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UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549   Form 10-Q    ☒
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended March 31, 2023 OR  ☐
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from
 to Commission File Number: 1-8424   SABINE ROYALTY TRUST (Exact name of registrant as specified in its charter)    Texas

75-6297143(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.) Argent Trust Company Park Place 2911 Turtle Creek Blvd Suite 850 Dallas, Texas
75219 (Address of principal executive offices) (Zip Code) (855) 588-7839 (Registrants telephone number, including area code) N/A (Former name, former
address and former fiscal year, if changed since last report)   Securities
registered pursuant to Section 12(b) of the Act:  Title of each class

Trading
Symbol

Name of each exchange
on which registeredUnits of Beneficial Interest

SBR

New York Stock Exchange Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d)
of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90
days.    Yes  ☒    No  ☐ Indicate by check mark whether the registrant has
submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period
that the registrant was required to submit such files).    Yes  ☐    No  ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated
filer, smaller reporting company or an emerging growth company. See the definitions of large accelerated filer, accelerated filer, smaller reporting company, and emerging growth company in Rule 12b-2 of the Exchange Act. (Check one):  Large accelerated filer

☒

Accelerated filer

☐Non-accelerated filer

☐

Smaller reporting company

☐Emerging growth company

☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act).    Yes  ☐    No  ☒ Number of units of beneficial interest outstanding at
May 8, 2023: 14,579,345




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TABLE OF CONTENTS  PART I  FINANCIAL INFORMATIONItem 1. Financial Statements


3Item 2. Trustees Discussion and Analysis of Financial Condition and Results
 of Operations


13Item 3. Quantitative and Qualitative Disclosures About Market
Risk


17Item 4. Controls and Procedures


17PART II  OTHER INFORMATIONItem 1. Legal Proceedings


18Item 1A. Risk Factors


18Item 6. Exhibits


18SIGNATURES


19EX-31EX-32




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SABINE ROYALTY TRUST PART I  FINANCIAL INFORMATION Item 1. Financial Statements. The condensed financial statements included herein have been prepared by Argent Trust Company, as Trustee (the Trustee) of Sabine
Royalty Trust (the Trust), pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in annual financial statements have been condensed or omitted
pursuant to such rules and regulations, although the Trustee believes that the disclosures are adequate to make the information presented not misleading. The condensed financial statements of the Trust presented herein are unaudited. It is suggested
that these condensed financial statements and notes thereto be read in conjunction with the financial statements and notes thereto included in the Trusts latest annual report on Form 10-K. The December
31, 2022 condensed statement of assets, liabilities and trust corpus is derived from the audited statement of assets, liabilities and trust corpus as of that date. In the opinion of the Trustee, all adjustments necessary to present fairly the
assets, liabilities and trust corpus of the Trust as of March 31, 2023, and the distributable income and the changes in trust corpus for the three-month periods ended March 31, 2023 and 2022, have been included. The distributable income
for such interim periods is not necessarily indicative of the distributable income for the full year. Unless specified otherwise, all amounts included herein are presented in US dollars. The condensed financial statements as of March 31, 2023, and for the three-month periods ended March 31, 2023 and 2022, included herein, have been
reviewed by Weaver and Tidwell, L.L.P., an independent registered public accounting firm, as stated in their report appearing herein.  PageReport of Independent Registered Public Accounting Firm (PCAOB ID Number 410)


4Condensed Statement of Assets, Liabilities, and Trust Corpus


5Condensed Statement of Distributable Income (Unaudited)


6Condensed Statement of Changes in Trust Corpus (Unaudited)


7 All financial statement schedules are omitted as they are inapplicable or the required information has been included in the
consolidated financial statements or notes thereto.   3




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Report of Independent Registered Public Accounting Firm To the Holders of Sabine Royalty Trust and Argent Trust
Company, Trustee Dallas, Texas Results of Review of
Interim Financial Statements We have reviewed the accompanying condensed statements of assets, liabilities and trust corpus of Sabine Royalty Trust
(the Trust) as of March 31, 2023 and the related condensed statements of distributable income and changes in trust corpus for the three-month periods ended March 31, 2023 and 2022, and the related notes (collectively referred to as the
condensed interim financial statements or interim financial information). Based on our reviews, we are not aware of any material modifications that should be made to the accompanying condensed interim financial statements for them to be
in conformity with the modified cash basis of accounting, which is a comprehensive basis of accounting other than accounting principles generally accepted in the United States of America. As described in Note 2 to the condensed interim financial statements, these condensed interim financial statements were prepared on a modified cash basis of
accounting, which is a comprehensive basis of accounting other than accounting principles generally accepted in the United States of America. We have
previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the statement of assets, liabilities, and trust corpus as of December 31, 2022, and the related statements of
distributable income and changes in trust corpus for the year then ended (not presented herein); and in our report dated February 28, 2023 we expressed an unqualified opinion on those financial statements. In our opinion, the information set forth
in the accompanying condensed statement of assets, liabilities and trust corpus as of December 31, 2022, is fairly stated, in all material respects, in relation to the statement of assets, liabilities, and trust corpus from which it has been
derived. Basis for Review Results These condensed
interim financial statements are the responsibility of the Trustee. We conducted our reviews in accordance with the standards of the PCAOB. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to
the Trust in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we
do not express such an opinion. WEAVER AND TIDWELL, L.L.P. Dallas, Texas May 8, 2023  4




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SABINE ROYALTY TRUST CONDENSED STATEMENTS OF ASSETS, LIABILITIES, AND TRUST CORPUS  Note


March 31,2023(UNAUDITED)


December 31,2022AssetsCash and short-term investments





$
14,436,850


$
16,170,491Royalty interests in oil and gas properties (less accumulated amortization of $22,288,539 and $
22,289,693 at March 31, 2023 and December 31, 2022)






106,646



112,492TOTAL





$
14,543,496


$
16,282,983Liabilities and Trust CorpusTrust expenses payable


4


$
458,952


$
210,757Other payables


4



1,689,051



4,662,7202,148,003



4,873,477Contingencies


6Trust corpus  14,579,345 units of beneficial interest authorized and outstanding






12,395,493



11,409,506TOTAL





$
14,543,496


$
16,282,983 The accompanying notes are an integral part of these condensed financial statements.   5




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SABINE ROYALTY TRUST CONDENSED STATEMENTS OF DISTRIBUTABLE INCOME (UNAUDITED)  Three Months EndedMarch 31,Notes


2023


2022Royalty Income





$
27,135,286


$
23,930,315Interest Income






247,016



2,748Total






27,382,302



23,933,063General and administrative expenses






(1,105,802
)


(918,583
)Distributable Income





$
26,276,500


$
23,014,480Distributable Income per unit (14,579,345 units)


1,3,5


$
1.80


$
1.58 The accompanying notes are an integral part of these condensed financial statements.   6




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SABINE ROYALTY TRUST CONDENSED STATEMENTS OF CHANGES IN TRUST CORPUS (UNAUDITED)  Three Months EndedMarch 31,Note



2023



2022Trust corpus, beginning of period





$
11,409,506


$
14,909,990Amortization of royalty interests






(5,846
)


(6,799
)Distributable income






26,276,500



23,014,480Distributions


3



(25,284,667
)


(25,052,127
)Trust corpus, end of period





$
12,395,493


$
12,865,544Distributions per unit (14,579,345 units)


3


$
1.73


$
1.72 The accompanying notes are an integral part of these condensed financial statements.   7




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##### Table of Contents

SABINE ROYALTY TRUST NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) 1. TRUST
ORGANIZATION AND PROVISIONS Sabine Royalty Trust (the Trust) was established by the Sabine Corporation Royalty Trust
Agreement (the Trust Agreement), made and entered into effective as of December 31, 1982, to receive a distribution from Sabine Corporation (Sabine) of royalty and mineral interests, including landowners royalties,
overriding royalty interests, minerals (other than executive rights, bonuses and delay rentals), production payments and any other similar, nonparticipator interests, in certain producing and proved undeveloped oil and gas properties located in
Florida, Louisiana, Mississippi, New Mexico, Oklahoma and Texas (the Royalties). Certificates evidencing units of beneficial
interest (the Units) in the Trust were mailed on December 31, 1982, to Sabines shareholders of record on December 23, 1982, on the basis of one Unit for each share of Sabines outstanding common stock. In connection with the
transfer of the Royalties to the Trust upon its formation, Sabine had reserved to itself all executive rights, including rights to execute leases and to receive bonuses and delay rentals. In May 1988, Sabine was acquired by Pacific Enterprises
(Pacific), a California corporation. Through a series of mergers, Sabine was merged into Pacific Enterprises Oil Company (USA) (Pacific (USA)), a California corporation which in turn was merged and consolidated into Sempra
Energy, effective January 1, 1993. On January 1, 1993, Pacific (USA) completed the sale of substantially all its producing oil and gas assets to a third party. The sale did not include executive rights relating to the Royalties and Pacific
(USA)s ownership of such rights was not affected by the sale. Those rights were transferred to Sempra Energy as a result of the merger. As of August 1, 2006, Sempra sold its various interests and rights to Providence Energy Corporation
(PEC). PEC in turn transferred its interests and rights to RJ Holdings, Inc. (RJH) as of June 1, 2021. The acquisitions and mergers had no effect on the Units. RJ Holdings, Inc. as successor to Sabine, has assumed by
operation of law all of Sabines rights and obligations with respect to the Trust. References herein to RJ Holdings, Inc. shall be deemed to include Sabine Corporation where appropriate. The Units are listed and traded on the New York Stock
Exchange. Argent Trust Company (the Trustee), acts as trustee of the Trust. Effective October 19, 2017, Simmons First
National Corporation (SFNC) completed its acquisition of First Texas BHC, Inc., the parent company of Southwest Bank. SFNC is the parent of Simmons Bank. SFNC merged Southwest Bank with Simmons Bank effective February 20, 2018. On November 4, 2021, Simmons Bank, as trustee, announced that it had entered into an agreement with Argent Trust Company, a Tennessee
chartered trust company (Argent), pursuant to which Simmons Bank would be resigning as trustee of the Trust and would nominate Argent as successor trustee of the Trust. Simmons Banks resignation as trustee, and Argents
appointment as successor trustee, became effective December 30, 2022. The defined term Trustee as used herein shall refer to
Southwest Bank for periods from May 30, 2014 through February 19, 2018, shall refer to Simmons Bank for periods on and after February 20, 2018 through December 29, 2022, and shall refer to Argent for periods on and after
December 30, 2022. The terms of the Trust Agreement provide, among other things, that:  

The Trust shall not engage in any business or commercial activity of any kind or acquire assets other than those
initially transferred to the Trust.  

The Trustee may not sell all or any part of its assets unless approved by the holders of a majority of the
outstanding Units in which case the sale must be for cash and the proceeds, after satisfying all existing liabilities, promptly distributed to Unit holders.  

The Trustee may establish a cash reserve for the payment of any liability that is contingent or uncertain in
amount or that otherwise is not currently due or payable.  

The Trustee will use reasonable efforts to cause the Trust and the Unit holders to recognize income and expenses
on monthly record dates.  

The Trustee is authorized to borrow funds to pay liabilities of the Trust provided that such borrowings are
repaid in full before any further distributions are made to Unit holders.  

The Trustee will make monthly cash distributions to Unit holders of record on the monthly record date (see Note
3).  8




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Because of the passive nature of the Trust and the restrictions and limitations on the
powers and activities of the Trustee contained in the Trust Agreement, the Trustee does not consider any of the officers and employees of the Trustee to be officers or executive officers of the Trust as such terms are defined
under applicable rules and regulations adopted under the Securities Exchange Act of 1934. The proceeds of production from the Royalties
are receivable from hundreds of separate payors. In order to facilitate creation of the Trust and to avoid the administrative expense and inconvenience of daily reporting to Unit holders, the conveyances by Sabine of the Royalties located in five of
the six states provided for the execution of an escrow agreement by Sabine and the initial trustee of the Trust, in its capacities as trustee of the Trust and as escrow agent. The conveyances by Sabine of the Royalties located in Louisiana provided
for the execution of a substantially identical escrow agreement by Sabine and a Louisiana bank in the capacities of escrow agent and of trustee under the name of Sabine Louisiana Royalty Trust. Sabine Louisiana Royalty Trust, the sole beneficiary of
which is the Trust, was established in order to avoid uncertainty under Louisiana law as to the legality of the Trustees holding record title to the Royalties located in Louisiana. The Trust now only has one escrow agent, which is the Trustee,
and a single escrow agreement. Pursuant to the terms of the escrow agreement and the conveyances of the properties by Sabine, the
proceeds of production from the Royalties for each calendar month, and interest thereon, are collected by the Trustee, as escrow agent, and are paid to and received by the Trust only on the next monthly record date. The Trustee, as escrow agent, has
agreed to endeavor to assure that it incurs and pays expenses and fees for each calendar month only on the next monthly record date. The Trust Agreement also provides that the Trustee is to endeavor to assure that income of the Trust will be accrued
and received and expenses of the Trust will be incurred and paid only on each monthly record date. Assuming that the escrow agreement is recognized for federal income tax purposes and that the Trustee is able to control the timing of income and
expenses, as stated above, cash and accrual basis Unit holders should be treated as realizing income only on each monthly record date. The Trustee is treating the escrow agreement as effective for federal income tax purposes. However, for financial
reporting purposes, royalty and interest income are recorded in the calendar month in which the amounts are received by either the escrow agent or the Trust. Distributable income as determined for financial reporting purposes for a given quarter will not usually equal the sum of distributions made
during that quarter. Distributable income for a given quarter will approximate the sum of the distributions made during the last two months of such quarter and the first month of the next quarter.  9




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2. ACCOUNTING POLICIES Basis of Accounting The
financial statements of the Trust are prepared on the following basis and are not intended to present financial position and results of operations in conformity with accounting principles generally accepted in the United States of America
(GAAP):  

Royalty income, net of severance and ad valorem taxes, and interest income are recognized in the month in which
amounts are received by the Trust, pending verification of ownership and title.  

Trust expenses, consisting principally of routine general and administrative costs, include payments made during
the accounting period. Expenses are accrued to the extent of amounts that become payable on the next monthly record date following the end of an accounting period. Reserves for liabilities that are contingent or uncertain in amount may also be
established if considered necessary.  

Royalties that are producing properties are amortized using the unit-of-production method. This amortization is shown as a reduction of Trust corpus.  

Distributions to Unit holders are recognized when declared by the Trustee (see Note 3). The financial statements of the Trust differ from financial statements prepared in conformity with accounting principles generally accepted in
the United States of America because of the following:  

Royalty income is recognized in the month received, pending verification of ownership and title, rather than in
the month of production.  

Expenses other than those expected to be paid on the following monthly record date are not accrued.  

Amortization of the Royalties is shown as a reduction to Trust corpus and not as a charge to operating results.  

Reserves may be established for contingencies that would not be recorded under accounting principles generally
accepted in the United States of America. This comprehensive basis of accounting other than 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. Use of Estimates The
preparation of financial statements in conformity with the basis of accounting described above requires the Trustee to make estimates and assumptions that affect reported amounts of certain assets, liabilities, revenues and expenses as of and for
the reporting periods. Actual results may differ from such estimates.  10




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Distributable Income per Unit Basic distributable income per Unit is computed by dividing distributable income by the weighted average number of Units outstanding.
Distributable income per Unit assuming dilution is computed by dividing distributable income by the weighted average number of Units and equivalent Units outstanding. The Trust had no equivalent Units outstanding for any period presented. Therefore,
basic distributable income per Unit and distributable income per Unit assuming dilution are the same. New Accounting Pronouncements There are no new pronouncements that are expected to have a significant impact on the Trusts financial statements. Federal Tax Considerations The
Internal Revenue Service has ruled that the Trust is classified as a grantor trust for federal income tax purposes and therefore is not subject to federal income tax at the trust level. The Unit holders are considered, for federal income tax
purposes, to own the Trusts income and principal as though no trust were in existence. Accordingly, no provision for federal income tax expense has been made in these financial statements. The income of the Trust will be deemed to have been received or accrued by each Unit holder at the time such income is received or accrued by the Trust (on the
applicable monthly record date) if the escrow arrangement discussed in Note 1 to these financial statements is respected by the Internal Revenue Service. In the absence of the escrow arrangement, Unit holders would be deemed to receive or accrue
income from production from the royalty properties (and interest income) on a daily basis, in accordance with their method of accounting, as the proceeds from production and interest thereon were received or accrued by the Trust. The Trustee is
treating the escrow arrangement as effective for federal income tax purposes and furnishes tax information to Unit holders on that basis.  11




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State Tax Considerations The Trust holds properties located in Florida, Louisiana, Mississippi, New Mexico, Oklahoma, and Texas. Unit holders should consult the
Trusts latest annual report on Form 10-K for a summary of tax matters. Florida does not
impose an individual income tax. Florida imposes an income tax on resident and nonresident corporations (except for S corporations not subject to the built-in-gains tax
or passive investment income tax), which will apply to royalty income allocable to a corporate Unit holder from properties located within Florida. Louisiana, Mississippi, New Mexico and Oklahoma each impose an income tax applicable to both resident and nonresident individuals and/or
corporations (subject to certain exceptions for S corporations and limited liability companies, depending on their treatment for federal tax purposes), which will apply to royalty income allocable to a Unit holder from properties located within
these states. New Mexico and Oklahoma impose a withholding tax on payments to nonresidents of oil and gas proceeds derived from royalty interests. To reduce the administrative burden imposed by these rules, the Trustee has opted to allow the payors
of oil and gas proceeds to withhold on royalty payments made to the Trust. The Trust files New Mexico and Oklahoma tax returns, obtains a refund, and distributes that refund to Unit holders. Unit holders who transfer their Units before either the
New Mexico or Oklahoma tax refunds are received by the Trust or after the refunds are received but before the next Monthly Record Date will not receive any portion of the refund. As a result, such Unit holders may effectively incur a double tax
 first, through the reduced distribution received from the Trust (as withholding at the Trust level reduces the amount of cash available for distribution) and second, by the tax payment made directly to New Mexico or Oklahoma taxing
authorities with the filing of their New Mexico or Oklahoma income tax returns. Texas does not impose an individual income tax. Texas
imposes a franchise tax at a rate of 0.75% on gross revenues less certain deductions, as specifically set forth in the Texas franchise tax statutes. Entities subject to the Texas franchise tax generally include trusts and most other types of
entities that provide limited liability protection, unless otherwise exempt. Trusts that receive at least 90% of their federal gross income from certain passive sources, including royalties from mineral properties and other non-operated mineral interest income, and do not receive more than 10% of their income from operating an active trade or business generally are exempt from the Texas franchise tax as passive entities.
The Trust has been and expects to continue to be exempt from Texas franchise tax as a passive entity. Because the Trust should be exempt from Texas franchise tax at the Trust level as a passive entity, each Unit holder that is a taxable entity under
the Texas franchise tax generally will be required to include its portion of Trust revenues in its own Texas franchise tax computation. This revenue is sourced to Texas under provisions of the Texas Administrative Code providing that such income is
sourced according to the principal place of business of the Trust, which is Texas. Unit holders should consult their tax advisor
regarding the possible state tax implications of owning Trust Units. 3. DISTRIBUTION TO UNIT HOLDERS The amount to be distributed to Unit holders (Monthly Income Amount) is determined on a monthly basis. The Monthly Income Amount is
an amount equal to the sum of cash received by the Trust during a monthly period (the period commencing on the day after a monthly record date and continuing through and including the next succeeding monthly record date) attributable to the
Royalties, any reduction in cash reserves and any other cash receipts of the Trust, including interest, reduced by the sum of liabilities paid and any increase in cash reserves. Due to the fact that oil and natural gas prices have been unusually
volatile in recent history, the Trustee maintains an expense reserve. The expense reserve was established to allow the Trustee to pay general and administrative expenses even if there were not sufficient funds generated from monthly royalty income
to pay such expenses. Unit holders of record as of the monthly record date (the 15th day of each calendar month except in limited circumstances) are entitled to have distributed to them the calculated Monthly Income Amount for such month on or
before 10 business days after the monthly record date. The Monthly Income Amount per Unit is declared by the Trust no later than 10 days prior to the monthly record date. The cash received by the Trust from purchasers of the Trusts oil and gas production consists of gross sales of production less
applicable severance taxes.  12




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4. PAYABLES Payables consist primarily of royalty receipts suspended pending verification of ownership interest or title, as well as amounts the Trustee
has reserved for payments of other expenses. The Trustee believes that these payables represent an ordinary operating condition of the
Trust and that such payables will be paid or released in the normal course of business with the exception of amounts reserved for payment of expenses. 5.
SUBSEQUENT EVENTS Subsequent to March 31, 2023, the Trust declared the following distributions:  Notification
Date

Monthly RecordDate


PaymentDate


Distributionper UnitApril 6, 2023


April 17, 2023



April 28, 2023


$
0.699540May 4, 2023


May 15, 2023



May 30, 2023


$
0.499000 6. CONTINGENCIES Contingencies related to the royalty properties that are unfavorably resolved would generally be reflected by the Trust as reductions to future
royalty income payments to the Trust with corresponding reductions to cash distributions to Unit holders. The Trustee is not aware of any such items as of March 31, 2023. *    *    *    *    * Item 2. Trustees Discussion and Analysis of Financial Condition and Results of Operations. Liquidity and Capital Resources The Trust makes
monthly distributions to the holders of Units of the excess of the preceding months royalty income received over expenses incurred. Upon receipt, royalty income is invested in short-term investments until its subsequent distribution. In
accordance with the Trust Agreement, the Trusts only long-term assets consist of royalty interests in producing and proved undeveloped oil and gas properties. Although the Trust is permitted to borrow funds if necessary to continue its
operations, borrowings are not anticipated in the foreseeable future.   13




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Commodity Prices The Trusts income and monthly distributions are heavily influenced by commodity prices. Commodity prices may fluctuate widely in response to (i)
relatively minor changes in the supply of and demand for oil and natural gas, (ii) market uncertainty and (iii) a variety of additional factors that are beyond the Trustees control. Prices increased significantly beginning in 2021
and continued into the second quarter of 2022 before falling a bit in the third quarter 2022, primarily because the restrictions due to the novel coronavirus (COVID-19) had mostly been lifted. The
price of oil and natural gas has fallen somewhat in the first quarter of 2023 due to less demand resulting from higher-than-normal inflation and an oversupply of the commodities. Factors which may affect commodity prices are discussed below and
under Item 1ARisk Factors in the Trusts Form 10-K for the year ended December 31, 2022. Factors that may impact future commodity prices, including the price of oil and natural gas,
include but are not limited to:  

political conditions in major oil producing regions, especially in the Middle East and Russia;  

worldwide economic conditions;  

weather conditions;  

trade barriers;  

public health concerns, including the COVID-19 pandemic;  

the supply and price of domestic and foreign crude oil or natural gas;  

the level of consumer demand;  

the price and availability of alternative fuels;  

the proximity to, and capacity of, transportation facilities;  

the effect of worldwide energy conservation measures; and  

the nature and extent of governmental regulation and taxation. Although we cannot predict the occurrence of events that may affect future commodity prices or the degree to which these prices will be affected, gas royalty
income for a given period generally relates to production three months prior to the period and crude oil royalty income for a given period generally relates to production two months prior to the period and will generally approximate current market
prices in the geographic region of the production at the time of production. When crude oil and natural gas prices decline, the Trust is affected in two ways. First, distributable income from the Royalty Properties is reduced. Second, exploration
and development activity by operators on the Royalty Properties may decline as some projects may become uneconomic and are either delayed or eliminated. It is impossible to predict future crude oil and natural gas price movements, and this reduces
the predictability of future cash distributions to Unit holders.   14




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##### Table of Contents

Results of Operations Distributable income consists of royalty income plus interest income plus any decrease in cash reserves established by the Trustee less general
and administrative expenses of the Trust less any increase in cash reserves established by the Trustee. Distributable income for the three months ended March 31, 2023 was $26,276,500, or $1.80 per unit. Royalty income for the three months ended
March 31, 2023 amounted to $27,135,286 while interest income was $247,016. General and administrative expenses totaled $1,105,802 for the three months ended March 31, 2023. Distributions during the period were $0.631510, $0.637300, and $0.465470 per Unit payable to Unit holders of record on January 17, February 15,
and March 15, 2023, respectively. Royalty income for the quarter ended March 31, 2023 increased approximately $3,205,000, or 13%, compared
with the first quarter of 2022. This increase was primarily the result of higher prices for oil ($1.2 million), higher production for both oil and natural gas ($2.4 million), and lower taxes and operating expenses ($0.4 million). Compared to the preceding quarter ended December 31, 2022, royalty income decreased approximately $6,707,000, or 20%, due mainly to decreases
in the price of both oil and natural gas ($9.2 million), and a decrease in the production of natural gas ($2.0 million). These decreases were offset somewhat by an increase in the production of oil ($1.9 million) and lower taxes and operating
expenses ($2.7 million). The following table illustrates average prices received for the periods discussed above and the related oil and
gas production volume:  Quarter EndedMarch 31,


March 31,


December 31,2023


2022


2022ProductionOil (Bals)


160,803



151,540



136,649Gas (Mcfs)


3,356,074



3,016,260



3,761,498Average PriceOil (per Bbl)

$
80.35


$
72.70


$
89.39Gas (per Mcf)

$
4.99


$
5.00


$
7.12   15




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##### Table of Contents

Gas royalty income received for the three months ended March 31, 2023, related primarily to
production for October through December 2022. The average price of gas reported by the Henry Hub for the same time period was $4.99 per Mcf. The average price of gas for the Henry Hub was $2.36 per Mcf for January through March 2023. Oil royalty
income for the three months ended March 31, 2023 related primarily to production for November 2022 through January 2023. The average price of oil as reported by NYMEX for that time period was $79.67 per barrel. The average price of oil was $75.93
per barrel for January through March 2023. As of May 1, 2023, the average price of gas for the Henry Hub was $2.02 per Mcf and the average price of oil reported by NYMEX was $75.65 per barrel. It is difficult to estimate future prices of oil and
gas, and any assumptions concerning future prices may prove to be incorrect. Interest income for the quarter ended March 31, 2023
increased $244,300 compared with the first quarter of 2022. Compared to the preceding quarter ended December 31, 2022, interest income increased $138,500. Changes in interest income are the result of changes in interest rates and funds available for
investment. General and administrative expenses for the quarter ended March 31, 2023 increased by approximately $187,200 compared to
the same quarter of 2022 primarily due to an increase in in the Escrow Agent/Trustee fees of approximately $160,300 and an increase due to the timing of payment of legal and professional services of approximately $37,300. These increases were
partially offset by a decrease due to the timing of payment of printing and unitholder information services of approximately $10,400. Compared to the previous quarter ended December 31, 2022, general and administrative expenses increased approximately $437,000 primarily
due to an increase in the Escrow Agent/Trustee fees of approximately $176,500, an increase due to the timing of payment of legal and professional services of approximately $158,300, an increase due to the timing of payment of the annual New York
Stock Exchange listing fee of $80,000 and an increase due to the timing of payment of printing and unitholder information services of approximately $22,200. The financial statements of the Trust differ from financial statements prepared in conformity with accounting principles generally accepted in
the United States of America because of the following:  

Royalty income is recognized in the month received, pending verification of ownership and title, rather than in
the month of production.  

Expenses other than those expected to be paid on the following monthly record date are not accrued.  

Amortization of the Royalties is shown as a reduction to Trust corpus and not as a charge to operating results.  

Reserves may be established for contingencies that would not be recorded under accounting principles generally
accepted in the United States of America. This comprehensive basis of accounting other than 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. Critical Accounting Policies and Estimates A
disclosure of critical accounting policies and the more significant judgments and estimates used in the preparation of the Trusts financial statements is included in Item 7 of the Trusts Annual Report on Form 10-K for the year ended December 31, 2022. There have been no significant changes to the critical accounting policies during the three months ended March 31, 2023. Distributable Income per Unit Basic distributable income per Unit is computed by dividing distributable income by the weighted average number of Units outstanding.
Distributable income per Unit assuming dilution is computed by dividing distributable income by the weighted average number of Units and equivalent Units outstanding. The Trust had no equivalent Units outstanding for any period presented. Therefore,
basic distributable income per Unit and distributable income per Unit assuming dilution are the same. New Accounting Pronouncements There are no new pronouncements that are expected to have a significant impact on the Trusts financial statements.   16




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Forward Looking Statements This Report includes forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934,
which are intended to be covered by the safe harbor created thereby. All statements other than statements of historical fact included in this Report are forward-looking statements. Although the Trustee believes that the expectations reflected in
such forward-looking statements are reasonable, such expectations are subject to numerous risks and uncertainties and the Trustee can give no assurance that they will prove correct. There are many factors, none of which is within the Trustees
control, that may cause such expectations not to be realized, including, among other things, factors identified in the Trusts most recent Annual Report on Form 10-K affecting oil and gas prices and the
recoverability of reserves, general economic conditions, actions and policies of petroleum-producing nations and other changes in the domestic and international energy markets. The Trust has an Internet website and has made available its annual reports on Form 10-K, quarterly
reports on Form 10-Q, current reports on Form 8-K, and amendments to such reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act at
http://www.sbr-sabine.com as soon as reasonably practicable after such information is electronically filed with or furnished to the SEC. Item 3. Quantitative and Qualitative Disclosures About Market Risk. The Trust invests in no derivative financial instruments and has no foreign operations or long-term debt instruments. Other than the
Trusts ability to periodically borrow money as necessary to pay expenses, liabilities and obligations of the Trust that cannot be paid out of cash held by the Trust, the Trust is prohibited from engaging in borrowing transactions. The amount
of any such borrowings is unlikely to be material to the Trust. The Trust periodically holds short-term investments acquired with funds held by the Trust pending distribution to Unit holders and funds held in reserve for the payment of Trust
expenses and liabilities. Because of the short-term nature of these borrowings and investments and certain limitations upon the types of such investments which may be held by the Trust, the Trustee believes that the Trust is not subject to any
material interest rate risk. Item 4. Controls and Procedures. As of the end of the period covered by this report, the Trustee carried out an evaluation of the effectiveness of the design and operation of
the Trusts disclosure controls and procedures pursuant to Exchange Act Rules 13a-15 and 15d-15. Based upon that evaluation, the Trustee concluded that the
Trusts disclosure controls and procedures are effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by the Trust in the reports that it files or submits under the Securities
Exchange Act of 1934 and are effective in ensuring that information required to be disclosed by the Trust in the reports that it files or submits under the Securities Exchange Act of 1934 is accumulated and communicated to the Trustee to allow
timely decisions regarding required disclosure. There has not been any change in the Trusts internal control over financial reporting during the period covered by this report that has materially affected, or is reasonably likely to materially
affect, the Trusts internal control over financial reporting. On May 14, 2013, the Committee of Sponsoring Organizations of the
Treadway Commission (COSO) issued an updated version of its Internal Control  Integrated Framework (the 2013 Framework). Originally, issued in 1992 (the 1992 Framework), the framework helps organizations
design, implement and evaluate the effectiveness of internal control concepts and simplify their use and application. The Trustee has transitioned fully to the Internal Control  Integrated Framework 2013 and is utilizing this framework in its
evaluation of the Trusts internal control over financial reporting.   17




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PART II  OTHER INFORMATION Item 1. Legal Proceedings. Not applicable. Item
1A. Risk Factors. Risk factors relating to the Trust are contained in Item 1A of the Trusts Annual Report on Form 10-K for the fiscal year ended December 31, 2022. No material change to such risk factors has occurred during the three months ended March 31, 2023. Items 2-5 not applicable. Item 6.
Exhibits. Exhibit Number and Description  4(a)*

Sabine Corporation Amended and Restated Royalty Trust Agreement effective as of May 22, 2014.(b)**

Amendment No. 1 to the Amended and Restated Royalty Trust Agreement of Sabine Royalty Trust, dated May 2, 2022(c)***

Sabine Corporation Louisiana Royalty Trust Agreement effective as of December 31, 1982, by and between Sabine Corporation and Hibernia National Bank in New Orleans, as trustee, and joined by InterFirst Bank Dallas, N.A., as trustee.
(P)31

Trustee Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 200232

Trustee Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002  *
Exhibit 4(a) is incorporated herein by reference to Exhibit 4(a) of the Registrants Quarterly Report on
Form 10-Q for the quarter ended June 30, 2014.  **
Exhibit 4(b) is incorporated herein by reference to Exhibit 4.1 to the Registrants Current Report on Form
8-K, filed May 6, 2022  ***
Exhibit 4(c) is incorporated herein by reference to Exhibit 4(b) of the Registrants Annual Report on Form
10-K for the year ended December 31, 1993.  (P)
Paper exhibits.  18




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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 thereunto duly authorized.  SABINE ROYALTY TRUSTBy:

Argent Trust Company, TrusteeBy:

/s/ Ron E. HooperRon E. HooperSVP, Royalty Trust Services
 Date: May 8, 2023 (The Trust has no directors or executive officers.)  19