FORT WORTH, Texas, April 20, 2018 /PRNewswire/ -- Simmons Bank,
as Trustee of the Hugoton Royalty Trust (NYSE: HGT) (the "Trust"),
today declared there would not be a cash distribution to the
holders of its units of beneficial interest for April 2018 due to the excess cost positions on
all three of the Trust's conveyances of net profits
interests. The following table shows underlying gas sales and
average prices attributable to the net overriding royalty for both
the current month and prior month. Underlying gas sales volumes
attributable to the current month were primarily produced in
February.
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|
Underlying Gas
Sales
|
|
|
|
|
Volumes (Mcf)
(a)
|
|
Average
Gas
|
|
|
Total
|
|
Daily
|
|
Price per
Mcf
|
|
|
|
|
|
|
|
Current
Month
|
|
967,000
|
|
35,000
|
|
$3.03
|
|
|
|
|
|
|
|
Prior Month
|
|
1,133,000
|
|
37,000
|
|
$2.77
|
|
|
(a)
|
Sales volumes are
recorded in the month the Trust receives the related net profits
income. Because of this, sales volumes may fluctuate from month to
month based on the timing of cash receipts.
|
XTO Energy has advised the Trustee that it has deducted budgeted
development costs of $2,188,000,
production expense of $1,480,000 and
overhead of $945,000 in determining
the royalty calculation for the Trust for the current
month.
Litigation Proceedings - Chieftain
As previously
disclosed, XTO Energy has advised the Trustee that it has reached a
tentative settlement with the plaintiffs in the Chieftain
class action royalty case. XTO Energy has advised the Trustee that
on March 27, 2018, the judge signed
orders approving the settlement, including the plaintiffs' initial
plan to allocate the net settlement fund among the wells covered by
the Chieftain class. Prior to the plaintiffs filing their
initial plan of allocation, XTO Energy advised the Trustee that it
believed the portion of the settlement that relates to the Trust
could be as much as $20
million. However, the portion of the settlement
allocable to the Trust cannot be finally determined until after the
judge approves the final plan of allocation, which plaintiffs are
scheduled to submit by July 30, 2018.
XTO Energy has advised the Trustee that depending on the final plan
of allocation, the portion of the settlement XTO Energy believes
should be allocated to the Trust may exceed $20 million. The Trustee has asked for
additional information regarding the allocation of the settlement
amount and has asked to be advised by XTO Energy as the matter
progresses. Once additional information is made available, the
Trustee intends to review any claimed reductions in payment to the
Trust based on the facts and circumstances of the settlement. The
Trustee has previously stated that to the extent any such claimed
reductions are similar to claimed reductions from XTO Energy's
settlement in the Fankhouser v. XTO Energy, Inc. class
action lawsuit that an arbitration tribunal ruled were not
permitted to be borne by the Trust, the Trustee would likely object
to such claimed reductions. After a review of the claimed
reductions in payments to the Trust relating to the settlement and
a determination whether the Trustee will object to any such
reductions, a determination will be made as to what amount of
reserve will be maintained for anticipated future Trust
expenses.
Excess Costs
XTO Energy has advised the Trustee that decreased costs in the
current month resulted in the partial recovery of excess costs of
$1,300 on properties underlying the
Kansas net profits interests.
However, after the partial recovery there were no remaining
proceeds from properties underlying the Kansas net profits interests to be included
for the current month. Underlying cumulative excess costs remaining
on the Kansas net profits
interests totaled $969,000, including
accrued interest of $126,000.
XTO Energy has advised the Trustee that increased budgeted
development costs in the current month, primarily due to the
projected drilling of four horizontal wells in Major County, Oklahoma during the second half
of 2018, caused costs to exceed revenues by $1,557,000 on properties underlying the
Oklahoma net profits interests.
Underlying cumulative excess costs remaining on the Oklahoma net profits interests totaled
$1,557,000.
XTO Energy has advised the Trustee that increased costs and
increased budgeted development costs in the current month caused
costs to exceed revenues by $82,000
on properties underlying the Wyoming net profits interests. Underlying
cumulative excess costs remaining on the Wyoming net profits interests totaled
$115,000, including accrued interest
of $339.
For more information on the Trust, please visit our web site at
www.hgt-hugoton.com.
Statements made in this press release regarding future events
or conditions are forward looking statements. Actual future
results, including development costs and future net profits, could
differ materially due to changes in natural gas prices and other
economic conditions affecting the gas industry and other factors
described in Part I, Item 1A of the Trust's Annual Report on Form
10-K for the year ended December 31,
2017.
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SOURCE Hugoton Royalty Trust