SABINE ROYALTY TRUST ANNOUNCES MONTHLY CASH DISTRIBUTION FOR JUNE 2024

Rhea-AI Summary

Sabine Royalty Trust (NYSE: SBR) announced a cash distribution of $0.537640 per unit for June 2024. The distribution will be paid on June 28, 2024, to unit holders of record on June 17, 2024. This distribution primarily reflects oil production for March 2024 and gas production for February 2024, with preliminary production volumes of approximately 75,929 barrels of oil and 1,359,458 Mcf of gas. Current month prices are $81.23 per barrel of oil and $2.13 per Mcf of gas.

The distribution is lower than the previous month due to decreased oil production and lower natural gas prices, partially offset by higher oil prices and increased natural gas production. The current month saw a drop in oil production from 87,730 barrels and a decrease in gas prices from $2.53 per Mcf in the previous month. Notably, approximately $244,000 of revenue will be posted in June due to end-of-month timing, and $890,000 of revenue has been received since the close of May.

Positive

• Increase in the price of oil to $81.23 per barrel compared to the previous month.
• Natural gas production increased to 1,359,458 Mcf, up from 1,176,257 Mcf in the previous month.
• Sabine Royalty Trust maintains a consistent distribution schedule with detailed reporting and transparency.
• Approximately $890,000 in additional revenue received since the close of May.

Negative

• Cash distribution of $0.537640 per unit is lower than the previous month's distribution.
• Decrease in oil production to 75,929 barrels from the previous month's 87,730 barrels.
• Natural gas price dropped to $2.13 per Mcf from $2.53 per Mcf in the previous month.
• Approximately $244,000 of revenue delayed due to timing, to be posted in the following month.

Insights

Financial Analyst

SABINE ROYALTY TRUST has declared a $0.537640 per unit cash distribution for June 2024. For retail investors, it’s essential to understand that royalty trusts like Sabine derive their distributions from the production of oil and gas. This month’s distribution is slightly lower than the previous month mainly due to reduced oil production volumes and a decline in natural gas prices. Interestingly, while there is an increase in natural gas production and oil prices, they haven't completely counterbalanced the drop in oil volumes and gas prices.

It's also important to note the nuances in royalty payments. Sales volumes and pricing can fluctuate based on the timing of cash receipts. This month, approximately $244,000 in revenue will be posted in the following month due to the timing mismatch. This deferred revenue highlights the importance of understanding the timing aspects in royalty income recognition. This delay could sometimes lead to misleading short-term impressions of the trust's performance.

75,929 barrels of oil and 1,359,458 Mcf of gas were produced, with prices at $81.23 per barrel and $2.13 per Mcf respectively. While these figures provide a snapshot, investors should consider the broader price trends and production stability to gauge long-term viability.

Overall, this announcement suggests stability in Sabine’s distribution policy but also flags potential volatility due to fluctuating production and pricing. Investors should be aware of these dynamics and carefully monitor monthly updates for a clearer picture of performance trends.

Market Research Analyst

From a market perspective, the decrease in oil production from 87,730 barrels to 75,929 barrels is significant. This drop reflects operational challenges or field depletion, which may concern long-term investors. However, a marginal increase in oil prices to $81.23 per barrel partly offsets this reduction. The gas production, on the other hand, has increased to 1,359,458 Mcf, although the price dipped to $2.13 per Mcf, showing the underlying volatility in natural gas markets.

For retail investors, it's important to consider the underlying commodity price trends and production capabilities. Factors such as geopolitical events, regional supply-demand dynamics and technological advancements in extraction processes influence these prices. The trust’s ability to maintain or grow its production levels while navigating price fluctuations will be critical for sustaining its distribution levels.

This announcement doesn't drastically change the outlook but serves as a reminder of the inherent volatility in the energy sector. Investors should keep an eye on broader market trends and factor in these monthly variations when making investment decisions.

DALLAS, June 7, 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 $0.537640 per unit, payable on June 28, 2024, to unit holders of record on June 17, 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 March 2024 and the gas production for February 2024, which is considered current production. Preliminary production volumes are approximately 75,929 barrels of oil and 1,359,458 Mcf of gas. Preliminary prices are approximately $81.23 per barrel of oil and $2.13 per Mcf of gas.

This month's distribution is less than the previous month's primarily due to a decrease in oil production and a decrease in the price of natural gas, partially offset by an increase in the price of oil and an increase in natural gas production.

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		75,929			1,359,458			$81.23		$2.13
Prior Month		87,730			1,176,257			$76.02		$2.53

(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 May, approximately $244,000 of revenue received will be posted in the following month of June, in addition to normal cash receipts received during June. Since the close of business in May and prior to this press release, approximately $890,000 in revenue has been received.

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/.

View original content:https://www.prnewswire.com/news-releases/sabine-royalty-trust-announces-monthly-cash-distribution-for-june-2024-302166262.html

SOURCE Sabine Royalty Trust

FAQ

What is the cash distribution for Sabine Royalty Trust (SBR) in June 2024?

The cash distribution for Sabine Royalty Trust (SBR) in June 2024 is $0.537640 per unit.

When will Sabine Royalty Trust (SBR) pay the June 2024 cash distribution?

The June 2024 cash distribution will be paid on June 28, 2024.

What were the preliminary production volumes for Sabine Royalty Trust (SBR) in June 2024?

The preliminary production volumes were approximately 75,929 barrels of oil and 1,359,458 Mcf of gas.

Why is the June 2024 cash distribution for Sabine Royalty Trust (SBR) lower than the previous month?

The June 2024 cash distribution is lower mainly due to decreased oil production and lower natural gas prices, partially offset by higher oil prices and increased natural gas production.

What were the average prices for oil and gas for Sabine Royalty Trust (SBR) in June 2024?

The average prices were $81.23 per barrel of oil and $2.13 per Mcf of gas.

How much additional revenue has Sabine Royalty Trust (SBR) received since the close of May 2024?

Sabine Royalty Trust has received approximately $890,000 in additional revenue since the close of May 2024.