Hugoton Royalty Trust Declares No October Cash Distribution
21 Oct 2026 · 9h ago
Summary
Hugoton Royalty Trust has announced that no cash distribution will be made to unitholders for October 2026, citing excess cost positions across its conveyances. The Trust's cash reserve saw a decrease of $4,000 due to expenses, and the Trustee plans to replenish it before future distributions are considered. Current month sales volumes show gas at 665,000 Mcf ($3.37/Mcf) and oil at 14,000 Bbls ($81.43/Bbl). Significant cumulative excess costs, including accrued interest, remain on the Kansas, Oklahoma, and Wyoming net profits interests, totaling $3.47 million, $15.07 million, and $13.61 million, respectively.
Key Highlights
- 1
Hugoton Royalty Trust announced there would be no cash distribution to unitholders for October 2026 due to excess cost positions on all conveyances.
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The Trust's cash reserve decreased by $4,000 for the payment of Trust expenses.
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The Trustee anticipates replenishing the cash reserve prior to declaring any future distributions, should net profits income be received.
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Underlying gas sales volumes for the current month were 665,000 Mcf at an average price of $3.37, and oil sales volumes were 14,000 Bbls at an average price of $81.43.
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Cumulative excess costs remaining on the Kansas net profits interests total $3,471,000, including accrued interest.
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Cumulative excess costs remaining on the Oklahoma net profits interests total $15,068,000, including accrued interest.
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Cumulative excess costs remaining on the Wyoming net profits interests total $13,613,000, including accrued interest.
Management Comments
Nancy Willis
Argent Trust Company, as Trustee of the Hugoton Royalty Trust (the “Trust”) (OTCPK: HGTXU) announced today there would not be a cash distribution to the holders of its units of beneficial interest for October 2026 due to the excess cost positions on all three of the Trust’s conveyances of net profits interests. The Trust’s cash reserve decreased by $4,000 for the payment of Trust expenses. To the extent any net profits income is received in future months, the Trustee anticipates replenishing the cash reserve prior to declaring any future distributions to unitholders. Replenishment of the cash reserve may include any increase in the cash reserve total, as determined by the Trustee. Based on the current excess costs, the Trustee does not foresee any distributions in the near term. The Trustee has curtailed spending as much as possible by deferring or eliminating unnecessary expenses, including the Trustee fee, which has been deferred since April 2024. This does not mitigate the fact that there are dwindling funds, and the Trust may have to take drastic measures to continue to exist or alternatively may have to terminate. The Trustee has sought sources of financing but currently believes that financing in an amount sufficient to satisfy the Trust’s long-term liquidity needs is unlikely to be a viable option for the Trust moving forward. As a result, the Trustee has reviewed and intends to continue to review options for the Trust, which may include alternatives to continuing as a going concern, such as seeking to terminate the Trust or marketing the Trust’s interest (which are net profits interests burdened by excess costs) for a potential sale. The Trustee has reached out to potential third parties regarding interest in the Trust’s assets, but no interest resulted from such discussions. As a result, the Trustee believes that a potential sale of the Trust’s assets may be unlikely in the near term, however it will continue to consider any and all viable options. Even if a sale of the Trust assets was to occur, there is no assurance that the proceeds would result in funds to distribute to unitholders after all financial obligations of the Trust are met. Any material sale of assets and/or termination of the Trust requires unitholder approval by at least 80 percent of all outstanding units.
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