Financial Performance - Net profits income for the three months ended June 30, 2024, was $1,564,871, down from $3,163,059 for the same period in 2023, indicating a decrease of about 50.5%[12] - Distributable income for the three months ended June 30, 2024, was $1,345,758, compared to $3,040,614 for the same period in 2023, reflecting a decline of approximately 55.8%[12] - Total income for the six months ended June 30, 2024, was $3,434,758, compared to $7,107,110 for the same period in 2023, a decrease of approximately 51.6%[12] - For the quarter ended June 30, 2024, net profits income was $1,564,871, a 51% decrease from $3,163,059 in the second quarter of 2023, primarily due to lower gas prices and increased development costs[36] - For the six months ended June 30, 2024, net profits income was $3,402,612, a 52% decrease from $7,075,763 in the same period of 2023, primarily due to lower gas prices and decreased production[38] - For the quarter ended June 30, 2024, distributable income was $1,345,758, or $0.224293 per unit, a decrease from $3,040,614, or $0.506769 per unit in the same quarter of 2023, representing a 56% decline[37] - Total revenues for the quarter ended June 30, 2024, were $4,714,656, a 25% decrease from $6,247,815 in the same quarter of 2023[43] Assets and Trust Corpus - As of June 30, 2024, total assets of Cross Timbers Royalty Trust amounted to $3,731,769, a decrease from $4,528,965 as of December 31, 2023, representing a decline of approximately 17.6%[8] - The trust corpus at the end of the period was $2,550,725, down from $2,671,583 at the end of 2023, marking a decrease of about 4.5%[9] - The trust's cash and short-term investments decreased to $1,175,691 from $1,852,320, a decline of approximately 36.5%[8] Expenses - Administration expenses for the three months ended June 30, 2024, were $234,286, an increase from $139,454 in the same period of 2023, representing an increase of about 68%[12] - Administration expenses for the six months ended June 30, 2024, increased by $168,488 compared to the prior year, totaling $595,786[39] - Production expenses decreased by 4% for the second quarter and by 3% for the six-month period, primarily due to lower power and fuel costs[49] - Development costs increased by 290% for the second quarter and 115% for the six-month period, mainly due to the timing of drilling activity costs[50] - Taxes, transportation, and other costs decreased by 33% for the second quarter and 48% for the six-month period, attributed to lower gas deductions and production taxes[48] Distribution to Unitholders - The distribution payable to unitholders for the quarter was $181,044, significantly lower than $857,382 for the same period in 2023, indicating a reduction of about 78.8%[9] Revenue Sources and Taxation - The Trust's revenues are sourced entirely from Texas, Oklahoma, or New Mexico, and it has not been taxed at the trust level in these states[22] - The Trust expects to continue being exempt from Texas franchise tax as a passive entity[23] Other Financial Information - The average oil price for the second quarter increased by 4% to $77.24 per Bbl, while the average gas price decreased by 66% to $4.04 per Mcf[46][47] - Oil sales volumes increased by 3% for the second quarter and 1% for the six-month period, while gas sales volumes increased by 27% for the second quarter but decreased by 45% for the six-month period[45] - Cumulative excess costs remaining at June 30, 2024, totaled $2,765,489, with accrued interest of $966,443[30] - Cumulative excess costs for the Texas and Oklahoma working interest conveyances totaled $3.7 million as of June 30, 2024[52] Governance and Compliance - The Trustee evaluated the effectiveness of the Trust's disclosure controls and procedures, concluding they are effective in timely reporting required information[56] - There have been no material changes in the risk factors disclosed in the Trust's Annual Report for the year ended December 31, 2023[58] - The Trust does not have any directors or officers, thus no trading arrangements were adopted or terminated[59] Impairment and Amortization - Accumulated amortization of net profits interests was $58,549,724 as of June 30, 2024, compared to $58,428,866 as of December 31, 2023[20] - No impairment of net profits interests was recorded as of June 30, 2024, as no trigger events indicated a need for assessment[19] Other Notes - The monthly overhead charge deducted by XTO Energy as of June 30, 2024, was $50,442, subject to annual adjustment based on an oil and gas industry index[33] - For the quarter ended June 30, 2024, excess costs were $80,661 on properties underlying the Texas working interest net profits interests[31] - The allocation of a portion of the Chieftain settlement to the Trust will be resolved in the third quarter of 2024[27]
Cross Timbers Royalty Trust(CRT) - 2024 Q2 - Quarterly Report