Cross Timbers Royalty Trust(CRT) - 2025 Q2 - Quarterly Report

Financial Performance - Distributable income for the three months ended June 30, 2025, was $892,548, down 33.5% from $1,345,758 in the same period of 2024[13] - Total income for the six months ended June 30, 2025, was $3,371,148, a slight decrease of 1.85% compared to $3,434,758 for the same period in 2024[13] - The net profits income for the three months ended June 30, 2025, was $1,293,766, a decrease of 17.3% from $1,564,871 in 2024[13] - For the quarter ended June 30, 2025, net profits income decreased by 17% to $1,293,766 compared to $1,564,871 in Q2 2024, primarily due to decreased oil and gas production and lower oil prices[35] - Distributable income for Q2 2025 was $892,548, or $0.148758 per unit, down from $1,345,758, or $0.224293 per unit in Q2 2024[36] Revenue and Sales - Total revenues for Q2 2025 were $3,591,776, a decrease of 24% from $4,714,656 in Q2 2024[42] - Oil sales volumes decreased by 18% for Q2 2025 and 7% for the six-month period, primarily due to timing of cash receipts and natural production decline[43] - Gas sales volumes decreased by 35% for Q2 2025 and 12% for the six-month period, attributed to the absence of out-of-period revenues and natural production decline[44] - Average oil price for Q2 2025 decreased by 14% to $66.79 per Bbl, while gas prices increased by 37% to $5.54 per Mcf[45][46] Expenses - The administration expense for the three months ended June 30, 2025, increased to $263,200, up 12.3% from $234,286 in 2024[13] - Production expenses increased by 24% for Q2 2025, primarily due to increased gas processing costs and labor[48] - Administration expenses for Q2 2025 increased by $28,914 from the prior year quarter, primarily due to timing of Trust expenses[36] - Total costs for Q2 2025 were $2,139,082, a decrease of 28% from $2,975,910 in Q2 2024[42] - Development costs related to properties underlying the 75% net profits interests decreased by 94% for Q2 and 90% for the six-month period due to the absence of drilling activity costs for the Hewitt Unit[49] Assets and Liabilities - As of June 30, 2025, total assets amounted to $3,655,138, a decrease of 3.95% from $3,806,934 on December 31, 2024[10] - The trust corpus at the end of the period was $2,290,044, a decrease of 6.1% from $2,433,344 as of December 31, 2024[10] - The expense reserve is currently funded at $1,150,000, which allows the Trustee to meet obligations if unable to pay from net profits income[10] - Cumulative excess costs remaining as of June 30, 2025, totaled $4.9 million, including accrued interest of $1.3 million[30] - Cumulative excess costs for the Texas and Oklahoma working interest conveyances as of June 30, 2025, totaled $4.9 million, including accrued interest of $1.3 million[50][51] Taxation and Compliance - The Trust has not been taxed at the trust level in New Mexico or Oklahoma, as it distributes all net income to unitholders[25] - No impairment of net profits interests was recorded as of June 30, 2025, indicating stable asset valuation[21] - The accumulated amortization of net profits interests was $58,810,405 as of June 30, 2025, reflecting ongoing depreciation of assets[22] Internal Controls and Risk Factors - The Trust's disclosure controls and procedures are effective in ensuring timely decisions regarding required disclosures, with no material changes affecting internal control over financial reporting during the reporting period[55] - There have been no material changes in the risk factors disclosed in the Trust's Annual Report for the year ended December 31, 2024[57]