8-K: Cross Timbers Royalty Trust Declares Distribution Amid Price Drop

Cross Timbers Royalty Trust announced a cash distribution of $0.067892 per unit, but underlying sales volumes and oil prices have decreased significantly compared to the prior month.

Summary

• Cross Timbers Royalty Trust declared a cash distribution of $0.067892 per unit, payable on September 15, 2026, to unitholders of record on August 31, 2026.
• Underlying oil sales volumes increased to 11,000 Bbls from 6,000 Bbls, while gas sales volumes decreased to 50,000 Mcf from 75,000 Mcf.
• Average oil price dropped significantly to $78.27 per Bbl from $109.21 per Bbl, while average gas price slightly decreased to $4.69 per Mcf from $4.84 per Mcf.
• Excess costs on Texas Working Interest properties increased by $43, with cumulative excess costs remaining at $6,021,000, including $1,727,000 in accrued interest.
• Excess costs on Oklahoma Working Interest properties saw a recovery of $246,000, but no remaining proceeds were available for distribution from these properties, with cumulative excess costs remaining at $552,000, including $34,000 in accrued interest.

Sentiment

Score: 4

Explanation: StockSavvy.ai views this as a neutral to slightly negative sentiment due to a significant decrease in oil prices and sales volumes, despite a declared distribution.

Positives

• A cash distribution of $0.067892 per unit has been declared.
• Oil sales volumes increased to 11,000 Bbls from 6,000 Bbls.
• A portion of excess costs ($246,000) was recovered on Oklahoma Working Interest properties.

Negatives

• The average oil price decreased substantially from $109.21 to $78.27 per barrel.
• Gas sales volumes decreased from 75,000 Mcf to 50,000 Mcf.
• Cumulative excess costs on Texas Working Interest net profits interests remain high at $6,021,000, including $1,727,000 in accrued interest.
• No proceeds from Oklahoma Working Interest properties were available for distribution after excess cost recovery, with cumulative excess costs of $552,000 remaining.

Risks

• Significant decrease in oil prices ($78.27/Bbl from $109.21/Bbl) impacting revenue.
• Fluctuations in sales volumes due to timing of cash receipts.
• High cumulative excess costs on Texas Working Interest properties ($6,021,000) and Oklahoma Working Interest properties ($552,000) continue to affect distributions.

Future Outlook

The filing does not contain specific forward-looking statements or guidance beyond the declared distribution and the current month's operational data.

Management Comments

• Argent Trust Company, as Trustee of the Cross Timbers Royalty Trust, declared a cash distribution to the holders of its units of beneficial interest of $0.067892 per unit.
• Sales volumes may fluctuate from month to month based on the timing of cash receipts.
• Excess costs increased by $43 on properties underlying the Texas Working Interest net profits interests, but these did not reduce net proceeds from the remaining conveyances.
• Excess costs were recovered on properties underlying the Oklahoma Working Interest net profits interests, but after the partial recovery, there were no remaining proceeds from these properties to be included in this month's distribution.

Industry Context

StockSavvy.ai notes that the significant drop in oil prices from $109.21 to $78.27 per barrel is a key factor affecting the trust's distributions, reflecting broader market volatility in the energy sector.

Stakeholder Impact

• Unitholders will receive a cash distribution of $0.067892 per unit, which is influenced by current commodity prices and operational costs.
• The ongoing accumulation of excess costs may impact future distributions if not adequately offset by revenue.

Next Steps

• Distribution of $0.067892 per unit to unitholders of record on August 31, 2026, payable on September 15, 2026.
• Continued monitoring of oil and gas sales volumes, prices, and excess costs.

Key Dates

Recommendation

The trust is distributing cash, which is positive for unitholders. However, the significant decline in oil prices and the persistent issue of high cumulative excess costs on certain properties suggest caution. The current distribution reflects these mixed factors, making a 'hold' recommendation appropriate pending a recovery in commodity prices or resolution of cost issues.

Keywords

Cash Distribution, Royalty Trust, Oil Price, Gas Price, Sales Volume, Excess Costs, Net Profits Interest, Unitholders