Gulf Coast Ultra Deep Royalty Trust reported significant financial changes in its 10-Q filing for the period ending September 30, 2024. The Trust's operating cash decreased sharply to $1,512 from $43,741 as of December 31, 2023. Reserve fund cash and short-term investments also fell to $1,059,344 from $1,116,460, contributing to a total asset decline to $1,060,856 from $1,160,201. The reserve fund liability increased to $1,159,726, resulting in a negative trust corpus of $(98,870), down from $43,741 at the end of the previous fiscal year.

Interest income for the three months ended September 30, 2024, was $263, a significant drop from $1,696 in the same period of 2023. For the nine-month period, interest income decreased to $3,520 from $15,220 year-over-year. Administrative expenses for the three months ended September 30, 2024, were $84,282, down from $108,432 in 2023, while for the nine-month period, they rose to $662,047 from $469,822, attributed to the timing of expense payments.

The Trust did not receive any royalties during the three- and nine-month periods ended September 30, 2024, compared to $401,278 in royalties received during the same nine-month period in 2023. This lack of revenue is primarily due to the cessation of production from the sole well in the onshore Highlander subject interest, which was shut in on March 31, 2023, and subsequently abandoned in March 2024.

The Royalty Trust's financial strategy included withholding $8,750 from distributions each quarter from Q1 2022 to Q1 2023 to build a cash reserve of approximately $350,000. However, no funds were withheld for the cash reserve in Q3 2024 due to a lack of proceeds available for distribution. The Trust does not anticipate cash availability for future distributions unless a new well is drilled on the Highlander subject interest.

Freeport-McMoRan Inc. (FCX) has committed to covering annual trust expenses up to $350,000, contributing approximately $166,000 for 2023 and the maximum for 2024. As of September 30, 2024, the Royalty Trust had no outstanding indebtedness and established a minimum cash reserve of $302,500. The Trustee's annual compensation remains at $200,000, plus reimbursement for expenses.

Overall, the Royalty Trust's financial performance reflects a challenging operational environment, with significant declines in revenue and cash reserves, alongside increased administrative expenses.