8-K: Cross Timbers Royalty Trust Announces July Cash Distribution of $0.096137 Per Unit

Cross Timbers Royalty Trust declared a cash distribution of $0.096137 per unit for unitholders of record on July 31, 2024, payable on August 14, 2024.

Summary

• Cross Timbers Royalty Trust has announced a cash distribution of $0.096137 per unit.
• The distribution is payable on August 14, 2024, to unitholders of record on July 31, 2024.
• The current month's distribution is based on underlying sales of 12,000 barrels of oil at an average price of $78.39 per barrel and 186,000 Mcf of gas at an average price of $4.03 per Mcf.
• The prior month's distribution was based on sales of 12,000 barrels of oil at $84.42 per barrel and 10,000 Mcf of gas at $8.14 per Mcf, which was later corrected to 22,000 Mcf of gas at $3.57 per Mcf.
• Excess costs on the Texas Working Interest increased by $142,000, with a total of $3,696,000 remaining, including $981,000 in accrued interest.
• Excess costs of $204,000, including $11,000 in accrued interest, were fully recovered on the Oklahoma Working Interest properties.

Sentiment

Score: 6

Explanation: The sentiment is neutral to slightly positive. The trust is making a distribution, which is positive, but there are ongoing excess cost issues, which are a concern.

Positives

• The Trust is making a cash distribution to unitholders.
• Excess costs were fully recovered on the Oklahoma Working Interest properties.

Negatives

• Excess costs on the Texas Working Interest increased by $142,000.
• There are still significant remaining excess costs of $3,696,000 on the Texas Working Interest.

Risks

• Fluctuations in oil and gas prices can impact the Trust's revenue and distributions.
• The remaining excess costs on the Texas Working Interest could affect 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 beyond the announced distribution.

Management Comments

• Argent Trust Company, as Trustee, declared the cash distribution.
• XTO Energy advised the Trustee of a volume correction in the prior month's gas sales.
• XTO Energy advised the Trustee of an increase in excess costs on the Texas Working Interest.
• XTO Energy advised the Trustee that excess costs were fully recovered on the Oklahoma Working Interest.

Industry Context

This announcement is typical for royalty trusts, which distribute cash based on underlying oil and gas sales. The fluctuations in sales volumes and prices reflect the volatility of the energy market.

Comparison to Industry Standards

• The distribution of $0.096137 per unit is within the range of typical distributions for royalty trusts, but the specific amount varies based on the underlying assets and market conditions.
• The oil and gas prices reported are consistent with market prices during the relevant periods, but the specific prices received by the trust may vary due to contractual agreements and other factors.
• The excess cost issues are not uncommon in royalty trusts, particularly those with working interests, and the management of these costs is a key factor in the trust's performance.

Stakeholder Impact

• Unitholders will receive a cash distribution of $0.096137 per unit.
• The distribution amount is subject to fluctuations in oil and gas prices and excess costs.

Next Steps

• The cash distribution will be paid on August 14, 2024.
• The Trust will continue to monitor oil and gas sales and excess costs.

Key Dates

Keywords

cash distribution, royalty trust, oil and gas, unit holders, excess costs, sales volumes, average price