MESA ROYALTY TRUST/TX (MTR)·Q4 2024 Earnings Summary

Executive Summary

• Q4 2024 distributions were highly variable: $0.005692813 per unit in October, $0.003060770 in November, and $0.022423076 in December; total Q4 distributions sum to $0.031176659 per unit (sum of monthly distributions) .
• YoY decline in monthly distributions across all three months: October 2024 vs October 2023 ($0.0057 vs $0.0171), November 2024 vs November 2023 ($0.0031 vs $0.0674), and December 2024 vs December 2023 ($0.0224 vs $0.0308), reflecting continued reserve build and excess production cost headwinds .
• Management reiterated that distributions are expected to be materially reduced until cash reserves reach $2.0 million, a continuing constraint on near-term payouts .
• No earnings call transcript was available for Q4 2024; investor narrative is driven by monthly distribution disclosures and commentary on reserves and excess production costs [List: earnings-call-transcript=0].

What Went Well and What Went Wrong

What Went Well

• December distribution increased to $0.022423076 per unit with $41,787 in net profits, driven entirely by New Mexico Hilcorp receipts ($47,632) .
• Contribution from Colorado SIMCOE reappeared in October ($26,349), diversifying sources of proceeds albeit modestly .
• The Trust maintained transparency on drivers and risks, consistently reminding investors that monthly proceeds are volatile and influenced by working interest owner reporting and adjustments .

Management quote:

• “Distributions to unitholders are expected to be materially reduced, until the Trust increases its cash reserves to a total of $2.0 million in order to provide added liquidity.”

What Went Wrong

• October and November distributions were very low ($0.005692813 and $0.003060770 per unit) with net profits of $10,609 and $5,704.02 respectively, reflecting limited proceeds after administrative expenses .
• The trust again emphasized substantial accumulated excess production costs, which can decrease or eliminate distributions; notably, there was no distribution in August 2024 due to costs exceeding revenue (prior quarter context) .
• YoY comparisons were weak: November 2024 distribution of $0.003060770 vs $0.067409199 in November 2023, and October 2024 $0.005692813 vs $0.017092459 in October 2023, highlighting ongoing headwinds and reserve build drag .

Financial Results

MTR does not provide consolidated quarterly revenue/EPS; the trust reports monthly distributions and net profits tied to royalty proceeds. Below are Q4 2024 monthly metrics, with comparisons.

Q4 2024 Monthly Distributions and Net Profits

Prior Quarter (Q3 2024) Monthly Snapshot (for trend context)

Year-over-Year Comparison (same months)

Guidance Changes

The Trust does not issue formal revenue/EPS/margin guidance. It provides ongoing policy commentary regarding distributions and reserves.

Earnings Call Themes & Trends

No earnings call transcript was available for Q4 2024. Themes below reflect disclosures in press releases across Q2–Q4 2024.

Management Commentary

• Strategic message: distributions will be constrained until reserves reach $2.0M; proceeds are volatile and controlled by working interest owners (Hilcorp, SIMCOE), with adjustments and expenses affecting payouts .
• Important quotes:
  • “Distributions to unitholders are expected to be materially reduced, until the Trust increases its cash reserves to a total of $2.0 million in order to provide added liquidity.”
  • “Proceeds reported by the working interest owners for any month are not generally representative of net proceeds that will be received by the Trust in future periods.”
  • “Production and development costs … have resulted in substantial accumulated excess production costs, which will decrease Trust distributions, and in some periods may result in no Trust distributions.”

Q&A Highlights

• No earnings call and therefore no Q&A or guidance clarifications in Q4 2024; investor information derived from monthly 8-K press releases [List: earnings-call-transcript=0].

Estimates Context

• Wall Street consensus (S&P Global) for Q4 2024 EPS/revenue was unavailable due to request-limit errors; MTR’s monthly distribution disclosures do not map to standard EPS/revenue guidance, and the Trust does not issue quarterly EPS or revenue targets [GetEstimates error].

Key Takeaways for Investors

• Q4 distributions were volatile, culminating in a stronger December ($0.022423076 per unit; net profits $41,787), driven by New Mexico Hilcorp receipts; October/November were modest and mixed by region .
• YoY payouts declined materially in October and November; December also declined YoY but less severely, underscoring persistent headwinds from reserve build and excess production costs .
• Ongoing reserve build to $2.0M remains the central constraint; until achieved, distributions are “expected to be materially reduced,” limiting near-term yield visibility .
• Colorado SIMCOE proceeds contributed in October/November, but the largest Q4 contribution was December from New Mexico Hilcorp; operator mix continues to drive monthly variability .
• Prior-quarter context matters: no August distribution due to costs > revenue; investors should assume monthly outcomes can include zero distributions when costs and adjustments exceed proceeds .
• Without an earnings call and with no formal guidance, narrative is set by monthly 8-Ks; monitoring operator-reported proceeds and administrative expense/reserve decisions is critical for forecasting distributions .
• For trading, monthly press releases (around mid-to-late month) are the catalysts; the December strength vs October/November suggests sensitivity to New Mexico receipts and seasonal/operational dynamics in the San Juan Basin .