#United States #Dallas #Argent Trust #Hugoton Royalty Trust #XTO Energy

Hugoton Royalty Trust Declares No February Cash Distribution

The Hugoton Royalty Trust, managed by Argent Trust Company, has officially announced that it will not be distributing any cash to its unitholders for the month of February 2025. This decision arises from rising costs associated with its net profits interests across three conveyors. The reduced cash reserve, which experienced a decrease of $88,000 for covering Trust expenses, has been cited as a key factor for this distribution halt.

The Trustee has indicated that any future distributions will depend on the replenishment of this cash reserve through net profits income received in forthcoming months. Furthermore, the replenishment may involve evaluating any potential increases in the cash reserve amount, as considered by the Trustee.

In terms of sales, the Trust experienced some fluctuations in gas and oil sales volumes. The underlying sales figures for the current month reflect a total of 672,000 Mcf of gas and 15,000 Bbls of oil. This contrasts with the prior month’s numbers of 734,000 Mcf and 12,000 Bbls, highlighting a notable shift in production outcomes. Average prices for these commodities exhibited variances as well, with current month gas priced at $3.83 per Mcf and oil at $66.06 per Bbl, compared to $2.81 and $66.93 respectively in the previous months.

Additionally, XTO Energy has provided information regarding newly developed non-operated wells within Major County, Oklahoma. This update included approximately 3,000 Bbls and 17,000 Mcf generated from these wells, yet associated development expenses totaling $40,000, production costs of around $1,854,000, and overheads amounting to $921,000 significantly impacted royalty calculations.

Concerning excess costs, XTO Energy informed the Trustee about recoveries on properties linked to the Kansas net profits interests, totaling $1,000. Unfortunately, subsequent analyses revealed no residual proceeds to be incorporated into the current month's distribution. The Trustee noted ongoing cumulative excess costs on Kansas interests now reaching $1,710,000, inclusive of accrued interest.

For the Oklahoma net profits interests, recoveries also amounted to $23,000, but like Kansas, no proceeds were available for distribution. Here, cumulative excess costs stand at $2,510,000. Wyoming interests presented a different scenario, as excess costs escalated by $62,000, with total cumulative excess costs reaching $8,107,000.

Additionally, XTO Energy disclosed plans for further non-operated wells, estimating that combined development costs could reach approximately $5.7 million. This significant investment reflects the trust’s ongoing commitment to enhancing its asset base and addressing the challenges presented by current economic conditions in the oil and gas sector.

As the Trustee and XTO work closely, plan updates about the non-operated wells will be communicated in future announcements. Stakeholders are encouraged to monitor progress and engage with the Trust for detailed annual tax information, distribution amounts, and prior press releases available on the Trust’s official website: www.hgt-hugoton.com.

It's essential to note that these announcements involve forward-looking statements. Actual results may diverge from projections due to fluctuations in the natural gas and oil markets, influenced by broader economic shifts and industry conditions, as detailed in the Trust's Annual Report. Therefore, interested parties should remain vigilant and informed regarding these developments to fully understand the implications for the Hugoton Royalty Trust and its stakeholders.