Mesa Royalty Trust(US:MTR)2025-11-13 21:13Royalty Income - Royalty income for Q3 2025 was $128,993, compared to $63,966 in Q3 2024, representing a 101.5% increase[11] - The Trust's royalty income for the three months ended September 30, 2025, was $67,122, while for the same period in 2024, it was $43,029, representing a year-over-year increase of approximately 56.1%[66] - Royalty income for the quarter ended September 30, 2025, was $128,993, a significant increase from $63,966 in the same quarter of 2024, reflecting a growth of approximately 101%[70] - Royalty income from San Juan Basin – New Mexico Properties increased to $128,993 in Q3 2025 from $63,966 in Q3 2024, representing an increase of approximately 101.5%[90] - Royalty income for the nine months ended September 30, 2025, was $460,810, down from $552,994 in the same period of 2024, a decrease of approximately 16.6%[94] - Royalty income attributable to Hugoton Royalty Properties was $0 for both the nine months ended September 30, 2025 and 2024, primarily due to expenses exceeding revenues[104] - Royalty income from the San Juan Basin – New Mexico Properties decreased to $460,810 for the nine months ended September 30, 2025, down approximately 17% from $552,994 in the same period of 2024[108] Distributable Income - Distributable income for the nine months ended September 30, 2025, was $365,709, down from $400,622 in the same period of 2024, a decrease of 8.7%[11] - Distributable income per unit increased to $0.0477 in Q3 2025 from $0.0295 in Q3 2024, a growth of 61.5%[11] - The Trust's distributable income available for distribution for the three months ended September 30, 2025, was $72,000, compared to $10,314 for the same period in 2024, representing a significant increase of 600%[51] - Distributable income available for distribution for the quarter ended September 30, 2025, was $72,000, representing $0.0386 per unit, compared to $10,314 or $0.0055 per unit in the same quarter of 2024, indicating a substantial increase in per unit distribution[77] Financial Position - Total assets as of September 30, 2025, were $3,222,233, up from $3,187,975 at the end of 2024, an increase of 1.1%[12] - Cash and short-term investments increased to $1,999,792 as of September 30, 2025, compared to $1,930,126 at the end of 2024, a rise of 3.6%[12] - The Trust's total liabilities and corpus remained stable at $3,222,233 as of September 30, 2025, consistent with the previous year[12] - The Trust's corpus at the end of Q3 2025 was $3,150,233, slightly up from $3,146,692 at the end of Q3 2024[15] Operating Costs - As of September 30, 2025, excess production costs totaled $929,446, up from $793,838 as of December 31, 2024, indicating an increase of approximately 17.1%[48] - The Trust's operating costs for the three months ended September 30, 2025, were $(409,297), compared to $(362,332) in 2024, indicating an increase of approximately 12.9%[66] - Operating costs for Hugoton Royalty Properties were $1,300,986 for the nine months ended September 30, 2025, slightly down from $1,302,531 in 2024[104] - Operating costs attributable to the San Juan Basin – New Mexico Properties were $725,934 for the nine months ended September 30, 2025, compared to $741,048 in 2024[108] Sales Prices - Average sales price for natural gas in the nine months ended September 30, 2025, was $2.03 per Mcf, compared to $1.90 per Mcf in 2024, reflecting an increase of approximately 6.8%[68] - The average sales price for natural gas was $3.59 per Mcf for the quarter ended September 30, 2025, compared to $2.84 per Mcf in the same quarter of 2024, representing an increase of approximately 27%[84] - The average sales price for natural gas in Hugoton Royalty Properties was $3.95 per Mcf in 2025, compared to $3.05 per Mcf in 2024, an increase of 29.5%[105] - Average sales price for oil and natural gas liquids was $18.66 per Bbl in 2025, down from $21.92 per Bbl in 2024[109] Production Volumes - The Trust's net production volumes attributable to the Royalty for the three months ended September 30, 2025, were 38,877 Mcf, compared to 24,249 Mcf in 2024, representing an increase of about 60.5%[66] - Actual production volumes attributable to the Royalty paid for San Juan Basin – New Mexico Properties were 369,108 Mcf of natural gas and 25,845 Bbls of oil and condensate in 2025[109] Legal and Regulatory Matters - There are no pending legal proceedings against the Trust, although the Working Interest Owners may face litigation that could impact future royalty income[43] - The Trust may be subject to litigation that could materially affect future royalty income, although no current material adverse effects are anticipated[124] Economic Factors - Ongoing global economic uncertainties, including high inflation and geopolitical risks, are expected to adversely impact royalty income and distributions in 2025[79] - The Trust's royalty income is heavily influenced by commodity prices, which can fluctuate widely due to supply and demand changes, market uncertainty, and other factors beyond the Trustee's control[49] Trustee and Governance - The Trustee's fees for Q3 2025 amounted to $108,288, with $95,897 reimbursed by the Working Interest Owners, unchanged from Q3 2024[32] - The Trustee intends to increase the Contingent Reserve to a total of $2.0 million, which will reduce net proceeds available to the Trust and distributions to unitholders[111] - The Trustee maintains effective disclosure controls and procedures to ensure timely reporting of required information[118] Contingent Reserve - The Contingent Reserve balance was $1,927,792 as of September 30, 2025, compared to $1,867,792 as of September 30, 2024, showing an increase of 3.2%[50] - The Contingent Reserve increased to $1,927,792 as of September 30, 2025, up from $1,867,792 as of September 30, 2024[101] - Substantial accumulated excess production costs have decreased Trust income and distributions, with some months resulting in no distributions[113] - Future distributions to unitholders may be impacted if royalty income is insufficient to fund the increase in the Contingent Reserve[114]