Texas Royalty properties are located in 33 Texas counties.

  Waddell Ranch properties are located in Crane county.

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The net overriding royalty interests held by the Trust are carved out of high-quality producing oil and gas properties located primarily in West Texas. A production index for oil and gas properties is the number of years derived by dividing remaining reserves by current production. The production index for the Trust properties based on the reserve report prepared by independent petroleum engineers as of December 31, 2010, is approximately 10 years. The net profits/overriding royalty interest in the Waddell Ranch properties is the largest asset of the Trust. The mineral interests in the Waddell Ranch, from which such net royalty interests are carved vary from 37.5% (Trust net interest) to 50% (Trust net interest) in 78,715 gross (34,205 net) producing acres. A majority of the proved reserves are attributable to six fields: Dune, Sand Hills (Judkins), Sand Hills (McKnight), Sand Hills (Tubb), University-Waddell (Devonian) and Waddell. At December 31, 2010, the Waddell Ranch properties contained 797 gross (371 net) productive oil wells, 212 gross (87 net) productive gas wells and 267 gross (119 net) injection wells.

BROG is operator of record of the Waddell Ranch properties. All field, technical and accounting operations have been contracted by agreements between the working interest owners and Schlumberger Integrated Project Management (IPM) and Riverhill Capital Corporation ("Riverhill Capital"), but remain under the direction of BROG.

Six major fields on the Waddell Ranch properties account for more than 80% of the total production. In the six fields, there are 12 producing zones ranging in depth from 2,800 to 10,600 feet. Most prolific of these zones are the Grayburg and San Andres, which produce from depths between 2,800 and 3,400 feet. Also productive from the San Andres are the Sand Hills (Judkins) gas field and the Sand Hills (McKnight) oil field, the Dune (Grayburg/San Andres) oil field, and the Waddell (Grayburg/San Andres) oil field.

The Dune and Waddell oil fields are productive from both the Grayburg and San Andres formations. The Sand Hills (Tubb) oil fields produce from the Tubb formation at depths averaging 4,300 feet, and the University Waddell (Devonian) oil field is productive from the Devonian formation between 8,400 and 9,200 feet.

The Waddell Ranch properties are mature producing properties, and all of the major oil fields are currently being waterflooded for the purpose of facilitating enhanced recovery. Proved reserves and estimated future net revenues attributable to the properties are included in the reserve reports summarized below. BROG does not own the full working interest in any of the tracts constituting the Waddell Ranch properties and, therefore, implementation of any development programs will require approvals of other working interest holders as well as BROG. In addition, implementation of any development programs will be dependent upon oil and gas prices currently being received and anticipated to be received in the future. There was 1 gross (0.5 net) well drilled and completed on the Waddell Ranch properties during 2010. At December 31, 2010, there were 4 drill wells and 5 workovers in progress on the Waddell Ranch properties. There were 11 gross (5 net) wells drilled and completed on the Waddell Ranch properties during 2009. At December 31, 2009 there were no drill wells and 2 workovers in progress on the Waddell Ranch properties. There were 3 gross (1 net) wells drilled and completed on the Waddell Ranch properties during 2008. At December 31, 2008 there were 6 drill wells and 3 workovers in progress on the Waddell Ranch properties. In 2010, there were 0 net productive and 0 dry exploratory wells drilled, and 0.5 net productive and 0 dry development wells drilled on the Waddell Ranch properties, compared to no net productive and no dry exploratory wells drilled and 5 net productive and no dry development wells drilled in 2009. In 2008, there were no net productive and no dry exploratory wells drilled, and 1 net productive and no dry development wells drilled on the Waddell Ranch Properties.

BROG has advised the Trustee that the total amount of capital expenditures for 2010 with regard to the Waddell Ranch properties totaled $12.0 million. Capital expenditures include the cost of remedial and maintenance activities. This amount spent is approximately $10 million less than the budgeted amount projected by BROG for 2010. BROG has advised the Trustee that the capital expenditures budget for 2011 totals approximately $23 million, of which approximately $0 million (gross) is attributable to the 2011 drilling program, and $19 million (gross) to workovers and recompletions. The remaining $4 million is attributable to facilities. Accordingly, there is a 91% increase in capital expenditures for 2011 as compared with the 2010 capital expenditures. The major reason for the variance is the increase in the number of planned capital recompletions and an increased level of facility work. There will be no new drillwells in 2011 as compared to 0 in 2010.