8-K: Cross Timbers Royalty Trust Declares January Distribution

Cross Timbers Royalty Trust announced a cash distribution of $0.032918 per unit for January, payable February 13, 2026.

Summary

• A cash distribution of $0.032918 per unit has been declared for unitholders.
• The distribution is payable on February 13, 2026, to unitholders of record on January 30, 2026.
• Current month oil sales volumes were 10,000 Bbls at an average price of $57.62 per Bbl.
• Current month gas sales volumes were 73,000 Mcf at an average price of $4.13 per Mcf.
• Prior month distribution was higher due to out-of-period gas revenues from the Hewitt Unit (Oklahoma Working Interest) and non-operated properties (New Mexico Royalty Interest).
• Excess costs on Texas Working Interest properties increased by $35,000, bringing the cumulative total to $5,526,000, including $1,500,000 in accrued interest; these costs did not reduce net proceeds.
• Excess costs on Oklahoma Working Interest properties increased by $666,000, with cumulative excess costs now totaling $666,000; these costs also did not reduce net proceeds.

Sentiment

Score: 4

Explanation: The filing reports a routine monthly distribution, but the distribution amount is lower than the prior month, primarily due to significantly reduced gas sales volumes and slightly lower commodity prices. There's also an increase in cumulative excess costs, although these did not impact current net proceeds.

Positives

• The Trust continues to declare regular monthly cash distributions to unitholders.
• Increased excess costs on Texas and Oklahoma Working Interest properties did not reduce net proceeds from the remaining conveyances for the current period.

Negatives

• The current month's cash distribution of $0.032918 per unit is lower than the prior month's distribution.
• Current month gas sales volumes significantly decreased to 73,000 Mcf from 245,000 Mcf in the prior month.
• Average oil price for the current month decreased to $57.62 per Bbl from $59.39 per Bbl in the prior month.
• Average gas price for the current month decreased to $4.13 per Mcf from $4.22 per Mcf in the prior month.
• Excess costs increased by $35,000 on Texas Working Interest properties and by $666,000 on Oklahoma Working Interest properties.

Risks

• Sales volumes may fluctuate from month to month based on the timing of cash receipts.
• The accumulation of excess costs on underlying properties, even if not currently reducing net proceeds, represents a future claim against revenues.

Future Outlook

Sales volumes may fluctuate from month to month based on the timing of cash receipts, which can impact future distributions.

Management Comments

• "Argent Trust Company, as Trustee of the Cross Timbers Royalty Trust, today declared a cash distribution to the holders of its units of beneficial interest of $0.032918 per unit."
• "XTO Energy has advised the Trustee that out of period gas 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 contributed to a higher cash distribution in the prior month."
• "XTO Energy has advised the Trustee that excess costs increased by $35,000 on properties underlying the Texas Working Interest net profits interests. However, these excess costs did not reduce net proceeds from the remaining conveyances."
• "XTO Energy has advised the Trustee that excess costs increased by $666,000 on properties underlying the Oklahoma Working Interest net profits interests. However, these excess costs did not reduce net proceeds from the remaining conveyances."

Industry Context

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Related Party Transactions

• XTO Energy, an entity related to Exxon Mobil Corporation, advises the Trustee on underlying sales and costs, indicating an ongoing operational relationship.

Stakeholder Impact

• Shareholders (unitholders) will receive a cash distribution, though the amount is lower than the previous month, potentially impacting their income.
• The Trust's financial performance, and thus unitholder value, remains directly tied to commodity prices and production volumes from the underlying oil and gas properties.

Next Steps

• Unitholders of record on January 30, 2026, will receive the declared cash distribution on February 13, 2026.

Key Dates

Recommendation

The filing details a routine monthly distribution, which is a core function of a royalty trust. While the distribution is lower than the prior month due to reduced gas volumes and slightly lower commodity prices, and excess costs increased, these are typical fluctuations for such an entity. There are no indications of fundamental changes to the Trust's structure or long-term viability. A 'hold' recommendation is appropriate as the news reflects expected operational variability without presenting a compelling reason for a significant change in investment position.

Keywords

Royalty Trust, Oil and Gas, Cash Distribution, CRT, Energy, Net Profits Interest, SEC Filing, 8-K, Texas Working Interest, Oklahoma Working Interest, New Mexico Royalty Interest