On October 13, 2020, Avalon Energy, LLC (“Avalon”) notified the Trust that on October 12, 2020, Avalon and Montare Resources I, LLC (“Montare”) entered into a Purchase and Sale Agreement, effective as of September 1, 2020, whereby Avalon sold wells and related assets associated with certain of its interests in specified oil and natural gas properties located in Andrews County, Texas (the “Underlying Properties”) to Montare, unburdened by the applicable portion of the royalty interests held by the Trust (the “Royalty Interests”), for approximately $4.9 million in accordance with Avalon’s contractual rights set forth in the Amended and Restated Trust Agreement governing the Trust (the “Trust Agreement”) and the conveyancing documents pursuant to which the Royalty Interests were conveyed to the Trust (the “Conveyances”) (the “Montare Sale”). Prior to the Montare Sale, Avalon engaged an independent petroleum engineering firm to determine the fair value of all wells burdened by Royalty Interests (the “Trust wells”). Avalon informed the Trust that Avalon then sold to Montare those Trust wells having a collective value of $4.9 million, leaving the 65 most valuable Trust wells burdened by Royalty Interests. The wells sold to Montare include 483 shut-in wells and 338 other wells with negative present value and 428 wells with positive present value. The Royalty Interests released by the Trust in connection with the Montare Sale represented approximately 32% of the fair value of the Royalty Interests at September 1, 2020, as determined by an appraisal prepared for Avalon by an independent petroleum engineering firm. The wells sold to Montare represented approximately 76% of production attributable to the Trust's Royalty Interests for the month ended August 31, 2020 (the most recent month for which production data is available). As required by the terms of the Trust Agreement, an officer of Avalon certified to the Trust that (i) the gross purchase price received by Avalon for the sale of the Underlying Properties was less than $5 million and (ii) the cash proceeds received by the Trust in respect of the Royalty Interests to be released in connection with such sale represents Fair Value (as defined in the Trust Agreement) to the Trust for such Royalty Interests. A copy of the independent petroleum engineering firm’s valuation report has been provided to the Trustee. The Montare Sale was completed on October 13, 2020, and all of the $4.9 million of proceeds that Avalon received from such sale have been paid to the Trust as fair value for the Royalty Interests required to be released by the Trustee in connection with the Montare Sale in accordance with Section 3.02 of the Trust Agreement. These proceeds will be distributed by the Trust, less any withholdings as determined by the Trustee, to Trust unitholders with the quarterly distribution, if any, for the three-month period ending December 31, 2020 (which primarily relates to production attributable to the Trust’s Royalty Interests from September 1, 2020 to November 30, 2020) in accordance with the terms of the Conveyances granting the Royalty Interests to the Trust. Such distribution is expected to occur in late February 2021.

The Trust is providing in this Current Report on Form 8-K pro forma financial information relating to the disposition of the Royalty Interests required to be released in connection with the Montare Sale. Such pro forma financial information is filed as Exhibit 99.2 to this Current Report on Form 8-K and is incorporated by reference into this Item 2.01.