No April payout as Hugoton Royalty Trust (OTCQB: HGTXU) faces going concern risk

Rhea-AI Filing Summary

Hugoton Royalty Trust announced there will be no cash distribution for April 2026 because all three net profits interests remain in excess cost positions. The cash reserve was reduced by $97,000 for expenses, and the Trustee does not foresee any distributions in the near term.

The Trust highlights severe liquidity pressure and states that accumulated excess costs and low commodity prices have raised substantial doubt about its ability to continue as a going concern. It is reviewing options including a potential sale of assets or termination, both requiring 80% unitholder approval, but notes a sale may be unlikely and distributions might not result even if a sale occurs.

The Trust dismissed Grant Thornton LLP as auditor and does not expect to engage a new firm or maintain future SEC reporting once its reserve is depleted. It warns that unitholders may have limited or no information on which to base decisions and could ultimately lose a significant portion or all of their investment.

Positive

• None.

Negative

• No April 2026 cash distribution is being declared, and the Trustee does not foresee any unitholder distributions in the near term due to ongoing excess cost positions.
• Substantial doubt about going concern status is disclosed, as the Trust lacks sufficient cash to meet obligations over the year after its year-end financial statements were issued.
• Severe excess costs persist across Kansas, Oklahoma, and Wyoming net profits interests, with cumulative balances reaching multiple millions of dollars and continuing to increase in some areas.
• Dismissal of Grant Thornton LLP and the expectation of no future audited financial statements or SEC filings greatly reduce financial transparency and oversight.
• Potential loss of OTCQB listing is flagged if SEC filings and audited reports cannot be maintained, which could further pressure unit liquidity and pricing.
• Strategic options are distressed, including possible termination of the Trust or sale of assets, and management cautions that even a sale may not produce distributable proceeds for unitholders.
• Unitholders are warned they could incur significant losses or lose their entire investment if the Trust is unable to continue as a going concern.

Insights

Income-trust and credit-risk analyst

No April payout, going concern doubt, auditor exit signal severe distress.

Hugoton Royalty Trust is in deep financial stress: April 2026 distributions are suspended, and the Trustee does not foresee near‑term payouts. Cash reserves were drawn down by $97,000, and accumulated excess costs on Kansas, Oklahoma, and Wyoming interests are substantial.

The Trust explicitly states “substantial doubt” about its ability to continue as a going concern and reports difficulty securing financing. It is exploring drastic options such as terminating the Trust or selling heavily burdened net profits interests, while cautioning that a sale may not generate distributable proceeds for unitholders.

Dismissal of Grant Thornton LLP and the expectation of no future audits or SEC filings compound governance and transparency risk. The Trust notes that units could be removed from the OTCQB and that unitholders may incur significant losses or lose their entire investment, underscoring a clearly negative development.

8-K Event Classification

2 items: 2.02, 9.01

2 items

Item 2.02 Results of Operations and Financial Condition Financial

Disclosure of earnings results, typically an earnings press release or preliminary financials.

Item 9.01 Financial Statements and Exhibits Exhibits

Financial statements, pro forma financial information, and exhibit attachments filed with this report.

Key Figures

Cash reserve usage: $97,000 Advance distributions: $1,000,000 Development costs: $3,600,000 +5 more

8 metrics

Cash reserve usage $97,000 Reduced from the Trust’s cash reserve to pay expenses for April 2026

Advance distributions $1,000,000 Two advance distributions from XTO Energy, treated as production cost and subject to recoupment

Development costs $3,600,000 Development costs used by Mach in the current month royalty calculation

Oklahoma excess costs $15,409,000 Underlying cumulative excess costs on Oklahoma net profits interests, including $1,057,000 interest

Kansas excess costs $3,181,000 Underlying cumulative excess costs on Kansas net profits interests, including $333,000 interest

Wyoming excess costs $11,305,000 Underlying cumulative excess costs on Wyoming net profits interests, including $1,324,000 interest

Underlying gas sales volume 707,000 Mcf Current month underlying gas sales volume, primarily produced in January

Average gas price $4.94/Mcf Average gas price for current month underlying sales

Key Terms

excess cost positions, net profits interests, going concern, advance distributions, +2 more

6 terms

excess cost positions financial

"no cash distribution for April 2026 due to the excess cost positions on all three of the Trust’s conveyances"

net profits interests financial

"all three of the Trust’s conveyances of net profits interests"

A net profits interest is a non‑operating claim on the earnings from a specific asset (commonly oil, gas, or mineral production) that pays its holder a percentage of the money left over after production revenues and agreed costs are deducted. Think of it like owning a share of the profits from a single project without running it; payouts can be attractive but fluctuate with output and expenses, so investors use NPIs to gain income exposure while avoiding operating responsibilities.

going concern financial

"These conditions raise substantial doubt about the Trust’s ability to continue as a going concern"

A going concern is a business that is expected to continue its operations and meet its obligations for the foreseeable future, rather than shutting down or selling off assets. This assumption matters to investors because it indicates stability and ongoing profitability, making the business a more reliable investment. Think of it as believing a restaurant will stay open and serve customers, rather than closing down suddenly.

advance distributions financial

"the two advance distributions totaling $1,000,000, and the previously disclosed excess cost positions"

OTCQB market

"could have a negative impact on the market price for the Trust units and could result in removal of Trust units from the OTCQB"

OTCQB is a tier of the over‑the‑counter (OTC) market where smaller or developing companies list their shares for trading without being on a major stock exchange. Think of it like a well‑kept side street market: companies must meet basic reporting and transparency checks so investors get more information than the lowest OTC tier, but trading is usually less liquid and riskier than on big exchanges. Investors care because OTCQB listings can offer early access to growth stories but come with higher price swings and greater chance of limited resale options.

independent registered public accounting firm regulatory

"the Trust dismissed Grant Thornton LLP, its independent registered public accounting firm on April 16, 2026"

An independent registered public accounting firm is an outside accounting company officially registered with the government regulator to examine and report on a public company's financial records and controls. Investors treat its reports like an impartial inspector’s certificate — they add credibility to financial statements, help spot errors or misleading claims, and reduce the risk that shareholders are relying on unchecked or biased numbers.

Understanding 8-K Material Events →

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 20, 2026

HUGOTON ROYALTY TRUST

(Exact name of registrant as specified in its charter)

Texas			001-10476	58-6379215
(State or other jurisdiction of incorporation)			(Commission File Number)	(IRS Employer Identification No.)
Argent Trust Company Trustee 3838 Oak Lawn Ave, Suite 1720
Dallas, Texas				75219-4518
(Address of principal executive offices)				(Zip Code)

Registrant’s telephone number, including area code: (855) 588-7839

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Units of Beneficial Interest		HGTXU		OTCQB

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02 Results of Operations and Financial Condition.

On April 20, 2026, the Registrant issued a news release that it will not declare a monthly cash distribution for the month of April 2026. A copy of the news release is furnished as Exhibit 99.1.

The information in this Current Report, including the news release attached hereto, is being furnished pursuant to Item 2.02 of Form 8-K and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liabilities of that Section.

Item 9.01 Financial Statements and Exhibits.

(d)	Exhibits.
	Exhibit 99.1		News Release dated April 20, 2026

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		HUGOTON ROYALTY TRUST
		By:	ARGENT TRUST COMPANY, TRUSTEE
Date:	April 20, 2026	By:	/s/ NANCY WILLIS
			Nancy Willis
			Director of Royalty Trust Services

Hugoton Royalty Trust

HUGOTON ROYALTY TRUST DECLARES NO APRIL CASH DISTRIBUTION; ADDRESSES TRUST LIQUIDITY CONCERNS; ANNOUNCES DISMISSAL OF AUDIT FIRM

Dallas, Texas, April 20, 2026 – 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 April 2026 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 $97,000 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. Based on the current excess costs, the Trustee does not foresee any distributions in the near term.

Trust Liquidity

As previously disclosed, accumulated excess costs for the Kansas, Oklahoma, and Wyoming conveyances have resulted in insufficient net proceeds to the Trust which have resulted in no unitholder distributions since July 2023, and a reduction in the Trust’s expense reserve. These conditions raise substantial doubt about the Trust’s ability to continue as a going concern as the Trust does not have sufficient cash to meet its obligations during the one-year period after the dates that the year-end financial statements are issued. Factors attributable to the cash shortage are primarily lower oil and natural gas prices, development costs, the two advance distributions totaling $1,000,000, and the previously disclosed excess cost positions on the Kansas, Oklahoma, and Wyoming Conveyances.

The Trustee has curtailed spending as much as possible by deferring or eliminating unnecessary expenses, including the Trustee fee, which has been deferred since April 2024. This does not mitigate the fact that there are dwindling funds, and the Trust may have to take drastic measures to continue to exist. The Trustee has sought sources of financing but currently believes that financing in an amount sufficient to satisfy the Trust’s long-term liquidity needs is unlikely to be a viable option for the Trust moving forward. As a result, the Trustee has reviewed and intends to continue to review options for the Trust, which may include alternatives to continuing as a going concern, such as seeking to terminate the Trust or marketing the Trust’s interest (which are net profits interests burdened by excess costs) for a potential sale. The Trustee has reached out to potential third parties regarding interest in the Trust’s assets, but no interest resulted from such discussions. As a result, the Trustee believes that a potential sale of the Trust’s assets may be unlikely in the near term, however it will continue to consider any and all viable options. Even if a sale of the Trust assets was to occur, there is no assurance that the proceeds would result in funds to distribute to unitholders after all financial obligations of the Trust are met. Any material sale of assets and/or termination of the Trust requires unitholder approval by at least 80 percent of all outstanding units.

Hugoton Royalty Trust

Dismissal of Audit Firm

As previously reported in the Trust’s annual report on Form 10-K for the year ended December 31, 2025, the Trust had substantial doubt about its ability to continue as a going concern and anticipated its cash reserve to be depleted in the second quarter of 2026, after which it would have no funds with which to continue to make filings with the Securities and Exchange Commission (“SEC”). As a result, the Trust does not anticipate being able to engage an independent audit firm to review and audit the Trust’s financial statements and disclosures in quarterly reports on Forms 10-Q or the annual report on Form 10-K for the year ended December 31, 2026. As reported in the Trust’s Form 8-K filed with the SEC on April 17, 2026, the Trust dismissed Grant Thornton LLP, its independent registered public accounting firm on April 16, 2026.

If the Trust is not able to continue to make SEC filings, provide reporting to unitholders, or provide audited financial statements or third-party reserve reports, the unitholders and potential investors may have limited or no information on which to base investment decisions, which could have a negative impact on the market price for the Trust units and could result in removal of Trust units from the OTCQB. If the Trust is unable to continue as a going concern, unitholders could incur significant losses on their investment in the Trust or lose their entire investment in the Trust altogether.

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 (Mcf)				Oil (Bbls)
Current Month Dist			707,000				14,000			$	4.94			$	56.66
Prior Month Dist			781,000				32,000			$	4.91			$	58.70
(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.

Mach Natural Resources (“Mach”) has advised the Trustee that development costs in the amount of $3,600,000, production expense of $1,869,000 and overhead of $921,000 in determining the royalty calculation for the Trust for the current month.

Expenses on New Non-Operated Wells

Mach has advised the Trustee that expenses in the amount of approximately $3,588,000 (approximately $2,870,000 net to the Trust) associated with the two non-operated wells that were recently drilled in Major County, Oklahoma, were charged to the Trust for the current month. Costs associated with the well that the Trust was

Hugoton Royalty Trust

credited with first production revenue in the prior month were $1,843,000 ($1,474,000 net to the Trust) and costs associated with the second well drilled were $1,745,000 ($1,396,000 net to the Trust).

Excess Costs

Mach has advised the Trustee that excess costs increased by $70,000 on properties underlying the Kansas net profits interests. Underlying cumulative excess costs remaining on the Kansas net profits interests total $3,181,000 including accrued interest of $333,000.

Mach has advised the Trustee that excess costs increased by $3,354,000 on properties underlying the Oklahoma net profits interests. Underlying cumulative excess costs remaining on the Oklahoma net profits interests total $15,409,000, including accrued interest of $1,057,000.

Mach has advised the Trustee that $63,000 in excess costs was recovered on properties underlying the Wyoming net profits interests. Underlying cumulative excess costs remaining on the Wyoming net profits interests total $11,305,000, including accrued interest of $1,324,000.

Cumulative excess costs balances above do not include advance distributions made to the Trust by XTO Energy totaling $1,000,000 (net to the Trust), that can be treated as a production cost, except that the advances can be recouped, together with interest, from what would otherwise be distributable net profits under any of the three conveyances; provided, however that Mach shall only be entitled to withhold distributions of net proceeds as recoupment to the extent that such recoupment does not leave the Trust with less than $250,000 of available cash.

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, future net profits (if any), recoupment of excess costs, ability to make future filings with the Securities and Exchange Commission and continued listing on the OTCQB 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, 2025.

* * *

Contact: Nancy Willis Director of Royalty Trust Services Argent Trust Company, Trustee 855-588-7839

FAQ

Why is Hugoton Royalty Trust (HGTXU) paying no April 2026 cash distribution?

Hugoton Royalty Trust is not declaring an April 2026 cash distribution because all three net profits interests remain in excess cost positions. The Trustee also reduced the cash reserve by $97,000 for expenses and does not foresee any distributions in the near term.

What going concern risks did Hugoton Royalty Trust (HGTXU) disclose?

The Trust disclosed that accumulated excess costs and low commodity prices have created a cash shortage, raising substantial doubt about its ability to continue as a going concern. It does not have enough cash to meet obligations for the year after its year-end financial statements were issued.

How did excess costs change for Hugoton Royalty Trust’s Kansas, Oklahoma, and Wyoming interests?

Excess costs increased by $70,000 on Kansas properties to $3,181,000, and by $3,354,000 on Oklahoma properties to $15,409,000. Wyoming properties saw $63,000 in excess costs recovered, leaving $11,305,000 in cumulative excess costs.

What strategic options is Hugoton Royalty Trust (HGTXU) considering?

Given liquidity problems, the Trustee is reviewing options that include alternatives to continuing as a going concern. These may involve seeking to terminate the Trust or marketing its net profits interests for sale, although it notes that a sale may be unlikely and may not yield distributable proceeds.

Why did Hugoton Royalty Trust dismiss its audit firm and what are the implications?

The Trust dismissed Grant Thornton LLP because it expects its cash reserve to be depleted and cannot fund future audits. Without audited financials or SEC filings, unitholders may have limited information and the units risk removal from the OTCQB marketplace.

How large are the recent development and well expenses affecting Hugoton Royalty Trust?

Mach Natural Resources reported development costs of $3,600,000, production expense of $1,869,000, and overhead of $921,000 for the current month. It also charged about $3,588,000 for two non‑operated wells, approximately $2,870,000 net to the Trust.

Filing Exhibits & Attachments

1 document

Press Releases

• EX-99.1 EX-99.1 65.2 KB