Cross Timbers Royalty Trust Reports 12% Increase in Net Profits Income for Q1 2025

Cross Timbers Royalty Trust reported a net profits income of $2,053,394 for the first quarter of 2025, reflecting a 12% increase from $1,837,741 in the same period of 2024. This rise in income was attributed to a combination of factors, including decreased development costs of $0.7 million, increased oil and gas production contributing an additional $0.3 million, and reduced taxes, transportation, and other costs by $0.1 million. However, these gains were partially offset by net excess costs activity of $0.6 million and lower oil and gas prices, which decreased by 6% and 10%, respectively.

Total income for the quarter reached $2,065,400, up from $1,854,714 in the prior year. The Trust's administration expenses decreased to $281,462 from $361,500, primarily due to the timing of expense payments. Consequently, the distributable income for the quarter was $1,783,938, or $0.297 per unit, compared to $1,493,214, or $0.249 per unit, in the first quarter of 2024. The distribution payable to unitholders also saw a significant increase, rising to $940,350 from $373,590 at the end of the previous fiscal period.

Operationally, the Trust reported a 4% increase in oil sales volumes, totaling 44,370 barrels, and a 19% increase in gas sales volumes, reaching 300,843 thousand cubic feet. The average daily oil production was 482 barrels, while gas production averaged 3,270 thousand cubic feet per day. Despite these increases in production volumes, the average sales prices for oil and gas decreased, impacting overall revenue. Oil sales generated $3,127,387, down 3% from the previous year, while gas sales increased by 7% to $1,235,336.

The Trust's total assets as of March 31, 2025, amounted to $4,287,064, an increase from $3,806,934 at the end of 2024. The net profits interests in oil and gas properties decreased slightly to $2,346,714 from $2,433,344, reflecting amortization. The Trust's expense reserve remained stable at $1,000,000, allowing for the payment of obligations should net profits income be insufficient. The Trustee has indicated plans to withhold $50,000 from future distributions to bolster the expense reserve to $1,500,000.

Looking ahead, the Trust's management remains cautious about the volatility in oil and gas prices and the potential impact on future revenues. The Trustee has not identified any impairment of net profits interests as of March 31, 2025, and continues to monitor market conditions closely. The Trust's financial performance will depend on various factors, including production levels, commodity prices, and operational costs, as well as broader economic conditions affecting the oil and gas industry.