CROSS TIMBERS ROYALTY TRUST

Previous 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.

Current wording

For the quarter ended March 31, 2026, net profits income was $774,181 compared to $2,053,394 for first quarter 2025. This 62 percent decrease in net profits income is primarily the result of decreased oil and gas production ($1.3 million), lower oil prices ($0.5 million), increased overhead ($0.4 million), and increased production costs ($0.1 million), partially offset by net excess costs activity ($0.8 million), decreased taxes, transportation and other costs ($0.1 million), and decreased development costs ($0.1 million). See “Net Profits Income” below.

Previous 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.

Current wording

After considering interest income of $13,666, administration expense of $234,441, and an increase to the expense reserve of $50,000, distributable income for the quarter ended March 31, 2026, was $503,406, or $0.083901 per unit of beneficial interest. Administration expense for the quarter decreased $47,021 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 first quarter 2025, distributable income was $1,783,938, or $0.297323 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 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.

Current wording

Because of the interval between time of production and receipt of royalty income by the Trust, oil and gas sales for the quarter ended March 31 generally represent oil production for the period November through January and gas production for the period October through December.

Previous 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:

Current wording

The following are explanations of significant variances on the underlying properties from first quarter 2025 to first quarter 2026:

Previous 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.

Current wording

Oil sales volumes decreased 37 percent from first quarter 2025 to first quarter 2026 primarily due to timing of cash receipts and natural production decline.

Previous 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.

Current wording

Taxes, transportation and other costs decreased 36 percent for first quarter 2026 primarily because of decreased oil and gas severance taxes on lower revenues and decreased gas deductions.

Previous 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.

Current wording

Development costs related to properties underlying the 75% net profits interests decreased 101 percent for first quarter 2026 primarily because of the absence of recompletion costs related to 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 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.

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 and Oklahoma working interest conveyances remaining as of March 31, 2026, totaled $6.7 million ($5.0 million net to the Trust), including accrued interest of $1.6 million ($1.2 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 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.

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 supply and demand, the impact of inflation and economic downturns on economic activity, government policy and actions and their 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, war and other geopolitical or security disturbances, and competition. 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, 2025, 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.