Cross Timbers Royalty Trust Reports 62% Decline in Net Profits for Q1 2026

Cross Timbers Royalty Trust reported a significant decline in financial performance for the first quarter of 2026, with net profits income totaling $774,181, a decrease of 62% from $2,053,394 in the same period of 2025. This decline was attributed to reduced oil and gas production, which fell by approximately $1.3 million, alongside lower oil prices that contributed an additional $0.5 million to the decrease. Increased overhead and production costs also played a role, while net excess costs activity provided a partial offset of $0.8 million. Total income for the quarter was $787,847, down from $2,065,400 year-over-year.

The Trust's distributable income for the quarter was $503,406, translating to $0.083901 per unit, compared to $1,783,938, or $0.297323 per unit, in the first quarter of 2025. The administration expenses decreased to $234,441 from $281,462, primarily due to the timing of expense payments and professional service terms. The Trust's cash and short-term investments decreased to $1,501,426 from $2,133,676 at the end of 2025, while the distribution payable to unitholders dropped significantly to $5,538 from $688,230.

Operationally, the Trust experienced a 37% decrease in oil sales volumes, totaling 28,119 barrels, and a 38% decrease in gas sales volumes, totaling 185,139 Mcf. The average oil price fell by 20% to $56.65 per barrel, while the average gas price increased slightly by 3% to $4.25 per Mcf. The total revenues from oil and gas sales were $2,380,635, down 45% from $4,362,723 in the previous year. The Trust's net profits interests in oil and gas properties decreased to $2,125,206 from $2,158,420 at the end of 2025.

Looking ahead, the Trust's management noted that the decrease in production and revenues is reflective of broader market conditions, including natural production declines and fluctuating commodity prices. The Trustee has not identified any impairment of net profits interests as of March 31, 2026, and anticipates that the long-term market dynamics will continue to influence performance. The Trust remains focused on managing its expenses and maintaining its operational integrity while navigating the challenges posed by the current economic environment.