8-K: Cross Timbers Royalty Trust Declares September Distribution

Cross Timbers Royalty Trust announced a cash distribution of $0.031753 per unit for September, reflecting increased oil and gas sales volumes.

Summary

• Cross Timbers Royalty Trust declared a cash distribution of $0.031753 per unit for September.
• The distribution is payable on October 15, 2025, to unitholders of record on September 30, 2025.
• Underlying oil sales volumes for the current month's distribution were 14,000 Bbls at an average price of $63.13 per Bbl.
• Underlying gas sales volumes for the current month's distribution were 111,000 Mcf at an average price of $3.17 per Mcf.
• Compared to the prior month, oil sales volumes increased from 10,000 Bbls to 14,000 Bbls, and gas sales volumes increased from 49,000 Mcf to 111,000 Mcf.
• The average oil price increased from $62.10 per Bbl in the prior month to $63.13 per Bbl in the current month.
• The average gas price decreased from $3.62 per Mcf in the prior month to $3.17 per Mcf in the current month.
• Excess costs on Texas Working Interest net profits interests increased by $129,000, bringing cumulative excess costs to $5,128,000, including $1,373,000 in accrued interest.
• Excess costs of $118,000, including $1,000 in accrued interest, were fully recovered on Oklahoma Working Interest net profits interests.

Sentiment

Score: 7

Explanation: The sentiment is positive due to significant increases in both oil and gas sales volumes and a higher average oil price, leading to a solid distribution. The full recovery of Oklahoma excess costs is also a positive. The decrease in gas price and increase in Texas excess costs are minor offsets.

Positives

• Oil sales volumes increased significantly to 14,000 Bbls from 10,000 Bbls in the prior month.
• Gas sales volumes more than doubled to 111,000 Mcf from 49,000 Mcf in the prior month.
• The average oil price rose to $63.13 per Bbl from $62.10 per Bbl.
• Excess costs on Oklahoma Working Interest net profits interests totaling $118,000 were fully recovered.

Negatives

• The average gas price decreased to $3.17 per Mcf from $3.62 per Mcf in the prior month.
• Excess costs on Texas Working Interest net profits interests increased by $129,000.

Risks

• Sales volumes may fluctuate from month to month based on the timing of cash receipts.
• Cumulative excess costs remaining on the Texas Working Interest net profits interests total $5,128,000, which could impact future distributions if not recovered.

Future Outlook

The filing does not contain explicit forward-looking statements or guidance beyond the routine declaration of a monthly distribution based on past performance. Future distributions will depend on underlying oil and gas sales volumes and commodity prices.

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.

Industry Context

This announcement is typical for a royalty trust, which operates as a pass-through entity distributing net profits from underlying oil and gas properties. The distribution amount is directly tied to commodity prices and production volumes from the previous period, reflecting the inherent volatility and commodity price exposure of the energy sector. The recovery of excess costs and fluctuations in sales volumes are common operational aspects for such trusts.

Comparison to Industry Standards

• N/A. As a royalty trust, its performance is measured by its distributions derived from specific underlying assets rather than operational efficiency or growth metrics comparable to exploration and production (E&P) companies. Its structure is designed to pass through income, making direct comparisons to operating companies or global benchmarks for project performance less applicable.

Related Party Transactions

• XTO Energy, an affiliate of Exxon Mobil Corporation, advises the Trustee on underlying property costs and sales, which is an inherent part of the trust's operational structure.

Stakeholder Impact

• Shareholders (unitholders) will receive a cash distribution of $0.031753 per unit, providing income.
• The Trustee, Argent Trust Company, continues its role in managing the trust and distributing proceeds.

Next Steps

• Future monthly cash distributions will be declared based on the net profits from underlying oil and gas properties.

Key Dates

Recommendation

The trust continues to provide regular cash distributions, with the current month showing positive trends in oil and gas sales volumes and oil prices. While gas prices slightly decreased and Texas excess costs increased, the overall operational performance for the distribution period appears robust, making it a stable income-generating asset for existing unitholders. No significant new information warrants a change in investment stance for income-focused investors.

Keywords

Cross Timbers Royalty Trust, CRT, Royalty Trust, Cash Distribution, Oil and Gas, Energy, Net Profits Interest, XTO Energy, Texas, Oklahoma