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Hugoton Royalty Trust (HGTXU+1.80%) has submitted its 10-K filing for the fiscal year ended December 31, 2024.
The filing reports that XTO Energy Inc. entered into a definitive agreement to divest its interest in the assets underlying the Trust to Mach Natural Resources LP, with the transaction expected to close on April 30, 2025.
The Trust's financial statements indicate a net profits income of $0 for 2024, compared to $11,467,914 in 2023, primarily due to lower oil and gas prices, decreased production, and increased production expenses.
The Trust's cash reserves are expected to be depleted in the second quarter of 2025, raising substantial doubt about its ability to continue as a going concern.
The Trust has not made any distributions to unitholders since July 2023 due to excess costs and a reduction in the Trust’s expense reserve.
XTO Energy has provided a one-time advance distribution of $500,000 to the Trust, which may be recouped from future net profits.
The Trust's net profits interests were impaired to zero in 2019, and the Trust has no remaining net profits interests in oil and gas properties.
The Trust is considering options for its future, including potential termination or sale of its interests, subject to unitholder approval.
The Trust's financial statements are prepared on a modified cash basis, which differs from U.S. GAAP, and the Trust does not have any off-balance sheet arrangements.
The Trust faces risks from fluctuating oil and gas prices, potential regulatory changes, and operational risks associated with the underlying properties.
This content was summarized by generative artificial intelligence using public filings retrieved from SEC.gov. The original data was derived from the Hugoton Royalty Trust annual 10-K report dated March 31, 2025. To report an error, please email earnings@qz.com.