PermRock Royalty Trust

The Underlying Properties consist of long-life reserves in mature, conventional oil fields with established decline curves. As of December 31, 2025, the Underlying Properties had proved reserves of 2.8 MMBoe and 100% of the volumes and 100% of PV-10 value were attributable to proved developed reserves. Approximately 94% of the 2.8 MMBoe of proved reserves, based on PV-10 value, were operated by T2S as of December 31, 2025. For more information regarding changes in proved reserves, see Note 12 to the financial statements included in Part II, Item 8 of this Annual Report.

Major Producing Areas

The Underlying Properties consist of the following four operating areas:

The Permian Clearfork area consists of 2,434 net acres on the Central Basin Platform of the Permian Basin in Hockley and Terry Counties, Texas. A majority of the production in the Permian Clearfork area comes from wells in the Kingdom Clearfork field, which primarily produce from the Clearfork formation. Boaz Energy's waterflooding operations were first implemented in the Kingdom Clearfork field in March 2015. As of December 31, 2025, Cawley, Gillespie & Associates, Inc. (“Cawley Gillespie”) estimates the Underlying Properties in the Permian Clearfork to have 0.9 MMBoe of total proved reserves, 100% of which are proved developed reserves.

The Permian Abo area consists of 1,667 net acres on the Central Basin Platform of the Permian Basin in Terry and Cochran Counties, Texas. A majority of the production in the Permian Abo area comes from wells in the Kingdom Abo field, which primarily produce from the Abo formation. In 2011, a waterflood pilot program was implemented in the North West Terry Abo unit (“NWTA”) located in the Kingdom Abo field that converted one producing well to an injection well. Boaz Energy fully converted the field to water injection upon purchasing the NWTA in June 2016, and in January 2017 installed a new injection pump that added an additional injection capacity of 2,500 barrels of water per day. In August 2017, NWTA 313 demonstrated initial waterflood response. As of December 31, 2025, Cawley Gillespie estimates the Underlying Properties in the Permian Abo to have 0.4 MMBoe of total proved reserves, 100% of which are proved developed reserves.

The Permian Shelf area consists of 14,390 net acres on the Eastern Shelf of the Permian Basin in Glasscock, Schleicher, Stonewall and Coke Counties, Texas. A significant portion of the production in the Permian Shelf area comes from wells in the Fort McKavitt and Flowers fields, which primarily produce from the Canyon formation. As of December 31, 2025, Cawley Gillespie estimates the Underlying Properties in the Permian Shelf to have 0.3 MMBoe of total proved reserves, 100% of which are proved developed reserves.

The Permian Platform area consists of 3,903 net acres on the Central Basin Platform of the Permian Basin in Ward, Crane, Terry and Ector Counties, Texas. The properties primarily produce from the Clearfork, San Andres, and Devonian formations. As of December 31, 2025, Cawley Gillespie estimates the Underlying Properties in the Permian Platform to have 1.2 MMBoe of total proved reserves, 100% of which are proved developed.

Oil and Natural Gas Data

Proved Reserves

Cawley Gillespie, independent petroleum and geological engineers, estimated crude oil and natural gas (including natural gas liquids) proved reserves of the Underlying Properties’ full economic life and for the Trust life as of December 31, 2025. Numerous uncertainties are inherent in estimating reserve volumes and values, and the estimates are subject to change as additional information becomes available. The reserves actually recovered and the timing of production of the reserves may vary significantly from the estimates. In addition, the reserves and net revenues attributable to the Net Profits Interest include only 80% of the reserves attributable to the Underlying Properties that are expected to be produced within the term of the Net Profits Interest. The technical person primarily responsible for overseeing the review of the third-party reserve reports prior to T2S taking over operations was Marshall Eves, Boaz Energy's Chief Executive Officer. T2S’s engineering department works closely with its independent reserve engineers to ensure the integrity, accuracy and timeliness of data furnished to the independent reserve engineers in their reserve estimating process. Periodically, the T2S petroleum engineer and other T2S executives meet with the independent reserve engineers to review properties and discuss methods and assumptions used by Boaz Energy, T2S and the independent reserve engineers to prepare reserve estimates.

• Higher production and development costs related to the Underlying Properties and other costs and expenses incurred by the Trust without concurrent increases in revenue, will result in decreased Trust distributions.
• A significant portion of the reserves associated with and production from the Underlying Properties will be influenced by the success of secondary recovery techniques. There are uncertainties associated with such techniques and, if these recovery methods do not result in expected production levels, net profits available for distribution to Trust unitholders could be less than expected.
• The standardized measure of the estimated proved oil and natural gas reserves attributable to the Trust’s interest in the Underlying Properties and the associated PV-10 calculation are not necessarily the same as the current market value of those estimated reserves.
• The Trust units may lose value as a result of title deficiencies with respect to the Underlying Properties.
• The amount of cash available for distribution by the Trust could be reduced by expenses caused by uninsured claims.
• War, military invasions, terrorism and continued geopolitical hostilities could adversely affect the Trust’s distributions to its unitholders or the market price of its units.
• Future net profits income to the Trust may be subject to risks relating to the creditworthiness of third parties.
• The Trust is passive in nature and neither the Trust nor the Trust unitholders have any ability to influence T2S or other third-party operators or control the operation or development of the Underlying Properties.
• T2S may transfer all or a portion of the Underlying Properties at any time without Trust unitholder consent, subject to specified limitations.
• The Trustee must, under certain circumstances, sell the Net Profits Interest and dissolve the Trust prior to the expected termination of the Trust. If this were to occur, Trust unitholders may not recover their investment.
• Conflicts of interest could arise between T2S or any successor to T2S, on the one hand, and the Trust and the Trust unitholders, on the other hand.
• The Trust is administered by a Trustee who cannot be replaced except by a majority vote of the Trust unitholders at a special meeting, which may make it difficult for Trust unitholders to remove or replace the Trustee.
• T2S’s or any successor's ability to perform its obligations to the Trust could be limited by restrictions under its debt agreements.
• Trust unitholders have limited ability to enforce provisions of the Conveyance creating the Net Profits Interest, and T2S's liability to the Trust (as well as the liability to the Trust of any successor to T2S) is limited.
• If the Trust cannot meet the New York Stock Exchange continued listing requirements, the NYSE may delist the Trust units.
• Ustx, LLC (or any future owner of the units currently held by Ustx, LLC) may sell Trust units in the public or private markets, and such sales could have an adverse impact on the trading price of the Trust units.
• The trading price for the Trust units may not reflect the value of the Net Profits Interest held by the Trust.
• Courts outside of Delaware may not recognize the limited liability of the Trust unitholders provided under Delaware law.
• The operations of the Underlying Properties are subject to complex federal, state, local and other laws and regulations, including environmental laws and regulations, that could adversely affect the cost, manner or feasibility of conducting operations on them or result in significant costs and liabilities, which could reduce the amount of cash available for distribution to Trust unitholders.
• Federal and state legislative and regulatory initiatives relating to hydraulic fracturing could result in T2S incurring increased costs, additional operating restrictions or delays and fewer potential drilling locations.
• The adoption and implementation of international, federal or state climate change legislation or regulations could result in increased operating costs for T2S (or any successor to T2S) and reduced demand for the oil, natural gas and NGLs that T2S (or any successor to T2S) produces.
• The potential physical effects of climate change could disrupt production on the Underlying Properties and cause T2S, any successor to T2S, or any other third-party operators to incur significant costs, thereby reducing cash distributable to Trust unitholders.
• Additional restrictions on drilling activities intended to protect certain species of wildlife may adversely affect T2S’s and other operators' ability to conduct drilling activities.
• The business of T2S or any successor to T2S could be negatively affected by various security threats, including cybersecurity threats, and other disruptions.
• The Trustee may be subject to attempted cybersecurity disruptions from a variety of sources.
• The Trust has not requested a ruling from the IRS regarding the tax treatment of the Trust. If the IRS were to determine (and be sustained in that determination) that the Trust is not a “grantor trust” for U.S. federal income tax purposes, the Trust could be subject to more complex and costly tax reporting requirements that could reduce the amount of cash available for distribution to Trust unitholders.
• Trust unitholders are required to pay U.S. federal income taxes on their share of the Trust’s income, even if they do not receive any cash distributions from the Trust.
• A portion of any gain recognized on the disposition of the Trust units could be taxed as ordinary income.
• The Trust generally allocates its items of income, gain, loss and deduction between transferors and transferees of the Trust units based upon the monthly record date. The IRS may challenge this treatment.
• Recent and potential changes in federal tax law may affect the tax treatment of an investment in the Trust units.
• BUSINESS AND OPERATING RISKS
• A bankruptcy of T2S , any successor to T2S, or any third-party operator could adversely affect the operation of the wells and the development of the proved undeveloped reserves and interrupt or decrease distributions to Trust unitholders.
• FINANCIAL RISKS
• RISKS RELATED TO THE STRUCTURE OF THE TRUST
• The Trust is passive in nature and neither the Trust nor the Trust unitholders have any ability to influence T2S and other third-party operators or control the operation or development of the Underlying Properties.
• T2S’s or its successor’s ability to perform its obligations to the Trust could be limited by restrictions under its debt agreements.
• Trust unitholders have limited ability to enforce provisions of the Conveyance creating the Net Profits Interest, and T2S’s and any successor’s liability to the Trust is limited.
• RISKS RELATED TO OWNERSHIP OF THE TRUST UNITS
• T2S's affiliate, Ustx, LLC (or any future owner of the units currently held by Ustx, LLC,) may sell Trust units in the public or private markets, and such sales could have an adverse impact on the trading price of the Trust units.
• LEGAL, ENVIRONMENTAL AND REGULATORY RISKS
• The potential physical effects of climate change could disrupt production on the Underlying Properties and cause T2S, any successor to T2S, and other third-party operators to incur significant costs, thereby reducing cash distributable to Trust unitholders.
• Additional restrictions on drilling activities intended to protect certain species of wildlife may adversely affect T2S’s and other operators’ ability to conduct drilling activities.
• CYBERSECURITY RISKS