8-K: Cross Timbers Royalty Trust Declares December Distribution

Cross Timbers Royalty Trust announced a cash distribution of $0.114705 per unit for December, payable January 15, 2026.

Summary

• A cash distribution of $0.114705 per unit has been declared for unitholders.
• The distribution is payable on January 15, 2026, to unitholders of record on December 31, 2025.
• Current month oil sales volumes were 10,000 Bbls at an average price of $59.39 per Bbl.
• Current month gas sales volumes were 245,000 Mcf at an average price of $4.22 per Mcf.
• Gas volumes significantly increased from the prior month's 50,000 Mcf, primarily due to out-of-period revenues from the Hewitt Unit and New Mexico Royalty Interest properties.
• Oil volumes decreased from the prior month's 14,000 Bbls.
• Excess costs on Texas Working Interest properties increased by $108,000, but did not reduce current net proceeds.
• Underlying cumulative excess costs remaining on the Texas Working Interest net profits interests total $5,458,000, including $1,467,000 in accrued interest.

Sentiment

Score: 6

Explanation: The higher cash distribution is a positive, driven by a significant increase in gas volumes from out-of-period revenues. However, this is partially offset by decreases in oil sales volumes and average prices for both oil and gas, along with an increase in underlying excess costs.

Positives

• The cash distribution of $0.114705 per unit is higher than the prior month's distribution.
• Gas sales volumes increased significantly to 245,000 Mcf from 50,000 Mcf in the prior month, primarily due to out-of-period revenues.
• Increased gas volumes contributed to a higher cash distribution in the current month.
• Increased excess costs on Texas Working Interest properties did not reduce net proceeds from remaining conveyances in the current month.

Negatives

• Oil sales volumes decreased to 10,000 Bbls from 14,000 Bbls in the prior month.
• The average oil price decreased to $59.39 per Bbl from $60.37 per Bbl in the prior month.
• The average gas price decreased to $4.22 per Mcf from $4.55 per Mcf in the prior month.
• Excess costs on Texas Working Interest properties increased by $108,000.

Risks

• Sales volumes may fluctuate from month to month based on the timing of cash receipts.
• Underlying cumulative excess costs on the Texas Working Interest net profits interests total $5,458,000, which could impact future distributions if they exceed proceeds.
• Distributions are subject to the volatility of underlying oil and gas commodity prices and production volumes.

Future Outlook

The filing does not provide explicit forward-looking statements or guidance beyond the upcoming distribution payment. It notes that sales volumes may fluctuate from month to month based on the timing of cash receipts.

Management Comments

• XTO Energy has advised the Trustee that gas volumes increased from prior month primarily due to out of period revenues attributable to the Hewitt Unit in the Oklahoma Working Interest net profits interests and non-operated properties in the New Mexico Royalty Interest net profits interests.
• This contributed to a higher cash distribution in the current month.
• XTO Energy has advised the Trustee that excess costs increased by $108,000 on properties underlying the Texas Working Interest net profits interests.
• However, these excess costs did not reduce net proceeds from the remaining conveyances.

Industry Context

Royalty trusts like Cross Timbers are directly exposed to fluctuations in crude oil and natural gas prices and production volumes. The significant increase in gas volumes due to out-of-period revenues highlights the potential for volatility in such structures, while the decline in oil volumes and prices reflects broader market dynamics for crude. The mention of XTO Energy (an ExxonMobil subsidiary) indicates the trust's reliance on a major operator for its underlying assets.

Comparison to Industry Standards

• This filing is a routine monthly distribution announcement specific to Cross Timbers Royalty Trust's underlying assets.
• Direct comparisons to specific comparable companies, projects, or their results are not provided within this filing.
• Royalty trusts typically distribute a high percentage of their net income, making their performance directly tied to the underlying asset's production volumes and prevailing commodity prices.
• The performance metrics (oil and gas volumes, average prices) are unique to the trust's specific net profits interests and are not directly comparable to integrated energy companies without further detailed analysis of their respective asset bases and operational structures.

Stakeholder Impact

• Shareholders/Unitholders will receive a higher cash distribution of $0.114705 per unit, providing income.
• The Trustee (Argent Trust Company) continues its role in managing the trust and facilitating distributions.
• The Operator (XTO Energy/Exxon Mobil) continues to manage the underlying properties, providing data and managing costs.

Next Steps

• Payment of the declared cash distribution to unitholders on January 15, 2026.

Key Dates

Recommendation

The higher distribution is positive, but it's largely due to out-of-period gas revenues, which may not be sustainable. Declining oil volumes and prices, coupled with increasing excess costs, present headwinds. Given the mixed signals and the nature of a royalty trust (pass-through entity), a 'hold' recommendation is appropriate for investors seeking income, but with an understanding of the underlying commodity price and production volatility.

Keywords

Cross Timbers Royalty Trust, CRT, cash distribution, oil and gas, royalty trust, energy, NYSE, SEC filing, 8-K, dividend, unitholders, commodity prices, net profits interest