8-K: Cross Timbers Royalty Trust Announces March Cash Distribution of $0.019390 Per Unit

Cross Timbers Royalty Trust declared a March cash distribution of $0.019390 per unit, payable on April 12, 2024, to unitholders of record on March 28, 2024.

Summary

• Cross Timbers Royalty Trust has announced a cash distribution of $0.019390 per unit.
• The distribution is payable on April 12, 2024, to unitholders of record on March 28, 2024.
• The current month's distribution is based on underlying sales of 15,000 barrels of oil at an average price of $73.26 per barrel and 50,000 Mcf of gas at an average price of $5.94 per Mcf.
• The prior month's distribution was based on sales of 14,000 barrels of oil at $73.21 per barrel and 123,000 Mcf of gas at $4.26 per Mcf.
• XTO Energy recovered $8,000 of excess costs on Texas properties, but no proceeds were available for distribution from these properties this month.
• Cumulative excess costs on the Texas Working Interest net profits interests total $3,375,000, including $883,000 in accrued interest.
• Excess costs on Oklahoma properties increased by $707,000, primarily due to drilling costs from the Hewitt Unit, but these costs did not reduce net proceeds from other conveyances.
• Cumulative excess costs on the Oklahoma Working Interest net profits interests total $724,000, including $113 in accrued interest.

Sentiment

Score: 6

Explanation: The sentiment is neutral to slightly positive. While there is a distribution, the presence of significant excess costs and their impact on the distribution temper the positive aspects.

Positives

• The Trust is making a cash distribution to unitholders.
• Oil prices remained relatively stable compared to the previous month, with a slight increase from $73.21 to $73.26 per barrel.
• Gas prices increased significantly from $4.26 to $5.94 per Mcf compared to the previous month.

Negatives

• Excess costs on the Texas properties were recovered, but no proceeds were available for distribution from these properties this month.
• Cumulative excess costs on the Texas Working Interest net profits interests remain high at $3,375,000.
• Excess costs on Oklahoma properties increased by $707,000 due to drilling costs.
• Cumulative excess costs on the Oklahoma Working Interest net profits interests total $724,000.

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, particularly drilling costs, can reduce net proceeds available for distribution.
• The high cumulative excess costs on both Texas and Oklahoma properties could impact future distributions.

Future Outlook

The Trust will continue to make monthly distributions based on underlying oil and gas sales, while also managing excess costs.

Management Comments

• Argent Trust Company, as Trustee of the Cross Timbers Royalty Trust, declared the cash distribution.
• XTO Energy advised the Trustee regarding excess costs on the Texas and Oklahoma properties.

Industry Context

This announcement is typical for royalty trusts, which distribute income from oil and gas production to unitholders. The fluctuations in sales volumes and prices are common in the oil and gas industry.

Comparison to Industry Standards

• The distribution amount is relatively low compared to some other royalty trusts, which can vary significantly based on the underlying assets and production.
• The excess costs reported are a common factor for royalty trusts, particularly those with working interests, and the amounts are within the range of what is expected for this type of trust.
• The oil and gas prices are in line with current market prices, and the fluctuations are consistent with industry trends.

Stakeholder Impact

• Unitholders will receive a cash distribution of $0.019390 per unit.
• The distribution amount is impacted by oil and gas sales and excess costs.
• The Trust's performance is directly tied to the performance of the underlying oil and gas properties.

Next Steps

• The Trust will continue to monitor oil and gas sales and excess costs.
• The next monthly distribution will be announced in the following month.

Key Dates

Keywords

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