8-K: Cross Timbers Royalty Trust Announces May Cash Distribution of $0.058252 Per Unit

Cross Timbers Royalty Trust declared a May cash distribution of $0.058252 per unit, payable on June 14, 2024, to unitholders of record on May 31, 2024.

Summary

• Cross Timbers Royalty Trust has announced a cash distribution of $0.058252 per unit.
• The distribution is payable on June 14, 2024, to unitholders of record on May 31, 2024.
• The current month's distribution is based on sales of 17,000 barrels of oil at an average price of $76.32 per barrel and 70,000 Mcf of gas at an average price of $4.64 per Mcf.
• The prior month's distribution was based on sales of 14,000 barrels of oil at an average price of $72.14 per barrel and 255,000 Mcf of gas at an average price of $3.71 per Mcf.
• XTO Energy reported that $46,000 of excess costs were recovered on Texas Working Interest properties, but no proceeds were available for distribution this month.
• The remaining cumulative excess costs on the Texas Working Interest properties are $3,484,000, including $931,000 in accrued interest.
• XTO Energy also reported that $366,000 of excess costs were recovered on Oklahoma Working Interest properties, but no proceeds were available for distribution this month.
• The remaining cumulative excess costs on the Oklahoma Working Interest properties are $153,000, including $9,000 in accrued interest.

Sentiment

Score: 6

Explanation: The sentiment is neutral to slightly positive. While the distribution is positive, the presence of significant remaining excess costs and the lack of proceeds from some properties temper the overall outlook.

Positives

• The Trust is continuing to make monthly cash distributions to unitholders.
• Oil prices increased from $72.14 to $76.32 per barrel compared to the prior month.
• Gas prices increased from $3.71 to $4.64 per Mcf compared to the prior month.
• Excess costs were partially recovered on both Texas and Oklahoma Working Interest properties.

Negatives

• No proceeds from the Texas Working Interest properties were available for distribution this month after the partial recovery of excess costs.
• No proceeds from the Oklahoma Working Interest properties were available for distribution this month after the partial recovery of excess costs.
• Significant cumulative excess costs remain on both the Texas and Oklahoma Working Interest properties.

Risks

• Fluctuations in oil and gas prices can impact the Trust's revenue and distributions.
• The timing of cash receipts can cause sales volumes to fluctuate from month to month.
• The recovery of excess costs can impact the amount of proceeds available for distribution.
• The remaining cumulative excess costs on the Texas and Oklahoma Working Interest properties could affect future distributions.

Future Outlook

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

Management Comments

• XTO Energy advised the Trustee about out of period gas revenues contributing to a higher prior month distribution.
• XTO Energy advised the Trustee about the recovery of excess costs on Texas and Oklahoma properties.

Industry Context

This announcement reflects the typical operational and financial reporting of a royalty trust, which is dependent on the production and pricing of oil and gas. The fluctuations in sales volumes and prices are common in the energy sector.

Comparison to Industry Standards

• Royalty trusts like Cross Timbers are generally compared to other similar trusts based on their distribution yields and the underlying assets.
• The distribution yield is influenced by commodity prices and production volumes, which can vary significantly.
• The recovery of excess costs is a common issue for royalty trusts, and the pace of recovery can impact distributions.
• Companies such as Sabine Royalty Trust (SBR) and Permian Basin Royalty Trust (PBT) are comparable in terms of structure and reliance on oil and gas production.

Stakeholder Impact

• Unitholders will receive a cash distribution of $0.058252 per unit.
• The distribution amount is influenced by oil and gas prices and the recovery of excess costs.
• The remaining cumulative excess costs could impact future distributions.

Next Steps

• The Trust will continue to monitor oil and gas sales and excess cost recoveries.
• The next monthly distribution will be announced in the following month.

Key Dates

Keywords

cash distribution, royalty trust, oil and gas, unit holders, excess costs, XTO Energy, Texas Working Interest, Oklahoma Working Interest