Critical Accounting Policies. The financial statements of Marine have been prepared on the modified cash basis method and are not intended to present financial position and results of operations in conformity with GAAP. Under the modified cash basis method:

• Royalty income is recognized when received by Marine.

• Marine's expenses (which include accounting, legal, and other professional fees, Trustees' fees and out-of-pocket expenses) are recorded on an actual paid basis. Reserves for liabilities that are contingent or uncertain in amount may also be established if considered necessary.

• Distributions to unitholders are recognized when declared by the Trustee of the Trust.

The financial statements of Marine differ from financial statements prepared in conformity with GAAP because of the following:

• Royalty income is recognized in the month received rather than in the month of production.

• Reserves may be established for contingencies that would not be recorded under GAAP.

• Expenses are recorded in the month paid rather than in the month incurred.

This comprehensive basis of accounting corresponds to the accounting principles permitted for royalty trusts by the SEC, as specified by Staff Accounting Bulletin Topic 12:E, Financial Statements of Royalty Trusts.

The preparation of financial statements in conformity with the modified cash basis method of accounting requires the Trustee to make various estimates and assumptions that affect the reported amount of liabilities at the date of the financial statements and the reported amount of expenses during the reporting period. Actual results may differ from such estimates.

Results of Operations. Marine's revenues are derived from the oil and natural gas production activities of third parties. Marine's revenues and distributions fluctuate from period to period based upon factors beyond Marine's control, including, without limitation, the number of leases subject to Marine's interests, the number of productive wells drilled on leases subject to Marine's interests, the level of production over time from such wells and the prices at which the oil and natural gas from such wells are sold.

Marine's results of operations are significantly impacted by oil and natural gas prices and the quantity of oil and natural gas production. Oil and natural gas prices have historically experienced significant volatility. Marine is not permitted to manage its commodity price risk through the use of fixed price contracts or financial derivatives.

Marine's income consists primarily of oil and natural gas royalties and is based on the value at the well of its percentage interest in oil and natural gas sold without reduction for any of the expenses of production. "Value at the well" for oil means the purchasers' selling price at its receiving point onshore, less the cost of transportation from the offshore lease to the onshore receiving point. "Value at the well" for natural gas means the selling price less the cost of compression, dehydration and transportation from the lease to the delivery point of the pipeline transporting the product to market. In general, value at the well is determined on the basis of the selling price of oil, natural gas and other minerals produced, saved and sold, or at wellhead prices determined by industry standards, where the selling price does not reflect value at the well. In the event an agreement is not arms-length in nature, the value is based upon current market prices.

Summary Review. In general, Marine receives royalties two months after oil production and three months after natural gas production. The March 2012 distribution decreased slightly from the December 2011 distribution, from $0.521592 per unit to $0.502340 per unit, and the June 2012 distribution decreased from the March 2012 distribution, from $0.502340 per unit to $0.431052 per unit. The September 2012 distribution decreased from the June 2012 distribution, from $0.431052 per unit to $0.383767 per unit.

Marine's distributable income for fiscal 2012 amounted to $3,816,713 or $1.91 per unit as compared to $3,187,776 or $1.59 per unit in fiscal 2011 and $2,640,561 or $1.32 per unit in fiscal 2010.

These results also include income from the Trust's interest in Tidelands, which amounted to $355,643 for fiscal 2012, $591,119 for fiscal 2011 and $835,401 for fiscal 2010. Income from Tidelands contributed approximately 9% of Marine's royalty income for fiscal 2012 as compared to 17% and 28% of Marine's royalty income for fiscal 2011 and 2010, respectively.

The following table shows the number of wells drilled or recompleted on leases in which Marine has an interest (including its interest in Tidelands) and the number of active wells at the end of each of the past three fiscal years.

                                                   Fiscal Year Ended June 30,
                                              2012            2011            2010
    Wells Drilled or Recompleted (Gross)             8              24              24
    Active Wells (Gross)                           206             206             210

The following table and related discussion and analysis shows the royalty income, the net quantities sold, and the average price received for oil and natural gas during fiscal 2012, 2011 and 2010, excluding the Trust's interest in Tidelands.

                                             Fiscal Year Ended June 30,
                                        2012            2011            2010
         Income from:
         Oil royalties               $ 3,093,122     $ 2,135,847     $ 1,506,768
         Natural gas royalties       $   662,436     $   716,560     $   601,835
         Totals                      $ 3,755,558     $ 2,852,407     $ 2,108,603
         Net quantities sold:
         Oil (bbls)                       26,896          24,207          21,168
         Natural gas (mcf)               139,328         145,719         129,349
         Average price:
         Oil (per bbl) (1)           $    115.00     $     88.23     $     71.18
         Natural gas (per mcf) (1)   $      4.75     $      4.92     $      4.65

(1) These amounts are net of the cost of transportation from offshore leases to onshore receiving points.

Fiscal Year 2012 Compared to Fiscal Year 2011. During fiscal 2012, Marine received approximately 82% of its royalty income from the sale of oil and 18% from the sale of natural gas, as compared to approximately 75% of its royalty income from the sale of oil and 25% from the sale of natural gas in fiscal 2011. Income from oil and natural gas royalties in fiscal 2012 increased approximately 32% from fiscal 2011, primarily due to increased prices realized for oil and an increase in production of oil.

Revenue from oil royalties amounted to $3,093,122 in fiscal 2012, an increase from the $2,135,847 realized in fiscal 2011. The average price realized for a barrel of oil increased to $115.00 from the $88.23 realized in fiscal 2011. In fiscal 2012, oil production increased to 26,896 barrels from the 24,207 barrels produced in fiscal 2011.

Revenue from natural gas royalties amounted to $662,436 in fiscal 2012, a decrease from the $716,560 realized in fiscal 2011. In fiscal 2012, the average price per mcf of natural gas decreased to $4.75 from the $4.92 realized in fiscal 2011. In fiscal 2012, natural gas production decreased to 139,328 mcf from the 145,719 mcf produced in fiscal 2011.

General and administrative expenses for fiscal 2012 amounted to $294,517, an increase from the $255,750 recorded in fiscal 2011, due to an increase in professional fees and expenses.

Fiscal Year 2011 Compared to Fiscal Year 2010. During fiscal 2011, Marine received approximately 75% of its royalty income from the sale of oil and 25% from the sale of natural gas, as compared to approximately 71% of its royalty income from the sale of oil and 29% from the sale of natural gas in fiscal 2010. Income from oil and natural gas royalties in fiscal 2011 increased approximately 35% from fiscal 2010, primarily due to increased prices realized for oil and natural gas and an increase in production of both oil and natural gas.

Revenue from oil royalties amounted to $2,135,847 in fiscal 2011, an increase from the $1,506,768 realized in fiscal 2010. The average price realized for a barrel of oil increased to $88.23 from the $71.18 realized in fiscal 2010. In fiscal 2011, oil production increased to 24,207 barrels from the 21,168 barrels produced in fiscal 2010.

Revenue from natural gas royalties amounted to $716,560 in fiscal 2011, an increase from the $601,835 realized in fiscal 2010. In fiscal 2011, the average price per mcf of natural gas increased to $4.92 from the $4.65 realized in fiscal 2010. In fiscal 2011, natural gas production increased to 145,719 mcf from the 129,349 mcf produced in fiscal 2010.

General and administrative expenses for fiscal 2011 amounted to $255,750, a decrease from the $303,454 recorded in fiscal 2010, due to a decrease in professional fees and expenses.

Capital Resources and Liquidity. The Trust's Indenture (and the charter and by-laws of MPC) expressly prohibits the operation of any kind of trade or business. Due to the limited purpose of the Trust as stated in the Trust's Indenture, there is no requirement for capital. Its only obligation is to distribute to unitholders the distributable income actually collected.

As an administrator of oil and natural gas royalty properties, the Trust collects income monthly, pays expenses of administration and disburses all distributable income collected to its unitholders each quarter. Because all of Marine's revenues are invested in liquid funds pending distribution, Marine does not experience liquidity problems.

Marine's oil and natural gas properties are depleting assets and are not being replaced due to the prohibition against these investments. These restrictions, along with other factors, allow the Trust to be treated as a non-taxable grantor trust for U.S. Federal income tax purposes. Accordingly, all of Marine's income and deductions should flow through to its unitholders on a proportionate basis. MPC will owe U.S. Federal (and state) income taxes with respect to its income after deducting statutory depletion. MPC's income specifically excludes 98% of oil and natural gas royalties collected by MPC, which are retained by and delivered to the Trust in respect of the Trust's net profits interest.

The Trust does not currently have any long term contractual obligations, other than the obligation to make distributions to unitholders pursuant to the Indenture. The Trust does not maintain any off-balance sheet arrangements within the meaning of Item 303 of Regulation S-K promulgated by the SEC.

Forward-Looking Statements. The statements discussed in this Annual Report on Form 10-K regarding Marine's future financial performance and results of operations, and other statements that are not historical facts, are forward-looking statements as defined in Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Marine uses the words "may," "expect," "anticipate," "estimate," "believe," "continue," "intend," "plan," "budget," or other similar words to identify forward-looking statements. All forward-looking statements speak only as of the date on which they are made. You should read statements that contain these words carefully because they discuss future expectations, contain projections of Marine's financial condition, and/or state other "forward-looking" information. Actual results may differ from expected results because of factors, risks and uncertainties including, but not limited to, the following: reductions in prices or demand for oil and natural gas, which might then lead to decreased production; reductions in production due to the depletion of existing wells or disruptions in service, which may be caused by storm damage to production facilities, blowouts or other production accidents, or geological changes such as cratering of productive

formations; changes in regulations; and the expiration or release of leases subject to Marine's interests. Events may occur in the future that Marine is unable to accurately predict, or over which it has no control. If one or more of these uncertainties as well as other risks of which we are not aware materialize, or if underlying assumptions prove incorrect, actual outcomes may vary materially from those contained in the forward-looking statements included in this Annual Report on Form 10-K.

Website. Marine has an Internet website and has made available its Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to such reports, filed or furnished pursuant to
Section 13(a) or 15(d) of the Exchange Act, at www.marps-marinepetroleumtrust.com. Each of these reports will be posted on this website as soon as reasonably practicable after such report is electronically filed with or furnished to the SEC.