8-K: Cross Timbers Royalty Trust Announces April Cash Distribution of $0.135867 Per Unit

Cross Timbers Royalty Trust declared a cash distribution of $0.135867 per unit for April, payable on May 14, 2024, to unitholders of record on April 30, 2024.

Summary

• Cross Timbers Royalty Trust has announced a cash distribution of $0.135867 per unit.
• The distribution is payable on May 14, 2024, to unitholders of record on April 30, 2024.
• The current month's distribution is based on 14,000 barrels of oil sold at an average price of $72.14 per barrel and 255,000 Mcf of gas sold at an average price of $3.71 per Mcf.
• This compares to the prior month's distribution which was based on 15,000 barrels of oil sold at $73.26 per barrel and 50,000 Mcf of gas sold at $5.94 per Mcf.
• Gas volumes increased due to out-of-period revenues from non-operated properties in Oklahoma.
• Excess costs on Texas Working Interest properties increased by $106,000, but did not reduce net proceeds.
• Cumulative excess costs on Texas properties total $3,505,000, including $907,000 in accrued interest.
• $215,000 of excess costs were recovered on Oklahoma Working Interest properties, but there were no remaining proceeds for this month's distribution.
• Cumulative excess costs on Oklahoma properties total $515,000, including $5,329 in accrued interest.

Sentiment

Score: 6

Explanation: The sentiment is neutral to slightly positive. While the distribution is positive, the decrease in oil sales volume and gas prices, along with increased excess costs, temper the overall outlook.

Positives

• The Trust is making a cash distribution to unitholders.
• Gas volumes increased due to out-of-period revenues, contributing to a higher distribution this month.
• $215,000 of excess costs were recovered on Oklahoma Working Interest properties.

Negatives

• Oil sales volumes decreased from 15,000 barrels in the prior month to 14,000 barrels in the current month.
• Average oil price decreased slightly from $73.26 per barrel to $72.14 per barrel.
• Average gas price decreased significantly from $5.94 per Mcf to $3.71 per Mcf.
• Excess costs on Texas Working Interest properties increased by $106,000.
• There were no remaining proceeds from the Oklahoma Working Interest properties to be included in this month's distribution after partial recovery of excess costs.

Risks

• Fluctuations in oil and gas prices can impact the Trust's revenue and distributions.
• The timing of cash receipts can cause sales volumes to fluctuate from month to month.
• Excess costs on properties can reduce net proceeds and distributions.
• The Trust is dependent on XTO Energy for information regarding sales volumes and excess costs.

Management Comments

• XTO Energy advised the Trustee that gas volumes increased due to out of period revenues.
• XTO Energy advised the Trustee excess costs increased by $106,000 on properties underlying the Texas Working Interest.
• XTO Energy advised the Trustee that $215,000 of excess costs were recovered on properties underlying the Oklahoma Working Interest.

Industry Context

The announcement reflects the typical operational and financial updates for a royalty trust in the oil and gas sector, where distributions are directly tied to commodity prices and production volumes. The fluctuations in sales volumes and prices are common in this industry.

Comparison to Industry Standards

• The distribution amount is dependent on the underlying sales volumes and prices of oil and gas, which are subject to market volatility, similar to other royalty trusts.
• The reported excess costs are a common factor for royalty trusts, and the management of these costs is crucial for maintaining distributions.
• The fluctuations in sales volumes and prices are typical for the oil and gas industry, and the Trust's performance is comparable to other trusts with similar assets.

Stakeholder Impact

• Unitholders will receive a cash distribution of $0.135867 per unit.
• The distribution amount is influenced by oil and gas prices and production volumes, which can impact shareholder returns.
• The management of excess costs is important for maintaining future distributions.

Key Dates

Keywords

cash distribution, royalty trust, oil and gas, XTO Energy, excess costs, unit holders, net profits, Oklahoma, Texas