Mesa Royalty Trust Announces There Will Be No Distribution for April 2021

Rhea-AI Summary

Mesa Royalty Trust (NYSE: MTR) will not distribute payments for April 2021, as expenses surpassed the revenue from oil and gas sales. The Trust operates on an overriding royalty interest in producing properties across Kansas, New Mexico, and Colorado. Monthly distributions fluctuate based on oil and gas prices, production yields, and administrative costs. A significant decline in commodity prices, exacerbated by COVID-19, may continue, adversely affecting future distributions. Additionally, various risks related to drilling and production could impact the Trust's financial outlook.

Positive

• None.

Negative

• No distribution for April 2021 due to expenses exceeding revenue.
• Continued low oil and gas prices may adversely affect future distributions.
• Potential volatility in commodity prices could decrease proceeds to the Trust.
• Risks associated with drilling and production could impact future royalty income.

Mesa Royalty Trust (the “Trust”) (NYSE: MTR) announced today that there will be no distribution paid for the month of April 2021 to holders of record as of the close of business on April 30, 2021, as costs, charges and expenses attributable to the Trust’s royalty properties, and applicable reserves, exceeded the revenue received from the sale of oil, natural gas and other hydrocarbons produced from such properties, as reported by the working interest owners.

The Trust was formed to own an overriding royalty interest of the net proceeds attributable to the specified interest in certain producing oil and gas properties located in the Hugoton field of Kansas and the San Juan Basin fields of New Mexico and Colorado. As described in the Trust's filings, the amount of the monthly distributions is expected to fluctuate from month to month, depending on the proceeds, if any, received by the Trust as a result of production, oil and natural gas prices and the amount of the Trust’s administrative expenses, among other factors. The amount of proceeds, if any, received or expected to be received by the Trust (and its ability to pay distributions to unitholders) has been and will continue to be directly affected, among other things, by the volatility in commodity prices. There was a substantial decrease in oil and natural gas prices in 2020 due in part to significantly decreased demand as a result of the COVID-19 pandemic and an oversupply of crude oil. Oil and natural gas prices could remain low for an extended period of time, which in turn could have a material adverse effect on Trust distributions. Continued low oil and natural gas prices, among other things, will reduce proceeds to which the Trust is entitled, which will reduce the amount of cash available for distribution to unitholders and in certain periods could result in no distributions to unitholders.

This press release contains forward-looking statements. No assurances can be given that the expectations contained in this press release will prove to be correct. The working interest owners alone control historical operating data, and handle receipt and payment of funds relating to the royalty properties and payments to the Trust for the related royalty. The Trustee cannot assure that errors or adjustments or expenses accrued by the working interest owners, whether historical or future, will not affect future royalty income and distributions by the Trust. Other important factors that could cause these statements to differ materially include delays in actual results of drilling operations, risks inherent in drilling and production of oil and gas properties, declines in commodity pricing, and other factors described in the Trust’s Form 10-K for the year ended December 31, 2020 under “Part I, Item 1A. Risk Factors.” Statements made in this press release are qualified by the cautionary statements made in such risk factors. The Trust does not intend, and assumes no obligations, to update any of the statements included in this press release.

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FAQ

Why is there no distribution for Mesa Royalty Trust in April 2021?

Mesa Royalty Trust will not pay a distribution for April 2021 because expenses exceeded the revenue from oil and gas sales.

How does commodity price volatility affect Mesa Royalty Trust?

Commodity price volatility directly impacts the proceeds the Trust receives, which can affect distributions to unitholders.

What factors influence the distributions of Mesa Royalty Trust?

Distributions are influenced by oil and gas production, prices, and the Trust’s administrative expenses.

What are the implications of low oil prices for MTR distributions?

Low oil prices may lead to reduced proceeds, resulting in lower or potentially no distributions to unitholders.

Are there risks associated with Mesa Royalty Trust operations?

Yes, risks include drilling and production uncertainties and fluctuations in commodity pricing, which may affect royalty income.