Mesa Royalty Trust Announces Trust Income for May 2022

Rhea-AI Summary

Mesa Royalty Trust (NYSE: MTR) announced the income distribution for May 2022, with unitholders set to receive $0.250358523 per unit on July 29, 2022. Total income for the month amounted to $466,566, derived from operations in New Mexico and Hugoton properties, with no income from Colorado assets. The Trust plans to bolster cash reserves to $2.0 million, potentially reducing future distributions due to accumulated excess production costs and related uncertainties in the oil and gas industry.

Positive

• Income distribution of $0.250358523 per unit for May 2022.
• Total income for the month reached $466,566.

Negative

• No income from Colorado properties in May 2022.
• Future distributions are expected to be reduced due to increased cash reserves and accumulated production costs.
• Potential for no distributions in certain periods due to volatility and working interest obligations.

HOUSTON--(BUSINESS WIRE)-- Mesa Royalty Trust (the “Trust”) (NYSE: MTR) announced today the Trust income distribution for the month of May 2022. Unitholders of record on May 31, 2022 will receive distributions amounting to $0.250358523 per unit, payable on July 29, 2022. The Trust received $254,904, 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, and $239,415, which came from the Hugoton Royalty properties operated by Scout Energy Group V, LP. No income was received in May 2022 from the Colorado portion of the Trust’s San Juan Basin properties operated by SIMCOE LLC, an affiliate of IKAV Energy Inc. or from the Colorado portion of the Trust’s San Juan Basin properties operated by Red Willow Production Company. This month, after the Trust’s withholding for cash reserves and the payment of administrative expenses, income from the distributable net profits was $466,566.

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 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, 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/20220520005433/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 latest distribution amount for Mesa Royalty Trust (MTR)?

The latest distribution amount for Mesa Royalty Trust (MTR) is $0.250358523 per unit for May 2022.

When will the income distribution for May 2022 be paid to unitholders of MTR?

The income distribution for May 2022 will be paid on July 29, 2022.

How much total income did Mesa Royalty Trust report for May 2022?

Mesa Royalty Trust reported a total income of $466,566 for May 2022.

Will Mesa Royalty Trust (MTR) distributions be reduced in the future?

Yes, future distributions are expected to be materially reduced as the Trust increases cash reserves.

Why was there no income from Colorado properties for MTR in May 2022?

No income was received from Colorado properties due to operational factors affecting the Trust.