All references to “we,” “us,” “our,” or the “Trust”“Trust” refer to SandRidge Permian Trust. References to “SandRidge”“SandRidge” refer to SandRidge Energy, Inc., and where the context requires, its subsidiaries. The royalty interests conveyed by SandRidge fromReferences to “Avalon” refer to Avalon Energy, LLC, and where the context requires, its interests in certain properties in the Permian Basin in Andrews County, Texas and held by the Trust are referred to as the “Royalty Interests.”

This Quarterly Report on Form 10-Q (“Quarterly Report”) includes “forward-looking statements” about the Trust, SandRidgeAvalon and other matters discussed herein that are subject to risks and uncertainties within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”“Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”“Exchange Act”). All statements other than statements of historical fact included in this document, including, without limitation, statements under “Management’s“Trustee’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 2 of Part I and elsewhere hereinin this Quarterly Report regarding the Trust’s or SandRidge’sAvalon’s plans and objectives for future operations, are forward-looking statements. Actual outcomes and results may differ materially from those projected. Forward-looking statements are generally accompanied by words such as “estimate,” “target,” “project,” “predict,” “believe,” “expect,” “anticipate,” “potential,” “could,” “may,” “foresee,” “plan,” “goal,” “should,” “intend” or other words that convey the uncertainty of future events or outcomes. We haveThe Trust has based these forward-looking statements on ourits current expectations and assumptions about future events. These statements are based on certain assumptions made by usthe Trust in light of ourits experience and ourits perception of historical trends, current conditions and expected future developments as well as other factors we believeit believes are appropriate under the circumstances. However, whether actual results and developments will conform with ourthe Trust’s expectations and predictions is subject to a number of risks and uncertainties, including the risk factors discussed in Item 1A of the Trust’s Annual Report on Form 10-K for the fiscal year ended December 31, 20162020 (the “2016“2020 Form 10-K”), which could affect the future results of the energy industry in general, and the Trust and SandRidgeAvalon in particular, and could cause those results to differ materially from those expressed in such forward-looking statements. The actual results or developments anticipated may not be realized or, even if substantially realized, they may not have the expected consequences to or effects on SandRidge’sAvalon’s business or the Trust’s results. Such statements are not guarantees of future performance and actual results or developments may differ materially from those projected in such forward-looking statements. The Trust undertakes no obligation to publicly update or revise any forward-looking statements.

SandRidge Permian Trust (the “Trust”“Trust”) is a statutory trust formed under the Delaware Statutory Trust Act pursuant to a trust agreement, as amended and restated, by and among SandRidge Energy, Inc. (“SandRidge”SandRidge”), as Trustor, The Bank of New York Mellon Trust Company, N.A., as Trustee (the “Trustee”“Trustee”), and The Corporation Trust Company, as Delaware Trustee (the “Delaware Trustee”“Delaware Trustee”) (such amended and restated trust agreement, as amended to date, the “Trust Agreement”).

The Trust holds held overriding royalty interests (the “Royalty Interests”) conveyed by SandRidge from its interests in specified oil and natural gas properties located in Andrews County, Texas (the “Underlying Properties”“Underlying Properties”)., until the sale of the Royalty Interests in June 2021, effective July 1, 2021 (the “Asset Sale”), as discussed in Note 2 below under “Liquidation of the Trust.” The Royalty Interests were conveyed by SandRidge to the Trust concurrent with the initial public offering and sale of the Trust’s34,500,000 Trust common units (“Trust units”) in August 2011.2011 pursuant to the terms set forth in conveyancing documents effective April 1, 2011 (the “Conveyances”). As consideration for conveyance of the Royalty Interests, the Trust remitted the net proceeds of the offering, along with 4,875,000 Trust common units and 13,125,000 Trustunregistered subordinated units of the Trust (“subordinated units”), to certain wholly ownedwholly-owned subsidiaries of SandRidge.

Pursuant to a development agreement between the Trust and SandRidge, SandRidge was obligated to drill, or cause to be drilled, 888 development wells within an area of mutual interest located in Andrews County, Texas by March 31, 2016. SandRidge fulfilled this obligation in November 2014. As no additional development wells will be drilled, the production attributable to the Trust’s Royalty Interests is expected to decline each quarter during the remainder of the Trust’s existence. As a result of SandRidge fulfilling its drilling obligation, in accordance with the terms of the Trust Agreement, the subordinated units were converted to Trust units in January 2016. At September 30, 2017,October 31, 2018, SandRidge owned 13,125,000 Trust units, or 25% of all Trust units.

On November 1, 2018, SandRidge sold all of its interests in the Underlying Properties and all of its outstanding Trust units (the “Sale Transaction”) to Avalon Energy, LLC, a Texas limited liability company (“Avalon”). The Conveyances permitted SandRidge to sell all or any part of its interest in the Underlying Properties, where the Underlying Properties were sold subject to and burdened by the Royalty Interests. In connection with the Sale Transaction, Avalon and its affiliates assumed all of SandRidge’s obligations under the Conveyances, the Trust Agreement and the administrative services agreement between SandRidge and the Trust (the “Administrative Services Agreement”) pursuant to which SandRidge and Avalon have provided accounting, tax preparation, bookkeeping and informational services to the Trust. In addition, SandRidge assigned its rights under the registration rights agreement between SandRidge and the Trust to Avalon. As of June 30, 2021, Avalon owned 13,125,000 Trust units, or 25% of all Trust units.

In connection with the Sale Transaction, Avalon obtained a revolving line of credit from Washington Federal Bank, National Association, formerly Washington Federal, National Association (“WaFed”), pursuant to the terms of a Loan Agreement and related security documents (the “WaFed Loan”). Avalon used the proceeds of the WaFed Loan to fund a portion of the purchase price for the interests in the Underlying Properties and Trust units acquired in the Sale Transaction. Until the release of WaFed’s liens as described under “Sale of Assets by Avalon to Montare” in Note 2 below, the WaFed Loan was secured by a first lien mortgage on Avalon’s interest in the Underlying Properties and a pledge of the Avalon Trust units (the “WaFed Collateral”). The Royalty Interests are not part of the WaFed Collateral.

The Trust is passive in nature and neither the Trust nor the Trustee has any control over, or responsibility for, or involvement with, any operating oraspect of the oil and natural gas operations, capital costs or other activities related to the Underlying Properties. The business and affairs of the Trust are administered by the Trustee. The trust agreementTrust Agreement generally limits the Trust’s business activities to owning the Royalty Interests and certain activities reasonably related thereto, including activities required or permitted by the terms of the conveyances related to the Royalty Interests.

The Trust makes quarterly cash distributions of substantially all of its cash receipts, after deducting amounts for the Trust’s administrative expenses, property taxtaxes and Texas franchise taxtaxes, and cash reserves determined and withheld by the Trustee in its sole discretion, on or about the 60th day following the completion of each calendar quarter. Due to the timing of the payment of production proceeds to the Trust attributable to the Royalty Interests, each distribution covers production fromfor a three-month calendar period consisting of the first two months of the most recently ended calendar quarter and the final month of the quarter preceding it.

2. Early Termination of the Trust and Going Concern

The accompanying financial statements have been prepared assuming that the Trust will continue as a going concern.  However, as explained in further detail below, the Trust is in the process of dissolution and there is substantial doubt that it will continue as a going concern for the period of one year from the date of issuance of these financial statements.

Avalon’s Financial Condition. As previously reported in the Trust’s Form 8-K filed on April 23, 2020, Avalon informed the Trustee that during 2019, Avalon repaired 29 producing Trust Wells (although not required to do so under the terms of the Conveyances) in an effort to increase production. Avalon reported that the working capital expended in this effort, combined with higher-than-expected lease operating expenses (“LOE”) and declining oil prices, contributed to an operating loss for Avalon in 2019 and 2020. Despite Avalon’s efforts to reduce LOE (including shutting in some oil and gas wells subject to the Royalty Interests (“Trust Wells”) that were not capable of producing oil and natural gas in paying quantities, as permitted under the Conveyances, alternating production to reduce electrical and other field operating costs, and staff lay-offs). Furthermore, Avalon informed the Trustee that it was likely to shut in additional Trust Wells, to further reduce LOE. The reduced demand for crude oil in the global market resulting from the economic effects of the COVID-19 pandemic and the dramatic reduction from mid-February to late April 2020 in the benchmark price of crude oil has had a further negative impact on Avalon’s financial condition resulting in Avalon shutting in additional non-economic Trust Wells (which were not necessary to hold the leasehold interests burdened by the Trust’s Royalty Interests). Avalon shut in 139 Trust Wells and 114 Trust Wells during the twelve-month periods ended December 31, 2019 and 2020, respectively. No Trust Wells were shut in during the six-month period ended June 30, 2021.

Given Avalon’s financial condition, in early 2020 the Board of Managers of Avalon decided to explore strategic alternatives with respect to its assets, including the Underlying Properties and the Avalon Trust units. After a number of discussions regarding a possible transaction with potential strategic partners during the first half of 2020, on July 30, 2020, Avalon entered into a letter agreement with Montare Resources I, LLC, a Texas limited liability company (“Montare”), agreeing to negotiate exclusively with Montare regarding a possible sale of Avalon assets, including the Underlying Properties, to Montare and supporting Montare in any transaction negotiated with the Trust with respect to the acquisition of all Trust units not owned by Montare. On January 1, 2016, the subordinated units, initially issuedsame date, Avalon and WaFed entered into an amendment to SandRidge, automatically convertedthe WaFed Loan that extended the date on which Avalon was obligated to provide a reserve report to WaFed (regarding the redetermination of the borrowing base) to September 15, 2020 and required Avalon to pay off the WaFed Loan by October 15, 2020. In addition, WaFed and Montare entered into common units on a one-for-one basis asParticipation Agreement with respect to the WaFed Loan whereby Montare purchased an undivided participation interest in the WaFed Loan along with the right to purchase the WaFed Loan in the event Avalon does not meet the conditions of the amended WaFed Loan. As a result of SandRidgeits operating loss in 2019, Avalon’s independent public accounting firm included a going concern paragraph in its audit report on Avalon’s financial statements for the fiscal year ended December 31, 2019.

The May 2020 Quarterly Payment. In April 2020, Avalon also informed the Trustee that Avalon had been using its commercially reasonable efforts to preserve the oil and gas leases burdened by the Royalty Interests so that in the future, assuming that oil prices returned to a profitable level, the Trust would still hold its Royalty Interests, and Trust unitholders might have the opportunity to receive future quarterly distributions. Avalon also informed the Trustee that it believed that continuing production from those Trust Wells required to preserve such leases was preferable to stopping production, as the failure to continue production would result in a termination of Avalon’s working interest in such Trust Wells and, therefore, the Royalty Interests, which would have a material adverse effect on the Trust’s financial condition. Avalon reported to the Trustee that Avalon therefore used revenues it received during the production period from December 1, 2019 to February 29, 2020 to pay the operating expenses necessary to maintain production from the Trust Wells and to pay oil and gas lessor royalties, as the proceeds attributable to Avalon’s net revenue interest in the Underlying Properties were insufficient to cover all such costs. Avalon had anticipated that revenues from production during the quarterly production period commencing March 1, 2020 would be sufficient to fund the quarterly payment to the Trust for the quarter ended March 31, 2020 in the amount of approximately $4.65 million (the “May 2020 Quarterly Payment”); however, revenues from production during that quarterly production period were insufficient to generate the cash needed to make the May 2020 Quarterly Payment to the Trust due to the sharp drop in crude oil prices during the first quarter of 2020. Consequently, the Trustee was unable to make any quarterly distribution to unitholders at the end of May 2020. In accordance with Section 5.02 of the Conveyances, the unpaid May 2020 Payment amount due and owing to the Trust has been accruing interest since May 15, 2020 at the rate of interest per annum publicly announced from time to time by The Bank of New York Mellon Trust Company, N.A. as its “prime rate” in effect at its principal office in New York City until paid to the Trust.

On March 1, 2021, the Trust and Avalon entered into a repayment agreement setting forth the terms by which Avalon agreed to pay the May 2020 Quarterly Payment to the Trust, together with accrued interest (the “Repayment Agreement”). Beginning with the quarterly distribution paid to Trust unitholders on or about February 26, 2021, Avalon agreed to apply towards the payment of the May 2020 Quarterly Payment the full amount of each quarterly cash distribution, if any, to which Avalon, as a unitholder of the Trust, is entitled until the May 2020 Quarterly Payment, together with accrued interest, has been paid in full to the Trust, subject to any obligations Avalon may have to repay the WaFed Loan that are not waived by WaFed as provided in the Agreement. 

On June 23, 2021, Avalon directed the Trustee, beginning with the three-month period ended June 30, 2021, to offset the amounts owed to Avalon Energy by the Trust under the Administrative Services Agreement as partial payment of the outstanding balance of the May 2020 Quarterly Pament to the Trust. Section 3.02 of the Administrative Services Agreement provides that in the event Avalon or any of its affiliates owes the Trust a sum certain in an uncontested amount under any other agreement, then any such amount may, in the sole discretion of Avalon, be aggregated and the Trust and Avalon will discharge their obligations by netting those amounts against any amounts owed by the Trust to Avalon under the Administrative Services Agreement. As a result of this offset, approximately $300,000 was credited toward the payment of the May 2020 Quarterly Payment.

On June 24, 2021, the Trust and Montare entered into an assignment agreement (the “Assignment”) pursuant to which Montare agreed to pay the Trust approximately $3.2 million representing payment in full of the remaining unpaid portion of the May 2020 Quarterly Payment, together with accrued interest, in exchange for the assignment by the Trust of the Trust’s rights and obligations under the Repayment Agreement, which amount was paid contemporaneously with the execution of the Assignment. The Trustee will distribute the cash received from Montare, less any amounts withheld to pay expenses of the Trust, to the Trust unitholders on the quarterly cash distribution date in August 2021.

Subsequent Distributions. As a result of improving oil prices, the Trust was able to make quarterly distributions for the three-month periods ended June 30, 2020 (which primarily relates to production attributable to the Trust’s Royalty Interests from March 1, 2020 to May 31, 2020) and September 30, 2020 (which primarily relates to production attributable to the Trust’s Royalty Interests from June 1, 2020 to August 31, 2020) of approximately $652,000 and $1,732,000. There was no distribution for the three-month period ended December 31, 2020 (which relates to production attributable to the Royalty Interests from September 1, 2020 to November 30, 2020) as costs, charges and expenses attributable to the Underlying Properties exceeded the revenue received from the sale of oil, natural gas and other hydrocarbons produced from the Underlying Properties. The Trust also made a quarterly distribution for the three-month period ended March 31, 2021 (which relates in part to production attributable to the Royalty Interests from December 1, 2020 to February 28, 2021) of approximately $1,470,000 (of which approximately $143,000 relates to production). The Trust has announced a quarterly distribution for the three-month period ended June 30, 2021 (which relates in part to production attributable to the Royalty Interests from March 1, 2021 to May 31, 2021) of approximately $9,500,000 (of which approximately $380,000 relates to production). See “—Liquidation of the Trust” below and “Subsequent Events” in Note 7 for further information regarding this distribution.

Sale of Assets by Avalon to Montare. On August 26, 2020, Montare, Avalon and certain of their respective affiliates entered into a Contribution and Support Agreement, pursuant to which Avalon, among other things, (i) agreed, subject to certain conditions, to contribute all of the assets held by Avalon and its affiliates, including the Underlying Properties and the Avalon Trust units, to Montare in exchange for interests in Montare or an affiliate thereof (the “Contribution Transaction”), (ii) agreed to support Montare’s acquisition of all of the issued and outstanding Trust units not owned by Avalon by means of a transaction with the Trust or as otherwise determined by Montare in its sole discretion (the “Montare Transaction”), and any related actions taken by Montare with respect to the Montare Transaction, including by exercising any of Avalon’s rights under the Trust Agreement, (iii) granted exclusivity and an irrevocable proxy to Montare to vote all Trust units beneficially owned by Avalon in connection with the Montare Transaction, and (iv) to not take any action that, directly or indirectly, is detrimental to or hinders Montare’s ability to consummate the Montare Transaction. The consummation of the Contribution Transaction is subject to certain conditions, including Montare’s determination in its sole and absolute discretion that all conditions necessary for the consummation of the Montare Transaction have been satisfied or waived. After preliminary discussions between Montare and the Trust regarding the Montare Transaction ended (as previously reported by Avalon and Montare in Amendment No. 3 to their joint Schedule 13D filed on September 8, 2020 and by the Trust in its Form 8-K filed on September 8, 2020), Montare and Avalon amended the Contribution and Support Agreement effective October 12, 2020. As amended, the Contribution and Support Agreement contemplates a sale of Avalon assets having meta value of less than $5.0 million, in accordance with the terms of the Trust Agreement, to Montare free from and unburdened by the applicable portion of the Royalty Interests held by the Trust.

On October 12, 2020, Montare and Avalon entered into a Purchase and Sale Agreement, effective as of September 1, 2020, whereby Avalon sold wells and related assets associated with certain Underlying Properties to Montare, unburdened by the applicable portion of the Royalty Interests held by the Trust, for approximately $4.9 million in accordance with Avalon’s contractual rights set forth in the Trust Agreement and the Conveyances (the “Montare Sale”). Prior to the Montare Sale, Avalon engaged an independent petroleum engineering firm to determine the fair value of substantially all wells burdened by the Trust’s Royalty Interests (the “Trust Wells”). A copy of the independent petroleum engineering firm’s valuation report has been provided to the Trustee. Avalon informed the Trustee that Avalon then sold to Montare those Trust Wells having a collective value of approximately $4.9 million, retaining ownership of 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 wells sold to Montare represented approximately 76% of production attributable to the Trust’s Royalty Interests for the month ended May 31, 2020 (the most recent month prior to the sale for which production data was available). 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 previously reported by the Trust in its drilling obligationForm 8-K filed October 14, 2020, Avalon notified the Trust of the Montare Sale on October 13, 2020. 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 specified Trust Wells was less than $5 million and (ii) the cash proceeds received by the Trust in respect of the Royalty Interests required to be released in connection with such sale represents Fair Value (as defined in the Trust Agreement) to the Trust for such Royalty Interests. The Montare Sale was completed on October 13, 2020, and all of the approximately $4.9 million of proceeds that Avalon received from such sale were paid to the Trust in November 2014. PriorOctober 2020 as fair value for the Royalty Interests required to this conversion,be released by the common and subordinated units had identical rights and privileges, exceptTrustee in connection with respect to their rights to receive distributions.

On October 30, 2020, Avalon and WaFed entered into the third amendment to the WaFed Loan that (i) extends the date by which Avalon is required to provide a reserve report of an independent petroleum engineer to WaFed (regarding the redetermination of the WaFed Loan borrowing base) to April 15, 2021, (ii) requires Avalon to pay off the WaFed Loan by April 15, 2021, and (iii) provides a partial release of Trust Wells located on certain of the Underlying Properties in connection with the Montare Sale. In addition, WaFed and Montare modified the Participation Agreement, and Montare purchased an additional interest in the WaFed Loan.

Effective April 15, 2021, Avalon and WaFed entered into a fourth amendment to the WaFed Loan. This amendment (i) extends the date by which Avalon is obligated to provide a reserve report of an independent petroleum engineer to WaFed (regarding the redetermination of the WaFed Loan borrowing base) to December 15, 2021, (ii) provides a partial waiver of violations of financial covenants to December 15, 2021, and (iii) requires Avalon to pay off the loan on the earlier to occur of the date that the Contribution Transaction is consummated or December 15, 2021. In addition, Montare and WaFed modified the Participation Agreement with Montare purchasing an additional interest in the WaFed Loan and agreeing to further purchases of additional interests in the future.

On June 30, 2021, Montare and Avalon entered into an Amended and Restated Contribution and Support Agreement that amends and restates in its entirety the Contribution and Support Agreement, as amended. See “Subsequent Events” in Note 7 for such quarter (“Incentive Threshold”).further disclosure regarding the Contribution Transaction. In addition, on June 30, 2021, Montare and WaFed entered into an Amended and Restated Participation Agreement pursuant to which Montare acquired the remaining balance of the WaFed Loan. As a result, WaFed has released all of its liens on the Avalon assets, including the 13,125,000 Trust units representing 25% of all Trust units.

Liquidation of the conversion of the subordinated units to common units in January 2016, SandRidge’s right to receive incentive distributions in respect of subsequent periods terminated. Beginning with the Trust’s May 2016 distribution, distributions made on common units no longer have the benefit of the Subordination Threshold, nor are the common units subject to the Incentive Threshold, and all Trust unitholders share on a pro rata basis in the Trust’s distributions.

Basis of Accounting.  The financial statements of the Trust differ from financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”GAAP”) as the Trust records revenues when cash is received (rather than when earned) and expenses when paid (rather than when incurred) and may also establish cash reserves for contingencies, which would not be accrued in financial statements prepared in accordance with GAAP. This comprehensive basis of accounting other than GAAP corresponds to the accounting permitted for royalty trusts by the Securities and Exchange Commission (“SEC”)SEC as specified by Staff Accounting Bulletin Topic 12:E, Financial Statements of Royalty Trusts. Amortization of investment in royalty interests,the Royalty Interests, calculated on a unit-of-production basis, and any impairments are charged directly to the trust corpus. Distributions to unitholders are recorded when declared.

Significant Accounting Policies.Most accounting pronouncements apply to entities whose financial statements are prepared in accordance with GAAP, which may require such entities to accrue or defer revenues and expenses in a period other than when such revenues are received, or expenses are paid. Because the Trust’s financial statements are prepared on the modified cash basis as described above, most accounting pronouncements are not applicable to the Trust’s financial statements.

The Trust is treated for federal and applicable state income tax purposes as a partnership. For U.S. federal income tax purposes, a partnership is not a taxable entity and incurs no U.S. federal income tax liability.

With respect to state taxation, a partnership is typically treated in the same manner as it is for U.S. federal income tax purposes.  However, the Trust’s activities result in the Trust having nexus in Texas and, therefore, make it subject to Texas franchise tax. Texas franchise tax is treated as an income tax for financial statement purposes. The Trust is required to pay Texas franchise tax each year at a maximum effective rate (subject to changes in the statutory rate) of 0.525% of its gross income, apportioned toall of which is realized from activities in Texas. The Trust records Texas franchise tax when paid.

Distributable Income Per Common and Subordinated Unit.For the periods prior to the conversion of the Trust’s subordinated units to common units, the Trust calculated distributable income per common and subordinated unit using the two-class method. In accordance with this method, undistributed earnings in the accompanying unaudited statements of distributable income were allocated to the common and subordinated units based upon the subordinated units’ contractual participation rights as if all of the distributable income for the periods presented had been distributed. Distributable income per unit amounts as calculated for the periods presented in the accompanying unaudited statements of distributable income may differ from declared distribution amounts per unit due to rounding. Beginning withrounding and the timing of the Trust’s May 2016 distribution, distributions made on common units no longer have the benefitpayment of the Subordination Threshold, nor are the common units subject to the Incentive Threshold,Trust administrative expenses and all Trust unitholders share on a pro rata basis in the Trust’s distributions.

The Trust makes quarterly cash distributions of substantially all of its cash receipts, after deducting amounts for the Trust’s administrative expenses, property taxtaxes and Texas franchise taxtaxes, and cash reserves withheld by the Trustee, on or about the 60th day following the completion of each calendar quarter. Distributions cover a three-month production period. See Note 6 for discussionperiod consisting of the Trust’sfirst two months of the most recently ended calendar quarter and the final month of the preceding calendar quarter. As the effective date of the Asset Sale was July 1, 2021, Montare is entitled to receive all proceeds from the oil and natural gas production attributable to the Royalty Interests from and after July 1, 2021, for the production period commencing on June 1, 2021. Therefore, the Trust will not receive any further proceeds from such production after June 30, 2021 and will not make any further regular quarterly cash distributions to the Trust unitholders following the distribution to be paidmade in November 2017.August 2021 with respect to the quarterly period ended June 30, 2021 as described in Note 7 below. A summary of the Trust’s distributions to unitholders during the nine-month periodthree and six-month periods ended SeptemberJune 30, 20172021 and each calendar quarter during the year ended December 31, 20162020 is as follows:

Trustee Administrative Fee.  Under the terms of the trust agreement,Trust Agreement, the Trust pays an annual administrative fee of approximately $150,000 to the Trustee, which increased by 2.1% as of April 1,prior to 2017 to $153,150 annually andwas $150,000. The annual administrative fee can be adjusted for inflation by no more than 3% in any year. The Trustee’s administrative fees paid during each of the three-month periods ended SeptemberJune 30, 20172021 and 20162020 totaled approximately $38,000.$41,000 and $40,000, respectively. The Trustee’s administrative fees paid during each of the nine-monthsix-month periods ended SeptemberJune 30, 20172021 and 20162020 totaled approximately $113,000.

Registration Rights Agreement. The Trust is party to a registration rights agreement pursuant to which the Trust has agreed to register the offering of the Trust units held by SandRidge and certain of its affiliates and permitted transferees upon request by SandRidge. The holders have the right to require the Trust to file no more than five registration statements in aggregate, one of which has been filed to date. The Trust does not bear any expenses associated with such transactions.