DALLAS, May 20, 2016 /PRNewswire/ -- Southwest Bank,
as Trustee of the Hugoton Royalty Trust (NYSE:HGT) (the "Trust"),
today reported that it will not declare a monthly cash distribution
to the holders of its units of beneficial interest for the month of
May 2016. The following table shows
underlying gas sales and average prices attributable to the net
overriding royalty for both the current month and prior
month. Underlying gas sales volumes attributable to the
current month were primarily produced in March.
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Underlying Gas
Sales
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|
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Volumes (Mcf)
(a)
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Average
Gas
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Total
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Daily
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Price per
Mcf
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|
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|
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Current
Month
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1,287,000
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42,000
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$1.53
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Prior Month
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1,176,000
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41,000
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|
$1.70
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|
|
(a)
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Sales volumes are
recorded in the month the trust receives the related net profits
income. Because of this, sales volumes may fluctuate from
month to month based on the timing of cash receipts.
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XTO Energy has advised the trustee that it has deducted budgeted
development costs of $100,000,
production expense of $1,405,000 and
overhead of $20,000 resulting in net
proceeds of approximately $167,000.
The net proceeds resulted in Trust net profits income of
approximately $133,000, which was
used to offset administrative expenses for the month of
approximately $84,000 and replenish
the expense reserve by approximately $49,000.
Operated Overhead
The May 2016 distribution includes
a one-time reimbursement of approximately $788,000 related to operated overhead corrections
for the period January 2014 through
February 2016. This reimbursement
affects the net profits income under the Kansas, Oklahoma and Wyoming conveyances by approximately
$186,000, $320,000 and $282,000, respectively. The increase in net
profits income was used to partially recoup excess costs for the
Kansas and Wyoming conveyances and to fully recoup excess
costs, plus accrued interest, for the Oklahoma conveyance. The remaining net profits
income from the Oklahoma
conveyance was used to partially replenish the administrative
expense reserve. The trustee intends to replenish the expense
reserve to the $1,000,000 level prior
to the payment of any future distributions to unitholders.
Development Costs
XTO Energy has advised the trustee that based on the revised
2016 development budget, it decreased the monthly development cost
deduction from $187,500 to $100,000
beginning in April 2016. Revised 2016
budgeted development costs for the underlying properties are
expected to be between $2 million and $4
million. The monthly deduction is based on the current level
of development expenditures, budgeted future development costs and
the cumulative actual costs under or over the previous deductions.
The development costs deduction will continue to be evaluated and
revised as necessary.
Excess Costs
XTO Energy has advised the trustee that a one-time reimbursement
for overhead corrections led to the partial recovery of excess
costs on properties underlying the Kansas and Wyoming net profits interests. However after
the partial recovery, there were no remaining proceeds from the
properties underlying the Kansas
or Wyoming net profits interests
to be included in this month's distribution.
XTO Energy has advised the trustee that a one-time reimbursement
for overhead corrections led to the full recovery of excess costs,
plus accrued interest, on properties underlying the Oklahoma net profits interests. The remaining
net profits income was used to partially replenish the expense
reserve.
For more information on the Trust, please visit our web site at
www.hgt-hugoton.com.
Statements made in this press release regarding future events
or conditions are forward looking statements. Actual future
results, including development costs and future net profits, could
differ materially due to changes in natural gas prices and other
economic conditions affecting the gas industry and other factors
described in Part I, Item 1A of the Trust's Annual Report on Form
10-K for the year ended December 31,
2015.
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visit:http://www.prnewswire.com/news-releases/hugoton-royalty-trust-declares-no-cash-distribution-for-may-300272341.html
SOURCE Hugoton Royalty Trust