CROSS TIMBERS ROYALTY TRUST

Previous wording

For the quarter ended June 30, 2025, net profits income was $1,293,766 compared to $1,564,871 for second quarter 2024. This 17 percent decrease in net profits income is primarily the result of decreased oil and gas production ($1.0 million), lower oil prices ($0.4 million), and increased production expenses ($0.3 million), partially offset by net excess costs activity ($0.6 million), higher gas prices ($0.5 million), decreased development costs ($0.2 million), and decreased taxes, transportation and other costs ($0.1 million). See “Net Profits Income” below.

Current wording

For the quarter ended September 30, 2025, net profits income was $761,552 compared to $1,697,724 for third quarter 2024. This 55 percent decrease in net profits income is primarily the result of decreased oil and gas production ($1.0 million), and lower oil prices ($0.5 million), partially offset by decreased production expenses ($0.3 million), decreased taxes, transportation and other costs ($0.2 million), and net excess costs activity ($0.1 million). See “Net Profits Income” below.

Previous wording

After adding interest income of $11,982, deducting administration expense of $263,200, and increasing the expense reserve $150,000, distributable income for the quarter ended June 30, 2025, was $892,548, or $0.148758 per unit of beneficial interest. Administration expense for the quarter increased $28,914 from the prior year quarter, primarily related to the timing of receipt and payment of Trust expenses and terms of professional services. Changes in interest income are attributable to fluctuations in net profits income, expense reserve, and interest rates. For second quarter 2024, distributable income was $1,345,758, or $0.224293 per unit.

Current wording

After adding interest income of $12,729, deducting administration expense of $170,963, and increasing the expense reserve $150,000, distributable income for the quarter ended September 30, 2025, was $453,318, or $0.075553 per unit of beneficial interest. Administration expense for the quarter decreased $19,973 from the prior year quarter, primarily related to the timing of receipt and payment of Trust expenses and terms of professional services. Changes in interest income are attributable to fluctuations in net profits income, expense reserve, and interest rates. For third quarter 2024, distributable income was $1,521,252, or $0.253542 per unit.

Previous wording

For the six months ended June 30, 2025, net profits income was $3,347,160 compared to $3,402,612 for the same 2024 period. This 2 percent decrease in net profits income is primarily the result of decreased oil and gas production ($0.6 million), lower oil prices ($0.5 million), and increased production expenses ($0.3 million), partially offset by decreased development costs ($1.0 million), higher gas prices ($0.2 million), and decreased taxes, transportation and other costs ($0.1 million). See “Net Profits Income” below.

Current wording

For the nine months ended September 30, 2025, net profits income was $4,108,712 compared to $5,100,336 for the same 2024 period. This 19 percent decrease in net profits income is primarily the result of decreased oil and gas production ($1.8 million), and lower oil prices ($1.0 million), partially offset by decreased development costs ($1.0 million), decreased taxes, transportation and other costs ($0.4 million), higher gas prices ($0.3 million), and net excess costs activity ($0.1 million). See “Net Profits Income” below.

Previous wording

After adding interest income of $23,988, deducting administration expense of $544,662, and increasing the expense reserve $150,000, distributable income for the six months ended June 30, 2025, was $2,676,486, or $0.446081 per unit of beneficial interest. Administration expense for the six months ended June 30, 2025, decreased $51,124 from the prior year six-month period, primarily related to the timing of receipt and payment of Trust expenses and terms of professional services. Changes in interest income are attributable to fluctuations in net profits income, expense reserve, and interest rates. For the six months ended June 30, 2024, distributable income was $2,838,972, or $0.473162 per unit.

Current wording

After adding interest income of $36,717, deducting administration expense of $715,625, and increasing the expense reserve $300,000, distributable income for the nine months ended September 30, 2025, was $3,129,804, or $0.521634 per unit of beneficial interest. Administration expense for the nine months ended September 30, 2025, decreased $71,097 from the prior year nine-month period, primarily related to the timing of receipt and payment of Trust expenses and terms of professional services. Changes in interest income are attributable to fluctuations in net profits income, expense reserve, and interest rates. For the nine months ended September 30, 2024, distributable income was $4,360,224, or $0.726704 per unit.

Previous wording

Because of the interval between time of production and receipt of royalty income by the Trust, (1) oil and gas sales for the quarter ended June 30 generally represent oil production for the period February through April and gas production for the period January through March and (2) oil and gas sales for the six-months ended June 30 generally represent oil production for the period November through April and gas production for the period October through March.

Current wording

Because of the interval between time of production and receipt of royalty income by the Trust, (1) oil and gas sales for the quarter ended September 30 generally represent oil production for the period May through July and gas production for the period April through June and (2) oil and gas sales for the nine-months ended September 30 generally represent oil production for the period November through July and gas production for the period October through June.

Previous wording

The following are explanations of significant variances on the underlying properties from second quarter 2024 to second quarter 2025 and from the first six months of 2024 to the comparable period in 2025:

Current wording

The following are explanations of significant variances on the underlying properties from third quarter 2024 to third quarter 2025 and from the first nine months of 2024 to the comparable period in 2025:

Previous wording

Oil sales volumes decreased 18 percent for the second quarter and decreased 7 percent for the six-month period primarily due to the timing of cash receipts and natural production decline.

Current wording

Oil sales volumes decreased 20 percent for the third quarter and decreased 11 percent for the nine-month period primarily due to the timing of cash receipts and natural production decline.

Previous wording

Gas sales volumes decreased 35 percent for the second quarter and decreased 12 percent for the six-month period primarily because of the absence of out-of-period revenues related to non-operated properties in the Oklahoma royalty interest net profits interests and natural production decline, partially offset by the timing of cash receipts.

Current wording

Gas sales volumes decreased 47 percent for the third quarter primarily due to the timing of cash receipts and natural production decline. Gas sales volumes decreased 26 percent for the nine-month period primarily because of the absence of out-of-period revenues related to non-operated properties in the Oklahoma royalty interest net profits interests, timing of cash receipts, and natural production decline.

Previous wording

The average oil price for the second quarter decreased 14 percent to $66.79 per Bbl and for the six-month period decreased 10 percent to $68.84 per Bbl.

Current wording

The average oil price for the third quarter decreased 20 percent to $62.21 per Bbl and for the nine-month period decreased 13 percent to $66.93 per Bbl.

Previous wording

Gas prices for the second quarter increased 37 percent to $5.54 per Mcf and for the six-month period increased 11 percent to $4.71 per Mcf.

Current wording

Gas prices for the third quarter were flat at $3.65 per Mcf and for the nine-month period increased 10 percent to $4.41 per Mcf.

Previous wording

Taxes, transportation and other costs decreased 16 percent for the second quarter primarily because of decreased oil and gas severance taxes on lower revenues and decreased property taxes, partially offset by increased gas deductions. Taxes, transportation and other costs decreased 19 percent for the six-month period primarily because of decreased oil and gas severance taxes and gas deductions on lower revenues and decreased property taxes.

Current wording

Taxes, transportation and other costs decreased 40 percent for the third quarter primarily because of decreased gas deductions and oil and gas severance taxes on lower revenues. Taxes, transportation and other costs decreased 26 percent for the nine-month period primarily because of decreased oil and gas severance taxes and gas deductions on lower revenues and decreased property taxes.

Previous wording

Production expense increased 24 percent for the second quarter primarily because of increased gas processing costs, labor, miscellaneous non-operated costs, and power and fuel costs, partially offset by decreased repairs and maintenance. Production expense increased 12 percent for the six-month period primarily because of increased labor, gas processing costs, repairs and maintenance, power and fuel, and chemical costs, partially offset by decreased field costs.

Current wording

Production expense decreased 17 percent for the third quarter primarily because of decreased gas processing costs, repairs and maintenance, miscellaneous non-operated costs, and field costs, partially offset by increased labor charges and power and fuel costs. Production expense increased 1 percent for the nine-month period primarily because of increased labor charges and power and fuel costs, partially offset by decreased field costs, miscellaneous non-operated costs, and gas processing costs.

Previous wording

Development costs related to properties underlying the 75% net profits interests decreased 94 percent for the second quarter and 90 percent for the six-month period primarily because of the absence of costs for drilling activity that occurred in the second half of 2023 for the Hewitt Unit.

Current wording

Development costs related to properties underlying the 75% net profits interests decreased 58 percent for the third quarter and 89 percent for the nine-month period primarily because of the absence of costs for drilling activity that occurred in the second half of 2023 for the Hewitt Unit.

Previous wording

If monthly costs exceed revenues for any conveyance, such excess costs must be recovered, with accrued interest, from future net proceeds of that conveyance and cannot reduce net proceeds from any other conveyance. Underlying cumulative excess costs for the Texas and Oklahoma working interest conveyances remaining as of June 30, 2025, totaled $4.9 million

Current wording

If monthly costs exceed revenues for any conveyance, such excess costs must be recovered, with accrued interest, from future net proceeds of that conveyance and cannot reduce net proceeds from any other conveyance. Underlying cumulative excess costs for the Texas working interest conveyance remaining as of September 30, 2025, totaled $5.1 million ($3.8 million net to the Trust), including accrued interest of $1.4 million ($1.0 million net to the Trust). For further information on excess costs, see Note 4 to Condensed Financial Statements.

Previous wording

Certain information included in this Quarterly Report and other materials filed, or to be filed, by the Trust with the Securities and Exchange Commission (as well as information included in oral statements or other written statements made or to be made by XTO Energy or the Trustee) contain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended, relating to the Trust, operations of the underlying properties and the oil and gas industry. Such forward-looking statements are based on XTO Energy’s and the Trustee’s current plans, expectations, assumptions, projections and estimates and are identified by words such as “may,” “expects,” “intends,” “plans,” “believes,” “estimates,” “should,” “could,” “would,” and similar words that convey the uncertainty of future events. Such forward-looking statements may concern, among other things, development activities, future development plans by area, increased density drilling, reserve-to-production ratios, future production, future net cash flows, maintenance projects, development, production, regulatory and other costs, oil and gas prices and expectations for future demand, the impact of inflation and economic downturns on economic activity, government policy and its impact on oil and gas prices and future demand, the development and competitiveness of alternative energy sources, pricing differentials, proved reserves, production levels, expense reserve budgets, availability of financing, arbitration, litigation, liquidity, financing, political and regulatory matters, such as tax and environmental policy, climate policy, trade barriers, tariffs, sanctions, competition, war and other political or security disturbances. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict, including those detailed in Part I, Item 1A of the Trust’s Annual Report on Form 10-K for the year ended December 31, 2024, which is incorporated by this reference as though fully set forth herein. Therefore, actual financial and operational results may differ materially from expectations, estimates or assumptions expressed in, implied in, or forecasted in such forward-looking statements. XTO Energy and the Trustee assume no duty to update these statements as of any future date.

Current wording

Certain information included in this Quarterly Report and other materials filed, or to be filed, by the Trust with the Securities and Exchange Commission (as well as information included in oral statements or other written statements made or to be made by XTO Energy or the Trustee) contain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended, relating to the Trust, operations of the underlying properties and the oil and gas industry. Such forward-looking statements are based on XTO Energy’s and the Trustee’s current plans, expectations, assumptions, projections and estimates and are identified by words such as “may,” “expects,” “intends,” “plans,” “believes,” “estimates,” “should,” “could,” “would,” and similar words that convey the uncertainty of future events. Such forward-looking statements may concern, among other things, development activities, future development plans by area, increased density drilling, reserve-to-production ratios, future production, future net cash flows, maintenance projects, development, production, regulatory and other costs, oil and gas prices and expectations for future demand, the impact of inflation and economic downturns on economic activity, government policy and its impact on oil and gas prices and future supply and demand, the development and competitiveness of alternative energy sources, pricing differentials, proved reserves, production levels, expense reserve budgets, availability of financing, arbitration, litigation, liquidity, financing, political and regulatory matters, such as tax and environmental policy, climate policy, trade barriers, tariffs, sanctions, competition, war and other political or security disturbances. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict, including those detailed in Part I, Item 1A of the Trust’s Annual Report on Form 10-K for the year ended December 31, 2024, which is incorporated by this reference as though fully set forth herein. Therefore, actual financial and operational results may differ materially from expectations, estimates or assumptions expressed in, implied in, or forecasted in such forward-looking statements. XTO Energy and the Trustee assume no duty to update these statements as of any future date.