Name: SABINE ROYALTY TRUST Q2 2024 Earnings Call
Start: 2024-09-06T00:00:00.000Z

Executive Summary

Q2 2024 distributions totaled $1.670870 per unit across April ($0.535500), May ($0.597730), and June ($0.537640), reflecting modest month-to-month volatility driven by oil/gas production and commodity prices .
Production volumes and realized prices were mixed: oil volumes rose from April to May then fell in June, while oil prices improved into June; natural gas prices softened into June despite higher gas volumes .
Cash distribution commentary emphasized timing effects from royalty receipts (e.g., ~$244k posted to June and ~$890k received post-May close) and normal seasonal tax items earlier in the year, which can shift monthly cash flows but not underlying production trends .
Near-term catalysts are distribution trajectory and commodity price sensitivity: higher oil prices and steady-to-rising oil volumes are supportive, while gas price weakness and timing-related posting variances can pressure monthly payouts .

What Went Well and What Went Wrong

Oil price tailwind into June: “Preliminary prices are approximately $81.23 per barrel of oil” (up from $76.02 in May), supporting unit distributions despite lower oil volumes in June .
Volume improvement in May: “This month’s distribution is greater than the previous month’s primarily due to an increase in oil production,” with oil volumes rising to ~87,730 bbl from ~64,623 bbl .
Operational receipts: Management highlighted ~$890k received since May close and ~$244k revenue posted to June, indicating healthy ongoing cash collections and normalization of posting timing .

June payout down vs May: “This month’s distribution is less than the previous month’s primarily due to a decrease in oil production and a decrease in the price of natural gas,” highlighting sensitivity to volumes and gas prices .
Gas price weakness: Average gas price fell from $2.53/Mcf in May to $2.13/Mcf in June, a headwind to cash distributions despite higher gas volumes .
Ongoing timing variances: Revenues received near month-end are posted the following month, which can create apparent volatility in monthly distributions disconnected from underlying production trends .

Metric	April 2024	May 2024	June 2024
Oil Volumes (bbls)	64,623	87,730	75,929
Gas Volumes (Mcf)	1,542,894	1,176,257	1,359,458
Avg Oil Price ($/bbl)	$81.94	$76.02	$81.23
Avg Gas Price ($/Mcf)	$2.39	$2.53	$2.13

Notes:

Reported volumes/prices reflect periods for which royalty income was received and identified; timing of receipts can cause month-to-month fluctuations in reported KPIs and distributions .
April commentary noted ~$297k of revenue posted into April and $983k received post-March close; May noted ~$249k posted into May and ~$1.075m received post-April close; June noted ~$244k posted into June and ~$890k received post-May close .

Metric	Period	Previous Guidance	Current Guidance	Change
Company Guidance	Q2 2024	N/A	N/A	Not provided; SBR communicates via monthly distribution press releases rather than formal quarterly guidance

Topic	Previous Mentions (Q1 2024)	Current Period (Q2 2024)	Trend
Commodity Prices	Oil ~$86.27/bbl Jan, $76.54/bbl Feb, $89.38/bbl Mar; Gas ~$2.30-$2.45/Mcf	Oil ~$81.94 → $76.02 → $81.23; Gas ~$2.39 → $2.53 → $2.13	Oil stabilized higher into June; gas softened in June
Production Volumes	Oil 58,697 → 56,969 → 48,104 bbl; Gas 1,015,516 → 1,346,113 → 1,046,545 Mcf	Oil 64,623 → 87,730 → 75,929 bbl; Gas 1,542,894 → 1,176,257 → 1,359,458 Mcf	Oil volumes improved vs Q1, peaking in May; gas volumes mixed
Timing of Revenue Posting	Regular month-end posting variances; e.g., $370k posted to Jan; $619k posted to Feb; $489k to Mar	Continued timing variances: ~$297k to Apr; ~$249k to May; ~$244k to June; significant receipts post month-end noted	Ongoing, creates apparent distribution volatility
Taxes/Seasonal Items	Ad valorem deductions: ~$223k Jan, ~$384k Feb, ~$2.8k Mar	~$13k ad valorem deducted in April	Seasonal impact smaller in Q2 vs Q1
Communication Modality	Monthly distribution press releases—no earnings call/Q&A observed	Same: monthly PRs in Apr/May/Jun, no call/Q&A observed	Unchanged

“This month’s distribution is greater than the previous month’s primarily due to an increase in oil production. This was offset somewhat by a decrease in oil prices and an increase in gas prices.” (May) .
“This month’s distribution is less than the previous month’s primarily due to a decrease in oil production and a decrease in the price of natural gas, partially offset by an increase in the price of oil and an increase in natural gas production.” (June) .
“Sales volumes are recorded in the month the Trust receives and identifies the related royalty income… revenues are only distributed after they are received, verified, and posted.” (Recurring disclosure across Q2 PRs) .

No public earnings call or Q&A was observed in Q2 2024; SBR’s disclosures were delivered via monthly distribution press releases in April, May, and June .

Wall Street consensus EPS/revenue estimates via S&P Global were not available/applicable for SBR’s Q2 2024 monthly-distribution disclosures. Estimates context cannot be provided for this period given the disclosure format and coverage.

Q2 distributions rose versus Q1 ($1.670870 vs $1.268070), with May the strongest month, supported by higher oil volumes and improving oil prices into June .
Gas price weakness into June ($2.13/Mcf) is a headwind; monthly payouts remain sensitive to commodity mix and realized prices .
Timing effects from royalty receipts and month-end postings can shift distributions between months, creating noise—focus on multi-month trends rather than single-month prints .
Seasonal ad valorem taxes impacted distributions more in Q1; Q2 deductions were modest ($13k in April), reducing headwind vs earlier months .
Near-term trading: positive skew when oil prices rise and oil volumes sustain May-like levels; caution when gas prices dip or oil volumes retrace .
Medium-term: SBR remains a pure-play royalty trust whose distributions track underlying operator activity and commodity prices; absent formal guidance/calls, monitoring monthly PRs for volume and price trends is key .
Watch for any updates on new wells or production growth (e.g., notable impact seen from Martin County wells in late 2023), which can meaningfully change monthly distribution trajectory .