Cross Timbers Royalty Trust Reports 72% Drop in Distributable Income Amid Production Declines

summarizeSummary

Cross Timbers Royalty Trust reported a significant 72% year-over-year decrease in distributable income for Q1 2026, driven by lower oil and gas production and prices, alongside rising excess costs.

check_boxKey Events

• Distributable Income Plummets

  Distributable income for Q1 2026 decreased by 71.7% to $503,406 ($0.083901 per unit) from $1,783,938 ($0.297323 per unit) in Q1 2025.

• Production and Revenue Decline

  Total revenues fell 45% year-over-year, primarily due to a 37% decrease in oil sales volumes and a 38% decrease in gas sales volumes from underlying properties, coupled with a 20% drop in average oil prices.

• Rising Excess Costs

  Cumulative excess costs, which reduce future distributions, increased to $5.0 million net to the Trust as of March 31, 2026, up from $2.99 million net at December 31, 2025.

• Insider Confidence Amidst Weakness

  Despite the poor financial performance reported in this filing, the company has seen over $2 million in insider purchases in the last 90 days, and the stock is trading near its 52-week high.

auto_awesomeAnalysis

The Trust's Q1 2026 financial results show a substantial deterioration in performance, with distributable income per unit falling by 72% compared to the prior year. This decline is primarily due to a 37-38% reduction in underlying oil and gas production volumes and a 20% drop in average oil prices. Additionally, cumulative excess costs, which must be recovered from future net proceeds before distributions, increased to $5.0 million net to the Trust. This level of decline is significantly worse than the 13% decrease reported for the full year 2025. Despite these negative financial indicators, the stock is trading near its 52-week high, and there has been over $2 million in insider buying activity in the last 90 days, suggesting that some investors, including insiders, may be looking past the current quarter's challenges.