Updated Again

PRELIMINARY PROXY STATEMENT – SUBJECT TO COMPLETION, DATED APRIL 5, 2019

Last one was updated on 4/4.  This is one day later.

Some changes/updates:

We do note that if the Trust were to hold annual elections of the entire Board, a party may have the ability to effect a change in control of the Trust at an annual meeting.

On water:

Mr. Oliver is not pre-judging any such approach, and believes each such option needs to be fully evaluated with proper outside consultants, in order to maximize value for holders of Shares.

Timeline update.  MLP idea is out due to new corp tax rate:

In 2016, SoftVest LP and ART-FGT suggested that the Trust actively consider converting some or all of its operations into a master limited partnership. This suggestion was driven by the belief that such structure could potentially result in increased distributions to investors due to the pass-through taxation treatment available to master limited partnerships. Written outlines of this alternative were delivered to the Trust on or about June 29, 2016 and October 25, 2016.

On or about December 15, 2016 SoftVest LP and ART-FGT submitted a further restructuring suggestion, which contemplated converting the Trust into a corporation and, thereafter, possibly into a master limited partnership.

Given various changes to US tax laws effected since 2016, including lower corporate tax rates, the Participants at this time are not suggesting that the Trust effect a conversion into a master limited partnership.

M&A possibilities:

On or about November 28, 2018, Mr. Tessler called Mr. Barry to convey that he had become aware that a certain oil and gas company (“Company A”) may be interested in discussing a possible negotiated business combination transaction with the Trust.

On or about January 22, 2019, Mr. Tessler sent an email to Mr. Barry regarding a potential business combination transaction with an oil and gas company (“Company B”), which is affiliated with Company A.

Mr. Oliver, if elected trustee, is committed to being open to any transaction that may create value for Trust investors, but he will only advocate for transactions that he believes will be in the best interest of Trust investors. At this time, Mr. Oliver and the other Participants do not have enough information to determine whether a transaction with Company A, Company B or another third party, if any of these is available, will be in the best interests of Trust investors.

 

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