Form 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 For the fiscal year ended December 31, 2025 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 1-8424 Sabine Royalty Trust (Exact name of registrant as specified in its charter) | Texas | 75-6297143 | | --- | --- | | ...

Core Viewpoint - Argent Trust Company, as Trustee of the Sabine Royalty Trust, announced a cash distribution of $0.283370 per unit, payable on February 27, 2026, to unit holders of record on February 17, 2026 [1] Distribution Details - The distribution is based on oil production for November 2025 and gas production for October 2025, with preliminary production volumes of approximately 45,316 barrels of oil and 1,026,714 Mcf of gas [2] - The average prices for this month's distribution are approximately $59.01 per barrel of oil and $2.27 per Mcf of gas [2] - This month's distribution is lower than the previous month due to decreased oil and natural gas production and lower pricing [2] Production and Pricing Comparison - Current month production and pricing compared to the prior month: - Oil: 45,316 barrels (down from 56,504 barrels) - Gas: 1,026,714 Mcf (down from 1,314,850 Mcf) - Oil price: $59.01 per barrel (down from $61.05) - Gas price: $2.27 per Mcf (down from $2.31) [3] Revenue Posting - Approximately $166,000 of revenue received in January will be posted in February, in addition to normal cash receipts for February [4] - Since the end of January, approximately $476,000 in revenue has been received [4] Tax Deductions - Approximately $17,000 for 2025 Ad Valorem taxes were deducted from this month's distribution, compared to $115,000 during the same period last year [5]

Cash Distribution - The Registrant announced a monthly cash distribution to unitholders of record on January 15, 2026[6] - The press release regarding the cash distribution was issued on January 5, 2026[6] - The cash distribution details are included in Exhibit 99.1 attached to the report[8]

Group 1 - The article discusses the analysis of oil and gas companies, focusing on identifying undervalued entities within the sector, including Sabine Royalty Trust [1] - Sabine Royalty Trust is characterized as a passive entity that passes through taxes to investors, presenting both advantages and challenges [2] - The oil and gas industry is described as cyclical, requiring patience and experience for successful investment [2] Group 2 - The investing group, Oil & Gas Value Research, seeks under-followed oil companies and out-of-favor midstream companies that present compelling investment opportunities [2] - The group facilitates discussions among oil and gas investors through an active chat room, allowing for the sharing of recent information and ideas [2]

Core Viewpoint - The share price of Sabine Royalty Trust (NYSE:SBR) has experienced a significant decline due to a substantial cut in its monthly dividend, marking a challenging period for the company in the energy sector [1][2][3]. Group 1: Dividend and Production Changes - Sabine Royalty Trust announced a monthly dividend of $0.19667 per share, which is a decrease of nearly 45% from the previous month's distribution of $0.3567 [3]. - The company reported preliminary production volumes of approximately 28,904 barrels of oil in September, a significant drop from 65,727 barrels in the prior month [3]. - Natural gas production also decreased, coming in at 796,698 Mcf compared to 1,135,345 Mcf previously [3]. Group 2: Historical Context and Market Reaction - This marks the fourth consecutive cut in monthly distributions by Sabine Royalty Trust, resulting in the lowest dividend since 2021 [4]. - Despite the recent slump, the company has gained over 10% in share price so far this year [5].

Core Insights - The article discusses the evolution and performance of indexation investing, particularly focusing on ETFs, highlighting that passive funds have now surpassed active funds in assets under management by the end of 2023 [3][4] - It emphasizes the disappointing annualized returns of equity ETFs, which have been in the 7% to 8% range over the past 25 years, despite expectations of higher returns [4][5] - The concentration of the Information Technology sector in the S&P 500 is noted, raising concerns about potential capital loss if valuations contract [6][9] Group 1: ETF Performance and Market Dynamics - The total assets in ETFs grew from $65 billion in 2000 to over $90 billion for the iShares Bitcoin Trust ETF alone by 2023, marking a significant shift in market dynamics [3][4] - Annualized equity ETF returns have consistently underperformed expectations, with fixed-income ETFs yielding even lower returns, often negative when adjusted for taxes and inflation [4][5] - The dominance of the Information Technology sector, which now comprises 46.1% of the S&P 500 market value, raises concerns about market concentration and the risks associated with it [5][6] Group 2: Market Concentration and Valuation Concerns - The article presents data showing that the top 10 companies in the S&P 500 accounted for 38.9% of total market capitalization by October 2025, compared to 18.0% in 1988, indicating increased market concentration [11] - The valuation metrics of the Information Technology sector are highlighted, with a forward P/E ratio of 122x earnings, contrasting sharply with lower valuations in other sectors [10][12] - The historical context of market concentration is discussed, comparing the current situation to the Dot-com Bubble, suggesting that high valuations in the IT sector may not be sustainable [9][13] Group 3: Securities Exchanges and Investment Strategies - The commentary introduces the concept of investing in securities exchanges as a strategy to sidestep indexation, suggesting that these entities have outperformed regional stock indices over time [15][19] - Data shows that major securities exchanges have consistently outperformed their respective regional stock indices, with CME Group and Nasdaq demonstrating significant returns over 20 years [20] - The article argues that the business model of securities exchanges allows them to benefit from increasing trading volumes and market activity, making them a compelling investment opportunity [24][32] Group 4: Localized Inflation and Investment Opportunities - The article discusses the concept of localized inflation, emphasizing that individual experiences of inflation can vary significantly across different sectors and commodities [58][60] - It highlights the challenges in measuring inflation accurately and the implications for investment strategies, particularly in sectors like energy and food [49][55] - The performance of specific investment vehicles, such as oil royalty trusts, is presented as a potential hedge against localized inflation, showcasing their ability to provide robust cash flow without significant capital expenditures [66][69]

Core Viewpoint - Monthly dividends are preferred over quarterly payouts due to more frequent cash flow and often higher annual yields, with examples yielding between 8% and 19.8% [2] Group 1: Monthly Dividend Stocks - Monthly dividend stocks can provide substantial annual income, with potential earnings ranging from $40,000 to $99,000 on a $500,000 investment [2] - The article discusses four specific monthly dividend payers, highlighting their unique characteristics and performance [2] Group 2: Sabine Royalty Trust (SBR) - Sabine Royalty Trust is a passive income vehicle that pays distributions from income generated by natural resources, primarily from the Permian Basin [3] - The trust has no debt and has outperformed the broader energy sector, but it is sensitive to commodity prices and has variable distributions [4][7] - SBR's asset base is fixed, and it may terminate if gross revenues fall below $2 million for two consecutive years or if unitholders vote for closure [6] Group 3: Capital Southwest Corp. (CSWC) - Capital Southwest Corp. is a business development company that provides capital to lower middle market firms, with a portfolio of 122 firms [8] - The company has a high percentage of floating-rate debt, which can be advantageous in rising rate environments, and it has outperformed its peers and the S&P 500 [10] - CSWC's dividends are well-covered, and it pays monthly, with a portion of the yield coming from supplemental dividends [10] Group 4: PennantPark Floating Rate Capital (PFLT) - PennantPark Floating Rate Capital targets midsized companies and invests primarily through first-lien floating-rate debt [12][14] - The company has faced tight dividend coverage, with the possibility of a dividend reduction, but management is optimistic about growth through joint ventures [14] Group 5: Orchid Island Capital (ORC) - Orchid Island Capital is a mortgage REIT that deals in agency residential mortgage-backed securities, currently offering a yield close to 20% [16] - The company has experienced significant price declines since its IPO, leading to a reverse stock split, and has a history of reducing dividends [18][19]

Core Insights - The article provides a market analysis focusing on Crude Oil WTI Futures and various royalty trusts including Cross Timbers Royalty Trust, Permian Basin Royalty Trust, and Sabine Royalty Trust [1] Group 1: Crude Oil WTI Futures - The analysis highlights the current trends and price movements in Crude Oil WTI Futures, indicating potential investment opportunities [1] Group 2: Royalty Trusts - Cross Timbers Royalty Trust, Permian Basin Royalty Trust, and Sabine Royalty Trust are examined for their performance and market positioning, suggesting that these trusts may offer attractive returns based on their underlying assets [1]

Group 1 - The article provides a market analysis covering several companies including Capital Southwest Corporation, Orchid Island Capital Inc, Sabine Royalty Trust, and PennantPark Floating Rate Capital Ltd [1] Group 2 - The analysis highlights the investment opportunities and risks associated with the mentioned companies, indicating a focus on their financial performance and market positioning [1]

Group 1: AI Investment Opportunity - Artificial intelligence is considered the greatest investment opportunity of our lifetime, with a strong emphasis on the urgency to invest now [1] - Wall Street is investing hundreds of billions into AI, but there is a critical question regarding the energy supply needed to support this technology [2] - AI data centers consume as much energy as small cities, leading to concerns about power grid strain and rising electricity prices [2] Group 2: Company Overview - A specific company is highlighted as a key player in the AI energy sector, owning critical energy infrastructure assets that are essential for meeting the increasing energy demands of AI [3][6] - This company is not a chipmaker or cloud platform but is positioned to benefit significantly from the upcoming AI energy spike [3] - It is involved in U.S. LNG exportation and is expected to thrive under the "America First" energy doctrine [7] Group 3: Financial Position - The company is completely debt-free and has a cash reserve equal to nearly one-third of its market cap, making it financially robust compared to other energy firms [8] - It trades at less than 7 times earnings, indicating it is undervalued relative to its potential [10] Group 4: Market Trends - The company is poised to benefit from the AI infrastructure supercycle, the onshoring boom due to tariffs, and a surge in U.S. LNG exports [14] - The influx of talent into the AI sector is expected to drive rapid advancements and innovation, further solidifying the importance of investing in AI [12] Group 5: Investment Potential - The company is described as a "toll booth" operator in the AI energy boom, collecting fees on energy exports and benefiting from the growing demand for electricity [5][6] - There is a potential for significant returns, with projections suggesting a 100+% return within 12 to 24 months [15]