Mesa Royalty Trust Announces Trust Income for November 2024

Rhea-AI Summary

Mesa Royalty Trust (NYSE: MTR) announced its November 2024 income distribution of $0.003060770 per unit for unitholders of record on November 29, 2024, payable on January 31, 2025. The Trust received $8,766.51 from Colorado properties operated by SIMCOE and $13,423.06 from New Mexico properties operated by Hilcorp San Juan LP. After administrative expenses, the distributable net profits were $5,704.02. The Trust warns that distributions are expected to be materially reduced until it builds cash reserves of $2.0 million for liquidity purposes.

Positive

• Received total income of $22,189.57 from Colorado and New Mexico properties
• Generated distributable net profits of $5,704.02

Negative

• Distributions to be materially reduced until $2.0M cash reserve is built
• Substantial accumulated excess production costs affecting distributions
• No income received from other working interest owners
• Very low per-unit distribution of $0.003060770

Insights

Financial Analyst

The announced distribution of $0.003060770 per unit for November 2024 reflects extremely low income generation, with total distributable net profits of only $5,704.02. The Trust received minimal income from its San Juan Basin properties - $8,766.51 from Colorado operations and $13,423.06 from New Mexico operations.

The Trust's current priority to build $2.0 million in cash reserves will continue to significantly impact unitholder distributions. With substantial accumulated excess production costs and volatile industry conditions affecting proceeds, investors should expect continued pressure on distributions. The minimal per-unit distribution amount signals ongoing challenges in generating meaningful income from the Trust's royalty interests.

HOUSTON--(BUSINESS WIRE)-- Mesa Royalty Trust (the “Trust”) (NYSE: MTR) announced today the Trust income distribution for the month of November 2024. Unitholders of record on November 29, 2024 will receive distributions amounting to $0.003060770 per unit, payable on January 31, 2025. The Trust received $8,766.51 which came from the Colorado portion of the Trust’s San Juan Basin properties operated by SIMCOE LLC, an affiliate of IKAV Energy Inc and $13,423.06 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 November 2024 from any other working interest owner. This month, after the Trust’s payment of administrative expenses, income from the distributable net profits was $5,704.02.

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, until the Trust increases its cash reserves to a total of $2.0 million in order 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, 2023. 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.

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

View source version on businesswire.com: https://www.businesswire.com/news/home/20241119851002/en/

Mesa Royalty Trust

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

Elaina Rodgers

713-483-6020

Source: Mesa Royalty Trust

FAQ

What is Mesa Royalty Trust's (MTR) distribution per unit for November 2024?

Mesa Royalty Trust announced a distribution of $0.003060770 per unit for November 2024, payable on January 31, 2025.

How much income did MTR receive from its San Juan Basin properties in November 2024?

MTR received $8,766.51 from Colorado properties and $13,423.06 from New Mexico properties, totaling $22,189.57.

Why are MTR's distributions expected to be reduced?

Distributions will be materially reduced until the Trust builds its cash reserves to $2.0 million to provide added liquidity.