10-Q 1 crt_10-q_2503.htm 10-Q 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

CROSS TIMBERS ROYALTY TRUST

(Exact name of registrant as specified in its charter)


Texas	1-10982	75-6415930
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(I.R.S. Employer Identification No.)

      c/o The Corporate Trustee:

     

      Argent Trust Company

     

Oak Lawn Ave, Suite 1720

     

      Dallas, Texas 75219-4518

     

      (Address of principal executive offices) (Zip Code)

     

      (Registrant’s telephone number, including area code) (855) 588-7839

     

      (Former name, former address and former fiscal year, if change since last report)

     

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Units of Beneficial Interest	CRT	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  No 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  No 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer		Smaller reporting company	
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  No 

Indicate the number of units of beneficial interest outstanding, as of the latest practicable date:

Outstanding as of May 14, 2025

6,000,000


Glossary of Terms		3
PART I ‑ FINANCIAL INFORMATION		4
Item 1.	Financial Statements (Unaudited)	4
	Condensed Statements of Assets, Liabilities and Trust Corpus at March 31, 2025 and December 31, 2024	5
	Condensed Statements of Distributable Income for the Three Months Ended March 31, 2025 and 2024	6
	Condensed Statements of Changes in Trust Corpus for the Three Months Ended March 31, 2025 and 2024	7
	Notes to Condensed Financial Statements	8
Item 2.	Trustee’s Discussion and Analysis	11
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	15
Item 4.	Controls and Procedures	15
PART II - OTHER INFORMATION		16
Item 1A.	Risk Factors	16
Item 5.	Other Information	16
Item 6.	Exhibits	16
Signatures		17


Bbl		Barrel (of oil)

Mcf		Thousand cubic feet (of natural gas)

MMBtu		One million British Thermal Units, a common energy measurement

net proceeds		Gross proceeds received by XTO Energy from sale of production from the underlying properties, less applicable costs, as defined in the net profits interest conveyances.

net profits income		Net proceeds multiplied by the applicable net profits percentage of 75% or 90%, which is paid to the Trust by XTO Energy. “Net profits income” is referred to as “royalty income” for income tax purposes.

net profits interest		An interest in an oil and gas property measured by net profits from the sale of production, rather than a specific portion of production. The following defined net profits interests were conveyed to the Trust from the underlying properties:

		90% net profits interests- interests that entitle the Trust to receive 90% of the net proceeds from the underlying properties that are substantially all royalty or overriding royalty interests in Texas, Oklahoma and New Mexico.

		75% net profits interests- interests that entitle the Trust to receive 75% of the net proceeds from the underlying properties that are working interests in Texas and Oklahoma.

royalty interest (and overriding royalty interest)		A non-operating interest in an oil and gas property that provides the owner a specified share of production without any production expense or development costs.

underlying properties		XTO Energy’s interest in certain oil and gas properties from which the net profits interests were conveyed. The underlying properties include royalty and overriding royalty interests in producing and nonproducing properties in Texas, Oklahoma and New Mexico, and working interests in producing properties located in Texas and Oklahoma.

working interest		An operating interest in an oil and gas property that provides the owner a specified share of production that is subject to all production expense and development costs.


		March 31, 2025			December 31, 2024
ASSETS

Cash and short-term investments	$		1,936,621	$		1,369,379

Interest to be received			3,729			4,211

Net profits interests in oil and gas properties - net (Note 1)			2,346,714			2,433,344

	$		4,287,064	$		3,806,934

LIABILITIES AND TRUST CORPUS

Distribution payable to unitholders	$		940,350	$		373,590

Expense reserve (a)			1,000,000			1,000,000

Trust corpus (6,000,000 units of beneficial interest authorized and outstanding)			2,346,714			2,433,344

	$		4,287,064	$		3,806,934


		Three Months Ended March 31
		2025			2024
Net profits income	$		2,053,394	$		1,837,741

Interest income			12,006			16,973

Total income			2,065,400			1,854,714

Administration expense			281,462			361,500

Distributable income	$		1,783,938	$		1,493,214

Distributable income per unit (6,000,000 units)	$		0.297323	$		0.248869


-	Net profits income recorded for a month is the amount computed and paid by XTO Energy Inc. (“XTO Energy”), the owner of the underlying properties, to Argent Trust Company, as trustee (the “Trustee”) for the Trust. XTO Energy is a wholly owned subsidiary of Exxon Mobil Corporation. Net profits income consists of net proceeds received by XTO Energy from the underlying properties in the prior month, multiplied by a net profits percentage of 90% for the 90% net profits interests, and 75% for the 75% net profits interests.

-	Costs deducted in the calculation of net proceeds for the 90% net profits interests generally include applicable taxes, transportation, marketing and legal costs. In addition to those costs, the 75% net profits interests include deductions for production expense, development costs, operating charges and other costs.

-	Net profits income is computed separately for each of the five conveyances under which the net profits interests were conveyed to the Trust. If monthly costs exceed revenues for any conveyance, such excess costs must be recovered, with accrued interest, from future net proceeds of that conveyance and cannot reduce net proceeds from the other conveyances.

-	Interest income and distribution payable to unitholders include interest earned on the previous month’s investment.

-	Trust expenses are recorded based on liabilities paid and cash reserves established by the Trustee for liabilities and contingencies.

-	Distributions to unitholders are recorded when declared by the Trustee.


	Underlying
	TX WI		OK WI		Total
Cumulative excess costs remaining at 12/31/24	$	3,140,906	$	-	$	3,140,906
Net excess costs (recovery) for the quarter ended 3/31/25		66,655		-		66,655
Cumulative excess costs remaining at 3/31/25		3,207,561		-		3,207,561
Accrued interest at 3/31/25		1,195,216		-		1,195,216
Total remaining to be recovered at 3/31/25	$	4,402,777	$	-	$	4,402,777

	NPI
	TX WI		OK WI		Total
Cumulative excess costs remaining at 12/31/24	$	2,355,680	$	-	$	2,355,680
Net excess costs (recovery) for the quarter ended 3/31/25		49,991		-		49,991
Cumulative excess costs remaining at 3/31/25		2,405,671		-		2,405,671
Accrued interest at 3/31/25		896,412		-		896,412
Total remaining to be recovered at 3/31/25	$	3,302,083	$	-	$	3,302,083


Record Date	Payment Date	Distribution per Unit
January 31, 2025	February 14, 2025	$	0.095045
February 28, 2025	March 14, 2025		0.045553
March 31, 2025	April 14, 2025		0.156725
		$	0.297323


	Three Months Ended
	March 31 (a)				Increase
	2025		2024		(Decrease)
Sales Volumes
Oil (Bbls) (b)
Underlying properties		44,370		42,662	4%
Average per day		482		464	4%
Net profits interests		17,383		14,825	17%

Gas (Mcf) (b)
Underlying properties		300,843		253,799	19%
Average per day		3,270		2,759	19%
Net profits interests		247,526		208,708	19%

Average Sales Prices
Oil (per Bbl)	$	70.48	$	75.30	(6%)
Gas (per Mcf)	$	4.11	$	4.57	(10%)

Revenues
Oil sales	$	3,127,387	$	3,212,363	(3%)
Gas sales		1,235,336		1,159,078	7%
Total Revenues		4,362,723		4,371,441	(0%)

Costs
Taxes, transportation and other		422,062		537,506	(21%)
Production expense (c)		1,549,120		1,565,161	(1%)
Development costs		131,242		1,113,069	(88%)
Excess costs (d)		(66,655)		(940,783)	(93%)
Total Costs		2,035,769		2,274,953	(11%)

Net Proceeds	$	2,326,954	$	2,096,488	11%

Net Profits Income	$	2,053,394	$	1,837,741	12%


(31)		Rule 13a-14(a)/15d-14(a) Certification

(32)		Section 1350 Certification

(99)		Items 1A, 7 and 7A to the Annual Report on Form 10-K for Cross Timbers Royalty Trust filed with the Securities and Exchange Commission on March 27, 2025 (incorporated herein by reference)


	CROSS TIMBERS ROYALTY TRUST
	By ARGENT TRUST COMPANY, TRUSTEE



	By	/s/ NANCY WILLIS
		Nancy Willis
		Director of Royalty Trust Services


	EXXON MOBIL CORPORATION



Date: May 14, 2025	By	/s/ KRISTY WALKER
		Kristy Walker
		Unconventional Finance General Manager

GLOSSARY OF TERMS

PART I ‑ FINANCIAL INFORMATION

Item 1. Financial Statements

Item 2. Trustee’s Discussion and Analysis

Item 3. Quantitative and Qualitative Disclosures About Market Risk

PART II - OTHER INFORMATION

Item 1A. Risk Factors

Item 6. Exhibits

SEC Form 10-Q filed by Cross Timbers Royalty Trust