SABINE ROYALTY TRUST ANNOUNCES MONTHLY CASH DISTRIBUTION FOR DECEMBER 2024

Rhea-AI Summary

Sabine Royalty Trust (NYSE: SBR) has declared a cash distribution of $0.311170 per unit for December 2024, payable on December 30, 2024, to unitholders of record on December 16, 2024. The distribution reflects oil production for September 2024 and gas production for August 2024, with preliminary volumes of 68,183 barrels of oil and 1,536,640 Mcf of gas. Average prices were $71.76 per barrel of oil and $1.39 per Mcf of gas.

This month's distribution decreased from the previous month due to lower oil and gas production volumes and decreased pricing. Additionally, approximately $1,526,000 of revenue will be posted in December, and $1,624,000 was deducted for 2024 Ad Valorem taxes.

Positive

• Continued monthly cash distribution to unitholders
• Additional $1,526,000 revenue to be posted in December

Negative

• Decrease in oil production from 70,299 to 68,183 barrels
• Decrease in gas production from 1,898,789 to 1,536,640 Mcf
• Oil price decline from $76.90 to $71.76 per barrel
• Gas price decline from $1.78 to $1.39 per Mcf
• Higher Ad Valorem taxes deduction ($1,624,000 vs $990,000 last year)

Insights

Financial Analyst

The December distribution of $0.311170 per unit represents a significant decrease from previous levels, driven by multiple factors. Oil production declined by 3% to 68,183 barrels, while gas production saw a steeper drop of 19% to 1,536,640 Mcf. More concerning is the pricing weakness, with oil prices falling 6.7% to $71.76 per barrel and gas prices declining 21.9% to $1.39 per Mcf.

The increased Ad Valorem tax deduction of $1.624 million, up 64% from last year's $990,000, further pressures the distribution. The delayed tax renditions create uncertainty for January and February 2025 distributions. The $1.526 million in deferred revenue recognition adds another layer of complexity to future distribution expectations.

Energy Market Analyst

The current pricing environment reflects broader market challenges in the energy sector. Natural gas prices at $1.39/Mcf are particularly concerning, sitting well below sustainable levels for many producers. The oil price decline to $71.76/bbl, while less severe, still indicates market softness. The production declines, especially the sharp drop in gas volumes, could signal underlying field performance issues or strategic production management in response to weak pricing.

The timing mismatch between production and distribution (September oil and August gas) means current market conditions aren't fully reflected yet. With continued volatility in energy markets and seasonal factors coming into play, unitholders should prepare for potential further distribution fluctuations in the near term.

DALLAS, Dec. 5, 2024 /PRNewswire/ -- Argent Trust Company, as Trustee of the Sabine Royalty Trust (NYSE: SBR), today declared a cash distribution to the holders of its units of beneficial interest of $0.311170 per unit, payable on December 30, 2024, to unit holders of record on December 16, 2024. Sabine's cash distribution history, current and prior year financial reports and tax information booklets, a link to filings made with the Securities and Exchange Commission and more can be found on its website, which has recently been updated with a new look, at http://www.sbr-sabine.com/.  Additionally, printed reports can be requested and are mailed free of charge.

This distribution reflects primarily the oil production for September 2024 and the gas production for August 2024, which is considered current production. Preliminary production volumes are approximately 68,183 barrels of oil and 1,536,640 Mcf of gas. Preliminary prices are approximately $71.76 per barrel of oil and $1.39 per Mcf of gas.

This month's distribution is lower than the previous month's primarily due to a decrease in oil and gas production, as well as a decrease in the pricing of both oil and natural gas.

The table below compares this month's production and prices to the previous month's:

		Net to Trust Sales
		Volumes (a)						Average Price (a)
		Oil (bbls)			Gas (Mcf)			Oil (per bbl)		Gas (per Mcf)
Current Month		68,183			1,536,640			$71.76		$1.39
Prior Month		70,299			1,898,789			$76.90		$1.78

(a)	Sales volumes are recorded in the month the Trust receives and identifies the related royalty income. Because of this, sales volumes and pricing may fluctuate from month to month based on the timing of cash receipts.

Revenues are only distributed after they are received, verified, and posted. Most energy companies normally issue payment of royalties on or about the 25^th of every month, and depending on mail delivery, a varying amount of royalties are not received until after the revenue posting on the last business day of the month. The revenues received after that date will be posted within 30 days of receipt.

Due to the timing of the end of the month of November, approximately $1,526,000 of revenue received will be posted in the following month of December, in addition to normal cash receipts received during December. Since the close of business in November and prior to this press release, approximately $290,000 in revenue has been received.

Approximately $1,624,000 for 2024 Ad Valorem taxes was deducted from this month's distribution as compared to $990,000 this time last year. The trustee has been advised that some of the tax renditions have been delayed somewhat this year, so the amounts to be deducted in the January 2025 and February 2025 distributions may be different relative to the same time periods last year. Ad Valorem tax payments are normal expenditures at this time of year.

The 2023 Annual Report with Form 10-K and the January 1, 2024 Reserve Summary are available on the Sabine website at http://www.sbr-sabine.com/. 

Forward-looking Statements

Any statements in this press release about future events or conditions, and other statements containing the words "estimates," "believes," "anticipates," "plans," "expects," "will," "may," "intends" and similar expressions, other than historical facts, constitute forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Factors or risks that could cause the Trust's actual results to differ materially from the results the Trustee anticipates include, but are not limited to the factors described in Part I, Item 1A, "Risk Factors" of the Trust's Annual Report on Form 10-K for the year ended December 31, 2023, and Part II, Item 1A, "Risk Factors" of subsequently filed Quarterly Reports on Form 10-Q.

Actual results may differ materially from those indicated by such forward-looking statements. In addition, the forward-looking statements included in this press release represent the Trustee's views as of the date hereof. The Trustee anticipates that subsequent events and developments may cause its views to change. However, while the Trustee may elect to update these forward-looking statements at some point in the future, it specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing the Trustee's views as of any date subsequent to the date hereof.

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SOURCE Sabine Royalty Trust

FAQ

What is Sabine Royalty Trust's (SBR) December 2024 distribution amount?

Sabine Royalty Trust's distribution for December 2024 is $0.311170 per unit, payable on December 30, 2024.

What caused the decrease in SBR's December 2024 distribution?

The decrease was primarily due to lower oil and gas production volumes, as well as decreased pricing for both oil and natural gas.

How much are the Ad Valorem taxes deducted from SBR's December 2024 distribution?

Approximately $1,624,000 was deducted for 2024 Ad Valorem taxes, compared to $990,000 in the previous year.

What were SBR's oil and gas production volumes for the current distribution period?

The preliminary production volumes were 68,183 barrels of oil and 1,536,640 Mcf of gas.