8-K: Cross Timbers Royalty Trust Announces August Cash Distribution of $0.055175 Per Unit

Cross Timbers Royalty Trust declared a cash distribution of $0.055175 per unit for August, payable on September 16, 2024.

Summary

• Cross Timbers Royalty Trust has announced a cash distribution of $0.055175 per unit.
• The distribution is payable on September 16, 2024, to unitholders of record on August 30, 2024.
• The current month's distribution is based on underlying sales volumes of 13,000 barrels of oil and 67,000 Mcf of gas.
• The average prices for the current month were $76.84 per barrel of oil and $3.33 per Mcf of gas.
• The prior month's distribution was based on sales volumes of 12,000 barrels of oil and 186,000 Mcf of gas, with average prices of $78.39 per barrel of oil and $4.03 per Mcf of gas.
• XTO Energy recovered $26,000 of excess costs on properties underlying the Texas Working Interest, but no proceeds were available for distribution from these properties this month.
• The remaining cumulative excess costs on the Texas Working Interest net profits interests total $3,697,000, including accrued interest of $1,008,000.

Sentiment

Score: 4

Explanation: The sentiment is slightly negative due to the decrease in gas sales volumes and prices, and the lack of proceeds from the Texas Working Interest properties. The remaining excess costs are also a concern.

Positives

• The Trust is continuing to make monthly cash distributions to unitholders.
• The Trust has provided detailed information on sales volumes and average prices for the current and prior month.

Negatives

• The current month's gas sales volumes are significantly lower than the prior month's (67,000 Mcf vs 186,000 Mcf).
• The average price of gas decreased from $4.03 to $3.33 per Mcf.
• There were no proceeds from the Texas Working Interest properties available for distribution this month after the recovery of $26,000 in excess costs.
• The cumulative excess costs on the Texas Working Interest remain substantial at $3,697,000.

Risks

• Fluctuations in oil and gas sales volumes and prices can impact the monthly distributions.
• The significant remaining excess costs on the Texas Working Interest could continue to reduce future distributions.
• The timing of cash receipts can cause fluctuations in sales volumes from month to month.

Future Outlook

The document does not provide specific forward-looking statements or guidance beyond the next distribution.

Management Comments

• Argent Trust Company, as Trustee of the Cross Timbers Royalty Trust, declared the cash distribution.
• XTO Energy advised the Trustee about the recovery of excess costs.

Industry Context

This announcement is typical for royalty trusts, which distribute cash based on underlying oil and gas production and prices. The fluctuations in sales volumes and prices are common in the energy sector.

Comparison to Industry Standards

• Other royalty trusts such as Permian Basin Royalty Trust (PBT) and Sabine Royalty Trust (SBR) also distribute cash based on production and prices, and their distributions fluctuate monthly.
• The reported sales volumes and prices are within the range of what is expected for oil and gas production in the regions where Cross Timbers Royalty Trust has interests.
• The excess cost recovery is a common issue for royalty trusts, and the amount of remaining cumulative excess costs is a key factor in evaluating the future distribution potential.

Stakeholder Impact

• Unitholders will receive a cash distribution of $0.055175 per unit.
• The decrease in gas sales volumes and prices may negatively impact future distributions.
• The remaining excess costs on the Texas Working Interest could continue to reduce future distributions.

Next Steps

• The next cash distribution will be announced in the following month.
• The Trust will continue to monitor oil and gas sales volumes and prices.

Key Dates

Keywords

cash distribution, royalty trust, oil and gas, unit holders, sales volumes, average prices, excess costs, XTO Energy