SABINE ROYALTY TRUST
For the period ended Nov 12, 2024. Filed Nov 12, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Nov 12, 2024 · Filed Nov 12, 2024
SBR$65.72-0.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-08-08; filed 2024-08-08.
0000950170-24-093772
Item 2. Trustee’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-11-12; filed 2024-11-12.
0000950170-24-124994
Item 2. Trustee’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 44 previous paragraphs and 44 current paragraphs.
30 unchanged; 11 reworded; 3 added; 3 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 2 previous and 2 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (3)
Current report
public health concerns;
Current report
Royalty income for the nine months ended September 30, 2024, increased approximately $4,217,000, or 7%, compared to the same 2023 period. This increase was primarily the result of an increase in both oil and natural gas production ($15.8 million) and an increase in oil prices ($2.0 million). This increase was tempered by a decrease in the price of natural gas ($12.6 million) and higher production taxes, operating expenses, and ad valorem taxes ($1.0 million).
Current report
Compared to the previous quarter ended June 30, 2024, general and administrative expenses increased approximately $156,400 primarily due to the timing of payment of unitholder services of approximately $80,000, an increase in professional services of approximately $79,200, an increase in Escrow Agent/Trustee fees of approximately $43,200, and an increase in revenue processing fees of approximately $68,400, partially offset by a decrease in printing fees due to the timing of payment of services of approximately $112,000, and approximately $2,400 in other miscellaneous expenses,
Removed paragraphs (3)
Previous report
public health concerns, such as COVID-19;
Previous report
Royalty income for the six months ended June 30, 2024, decreased approximately $1,203,000 or 3% compared to the same time period in 2023. This decrease was due mainly to lower natural gas prices ($11.6 million). This decrease was tempered somewhat by an increase in the production of both oil and natural gas ($9.8 million) and lower ad valorem taxes and operating expenses ($0.6 million).
Previous report
Compared to the previous quarter ended March 31, 2024, general and administrative expenses decreased approximately $285,800 primarily due to a decrease related to timing of payment of legal and professional services of approximately $216,000, unitholder services of $57,800, and CDEX account and transfer agent services of $12,000.
Reworded paragraphs (11)
Previous wording
The Trust’s income and monthly distributions are heavily influenced by commodity prices. Commodity prices may fluctuate widely in response to (i) relatively minor changes in the supply of and demand for oil and natural gas, (ii) market uncertainty and (iii) a variety of additional factors that are beyond the Trustee’s control. The price of oil and natural gas continued to remain soft from the first quarter through the beginning of the third quarter in 2023 due to continued lower demand resulting from higher-than-normal inflation and an oversupply of the commodities. In the latter part of the third quarter of 2023, the price of oil and gas began to increase, due mainly to OPEC cutting oil production and colder weather during the winter. Oil prices have continued to fluctuate during the first six months of 2024, due mainly to weather conditions and geopolitical conditions in Eastern Europe and the Middle East. Factors which may affect commodity prices are discussed below and under “Item 1A—Risk Factors” in the Trust’s Form 10-K for the year ended December 31, 2023. Factors that may impact future commodity prices, including the price of oil and natural gas, include but are not limited to:
Current wording
The Trust’s income and monthly distributions are heavily influenced by commodity prices. Commodity prices may fluctuate widely in response to (i) relatively minor changes in the supply of and demand for oil and natural gas, (ii) market uncertainty and (iii) a variety of additional factors that are beyond the Trustee’s control. The price of oil and natural gas continued to remain soft from the first quarter through the beginning of the third quarter in 2023 due to continued lower demand resulting from higher-than-normal inflation and an oversupply of the commodities. In the latter part of the third quarter of 2023, the price of oil and gas began to increase, due mainly to OPEC cutting oil production and colder weather during the winter. Oil prices have continued to fluctuate during the first nine months of 2024, due mainly to weather conditions and geopolitical conditions in Eastern Europe and the Middle East. Factors which may affect commodity prices are discussed below and under “Item 1A—Risk Factors” in the Trust’s Form 10-K for the year ended December 31, 2023. Factors that may impact future commodity prices, including the price of oil and natural gas, include but are not limited to:
Previous wording
political conditions in major oil producing regions, especially in the Middle East and Eastern Europe, including the conflicts between Russia and Ukraine and Israel and Hamas and Israel and Iran;
Current wording
political conditions in major oil producing regions, especially in the Middle East and Eastern Europe, including the conflicts between Russia and Ukraine, Israel and Hamas, and Israel and Iran;
Previous wording
Distributable income consists of royalty income plus interest income plus any decrease in cash reserves established by the Trustee less general and administrative expenses of the Trust less any increase in cash reserves established by the Trustee. Distributable income for the three months ended June 30, 2024, was $22,078,997, or $1.51 per unit. Royalty income for the three months ended June 30, 2024, amounted to $22,607,108 while interest income was $175,353. General and administrative expenses totaled $703,464 for the three months ended June 30, 2024.
Current wording
Distributable income consists of royalty income plus interest income plus any decrease in cash reserves established by the Trustee less general and administrative expenses of the Trust less any increase in cash reserves established by the Trustee. Distributable income for the three months ended September 30, 2024, was $19,070,466, or $1.31 per unit. Royalty income for the three months ended September 30, 2024, amounted to $19,784,478 while interest income was $145,868. General and administrative expenses totaled $859,880 for the three months ended September 30, 2024.
Previous wording
Distributions during the period were $0.535500, $0.597730, and $0.537640 per Unit payable to Unit holders of record on April 15, May 15, and June 17, 2024, respectively.
Current wording
Distributions during the period were $0.379040, $0.450890, and $0.421310 per Unit payable to Unit holders of record on July 15, August 15, and September 16, 2024, respectively.
Previous wording
Royalty income for the quarter ended June 30, 2024, increased approximately $5,173,000 or 30%, compared with the second quarter of 2023. This increase was primarily the result of an increase in both oil and natural gas production ($7.2 million) and in oil prices ($1.3 million), offset by a decrease in natural gas prices ($2.7 million) and increased production taxes, operating expenses, and ad valorem taxes ($0.6 million).
Current wording
Royalty income for the quarter ended September 30, 2024, increased approximately $5,419,000, or 38%, compared with the third quarter of 2023. This increase was primarily the result of an increase in both oil and natural gas production ($6.3 million) and in oil prices ($0.8 million), partially offset by a decrease in natural gas prices ($1.3 million) and increased production taxes, operating expenses, and ad valorem taxes ($0.4 million).
Previous wording
Compared to the preceding quarter ended March 31, 2024 royalty income increased approximately $1,848,000, or 9%, due mainly to increased oil production ($3.7 million), offset by lower oil and natural gas prices ($1.7 million), and lower gas production ($0.1 million). Production taxes, operating expenses, and ad valorem taxes were relatively flat.
Current wording
Compared to the preceding quarter ended June 30, 2024, royalty income decreased approximately $2,823,000, or 12%, due mainly to decreased oil and natural gas production ($1.1 million), and lower oil and natural gas prices ($2.1 million). These decreases to royalty income were partially offset by lower production taxes, operating expenses, and ad valorem taxes ($0.4 million).
Previous wording
Gas royalty income received for the three months ended June 30, 2024, related primarily to production for January through March 2024. The average price of gas reported by the Henry Hub for the same time period was $1.93 per Mcf. The average price of gas for the Henry Hub was $1.90 per Mcf for January through June 2024. Oil royalty income for the three months ended June 30, 2024, related primarily to production for February through April 2024. The average price of oil as reported by NYMEX for that time period was $81.42 per barrel. The average price of oil was $79.69 per barrel for January through June 2024. As of July 29, 2024, the average price of gas for the Henry Hub was $1.71 per Mcf and the average price of oil reported by NYMEX was $77.27 per barrel. It is difficult to estimate future prices of oil and gas, and any assumptions concerning future prices may prove to be incorrect.
Current wording
Oil royalty income for the three months ended September 30, 2024, related primarily to production for May through July 2024. The average price of oil reported by NYMEX for the May through July 2024 period was $80.57 per barrel. The average price of oil was $78.58 per barrel for January through September 2024. Gas royalty income received for the three months ended September 30, 2024, related primarily to production for April through June 2024. The average price of gas reported by the Henry Hub for the April through June 2024 period was $1.86 per thousand cubic feet ("Mcf"). The average price of gas reported by the Henry Hub was $1.90 per Mcf for January through September 2024. As of October 28, 2024, the average price of oil reported by NYMEX was $67.65 per barrel and the average price of gas for the Henry Hub was $1.83 per Mcf. It is difficult to estimate future prices of oil and gas, and any assumptions concerning future prices may prove to be incorrect.
Previous wording
Interest income for the quarter ended June 30, 2024, increased $20,644 compared with the second quarter of 2023. Compared to the preceding quarter ended March 31, 2024, interest income increased $23,427. Interest income for the six months ended June 30, 2024 decreased approximately $74,446 compared to the same period in 2023. Changes in interest income are the result of changes in interest rates and funds available for investment.
Current wording
Interest income for the quarter ended September 30, 2024, increased $16,900 compared to the third quarter of 2023. Compared to the preceding quarter ended June 30, 2024, interest income decreased $29,500. Interest income for the nine months ended September 30, 2024, decreased approximately $57,500 compared to the same period in 2023. Changes in interest income are the result of changes in interest rates and funds available for investment.
Previous wording
General and administrative expenses for the quarter ended June 30, 2024 decreased approximately $186,300 compared to the same quarter of 2023 due primarily to a decrease in Escrow Agent/Trustee fees of approximately $88,700, unitholder services of $69,500, printing services of $24,200, and professional services of $18,500. These were partially offset by an increases in CDEX services of $11,000, and audit services of $4,200.
Current wording
General and administrative expenses for the quarter ended September 30, 2024, increased approximately $93,700 compared to the same quarter of 2023 due primarily to the timing of payment of unitholder services of approximately $80,000 and professional services of approximately $40,000. These were offset by a decrease in printing services of approximately $30,000, and approximately $3,000 in other miscellaneous expenses.
Previous wording
General and administrative expenses decreased approximately $302,800 for the six months ended June 30, 2024, compared to the same time period in 2023 due primarily to a decrease in Escrow Agent/Trustee fees of approximately $267,100 and a decrease in professional services of $35,900.
Current wording
General and administrative expenses decreased approximately $209,000 for the nine months ended September 30, 2024, compared to the same period in 2023 due primarily to a decrease in Escrow Agent fees of approximately $236,000, offset by an increase in CDEX account services of $27,000.
Previous wording
The financial statements of the Trust differ from financial statements prepared in conformity with accounting principles generally accepted in the United States of America because of the following:
Current wording
The condensed financial statements of the Trust differ from financial statements prepared in conformity with accounting principles generally accepted in the United States of America because of the following: