Revenue from natural gas royalties amounted to $81,913 in fiscal 2020, an increase from the
$77,881 realized in fiscal 2019. In fiscal 2020, the average price per mcf of natural gas decreased to $2.44 from the $3.52 realized in fiscal 2019. In fiscal 2020, natural gas production increased to 33,639 mcf from the 22,147 mcf produced in
fiscal 2019.
General and administrative expenses for fiscal 2020 amounted to $214,075, a decrease from the $226,471 recorded in
fiscal 2019, due to a decrease in professional fees, transfer agent fees and printing expenses.
Capital Resources and Liquidity.
The Trusts Indenture (and the charter and by-laws of MPC) expressly prohibits the operation of any kind of trade or business. Due to the limited purpose of the Trust as stated in the Trusts
Indenture, there is no requirement for capital. Its only obligation is to distribute to unitholders the distributable income actually collected.
As an administrator of oil and natural gas royalty properties, the Trust collects income monthly, pays expenses of administration and
disburses all distributable income collected to its unitholders each quarter, less an amount reserved for accrued liabilities and estimated future expenses. Because all of Marines revenues are invested in liquid funds pending distribution,
Marine does not experience liquidity problems.
Marines oil and natural gas properties are depleting assets and are not being
replaced due to the prohibition against these investments. These restrictions, along with other factors, allow the Trust to be treated as a non-taxable grantor trust for U.S. Federal income tax purposes.
Accordingly, all of Marines income and deductions should flow through to its unitholders on a proportionate basis. MPC will owe U.S. Federal (and state) income taxes with respect to its income after deducting statutory
depletion. MPCs income specifically excludes 98% of oil and natural gas royalties collected by MPC, which are retained by and delivered to the Trust in respect of the Trusts net profits interest.
The Trust does not currently have any long-term contractual obligations, other than the obligation to make distributions to unitholders
pursuant to the Indenture. The Trust does not maintain any off-balance sheet arrangements within the meaning of Item 303 of Regulation S-K.
Forward-Looking Statements. The statements discussed in this Annual Report on Form 10-K
regarding Marines future financial performance and results of operations, and other statements that are not historical facts, are forward-looking statements as defined in Section 27A of the Securities Act of 1933, as amended and
Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act). Marine uses the words may, expect, anticipate, estimate, believe, continue,
intend, plan, budget, or other similar words to identify forward-looking statements. All forward-looking statements speak only as of the date on which they are made. You should read statements that contain these
words carefully because they discuss future expectations, contain projections of Marines financial condition, and/or state other forward-looking information. Actual results may differ from expected results because of factors, risks
and uncertainties including, but not limited to, the following: reductions in prices or demand for oil and natural gas, due to, for example, the COVID-19 pandemic, which might then lead to decreased production
or impair Marines ability to make distributions; reductions in production due to the depletion of existing wells or disruptions in service, which may be caused by storm damage to production facilities, blowouts or other production accidents,
or geological changes such as cratering of productive formations; changes in regulations; general economic conditions; actions and policies of petroleum producing nations; other changes in domestic and international energy markets; the resignation
of the Trustee; and the expiration, termination or release of leases subject to Marines interests. Events may occur in the future that Marine is unable to accurately predict, or over which it has no control. If one or more of these
uncertainties as well as other risks of which we are not aware materialize, or if underlying assumptions prove incorrect, actual outcomes may vary materially from those contained in the forward-looking statements included in this Annual Report on
Form 10-K.
Website. Marine has an Internet website and has made available its
Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to such reports, filed
or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, at www.marps-marine.com. Each of these reports will be posted on this website as soon as reasonably practicable after such report is electronically filed with or furnished to
the SEC.
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