#USA #Dallas #Argent Trust Company #Hugoton Royalty Trust #HGTXU

Hugoton Royalty Trust's March 2025 Cash Distribution Update

In a recent announcement, Argent Trust Company, the Trustee for the Hugoton Royalty Trust (OTCQB: HGTXU), revealed that there will be no cash distribution to unit holders for March 2025. This decision stems from excessive costs impacting the profitability across all three of the Trust's net profit interests.

The Trust's cash reserves have taken a hit, declining by $28,000 due to ongoing payment obligations. Moving forward, the Trustee plans to replenish the cash reserve as net profits income becomes available in future months, allowing for potential cash distributions at that time. The replenishment may include any increase to the total cash reserve, as determined by the Trustee's assessments.

Financial Overview

The announcement came with some financial data that reflects the current situation with the Trust's operations:

• - Natural Gas Sales: In March, the Trust reported sales of 554,000 Mcf of natural gas, with an average price of $4.68 per Mcf.
• - Oil Sales: Oil sales stood at 12,000 barrels, with an average price of $69.34 per barrel.

These figures mark a decline in sales from February, in which volumes were 672,000 Mcf for gas and 15,000 barrels for oil, reflecting prices of $3.83 and $66.06 respectively.

According to XTO Energy, which provides support for the Trust, there are multiple underlying variables contributing to the current excess cost issues. Specifically, they identified a $32,000 increase in excess costs linked to properties under Kansas net profit interests, with cumulative excess costs remaining at approximately $1,753,000 since accrued interest is also accounted for.

In Oklahoma, while $288,000 in excess costs were recovered, there weren’t enough proceeds from the properties to include in the current month. Thus, cumulative excess costs for Oklahoma remain at $2,237,000. Wyoming properties also reported an additional $25,000 in excess costs, totaling $8,179,000 in underlying cumulative excess costs.

Development and Future Projections

XTO Energy has also informed the Trustee about the development of six new non-operated wells in Major County, Oklahoma. The Trust has incurred $10.5 million in development costs, of which $8.4 million is net to the Trust. These operational costs are critical as they directly influence the Trust’s financial health and capacity to disburse cash in the future.

As for statements concerning future events or conditions, the Trustee emphasizes that these are forward-looking and actual results may vary considerably. Shifts in oil and gas prices, along with other economic conditions in the industry, create uncertainty that must be navigated vigilantly. For more information about Hugoton Royalty Trust, including annual tax data and historical distribution amounts, interested parties can visit Hugoton's official website.

Conclusion

While the absence of a cash distribution for March 2025 may be disappointing for unitholders, it illustrates the inherent volatility in the natural gas and oil sectors. As the Trust navigates through these financial challenges, attention will turn to future profit streams and operational updates, which will determine the possibility of restored distributions down the line.