8-K
HUGOTON ROYALTY TRUST (HGTXU)
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
| Date of Report (Date of earliest event reported): May 19, 2025 |
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HUGOTON ROYALTY TRUST
(Exact name of registrant as specified in its charter)
| Texas | 001-10476 | 58-6379215 |
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| (State or other jurisdiction<br>of incorporation) | (Commission<br><br>File Number) | (IRS Employer<br>Identification No.) |
| Argent Trust Company<br><br>Trustee<br><br>3838 Oak Lawn Ave, Suite 1720 | ||
| Dallas, Texas | 75219-4518 | |
| (Address of principal executive offices) | (Zip Code) | |
| Registrant’s telephone number, including area code: (855) 588-7839 | ||
| --- |
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Units of Beneficial Interest | HGTXU | OTCQB |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On May 19, 2025, the Registrant issued a news release that it will not declare a monthly cash distribution for the month of May 2025. A copy of the news release is furnished as Exhibit 99.1.
The information in this Current Report, including the news release attached hereto, is being furnished pursuant to Item 2.02 of Form 8-K and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liabilities of that Section.
Item 9.01 Financial Statements and Exhibits.
| (d) | Exhibits. | |
|---|---|---|
| Exhibit 99.1 | News Release dated May 19, 2025 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| HUGOTON ROYALTY TRUST | |||
|---|---|---|---|
| By: | ARGENT TRUST COMPANY, TRUSTEE | ||
| Date: | May 19, 2025 | By: | /s/ NANCY WILLIS |
| Nancy Willis | |||
| Director of Royalty Trust Services |
EX-99.1
Hugoton Royalty Trust
News Release
HUGOTON ROYALTY TRUST DECLARES NO MAY CASH DISTRIBUTION,
SECOND ADVANCE FROM XTO, NEW OPERATOR, LATE FILING OF 10-Q AND DISMISSAL OF AUDITOR
Dallas, Texas, May 19, 2025 – Argent Trust Company, as Trustee of the Hugoton Royalty Trust (the “Trust”) (OTCQB: HGTXU) announced today there would not be a cash distribution to the holders of its units of beneficial interest for May 2025 due to the excess cost positions on all three of the Trust’s conveyances of net profits interests. The Trust’s cash reserve was reduced by $23,000 for the payment of Trust expenses. To the extent net profits income is received in future months, the Trustee anticipates replenishing the cash reserve prior to declaring any future distributions to unitholders. Replenishment of the cash reserve may include any increase in the cash reserve total, as determined by the Trustee.
Second Advance Distribution from XTO Energy
As disclosed previously, the Trust and XTO Energy, Inc. (“XTO”) entered into a Second Advance Distribution Agreement (the “Agreement") intended to provide the Trustee of the Trust with liquidity to meet current and near-term financial reporting obligations, including payment of third-party auditor and other expenses related to filing the Trust's Quarterly Report on Form 10-Q for the period ending March 31, 2025, and additional near-term filing obligations.
New Operator
XTO has informed the Trustee that it closed the divestment of XTO’s interest in the assets underlying the Trust to Mach Natural Resources LP and its affiliates (“Mach”) on April 30, 2025. XTO has informed the Trustee that Mach has assumed XTO's obligations under the Trust Indenture and operatorship of the applicable properties.
Hugoton Royalty Trust
The following table shows underlying gas and oil sales and average prices attributable to the net overriding royalty for both the current month and prior month. Underlying gas and oil sales volumes attributable to the current month were primarily produced in March.
| Underlying Sales | |||||
|---|---|---|---|---|---|
| Volumes (a) | Average Price | ||||
| Gas<br><br>(Mcf) | Oil<br><br>(Bbls) | Gas<br><br>(per Mcf) | Oil<br><br>(per Bbl) | ||
| Current Month Distribution | 640,000 | 14,000 | $4.05 | $65.70 | |
| Prior Month Distribution | 738,000 | 29,000 | $4.08 | $68.34 | |
| <ul><li><font>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.</font></li></ul> |
XTO, through Mach, has advised the Trustee that it has deducted development costs of $404,000, production expense of $2,110,000, and overhead of $987,000 in determining the royalty calculation for the Trust for the current month.
The Trust has self-published this month’s press release on its website, www.hgt-hugoton.com, and the release has not been included in any wire distribution, which was the normal procedure for each monthly press release prior to April. The self-publication is due to conservation of the Trust’s cash reserves. The Trust will continue to furnish unitholders with information through its website and Form 8-K filings with the Securities and Exchange Commission.
Excess Costs
XTO, through Mach, has advised the Trustee excess costs increased $102,000 on properties underlying the Kansas net profits interests. Underlying cumulative excess costs remaining on the Kansas net profits interests total $1,855,000 including accrued interest of $165,000.
XTO, through Mach, has advised the Trustee that excess costs increased by $270,000 on properties underlying the Oklahoma net profits interests. Underlying cumulative excess costs remaining on the Oklahoma net profits interests total $5,163,000, including accrued interest of $468,000.
XTO, through Mach, has advised the Trustee that excess costs increased by $325,000 on properties underlying the Wyoming net profits interests. Underlying cumulative excess costs remaining on the Wyoming net profits interests total $8,710,000, including accrued interest of $630,000.
Hugoton Royalty Trust
Development Costs
XTO Energy, through Mach, had previously advised the Trustee of six total non-operated wells in Major County, Oklahoma in which it has elected to participate. XTO Energy has also advised the Trustee that it is not aware of any additional wells that XTO has elected to participate that would need to be reported for the Trust. Currently Mach is reviewing the development budget for the Trust’s interests in conjunction with its overall development budget and will update the Trust when that review is completed.
Late Filing and Dismissal of Auditor
As previously reported in the Registrant’s Form 10-K for the year ended December 31, 2024, the Registrant had substantial doubt about its ability to continue as a going concern and anticipated its cash reserve to be depleted in the second quarter of 2025, after which it would not have funds with which to continue to make SEC filings. As a result, the Registrant did not anticipate being able to file its quarterly report on Form 10-Q for the quarter ended March 31, 2025 (the “Form 10-Q”). As reported in the Registrant’s Form 8-K filed May 1, 2025, the Registrant received an advance distribution from XTO Energy, Inc. intended to provide the Trustee of the Registrant with liquidity to meet current and near-term financial reporting obligations, including payment of third-party auditor and other expenses related to filing the Form 10-Q. Due to the timing of such advance distribution in relation to the due date for the Form 10-Q, the Registrant has not had sufficient time to complete preparation of the Form 10-Q, including review of such Form 10-Q by third party advisors, in time to meet the due date for the Form 10-Q. Additionally, as disclosed in the Registrant’s Form 8-K filed May 16, 2025, the Registrant dismissed PricewaterhouseCoopers, LLP, its independent registered public accounting firm on May 13, 2025 and is currently seeking engagement of a new independent registered public accounting firm. For the foregoing reasons, the Registrant requires additional time in order to prepare and file the Form 10-Q.
It is not anticipated that the Form 10-Q will be filed on or before the fifth calendar day following the prescribed due date for the Form 10-Q; however, the Registrant intends to file the Form 10-Q as soon as the Form 10-Q has been completed.
For more information on the Trust, including the annual tax information, distribution amounts, and historical press releases, please visit our website 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 timing, and future net profits, could differ materially due to changes in natural gas and oil prices and other economic conditions affecting the gas and oil 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, 2024.
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| Contact: | Nancy Willis<br><br>Director of Royalty Trust Services<br><br>Argent Trust Company, Trustee 855-588-7839 |
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