MARINE PETROLEUM TRUST

Marine Petroleum Trust is a royalty trust created in 1956 under Texas law, organized for the sole purpose of administering and liquidating rights to payments from certain oil and natural gas leases in the Gulf of America (formerly the Gulf of Mexico) ¹. The Trust holds overriding royalty interests equal to three-fourths of 1% of the value at the well of any oil, natural gas, or other minerals produced and sold from the leases ². As of the filing date, the leases subject to Marine's interests cover an aggregate of 77,646 gross acres ³. The Trust is prohibited from engaging in any business activity and does not reinvest funds, so its depleting assets are not being replaced ⁴. Marine derives no revenues from foreign sources and has no export sales ⁵.

For the fiscal year ended June 30, 2026, Arena Energy, LP accounted for 100% of the royalty revenues received by Marine ⁶. Chevron USA, Inc. accounted for less than 1% of royalty revenue during fiscal years 2026, 2025, and 2024 ⁷. The Trust's competitive position is not defined by market share but by its contractual rights to overriding royalties from existing leases; it cannot acquire royalty interests in any more leases ⁸. The working interest owners, including Arena and Chevron's assignees, control operations and development, and Marine has little influence over them ⁹.

Marine's core business model is the collection and distribution of overriding royalty revenues from oil and natural gas production on leases in the Gulf of America ¹⁰. The Trust collects income monthly, pays administrative expenses, and distributes all distributable income to unitholders quarterly, less a reserve for accrued liabilities and estimated future expenses ¹¹. The Trust does not operate any trade or business and has no employees; all operations are conducted by third parties, including the working interest owners and the transfer agent ¹². The Trust's income is derived from contracts that provide for payments in the nature of overriding royalties based on oil and natural gas sales ¹³.

Marine's overriding royalty interest is three-fourths of 1% of the value at the well of oil, natural gas, or other minerals produced and sold from the leases ¹⁴. For the fiscal year ended June 30, 2026, approximately 93% of Marine's royalty revenues were attributable to the sale of oil and approximately 7% were attributable to the sale of natural gas and natural gas liquids ¹⁵. The Trust holds interests in 17 different oil and natural gas leases covering an aggregate of 77,646 gross acres, all located in federal waters in the Central and Western areas of the Gulf of America off the coasts of Louisiana and Texas ¹⁶. Of the aggregate gross acres, 210 gross acres are located on leases that have commercial production, but the production is not on Marine's overriding royalty area within those leases ¹⁷.

During fiscal year 2026, Marine's distributable income amounted to $659,781, or $0.33 per unit, compared to $727,995, or $0.36 per unit, in fiscal year 2025 ¹⁸. Total income for fiscal year 2026 was $985,720, consisting of $966,849 in oil and natural gas royalties and $18,871 in interest and other income ¹⁹. General and administrative expenses for fiscal year 2026 amounted to $325,939, an increase from $315,835 in fiscal year 2025 ²⁰. The Trust did not repurchase any units of beneficial interest during the quarter ended June 30, 2026 ²¹.

The Trust's units trade on the Nasdaq Capital Market under the symbol 'MARPS' ²². The Trust is authorized to issue and has issued 2,000,000 units of beneficial interest ²³. As of September 25, 2026, there were 162 unitholders of record ²⁴. The reserve for future expenses amounted to $52,500 for the distribution paid on June 30, 2026 ²⁵. The Trust does not maintain any equity compensation plans ²⁶.

However, the Trust's future performance is tied to oil and natural gas prices and production levels, which are subject to significant volatility ²⁷. The Trust is not permitted to manage commodity price risk through fixed price contracts or financial derivatives ²⁸.

Marine's growth is limited by its structure; it cannot acquire additional royalty interests or make investments in new oil and natural gas interests ²⁹. The Trust's overriding royalty interests apply only to existing leases and do not apply to new leases that the Interest Owners may acquire ³⁰. As of June 30, 2026, operators had designated three locations for additional operations, which may include drilling, workovers, recompletions, sidetracks, or other types of operations, but there is no assurance that wells will be drilled or successful ³¹.

The Trust's cost structure consists primarily of general and administrative expenses, which increased to $325,939 in fiscal year 2026 from $315,835 in fiscal year 2025 due to an increase in professional services expenses ³². The Trust's expenses are recorded on an actual paid basis under the modified cash basis of accounting ³³.

The Trust does not have any long-term contractual obligations other than the obligation to make distributions to unitholders pursuant to the Indenture ³⁴. The Trust does not maintain any off-balance sheet arrangements ³⁵. Cash held by the Trust is held in a non-interest bearing trust account, and there is no material interest rate risk ³⁶.

The Trust does not have capital expenditure plans or share repurchase authorizations. The Trust's only obligation is to distribute distributable income to unitholders quarterly, less a reserve for future expenses ³⁷. The Trust did not repurchase any units during the quarter ended June 30, 2026 ³⁸.

The Trust faces headwinds from the depleting nature of its royalty interests; the properties will eventually stop producing in commercial quantities, and Marine will cease to receive distributions ³⁹. Oil and natural gas prices are volatile and subject to factors beyond Marine's control, including political conditions, weather, and government regulations ⁴⁰. The Trust is also exposed to risks from the concentration of royalty payments from a limited number of working interest owners; for fiscal year 2026, two working interest owners accounted for 100% of royalty payments, one of which accounted for effectively 100% ⁴¹.

The Trust's distributions are highly dependent on oil and natural gas prices, which are volatile and subject to uncontrollable factors such as political conditions, weather, and government regulations ⁴². A substantial decline in production or prices could result in Marine being unable to make distributions in future quarters ⁴³. The Trust's royalty interests are depleting assets and are not being replaced, so the properties will eventually stop producing in commercial quantities ⁴⁴. The Trust faces concentration risk as two working interest owners accounted for 100% of royalty payments in fiscal year 2026, one of which accounted for effectively 100% ⁴⁵. Marine does not require working interest owners to pledge collateral or post security for royalty payments, and any collection issues could reduce distributable income ⁴⁶. The Trust's units are thinly traded, and an active trading market may not develop, which could cause the price of units to fluctuate greatly ⁴⁷. Unitholders have limited voting rights, and the Trust may be terminated if holders of 80% or more of the units approve a sale and termination ⁴⁸.

The Trustee's discussion emphasizes the Trust's dependence on oil and natural gas prices and production, noting that distributable income for fiscal year 2026 was $659,781, or $0.33 per unit, compared to $727,995, or $0.36 per unit, in fiscal year 2025 ⁴⁹. The June 2026 distribution of $0.10 per unit was consistent with the March 2026 distribution of $0.10 per unit, and the September 2026 distribution of $0.10 per unit will be consistent with the June 2026 distribution ⁵⁰. The Trustee highlights that Marine is not permitted to manage commodity price risk through fixed price contracts or financial derivatives ⁵¹. Strategic priorities include the efficient administration and collection of royalties, maintaining the Trust's status as a non-taxable grantor trust, and distributing all available cash to unitholders ⁵².