 14 removed between the two most recent 10-Ks. The risks a company starts — or stops — disclosing are often the story.
Newly disclosed
SoftVest has stated in documents filed with the SEC that if the judicial modification is successful, it believes the Trust should be converted into a publicly traded corporation or limited liability company to be effected by means of (a) the transfer of the Trust’s assets to a newly-formed corporation or limited liability company (“Newco”), (b) the subsequent distribution of Newco’s equity interests to Unit holders and (c) the termination of the Trust.
From a global perspective, the International Energy Agency (“IEA”) observed in its World Energy Outlook 2025 that global electricity demand continued to grow in 2024 and all energy sources, including renewable power and each of the fossil fuels, grew to meet that demand, which stemmed from emerging market and developing economies.
Renewable power generation constituted 70% of the energy sources that met that demand and renewables grow faster than any other energy source in each of the IEA World Outlook current policies, stated policies, net zero emissions by 2050, and accelerating clean cooking and electricity services scenarios.
Blackbeard does not provide any forward looking information regarding future-development and capital expenditures such that the reserve estimates as of December 31, 2024 and forward exclude all proved undeveloped reserves ("PUDs").
Additionally, the One Big Beautiful Bill Act (“OBBBA”) was signed into law on July 4, 2025 and, among other items, made permanent, extended or modified certain provisions under the TCJA.
As of March 16, 2026, the price of oil was $93.39 per barrel and the price of natural gas was $3.03 per million British thermal units (“MMBtu”).
Proposed actions by certain Unit holders may have the effect of converting the Trust into a different type of investment, terminating the Trust, and/or permitting other changes to the Trust to occur that may not be acceptable to all Unit holders.
SoftVest, L.P., a Unit holder of the Trust, has a petition pending in District Court in Tarrant County, Texas, seeking to judicially modify the Trust indenture to eliminate certain supermajority voting requirements and prohibited amendments to the indenture.
If SoftVest, L.P.’s petition is successful, the effect of such modification would be that any provision of the indenture could be amended by a majority in interest of Unit holders constituting a quorum at a meeting of Unit holders where a quorum is present.
While providing greater flexibility to make changes that a majority of Units represented at a meeting are in support of, such a modification could have the result of permitting changes to be made to the Trust that holders of a majority of all outstanding Units are not actually in favor of.
SoftVest has stated that the proposed conversion would terminate the Trust’s status as a fixed investment trust that is taxed as a grantor trust for federal income tax purposes, and that Newco would be subject to tax at the entity level if it is a corporation (unlike a grantor trust that is not subject to tax at the Trust level).
Any modifications to the Trust’s classification for federal (and applicable state and local) income tax purposes would result in additional costs incurred by the Trust to implement and maintain new reporting procedures, which could result in reduced distributions to Unit holders.
No longer disclosed
In response to the Trust’s lawsuit against Blackbeard in the District Court of Tarrant County Texas, Blackbeard has filed a counterclaim asking the court to limit the information it provides to the Trust to quarterly statements of the net proceeds computation and inspection of books and record during normal business hours.
The Trustee has requested information regarding future development and capital expenditures from Blackbeard for fiscal year 2025 but Blackbeard has refused to provide any forward looking information despite having provided this information in previous years.
In addition, the IEA predicts that oil and natural gas, along with coal, are each expected to reach their high point in global energy supply before 2030, with their combined percentage of global energy supply expected to drop below eighty percent (80%) before that time.
The International Energy Agency (“IEA”) estimates in its World Energy Outlook 2024 that growth in global energy demand is expected to slow due to efficiency improvements, electrification, and quick expansion of renewables.
In contrast to previous years, the reserve estimates as of December 31, 2024 exclude all proved undeveloped reserves ("PUDs") as a result of Blackbeard's refusal to provide such information.
In 2023, the proved undeveloped reserves constituted 48.3% of the total proved reserves for the Waddell Ranch properties and 38% of the total proved reserves for the Trust.
In addition, the growth in demand for fossil fuels could be tempered and decrease further if the growth of China’s economy slows and investment in clean and efficient energy by it, as well as other high-energy-demand growth areas, such as India, Southeast Asia, and Africa, continues.
As of February 24, 2025, the price of oil was $71.06 per barrel and the price of natural gas was $3.86 per Mcf.
The operators developing the Texas Royalty properties have no duty to protect the interests of the Unit holders and do not have sole discretion regarding development activities on the Underlying Properties.
Ultimately, these initiatives could make it more difficult for companies, including the companies that operate the Underlying Properties, to secure funding for exploration and production activities.
As a result, distribution of net proceeds from the Waddell Ranch properties each month has been delayed by a month from the time such proceeds have historically been distributed to unitholders.
If Blackbeard continues to limit the information provided to the Trustee, distributions to unitholders of net proceeds from the Waddell Ranch properties will likely continue to be delayed.