CROSS TIMBERS ROYALTY TRUST DECLARES SEPTEMBER CASH DISTRIBUTION

Rhea-AI Summary

Argent Trust Company, Trustee of Cross Timbers Royalty Trust (NYSE: CRT), declared a cash distribution of $0.102230 per unit, payable on October 15, 2024, to unitholders of record on September 30, 2024. The distribution reflects underlying oil and gas sales volumes and prices. The September distribution includes a $24,128 deduction related to the Chieftain settlement with XTO Energy Inc.

XTO Energy reported an increase of $124,000 in excess costs on properties underlying the Texas Working Interest net profits interests. Cumulative excess costs on these interests total $3,847,000, including accrued interest of $1,034,000. However, these excess costs did not reduce net proceeds from other conveyances.

Positive

• Cash distribution of $0.102230 per unit declared for September
• Increase in underlying oil sales volumes from 13,000 to 16,000 Bbls
• Increase in underlying gas sales volumes from 67,000 to 138,000 Mcf
• Slight increase in average oil price from $76.84 to $77.46 per Bbl

Negative

• Deduction of $24,128 from distribution due to Chieftain settlement
• Excess costs increased by $124,000 on Texas Working Interest properties
• Cumulative excess costs on Texas Working Interest properties total $3,847,000
• Slight decrease in average gas price from $3.33 to $3.29 per Mcf

Insights

Financial Analyst

The $0.102230 per unit distribution announced by Cross Timbers Royalty Trust is a mixed bag for investors. While it signals ongoing income, the underlying sales volumes show significant fluctuations. Oil sales increased by 23% and gas sales surged by 106% compared to the prior month. However, the average gas price slightly decreased, potentially offsetting some gains.

The $24,128 deduction for the Chieftain settlement is a negative factor, albeit relatively small. More concerning is the $124,000 increase in excess costs for Texas Working Interest properties, bringing the total to a substantial $3,847,000. This growing liability could impact future distributions if not addressed promptly.

Legal Expert

The resolution of the Chieftain Royalty Company v. XTO Energy Inc. lawsuit has finally materialized in this distribution, albeit with a modest $24,128 impact on the Trust. This settlement demonstrates the ongoing legal risks in the royalty trust sector. The Trustee's proactive stance in challenging similar claims for another trust (Hugoton Royalty Trust) shows diligence in protecting unitholder interests.

However, the $3,847,000 in cumulative excess costs, including $1,034,000 in accrued interest, presents a significant legal and financial challenge. This liability could potentially lead to future disputes or impact the Trust's ability to maintain consistent distributions, warranting close monitoring by unitholders.

DALLAS, Sept. 20, 2024 /PRNewswire/ -- Argent Trust Company, as Trustee of the Cross Timbers Royalty Trust (the "Trust") (NYSE: CRT), today declared a cash distribution to the holders of its units of beneficial interest of $0.102230 per unit, payable on October 15, 2024, to unitholders of record on September 30, 2024. The following table shows underlying oil and gas sales and average prices attributable to the current month and prior month distributions.

			Underlying Sales
			Volumes (a)					Average Price
			Oil (Bbls)			Gas (Mcf)		Oil (per Bbl)			Gas (per Mcf)
	Current Month Distribution		16,000			138,000		$77.46		$3.29
	Prior Month Distribution			13,000		67,000		$76.84			$3.33
(a)	Sales volumes are recorded in the month the Trust receives the related net profits income.  Because of this, sales volumes may fluctuate from month to month based on the timing of cash receipts.

Litigation Settlement in Current Month Distribution

 A federal district court approved the settlement of a royalty class action lawsuit against XTO Energy Inc. (Chieftain Royalty Company v. XTO Energy Inc.) in March 2018. In July 2018, the class plaintiffs submitted their plan to allocate the settlement funds among members of the class. After that plan of allocation was approved, XTO Energy advised the Trustee that, based upon that plan, approximately $40,000 should be allocated to the Trust as additional production costs.

The Trustee objected to similar claims relating to the Chieftain settlement with respect to another trust for which it serves as trustee (the Hugoton Royalty Trust) in an arbitration styled Simmons Bank (successor to Southwest Bank and Bank of America, N.A.) vs. XTO Energy Inc. through the American Arbitration Association. The Trustee and XTO Energy entered into a settlement agreement on June 18, 2024, which resolved the issues subject to the arbitration. As a result, the September 2024 distribution includes a $24,128 (net to the Trust) deduction allocated to the Trust as a production cost for the Chieftain settlement.

Excess Costs

XTO Energy has advised the Trustee that excess costs increased by $124,000 on properties underlying the Texas Working Interest net profits interests. However, these excess costs did not reduce net proceeds from the remaining conveyances. Underlying cumulative excess costs remaining on the Texas Working Interest net profits interests total $3,847,000, including accrued interest of $1,034,000.

For more information on the Trust, including the annual tax information, distribution amounts, and historical press releases, please visit our website at www.crt-crosstimbers.com.

Contact:	Nancy Willis
	Director of Royalty Trust Services
	Argent Trust Company, Trustee
	855-588-7839

 

View original content:https://www.prnewswire.com/news-releases/cross-timbers-royalty-trust-declares-september-cash-distribution-302253767.html

SOURCE Cross Timbers Royalty Trust

FAQ

What is the September 2024 cash distribution for Cross Timbers Royalty Trust (CRT)?

Cross Timbers Royalty Trust (CRT) declared a cash distribution of $0.102230 per unit for September 2024, payable on October 15, 2024, to unitholders of record on September 30, 2024.

How did the Chieftain settlement affect CRT's September 2024 distribution?

The September 2024 distribution for CRT includes a $24,128 deduction (net to the Trust) allocated as a production cost for the Chieftain settlement with XTO Energy Inc.

What are the current excess costs for CRT's Texas Working Interest properties?

XTO Energy reported that excess costs increased by $124,000 on properties underlying CRT's Texas Working Interest net profits interests. Cumulative excess costs on these interests total $3,847,000, including accrued interest of $1,034,000.

How have the underlying oil and gas sales volumes changed for CRT's September 2024 distribution?

For the September 2024 distribution, oil sales volumes increased to 16,000 Bbls from 13,000 Bbls, and gas sales volumes increased to 138,000 Mcf from 67,000 Mcf compared to the prior month's distribution.