Hugoton Royalty Trust reported significant declines in financial performance for the three and nine months ended September 30, 2024, compared to the same periods in 2023. For the third quarter of 2024, total revenues were $9.0 million, an 8% decrease from $9.8 million in Q3 2023. Gas sales fell by 21% to $5.1 million, while oil sales increased by 18% to $3.9 million. For the nine-month period, total revenues dropped 43% to $28.0 million, with gas sales plummeting 57% to $17.5 million, although oil sales rose by 15% to $10.5 million.

Net profits income for the third quarter remained at $0, unchanged from the previous year, and for the nine months, it also fell to $0 from $11.5 million in 2023. This decline was primarily attributed to lower gas prices, which decreased by 51% year-over-year, and increased production expenses. The average gas price in Q3 2024 was $2.40 per Mcf, down from $2.80 per Mcf in Q3 2023, while the average oil price increased slightly to $75.84 per Bbl.

Total costs for the third quarter were $9.0 million, a 7% decrease from the prior year, but production expenses surged by 45% to $6.2 million, largely due to the Chieftain Settlement and rising labor costs. Administration expenses also decreased significantly, down to $171,655 from $374,347 in Q3 2023.

The Trust has not made any unitholder distributions since July 2023 due to insufficient net proceeds, which have been impacted by development costs for non-operated wells in Oklahoma, lower oil and gas prices, and excess costs in Kansas, Oklahoma, and Wyoming. The cumulative excess costs as of September 30, 2024, totaled approximately $10.5 million.

In June 2024, a Settlement Agreement was reached with XTO Energy regarding the Chieftain Claim and Overhead Claims, with stipulated values of $18.1 million and $17.3 million, respectively. XTO Energy has also provided a one-time advance distribution of $500,000 to the Trust, which is expected to be recouped from future net profits.

The Trustee has expressed substantial doubt about the Trust's ability to continue as a going concern, considering options such as termination or marketing the Trust's interests for sale due to a lack of viable financing options. Unitholders face potential losses if the Trust cannot generate sufficient income to meet its obligations.