Executive Summary

Q4 2024 produced $10.57M of underlying revenues but zero net proceeds and zero distributions; costs (incl. production, overhead, development and excess-cost dynamics) fully absorbed revenues, leaving net profits income at $0, consistent with Q2 and Q3 2024 .
The Trustee reiterated going-concern risk; cash reserves are expected to be depleted in 2Q 2025 without renewed net profits income, and alternatives (termination/sale) are under review .
Excess-cost balances remain the gating factor to any future payouts: as of 12/31/24, cumulative excess costs were $10.65M underlying ($8.52M net to Trust), with Wyoming the largest at $7.80M underlying; Oklahoma improved materially in Q4, but overall balances remain high .
Monthly 8-Ks in Oct/Nov/Dec confirmed no distributions and incremental drawdowns of the expense reserve ($89K in Oct; $4K in Nov; $15K in Dec); the Trustee must replenish the reserve before any future distributions .
Key trading catalysts: sustained natural gas price recovery and operating cost reductions that accelerate excess-cost recovery; continued “no distribution” prints and looming going-concern milestones are negative sentiment drivers near-term .

What Went Well and What Went Wrong

What Went Well

Oklahoma excess-cost position improved in Q4: the 10-K shows excess-cost recoveries in Oklahoma during 4Q, reducing the underlying Oklahoma balance to $1.09M vs. $2.85M at 9/30/24; net to the Trust, Oklahoma fell to $0.88M vs. $2.28M at 9/30/24 .
Other proceeds tailwind: Q4 included $329,433 of “other proceeds” (interest received on past due payments), partially offsetting cost pressure in the quarter .
Trustee tone on cost control: “To help control costs, the Trustee has deferred payment of its monthly fee of approximately $7,300 since April 2024,” signaling administrative discipline amid liquidity constraints .

What Went Wrong

Zero distributions and zero net profits income persisted: net proceeds were $0 in Q2, Q3, and Q4 2024, resulting in no distributions per unit for those quarters .
Going-concern risk escalated: the Trustee projects depletion of the expense reserve in 2Q 2025, and is reviewing termination/sale options due to the unlikelihood of viable financing .
Excess costs remain elevated: total underlying excess costs + interest were $10.65M at 12/31/24 (Wyoming $7.80M; Kansas $1.38M; Oklahoma $1.48M), still blocking distributions despite Oklahoma’s improvement .

Management quotes:

“There would not be a cash distribution… due to the excess cost positions on all three of the Trust’s conveyances…” (Oct/Nov/Dec 2024 monthly releases) .
“These conditions raise substantial doubt about the Trust’s ability to continue as a going concern…” (10-K) .

Financial Results

Quarterly P&L bridge (underlying properties; modified-cash basis used by the Trust)

Metric	Q2 2024	Q3 2024	Q4 2024
Total Revenues ($)	$7,581,747	$9,022,427	$10,571,110
Taxes, Transportation & Other ($)	$1,686,545	$1,747,086	$2,172,975
Production Expense ($)	$5,555,552	$6,233,224	$5,430,311
Development Costs ($)	$729,895	$469,797	$333,402
Overhead ($)	$3,188,217	$2,929,000	$2,881,484
Excess Costs (Recovery) ($)	$(3,578,462)	$(2,331,003)	$82,371
Total Costs ($)	$7,581,747	$9,048,104	$10,900,543
Net Proceeds ($)	$0	$0	$0
Net Profits Income ($)	$0	$0	$0
Distribution per Unit ($)	$0.000000	$0.000000	$0.000000

Notes: Net profits income is 80% of net proceeds but is zero when costs meet/exceed revenues .

Q4 YoY (Q4 2024 vs Q4 2023)

Metric	Q4 2023	Q4 2024
Average Gas Price ($/Mcf)	$3.37	$3.14
Average Oil Price ($/Bbl)	$77.16	$71.53
Underlying Gas Sales (Mcf)	2,465,801	2,158,363
Underlying Oil Sales (Bbls)	95,885	52,890
Total Revenues ($)	$15,701,600	$10,571,110
Total Costs ($)	$15,701,600	$10,900,543
Net Proceeds / Net Profits Income ($)	$0 / $0	$0 / $0
Distribution per Unit ($)	$0.000000	$0.000000

KPIs – Prices and Volumes

KPI	Q2 2024	Q3 2024	Q4 2024
Avg Gas Price ($/Mcf)	$2.38	$2.40	$3.14
Avg Oil Price ($/Bbl)	$76.59	$75.84	$71.53
Underlying Gas Sales (Mcf)	1,901,385	2,133,138	2,158,363
Underlying Oil Sales (Bbls)	40,011	51,512	52,890

Segment/Conveyance – Excess Cost Balances (blocking distributions)

Underlying cumulative excess costs + accrued interest (period-end):

Conveyance	6/30/24	9/30/24	12/31/24
Kansas ($)	$1,310,691	$1,420,084	$1,376,852
Oklahoma ($)	$2,119,713	$2,847,278	$1,477,301
Wyoming ($)	$4,570,202	$6,262,939	$7,798,638
Total ($)	$8,000,606	$10,530,301	$10,652,791

Net-to-Trust cumulative excess costs + interest (period-end):

Conveyance	6/30/24	9/30/24	12/31/24
Kansas ($)	$1,048,554	$1,136,067	$1,101,482
Oklahoma ($)	$1,695,771	$2,277,822	$1,181,841
Wyoming ($)	$3,656,160	$5,010,350	$6,238,910
Total ($)	$6,400,485	$8,424,239	$8,522,233

Monthly Q4 context (from 8-K Item 2.02 press releases):

Oct 2024: no distribution; expense reserve reduced $89K; underlying sales: gas 719K Mcf, oil 24K Bbls; avg prices: gas $4.09/Mcf (incl. out-of-period plant product revenue), oil $75.13/Bbl .
Nov 2024: no distribution; reserve reduced $4K; underlying sales: gas 648K Mcf, oil 12K Bbls; avg prices: gas $2.68/Mcf, oil $67.67/Bbl .
Dec 2024: no distribution; reserve reduced $15K; underlying sales: gas 791K Mcf, oil 18K Bbls; avg prices: gas $2.67/Mcf, oil $69.27/Bbl .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance/Update	Change
Monthly distributions	Ongoing	N/A	No distributions for Oct/Nov/Dec 2024; expense reserve must be replenished before any future distributions	Maintained suspension
Expense reserve	Q4 2024	N/A	Reserve reduced by $89K (Oct), $4K (Nov), $15K (Dec)	Lowered
2025 development costs (budget)	FY 2025	N/A	~$10M underlying budgeted by operator for 2025	New disclosure
Liquidity/going concern	Next 12 months	Severe risk noted in Q2/Q3	Cash reserves expected to deplete in 2Q 2025 absent net profits income; Trustee reviewing termination/sale; financing unlikely	Deteriorated
Operator change (subsequent event)	2025	XTO operator	XTO agreed to divest to Mach Natural Resources; closing targeted 4/30/25; Mach to assume obligations upon closing	Strategic change (post-Q4)

Earnings Call Themes & Trends

No earnings call transcript was available; HGTXU does not typically host quarterly calls (no transcripts found) [SearchDocuments: earnings-call-transcript for HGTXU – none].

Topic	Previous Mentions (Q2 2024, Q3 2024)	Current Period (Q4 2024)	Trend
Excess costs	Rising balances; 6/30/24 total $8.00M underlying; WY the largest	12/31/24 total $10.65M underlying; OK improved in Q4; WY increased	Mixed: OK improved; WY worsened
Development wells (Major County, OK)	4 non-operated wells; costs charged: ~$10.1M underlying as of Aug; rising	As of Nov/Dec, ~$10.4M underlying; ongoing updates by Trustee	Costs largely complete; monitoring performance
Commodity prices	Avg gas $2.38 (Q2), $2.40 (Q3)	Avg gas $3.14 (Q4); oil $71.53 (Q4)	Gas improved q/q; oil down q/q
Liquidity/going-concern	Substantial doubt; expense reserve reliance	Reserve depletion expected 2Q25; alternatives under review	Deteriorating runway
Distributions	None since July 2023	No Oct/Nov/Dec distributions	Unchanged (none)
Legal/settlement (Chieftain)	Settlement in June; booked in Q3; production expense impact	Continues to influence cost structure; “other proceeds” interest benefit in Q4	Residual effects; partial offsets

Management Commentary

“There would not be a cash distribution… due to the excess cost positions on all three of the Trust’s conveyances of net profits interests… 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.” (Oct/Nov/Dec press releases) .
“These conditions raise substantial doubt about the Trust’s ability to continue as a going concern… the Trustee anticipates that the Trust’s cash reserves will be depleted in the second quarter of 2025…” (10-K) .
“The Trustee has sought sources of financing, but currently believes that financing… is unlikely to be a viable option… intends to review options… including seeking to terminate the Trust or marketing the Trust’s interests for a potential sale.” (10-K) .

Q&A Highlights

No Q&A; the Trust did not host an earnings call and no transcript was available [SearchDocuments: none].

Estimates Context

Wall Street consensus (S&P Global/Capital IQ): No EPS or revenue consensus was available for HGTXU for Q4 2024; the Trust appears to lack traditional analyst coverage. As a result, there are no estimate “beats/misses” to report (S&P Global data search returned no consensus series).

Key Takeaways for Investors

Distributions remain unlikely near-term: Excess-cost balances (especially in Wyoming) and the need to replenish the expense reserve continue to block payouts; Q4 net profits income was $0 despite $10.57M in underlying revenues .
Watch conveyance-level recovery: Oklahoma improved sharply in Q4; if this extends and commodity prices firm, total excess-cost amortization could accelerate, but Wyoming remains the swing factor at $7.80M underlying .
Liquidity runway is short: Expense reserves are projected to deplete in 2Q 2025 absent positive net profits income; Trustee is actively evaluating termination/sale options; financing is deemed unlikely .
Macro sensitivity is high: Gas-price recovery into 2025 would help, but higher operating/production expenses and overhead can offset gains and keep balances in excess .
Development overhang largely recognized: Four non-operated OK wells’ costs (~$10.4M underlying by Dec) have been charged; operational updates (volumes/prices) matter more now than incremental capex .
Structural change ahead: XTO’s announced sale of underlying assets to Mach Natural Resources (expected close 4/30/25) could alter operating practices/overhead; monitor transition execution and any revised accounting/tariffs .
Trading posture: Near-term prints (monthly 8-Ks) likely continue “no distribution” headlines—typically a negative sentiment overhang; optionality is levered to gas prices and WY cost relief.

HUGOTON ROYALTY TRUST (HGTXU)·Q4 2024 Earnings Summary