10-Q

10-Q 1 sbr_10-q_2024-09-30.htm 10-Q 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)


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

For the quarterly period ended September 30, 2024


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

For the transition period to

Commission File Number: 1-8424

SABINE ROYALTY TRUST

(Exact name of registrant as specified in its charter)


Texas	75-6297143
( State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
Argent Trust Company 3838 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

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


	Trading Symbol(s)	Name of each exchange on which registered
Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Units of Beneficial Interest	SBR	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. (Check one):


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 ☒

Number of units of beneficial interest outstanding at November 12, 2024: 14,579,345


PART I — FINANCIAL INFORMATION		3
	Item 1. Financial Statements	3
	Item 2. Trustee’s Discussion and Analysis of Financial Condition and Results of Operations	14
	Item 3. Quantitative and Qualitative Disclosures About Market Risk	16
	Item 4. Controls and Procedures	16
PART II — OTHER INFORMATION		18
	Item 1. Legal Proceedings	18
	Item 1A. Risk Factors	18
	Item 5. Other Information	18
	Item 6. Exhibits	18
SIGNATURES		19
EX-31
EX-32


	Page
Report of Independent Registered Public Accounting Firm (PCAOB ID Number 410)	4
Condensed Statements of Assets, Liabilities, and Trust Corpus	5
Condensed Statements of Distributable Income (Unaudited)	6,7
Condensed Statements of Changes in Trust Corpus (Unaudited)	8,9


			September 30,		December 31,
			2024		2023
	Note		(UNAUDITED)
Assets
Cash and short-term investments			$	8,666,325	$	9,342,423
Royalty interests in oil and gas properties (less accumulated amortization of $22,315,263 and $22,299,783 at September 30, 2024 and December 31, 2023)				79,922		95,402
Total			$	8,746,247	$	9,437,825
Liabilities and Trust Corpus
Trust expenses payable		4	$	215,830	$	508,489
Other payables		4		6,183		370,430
Total liabilities				222,013		878,919
Contingencies		6
Trust corpus — 14,579,345 units of beneficial interest authorized and outstanding				8,524,234		8,558,906
Total			$	8,746,247	$	9,437,825


		Three Months Ended September 30,
	Notes	2024			2023
Royalty income		$	19,784,478		$	14,364,695
Interest income			145,868			128,927
Total			19,930,346			14,493,622
General and administrative expenses			(859,880	)		(766,161	)
Distributable income		$	19,070,466		$	13,727,461
Distributable income per unit (14,579,345 units)	1,3,5	$	1.31		$	0.94


		Nine Months Ended September 30,
	Notes	2024			2023
Royalty income		$	63,150,392		$	58,933,827
Interest income			473,146			530,652
Total			63,623,538			59,464,479
General and administrative expenses			(2,552,648	)		(2,761,682	)
Distributable income		$	61,070,890		$	56,702,797
Distributable income per unit (14,579,345 units)	1,3,5	$	4.19		$	3.89


Notification Date	Monthly Record Date	Payment Date	Distribution per Unit
October 4, 2024	October 15, 2024	October 29, 2024	$	0.435840
November 5, 2024	November 15, 2024	November 29, 2024	$	0.514350


			Quarter Ended
	September 30,		September 30,		June 30,
	2024		2023		2024
Production
Oil (Bbls)		206,892		140,084		220,438
Gas (Mcfs)		3,822,044		3,061,615		3,869,375
Average Realized Price
Oil (per Bbl)	$	77.55	$	71.83	$	78.89
Gas (per Mcf)	$	1.52	$	1.96	$	1.99


	Nine Months Ended
	September 30, 2024		September 30, 2023
Production
Oil (Bbls)		601,332		460,435
Gas (Mcfs)		11,490,966		9,093,788
Average Realized Price
Oil (Bbls)	$	78.81	$	74.46
Gas (Mcfs)	$	1.99	$	3.38


4(a)*	Sabine Corporation Amended and Restated Royalty Trust Agreement effective as of May 22, 2014

(b)**	Amendment No. 1 to the Amended and Restated Royalty Trust Agreement of Sabine Royalty Trust, dated May 2, 2022

(c)***	Sabine Corporation Louisiana Royalty Trust Agreement effective as of December 31, 1982, by and between Sabine Corporation and Hibernia National Bank in New Orleans, as trustee, and joined by InterFirst Bank Dallas, N.A., as trustee. (P)

31	Trustee Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32	Trustee Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002


SABINE ROYALTY TRUST

By:		Argent Trust Company, Trustee

By:		/s/ Nancy Willis
		Nancy Willis
		Director of Royalty Trust Services

SEC Form 10-Q filed by Sabine Royalty Trust