HUGOTON ROYALTY TRUST DECLARES NO DECEMBER CASH DISTRIBUTION

Rhea-AI Summary

Hugoton Royalty Trust (HGTXU) announced no cash distribution to unitholders for December 2024 due to excess cost positions across all three Trust's conveyances of net profits interests. The Trust's cash reserve was reduced by $15,000 for expense payments. The Trust reported underlying gas sales of 791,000 Mcf at $2.67/Mcf and oil sales of 18,000 Bbls at $69.27/Bbl.

XTO Energy reported cumulative excess costs of $1.377 million in Kansas, $1.477 million in Oklahoma, and $7.799 million in Wyoming. Development costs of $10.4 million ($8.3 million net to Trust) were charged for four non-operated wells in Major County, Oklahoma.

Positive

• Gas sales volume increased from 648,000 Mcf to 791,000 Mcf month-over-month
• Oil sales volume increased from 12,000 Bbls to 18,000 Bbls month-over-month
• Oil price improved from $67.67 to $69.27 per barrel

Negative

• No cash distribution to unitholders for December 2024
• $15,000 reduction in Trust's cash reserve
• Excess costs increased by $128,000 in Kansas properties
• Excess costs increased by $418,000 in Wyoming properties
• Total cumulative excess costs across all regions reached $10.65 million
• $10.4 million in development costs charged for new wells

DALLAS, Dec. 20, 2024 /PRNewswire/ -- Argent Trust Company, as Trustee of the Hugoton Royalty Trust (the "Trust") (OTCQB: HGTXU) announced today there would not be a cash distribution to the holders of its units of beneficial interest for December 2024 due to the excess cost positions on all three of the Trust's conveyances of net profits interests. The Trust's cash reserve was reduced by $15,000 for the payment of Trust expenses. To the extent net profits income is received in future months, the Trustee anticipates replenishing the cash reserve prior to declaring any future distributions to unitholders. Replenishment of the cash reserve may include any increase in the cash reserve total, as determined by the Trustee. The following table shows underlying gas and oil sales and average prices attributable to the net overriding royalty for both the current month and prior month. Underlying gas and oil sales volumes attributable to the current month were primarily produced in October.

		Underlying Sales
		Volumes (a)					Average Price
		Gas (Mcf)			Oil (Bbls)		Gas (per Mcf)		Oil (per Bbl)
Current Month Distribution		791,000			18,000		$2.67		$69.27
Prior Month Distribution			648,000		12,000		$2.68		$67.67

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

XTO Energy has advised the Trustee that it has included underlying sales volumes of approximately 5,000 Bbls and 40,000 Mcf from four new non-operated wells drilled in Major County, Oklahoma and has deducted development costs of $54,000, production expense of $1,773,000, and overhead of $941,000 in determining the royalty calculation for the Trust for the current month.

Excess Costs
XTO Energy has advised the Trustee that excess costs increased by $128,000 on properties underlying the Kansas net profits interests. Underlying cumulative excess costs remaining on the Kansas net profits interests total $1,377,000, including accrued interest of $114,000.

XTO Energy has advised the Trustee that $329,000 of excess costs were recovered on properties underlying the Oklahoma net profits interests. However, after the partial recovery, there were no remaining proceeds from the properties underlying the Oklahoma net profits interests to be included in the current month's distribution. Underlying cumulative excess costs remaining on the Oklahoma net profits interests total $1,477,000, including accrued interest of $383,000.

XTO Energy has advised the Trustee that excess costs increased by $418,000 on properties underlying the Wyoming net profits interests. Underlying cumulative excess costs remaining on the Wyoming net profits interests total $7,799,000, including accrued interest of $377,000.

Development Costs
As previously disclosed, XTO Energy advised the Trustee that it elected to participate in the development of four non-operated wells in Major County, Oklahoma. As of the date hereof, $10.4 million underlying ($8.3 million net to the Trust) in development costs have been charged to the Trust for the four non-operated wells. Two wells were completed in second quarter 2023, the third was completed in fourth quarter 2023, and the fourth was completed in first quarter 2024. The Trustee and XTO Energy will continue to provide material updates on the four non-operated wells in subsequent communications.

For more information on the Trust, including the annual tax information, distribution amounts, and historical press releases, please visit our website at www.hgt-hugoton.com.

Statements made in this press release regarding future events or conditions are forward looking statements. Actual future results, including development costs and timing, and future net profits, could differ materially due to changes in natural gas and oil prices and other economic conditions affecting the gas and oil industry and other factors described in Part I, Item 1A of the Trust's Annual Report on Form 10-K for the year ended December 31, 2023.

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SOURCE Hugoton Royalty Trust

FAQ

Why did HGTXU suspend its December 2024 cash distribution?

HGTXU suspended its December 2024 distribution due to excess cost positions on all three of the Trust's conveyances of net profits interests.

What are the current excess costs for HGTXU across different regions?

HGTXU's excess costs are $1.377 million in Kansas, $1.477 million in Oklahoma, and $7.799 million in Wyoming, totaling approximately $10.65 million including accrued interest.

How much did HGTXU spend on the Major County, Oklahoma wells development?

HGTXU was charged $10.4 million ($8.3 million net to the Trust) in development costs for four non-operated wells in Major County, Oklahoma.

What were HGTXU's gas and oil sales volumes for the current month?

HGTXU reported gas sales of 791,000 Mcf at $2.67 per Mcf and oil sales of 18,000 Bbls at $69.27 per barrel.

How much was HGTXU's cash reserve reduced by in December 2024?

HGTXU's cash reserve was reduced by $15,000 for the payment of Trust expenses.