FORT WORTH, Texas, Feb. 16, 2018 /PRNewswire/ -- Southwest
Bank, as Trustee of the Hugoton Royalty Trust (NYSE: HGT) (the
"Trust"), today declared a cash distribution to the holders of its
units of beneficial interest of $0.009251 per unit, payable on March 14, 2018, to unitholders of record on
February 28, 2018. 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 December.
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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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|
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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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Current
Month
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|
1,067,000
|
|
34,000
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$3.24
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|
|
|
|
|
|
|
Prior Month
|
|
1,097,000
|
|
37,000
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|
$2.91
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|
|
(a)
|
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 $280,000,
production expense of $1,509,000 and
overhead of $975,000 in determining
the royalty payment to the Trust for the current month.
As previously disclosed, XTO Energy has advised the Trustee that
it has reached a tentative settlement with the plaintiffs in the
Chieftain class action royalty case, and believes that the
portion of the settlement that relates to the Trust is as much as
$20 million. XTO Energy has
advised the Trustee that the settlement requires final approval by
a judge, which is expected to occur in late first quarter of
2018. The Trustee has asked for additional information
regarding the allocation of the settlement amount and has asked to
be advised by XTO as the matter progresses. Once additional
information is made available, the Trustee intends to review any
claimed reductions in payment to the Trust based on the facts and
circumstances of the settlement. The Trustee has previously
stated that to the extent any such claimed reductions are similar
to claimed reductions from XTO Energy's settlement in the
Fankhouser v. XTO, Inc. class action lawsuit that an
arbitration tribunal ruled were not permitted to be borne by the
Trust, the Trustee would likely object to such claimed reductions.
In light of this, the Trustee has made the decision to hold
in reserve $250,000 that would have
been distributed for February. After a review of the claimed
reductions in payments to the Trust relating to the settlement and
a determination whether the Trustee will object to any such
reductions, a determination will be made as to what amount of
reserve will be maintained for anticipated future Trust
expenses.
Excess Costs
XTO Energy has advised the Trustee that lower gas prices caused
costs to exceed revenues by $61,000
on properties underlying the Kansas net profits interests. However, these
excess costs did not reduce net proceeds from the remaining
conveyances. Underlying cumulative excess costs remaining on the
Kansas net profits interests after
the current month's distribution totaled $947,000, including accrued interest of
$119,000.
XTO Energy has advised the Trustee that lower gas prices and
increased costs in the current month distribution caused costs to
exceed revenues by $60,000 on
properties underlying the Wyoming
net profits interests. However, these excess costs did not reduce
net proceeds from the remaining conveyances. Underlying cumulative
excess costs remaining on the Wyoming net profits interests after the
current month's distribution totaled $60,000.
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,
2016.
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SOURCE Hugoton Royalty Trust