Mesa Royalty Trust Reports Increased Royalty Income in Q3 2025

Mesa Royalty Trust reported its financial results for the third quarter of 2025, revealing a significant increase in royalty income compared to the same period last year. The Trust's royalty income for the quarter reached $128,993, up from $63,966 in the third quarter of 2024. This increase is attributed to higher pricing for natural gas and natural gas liquids, as well as increased net production for these commodities. However, the Trust's overall income available for distribution prior to cash reserves was $88,894, compared to $54,942 in the previous year, reflecting a per-unit distribution of $0.0477, up from $0.0295.

In terms of year-to-date performance, the Trust reported total royalty income of $460,810 for the nine months ended September 30, 2025, down from $552,994 for the same period in 2024. The decrease in year-to-date income is primarily due to lower pricing for natural gas liquids and oil, as well as decreased net production. The Trust's distributable income for the nine-month period was $365,709, translating to $0.1962 per unit, compared to $400,622, or $0.2150 per unit, in the prior year.

Operationally, the Trust continues to face challenges, particularly with the Hugoton Royalty Properties, which reported no royalty income for both the third quarter and the nine-month period due to expenses exceeding revenues. The San Juan Basin Royalty Properties also experienced similar issues, with no income reported from the Colorado properties and a decrease in income from the New Mexico properties. The Trust remains engaged with its operators, including Hilcorp and Simcoe, to review past and current Net Proceeds.

The Trust's total assets as of September 30, 2025, amounted to $3,222,233, a slight increase from $3,187,975 at the end of 2024. Liabilities, including distributions payable, rose to $72,000 from $58,101. The Trust's corpus also increased to $3,150,233, reflecting ongoing adjustments in cash reserves and operational expenses. The Trustee has indicated plans to increase the Contingent Reserve to $2 million, which may impact future distributions to unitholders.

Looking ahead, the Trust's financial outlook remains cautious due to ongoing volatility in commodity prices and potential impacts from global economic conditions, including trade policies and inflation. The Trustee noted that future distributions could be significantly affected if commodity prices decline or remain unstable, emphasizing the importance of monitoring market conditions closely.