CROSS TIMBERS ROYALTY TRUST

Previous wording

Net profits income for 2024 was $6,563,177 as compared with $12,300,176 for 2023. The 47 percent decrease in net profits income from 2023 to 2024 was primarily the result of decreased oil and gas production ($3.8 million), lower oil and gas prices ($3.4 million), and increased development costs ($0.3 million), partially offset by decreased taxes, transportation and other costs ($1.1 million), net excess costs activity ($0.4 million), and decreased production expenses ($0.3 million). During 2024 and 2023, 46 percent and 57 percent, respectively, of net profits income was derived from gas sales.

Current wording

Net profits income for 2025 was $5,738,240 as compared with $6,563,177 for 2024. The 13 percent decrease in net profits income from 2024 to 2025 was primarily the result of lower oil prices ($1.3 million), decreased oil production ($0.9 million), and decreased gas production ($0.6 million), partially offset by decreased development costs ($1.0 million), higher gas prices ($0.6 million), decreased taxes, transportation and other costs ($0.2 million), and decreased production expenses ($0.2 million). During 2025 and 2024, 51 percent and 46 percent, respectively, of net profits income was derived from gas sales.

Previous wording

Trust administration expense was $945,612 in 2024 as compared to $816,185 in 2023. Cash reserve activity was $0 in 2024 and 2023. As of December 31, 2024, the reserve is funded at $1,000,000. Interest income was $60,253 in 2024 and $63,897 in 2023. Other changes in interest income are attributable to fluctuations in net profits income and interest rates.

Current wording

Trust administration expense was $847,078 in 2025 as compared to $945,612 in 2024. Cash reserve activity was $450,000 in 2025 and $0 in 2024. As of December 31, 2025, the reserve is funded at $1,450,000. Interest income was $49,682 in 2025 and $60,253 in 2024. Changes in interest income are attributable to fluctuations in net profits income and interest rates.

Previous wording

Oil. Underlying oil sales volumes decreased 14 percent from 2023 to 2024 primarily because of timing of cash receipts and natural production decline.

Current wording

Oil. Underlying oil sales volumes decreased 10 percent from 2024 to 2025 primarily because of timing of cash receipts and natural production decline.

Previous wording

Gas. Underlying gas sales volumes decreased 31 percent from 2023 to 2024 primarily due to absence of receipts for the New Mexico royalty interest net profits interests related to March 2018 to December 2020 production, timing of cash receipts, and natural production decline, partially offset by out of period revenues attributable to non-operated properties in the Oklahoma royalty interest net profits interests.

Current wording

Gas. Underlying gas sales volumes decreased 10 percent from 2024 to 2025 primarily due to 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, partially offset by out-of-period revenues related to Hewitt Unit residue gas sales.

Previous wording

Oil. The average oil price for 2024 was $75.68 per Bbl, down 2 percent from the 2023 average oil price of $77.05 per Bbl. Oil prices are expected to remain volatile. The average NYMEX price for November 2024 through January 2025 was $71.56 per Bbl. At March 14, 2025, the average NYMEX oil price for the following 12 months was $65.20 per Bbl.

Current wording

Oil. The average oil price for 2025 was $65.85 per Bbl, down 13 percent from the 2024 average oil price of $75.68 per Bbl. Oil prices are expected to remain volatile. The average NYMEX price for November 2025 through January 2026 was $59.29 per Bbl. At March 13, 2026, the average NYMEX oil price for the following 12 months was $83.43 per Bbl.

Previous wording

Gas. The 2024 average gas price was $3.97 per Mcf, down 34 percent from the 2023 average gas price of $6.00 per Mcf. Natural gas prices are affected by natural gas liquids prices, the level of North American production, weather, crude oil prices, the U.S. economy, storage levels and export levels of liquefied natural gas. Natural gas prices are expected to remain volatile. The average NYMEX price for fourth quarter 2024 was $2.16 per MMBtu. At March 14, 2025, the average NYMEX gas price for the following 12 months was $4.66 per MMBtu.

Current wording

Gas. The 2025 average gas price was $4.40 per Mcf, up 11 percent from the 2024 average gas price of $3.97 per Mcf. Natural gas prices are affected by natural gas liquids prices, the level of North American production, weather, crude oil prices, the U.S. economy, storage levels and export levels of liquefied natural gas. Natural gas prices are expected to remain volatile. The average NYMEX price for fourth quarter 2025 was $3.07 per MMBtu. At March 13, 2026, the average NYMEX gas price for the following 12 months was $3.84 per MMBtu.

Previous wording

Total costs deducted in the calculation of net profits income were $9.8 million in 2024 and $11.5 million in 2023. The 14 percent decrease in costs from 2023 to 2024 is attributable to decreased taxes, transportation and other costs ($1.2 million), net excess costs activity ($0.5 million), and decreased production expenses ($0.4 million), offset by increased development costs ($0.4 million).

Current wording

Total costs deducted in the calculation of net profits income were $8.0 million in 2025 and $9.8 million in 2024. The 18 percent decrease in costs from 2024 to 2025 is attributable to decreased development costs ($1.3 million), decreased taxes, transportation and other costs ($0.3 million), and decreased production expenses ($0.2 million).

Previous wording

Unit operators of the properties underlying the 75% net profits interests have reported underlying budgeted development costs of approximately $0.75 million for 2025 and $0.85 million for 2026 ($0.56 million and $0.64 million, respectively, net to the Trust), as compared to underlying budgeted development costs of $0.20 million ($0.15 million net to the Trust) and actual development costs of $1.51 million ($1.13 million net to the Trust) for 2024. Actual development costs often differ from amounts budgeted because of changes in product prices and other factors that may affect the timing or selection of projects. Changes in oil or natural gas prices could impact future development plans on the underlying properties.

Current wording

Unit operators of the properties underlying the 75% net profits interests have reported underlying budgeted development costs of approximately $0.09 million for 2026 and $0.08 million for 2027 ($0.07 million and $0.06 million, respectively, net to the Trust), as compared to underlying budgeted development costs of $0.75 million ($0.56 million net to the Trust) and actual development costs of $0.17 million ($0.12 million net to the Trust) for 2025. Actual development costs often differ from amounts budgeted because of changes in product prices and other factors that may affect the timing or selection of projects. Changes in oil or natural gas prices could impact future development plans on the underlying properties.

Previous wording

During the quarter ended December 31, 2024, the Trust received net profits income totaling $1,462,841, compared with fourth quarter 2023 net profits income of $2,548,233. This 43 percent decrease in net profits income is primarily the result of decreased oil and gas production ($1.4 million), lower oil and gas prices ($0.5 million) and net excess costs activity ($0.2 million), partially offset by decreased production expenses ($0.6 million), decreased development costs ($0.2 million), and decreased taxes, transportation and other costs ($0.2 million).

Current wording

During the quarter ended December 31, 2025, the Trust received net profits income totaling $1,629,528, compared with fourth quarter 2024 net profits income of $1,462,841. This 11 percent increase in net profits income is primarily the result of increased gas production ($0.4 million), higher gas prices ($0.2 million), and decreased production expenses ($0.2 million), partially offset by lower oil prices ($0.3 million), increased taxes, transportation and other costs ($0.1 million), decreased oil production ($0.1 million) and net excess costs activity ($0.1 million).

Previous wording

Administration expense was $158,890 and Trust interest income was $13,643, resulting in fourth quarter 2024 distributable income of $1,317,594, or $0.219599 per unit. Distributable income for fourth quarter 2023 was $2,416,884, or $0.402814 per unit.

Current wording

Administration expense was $131,453, cash reserve activity was $150,000, and Trust interest income was $12,965, resulting in fourth quarter 2025 distributable income of $1,361,040, or $0.226840 per unit. Distributable income for fourth quarter 2024 was $1,317,594, or $0.219599 per unit.

Previous wording

Fourth quarter 2024 underlying oil sales volumes were down 29 percent from fourth quarter 2023 primarily because of timing of cash receipts and natural production decline. Underlying gas sales volumes for fourth quarter 2024 were down 35 percent from fourth quarter 2023 because of timing of cash receipts and natural production decline.

Current wording

Fourth quarter 2025 underlying oil sales volumes were down 7 percent from fourth quarter 2024 primarily because of timing of cash receipts and natural production decline. Underlying gas sales volumes for fourth quarter 2025 were up 59 percent from fourth quarter 2024 because of out-of-period revenues related to Hewitt Unit residue gas sales and timing of cash receipts, partially offset by natural production decline.

Previous wording

The average fourth quarter 2024 oil price was $72.32 per Bbl, down 9 percent from the fourth quarter 2023 average price of $79.05 per Bbl. The average fourth quarter 2024 gas price was $3.78 per Mcf, down 18 percent from the fourth quarter 2023 average price of $4.63 per Mcf. For further information about oil and gas prices, see “Years Ended December 31, 2024 and 2023 – Prices” above.

Current wording

The average fourth quarter 2025 oil price was $62.42 per Bbl, down 14 percent from the fourth quarter 2024 average price of $72.32 per Bbl. The average fourth quarter 2025 gas price was $4.39 per Mcf, up 16 percent from the fourth quarter 2024 average price of $3.78 per Mcf. For further information about oil and gas prices, see “Years Ended December 31, 2025 and 2024 – Prices” above.

Previous wording

Costs deducted in the calculation of fourth quarter 2024 net profits income decreased $1.1 million from fourth quarter 2023. This decrease was primarily attributable to decreased production expenses ($0.8 million), development costs ($0.3 million), and taxes, transportation and other costs ($0.3 million), partially offset by net excess costs activity ($0.3 million). For further information about development and excess costs, see “Years Ended December 31, 2024 and 2023 – Costs” above.

Current wording

Costs deducted in the calculation of fourth quarter 2025 net profits income increased 1 percent from fourth quarter 2024. This increase was primarily attributable to increased taxes, transportation and other costs ($0.1 million) and net excess costs activity ($0.1 million), partially offset by decreased production expenses ($0.2 million). For further information about development and excess costs, see “Years Ended December 31, 2025 and 2024 – Costs” above.

Previous wording

Approximately 23 of the underlying royalty interests burden working interests in properties operated by XTO Energy. XTO Energy operates the Hewitt Unit which is one of the properties underlying the Oklahoma 75% net profits interests. Other than these properties, XTO Energy and ExxonMobil do not operate or control any of the underlying properties or related working interests.

Current wording

Approximately 21 of the underlying royalty interests burden working interests in properties operated by XTO Energy. XTO Energy operates the Hewitt Unit which is one of the properties underlying the Oklahoma 75% net profits interests. Other than these properties, XTO Energy and ExxonMobil do not operate or control any of the underlying properties or related working interests.

Previous wording

In computing net proceeds for the 75% net profits interests (Note 3), XTO Energy deducts an overhead charge as reimbursement for costs associated with monitoring these interests. This overhead charge at December 31, 2024, was approximately $50,443 per month, or $605,316 annually (net to the Trust of $37,832 per month, or $453,984 annually), and is subject to annual adjustment based on an oil and gas industry index.

Current wording

In computing net proceeds for the 75% net profits interests (Note 3), XTO Energy deducts an overhead charge as reimbursement for costs associated with monitoring these interests. This overhead charge at December 31, 2025, was approximately $53,620 per month, or $643,440 annually (net to the Trust of $40,215 per month, or $482,580 annually), and is subject to annual adjustment based on an oil and gas industry index.

Previous wording

XTO Energy deducts a monthly overhead charge for reimbursement of administrative expenses as operator of the Hewitt Unit, which is one of the properties underlying the Oklahoma 75% net profits interests. As of December 31, 2024, this charge was approximately $35,056 per month, or $420,672 annually (net to the Trust of $26,292 per month, or $315,504 annually), and is subject to annual adjustment based on an oil and gas industry index.

Current wording

XTO Energy deducts a monthly overhead charge for reimbursement of administrative expenses as operator of the Hewitt Unit, which is one of the properties underlying the Oklahoma 75% net profits interests. As of December 31, 2025, this charge was approximately $37,104 per month, or $445,248 annually (net to the Trust of $27,828 per month, or $333,936 annually), and is subject to annual adjustment based on an oil and gas industry index.

Previous wording

This comprehensive basis of accounting other than U.S. GAAP corresponds to the accounting permitted for royalty trusts by the U.S. Securities and Exchange Commission, as specified by Staff Accounting Bulletin Topic 12:E, Financial Statements of Royalty

Current wording

This comprehensive basis of accounting other than U.S. GAAP corresponds to the accounting permitted for royalty trusts by the U.S. Securities and Exchange Commission, as specified by Staff Accounting Bulletin Topic 12:E, Financial Statements of Royalty Trusts. For further information regarding the Trust’s basis of accounting, see Note 2 to Financial Statements under Item 8. Financial Statements and Supplementary Data.

Previous wording

The initial carrying value of the net profits interests of $61,100,449 was XTO Energy’s historical net book value of the interests on February 12, 1991, the date of the transfer to the Trust. Amortization of the net profits interests is calculated on a unit‑of‑production basis using proved reserves and is charged directly to trust corpus. Accumulated amortization was $58,667,105 as of December 31, 2024, and $58,428,866 as of December 31, 2023. Amortization of the NPI does not impact unitholder distributions or the determination of proved reserves.

Current wording

The initial carrying value of the net profits interests of $61,100,449 was XTO Energy’s historical net book value of the interests on February 12, 1991, the date of the transfer to the Trust. Amortization of the net profits interests is calculated on a unit‑of‑production basis using proved reserves and is charged directly to trust corpus. Accumulated amortization was $58,942,029 as of December 31, 2025, and $58,667,105 as of December 31, 2024. Amortization of the NPI does not impact unitholder distributions or the determination of proved reserves.

Previous wording

Certain information included in this annual 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 may concern, among other things, development activities, future development plans, 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, arbitration, litigation, liquidity, financing, political and regulatory matters, such as tax and environmental policy, climate policy, trade barriers, tariffs, sanctions, war and other political or security disturbances, and competition. 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,” “projects,” “anticipates,” “predicts,” “believes,” “goals,” “estimates,” “should,” “could,” “would,” and similar words that convey the uncertainty of future events. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict. 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. Some of the risk factors that could cause actual results to differ materially are explained in Item 1A. Risk Factors.

Current wording

Certain information included in this annual 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 may concern, among other things, development activities, future development plans, 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, arbitration, litigation, liquidity, financing, political and regulatory matters, such as tax and environmental policy, climate policy, trade barriers, tariffs, sanctions, war and other geopolitical or security disturbances, and competition. 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,” “projects,” “anticipates,” “predicts,” “believes,” “goals,” “estimates,” “should,”