HUGOTON ROYALTY TRUST DECLARES NO FEBRUARY CASH DISTRIBUTION – TipRanks Monetary Weblog

DALLAS, Feb. 16, 2024 /PRNewswire/ — Argent Belief Firm, as Trustee of the Hugoton Royalty Belief (the “Belief”) (OTCQB: HGTXU) introduced right this moment there wouldn’t be a money distribution to the holders of its items of useful curiosity for February 2024 because of the extra price positions on all three of the Belief’s conveyances of internet earnings pursuits. The Belief’s money reserve was diminished by $26,000 for the fee of Belief bills. To the extent internet earnings revenue is obtained in future months, the Trustee anticipates replenishing the money reserve previous to declaring any future distributions to unitholders. Replenishment of the money reserve could embrace any improve within the money reserve complete, as decided by the Trustee. The next desk exhibits underlying fuel and oil gross sales and common costs attributable to the web overriding royalty for each the present month and prior month. Underlying fuel and oil gross sales volumes attributable to the present month have been primarily produced in December.

XTO Power has suggested the Trustee that it has included two months of underlying gross sales volumes of roughly 9,000 Bbls and 52,000 Mcf from two new non-operated wells drilled in Main County, Oklahoma and has deducted growth prices of $169,000, manufacturing expense of $1,073,000 and overhead of $1,161,000 in figuring out the royalty calculation for the Belief for the present month.

Extra Prices
XTO Power has suggested the Trustee that extra prices elevated by $129,000 on properties underlying the Kansas internet earnings pursuits. Underlying cumulative extra prices remaining on the Kansas internet earnings pursuits complete $972,000, together with accrued curiosity of $27,000.

XTO Power has suggested the Trustee that $1,121,000 of extra prices have been recovered on properties underlying the Oklahoma internet earnings pursuits. Nevertheless, after the partial restoration, there have been no remaining proceeds from the properties underlying the Oklahoma internet earnings pursuits to be included within the present month’s distribution. Underlying cumulative extra prices remaining on the Oklahoma internet earnings pursuits complete $711,000, together with accrued curiosity of $249,000. This stability doesn’t embrace the portion of the Chieftain settlement the arbitration panel decided might be charged as a manufacturing price. XTO Power has estimated the quantity to be roughly $14.6 million (internet to the Belief).

XTO Power has suggested the Trustee that $440,000 of extra prices have been recovered on properties underlying the Wyoming internet earnings pursuits. Nevertheless, after the partial restoration, there have been no remaining proceeds from the properties underlying the Wyoming internet earnings pursuits to be included within the present month’s distribution. Underlying cumulative extra prices remaining on the Wyoming internet earnings pursuits complete $1,804,000, together with accrued curiosity of $56,000.

Growth Prices
As beforehand disclosed, XTO Power suggested the Trustee that it elected to take part within the growth of three non-operated wells in Main County, Oklahoma. As of the date hereof, $9.1 million underlying ($7.3 million internet to the Belief) in growth prices have been charged to the Belief for the three non-operated wells. Two of the three wells have been accomplished in second quarter 2023 and the third was accomplished in fourth quarter 2023. The Trustee and XTO Power will proceed to offer materials updates on the three non-operated wells in subsequent communications.

Arbitration
As beforehand disclosed, XTO Power suggested the Trustee that it reached a settlement with the plaintiffs within the Chieftain class motion royalty case. On July 27, 2018, the ultimate plan of allocation was authorized by the court docket. Primarily based on the ultimate plan of allocation, XTO Power suggested the Trustee that it believes roughly $24.3 million in further manufacturing prices must be allotted to the Belief. On Could 2, 2018, the Trustee submitted a requirement for arbitration looking for a declaratory judgment that the Chieftain settlement just isn’t a manufacturing price and that XTO Power is prohibited from charging the settlement as a manufacturing price beneath the conveyance or in any other case lowering the Belief’s funds now or sooner or later because of the Chieftain litigation. The Belief and XTO Power carried out the interim listening to on the claims associated to the Chieftain settlement on October 12-13, 2020. Within the arbitration, the Trustee contended that the roughly $24.3 million allocation associated to the Chieftain settlement was not a manufacturing price and, subsequently, there shouldn’t be a associated adjustment to the Belief’s share of internet proceeds. Nevertheless, XTO Power contended that the roughly $24.3 million was a manufacturing price and will cut back the Belief’s share of internet proceeds.

On January 20, 2021, the arbitration panel issued its Corrected Interim Closing Award (i) “reject[ing] the Belief’s competition that XTO has no proper beneath the Conveyance to cost the Belief with quantities XTO paid beneath part 1.18(a)(i) as royalty obligations to settle the Chieftain litigation” and (ii) stating “[t]he subsequent part will decide how a lot of the Chieftain settlement will be so charged, if any of it may be, within the train of the fitting discovered by the Panel.” Following briefing by each events, on Could 18, 2021, the Panel issued its second interim closing award over the quantity of XTO Power’s settlement within the Chieftain class motion lawsuit that may be charged to the Belief as a manufacturing price. The Panel in its choice has dominated that out of the $80 million settlement, the “Belief is obligated to pay its share beneath the Conveyance of the $48 million that was obtained by the plaintiffs within the Chieftain lawsuit by advantage of the settlement of that litigation. The Belief just isn’t obligated by the Conveyance to pay any share of the $32 million obtained by the legal professionals for the plaintiffs within the Chieftain lawsuit by advantage of the settlement.” XTO Power and the Trustee are within the means of figuring out the portion of the $48 million that’s allocable to Belief properties to be charged as an extra price to the Belief, however estimate it to be roughly $14.6 million internet to the Belief.

The discount within the Belief’s share of internet proceeds from the portion of the settlement quantity the Panel has dominated could also be charged towards the Oklahoma conveyance would end in extra prices beneath the Oklahoma conveyance that might seemingly end in no distributions beneath the Oklahoma conveyance whereas these extra prices are recovered. This award completes the portion of the arbitration associated to the Chieftain settlement. Extra prices on any particular person conveyance wouldn’t have an effect on internet proceeds to the Belief on any of the opposite remaining conveyances.

Different Trustee claims associated to disputed quantities on the computation of the Belief’s internet proceeds for 2014 by way of 2019 and 2021 have been bifurcated from the preliminary arbitration. Though the arbitration just isn’t terminated, the ultimate listening to relating to the remaining dispute over internet proceeds was cancelled. XTO Power and the Trustee will present materials updates as they develop into out there.

For extra info on the Belief, together with the annual tax info, distribution quantities, and historic press releases, please go to our web site at www.hgt-hugoton.com.

Statements made on this press launch relating to future occasions or situations are ahead trying statements. Precise future outcomes, together with growth prices and timing, and future internet earnings, may differ materially as a consequence of modifications in pure fuel and oil costs and different financial situations affecting the fuel and oil business and different components described in Half I, Merchandise 1A of the Belief’s Annual Report on Type 10-Ok for the 12 months ended December 31, 2022.

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SOURCE Hugoton Royalty Belief