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Sabine Royalty Trust(SBR) - 2024 Q4 - Annual Report
SBRSabine Royalty Trust(SBR)2025-02-27 21:13

Financial Performance - As of December 31, 2024, the Trust's total assets amounted to 9,250,361,adecreasefrom9,250,361, a decrease from 9,437,825 in 2023, reflecting a decline of approximately 1.98%[235] - Royalty income for the year ended December 31, 2024, was 82,569,642,down11.2582,569,642, down 11.25% from 93,012,044 in 2023[237] - Distributable income for 2024 was 79,642,694,representingadecreaseof11.7379,642,694, representing a decrease of 11.73% compared to 90,251,235 in 2023[237] - The Trust's cash and short-term investments decreased to 9,169,742in2024from9,169,742 in 2024 from 9,342,423 in 2023, a decline of 1.85%[235] - Total liabilities decreased to 543,429in2024from543,429 in 2024 from 878,919 in 2023, a reduction of approximately 38.25%[235] - Distributions to unit holders in 2024 were 79,479,885,downfrom79,479,885, down from 93,084,745 in 2023, indicating a decrease of 14.66%[240] - The distributable income per unit for 2024 was 5.46,downfrom5.46, down from 6.19 in 2023, reflecting a decrease of 11.77%[237] - The Trust's total general and administrative expenses for 2024 amounted to 3.528million,slightlydownfrom3.528 million, slightly down from 3.564 million in 2023[271] Asset and Reserve Information - The Trust's corpus at the end of 2024 was 8,706,932,anincreasefrom8,706,932, an increase from 8,558,906 in 2023, marking a growth of 1.73%[240] - As of December 31, 2024, the Trust's proved oil reserves increased to 8,872 thousand barrels, and proved gas reserves increased to 64,236 thousand Mcf[275] Royalty Income and Adjustments - Total royalty income for 2024 was 82.569million,withdistributableincomeof82.569 million, with distributable income of 79.642 million, resulting in a distributable income per unit of 5.46[272]−Inthefourthquarterof2024,royaltyincomewas5.46[272] - In the fourth quarter of 2024, royalty income was 19.419 million, and distributable income was 18.572million,leadingtoadistributableincomeperunitof18.572 million, leading to a distributable income per unit of 1.27[272] - Royalty income, net of severance and ad valorem taxes, decreased by 82,570,000in2024,comparedtoadecreaseof82,570,000 in 2024, compared to a decrease of 93,012,000 in 2023 and 125,749,000in2022[280]−Changesinprices,netofrelatedcosts,resultedinadecreaseof125,749,000 in 2022[280] - Changes in prices, net of related costs, resulted in a decrease of 25,194,000 in 2024, while in 2023, it was a decrease of 121,929,000,andin2022,anincreaseof121,929,000, and in 2022, an increase of 118,200,000[280] - Revisions of previous estimates and other adjustments contributed 104,784,000in2024,comparedto104,784,000 in 2024, compared to 112,627,000 in 2023 and 106,918,000in2022[280]TaxandRegulatoryInformation−TheTrustdoesnotengageinforeigncurrencytransactionsorholdderivativefinancialinstruments,minimizingexposuretorelatedmarketrisks[222]−TheTrustisexemptfromTexasfranchisetaxasapassiveentity,benefitingUnitholdersbynotsubjectingtheTrust′sincometostateincometax[281]−UnitholdersmayhavestatefilingresponsibilitiesinLouisiana,Florida,Mississippi,NewMexico,orOklahoma,despitetheTrustnotowingtaxinthosestates[282]−TheTrusthasfiledtaxreturnsfor2022and2023withtheStatesofOklahomaandNewMexicorequestingrefundsforwithheldtaxes[267]FutureProjections−Thestandardizedmeasureofdiscountedfuturenetcashinflowsfor2024is106,918,000 in 2022[280] Tax and Regulatory Information - The Trust does not engage in foreign currency transactions or hold derivative financial instruments, minimizing exposure to related market risks[222] - The Trust is exempt from Texas franchise tax as a passive entity, benefiting Unit holders by not subjecting the Trust's income to state income tax[281] - Unit holders may have state filing responsibilities in Louisiana, Florida, Mississippi, New Mexico, or Oklahoma, despite the Trust not owing tax in those states[282] - The Trust has filed tax returns for 2022 and 2023 with the States of Oklahoma and New Mexico requesting refunds for withheld taxes[267] Future Projections - The standardized measure of discounted future net cash inflows for 2024 is 280,325,000, an increase from 257,550,000in2023butadecreasefrom257,550,000 in 2023 but a decrease from 327,149,000 in 2022[279] - Future net cash inflows for 2024 are projected at 549,340,000,comparedto549,340,000, compared to 524,282,000 in 2023 and 657,947,000in2022[279]−Thediscountoffuturenetcashflowsatarateof10657,947,000 in 2022[279] - The discount of future net cash flows at a rate of 10% is 269,015,000 for 2024, up from 226,732,000in2023anddownfrom226,732,000 in 2023 and down from 330,798,000 in 2022[279] Miscellaneous - The Trust's royalty receipts in suspense pending verification of ownership or title were 231,645asofDecember31,2024,downfrom231,645 as of December 31, 2024, down from 370,430 in 2023[268] - The Trust's royalty income is recognized in the month received, pending verification of ownership and title, rather than in the month of production[262] - The Trustee has not identified any impairment of assets as of December 31, 2024[259] - The Trust's basic distributable income per unit and distributable income per unit assuming dilution are the same, as there were no equivalent units outstanding[261] - As of February 18, 2025, NYMEX posted oil prices were approximately 72.21perbarrel,comparedtotheaveragepriceof72.21 per barrel, compared to the average price of 72.91 per barrel used for calculations[280] - NYMEX posted gas prices as of February 18, 2025, were 6.40permillionBritishthermalunits,significantlyhigherthantheaveragepriceof6.40 per million British thermal units, significantly higher than the average price of 1.795 per million British thermal units used for calculations[280]