Mesa Royalty Trust Announces Trust Income for February 2022

Rhea-AI Summary

Mesa Royalty Trust (NYSE: MTR) announced its February 2022 income distribution of $0.109409758 per unit, payable on April 29, 2022, to unitholders of record as of February 28, 2022. The Trust's income totaled $238,351 from its New Mexico properties, with $203,895 distributable after expenses. Due to anticipated fluctuations based on production and market conditions, distributions are expected to decrease as the Trust aims to boost cash reserves from $1.0 million to $2.0 million throughout 2022. Ongoing production costs may also lead to reduced or zero distributions in future periods.

Positive

• Distribution of $0.1094 per unit for February 2022.
• Income from New Mexico properties amounted to $238,351.

Negative

• Trust anticipates reduced distributions in 2022 to increase cash reserves.
• Accumulated excess production costs may lead to reduced or no future distributions.

HOUSTON--(BUSINESS WIRE)-- Mesa Royalty Trust (the “Trust”) (NYSE: MTR) announced today the Trust income distribution for the month of February 2022. Unitholders of record on February 28, 2022 will receive distributions amounting to $0.109409758 per unit, payable on April 29, 2022. The Trust received $238,351, all of which came from the New Mexico portion of the Trust’s San Juan Basin properties operated by Hilcorp San Juan LP, an affiliate of Hilcorp Energy Company. No income was received in February 2022 from any other working interest owner. This month, after the Trust’s withholding for cash reserves and the payment of administrative expenses, income from the distributable net profits was $203,895.

The Trust was formed to own an overriding royalty interest of the net proceeds attributable to 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 public 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. In addition, as further described in the Trust’s most recent filing on Form 10-Q, distributions to unitholders are expected to be materially reduced during 2022, as the Trust intends to increase cash reserves from $1.0 million to a total of $2.0 million to provide added liquidity.

Proceeds reported by the working interest owners for any month are not generally representative of net proceeds that will be received by the Trust in future periods. As further described in the Trust’s Form 10-K and Form 10-Q filings, production and development costs for the royalty interest have resulted in substantial accumulated excess production costs, which will decrease Trust distributions, and in some periods may result in no Trust distributions. 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 volatility in the industry and revenues and expenses reported to the Trust by working interest owners. Any additional expenses and adjustments, among other things, will reduce proceeds to the Trust, 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, prices received by working interest owners and other risks described in the Trust’s Form 10-K for the year ended December 31, 2020, Form 10-Q for the quarter ended March 31, 2021, Form 10-Q for the quarter ended June 30, 2021 and Form 10-Q for the quarter ended September 30, 2021. 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. Each unitholder should consult its own tax advisor with respect to its particular circumstances.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220218005385/en/

Mesa Royalty Trust

The Bank of New York Mellon Trust Company, N.A., as Trustee

Elaina Rodgers

713-483-6020

http://mtr.q4web.com/home/default.aspx

Source: Mesa Royalty Trust

FAQ

What is the February 2022 distribution amount for Mesa Royalty Trust (MTR)?

The distribution amount for February 2022 is $0.109409758 per unit.

When will the distribution for Mesa Royalty Trust (MTR) be paid?

The distribution will be payable on April 29, 2022.

How much income did Mesa Royalty Trust (MTR) receive in February 2022?

Mesa Royalty Trust received a total income of $238,351.

Why are distributions expected to decrease for Mesa Royalty Trust (MTR) in 2022?

Distributions are expected to decrease as the Trust plans to increase cash reserves from $1.0 million to $2.0 million.

What impact do production costs have on Mesa Royalty Trust (MTR) distributions?

Production costs may lead to substantially lower distributions or potentially no distributions at all.