0001193125-13-062475.txt : 20130219 0001193125-13-062475.hdr.sgml : 20130219 20130215151406 ACCESSION NUMBER: 0001193125-13-062475 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20130215 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20130215 DATE AS OF CHANGE: 20130215 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HUGOTON ROYALTY TRUST CENTRAL INDEX KEY: 0000862022 STANDARD INDUSTRIAL CLASSIFICATION: OIL ROYALTY TRADERS [6792] IRS NUMBER: 586379215 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-10476 FILM NUMBER: 13619028 BUSINESS ADDRESS: STREET 1: C/O NATIONS BANK, N.A. TRUSTEE STREET 2: 901 MAIN ST., 17TH FLOOR CITY: DALLAS STATE: TX ZIP: 75202 BUSINESS PHONE: 214-209-2400 MAIL ADDRESS: STREET 1: C/O NATIONS BANK, N.A. TRUSTEE STREET 2: 901 MAIN ST., 17TH FLOOR CITY: DALLAS STATE: TX ZIP: 75202 8-K 1 d487970d8k.htm FORM 8-K Form 8-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D) OF

THE SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): February 15, 2013

 

 

HUGOTON ROYALTY TRUST

(Exact Name of Registrant as Specified in Its Charter)

 

 

Texas

(State or Other Jurisdiction of Incorporation)

 

1-10476   58-6379215
(Commission File Number)   (IRS Employer Identification No.)
U.S. Trust, Bank of America  
Private Wealth Management Trustee  
P.O. Box 830650  
Dallas, Texas   75283-0650
(Address of Principal Executive Offices)   (Zip Code)

(877) 228-5083

(Registrant’s Telephone Number, Including Area Code)

NONE

(Former Name or Former Address, if Changed Since Last Report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

Item 2.02. Results of Operations and Financial Condition.

On February 15, 2013, the Registrant issued a news release announcing its monthly cash distribution to unitholders of record on February 28, 2013. A copy of the news release is furnished as Exhibit 99.1.

The information in this Current Report, including the news release attached hereto, is being furnished pursuant to Item 2.02 of Form 8-K and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liabilities of that Section.

Item 9.01. Financial Statements and Exhibits.

 

  (c) Exhibits.

 

99.1    News Release dated February 15, 2013

 

2

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  HUGOTON ROYALTY TRUST
  By:   BANK OF AMERICA, N.A., TRUSTEE
Date: February 15, 2013   By:   /S/ NANCY G. WILLIS
   

 

    Nancy G. Willis
    Vice President
  EXXON MOBIL CORPORATION
  By:   /s/ JAMES A. HALL
   

 

    James A. Hall
    Vice President—Upstream Business Services

 

3

EXHIBIT INDEX

Exhibit Number and Description

 

99.1 News Release dated February 15, 2013

 

4

EX-99.1 2 d487970dex991.htm EX-99.1 EX-99.1

EXHIBIT 99.1

[NEWS RELEASE LETTERHEAD OF HUGOTON ROYALTY TRUST APPEARS HERE]

HUGOTON ROYALTY TRUST

DECLARES FEBRUARY CASH DISTRIBUTION

Dallas, Texas, February 15, 2013 – U.S. Trust, Bank of America Private Wealth Management, as Trustee of the Hugoton Royalty Trust (NYSE – HGT), today declared a cash distribution to the holders of its units of beneficial interest of $0.068665 per unit, payable on March 14, 2013, to unitholders of record on February 28, 2013. The following table shows underlying gas sales and average prices attributable to the net overriding royalty payments made by XTO Energy Inc. (XTO Energy) to the Trust for both the current month and prior month distributions. Underlying gas sales volumes attributable to the current month distribution were primarily produced in December.

 

     Underlying Gas Sales         
     Volumes (Mcf) (a)      Average Gas  
     Total      Daily      Price per Mcf  

Current Month Distribution

      1,598,000         52,000       $ 4.03   

Prior Month Distribution

      1,558,000         52,000       $ 3.91   

 

(a) Sales volumes are recorded in the month the trust receives the related net profits income. Because of this, sales volumes may fluctuate from month to month based on the timing of cash receipts.

XTO Energy has advised the trustee that it has deducted budgeted development costs of $500,000, production expense of $1,941,000 and overhead of $947,000 in determining the royalty payment to the Trust for the current month.

Other / Excess Costs

Regarding the $37 million settlement reached by XTO Energy on the Fankhouser v. XTO Energy, Inc. litigation, XTO Energy notified the trustee with the September 2012 distribution that it charged the trust $28.5 million of the settlement, of which $23.4 million affected the net proceeds from Oklahoma and $5.1 million affected the net proceeds from Kansas. Based on recent revenue and expense levels, XTO Energy has advised the trustee that it expects the settlement deductions to cause costs to exceed revenues for 12 months on properties underlying the Oklahoma net profits interests and 7 years on properties underlying the Kansas net profits interests; however, changes in oil or natural gas prices or expenses could cause the time period to increase or decrease, correspondingly.

As mentioned in the third quarter Form 10-Q filed on November 5, 2012, the trustee disagrees with XTO Energy that all or any portion of the settlement should be deducted from Trust revenues, and the dispute is being arbitrated. The three member panel of arbitrators (the “Tribunal”) has been named and pleadings have been filed by both parties. The arbitration hearing is tentatively scheduled for October 7, 2013 in Fort Worth, Texas if not sooner disposed of by the parties by agreement or by the Tribunal on motion. The trustee requested that the Tribunal enjoin XTO Energy from continuing to deduct the Fankhouser settlement amount while the arbitration is pending. A hearing on the injunction was held on October 27, 2012. The Tribunal ordered that pending the issuance of a final award or further order of the Tribunal, XTO Energy should not treat any costs or expenses associated with the Fankhouser settlement as chargeable against the trust’s net profit interest under the conveyances. The Tribunal denied the trust’s request for an interim order directing XTO Energy to pay the trust the amounts offset against the trust’s September and October 2012 distributions on the basis of the Fankhouser litigation. Based on this decision, deductions associated with the Fankhouser settlement were suspended starting in November 2012.

For more information on the Trust, please visit our web site at www.hugotontrust.com.

Statements made in this press release regarding future events or conditions are forward looking statements. Actual future results, including development costs, the outcome of litigation, and future net profits, could differ materially due to changes in natural gas prices and other economic conditions affecting the gas industry and other factors described in Part I, Item 1A of the trust’s Annual Report on Form 10-K for the year ended December 31, 2011.

*     *     *

 

  Contact: Nancy G. Willis

Vice President

U.S. Trust, Bank of America Private Wealth Management, Trustee

(Toll Free)

877-228-5083