Key Highlights

  • Cross Timbers Royalty Trust declared a $0.064277 per unit distribution, payable October 15, 2026 to unitholders of record September 30.
  • The distribution reflects underlying sales of 10,000 barrels of oil at $76.19 and 48,000 Mcf of gas at $4.67.
  • Second-quarter net profits income was $1,088,155, down 16% from $1,293,766 a year earlier.
  • Second-quarter distributable income was $861,180, or $0.143530 per unit, compared with $0.148758 a year earlier.

Overview

Cross Timbers Royalty Trust's (NYSE:CRT) September distribution of $0.064277 per unit yields approximately 5.18% and is payable October 15 to unitholders of record on September 30. The trust distributes monthly, and the amount varies with net profits income, so the distribution is not a fixed dividend. Second-quarter distributable income was $0.143530 per unit, equal to the three monthly distributions paid for the quarter.

Distribution Program and Unitholder Returns

Argent Trust Company, as trustee, declared the September distribution on September 18. The monthly distributions for the second quarter were $0.069720 for April, $0.029624 for May and $0.044186 for June, totaling $0.143530 per unit. The July distribution was $0.061397 and the August distribution was $0.067892.

The September distribution is lower than August and higher than July. It reflects underlying sales of 10,000 barrels of oil and 48,000 Mcf of gas at average prices of $76.19 per barrel and $4.67 per Mcf, compared with 11,000 barrels and 50,000 Mcf at $78.27 and $4.69 for the prior distribution.

About the Company

Cross Timbers Royalty Trust was created on February 12, 1991 to collect and distribute monthly net profits income from 90% net profits interests in royalty and overriding royalty interests in Texas, Oklahoma and New Mexico, and 75% net profits interests in working interest properties in Texas and Oklahoma. XTO Energy owns the underlying properties, and the trust's units trade on the New York Stock Exchange. It had approximately 6 million units outstanding.

Financial Performance Behind the Payout

For the second quarter, net profits income was $1,088,155, compared with $1,293,766 a year earlier. After adding interest income of $13,591 and deducting administration expense of $240,566, distributable income was $861,180, or $0.143530 per unit, compared with $892,548, or $0.148758. The trust attributed the decline primarily to lower gas prices, lower gas production and higher costs, partly offset by higher oil prices and production.

For the six months, net profits income was approximately $1.862 million, down approximately 44% from $3.347 million. Distributable income was $1,364,586, or $0.227431 per unit, after administration expense of $475,007 and a $50,000 increase to the expense reserve, compared with $2,676,486, or $0.446081. Net profits income is recorded when received by the trust, generally two months after oil production and three months after gas production.

Commodity Prices, Production Volumes and Excess Costs Behind Monthly Distributions

Distributable income varies with Commodity prices, production volumes and costs, so annualizing one month's distribution can misstate the trust's earnings. The September distribution of $0.064277 was 5% below August's $0.067892.

XTO Energy advised the Trustee that excess costs increased by $277,000 on properties underlying the Texas working interest net profits interests, with cumulative excess costs of $6,332,000, including accrued interest of $1,762,000. These excess costs did not reduce net proceeds from the remaining conveyances. On the Oklahoma working interest net profits interests, $67,000 of excess costs were recovered.

Outlook

The trust's monthly distribution was $0.064277 per unit for September. Oil and gas prices relative to the $76.19 per barrel and $4.67 per Mcf reflected in this distribution, production volumes, and excess cost balances on the working interest properties are the relevant considerations.