HUGOTON ROYALTY TRUST DECLARES NO JANUARY CASH DISTRIBUTION

Rhea-AI Summary

Hugoton Royalty Trust (HGTXU) announced no cash distribution to unitholders for January 2025 due to excess cost positions across all three Trust's conveyances of net profits interests. The Trust's cash reserve was reduced by $12,000 for expenses.

The Trust reported underlying gas sales of 734,000 Mcf at $2.81 per Mcf and oil sales of 12,000 Bbls at $66.93 per Bbl. XTO Energy included sales from four new non-operated wells in Major County, Oklahoma, with development costs of $59,000, production expense of $1,774,000, and overhead of $944,000.

Excess costs increased across all regions: Kansas (+$314,000, total $1.7M), Oklahoma (+$1,030,000, total $2.517M), and Wyoming (+$145,000, total $7.995M). Development costs for the four non-operated wells in Oklahoma amount to $10.4 million underlying ($8.3 million net to Trust).

Positive

• Gas price increased from $2.67 to $2.81 per Mcf

Negative

• No cash distribution to unitholders for January 2025
• Cash reserve reduced by $12,000
• Excess costs increased across all regions totaling $12.212M
• Oil price decreased from $69.27 to $66.93 per Bbl
• Lower sales volumes: Gas decreased from 791,000 to 734,000 Mcf; Oil decreased from 18,000 to 12,000 Bbls
• High development costs of $10.4M for four non-operated wells

DALLAS, Jan. 21, 2025 /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 January 2025 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 $12,000 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 November.

		Underlying Sales
		Volumes (a)					Average Price
		Gas (Mcf)			Oil (Bbls)		Gas (per Mcf)		Oil (per Bbl)
Current Month Distribution		734,000			12,000		$2.81		$66.93
Prior Month Distribution			791,000		18,000		$2.67		$69.27

(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 3,000 Bbls and 20,000 Mcf from four new non-operated wells drilled in Major County, Oklahoma and has deducted development costs of $59,000, production expense of $1,774,000, and overhead of $944,000 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 $314,000 on properties underlying the Kansas net profits interests. Underlying cumulative excess costs remaining on the Kansas net profits interests total $1,700,000, including accrued interest of $123,000.

XTO Energy has advised the Trustee that excess costs increased by $1,030,000 on properties underlying the Oklahoma net profits interests. Underlying cumulative excess costs remaining on the Oklahoma net profits interests total $2,517,000, including accrued interest of $393,000. 

XTO Energy has advised the Trustee that excess costs increased by $145,000 on properties underlying the Wyoming net profits interests. Underlying cumulative excess costs remaining on the Wyoming net profits interests total $7,995,000, including accrued interest of $429,000.

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 January 2025 distribution?

HGTXU suspended its January 2025 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: Kansas ($1.7M including $123,000 interest), Oklahoma ($2.517M including $393,000 interest), and Wyoming ($7.995M including $429,000 interest).

How much did HGTXU's gas and oil sales volumes change in the current month?

Gas sales decreased from 791,000 to 734,000 Mcf, and oil sales decreased from 18,000 to 12,000 Bbls.

What is the total development cost for HGTXU's four non-operated wells in Major County, Oklahoma?

The development costs for the four non-operated wells amount to $10.4 million underlying ($8.3 million net to the Trust).

How much was HGTXU's cash reserve reduced by in January 2025?

HGTXU's cash reserve was reduced by $12,000 for the payment of Trust expenses.