HUGOTON ROYALTY TRUST DECLARES NO MARCH CASH DISTRIBUTION

Rhea-AI Summary

Hugoton Royalty Trust (HGTXU) announced no cash distribution to unitholders for March 2025 due to excess cost positions across all three Trust's conveyances of net profits interests. The Trust's cash reserve decreased by $28,000 for expense payments.

Key financial updates include:

• Kansas properties: Excess costs increased by $32,000, with cumulative excess costs at $1,753,000
• Oklahoma properties: Recovered $288,000 in excess costs, but cumulative excess remains at $2,237,000
• Wyoming properties: Excess costs increased by $25,000, with total cumulative excess at $8,179,000

Development costs of $10.5 million ($8.4 million net to Trust) have been charged for six non-operated wells in Major County, Oklahoma. The Trust added sales volumes of approximately 2,000 Bbls and 17,000 Mcf from four new non-operated wells in the same region.

Positive

• Recovery of $288,000 in excess costs on Oklahoma properties
• Addition of new production volumes from four wells (2,000 Bbls and 17,000 Mcf)

Negative

• No March 2025 cash distribution to unitholders
• Increased excess costs in Kansas ($32,000) and Wyoming ($25,000) properties
• High cumulative excess costs across all properties totaling $12.17 million
• Cash reserve reduction of $28,000 for Trust expenses
• Significant development costs of $10.5 million for new wells

DALLAS, March 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 March 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 $28,000 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 January.

		Underlying Sales
		Volumes (a)					Average Price
		Gas (Mcf)			Oil (Bbls)		Gas (per Mcf)		Oil (per Bbl)
Current Month Distribution		554,000			12,000		$4.68		$69.34
Prior Month Distribution			672,000		15,000		$3.83		$66.06

(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 2,000 Bbls and 17,000 Mcf from four new non-operated wells drilled in Major County, Oklahoma and has deducted development costs of $34,000, production expense of $1,426,000, and overhead of $1,031,000 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 $32,000 on properties underlying the Kansas net profits interests. Underlying cumulative excess costs remaining on the Kansas net profits interests total $1,753,000, including accrued interest of $143,000.

XTO Energy has advised the Trustee that $288,000 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 $2,237,000, including accrued interest of $424,000. 

XTO Energy has advised the Trustee that excess costs increased by $25,000 on properties underlying the Wyoming net profits interests. Underlying cumulative excess costs remaining on the Wyoming net profits interests total $8,179,000, including accrued interest of $526,000.

Development Costs

As previously disclosed, XTO Energy advised the Trustee that it elected to participate in the development of six non-operated wells in Major County, Oklahoma. As of the date hereof, $10.5 million underlying ($8.4 million net to the Trust) in development costs have been charged to the Trust for the six non-operated wells. The Trustee and XTO Energy will continue to provide material updates on the six 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 Hugoton Royalty Trust (HGTXU) suspend its March 2025 distribution?

HGTXU suspended March 2025 distribution due to excess cost positions on all three Trust's conveyances of net profits interests and reduced cash reserves by $28,000 for Trust expenses.

What are the current excess costs for HGTXU's Kansas properties?

Kansas properties' excess costs increased by $32,000, with cumulative excess costs totaling $1,753,000, including $143,000 in accrued interest.

How much are the development costs for HGTXU's new wells in Major County, Oklahoma?

Development costs total $10.5 million ($8.4 million net to Trust) for six non-operated wells in Major County, Oklahoma.

What is the current status of HGTXU's Wyoming properties excess costs?

Wyoming properties saw excess costs increase by $25,000, with total cumulative excess costs at $8,179,000, including $526,000 in accrued interest.