8-K: Cross Timbers Royalty Trust Announces June Cash Distribution of $0.030174 Per Unit

Cross Timbers Royalty Trust declared a June cash distribution of $0.030174 per unit, payable on July 15, 2024, to unitholders of record on June 28, 2024.

Summary

• Cross Timbers Royalty Trust has announced a cash distribution of $0.030174 per unit.
• The distribution is payable on July 15, 2024, to unitholders of record on June 28, 2024.
• The current month's distribution is based on underlying sales of 12,000 barrels of oil at an average price of $84.42 per barrel and 10,000 Mcf of gas at an average price of $8.14 per Mcf.
• Prior month's distribution was based on sales of 17,000 barrels of oil at $76.32 per barrel and 70,000 Mcf of gas at $4.64 per Mcf.
• A volume correction for Oklahoma Royalty Interest net profits interests was noted, which would have resulted in 22,000 Mcf of gas sales for the current month and 58,000 Mcf for the prior month, with average gas prices of $3.57 and $5.65 per Mcf respectively, had it been recorded correctly.
• Excess costs increased by $21,000 on Texas Working Interest properties and $48,000 on Oklahoma Working Interest properties, but these did not reduce net proceeds from remaining conveyances.
• Cumulative excess costs remaining on the Texas Working Interest total $3,530,000, including $956,000 in accrued interest.
• Cumulative excess costs remaining on the Oklahoma Working Interest total $202,000, including $10,000 in accrued interest.

Sentiment

Score: 4

Explanation: The sentiment is slightly negative due to decreased sales volumes and increased excess costs, despite higher average prices. The distribution is still being made, but the underlying performance is weaker than the prior month.

Positives

• The Trust is continuing to make monthly cash distributions to unitholders.
• The average price of oil increased from $76.32 to $84.42 per barrel compared to the prior month.
• The average price of gas increased from $4.64 to $8.14 per Mcf compared to the prior month.

Negatives

• Oil sales volumes decreased from 17,000 barrels to 12,000 barrels compared to the prior month.
• Gas sales volumes decreased from 70,000 Mcf to 10,000 Mcf compared to the prior month.
• There were increases in excess costs on both Texas and Oklahoma Working Interest properties.
• There are significant cumulative excess costs remaining on both the Texas and Oklahoma Working Interest properties.

Risks

• Sales volumes can fluctuate from month to month based on the timing of cash receipts.
• Excess costs can impact the net proceeds from conveyances.
• The Trust is subject to fluctuations in oil and gas prices.

Future Outlook

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

Management Comments

• XTO Energy advised the Trustee of a volume correction for Oklahoma Royalty Interest net profits interests.
• XTO Energy advised the Trustee that excess costs increased on properties underlying the Texas and Oklahoma Working Interest net profits interests.

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 are common in the energy sector.

Comparison to Industry Standards

• The distribution yield will be dependent on the unit price of CRT, which is not mentioned in the document.
• Other royalty trusts such as Permian Basin Royalty Trust (PBT) and Sabine Royalty Trust (SBR) also distribute cash based on underlying oil and gas sales, and their distributions fluctuate based on commodity prices and production volumes.
• The excess costs are a common issue for royalty trusts, and the amounts reported are within the range of what is seen in other similar trusts.

Stakeholder Impact

• Unitholders will receive a cash distribution of $0.030174 per unit.
• The distribution amount is lower than the prior month due to lower sales volumes.

Next Steps

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

Key Dates

Keywords

Cash Distribution, Royalty Trust, Oil and Gas, Unit Holders, Sales Volumes, Average Price, Excess Costs, Net Profits, XTO Energy