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CT

CROSS TIMBERS ROYALTY TRUST (CRT)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 net income was $1.32M and diluted EPS was $0.2196; both declined sequentially versus Q3 2024 ($1.52M, $0.2535) and were markedly below Q4 2023 ($2.42M, $0.4028) .
  • Monthly cash distributions in the quarter were $0.064592 (Oct), $0.092742 (Nov), and $0.062265 (Dec), with November a temporary uptick on higher gas volumes and prices, followed by December softness on lower volumes and oil price .
  • Operating commentary focused on “excess costs” on Texas working interest net profits—+$125k (Oct), +$133k (Nov), and +$69k (Dec)—with cumulative excess costs rising to $4.256M including $1.115M accrued interest by December .
  • No formal guidance or earnings call; near-term distribution trajectory is driven by commodity price realizations, volume timing, and excess-cost recovery dynamics (with a one-time settlement deduction evident in September’s distribution that flowed through October’s release) .

What Went Well and What Went Wrong

What Went Well

  • November distribution increased to $0.092742 per unit (from $0.064592 in October) supported by higher underlying gas volumes (86k Mcf) and improved realized gas price ($3.54/Mcf) .
  • Sequential margin resiliency into Q4 2024 as net income margin ticked up versus Q3 (89.24%* vs. 88.85%) despite softer revenue, reflecting the trust’s low-cost pass-through economics.
  • Resolution and transparency around a legacy royalty class action allocation: the Trustee highlighted a $24,128 net deduction included in September’s distribution, clarifying impact to the October update .

What Went Wrong

  • Q4 2024 diluted EPS fell to $0.2196 from $0.2535 in Q3 and $0.4028 in Q4 2023, tracking weaker quarter revenue and distribution levels .
  • Persistent “excess costs” on Texas working interest properties continued to rise (+$125k in Oct, +$133k in Nov, +$69k in Dec), pressuring distributable cash and increasing cumulative excess costs to $4.256M including interest by year-end .
  • December showed softer oil volumes (13k bbl) and realized oil price ($69.15/bbl) and lower gas volumes (68k Mcf), driving a sequentially lower per-unit distribution ($0.062265) versus November .

Financial Results

MetricQ4 2023Q2 2024Q3 2024Q4 2024
Revenue ($USD)—$1,580,044*$1,712,188*$1,476,484*
Net Income - (IS) ($USD)$2,416,884 $1,345,758 $1,521,252 $1,317,594
Diluted EPS - Continuing Operations ($USD)$0.402814 $0.224293 $0.253542 $0.219599
Net Income Margin %94.26%*85.17%*88.85%*89.24%*
EBIT Margin %94.26%*85.17%*88.85%*89.24%*

Values marked with * retrieved from S&P Global.

KPIs (Monthly detail for Q4 2024):

KPIOct 2024Nov 2024Dec 2024
Cash Distribution per Unit ($)$0.064592 $0.092742 $0.062265
Underlying Oil Volumes (Bbls)12,000 13,000 13,000
Underlying Gas Volumes (Mcf)82,000 86,000 68,000
Avg Oil Price ($/Bbl)$76.77 $71.39 $69.15
Avg Gas Price ($/Mcf)$4.46 $3.54 $3.26
Excess Costs Change ($)+$125,000 +$133,000 +$69,000
Cum. Excess Costs Texas WI ($)$4,000,000 incl. $1,061,000 interest $4,160,000 incl. $1,088,000 interest $4,256,000 incl. $1,115,000 interest

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Cash Distribution per UnitOct 2024$0.102230 (Sep) $0.064592 Lowered
Cash Distribution per UnitNov 2024$0.064592 (Oct) $0.092742 Raised
Cash Distribution per UnitDec 2024$0.092742 (Nov) $0.062265 Lowered

Note: Trust provides no formal forward guidance; monthly distributions are declared and reflect realized volumes, prices, and excess-cost dynamics .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2: Q2 2024)Previous Mentions (Q-1: Q3 2024)Current Period (Q4 2024)Trend
Commodity price realizationsGas price volatility and corrections in Oklahoma RI volumes; avg gas $8.14/Mcf (June) then $4.03 (July) Avg oil/gas prices $77.46/bbl and $3.29/Mcf in Sep; one-time settlement deduction Oil $76.77/$71.39/$69.15; gas $4.46/$3.54/$3.26 Oct–Dec Moderating prices into Dec
Excess costs (Texas WI)Cumulative Texas WI excess costs rose to $3.696M incl. $981k interest; Oklahoma WI excess costs fully recovered Texas WI excess costs $3.847M incl. $1.034M interest (+$124k) Texas WI excess costs rose to $4.000M/$4.160M/$4.256M incl. interest Oct–Dec Continued increases
Volume timing/mixOut-of-period gas revenues boosted April/May distributions September gas volumes 138k Mcf supported distribution Nov gas volumes up (86k), Dec gas volumes down (68k) Mixed; Dec weaker
Litigation/one-offsNone noted in Q2 outside corrections $24,128 net deduction tied to Chieftain settlement flowed through Sep distribution October note reiterates the September deduction One-off impact behind; transparency maintained

Management Commentary

  • “XTO Energy has advised the Trustee that excess costs increased by $69,000 on properties underlying the Texas Working Interest net profits interests… Underlying cumulative excess costs… total $4,256,000, including accrued interest of $1,115,000.” (December release) .
  • “XTO Energy has advised the Trustee that excess costs increased by $133,000… Underlying cumulative excess costs… total $4,160,000, including accrued interest of $1,088,000.” (November release) .
  • “As a result, the September 2024 distribution included a $24,128 (net to the Trust) deduction allocated to the Trust as a production cost for the Chieftain settlement.” (October release) .

Q&A Highlights

  • No earnings call or Q&A was held; the Trust communicates monthly via press releases and 8-K Item 2.02 updates .

Estimates Context

  • Wall Street consensus estimates were unavailable for EPS, target price, and recommendation for Q4 2024 (no data returned).
  • Reported revenue figures for Q2–Q4 2024 from S&P Global show actuals of $1.58M, $1.71M, and $1.48M, respectively (used above for “Revenue”)*.
    Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • Distributions remain highly sensitive to monthly commodity realizations and volume timing; December’s lower oil and gas volumes/prices drove a smaller payout versus November .
  • Ongoing increases in Texas WI excess costs are a headwind to distributable cash; watch cumulative excess-cost trajectory ($4.256M incl. interest at year-end) for signs of stabilization .
  • Sequential EPS and net income declines versus Q3 and steep YoY declines versus Q4 2023 underscore the macro-driven nature of the Trust’s cash flows .
  • November’s temporary strength indicates upside torque when volumes/prices improve; traders can use realized price momentum (particularly gas) as a near-term distribution signal .
  • One-off settlement deductions are now disclosed and resolved; monitor for further non-recurring items, but base case remains macro/operational inputs .
  • With no formal guidance or call, the catalyst path is monthly 8-K/press releases; near-term positioning should track commodity price trends and excess-cost updates .
  • Medium-term thesis: distributions should revert toward commodity fundamentals; downside risk persists if excess costs continue to rise faster than realized price/volume improvements .