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  4. [8-K] HUGOTON ROYALTY TRUST Reports Material Event

Hugoton Royalty Trust sees no payouts, mulls sale

Hugoton Royalty Trust (HGTXU), administered by Argent Trust Company, announced there will be no cash distribution to unitholders for May 2026 because all three net profits interests remain in excess cost positions.

Filing Impact
(High)
Filing Sentiment
(Neutral)
Form Type
8-K

Rhea-AI Filing Summary

Hugoton Royalty Trust (HGTXU), administered by Argent Trust Company, announced there will be no cash distribution to unitholders for May 2026 because all three net profits interests remain in excess cost positions. The Trust’s cash reserve was reduced by $8,000 to pay expenses, and the Trustee does not foresee any near-term distributions.

Accumulated excess costs on the Kansas, Oklahoma, and Wyoming conveyances have prevented any distributions since July 2023 and depleted the expense reserve. The Trust states these conditions raise substantial doubt about its ability to continue as a going concern, and that it may need drastic measures, including a potential sale of assets or termination of the Trust, which would require approval by at least 80% of outstanding units.

The Trust is not engaging a new independent registered public accounting firm due to cash constraints and has filed a Form 12b-25 indicating it cannot file its June 30, 2026 Form 10-Q. It notes that unitholders and potential investors may have limited or no information, and units were removed from the OTCQB on July 17, 2026 and now trade on the Expert Market on an unsolicited quotes-only basis. Significant excess cost balances remain on all three state conveyances, further limiting the prospect of future net profits.

Positive

  • None.

Negative

  • No May 2026 cash distribution and Trustee does not foresee near-term distributions due to excess cost positions on all three net profits interests.
  • Going-concern warning: the Trust states conditions raise substantial doubt about its ability to continue as a going concern over the next year.
  • SEC reporting halted: the Trust is not engaging a new auditor, cannot file the Form 10-Q for June 30, 2026, and says investors may have limited or no information.
  • Delisting from OTCQB: on July 17, 2026 the units were removed from the OTCQB and now trade on the Expert Market on an unsolicited quotes-only basis.
  • Large excess cost balances: cumulative excess costs total $3.289 million (Kansas), $15.058 million (Oklahoma), and $12.735 million (Wyoming), all including accrued interest.

Filing Explained

The August 21 filing quantifies remaining excess costs at $3.289 million in Kansas, $15.058 million in Oklahoma, and $12.735 million in Wyoming.

The trust reports that all three net profits interests remain in excess-cost positions, with cumulative balances of $3,289,000 in Kansas, $15,058,000 in Oklahoma, and $12,735,000 in Wyoming; this leaves no cash distribution for May 2026 and keeps distributions dependent on first overcoming those balances.

The disclosed balances include accrued interest of $405,000, $1,387,000, and $1,585,000, respectively, while the separate $1,000,000 in advance distributions may also be recouped from future net profits, subject to leaving the trust at least $250,000 in available cash.

For the current month, Mach reported $1,471,000 of development costs, $1,414,000 of production expense, and $904,000 of overhead in the royalty calculation; excess costs also increased by $33,000 in Kansas, $934,000 in Oklahoma, and $478,000 in Wyoming.

The trustee says it sought financing and contacted potential buyers, but currently considers financing sufficient for long-term liquidity unlikely and received no interest from the third parties contacted, leaving financing, a potential asset sale, or termination as unresolved paths requiring further disclosure and, for a material sale or termination, approval by at least 80 percent of outstanding units.

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, or exhibit attachments filed with this report.
Cash reserve decrease $8,000 Reduction of the Trust’s cash reserve to pay expenses related to the May 2026 distribution period
Current month gas sales volume 693,000 Mcf Underlying gas sales volume attributable primarily to May production for the current month distribution
Current month oil sales volume 13,000 Bbls Underlying oil sales volume attributable primarily to May production for the current month distribution
Average gas price, current month $2.80 per Mcf Average gas price used in the current month distribution calculation
Development costs (current month) $1,471,000 Mach Natural Resources’ reported development costs used in the royalty calculation
Cumulative excess costs – Kansas $3,289,000 Underlying cumulative excess costs on Kansas net profits interests, including $405,000 accrued interest
Cumulative excess costs – Oklahoma $15,058,000 Underlying cumulative excess costs on Oklahoma net profits interests, including $1,387,000 accrued interest
Cumulative excess costs – Wyoming $12,735,000 Underlying cumulative excess costs on Wyoming net profits interests, including $1,585,000 accrued interest
excess costs financial
"due to the excess cost positions on all three of the Trust’s conveyances"
Excess costs are expenses a company incurs that are above its normal or expected operating costs—unexpected charges, one-time losses, or spending beyond budget, like a household suddenly paying for major repairs. They matter to investors because they can temporarily or permanently reduce profits and cash flow, and frequent or large excess costs may signal operational problems or higher risk, helping investors decide whether a profit hit is a short-term anomaly or a lasting issue.
going concern financial
"These conditions raise substantial doubt about the Trust’s ability to continue as a going concern"
Going concern is the accounting assumption that a company will keep operating and meeting its obligations for the foreseeable future. The phrase matters most when a company or its auditors disclose substantial doubt about it, a formal warning that the business may not have enough resources to continue without raising money, restructuring, or selling assets. That language in a filing or press release signals elevated financial risk.
Form 12b-25 regulatory
"the Trust filed a Form 12b-25 stating that it would be unable to file"
Form 12b-25 is a notice a publicly traded company files with the U.S. Securities and Exchange Commission when it cannot deliver a required periodic report (like a quarterly or annual financial report) on time. It explains the reason for the delay and gives the company a short, temporary window to finish the report without being marked as delinquent; investors watch it because late filings can signal accounting, operational, or control issues that may affect a company’s reliability and stock risk, much like a missed homework deadline can raise concerns about a student’s preparedness.
Expert Market market
"units had been removed from the OTCQB and are now trading on the Expert Market"
An expert market is a trading venue or segment where a designated professional or market maker actively runs the buying and selling process for certain securities, especially those that are complex or thinly traded. Like an auctioneer at a niche market who knows the products and keeps transactions flowing, the expert helps set fair prices and provide liquidity; for investors this affects how easily they can trade, the transparency of prices, and potential costs or risks when buying or selling.
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.
advance distributions financial
"the two advance distributions totaling $1,000,000"
Underlying gas sales volume 693,000 Mcf Increased from 666,000 Mcf in the prior month distribution
Underlying oil sales volume 13,000 Bbls Decreased from 14,000 Bbls in the prior month distribution
Average gas price $2.80 per Mcf Decreased from $3.06 per Mcf in the prior month distribution
Average oil price $100.73 per Bbl Increased from $93.52 per Bbl in the prior month distribution

FAQ

Why is Hugoton Royalty Trust (HGTXU) paying no cash distribution for May 2026?
There will be no May 2026 cash distribution because all three of the Trust’s net profits interests are in excess cost positions, so there were insufficient net proceeds. Excess costs have also prevented any distributions since July 2023 and depleted the Trust’s expense reserve.

What going-concern risks did Hugoton Royalty Trust (HGTXU) disclose?
The Trust states that accumulated excess costs, lack of cash, and depleted reserves raise substantial doubt about its ability to continue as a going concern, as it does not have sufficient cash to meet obligations during the one-year period after issuance of the year-end financial statements.

How has Hugoton Royalty Trust’s cash reserve changed in August 2026?
The Trust’s cash reserve was decreased by $8,000 to pay Trust expenses. The Trustee anticipates replenishing the cash reserve from any future net profits income before declaring future distributions and may increase the reserve total at its discretion.

What are the excess cost balances for HGTXU’s Kansas, Oklahoma, and Wyoming interests?
Cumulative excess costs, including accrued interest, are $3,289,000 for Kansas (with $405,000 interest), $15,058,000 for Oklahoma (with $1,387,000 interest), and $12,735,000 for Wyoming (with $1,585,000 interest). These balances must be recovered before net profits are payable.

What is the status of Hugoton Royalty Trust’s SEC filings and exchange listing?
On August 14, 2026, the Trust filed a Form 12b-25 stating it cannot file the June 30, 2026 Form 10-Q due to cash constraints and lack of an auditor. On July 17, 2026, its units were removed from the OTCQB and now trade on the Expert Market.

What potential strategic options is Hugoton Royalty Trust (HGTXU) considering?
The Trustee is reviewing options including terminating the Trust or marketing its net profits interests for sale. Any material sale of assets or termination would require approval from at least 80% of all outstanding units, and there is no assurance of residual proceeds for unitholders.

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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): August 21, 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

 

OTCPK

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 August 21, 2026, the Registrant issued a news release that it will not declare a monthly cash distribution and an update on the SEC filings for the month of August 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 August 21, 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:

 

August 21, 2026

 

By:

 

/s/ NANCY WILLIS

 

 

 

Nancy Willis

 

 

 

Director of Royalty Trust Services

 

 

 

 

Hugoton Royalty Trust

HUGOTON ROYALTY TRUST DECLARES NO AUGUST CASH DISTRIBUTION;

SEC FILING UPDATE

Dallas, Texas, August 21, 2026 – Argent Trust Company, as Trustee of the Hugoton Royalty Trust (the “Trust”) (OTCPK: HGTXU) announced today there would not be a cash distribution to the holders of its units of beneficial interest for May 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 decreased by $8,000 for the payment of Trust expenses. To the extent any 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 or alternatively may have to terminate. 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

SEC Filings and Exchange Status

On August 14, 2026, the Trust filed a Form 12b-25 stating that it would be unable to file the quarterly report on Form 10-Q for the quarter ended June 30, 2026, because it is not currently seeking engagement of a new independent registered public accounting firm, due to cash constraints. Since 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. The Trust was notified that on July 17,2026, the Trust units had been removed from the OTCQB and are now trading on the Expert Market on an unsolicited quotes only basis. 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 May.

 

 

Underlying
Sales

 

 

 

 

 

 

 

 

 

Volumes (a)

 

 

Average Price

 

 

 

Gas
(Mcf)

 

 

Oil
(Bbls)

 

 

Gas
(Mcf)

 

 

Oil
(Bbls)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Month Dist

 

 

693,000

 

 

 

13,000

 

 

$

2.80

 

 

$

100.73

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prior Month Dist

 

 

666,000

 

 

 

14,000

 

 

$

3.06

 

 

$

93.52

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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 $1,471,000, production expense of $1,414,000 and overhead of $904,000 in determining the royalty calculation for the Trust for the current month.

Excess Costs

Mach has advised the Trustee that excess costs increased by $33,000 on properties underlying the Kansas net profits interests. Underlying cumulative excess costs remaining on the Kansas net profits interests total $3,289,000 including accrued interest of $405,000.

Mach has advised the Trustee that excess cost increased by $934,000 on properties underlying the Oklahoma net profits interests. Underlying cumulative excess costs remaining on the Oklahoma net profits interests total $15,058,000, including accrued interest of $1,387,000.

 

Hugoton Royalty Trust

Mach has advised the Trustee that excess costs increased by $478,000 on properties underlying the Wyoming net profits interests. Underlying cumulative excess costs remaining on the Wyoming net profits interests total $12,735,000, including accrued interest of $1,585,000.

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

 

Source: View Original Filing on SEC EDGAR

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