912030--11/25/2009--TORCH_ENERGY_ROYALTY

related topics

{interest, director, officer}

{gas, price, oil}

{loss, insurance, financial}

{tax, income, asset}

{stock, price, operating}

{cost, regulation, environmental}

If gas and oil prices decline significantly, the Trust s cash flow from operations will likely decline and the Trust may have to lower the cash distributions or may not be able to pay distributions at all during the wind up and liquidation of the Trust. Trust expenses may have an adverse impact on the distributions to Unitholders during the wind up and liquidation of the Trust. The estimated reserve quantities in this report are based on many assumptions that may prove to be inaccurate. Any material inaccuracies in these reserve estimates or underlying assumptions will materially affect the quantities and present value of the Trust s reserves. As more Infill Wells are drilled, they could cause a reduction in amounts payable to the Trust or a purchaser of the Net Profits Interests. The Trust s business is subject to operational risks that may not be fully insured, which, if they were to occur, could adversely affect the Trust s financial condition or results of operations and, as a result, the Trust s ability to pay distributions to Unitholders. The Trust may be unable to compete effectively with larger companies, which may adversely affect the Trust s ability to generate sufficient revenue and its ability to pay distributions to Unitholders prior to the windup and liquidation of the Trust. The Trust s operations are subject to regulations which may limit the Trust s production of natural gas or the price that the Trust receives for natural gas. If it is determined that the Trust is subject to the Texas margin tax, the Trustee may have to withhold a disproportionate amount from future distributions to pay the tax liability. Because the Trust handles oil and gas petroleum products, the Trust may incur significant costs and liabilities in the future resulting from a failure to comply with new or existing environmental regulations or an accidental release of hazardous substances in the environment. Net Proceeds Attributable to the Robinson s Bend Field have declined significantly. The market price for the Trust s Units may not reflect the value of the Net Profits Interests held by the Trust. Financial information of the Trust is not prepared in accordance with GAAP. The Trust is dependent on certain service providers to provide various services to the Trust.

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912030--11/25/2009--TORCH_ENERGY_ROYALTY_TRUST