Executive Summary

Q2 2024 distributable income was $0.00, with zero monthly distributions (Apr–Jun) as all three conveyances remained in excess-cost positions and the Trustee used $111,891 of the cash reserve to fund expenses . Net profits income was $0 vs $1.01M in Q2 2023 as gas prices fell 42% YoY to $2.38/Mcf and gas volumes declined 17% YoY; oil volumes rose 9% and oil prices +4% YoY, partially offsetting the decline .
The Trust and XTO entered a global settlement: $18.105M (Chieftain) offset by $17.275M (Overhead) leaves $0.83M net production cost under the Oklahoma conveyance; XTO also advanced $0.50M to partially replenish the expense reserve (subject to recoupment) .
Liquidity remains strained; the Trustee disclosed “substantial doubt” about going-concern ability and will evaluate alternatives such as terminating the Trust or marketing the net profits interests for sale .
All four non‑operated wells in Major County, OK are now completed (two in Q2’23, one in Q4’23, one in Q1’24). They supported oil volume growth but were outweighed by low gas prices and accumulating excess costs .
No Q2 2024 earnings call transcript was available, and there was no 8‑K Item 2.02 earnings press release; the 10‑Q and monthly distribution press releases served as the primary sources .

What Went Well and What Went Wrong

What Went Well
- Oil volumes +9% YoY in Q2 2024, supported by new Oklahoma wells; oil prices +4% YoY to $76.59/Bbl .
- Taxes, transportation and other costs fell 33% YoY in Q2 2024, reflecting lower gas revenues and production taxes .
- Settlement reduced multi‑year arbitration uncertainty and improved accounting practices (overhead charges to conform with conveyance schedule; no overhead on non‑producing wells, effective June 1, 2024) .
What Went Wrong
- Gas prices collapsed 42% YoY to $2.38/Mcf; underlying gas volumes fell 17% YoY, driving a 37% YoY revenue decline and eliminating Q2 net profits to the Trust .
- Excess costs increased materially during Q2 across all conveyances, with cumulative underlying excess costs reaching $8.0M ($6.4M net to the Trust) at June 30, 2024 (ex‑settlement items, which will be recorded in Q3) .
- Going‑concern risk escalated: no distributions since July 2023, trustee fee deferrals since April 2024 and potential need to pursue termination or sale alternatives .

Financial Results

Q2 2024 vs Q1 2024 vs Q2 2023 operating metrics

Metric	Q2 2023	Q1 2024	Q2 2024
Gas Sales Volumes (Underlying, Mcf)	2,301,331	2,068,643	1,901,385
Oil Sales Volumes (Underlying, Bbls)	36,572	48,791	40,011
Avg Gas Price ($/Mcf)	$4.10	$3.80	$2.38
Avg Oil Price ($/Bbl)	$73.91	$72.17	$76.59
Total Revenues (Underlying)	$12,130,168	$11,388,171	$7,581,747
Total Costs	$10,869,967	$11,388,171	$7,581,747
Net Proceeds	$1,260,201	$0	$0
Net Profits Income to Trust (80%)	$1,008,161	$0	$0
Distributable Income per Unit	$0.023019	$0.000000	$0.000000

Excess costs – activity in Q2 2024 and cumulative balances (Underlying and Net to Trust)

Conveyance	Net Excess Costs in Q2 2024 (Underlying)	Net Excess Costs in Q2 2024 (Net to Trust)	Cumulative Excess Costs at 6/30/24 (Underlying)	Accrued Interest at 6/30/24 (Underlying)	Total Remaining to Recover at 6/30/24 (Underlying)	Cumulative Excess Costs at 6/30/24 (Net to Trust)	Accrued Interest at 6/30/24 (Net to Trust)	Total Remaining to Recover at 6/30/24 (Net to Trust)
Kansas	$264,416	$211,533	$1,254,213	$56,478	$1,310,691	$1,003,371	$45,183	$1,048,554
Oklahoma	$968,719	$774,975	$1,834,901	$284,812	$2,119,713	$1,467,921	$227,850	$1,695,771
Wyoming	$2,345,327	$1,876,261	$4,440,511	$129,691	$4,570,202	$3,552,407	$103,753	$3,656,160
Total	$3,578,462	$2,862,769	$7,529,625	$470,981	$8,000,606	$6,023,699	$376,786	$6,400,485

KPIs and liquidity

KPI	Q1 2024	Q2 2024
Expense Reserve (end of period)	$120,303	$508,412 (includes $500,000 advance)
Admin Expense (quarter)	$228,423	$113,723
Cash Reserve Utilized for Expenses (quarter)	$223,745	$111,891
Monthly Distributions per Unit	Feb $0.000000; Mar $0.000000; Apr $0.000000	Apr $0.000000; May $0.000000; Jun $0.000000

Monthly operating snapshots (Q2 press releases)

Month (Announcement)	Gas Vol (Mcf)	Oil Vol (Bbls)	Gas $/Mcf	Oil $/Bbl
April PR (Apr 19)	500,000	11,000	$3.45	$72.91
May PR (May 20)	678,000	11,000	$1.82	$78.07
June PR (Jun 17)	724,000	19,000	$2.16	$77.86

Note: No 8‑K Item 2.02 earnings press release or earnings call transcript was available for Q2 2024; the 10‑Q and monthly distribution press releases are the primary sources .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Distributions	Ongoing	No formal guidance; distributions suspended since Jul 2023	No distributions declared in Apr–Jun; any future net profits will first replenish the cash reserve; XTO advance recoupment cannot reduce cash below $250k	Maintained suspension; clarified reserve priority and $250k minimum cash
Administrative Fees	2024	Standard trustee fee	Trustee deferred ~$7,300 monthly fee since April 2024 to reduce costs	Cost containment (defer)
Strategic Alternatives	Next 12 months	Not previously emphasized	Trustee intends to review termination or sale of interests given going‑concern risks	New disclosure emphasis
Accounting/Overhead	Effective Jun 1, 2024	Prior practices	XTO to align overhead with conveyance schedule; no overhead on non‑producing wells	Improved methodology

The Trust does not issue quantitative revenue, margin, OpEx, or tax guidance.

Earnings Call Themes & Trends

No Q2 2024 earnings call transcript was found for HGTXU [Search No Results]. Themes below reflect Trustee commentary (10‑Q) and monthly press releases.

Topic	Previous Mentions (Q4 2023, Q1 2024)	Current Period (Q2 2024)	Trend
Commodity Prices	Q1: Gas fell 64% YoY to $3.80/Mcf; oil −9% YoY to $72.17/Bbl, press releases showed volatile monthly prices	Gas −42% YoY to $2.38/Mcf; oil +4% YoY to $76.59/Bbl	Gas weakness persists; oil stable to slightly higher
Excess Costs	Q1: Underlying cumulative $4.3M at 3/31/24 (net $3.4M); OK expected to include Chieftain charge when finalized	Underlying cumulative $8.0M at 6/30/24 (net $6.4M), settlement booked in Q3	Worsening in Q2; settlement mechanics to flow in H2
Chieftain/Overhead Settlement	Q1: Panel allowed partial charge; estimate ~$14.6M net to Trust for OK conveyance	Global settlement: $18.105M vs $17.275M offset → $0.83M net cost to OK; $0.50M advance	Uncertainty reduced; near‑term recoupment overhang
New Wells (Major County, OK)	Q1: 4 total wells; final well completed in Q1 2024	Oil volumes +9% YoY; two wells were completed in Q2’23, third in Q4’23, fourth in Q1’24	Contribution visible, but overwhelmed by gas price headwinds
Liquidity/Going Concern	Q1: Substantial doubt; evaluating options incl. financing (uncertain)	Still substantial doubt; trustee fee deferral; financing unlikely; considering termination or sale	Deteriorated outlook
Distributions/Reserve	Q1: $0 monthly; reserve draw for expenses	$0 monthly; reserve partially replenished by $0.5M advance; recoupment with $250k minimum cash covenant	No distributions; reserve management framework updated

Management Commentary

“These conditions raise substantial doubt about the Trust’s ability to continue as a going concern… the Trustee intends to review options for the Trust which may include alternatives to continuing as a going concern such as seeking to terminate the Trust or marketing the Trust’s interest… for a potential sale.” (Trustee) .
“Underlying cumulative excess costs for the Kansas, Oklahoma and Wyoming conveyances remaining as of June 30, 2024, totaled $8.0 million ($6.4 million net to the Trust), including accrued interest of $0.5 million ($0.4 million net to the Trust). The excess costs balance does not include items from the Settlement Agreement since these will be recorded in third quarter 2024.” .
“XTO Energy will provide the Trust a one-time advance distribution of $500,000… which can be recouped… provided… recoupment does not leave the Trust with less than $250,000 of available cash.” .
“The second quarter 2024 average gas price was $2.38 per Mcf, a 42 percent decrease from… $4.10 per Mcf… Oil sales volumes increased nine percent… primarily because of oil sales from new wells in Major County, Oklahoma.” .

Q&A Highlights

No earnings call transcript or Q&A was available for Q2 2024 [Search No Results].

Estimates Context

Wall Street consensus estimates: S&P Global/Capital IQ consensus for EPS and revenue was not available at the time of request (tool request limit exceeded and likely no active coverage for this OTC trust). As a result, no vs‑consensus comparisons are shown for Q2 2024 or prior quarters [GetEstimates error].

Key Takeaways for Investors

Distributions remain suspended; resumption requires clearing excess costs and restoring sustainable net proceeds—primarily a function of gas prices and operating cost discipline .
The XTO settlement reduces legacy arbitration uncertainty but adds a near‑term $0.83M recoupable production cost at OK; the $0.5M advance improves liquidity but will be recouped subject to a $250k minimum cash balance .
Going‑concern risk is elevated; the Trustee flagged potential termination or sale of the Trust’s interests if conditions do not improve .
New OK wells are contributing (oil volumes +9% YoY), but higher production cannot offset severe gas price compression; Trust cash flows remain highly levered to gas price recovery .
Monthly 8‑K/press release cadence is the primary near‑term catalyst path (distribution status, reserve changes, excess costs progress) .
Watch Q3 accounting for the settlement mechanics and whether net proceeds trends improve alongside gas price movements; excess costs trajectory by conveyance (especially WY and OK) is critical .
Administrative cost controls (trustee fee deferral) and overhead accounting changes at XTO should marginally help, but are unlikely to change the distribution outlook without commodity support .

HUGOTON ROYALTY TRUST (HGTXU)·Q2 2024 Earnings Summary