8-K: Cross Timbers Royalty Trust Announces May Cash Distribution of $0.080799 Per Unit

Cross Timbers Royalty Trust declares a May cash distribution of $0.080799 per unit, payable on June 13, 2025, to unitholders of record on May 30, 2025.

Summary

• Cross Timbers Royalty Trust declared a cash distribution of $0.080799 per unit.
• The distribution is payable on June 13, 2025, to unitholders of record on May 30, 2025.
• Underlying oil sales were 13,000 barrels at an average price of $67.18 per barrel.
• Underlying gas sales were 72,000 Mcf at an average price of $5.80 per Mcf.
• Excess costs on the Texas Working Interest net profits interests increased by $70,000.
• Cumulative excess costs remaining total $4,665,000, including accrued interest of $1,251,000.
• The Trustee withheld $50,000 from the distribution to increase the cash reserve.
• The Trustee intends to continue withholding $50,000 per month until the cash reserve reaches $1,500,000.

Sentiment

Score: 6

Explanation: The sentiment is neutral. While the distribution is positive, the increase in excess costs and the withholding for the cash reserve are slightly negative factors.

Positives

• The Trust continues to make monthly cash distributions to unitholders.

Negatives

• Excess costs on the Texas Working Interest net profits interests increased by $70,000.
• The Trustee is withholding $50,000 from the distribution to increase the cash reserve, reducing the immediate payout to unitholders.

Risks

• Fluctuations in oil and gas sales volumes can impact distribution amounts.
• Excess costs can reduce net proceeds from conveyances.
• The continued withholding of $50,000 per month to increase the cash reserve will reduce distributable funds in the short term.

Future Outlook

The Trustee intends to continue withholding $50,000 from distributable funds per month until the cash reserve has reached $1,500,000.

Industry Context

This announcement reflects the ongoing operations of a royalty trust in the oil and gas sector, where distributions are directly tied to the performance of underlying assets and commodity prices.

Comparison to Industry Standards

• Comparing Cross Timbers Royalty Trust's distribution yield to other royalty trusts and energy sector dividend yields provides context on its relative attractiveness.
• Companies like Viper Energy Partners LP (VNOM) and Black Stone Minerals, L.P. (BSM) are comparable royalty and mineral interest companies.
• Benchmarking the Trust's operating costs and excess costs against similar trusts can highlight its efficiency.
• The cash reserve strategy can be compared to industry best practices for managing financial stability in volatile commodity markets.

Stakeholder Impact

• Unitholders will receive a cash distribution, although it is slightly reduced due to the cash reserve withholding.
• The cash reserve aims to provide financial stability for the Trust, benefiting unitholders in the long term.

Next Steps

• Unitholders will receive the cash distribution on June 13, 2025, if they were holders of record on May 30, 2025.
• The Trustee will continue to withhold $50,000 per month to increase the cash reserve.

Key Dates

Keywords

cash distribution, royalty trust, oil and gas, Cross Timbers Royalty Trust, CRT, Argent Trust Company, excess costs, cash reserve