Cross Timbers Royalty Trust Files Q2 2024 10-Q

TL;DR

Cross Timbers Royalty Trust filed its Q2 2024 10-Q. All good.

AI Summary

Cross Timbers Royalty Trust filed its 10-Q for the quarterly period ended June 30, 2024. The filing details the company's financial performance and operational status. The trust is incorporated in Texas and its principal executive offices are located in Dallas, Texas.

Why It Matters

This filing provides investors with an update on the financial health and operational activities of Cross Timbers Royalty Trust for the second quarter of 2024.

Risk Assessment

Risk Level: low — This is a routine quarterly filing with no immediate red flags or significant negative news.

Key Numbers

• 001-10982 — SEC File Number (Identifies the specific SEC filing for the company.)
• 75-6415930 — IRS Employer Identification No. (Tax identification number for the trust.)

Key Players & Entities

• CROSS TIMBERS ROYALTY TRUST (company) — Registrant
• June 30, 2024 (date) — Quarterly period end date
• 20240813 (date) — Filing date
• Texas (location) — State of incorporation
• Dallas, Texas (location) — Business and mail address city and state
• Argent Trust Company (company) — Corporate Trustee

FAQ

Key Financial Figures

• $1,000,000 — ome. The reserve is currently funded at $1,000,000. The accompanying notes to condensed
• $61,100,449 — g value of the net profits interests of $61,100,449 represents XTO Energy’s historic
• $58,549,724 — st corpus. Accumulated amortization was $58,549,724 as of June 30, 2024, and $58,428,866 as
• $58,428,866 — as $58,549,724 as of June 30, 2024, and $58,428,866 as of December 31, 2023. Amortization o
• $40,000 — at, based upon that plan, approximately $40,000 should be allocated to the Trust as add
• $80,661 — ended June 30, 2024, excess costs were $80,661 ($60,496 net to the Trust) on propertie
• $60,496 — ne 30, 2024, excess costs were $80,661 ($60,496 net to the Trust) on properties underly
• $532,024 — er ended June 30, 2024, excess costs of $532,024 ($399,018 net to the Trust) were recove
• $399,018 — une 30, 2024, excess costs of $532,024 ($399,018 net to the Trust) were recovered on pro
• $3.7 million — remaining as of June 30, 2024, totaled $3.7 million ($2.8 million net to the Trust), includ
• $2.8 million — of June 30, 2024, totaled $3.7 million ($2.8 million net to the Trust), including accrued in
• $1.0 million — e Trust), including accrued interest of $1.0 million ($0.7 million net to the Trust). 5. R
• $0.7 million — uding accrued interest of $1.0 million ($0.7 million net to the Trust). 5. Related Party T
• $50,442 — verhead charge as of June 30, 2024, was $50,442 ($37,832 net to the Trust) and is subje
• $37,832 — harge as of June 30, 2024, was $50,442 ($37,832 net to the Trust) and is subject to ann

Filing Documents

• crt_10-q_2406.htm (10-Q) — 526KB
• crt-ex31.htm (EX-31) — 14KB
• crt-ex32.htm (EX-32) — 11KB
• 0000950170-24-096269.txt ( ) — 553KB

‑ FINANCIAL INFORMATION

PART I ‑ FINANCIAL INFORMATION 4 Item 1.

Financial Statements (Unaudited)

Financial Statements (Unaudited) 4 Condensed Statements of Assets, Liabilities and Trust Corpus at June 30, 2024 and December 31, 2023 5 Condensed Statements of Distributable Income for the Three and Six Months Ended June 30, 2024 and 2023 6 Condensed Statements of Changes in Trust Corpus for the Three and Six Months Ended June 30, 2024 and 2023 7 Notes to Condensed Financial Statements 8 Item 2. Trustee’s Discussion and Analysis 12 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 16 Item 4.

Controls and Procedures

Controls and Procedures 16

- OTHER INFORMATION

PART II - OTHER INFORMATION 17 Item 1A.

Risk Factors

Risk Factors 17 Item 5. Other Information 17 Item 6. Exhibits 17

Signatures

Signatures 18 Table of Contents CROSS TIMBERS ROYALTY TRUST GLOSS ARY OF TERMS The following are definitions of significant terms used in this Form 10-Q: Bbl Barrel (of oil) Mcf Thousand cubic feet (of natural gas) MMBtu One million British Thermal Units, a common energy measurement net proceeds Gross proceeds received by XTO Energy from sale of production from the underlying properties, less applicable costs, as defined in the net profits interest conveyances. net profits income Net proceeds multiplied by the applicable net profits percentage of 75% or 90%, which is paid to the Trust by XTO Energy. “Net profits income” is referred to as “royalty income” for income tax purposes. net profits interest An interest in an oil and gas property measured by net profits from the sale of production, rather than a specific portion of production. The following defined net profits interests were conveyed to the Trust from the underlying properties: 90% net profits interests - interests that entitle the Trust to receive 90% of the net proceeds from the underlying properties that are substantially all royalty or overriding royalty interests in Texas, Oklahoma and New Mexico. 75% net profits interests - interests that entitle the Trust to receive 75% of the net proceeds from the underlying properties that are working interests in Texas and Oklahoma. royalty interest (and overriding royalty interest) A non-operating interest in an oil and gas property that provides the owner a specified share of production without any production expense or development costs. underlying properties XTO Energy’s interest in certain oil and gas properties from which the net profits interests were conveyed. The underlying properties include royalty and overriding royalty interests in producing and nonproducing properties in Texas, Oklahoma and New Mexico, and working interests in producing properties located in Texas and O

‑ FINAN CIAL INFORMATION

PART I ‑ FINAN CIAL INFORMATION

Fin ancial Statements

Item 1. Fin ancial Statements The condensed financial statements included herein are presented, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Unless specified otherwise, all amounts included herein are presented in U.S. dollars. Certain information and footnote disclosures normally included in annual financial statements have been condensed or omitted pursuant to such rules and regulations, although the Trustee believes that the disclosures are adequate to make the information presented not misleading. These condensed financial statements should be read in conjunction with the financial statements and the notes thereto included in the Trust’s latest Annual Report on Form 10‑K. In the opinion of the Trustee, all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the assets, liabilities and trust corpus of the Cross Timbers Royalty Trust at June 30, 2024, and the distributable income and changes in trust corpus for the three-month periods ended June 30, 2024 and 2023, have been included. Distributable income for such interim periods is not necessarily indicative of the distributable income for the full year. 4 Table of Contents CROSS TIMBERS ROYALTY TRUST Condensed Statement s of Assets, Liabilities and Trust Corpus (Unaudited) June 30, 2024 December 31, 2023 ASSETS Cash and short-term investments $ 1,175,691 $ 1,852,320 Interest to be received 5,353 5,062 Net profits interests in oil and gas properties - net (Note 1) 2,550,725 2,671,583 $ 3,731,769 $ 4,528,965 LIABILITIES AND TRUST CORPUS Distribution payable to unitholders $ 181,044 $ 857,382 Expense reserve (a) 1,000,000 1,000,000 Trust corpus (6,000,000 units of beneficial interest authorized and outstanding) 2,550,725 2,671,583 $ 3,731,769 $ 4,528,965 (a) Expense reserve allows the Trustee to pay its obligations should it be un

Trustee’s D iscussion and Analysis

Item 2. Trustee’s D iscussion and Analysis The following discussion should be read in conjunction with the Trustee’s discussion and analysis contained in the Trust’s 2023 Annual Report on Form 10-K, as well as the condensed financial statements and notes thereto included in this Quarterly Report on Form 10-Q. The Trust’s Annual Report on Form 10-K, Quarterly Reports on Form 10‑Q, Current Reports on Form 8-K and all amendments to those reports are available on the Trust’s website at www.crt-crosstimbers.com . Distributable Income Quarter For the quarter ended June 30, 2024, net profits income was $1,564,871 compared to $3,163,059 for second quarter 2023. This 51 percent decrease in net profits income is primarily the result of lower gas prices ($1.9 million), net excess costs activity ($0.2 million), increased development costs ($0.2 million), partially offset by increased gas and oil production ($0.3 million), decreased taxes, transportation and other costs ($0.2 million), higher oil prices ($0.1 million), and decreased production expenses ($0.1 million). See “Net Profits Income” below. After considering interest income of $15,173 and administration expense of $234,286, distributable income for the quarter ended June 30, 2024,was $1,345,758, or $0.224293 per unit of beneficial interest. Administration expense for the quarter increased $94,832 from the prior year quarter, primarily related to the timing of receipt and payment of Trust expenses and terms of professional services. Changes in interest income are attributable to fluctuations in net profits income, expense reserve, and interest rates. For second quarter 2023, distributable income was $3,040,614, or $0.506769 per unit. Distributions to unitholders for the quarter ended June 30, 2024, were: Record Date Payment Date Distribution per Unit April 30, 2024 May 14, 2024 $ 0.135867 May 31, 2024 June 14, 2024 0.058252 June 28,

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