M&A - HUGOTON ROYALTY TRUST

Form Type: 10-K

Filing Date: 2025-03-31

Corporate Action: Acquisition

Type: New

Accession Number: 000095017025047645

Filing Summary: Hugoton Royalty Trust's annual report for fiscal year ended December 31, 2024, provides a comprehensive overview of its financial status and corporate activities. A significant recent development is the announcement that XTO Energy Inc. entered into a definitive agreement on March 25, 2025, to divest its interests in the assets underlying the Trust to Mach Natural Resources LP. This transaction is expected to close on April 30, 2025, at which point Mach will assume XTO Energy's obligations under the Trust indenture. The Trust has been struggling financially, with no unitholder distributions since July 2023 due to excess costs overrunning net proceeds from its oil and gas operations. The current market value of the Trust’s units is approximately $19.6 million, and as of March 31, 2025, there are 40 million units of beneficial interest outstanding. The report underscores the uncertainty around the Trust's ability to continue as a going concern and outlines various risks including operational risks, market volatility, and the impact of oil and natural gas price fluctuations on distributions to unitholders. Additionally, the Trustee is exploring options for the Trust’s future, potentially considering termination of the Trust or selling its interests.