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UNITED STATES SECURITIES AND EXCHANGE
COMMISSION Washington, D.C. 20549   Form 10-K ☒ANNUAL REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 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 No. 1-10982 Cross Timbers Royalty Trust (Exact name of registrant as specified in its charter)  Texas

75-6415930(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)c/o Corporate Trustee:
Simmons Bank 2911 Turtle Creek Blvd, Suite
850 Dallas, Texas

75219(Address of principal executive offices)

(Zip Code) Registrants telephone number, including area code (at the office of the Corporate Trustee): (855) 588-7839 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

CRT

New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities
Act.    YES  ☐        NO  ☒ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the
Act.    YES  ☐        NO  ☒ 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, a 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.  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 has filed a report on and attestation to its managements assessment of the effectiveness of its
internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit
report.  ☐ Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Act).    YES  ☐        NO  ☒ The aggregate market value of units of beneficial interest held by
non-affiliates of the registrant at June 30, 2021 (the last business day of the registrants most recently completed second fiscal quarter) was approximately $71.0 million. The number of units of beneficial interest outstanding as of March 15, 2022 was 6,000,000.




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CROSS TIMBERS ROYALTY TRUST 2021 ANNUAL REPORT ON FORM 10-K TABLE OF CONTENTS  PageGlossary of Terms


1Part IItem 1.

Business


2Item 1A.

Risk Factors


4Item 1B.

Unresolved Staff Comments


9Item 2.

Properties


9Item 3.

Legal Proceedings


19Item 4.

Mine Safety Disclosures


19Part IIItem 5.

Market for Units of the Trust, Related Unitholder Matters and Trust Purchases of Units


19Item 6.

[Reserved]


19Item 7.

Trustees Discussion and Analysis of Financial Condition and Results of Operations


20Item 7A.

Quantitative and Qualitative Disclosures about Market Risk


26Item 8.

Financial Statements and Supplementary Data


26Item 9.

Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure


39Item 9A.

Controls and Procedures


39Item 9B.

Other Information


39Item 9C.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections


39Part IIIItem 10.

Directors, Executive Officers and Corporate Governance


40Item 11.

Executive Compensation


40Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Unitholder Matters


40Item 13.

Certain Relationships and Related Transactions, and Director
Independence


40Item 14.

Principal Accountant Fees and Services


41Part IVItem 15.

Exhibits and Financial Statement Schedules


42




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Glossary of Terms The following is a glossary of certain defined terms used in this Annual Report on Form 10-K. GLOSSARY  Bbl
Barrel (of oil)  Bcf
Billion cubic feet (of natural gas)  BOE
Barrel of oil equivalent  Mcf
Thousand cubic feet (of natural gas)  MMBtu
One million British Thermal Units, a common energy measurement  net proceeds
Gross proceeds received by XTO Energy from sale of production from the underlying properties, less applicable costs, as defined in the net profits interest conveyances  net profits income
Net proceeds multiplied by the applicable net profits percentage of 75% or 90%, which is paid to the Trust by XTO Energy. Net profits income is referred to as royalty income for income tax purposes.  net profits interest
An interest in an oil and gas property measured by net profits from the sale of production, rather than a specific portion of production. The following defined net profits interests were conveyed to the Trust from the underlying properties:  90% net profits interestsinterests that entitle the Trust to receive 90% of the net proceeds from the underlying properties that are substantially all royalty or overriding royalty interests in Texas,
Oklahoma and New Mexico  75% net profits interestsinterests that entitle the Trust to receive 75% of the net proceeds from the underlying properties that are working interests in Texas and Oklahoma  royalty interest (and overriding royalty interest)
A non-operating interest in an oil and gas property that provides the owner a specified share of production without any production expense or development costs  underlying properties
XTO Energys interest in certain oil and gas properties from which the net profits interests were conveyed. The underlying properties include royalty and overriding royalty interests in producing and nonproducing properties in Texas,
Oklahoma and New Mexico, and working interests in producing properties located in Texas and Oklahoma.  working interest
An operating interest in an oil and gas property that provides the owner a specified share of production that is subject to all production expense and development costs  1




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PART I  ITEM 1.
BUSINESS Cross Timbers Royalty Trust (the Trust) is an express trust created under the laws of Texas pursuant to the Cross Timbers Royalty Trust
Indenture entered into on February 12, 1991 between predecessors of XTO Energy Inc. (formerly known as Cross Timbers Oil Company and, hereafter, XTO Energy), as grantors, and NCNB Texas National Bank, as Trustee. Simmons Bank (the
Trustee) is now the Trustee of the Trust. On November 4, 2021, the Trustee announced that it has entered into an agreement with Argent Trust Company, a Tennessee chartered trust company (Argent), pursuant to which
Simmons Bank will be resigning as trustee of the Trust and will nominate Argent as successor trustee of the Trust. The Trustees resignation as trustee, and Argents appointment as successor trustee, are subject to certain conditions set
forth in the agreement, including approval by the unitholders of the Trust and of certain other trusts of which Simmons Bank acts as trustee (or a court) of (i) Argents appointment as successor trustee and (ii) any amendments to the
indenture of the Trust and the trust agreements and indentures of the other trusts necessary to permit Argent to serve as successor trustee. The
principal office of the Trust is 2911 Turtle Creek Blvd, Suite 850, Dallas, Texas 75219. (Telephone number 855-588-7839). The Trusts internet web site is www.crt-crosstimbers.com. We make available free of charge, through our web site, our Annual Report on Form 10-K, quarterly reports on Form
10-Q, current reports on Form 8-K and all amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934.
These reports are accessible through our internet web site as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission. Information on our website is not incorporated
into this report. On February 12, 1991, the predecessors of XTO Energy conveyed defined net profits interests to the Trust under five separate
conveyances:  1.
one in each of the states of Texas, Oklahoma and New Mexico, to convey a 90% defined net profits interest carved out of
substantially all royalty and overriding royalty interests owned by the predecessors in those states, and  2.
one in each of the states of Texas and Oklahoma, to convey a 75% defined net profits interest carved out of specific
working interests owned by the predecessors in those states. The conveyance of these net profits interests was effective for
production from October 1, 1990. The net profits interests and the underlying properties are further described under Item 2, Properties. In exchange for the net profits interests conveyed to the Trust, the predecessors of XTO Energy received 6,000,000 units of beneficial interest of the
Trust. Predecessors of XTO Energy distributed units to their owners in February 1991 and November 1992, and in February 1992, sold units in the Trusts initial public offering. Units are listed and traded on the New York Stock Exchange under
the symbol CRT. XTO Energy currently is not a unitholder of the Trust. On June 25, 2010, XTO Energy became a wholly owned
subsidiary of Exxon Mobil Corporation. Under the terms of each of the five conveyances, the Trust receives net profits income from the net profits
interests generally on the last business day of each month. Net profits income is determined by XTO Energy by multiplying the net profit percentage (90% or 75%) times net proceeds from the underlying properties for each conveyance during the
previous month. Net proceeds are the gross proceeds received from the sale of production, less production costs, as defined in the conveyances. For the 90% net profits interests and the 75% net profits interests, production costs
generally include applicable property taxes, transportation, marketing and other charges. For the 75% net profits interests, production costs also include capital and operating costs paid (e.g., drilling, production and other direct costs of owning
and operating the property), monthly overhead charged by operators of the underlying properties, and a monthly overhead XTO Energy deducts as reimbursement for costs associated with monitoring these interests. If production costs exceed gross
proceeds for any conveyance, this excess is carried forward to future monthly computations of net proceeds until the excess costs (plus interest accrued as specified in the conveyances) are completely recovered. Excess production costs and related
accrued interest from one conveyance cannot be used to reduce net proceeds from any other conveyance. For further information on excess costs, see Note 7 to Financial Statements under Item 8, Financial Statements and Supplementary Data.  2




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The Trust is not liable for any production costs or liabilities attributable to the underlying
properties. If at any time the Trust receives net profits income in excess of the amount due, the Trust is not obligated to return such overpayment, but future net profits income payable to the Trust will be reduced until the overpayment, plus
interest at the prime rate, is recovered. As a working interest owner, XTO Energy can generally decline participation in any operation and allow
consenting parties to conduct such operations, as provided under the operating agreements. XTO Energy also can assign, sell, or otherwise transfer its interest in the underlying properties, subject to the net profits interests, or can abandon an
underlying property that is a working interest if it is incapable of producing in paying quantities, as determined by XTO Energy. To the extent
allowed, XTO Energy is responsible for marketing its production from the underlying properties under existing sales contracts or new arrangements on the best terms reasonably obtainable in the circumstances. Net profits income received by the Trust on or before the last business day of the month is generally attributable to oil production two months prior
and gas production three months prior. The monthly distribution amount to unitholders is determined by: Adding - 1.
net profits income received; 2.
estimated interest income to be received on the monthly distribution amount, including an adjustment for the difference
between the estimated and actual interest received for the prior monthly distribution amount; 3.
cash available as a result of reduction of cash reserves; and 4.
other cash receipts; then Subtracting - 1.
liabilities paid; and 2.
the reduction in cash available due to establishment of or increase in any cash reserve. The monthly distribution amount is distributed to unitholders of record within ten business days after the monthly record date. The monthly record date
is generally the last business day of the month. The Trustee calculates the monthly distribution amount and announces the distribution per unit at least ten days prior to the monthly record date. The Trustee may establish cash reserves for contingencies. Cash held for such reserves, as well as for pending payment of the monthly distribution
amount, may be invested in federal obligations or certificates of deposit of major banks. The Trustees function is to collect the net profits
income from the net profits interests, to pay all Trust expenses and to pay the monthly distribution amount to unitholders. The Trustees powers are specified by the terms of the indenture. The Trust cannot engage in any business activity or
acquire any assets other than the net profits interests and specific short-term cash investments. The Trust has no employees since all administrative functions are performed by the Trustee. Approximately 53% of the net profits income received by the Trust during 2021 was attributable to natural gas, as well as 46% of the Trusts
estimated future net cash flows from proved reserves at December 31, 2021 (based on estimated future net cash flows using 12-month average oil and gas prices, based on the
first-day-of-the-month price for each month in the period). There is generally a greater
demand for gas during the winter. Otherwise, Trust income is not subject to seasonal factors, nor dependent upon patents, licenses, franchises or concessions. The Trust conducts no research activities. The oil and gas industry is highly competitive in all its phases. Operators of the properties in which the Trust holds interests encounter competition
from other oil and gas companies and from individual producers and operators. Oil and natural gas are commodities, for which market prices are determined by external supply and demand factors. Current market conditions are not necessarily indicative
of future conditions.  3




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ITEM 1A.
RISK FACTORS The following factors could cause actual results to differ materially from those contained in forward-looking statements made in this report and
presented elsewhere by the Trustee from time to time. Such factors may have a material adverse effect upon the Trusts financial condition, distributable income and changes in trust corpus. The following discussion of risk factors should be read in conjunction with the financial statements and related notes included under Item 8,
Financial Statements and Supplementary Data. Because of these and other factors, past financial performance should not be considered an indication of future performance. The market price for the Trust units may not reflect the value of the net profits interests held by the Trust. The public trading price for the Trust units tends to be tied to the recent and expected levels of cash distributions on the Trust units. The amounts
available for distribution by the Trust vary in response to numerous factors outside the control of the Trust or XTO Energy, including prevailing prices for oil and natural gas produced from the underlying properties. The market price of the Trust
units is not necessarily indicative of the value that the Trust would realize if the net profits interests were sold to a third party buyer. In addition, such market price is not necessarily reflective of the fact that, since the assets of the Trust
are depleting assets, a portion of each cash distribution paid on the Trust units should be considered by investors as a return of capital, with the remainder being considered as a return on investment. There is no guarantee that distributions made
to a unitholder over the life of these depleting assets will equal or exceed the purchase price paid by the unitholder. Current and future oil and natural
gas prices fluctuate due to a number of uncontrollable factors, and any decline will adversely affect the net proceeds payable to the Trust and Trust distributions. The Trusts monthly cash distributions are highly dependent upon the prices realized from the sale of natural gas and oil. Oil and natural gas
prices can fluctuate widely on a month-to-month basis in response to a variety of factors that are beyond the control of the Trust and XTO Energy. Factors that
contribute to price fluctuations include instability in oil-producing regions, worldwide economic conditions, weather conditions, trade barriers, political instability, public health concerns, such as COVID-19, the supply of domestic and foreign oil, natural gas and natural gas liquids, consumer demand, the price and availability of alternative fuels, the proximity to, and capacity of, transportation facilities
and the effect of worldwide energy conservation measures. Moreover, government regulations, such as regulation of natural gas transportation and price controls, environmental regulations, production restrictions, or trade barriers, can affect
product prices. Oil and natural gas prices have experienced substantial fluctuations over the recent past and may vary significantly from period to period. For example, sharp decline in demand as a result of the
COVID-19 pandemic and the ensuing government responses resulted in negative oil prices briefly in 2020. Further, a significant decline in current oil or natural gas prices or lower anticipated long-term prices
could have a material adverse effect on the amount of oil and natural gas that is economic to produce, Trust net profits (and therefore cash available for distribution to unitholders) and proved reserves attributable to the Trusts interests.
Adjustments impacting volume or value could also impact the reported natural gas and oil prices. The volatility of energy prices reduces the predictability of future cash distributions to Trust unitholders. Higher production expense and/or development costs, without concurrent increases in revenue, will directly decrease the net proceeds payable to the Trust from the
properties underlying the 75% net profits interests. Production expense and development costs are deducted in the calculation of the
Trusts share of net proceeds from properties underlying the 75% net profits interests. Accordingly, higher or lower production expense and development costs, without concurrent changes in revenue, will directly decrease or increase the amount
received by the Trust for its 75% net profits interests. If development costs and production expense for properties underlying the 75% net profits in a particular state exceed the production proceeds from the properties, (as was the case with
respect to the properties underlying the Texas working interests for all of 2020 and 2021 and with respect to the properties underlying the Oklahoma working interests for the 2020 distribution months of June through December and the 2021
distribution months of January through March) the Trust will not receive net profits income for those properties until future net proceeds from production in that state exceed the total of the excess costs plus accrued interest during the deficit
period. Development activities may not generate sufficient additional revenue to repay the costs.  4




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Government action, policies or regulations designed to discourage production, reduce demand for, or promote
alternatives to oil and natural gas could impact the price of oil and natural gas produced on the properties underlying the Trusts net profits interests, directly as intended or through unintended consequences. Governments around the world are considering actions intended to reduce greenhouse gas emissions by decreasing both the supply of and the demand for oil
and natural gas products or promote alternatives. These include the adoption of cap and trade regimes, carbon taxes, trade tariffs, minimum renewable usage requirements, restrictive permitting, increased mileage and other efficiency standards,
mandates for sales of electric vehicles, mandates for use of specific fuels or technologies, and other incentives or mandates designed to support transitioning to lower-emission energy sources. Political and other actors and their agents also
increasingly seek to advance climate change objectives indirectly, such as by seeking to reduce the availability or increase the cost of financing and investment in the oil and gas sector. Depending on how policies are formulated and applied, such
policies could impact the ability and costs of the operators of the properties underlying the Trusts net profits interests to supply products, demand for their products, or the competitiveness of hydrocarbon-based products, which in turn,
could reduce net proceeds to the Trust. Any policy that increases the costs for operators of the properties underlying the net profits interests or decreased market prices could have a material impact on the distributable income of the Trust. War, terrorism, geopolitical hostilities, and other military actions or political instability could adversely affect Trust distributions or the market price of
the Trust units. There are a number of national and international events that could cause instability in global financial and energy
markets. War, terrorist attacks and the threat of war or terrorist attacks, whether domestic or foreign, as well as other military or similar actions taken in response, impact the demand for and price of oil and natural gas in unpredictable ways,
including increasing volatility in pricing. Actual or threatened acts of war, terrorism and other geopolitical hostilities could adversely affect Trust distributions or the market price of the Trust units in unpredictable ways, including through the
disruption of fuel supplies and markets, increased volatility in oil and natural gas prices, or the possibility that the infrastructure on which the operators of the underlying properties rely could be a direct target or an indirect casualty of such
an event. Proved reserve estimates depend on many assumptions that may turn out to be inaccurate. Any material inaccuracies in reserve estimates or
underlying assumptions could cause the quantities and net present value of the reserves to be overstated. Estimating proved oil and gas
reserves is inherently uncertain. Petroleum engineers consider many factors and make assumptions in estimating reserves and future net cash flows. Those factors and assumptions include historical production from the area compared with production
rates from similar producing areas, the effects of governmental regulation, assumptions about future commodity prices, production expense and development costs, taxes and capital expenditures, the availability of enhanced recovery techniques and
relationships with landowners, working interest partners, pipeline companies and others. Lower oil and gas prices generally cause lower estimates of proved reserves. Ultimately, actual production, revenues and expenditures for the underlying
properties will vary from estimates and those variances could be material. Because the Trust owns net profits interests, it does not own a specific percentage of the oil and gas reserves. Estimated proved reserves for the net profits interests are
based on estimates of reserves for the underlying properties and an allocation method that considers estimated future net proceeds and oil and gas prices. Because Trust reserve quantities are determined using an allocation formula, increases or
decreases in oil and gas prices can significantly affect estimated reserves of the net profits interests. Operational risks and hazards associated with the
development and operations of the underlying properties may decrease Trust distributions. There are operational risks and hazards associated
with the production and transportation of oil and natural gas, including without limitation natural disasters, blowouts, explosions, fires, leakage of oil or natural gas, releases of other hazardous materials, mechanical failures, cratering, and
pollution. Any of these or similar occurrences could result in the interruption or cessation of operations, personal injury or loss of life, property damage, damage to productive formations or equipment, damage to the environment or natural
resources, or cleanup obligations. The operation of oil and gas properties is also subject to various laws and regulations. Non-compliance with such laws and regulations could subject the operator to
additional costs, sanctions or  5




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liabilities. The uninsured costs resulting from any of the above or similar occurrences could be deducted as a production expense or development cost in calculating the net proceeds payable to
the Trust from properties underlying the 75% net profits interests, and would therefore reduce Trust distributions by the amount of such uninsured costs. XTO
Energy and the Trustee may be subject to attempted cybersecurity disruptions from a variety of sources including state-sponsored actors. XTO
Energys defensive preparedness includes multi-layered technological capabilities for prevention and detection of cybersecurity disruptions; non-technological measures such as threat information sharing
with governmental and industry groups; internal training and awareness campaigns including routine testing of employee awareness and an emphasis on resiliency including business response and recovery. The Trustee also maintains robust cybersecurity
protocols including, but not limited to technological capabilities that prevent and detect disruptions; computer workstations and programs protected with passwords and passphrases, as well as employee training throughout the year on banking
regulations and cybersecurity followed up by testing of that knowledge. Other, non-technical protocols include securing of documents and work areas that could contain personal,
non-public information. If the measures taken to protect against cybersecurity disruptions prove to be insufficient or if proprietary data is otherwise not protected, XTO Energy, the Trustee or customers,
employees, or third parties could be adversely affected. The Trust is also exposed to potential harm from cybersecurity events that may affect the operations of third-parties, including our partners, suppliers, service providers (including providers
of cloud-hosting services for our data or applications), and customers. Cybersecurity disruptions could cause physical harm to people or the environment; damage or destroy assets; compromise business systems; result in proprietary information being
altered, lost, or stolen; result in employee, customer, or third-party information being compromised; or otherwise disrupt our business operations. We could incur significant costs to remedy the effects of a major cybersecurity disruption in
addition to costs in connection with resulting regulatory actions, litigation, or reputational harm. Future net profits may be subject to risks relating to
the creditworthiness of third parties. The Trust does not lend money and has limited ability to borrow money, which the Trustee believes
limits the Trusts risk from exposure to credit markets. The Trusts future net profits, however, may be subject to risks relating to the creditworthiness of the operators of the underlying properties and other purchasers of crude oil and
natural gas produced from the underlying properties. This creditworthiness may be impacted by the price of crude oil and natural gas. Trust unitholders and
the Trustee have no influence over the operations on, or future development of, the underlying properties. Because XTO Energy does not
operate most of the underlying properties, it is unable to significantly influence the operations or future development of the underlying properties. Neither the Trustee nor the Trust unitholders can influence or control the operation or future
development of the underlying properties. The failure of an operator to conduct its operations or discharge its obligations in a proper manner could have an adverse effect on the net proceeds payable to the Trust. Although XTO Energy and the other
operators of the underlying properties must adhere to the standard of a prudent operator, they are under no obligation to continue operating the properties. Neither the Trustee nor Trust unitholders have the right to replace an operator. The assets of the Trust represent interests in depleting assets and, if XTO Energy or any other operators developing the underlying properties do not perform
additional successful development projects, the assets may deplete faster than expected. Eventually, the assets of the Trust will cease to produce in commercial quantities and the Trust will cease to receive proceeds from such assets. The net proceeds payable to the Trust are derived from the sale of hydrocarbons from depleting assets. Future maintenance and development projects on the
underlying properties will affect the quantity of proved reserves and can offset the reduction in the depletion of proved reserves. The timing and size of these projects will depend on the market prices of oil and natural gas. If the operator(s) of
the properties do not implement additional maintenance and development projects, the future rate of production decline of proved reserves may be higher than the rate currently expected by the Trust. Because the net proceeds payable to the Trust are
derived from the sale of hydrocarbons from depleting assets, the portion of distributions to unitholders  6




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attributable to depletion may be considered a return on capital as opposed to a return on investment. Distributions that are a return of capital will ultimately diminish the depletion tax
benefits available to the unitholders, which could reduce the market value of the units over time. Eventually, the properties underlying the Trusts net profits interest will cease to produce in commercial quantities and the Trust will,
therefore, cease to receive any net proceeds therefrom. The spread of different variants of the COVID-19, or the
novel coronavirus, and the continually changing measures taken to mitigate the impact of single or multiple waves of the COVID-19 pandemic, had and may in the future have an adverse effect on
the demand for oil and gas and the business and operations of the operators of the properties underlying the net profits interests, which in turn could have an adverse effect on Trust distributions. Demand for oil and gas, and the business and operations of the operators of the properties underlying the net profits interests, has been and may in the
future be adversely impacted by the different variants of the COVID-19 pandemic and measures being taken to mitigate its impact. As past coronavirus outbreaks and government responses
escalated and de-escalated regionally and sporadically, the extent of any future impact on domestic sales of crude oil and natural gas remains unknown. The industry experienced a sharp and rapid decline in the
demand for crude oil and natural gas as the U.S. and global economy in 2020, and commodity prices, were negatively impacted as economic activity was curtailed in response to the COVID-19 pandemic, as
well as due to other geopolitical factors. At this time, the full extent to which COVID-19 will negatively impact the global economy and the oil and gas industry in the future is uncertain, but
pandemics or other significant public health events will most likely have a material adverse effect on operators business and financial condition which would likely have an adverse effect on Trust distributions. XTO Energy may transfer its interest in the underlying properties without the consent of the Trust or the Trust unitholders. XTO Energy may at any time transfer all or part of its interest in the underlying properties to another party. Neither the Trust nor the Trust
unitholders are entitled to vote on any transfer of the properties underlying the Trusts net profits interests, and the Trust will not receive any proceeds of any such transfer. Following any transfer, the transferred property will continue to
be subject to the net profits interests of the Trust, but the calculation, reporting and remitting of net proceeds to the Trust will be the responsibility of the transferee. XTO Energy or any other operator of any underlying property may abandon the property, thereby terminating the related net profits interest payable to the Trust. XTO Energy or any other operator of the underlying properties, or any transferee thereof, may abandon any well or property without the
consent of the Trust or the Trust unitholders if they reasonably believe that the well or property can no longer produce in commercially economic quantities. This could result in the termination of the net profits interest relating to the abandoned
well or property. The net profits interests can be sold and the Trust would be terminated. The Trust will also be terminated if it fails to generate
sufficient gross revenues. The Trust may sell the net profits interests if the holders of 80% or more of the outstanding Trust units approve
the sale or vote to terminate the Trust. The Trust will terminate if it fails to generate gross revenues from the underlying properties of at least $1,000,000 per year over any successive two-year period.
Sale of all of the net profits interests will terminate the Trust. The net proceeds of any sale must be for cash with the proceeds less any Trust administrative costs promptly distributed to the Trust unitholders. The sale of the remaining net profits interests and the termination of the Trust will be taxable events to the Trust unitholders. Generally, a Trust
unitholder will realize gain or loss equal to the difference between the amount realized on the sale and termination of the Trust and his adjusted basis in such units. Gain or loss realized by a Trust unitholder who is not a dealer with respect to
such units and who has a holding period for the units of more than one year will be treated as long-term capital gain or loss except to the extent of any depletion recapture amount, which must be treated as ordinary income. Other federal and state
tax issues concerning the Trust are discussed under Item 2 and Note 4 to the Trusts financial statements, which are  7




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included herein. Each Trust unitholder should consult his own tax advisor regarding Trust tax compliance matters, including federal and state tax implications concerning the sale of the net
profits interests and the termination of the Trust. Trust unitholders have limited voting rights and have limited ability to enforce the Trusts rights
against XTO Energy or any other operator of the underlying properties. The voting rights of a Trust unitholder are more limited than those
of stockholders of most public corporations. For example, there is no requirement for annual meetings of Trust unitholders or for an annual or other periodic re-election of the Trustee. Additionally, Trust
unitholders have no voting rights in XTO Energy or Exxon Mobil Corporation. The Trust indenture and related trust law permit the Trustee and the
Trust to sue XTO Energy or any other operator of the underlying properties to compel them to fulfill the terms of the conveyance of the net profits interests. If the Trustee does not take appropriate action to enforce provisions of the conveyance,
the recourse of the Trust unitholders would likely be limited to bringing a lawsuit against the Trustee to compel the Trustee to take specified actions. Trust unitholders probably would not be able to sue XTO Energy or any other operator of the
underlying properties. Financial information of the Trust is not prepared in accordance with U.S. GAAP. The financial statements of the Trust are prepared on a modified cash basis of accounting, which is a comprehensive basis of accounting other than U.S.
generally accepted accounting principles, or U.S. GAAP. Although this basis of accounting is permitted for royalty trusts by the Securities and Exchange Commission, the financial statements of the Trust differ from U.S. GAAP financial statements
because net profits income is not accrued in the month of production, expenses are not recognized when incurred and cash reserves may be established for certain contingencies that would not be recorded in U.S. GAAP financial statements. The limited liability of Trust unitholders is uncertain. The Trust unitholders are not protected from the liabilities of the Trust to the same extent that a shareholder would be protected from a
corporations liabilities. The structure of the Trust does not include the interposition of a limited liability entity such as a corporation or limited partnership which would provide further limited liability protection to Trust unitholders.
While the Trustee is liable for any excess liabilities incurred if the Trustee fails to ensure that such liabilities are to be satisfied only out of Trust assets, under the laws of Texas, which are unsettled on this point, a unitholder may be
jointly and severally liable for any liability of the Trust if the satisfaction of such liability was not contractually limited to the assets of the Trust and the assets of the Trust and the Trustee are not adequate to satisfy such liability. As a
result, Trust unitholders may be exposed to personal liability. The Trust, however, is not liable for production costs or other liabilities of the underlying properties. Drilling oil and natural gas wells is a high-risk activity and subjects the Trust to a variety of factors that it cannot control. Drilling oil and natural gas wells involves numerous risks, including the risk that commercially productive oil and natural gas reservoirs are not
encountered. The presence of unanticipated pressures or irregularities in formations, miscalculations or accidents may cause drilling activities to be unsuccessful. In addition, there is often uncertainty as to the future cost or timing of drilling,
completing and operating wells. Further, development activities may be curtailed, delayed or canceled as a result of a variety of factors, including:  1.
reduced oil or natural gas prices; 2.
unexpected drilling conditions; 3.
title problems; 4.
restricted access to land for drilling or laying pipeline; 5.
pressure or irregularities in formations; 6.
equipment failures or accidents; 7.
adverse weather conditions, natural disasters, or public health events; and 8.
costs of, or shortages or delays in the availability of, drilling rigs, labor, tubular materials and equipment.  8




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##### Table of Contents

While these risks do not expose the Trust to liabilities of the drilling contractor or operator of the
well, they can reduce net proceeds payable to the Trust and Trust distributions by decreasing oil and gas revenues or increasing production expense or development costs from the underlying properties. Furthermore, these risks may cause the costs of
development activities on properties underlying the 75% net profits interests to exceed the revenues therefrom, thereby reducing net proceeds payable to the Trust and Trust distributions. The underlying properties are subject to complex federal, state and local laws and regulations that could adversely affect net proceeds payable to the Trust and
Trust distributions. Extensive federal, state and local regulation of the oil and natural gas industry significantly affects operations on
the underlying properties. In particular, oil and natural gas development and production are subject to stringent environmental regulations. These regulations have increased the costs of planning, designing, drilling, installing, operating and
abandoning oil and natural gas wells and other related facilities, which costs could reduce net proceeds payable to the Trust and Trust distributions. These regulations may become more demanding in the future. These regulations can often be changed
by administrative agencies without formal legislation, resulting in additional costs that can impact distributions. See Regulation in Item 2, Properties, and Greenhouse Gas Emissions and Climate Change Regulations in
Item 7, Trustees Discussion and Analysis of Financial Condition and Results of Operations. Cash held by the Trustee is not insured by the
Federal Deposit Insurance Corporation. Currently, cash held by the Trust reserved for the payment of accrued liabilities and estimated
future expenses and distributions to unitholders is typically held in a treasury fund that under normal market conditions invests exclusively in U.S. Treasury obligations. Although the funds underlying investments are obligations of the U.S.
government, the fund itself is not insured by the Federal Deposit Insurance Corporation. In the event that the fund becomes insolvent, the Trustee may be unable to recover any or all such cash from the insolvent fund. Any loss of such cash may have
a material adverse effect on the Trusts cash balances and any distributions to unitholders. The tax treatment of an investment in Trust units could be
affected by recent and potential legislative changes, possibly on a retroactive basis. U.S. federal tax reform legislation informally known
as the Tax Cuts and Jobs Act (the TCJA) was enacted December 22, 2017, and makes significant changes to the federal income tax rules applicable to both individuals and entities, including changes to the effective tax rate on a Trust
unitholders allocable share of certain income from the Trust. The TCJA is complex, thus, Trust unitholders should consult their tax advisor regarding the TCJA and its effect on an investment in Trust units. In addition, the current
administration has generally proposed repealing fossil fuel tax subsidies, which could impact certain tax benefits available to Trust unitholders. Any modification to the U.S. federal income tax laws or interpretations thereof (including administrative guidance relating to the TCJA) may be applied
retroactively and could adversely affect our business, financial condition or results of operations. The Trust is unable to predict whether any changes or other proposals will ultimately be enacted, or whether any adverse interpretations will be
used. Any such changes or interpretations could negatively impact the value of an investment in the Trust units.  ITEM 1B.
UNRESOLVED STAFF COMMENTS As of December 31, 2021, the Trust did not have any unresolved Securities and Exchange Commission staff comments.  ITEM 2.
PROPERTIES The net profits interests are the principal asset of the Trust. The Trustee cannot acquire any other asset, with the exception of certain short-term
investments as specified under Item 1, Business. The Trustee is prohibited from selling any portion of the net profits interests unless approved by holders of at least 80% or more of the outstanding Trust units or at such time as Trust gross
revenue is less than $1 million for two successive years.  9




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##### Table of Contents

The net profits interests comprise:  1.
the 90% net profits interests which are carved from:  a)
producing royalty and overriding royalty interest properties in Texas, Oklahoma and New Mexico; and  b)
11.11% nonparticipating royalty interests in nonproducing properties located primarily in Texas and Oklahoma; and  2.
the 75% net profits interests which are carved from working interests in four properties in Texas and three properties in
Oklahoma. All underlying royalties, underlying nonproducing royalties and underlying working interest properties are currently
owned by XTO Energy or other affiliated companies of ExxonMobil. XTO Energy may sell all or any portion of the underlying properties at any time, subject to and burdened by the net profits interests. The underlying properties include over 2,900 producing properties with established production histories in Texas, Oklahoma and New Mexico. The average reserve-to-production index for the underlying properties as of December 31, 2021 is approximately eleven years. This index is calculated using total proved reserves and
estimated 2022 production for the underlying properties. The projected 2022 production is from proved developed producing reserves as of December 31, 2021. Based on estimated future net cash flows at
12-month average oil and gas prices, based on the
first-day-of-the-month price for each month in the period, the future net cash flows from
proved reserves of the underlying properties are approximately 55% oil and 45% natural gas. The underlying properties also include certain nonproducing properties in Texas, Oklahoma and New Mexico that are primarily mineral interests. Producing Acreage, Wells and Drilling 90% Net Profits
Interests Underlying Royalties.Royalty and overriding royalty properties underlying the 90% net profits interests represent approximately 88% of the discounted future net cash flows from Trusts net
profits interests proved reserves at December 31, 2021. Approximately 51% of the discounted future net cash flows from the 90% net profits interests are from gas reserves, totaling 12.6 Bcf. Oil reserves allocated to the 90% net profits
interests are primarily located in West Texas and are estimated to be 1,035,000 Bbls at December 31, 2021. The underlying royalties are
royalty and overriding royalty interests primarily located in mature producing oil and gas fields. The most significant producing region in which the underlying royalties are located is the San Juan Basin in northwestern New Mexico. The San Juan
Basin royalties gas production accounted for approximately 78% of the Trusts net profits interests gas sales volumes and 41% of the net profits income for 2021. The Trusts net profits interests estimated proved gas reserves from this
region totaled 9.9 Bcf at December 31, 2021, or approximately 79% of Trusts net profits interests total gas reserves at that date. XTO Energy estimates that underlying royalties in the San Juan Basin include more than 4,783 gross wells,
covering almost 60,000 gross acres. The majority of these wells are operated by Simcoe LLC or Hilcorp Energy Company. San Juan Basin oil and gas
accumulations, inclusive of the Fruitland Coal, Pictured Cliffs, Mancos, Mesaverde, and Dakota formations, have produced within the basin for over 100 years. Although these reservoirs have seen almost a century of development, numerous upside
opportunities are still available to basin operators via down-spacing drilling, recompletions, lateral drilling, and lease cost optimizations. Recently, operators have moved development toward the more liquid-rich portions of the basin through the
following:  1.
reduced dry gas drilling with a shift toward horizontal drilling in the more liquids-rich areas; 2.
lease optimization via compression upgrades, restimulations, and improved artificial lift; 3.
basinal work to rail crude oil out of basin to improve pricing; and 4.
stable gas pipeline infrastructure. The underlying royalties also include royalties in the Sand Hills field of Crane County, Texas. Most of these properties are operated by major
operators. The Sand Hills field was discovered in 1931 and includes production from three main intervals, the Tubb, McKnight and Judkins. Development potential for the field includes recompletions and additional infill drilling.  10




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##### Table of Contents

The underlying royalties contain approximately 277,517 gross (approximately 31,220 net) producing
acres. Well counts for the underlying royalties cannot be provided because information regarding the number of wells on royalty properties is generally not made available to royalty interest owners. Because the properties related to the 90% net profits interests are primarily royalty interests and overriding royalty interests, the net profits income
from these properties is not reduced by production or development costs, with the exception of a limited number of wells that were converted to working interest after conveyance that incur production and development costs. Additionally, net profits
income from these interests cannot be reduced by any excess costs of the 75% net profits interests. The Trust, therefore, should generally receive monthly net profits income from these interests, as determined by oil and gas sales volumes and
prices. 75% Net Profits Interests Underlying Working Interest Properties.Underlying the 75% net
profits interests are working interests in seven large, predominantly oil-producing properties in Texas and Oklahoma operated primarily by established oil companies. These properties are located in mature
fields undergoing secondary or tertiary recovery operations. Most of the oil produced from the 75% net profits interest properties is sour oil, which is sold at a discount to NYMEX sweet crude oil prices. XTO Energy is the operator of the Hewitt
Unit, which is one of the properties underlying the Oklahoma 75% net profits interests. With the exception of the Hewitt Unit, XTO Energy and ExxonMobil generally have little influence or control over operations on any of these properties. Trusts net profits interests proved reserves from the 75% net profits interests are almost entirely oil, estimated to be
approximately 243,000 Bbls and represent approximately 12% of the discounted future net cash flows of the Trusts net profits interests proved reserves at December 31, 2021. The underlying working interest properties are detailed below:  Ownership byXTO EnergyUnit

County/State

Operator

WorkingInterest


RevenueInterestNorth Cowden

Ector/Texas

Occidental Permian Ltd.


1.7
%


1.4
%North Central Levelland

Hockley/Texas

Apache Corporation


3.2
%


2.1
%Penwell

Ector/Texas

Cross Timbers Energy, LLC


5.2
%


4.6
%Sharon Ridge Canyon

Borden/Texas

OXY USA WTP LP


4.3
%


2.8
%Hewitt

Carter/Oklahoma

XTO Energy Inc.


11.3
%


9.9
%Wildcat Jim

Carter/Oklahoma

Citation Oil & Gas Corporation


8.6
%


7.5
%South Graham Deese Sand

Carter/Oklahoma

Scout Energy Management LLC


9.2
%


7.4
% The underlying working interest properties consist of 3,834 gross (3,036 net) producing acres. As of December 31,
2021, there were 1,277 gross (67.3 net) productive oil wells. There were two gross (0.23 net) wells drilled in 2021, six gross (0.68 net) wells in progress, and no wells drilled in 2020 or 2019. As operator of the Hewitt Unit, XTO Energy has advised
the Trustee that it has plans to drill six wells in 2022. Because these underlying properties are working interests, production expense and
development costs are deducted in calculating net profits income from the 75% net profits interests. As a result, net profits income from these interests is affected by the level of maintenance and development activity on these underlying
properties. Net profits income is also dependent upon oil and gas sales volumes and prices and is subject to reduction for any prior period excess costs. Total underlying 2021 development costs were $152,884, up 27% from 2020 development costs of $120,684. Development costs were higher in 2021 primarily
because of increased recompletion costs in the Hewitt Unit. As reported to XTO Energy by unit operators in February of each year, underlying
budgeted development costs were $1.0 million for 2021 and $2.1 million for 2020 ($0.7 million and $1.6 million, respectively, net to the Trust). Actual development costs often differ from amounts budgeted because of changes in
product prices and other factors that may affect the timing or  11




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##### Table of Contents

selection of projects. Also, costs are deducted in the calculation of Trust net profits income several months after they are incurred by the operator. Unit operators have reported underlying
budgeted costs of approximately $1.4 million for 2022 and $1.6 million for 2023 ($1.0 million and $1.2 million, respectively, net to the Trust). Changes in oil or natural gas prices could impact future development plans on the
underlying properties. 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 profits income from other conveyances. Remaining cumulative excess costs for the Texas working interest conveyance totaled $6,304,806 ($4,728,605 net to the Trust), including accrued interest of
$0.5 million ($0.4 million net to the Trust) for the period ended December 31, 2021. For information regarding the effect of excess costs on Trust net profits income, see Note 7 to Financial Statements under Item 8, including the
excess cost balance and accrued interest by conveyance, Financial Statements and Supplementary Data. Estimated Proved Reserves and Future Net Cash Flows The following are proved reserves of the underlying properties, as estimated by independent engineers, and proved reserves and future net cash
flows from proved reserves of the net profits interests, based on an allocation of these reserves, at December 31, 2021:  Underlying Properties


Net Profits InterestsProved Reserves (a)


Proved Reserves (a) (b)


Future Net Cash Flowsfrom Proved Reserves (a) (c)Oil


Gas


Oil


Gas(in thousands)

(Bbls)


(Mcf)


(Bbls)


(Mcf)


Undiscounted


Discounted90% Net Profits InterestsSan Juan Basin


13



10,961



12



9,865


$
47,697


$
25,089Other New Mexico


35



73



31



71



2,283



1,139Texas


1,048



1,650



943



1,486



65,938



30,947Oklahoma


55



1,299



49



1,128



9,030



5,051Total


1,151



13,983



1,035



12,550



124,948



62,22675% Net Profits InterestsTexas


238



2















Oklahoma


1,111



323



243



71



14,809



8,822Total


1,349



325



243



71



14,809



8,822TOTAL


2,500



14,308



1,278



12,621


$
139,757


$
71,048  (a)
Based on 12-month average oil price of $63.88 per Bbl and $5.68 per Mcf for gas,
based on the first-day-of-the-month price for each month in the period.  (b)
Since the Trust has defined net profits interests, the Trust does not own a specific percentage of the oil and gas
reserves. Oil and gas reserves are allocated to the net profits interests by dividing Trust net cash inflows by 12-month average oil and gas prices. As such, reserves allocated to the Trust have been reduced
to reflect recovery of the Trusts portion of applicable production and development costs, which includes excess costs. Any conveyance where costs exceed revenues will result in zero allocated net profits interests reserves for that conveyance.  (c)
Before income taxes since future net cash flows are not subject to taxation at the trust level. Future net cash flows are
discounted at an annual rate of 10%.  12




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##### Table of Contents

Proved reserves at December 31, 2021 consist of the following:  Underlying Properties


Net Profits InterestsProved Reserves


Proved Reserves(in thousands)

Gas (Mcf)


Oil (Bbls)


Gas (Mcf)


Oil (Bbls)Proved developed producing reserves


2,500



14,308



1,278



12,621Proved undeveloped reserves














Proved developed non-producing reserves














Total proved reserves


2,500



14,308



1,278



12,621 The process of estimating oil and gas reserves is complex and requires significant judgment as discussed in
Item 1A, Risk Factors, and is performed by XTO Energy. As a result, XTO Energy has developed internal policies and controls for estimating and recording reserves. XTO Energys policies regarding booking reserves require proved
reserves to be in compliance with the SEC definitions and guidance. XTO Energys policies assign responsibilities for compliance in reserves bookings to its reserve engineering group and require that reserve estimates be made by qualified
reserves estimators, as defined by the Society of Petroleum Engineers standards. All qualified reserves estimators are required to receive education covering the fundamentals of SEC proved reserves assignments. The XTO Energy reserve engineering group reviews reserve estimates with third-party petroleum consultants, Miller and Lents, Ltd., independent petroleum engineers.
Miller and Lents, Ltd. estimated oil and gas reserves attributable to the underlying properties as of December 31, 2021. Miller and Lents primary technical person responsible for calculating the Trusts reserves has more than ten
years of experience as a reserve engineer. The estimated reserves for the underlying properties are then used by XTO Energy to calculate the estimated oil and gas reserves attributable to the net profits interests. Numerous uncertainties are
inherent in estimating reserve volumes and values, and such estimates are subject to change as additional information becomes available. The reserves actually recovered and the timing of production of these reserves may be substantially different
from the original estimates. Reserve quantities and revenues for the net profits interests were estimated from projections of reserves and revenues
attributable to the underlying properties. Since the Trust has defined net profits interests, the Trust does not own a specific percentage of the oil and gas reserves. Oil and gas reserves are allocated to the net profits interests by dividing Trust
net cash inflows by 12-month average oil and gas prices. Oil and Natural Gas Production Trust production is recognized in the period net profits income is received, which is the month following receipt by XTO Energy, and generally two months
after the time of oil production and three months after gas production. Oil and gas sales volumes are allocated to the net profits interests based upon a formula that considers oil and gas prices and the total amount of production expense and
development costs. As such, the underlying property production volume changes may not correlate with the Trusts net profit share of those volumes in any given period.  13




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##### Table of Contents

Oil and gas production and average sales prices attributable to the underlying properties and the net
profits interests for each of the three years ended December 31 were as follows:  90% Net Profits Interests


75% Net Profits Interests


Total2021


2020


2019


2021


2020


2019


2021


2020


2019ProductionUnderlying PropertiesOil - Sales (Bbls)


50,522



67,762



50,928



42,080



131,668



127,413



92,602



199,430



178,341Average per day (Bbls)


139



185



140



115



360



349



254



545



489Gas - Sales (Mcf)


930,143



1,231,360



1,326,336



9,207



9,998



10,444



939,350



1,241,358



1,336,780Average per day (Mcf)


2,549



3,364



3,634



25



27



28



2,574



3,391



3,662Net Profits InterestsOil - Sales (Bbls)


39,205



56,676



43,453



21,464



13,517



7,606



60,669



70,193



51,059Average per day (Bbls)


107



155



119



59



37



21



166



192



140Gas - Sales (Mcf)


826,939



1,347,518



1,171,285



517



289



1,076



827,456



1,347,807



1,172,361Average per day (Mcf)


2,266



3,682



3,209



1



1



3



2,267



3,683



3,212Average Sales PriceOil (per Bbl)

$
60.22


$
45.31


$
54.68


$
68.85


$
38.38


$
52.04


$
64.14


$
40.74


$
52.79Gas (per Mcf)

$
5.80


$
2.52


$
3.69


$
19.55


$
7.57


$
10.72


$
5.93


$
2.56


$
3.74Average ProductionCost per BOE(a)(b)

$
1.10


$
0.07


$
0.26


$
99.28


$
32.32


$
41.78


$
18.28


$
10.65


$
13.63  (a)
Total average production cost per BOE includes production from the properties underlying the 90% net profits interests,
which are substantially all royalty and overriding royalty interests with insignificant production costs.  (b)
75% Net Profits Interests average production cost per BOE for 2021 is inflated due to the reversal of oil sales volumes
by the oil purchaser of the North Cowden Unit in fourth quarter 2021. These oil sales were subsequently paid by the operator in first quarter 2022. Oil and gas production by conveyance attributable to the underlying properties for each of the three years ended December 31 were as follows:  Underlying Gas Production (Mcf)Conveyance

2021


2020


2019New Mexico royalty interest


708,689



836,918



991,262Oklahoma royalty interest


155,443



213,405



191,611Texas royalty interest


66,011



181,038



143,463Texas working interest


7,295



9,379



7,420Oklahoma working interest


1,912



618



3,024Total


939,350



1,241,358



1,336,780Underlying Oil Production (Bbls)Conveyance

2021


2020


2019New Mexico royalty interest


6,263



4,961



3,236Oklahoma royalty interest


11,260



22,102



15,729Texas royalty interest


32,999



40,699



31,963Texas working interest (a)


(45,292
)


41,061



42,537Oklahoma working interest


87,372



90,607



84,876Total


92,602



199,430



178,341  (a)
Texas working interest underlying oil production for 2021 is negative due to the reversal of oil sales volumes by the oil
purchaser of the North Cowden Unit in fourth quarter 2021. These oil sales were subsequently paid by the operator in first quarter 2022.  14




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##### Table of Contents

Nonproducing Acreage The underlying nonproducing royalties contain approximately 215,000 gross (approximately 21,000 net) acres in Texas, Oklahoma and New Mexico which were
nonproducing at the date of the Trusts creation. The Trust is entitled to 10% of oil and gas production attributable to the underlying mineral interests, but is not entitled to delay rental payments or lease bonuses. There has been no
significant development of such nonproducing acreage since the Trusts creation. Pricing and Sales Information Oil and gas are generally sold from the underlying properties at market-sensitive prices. The majority of sales from the underlying working interest
properties are to major oil and gas companies. Information about purchasers of oil and gas from royalty properties is generally not provided by operators to XTO Energy as a royalty owner, or to the Trust. Regulation Natural Gas Regulation The interstate transportation and sale for resale of natural gas is subject to federal regulation, including transportation and storage rates charged,
tariffs, and various other matters, by the Federal Energy Regulatory Commission. Federal price controls on wellhead sales of domestic natural gas terminated on January 1, 1993. While natural gas prices are currently unregulated, Congress
historically has been active in the area of natural gas regulation. On August 8, 2005, Congress enacted the Energy Policy Act of 2005. The Energy Policy Act, among other things, amended the Natural Gas Act to prohibit market manipulation by any
entity, to direct FERC to facilitate market transparency in the market for sale or transportation of physical natural gas in interstate commerce, and to significantly increase the penalties for violations of the Natural Gas Act, the Natural Gas
Policy Act of 1978, or FERC rules, regulations or orders thereunder. FERC has promulgated regulations to implement the Energy Policy Act, including enforcement rules and new annual reporting requirements for certain sellers of natural gas. It is
impossible to predict whether new legislation to regulate natural gas might be proposed, what proposals, if any, might actually be enacted by Congress or the various state legislatures, and what effect, if any, such proposals might have on the
operations of the underlying properties. Federal Regulation of Oil Sales of crude oil, condensate and natural gas liquids are not currently regulated and are made at market prices. The net price received from the sale of
these products is affected by market transportation costs. Under rules adopted by FERC effective January 1995, interstate oil pipelines can change rates based on an inflation index, though other rate mechanisms may be used in specific circumstances. On December 19, 2007, the President signed into law the Energy Independence & Security Act of 2007 (PL
110-140). The EISA, among other things, prohibits market manipulation by any person in connection with the purchase or sale of crude oil, gasoline or petroleum distillates at wholesale in contravention of such
rules and regulations that the Federal Trade Commission may prescribe, directs the Federal Trade Commission to enforce the regulations, and establishes penalties for violations thereunder. XTO Energy has advised the Trustee that it cannot predict
the impact of future government regulation on any crude oil, condensate or natural gas liquids facilities, sales or transportation transactions. Environmental Regulation Companies
that are engaged in the oil and gas industry are affected by federal, state and local laws regulating the discharge of materials into the environment. Those laws may impact operations of the underlying properties. No material expenses have been
incurred on the underlying properties in complying with environmental laws and regulations. XTO Energy does not expect that future compliance will have a material adverse effect on the Trust. There is an increased focus by local, national and international regulatory bodies on greenhouse gas (GHG) emissions and climate change. Several states
have adopted climate change legislation and regulations, and various other regulatory bodies  15




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##### Table of Contents

have announced their intent to regulate GHG emissions or adopt climate change regulations. As these regulations are under development, XTO Energy is unable to predict the total impact of the
potential regulations upon the operators of the underlying properties, and it is possible that operators of the underlying properties could face increases in operating costs in order to comply with climate change or GHG emissions legislation, which
costs could reduce net proceeds payable to the Trust and Trust distributions. State Regulation The various states regulate the production and sale of oil and natural gas, including imposing requirements for obtaining drilling permits, the method of
developing new fields, the spacing and operation of wells and the prevention of waste of oil and gas resources. The rates of production may be regulated and the maximum daily production allowables from both oil and gas wells may be established on a
market demand or conservation basis, or both. Federal Income Taxes For federal income tax purposes, the Trust constitutes a fixed investment trust that is taxed as a grantor trust. A grantor trust is not subject to tax
at the trust level. The unitholders are considered to own the Trusts income and principal as though no trust were in existence. The income of the Trust is deemed to have been received or accrued by each unitholder at the time such income is
received or accrued by the Trust and not when distributed by the Trust. Impairments recorded for book purposes will not result in a loss for tax purposes for the unitholders until the loss is recognized. Because the Trust is a grantor trust for federal tax purposes, each unitholder is taxed directly on his proportionate share of income, deductions and
credits of the Trust consistent with each such unitholders taxable year and method of accounting and without regard to the taxable year or method of accounting employed by the Trust. The income of the Trust consists primarily of a specified
share of the net profits from the sale of oil and natural gas produced from the underlying properties. During 2021, the Trust incurred administration expenses and earned interest income on funds held for distribution and for the cash reserve
maintained for the payment of contingent and future obligations of the Trust. The Trust generally allocates its items of income, gain, loss and
deduction between transferors and transferees of the units each month based upon the ownership of the Trust units on the monthly record date, instead of on the basis of the date a particular unit is transferred. It is possible that the IRS could
disagree with this allocation method and could assert that income and deductions of the Trust should be determined and allocated on a daily or prorated basis, which could require adjustments to the tax returns of the unitholders affected by the
issue and result in an increase in the administrative expense of the Trust in subsequent periods. The net profits interests constitute
economic interests in oil and gas properties for federal tax purposes. Each unitholder is entitled to amortize the cost of the units through cost depletion over the life of the net profits interests or, if greater, through percentage
depletion equal to 15% of gross income, limited to 100% of the net income from such net profits interests. Unlike cost depletion, percentage depletion is not limited to a unitholders depletable tax basis in the units. Rather, a unitholder is
entitled to a percentage depletion deduction as long as the applicable underlying properties generate gross income. Unitholders should compute both percentage depletion and cost depletion from each property and claim the larger amount as a deduction
on their income tax returns. Unitholders must maintain records of their adjusted basis in their Trust units (generally their cost less prior
depletion deductions), make adjustments for depletion deductions to such basis, and use the adjusted basis for the computation of gain or loss on the disposition of the Trust units. If a taxpayer disposes of any Section 1254 property (certain oil, gas, geothermal or other mineral property), and the adjusted basis of
such property includes adjustments for depletion deductions under Section 611 of the Internal Revenue Code (the Code), the taxpayer generally must recapture the amount deducted for depletion as ordinary income (to the extent of gain
realized on such disposition). This depletion recapture rule applies to any disposition of Section 1254 property that was placed in service by the taxpayer after December 31, 1986. Detailed rules set forth in Sections 1.1254-1 through 1.1254-6 of the U.S. Treasury Regulations govern dispositions of property after March 13, 1995.  16




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##### Table of Contents

Interest and net profits income attributable to ownership of units and any gain on the sale thereof
are considered portfolio income, and not income from a passive activity, to the extent a unitholder acquires and holds units as an investment and not in the ordinary course of a trade or business. Therefore, interest and net profits
income attributable to ownership of units generally may not be offset by losses from any passive activities. Under the 2017 TCJA, for tax years
beginning after December 31, 2017 and before January 1, 2026, the highest marginal U.S. federal income tax rate applicable to ordinary income of individuals is 37%, and the highest marginal U.S. federal income tax rate applicable to
long-term capital gains (generally, gains from the sale or exchange of certain investment assets held for more than one year) and qualified dividends of individuals is 20%. Under the TCJA, for such tax years, personal exemptions and miscellaneous
itemized deductions are not allowed. For such tax years, the U.S. federal income tax rate applicable to corporations is 21%, and such rate applies to both ordinary income and capital gains. Individuals may also incur expenses in connection with the acquisition or maintenance of Trust units. For tax years beginning before January 1,
2018 and after December 31, 2025, these expenses, which are different from a unitholders share of the Trusts administrative expenses discussed above, may be deductible as miscellaneous itemized deductions only to the
extent that such expenses exceed 2 percent of the individuals adjusted gross income. Under the TCJA, for tax years beginning after December 31, 2017 and before January 1, 2026, miscellaneous itemized deductions are not allowed. Section 1411 of the Code imposes a 3.8% Medicare tax on certain investment income earned by individuals, estates, and trusts. For these
purposes, investment income generally will include a unitholders allocable share of the Trusts interest and royalty income plus the gain recognized from a sale of Trust units. In the case of an individual, the tax is imposed on the
lesser of (i) the individuals net investment income from all investments, or (ii) the amount by which the individuals modified adjusted gross income exceeds specified threshold levels depending on such individuals federal
income tax filing status. In the case of an estate or trust, the tax is imposed on the lesser of (i) undistributed net investment income, or (ii) the excess adjusted gross income over the dollar amount at which the highest income tax
bracket applicable to an estate or trust begins. The difference between the per-unit taxable income for any
period and the per-unit cash distributions, if any, reported for such period is attributable to (i) items that reduce cash distributions but are not currently deductible, such as an increase in the cash
reserve maintained by the Trust for the payment of future expenditures; (ii) the current deduction of expenses that are paid with amounts previously reserved; (iii) items that increase cash distributions but do not constitute taxable
income, such as a decrease in the cash reserve maintained by the Trust and/or a return of capital; and (iv) items that constitute taxable income due to the recovery of prior period expense adjustments. Because of these types of items and when
the Trustee elects to reserve amounts from monthly distributions to maintain an administrative expense reserve, the taxable income per period frequently differs from the actual amount distributed to unitholders. Pursuant to the Foreign Account Tax Compliance Act (commonly referred to as FATCA), distributions from the Trust to foreign financial
institutions and certain other non-financial foreign entities may be subject to U.S. withholding taxes. Specifically, certain withholdable payments (including certain royalties,
interest and other gains or income from U.S. sources) made to a foreign financial institution or non-financial foreign entity will generally be subject to the withholding tax unless the foreign financial
institution or non-financial foreign entity complies with certain information reporting, withholding, identification, certification and related requirements imposed by FATCA. Foreign financial institutions
located in jurisdictions that have an intergovernmental agreement with the United States governing FATCA may be subject to different rules. The
Treasury Department issued guidance providing that the FATCA withholding rules described above generally apply to qualifying payments made after June 30, 2014. Foreign unitholders are encouraged to consult their own tax advisor regarding the
possible implications of these withholding provisions on their investment in Trust units. Some Trust units are held by middlemen, as such term is
broadly defined in U.S. Treasury Regulations (and includes custodians, nominees, certain joint owners, and brokers holding an interest for a customer in street name, collectively referred to herein as middlemen). Therefore, the Trustee
considers the Trust to be a non-mortgage widely held fixed investment trust (WHFIT) for U.S. federal income tax purposes. Simmons Bank, EIN: 71-0162300, 2911
Turtle Creek Blvd, Suite 850, Dallas, Texas, 75219, telephone number 1-855-588-7839, email address
Trustee@crt-crosstimbers.com, is the representative of the  17




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Trust that will provide tax information in accordance with applicable U.S. Treasury Regulations governing the information reporting requirements of the Trust as a WHFIT. Tax information is also
posted by the Trustee at www.crt-crosstimbers.com. Notwithstanding the foregoing, the middlemen holding Trust units on behalf of unitholders, and not the Trustee of the Trust, are solely responsible for
complying with the information reporting requirements under the U.S. Treasury Regulations with respect to such Trust units, including the issuance of IRS Forms 1099 and certain written tax statements. Unitholders whose Trust units are held by
middlemen should consult with such middlemen regarding the information that will be reported to them by the middlemen with respect to the Trust units. Unitholders should consult their tax advisor regarding Trust tax compliance matters. State Taxes All revenues from the
Trust are from sources within Texas, Oklahoma or New Mexico. Because it distributes all of its net income to unitholders, the Trust has not been taxed at the trust level in New Mexico or Oklahoma. While the Trust has not owed tax, the Trustee is
required to file an Oklahoma income tax return reflecting the income and deductions of the Trust attributable to properties located in that state, along with a schedule that includes information regarding distributions to unitholders. Oklahoma and
New Mexico tax the income of nonresidents from real property located within those states, and the Trust has been advised by counsel that such states will tax nonresidents on income from the net profits interests located in those states. Oklahoma and
New Mexico also impose a corporate income tax that may apply to unitholders organized as corporations (subject to certain exceptions for S corporations and limited liability companies, depending on their treatment for federal tax purposes). 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 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 unitholder that is a taxable entity under the Texas franchise tax will generally be required to include its Texas 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. Each unitholder should consult their own tax advisor regarding state income tax requirements, if any, applicable to such persons ownership of
Trust units. State Tax Withholding Several states have enacted legislation requiring state income tax withholding from payments to nonresident recipients of oil and gas proceeds. After
consultation with its tax counsel, the Trustee believes that it is not required to withhold on payments made to the unitholders. However, regulations are subject to change by the various states, which could change this conclusion. Should amounts be
withheld on payments made to the Trust or the unitholders, distributions to the unitholders would be reduced by the required amount, subject to the filing of a claim for refund by the Trust or unitholders for such amount. Other Regulation The petroleum
industry is also subject to compliance with various other federal, state and local regulations and laws, including, but not limited to, regulations and laws relating to environmental protection, occupational safety, resource conservation and equal
employment opportunity. XTO Energy has advised the Trustee that it does not believe that compliance with these laws will have any material adverse effect upon the unitholders.  18




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##### Table of Contents

ITEM 3.
LEGAL PROCEEDINGS Certain of the underlying properties are involved in various lawsuits and certain governmental proceedings arising in the ordinary course of business.
XTO Energy has advised the Trustee that it does not believe that the ultimate resolution of these claims will have a material effect on Trust annual distributable income, financial position or liquidity.  ITEM 4.
MINE SAFETY DISCLOSURES Not Applicable. PART
II  ITEM 5.
MARKET FOR UNITS OF THE TRUST, RELATED UNITHOLDER MATTERS AND TRUST PURCHASES OF UNITS Units of Beneficial Interest The
units of beneficial interest in the Trust are listed and traded on the New York Stock Exchange under the symbol CRT. At March 7,
2022, there were 6,000,000 units outstanding and approximately 175 unitholders of record; 5,927,591 of these units were held by depository institutions. The Trust has no equity compensation plans, nor has it purchased any units during the period covered by this report. See Item 1. Business for a description of the Trustees obligations to make monthly distributions and how the monthly
distribution amount is determined under the indenture.  ITEM 6.
[RESERVED]  19




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ITEM 7.
TRUSTEES DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Calculation of Net Profits Income The following is a summary of the calculation of net profits income received by the Trust:  Year Ended December 31(a)


Quarter Ended December 31(a)2021


2020


2021


2020Sales VolumesOil (Bbls) (b)Underlying properties


92,602



199,430



(38,259
)


50,785Average per day


254



545



(416
)


552Net profits interests


60,669



70,193



14,978



15,406Gas (Mcf) (b)Underlying properties


939,350



1,241,358



(36,372
)


293,660Average per day


2,574



3,391



(395
)


3,192Net profits interests


827,456



1,347,807



(7,443
)


500,698Average Sales PriceOil (per Bbl)

$
64.14


$
40.74


$
34.23


$
39.53Gas (per Mcf)

$
5.93


$
2.56


$
(27.98
)

$
2.31RevenuesOil sales

$
5,939,937


$
8,124,134


$
(1,309,441
)

$
2,007,781Gas sales


5,573,982



3,178,087



1,017,517



677,472Total Revenues


11,513,919



11,302,221



(291,924
)


2,685,253CostsTaxes, transportation and other


1,522,567



1,455,933



(102,481
)


481,860Production expense (c)


4,555,193



4,327,241



1,149,654



1,019,819Development costs


152,884



120,684



102,506



(3,688
)Excess costs (d)


(3,289,369
)


(509,602
)


(3,580,678
)


(9,400
)Total Costs


2,941,275



5,394,256



(2,430,999
)


1,488,591Other Proceeds (e)


(33,956
)


145,282







137,094Net Proceeds

$
8,538,688


$
6,053,247


$
2,139,075


$
1,333,756Net Profits Income

$
7,438,451


$
5,308,249


$
1,835,853


$
1,200,380  (a)
Because of the interval between time of production and receipt of net profits income by the Trust, oil and gas sales for
the year ended December 31 generally relate to oil production from November through October and gas production from October through September, while oil and gas sales for the quarter ended December 31 generally relate to oil production
from August through October and gas production from July through September.  (b)
Oil and gas sales volumes are allocated to the net profits interests by dividing Trust net cash inflows by average sales
prices. As oil and gas prices change, the Trusts allocated production volumes are impacted as the quantity of production necessary to cover expenses changes inversely with price. As such, the underlying property production volume changes may
not correlate with the Trusts allocated production volumes in any given period. Therefore, comparative discussion of oil and gas sales volumes is based on the underlying properties.  (c)
Production expense includes an overhead charge which is deducted and retained by the operator. XTO Energy deducts an
overhead charge as reimbursement for costs associated with monitoring these interests. See Note 5 to Financial Statements under Item 8, Financial Statements and Supplementary Data.  (d)
See Note 7 to Financial Statements under Item 8, Financial Statements and Supplementary Data.  (e)
See Note 10 to Financial Statements under Item 8, Financial Statements and Supplementary Data.  20




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Results of Operations Years Ended December 31, 2021 and 2020 Net profits
income for 2021 was $7,438,451 as compared with $5,308,249 for 2020. The 40% increase in net profits income from 2020 to 2021 was primarily because of higher oil and gas prices ($7.6 million) and net excess costs activity ($2.1 million), partially
offset by decreased oil and gas production ($7.1 million), increased production expenses ($0.2 million), decreased other proceeds ($0.2 million), and increased taxes, transportation and other costs ($0.1 million). During 2021 and 2020, 53% and 41%,
respectively, of net profits income was derived from gas sales. Trust administration expense was $765,317 in 2021 as compared to $639,441 in 2020.
Cash reserve activity was $0 in 2021 and 2020. As of December 31, 2021, the reserve is funded at $1,000,000. Interest income was $168 in 2021 and $5,864 in 2020. Other changes in interest income are attributable to fluctuations in net profits
income and interest rates. Net profits income is recorded when received by the Trust, which is the month following receipt by XTO Energy, and
generally two months after oil production and three months after gas production. Net profits income is generally affected by three major factors:  1.
oil and gas sales volumes; 2.
oil and gas sales prices; and 3.
costs deducted in the calculation of net profits income. Volumes Oil.    Underlying oil sales volumes decreased 54% from 2020 to 2021 primarily because of natural production decline
and the reversal of oil sales volumes by the oil purchaser of the North Cowden Unit in fourth quarter 2021. These oil sales were subsequently paid by the operator in first quarter 2022. Gas.    Underlying gas sales volumes decreased 24% from 2020 to 2021 primarily because of natural production decline
and timing of cash receipts. The estimated rate of natural production decline on the underlying oil and gas properties is approximately 6% to 8% a
year. Prices Oil.    The average oil price for 2021 was $64.14 per Bbl, up 57% from the 2020 average oil price of $40.74 per Bbl.
Oil prices are expected to remain volatile. The average NYMEX price for November 2021 through January 2022 was $77.07 per Bbl. At March 15, 2022, the average NYMEX oil price for the following 12 months was $86.91 per Bbl. Gas.    The 2021 average gas price was $5.93 per Mcf, up 132% from the 2020 average gas price of $2.56 per Mcf.
Natural gas prices are affected by natural gas liquids prices, the level of North American production, weather, crude oil prices, the U.S. economy, storage levels and export levels of liquefied natural gas. Natural gas prices are expected to remain
volatile. The average NYMEX price for fourth quarter 2021 was $4.01 per MMBtu. At March 15, 2022, the average NYMEX gas price for the following 12 months was $4.79 per MMBtu. Costs Because properties underlying the 90% net
profits interests are primarily royalty and overriding royalty interests, the calculation of net profits income from these interests includes deductions for production and property taxes, legal costs, and marketing and transportation charges. In
addition to these costs, the calculation of net profits income from the 75% net profits interests includes deductions for production expense and development costs since the related underlying properties are working interests. Net profits income is
calculated monthly for each of the five conveyances under which the net profits interests were conveyed to the Trust. If monthly costs exceed revenues for any conveyance, such excess costs must be recovered, with accrued  21




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##### Table of Contents

interest, from future net proceeds of that conveyance and cannot reduce net profits income from other conveyances. Costs have never exceeded revenues from the 90% net profits interests, nor are
they expected to in the future. For further information on excess costs, see Note 7 to Financial Statements under Item 8, Financial Statements and Supplementary Data. Total costs deducted in the calculation of net profits income were $2.9 million in 2021 and $5.4 million in 2020. The 45% decrease in costs
from 2020 to 2021 is attributable to excess costs ($2.8 million), partially offset by decreased production expense ($0.2 million) and taxes, transportation and other costs ($0.1 million). Unit operators of the properties underlying the 75% net profits interests have reported underlying budgeted development costs of approximately
$1.4 million for 2022 and $1.6 million for 2023 ($1.0 million and $1.2 million, respectively, net to the Trust), as compared to underlying budgeted development costs of $1.0 million ($0.7 million net to the Trust) and
actual development costs of $0.2 million ($0.1 million net to the Trust) for 2021. Actual development costs often differ from amounts budgeted because of changes in product prices and other factors that may affect the timing or selection
of projects. Changes in oil or natural gas prices could impact future development plans on the underlying properties. Other Proceeds The calculation of net profits income for the year ended December 31, 2021 included an expense adjustment from XTO Energy of $33,956 ($30,560 net to
the Trust). The calculation of net profits income for the year ended December 31, 2020 included $145,282 ($129,526 net to the Trust) from XTO
Energy due to interest received on past due payments of $343,852 ($308,239 net to the Trust), partially offset by an expense adjustment of $198,570 ($178,713 net to the Trust). Fourth Quarter 2021 and 2020 During the quarter ended
December 31, 2021, the Trust received net profits income totaling $1,835,853, compared with fourth quarter 2020 net profits income of $1,200,380. This 53% increase is primarily attributable to increased gas production ($7.2 million), net excess
costs activity ($2.7 million), higher oil prices ($0.5 million), and decreased taxes, transportation and other costs ($0.5 million), partially offset by lower gas prices ($6.9 million), decreased oil production ($3.1 million), decreased other
proceeds ($0.1 million), increased production expenses ($0.1 million), and increased development costs ($0.1 million). Administration expense was
$173,106 and Trust interest income was $45, resulting in fourth quarter 2021 distributable income of $1,662,792, or $0.277132 per unit. Distributable income for fourth quarter 2020 was $1,142,754, or $0.190459 per unit. Distributions to unitholders for the quarter ended December 31, 2021 were:  Record Date

Payment Date

Per UnitOctober 29, 2021

November 15, 2021

$
0.067003November 30, 2021

December 14, 2021


0.073000December 31, 2021

January 14, 2022


0.137129$
0.277132 Volumes Fourth
quarter 2021 underlying oil sales volumes were down 175% from fourth quarter 2020 primarily because of natural production decline and the reversal of oil sales volumes by the oil purchaser of the North Cowden Unit. These oil sales were subsequently
paid by the operator in first quarter 2022. Underlying gas sales volumes for fourth quarter 2021 were down 112% from fourth quarter 2020 because of timing of cash receipts, natural production decline and adjustments.  22




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##### Table of Contents

Prices The average fourth quarter 2021 oil price was $34.23 per Bbl, down 13% from the fourth quarter 2020 average price of $39.53 per Bbl primarily because of
the reversal of oil sales volumes by the oil purchaser of the North Cowden Unit. The average fourth quarter 2021 gas price was ($27.98) per Mcf, down 1311% from the fourth quarter 2020 average price of $2.31 per Mcf primarily because of adjustments
recorded in fourth quarter 2021. For further information about oil and gas prices, see Years Ended December 31, 2021 and 2020  Prices above. Costs Costs deducted in the calculation of fourth
quarter 2021 net profits income decreased $3.9 million, or 263%, from fourth quarter 2020. This decrease was primarily attributable to excess costs ($3.5 million), decreased taxes, transportation and other costs ($0.6 million), partially offset
by increased production expenses ($0.1 million) and development costs ($0.1 million). For further information about development and excess costs, see Years Ended December 31, 2021 and 2020  Costs above. Other Proceeds The calculation of net profits income
for the quarter ended December 31, 2020 included $137,094 ($123,385 net to the Trust) from XTO Energy due to interest received on past due payments of $335,664 ($302,098 net to the Trust), partially offset by an expense adjustment of $198,570
($178,713 net to the Trust). Liquidity and Capital Resources The Trusts only cash requirement is the monthly distribution of its income to unitholders, which is funded by the monthly receipt of net profits
income after payment of Trust administration expenses. The Trust is not liable for any production costs or liabilities attributable to the underlying properties. If at any time the Trust receives net profits income in excess of the amount due, the
Trust is not obligated to return such overpayment, but future net profits income payable to the Trust will be reduced by the overpayment, plus interest at the prime rate. The Trustee may establish cash reserves for certain contingencies. The Trust
may borrow funds required to pay Trust liabilities if fully repaid prior to further distributions to unitholders. The Trust does not have any
transactions, arrangements or other relationships with unconsolidated entities or persons that could materially affect the Trusts liquidity or the availability of capital resources. Greenhouse Gas Emissions and Climate Change Regulations There is an increased focus by local, national and international regulatory bodies on greenhouse gas (GHG) emissions and climate change. A number of
nations and U.S. states have adopted or are considering some form of climate change legislation and regulations, including carbon taxes, cap-and-trade policies and bans
on drilling in certain areas or in certain ways. The climate accord reached at the Conference of the Parties (COP21) in Paris set many new goals, and while many related policies are still emerging, XTO Energy has informed the Trustee that it
continues to anticipate that such policies will increase the cost of carbon dioxide emissions over time. As these regulations are under development, XTO Energy is unable to predict the total impact of the potential regulations upon the operators of
the underlying properties, and it is possible that the operators of the underlying properties could face increases in operating costs or a ban of certain types of activities in order to comply with climate change or GHG emissions legislation, which
costs could reduce or eliminate net proceeds payable to the Trust and Trust distributions. Off-Balance Sheet
Arrangements The Trust has no off-balance sheet financing arrangements. The Trust has not guaranteed the
debt of any other party, nor does the Trust have any other arrangements or relationships with other entities that could potentially result in unconsolidated debt, losses or contingent obligations. Related Party Transactions The underlying properties from
which the net profits interests were carved are currently owned by XTO Energy or other affiliated companies of ExxonMobil.  23




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##### Table of Contents

Approximately 35 of the underlying royalty interests burden working interests in properties operated
by XTO Energy. XTO Energy operates the Hewitt Unit which is one of the properties underlying the Oklahoma 75% net profits interests. Other than these properties, XTO Energy and ExxonMobil do not operate or control any of the underlying properties or
related working interests. In computing net proceeds for the 75% net profits interests (Note 3), XTO Energy deducts an overhead charge as
reimbursement for costs associated with monitoring these interests. This overhead charge at December 31, 2021 was approximately $44,269 per month, or $531,227 annually (net to the Trust of $33,202 per month, or $398,420 annually), and is
subject to annual adjustment based on an oil and gas industry index. XTO Energy deducts a monthly overhead charge for reimbursement of
administrative expenses as operator of the Hewitt Unit, which is one of the properties underlying the Oklahoma 75% net profits interests. As of December 31, 2021, this charge was approximately $30,000 per month, or $360,000 annually (net to the
Trust of $22,500 per month, or $270,000 annually), and is subject to annual adjustment based on an oil and gas industry index. The calculation of
net profits income for the year ended December 31, 2021 included an expense adjustment from XTO Energy of $33,956 ($30,560 net to the Trust). On June 25, 2010, XTO Energy became a wholly owned subsidiary of Exxon Mobil Corporation. Critical Accounting Policies The financial statements of the
Trust are significantly affected by its basis of accounting and estimates related to its oil and gas properties and proved reserves, as summarized below. Basis of Accounting The Trusts
financial statements are prepared on a modified cash basis, which is a comprehensive basis of accounting other than U.S. generally accepted accounting principles. This method of accounting is consistent with reporting of taxable income to Trust
unitholders. The most significant differences between the Trusts financial statements and those prepared in accordance with U.S. generally accepted accounting principles are:  1.
net profits income is recognized in the month received rather than accrued in the month of production; 2.
expenses are recognized when paid rather than when incurred; and 3.
cash reserves may be established by the Trustee for certain contingencies that would not be recorded under U.S. generally
accepted accounting principles. This comprehensive basis of accounting other than U.S. generally accepted accounting principles
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. For further information regarding the
Trusts basis of accounting, see Note 2 to Financial Statements under Item 8, Financial Statements and Supplementary Data. All amounts
included in the Trusts financial statements are based on cash amounts received or disbursed, or on the carrying value of the net profits interests, which was derived from the historical cost of the interests at the date of their transfer from
XTO Energy, less accumulated amortization to date. Accordingly, there are no fair value estimates included in the financial statements based on either exchange or non-exchange trade values. Impairment of Net Profits Interests The Trustee reviews the Trusts net profits interests (NPI) in oil and gas properties for impairment whenever events or circumstances
indicate that the carrying value of the NPI may not be recoverable. In general, the Trustee does not view temporarily low prices as an indication of impairment. The markets for crude oil and natural gas have a history of significant  24




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price volatility and though prices will occasionally drop significantly, industry prices over the long term will continue to be driven by market supply and demand. If events and circumstances
indicate the carrying value may not be recoverable, the Trustee would use the estimated undiscounted future net cash flows from the NPI to evaluate the recoverability of the Trust assets. If the undiscounted future net cash flows from the NPI are
less than the NPI carrying value, the Trust would recognize an impairment loss for the difference between the NPI carrying value and the estimated fair value of the NPI. The determination as to whether the NPI is impaired requires a significant
amount of judgment by the Trustee and is based on the best information available to the Trustee at the time of the evaluation, including commodity pricing and other information provided by XTO Energy such as estimates of future production and
development and operating expenses. During 2021, including fourth quarter, no trigger event occurred that would indicate a need for an impairment
assessment. Accordingly, there was no impairment of the NPI as of December 31, 2021. During the first and second quarters of 2020, trigger events occurred indicating a need for impairment assessments. Impairment assessments were completed and
no impairment was indicated. During the third and fourth quarters of 2020, no trigger events occurred indicating a need for impairment assessments. Accordingly, there was no impairment of the NPI as of December 31, 2020. Any impairment recorded
for book purposes will not result in a loss for tax purposes for the unitholders until the loss is recognized. Net profits interests in oil
and gas properties The initial carrying value of the net profits interests of $61,100,449 was XTO Energys historical net book value of
the interests on February 12, 1991, the date of the transfer to the Trust. Amortization of the net profits interests is calculated on a unit-of-production
basis using proved reserves and charged directly to trust corpus. Accumulated amortization was $57,834,093 as of December 31, 2021 and $53,577,384 as of December 31, 2020. As previously disclosed, significantly lower 2020 oil prices used
in calculating the net profits interests proved reserves have resulted in significantly higher amortization in 2021 and full amortization of the working interest net profits interests. Amortization of the NPI does not impact unitholder distributions
or the determination of proved reserves. Oil and Gas Reserves The proved oil and gas reserves for the underlying properties are estimated by independent petroleum engineers. The estimated reserves for the underlying
properties are then used by XTO Energy to calculate the estimated oil and gas reserves attributable to the net profits interests. Reserve engineering is a subjective process that is dependent upon the quality of available data and the interpretation
thereof. Estimates by different engineers often vary, sometimes significantly. In addition, physical factors such as the results of drilling, testing and production subsequent to the date of an estimate, as well as economic factors such as changes
in product prices, may justify revision of such estimates. Because proved reserves are required to be estimated using 12-month average prices, based on the first-day-of-the-month price for each month in the period, estimated reserve quantities can be significantly impacted by changes
in product prices. Accordingly, oil and gas quantities ultimately recovered and the timing of production may be substantially different from original estimates. The standardized measure of discounted future net cash flows and changes in such cash flows, as reported in Note 8 to Financial Statements under
Item 8, Financial Statements and Supplementary Data, is prepared using assumptions required by the Financial Accounting Standards Board and the Securities and Exchange Commission. Such assumptions include using 12-month average oil and gas prices, based on the
first-day-of-the-month price for each month in the period, and year end costs for
estimated future development and production expenditures, including recovery of cumulative excess costs remaining at year end. Discounted future net cash flows are calculated using a 10% rate. Changes in any of these assumptions, including
consideration of other factors, could have a significant impact on the standardized measure. Accordingly, the standardized measure does not represent XTO Energys or the Trustees estimated current market value of proved reserves. Forward-Looking Statements Certain information included in
this annual 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  25




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##### Table of Contents

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 may concern, among other things, development activities, future development plans, 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, government policy and its impact on oil and gas prices and future demand,
pricing differentials, proved reserves, production levels, arbitration, litigation, liquidity, financing, political and regulatory matters, such as tax and environmental policy, climate policy, trade barriers, sanctions, war, and competition. 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, projects, anticipates, predicts, believes, goals, estimates, should, could, would, and similar words that convey the
uncertainty of future events. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict. 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. Some of the risk factors that could cause actual results to differ materially are explained in Item 1A, Risk Factors.  ITEM 7A.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Not required for smaller reporting companies; the Trust has elected to omit this information.  ITEM 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA  PageReport of Independent Registered Public Accounting Firm (PCAOB 238)


27Statements of Assets, Liabilities and Trust Corpus


29Statements of Distributable Income


29Statements of Changes in Trust Corpus


29Notes to Financial Statements


30 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.  26




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Report of Independent Registered Public Accounting Firm To the Unitholders of Cross Timbers Royalty Trust and Simmons Bank, as Trustee Opinion on the Financial Statements We have audited the accompanying
statements of assets, liabilities and trust corpus of Cross Timbers Royalty Trust (the Trust) as of December 31, 2021 and 2020,and the related statements of distributable income and changes in trust corpus for the years then
ended, including the related notes (collectively referred to as the financial statements).In our opinion, the financial statements present fairly, in all material respects, the assets, liabilities and trust corpus of the Trust as
of December 31, 2021 and 2020,and its distributable income and its changes in trust corpus for the years then ended in conformity with the modified cash basis of accounting described in Note 2. Basis for Opinion These financial statements are the responsibility
of the Trustee. Our responsibility is to express an opinion on the Trustsfinancial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (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. We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Trust is not required to have, nor were we engaged to perform, an audit of its internal control over financial
reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Trusts internal control over financial
reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial
statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also
included evaluating the accounting principles used and significant estimates made by the Trustee, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Basis of Accounting As described in Note 2, these financial
statements were prepared on the modified cash basis of accounting, which is a comprehensive basis of accounting other than generally accepted accounting principles. Critical Audit Matters The critical audit matter communicated below
is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the financial
statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by
communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. The Impact of Proved Oil and Gas Reserves on Net Profits Interests in Oil and Gas Properties, Net The Trusts net profits interests (NPI) in oil and gas properties, net balance was $3,266 thousand as of December 31, 2021 and amortization of
net profits interests for the year ended December 31, 2021 was $4,257 thousand. As described in Note 2, amortization of the net profits interests is calculated on a
unit-of-production basis using proved reserves and charged directly to  27




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##### Table of Contents

trust corpus. As disclosed by the Trustee, proved reserves are those quantities of oil and natural gas, which, by
analysis of geoscience and engineering data can be estimated with reasonable certainty to be economically producible from a given date forward, from known reservoirs and under existing economic conditions, operating methods, and government
regulation before the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain. Proved developed reserves are the quantities expected to be recovered through existing wells with
existing equipment and operating methods in which the cost of the required equipment is relatively minor compared with the cost of a new well. Physical factors such as the results of drilling, testing and production subsequent to the date of an
estimate, as well as economic factors such as changes in product prices, may justify revision of such estimates. Because proved reserves are required to be estimated using 12-month average prices, based on the
first-day-of-the-month price for each month in the period, estimated reserve quantities
can be significantly impacted by changes in product prices. Accordingly, oil and gas quantities ultimately recovered and the timing of production may be substantially different from original estimates. The proved oil and gas reserves for the
underlying properties are estimated by independent petroleum engineers (specialists). The principal considerations for our determination that
performing procedures relating to the impact of proved oil and gas reserves on net profits interests in oil and gas properties, net is a critical audit matter are (i) the significant judgment by the Trustee, including the use of specialists,
when developing the estimates of proved oil and gas reserves, which in turn led to (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating the audit evidence related to the data, methods, and
assumptions used by the Trustee and its specialists in developing the estimates of the reserve quantities. Addressing the matter involved performing procedures and
evaluating audit evidence in connection with forming our overall opinion on the financial statements. These procedures included, among others, testing the completeness and accuracy of the data related to estimates of reserve quantities. The work of
the Trustees specialists was used in performing the procedures to evaluate the reasonableness of the reserve quantities. As a basis for using this work, the specialists qualifications and objectivity were understood, as well as the
methods used by the specialists. The procedures performed also included tests of the data used by the specialists and an evaluation of the specialists results. /s/ PricewaterhouseCoopers LLP Dallas, Texas March 29, 2022 We have served as the Trusts auditor since 2011.  28




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CROSS TIMBERS ROYALTY TRUST Statements of Assets, Liabilities and Trust Corpus  December 312021


2020AssetsCash and short-term investments

$
1,822,750


$
1,372,799Interest to be received


24



23Net profits interests in oil and gas properties - net (Notes 1 and 2)


3,266,356



7,523,065$
5,089,130


$
8,895,887Liabilities and Trust CorpusDistribution payable to unitholders

$
822,774


$
372,822Expense reserve (a)


1,000,000



1,000,000Trust corpus (6,000,000 units of beneficial interest authorized and outstanding)


3,266,356



7,523,065$
5,089,130


$
8,895,887  (a)
Expense reserve allows the Trustee to pay its obligations should it be unable to pay them out of the net profits income.
The reserve is currently funded at $1,000,000. Statements of Distributable Income  Year Ended December 312021


2020Net profits income

$
7,438,451


$
5,308,249Interest income


168



5,864Total income


7,438,619



5,314,113Administration expense


765,317



639,441Distributable income

$
6,673,302


$
4,674,672Distributable income per unit (6,000,000 units)

$
1.112217


$
0.779112 Statements of Changes in Trust Corpus  Year Ended December 312021


2020Trust corpus, beginning of year

$
7,523,065


$
8,161,795Amortization of net profits interests


(4,256,709
)


(638,730
)Distributable income


6,673,302



4,674,672Distributions declared


(6,673,302
)


(4,674,672
)Trust corpus, end of year

$
3,266,356


$
7,523,065 See accompanying notes to financial statements.  29




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##### Table of Contents

CROSS TIMBERS ROYALTY TRUST NOTES TO FINANCIAL STATEMENTS 1.
Trust Organization and Provisions Cross Timbers Royalty Trust (the Trust) was created on February 12, 1991 by predecessors of
XTO Energy Inc. (XTO Energy), when the following net profits interests were conveyed under five separate conveyances to the Trust effective October 1, 1990, in exchange for 6,000,000 units of beneficial interest in the Trust:  1.
90% net profits interests in certain producing and nonproducing royalty and overriding royalty interest properties in
Texas, Oklahoma and New Mexico; and  2.
75% net profits interests in certain working interest properties in Texas and Oklahoma. The underlying properties from which the net profits interests were carved are currently owned by XTO Energy or other affiliated companies of ExxonMobil
(Note 5). The Trusts initial public offering was in February 1992. Simmons Bank is the Trustee of the Trust. The Trust indenture provides,
among other provisions, that:  1.
the Trust may not engage in any business activity or acquire any assets other than the net profits interests and specific
short-term cash investments;  2.
the Trust may not dispose of all or part of the net profits interests unless approved by holders of 80% or more of the
outstanding Trust units, or upon Trust termination, and any sale must be for cash with the proceeds promptly distributed to the unitholders on the next declared distribution;  3.
the Trustee may establish a cash reserve for payment of any liability that is contingent or not currently payable;  4.
the Trustee may borrow funds required to pay Trust liabilities if fully repaid prior to further distributions to
unitholders;  5.
the Trustee will make monthly cash distributions to unitholders (Note 3); and  6.
the Trust will terminate upon the first occurrence of:  a)
disposition of all net profits interests pursuant to terms of the Trust indenture;  b)
gross revenue of the Trust is less than $1 million per year for two successive years; or  c)
a vote of holders of 80% or more of the outstanding Trust units to terminate the Trust in accordance with provisions of
the Trust indenture. 2. Basis of Accounting The financial statements of Cross Timbers Royalty Trust (the Trust) are prepared on the following basis and are not intended to present
financial position and results of operations in conformity with U.S. generally accepted accounting principles (GAAP):  1.
net profits income is recorded in the month received by the Trustee (Note 3);  2.
interest income, interest to be received and distribution payable to unitholders include interest to be earned on net
profits income from the monthly record date (last business day of the month) through the date of the next distribution;  3.
trust expenses are recorded based on liabilities paid and cash reserves established by the Trustee for liabilities and
contingencies; and  4.
distributions to unitholders are recorded when declared by the Trustee (Note 3). The most significant differences between the Trusts financial statements and those prepared in accordance with U.S. GAAP are:  1.
net profits income is recognized in the month received rather than accrued in the month of production;  30




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CROSS TIMBERS ROYALTY TRUST NOTES TO FINANCIAL STATEMENTS(Continued)  2.
expenses are recognized when paid rather than when incurred; and  3.
cash reserves may be established by the Trustee for certain contingencies that would not be recorded under U.S. GAAP. This comprehensive basis of accounting 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. Most accounting pronouncements
apply to entities whose financial statements are prepared in accordance with U.S. GAAP, directing such entities to accrue or defer revenues and expenses in a period other than when such revenues were received or expenses were paid. Because the
Trusts financial statements are prepared on the modified cash basis, as described above, most accounting pronouncements are not applicable to the Trusts financial statements. Impairment of Net Profits Interests The Trustee
reviews the Trusts net profits interests (NPI) in oil and gas properties for impairment whenever events or circumstances indicate that the carrying value of the NPI may not be recoverable. In general, the Trustee does not view
temporarily low prices as an indication of impairment. The markets for crude oil and natural gas have a history of significant price volatility and though prices will occasionally drop significantly, industry prices over the long term will continue
to be driven by market supply and demand. If events and circumstances indicate the carrying value may not be recoverable, the Trustee would use the estimated undiscounted future net cash flows from the NPI to evaluate the recoverability of the Trust
assets. If the undiscounted future net cash flows from the NPI are less than the NPI carrying value, the Trust would recognize an impairment loss for the difference between the NPI carrying value and the estimated fair value of the NPI. The
determination as to whether the NPI is impaired requires a significant amount of judgment by the Trustee and is based on the best information available to the Trustee at the time of the evaluation, including commodity pricing and other information
provided by XTO Energy such as estimates of future production and development and operating expenses. During 2021, including fourth quarter, no
trigger event occurred that would indicate a need for an impairment assessment. Accordingly, there was no impairment of the NPI as of December 31, 2021. During the first and second quarters of 2020, trigger events occurred indicating a need for
impairment assessments. Impairment assessments were completed and no impairment was indicated. During the third and fourth quarters of 2020, no trigger events occurred indicating a need for impairment assessments. Accordingly, there was no
impairment of the NPI as of December 31, 2020. Any impairment recorded for book purposes will not result in a loss for tax purposes for the unitholders until the loss is recognized. Net profits interests in oil and gas properties The
initial carrying value of the net profits interests of $61,100,449 was XTO Energys historical net book value of the interests on February 12, 1991, the date of the transfer to the Trust. Amortization of the net profits interests is
calculated on a unit-of-production basis using proved reserves and charged directly to trust corpus. Accumulated amortization was $57,834,093 as of December 31,
2021 and $53,577,384 as of December 31, 2020. As previously disclosed, significantly lower 2020 oil prices used in calculating the net profits interests proved reserves have resulted in significantly higher amortization in 2021 and full
amortization of the working interest net profits interests. Amortization of the NPI does not impact unitholder distributions or the determination of proved reserves. 3. Distributions to Unitholders The Trustee determines the
amount to be distributed to unitholders each month by totaling net profits income and other cash receipts, and subtracting liabilities paid and adjustments in cash reserves established by the Trustee. The resulting amount (with estimated interest to
be received on such amount through the distribution date) is distributed to unitholders of record within ten business days after the monthly record date, the last business day of the month.  31




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CROSS TIMBERS ROYALTY TRUST NOTES TO FINANCIAL STATEMENTS(Continued)  Net profits income received by the Trustee consists of net proceeds received in the prior month by XTO
Energy from the underlying properties multiplied by the net profits percentage of 90% or 75%. Net proceeds are the gross proceeds received from the sale of production, less applicable costs. For the 90% net profits interests, such costs generally
include production and property taxes, legal costs, and marketing and transportation charges. In addition to these costs, the 75% net profits interests include deductions for production expense and development costs. XTO Energy, as owner of the underlying properties, computes net profits income separately for each of the five conveyances. If costs exceed gross
proceeds for any conveyance, such excess costs must be recovered, with accrued interest, from future net proceeds of that conveyance and cannot reduce net profits income from the other conveyances (Note 7). 4. Income Taxes For federal income tax purposes, the Trust
constitutes a fixed investment trust that is taxed as a grantor trust. A grantor trust is not subject to tax at the trust level. Accordingly, no provision for income taxes has been made in the financial statements. The unitholders are considered to
own the Trusts income and principal as though no trust were in existence. The income of the Trust is deemed to have been received or accrued by each unitholder at the time such income is received or accrued by the Trust and not when
distributed by the Trust. Impairments recorded for book purposes will not result in a loss for tax purposes for the unitholders until the loss is recognized. All revenues from the Trust are from sources within Texas, Oklahoma or New Mexico. Because it distributes all of its net income to unitholders, the
Trust has not been taxed at the trust level in New Mexico or Oklahoma. While the Trust has not owed tax, the Trustee is required to file an Oklahoma income tax return reflecting the income and deductions of the Trust attributable to properties
located in that state, along with a schedule that includes information regarding distributions to unitholders. Oklahoma and New Mexico tax the income of nonresidents from real property located within those states, and the Trust has been advised by
counsel that such states will tax nonresidents on income from the net profits interests located in those states. Oklahoma and New Mexico also impose a corporate income tax that may apply to unitholders organized as corporations (subject to certain
exceptions for S corporations and limited liability companies, depending on their treatment for federal tax purposes). 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 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 unitholder that is a taxable entity under the Texas franchise tax will generally be required to
include its Texas 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. The Trust may be required to bear a portion of the settlement costs arising from
theChieftain royalty class action settlement. For information on contingencies, see Note 6 to Financial Statements. In the event that the Trust is determined to be responsible for such costs, XTO Energy will deduct the costs
in its calculation of the net profits income payable to the Trust from the applicable net profits interests. Thus, for unitholders, the portion of the settlement payment to the Chieftainroyalty owner class for which the Trust is determined
to be responsible will be reflected through a reduction in net profits income received from the Trust and thus in a reduction in the gross royalty income reported by and taxable to the unitholders. In the event that the Trustee objects to such
claimed reductions, the Trustee may also incur legal fees in representing the Trusts interests. For unitholders, such costs would be reflected through an increase in the Trusts administrative expenses, which would be deductible by
unitholders in determining the net royalty income from the Trust.  32




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##### Table of Contents

CROSS TIMBERS ROYALTY TRUST NOTES TO FINANCIAL STATEMENTS(Continued)  Each unitholder should consult their own tax advisor regarding income tax requirements, if any,
applicable to such persons ownership of Trust units. 5. XTO Energy Inc. The underlying properties from which the net profits interests were carved are currently owned by XTO Energy or other affiliated companies of ExxonMobil. Approximately 35 of the underlying royalty interests burden working interests in properties operated by XTO Energy. XTO Energy operates the Hewitt
Unit which is one of the properties underlying the Oklahoma 75% net profits interests. Other than these properties, XTO Energy and ExxonMobil do not operate or control any of the underlying properties or related working interests. In computing net proceeds for the 75% net profits interests (Note 3), XTO Energy deducts an overhead charge as reimbursement for costs associated with
monitoring these interests. This overhead charge at December 31, 2021 was approximately $44,269 per month, or $531,227 annually (net to the Trust of $33,202 per month, or $398,420 annually), and is subject to annual adjustment based on an oil
and gas industry index. XTO Energy deducts a monthly overhead charge for reimbursement of administrative expenses as operator of the Hewitt Unit,
which is one of the properties underlying the Oklahoma 75% net profits interests. As of December 31, 2021, this charge was approximately $30,000 per month, or $360,000 annually (net to the Trust of $22,500 per month, or $270,000 annually), and
is subject to annual adjustment based on an oil and gas industry index. The calculation of net profits income for the year ended December 31,
2021 included an expense adjustment from XTO Energy of $33,956 ($30,560 net to the Trust). On June 25, 2010, XTO Energy became a wholly owned
subsidiary of Exxon Mobil Corporation. 6. Contingencies A federal district court approved the settlement of a royalty class action lawsuit against XTO Energy Inc. (Chieftain Royalty Company v. XTO Energy
Inc.) in March 2018. In July 2018, the class plaintiffs submitted their plan to allocate the settlement funds among members of the class. After that plan of allocation was approved, XTO Energy advised the Trustee that, based upon that plan,
approximately $40,000 should be allocated to the Trust as additional production costs. The Trustee has objected to similar claims relating to the
Chieftain settlement with respect to another trust for which it serves as trustee (the Hugoton Royalty Trust) in an arbitration styled Simmons Bank (successor to Southwest Bank and Bank of America, N.A.) vs. XTO Energy Inc. through the
American Arbitration Association. In that arbitration, the Trustee requested a declaratory judgment that the Chieftainsettlement is not a production cost and that XTO Energy is prohibited from charging the settlement as a production cost
under the conveyance or otherwise reducing the Hugoton Royalty Trusts payments now or in the future as a result of the Chieftain litigation. Similar issues have arisen as between XTO Energy and the Trust, but it was agreed those issues
would be considered once the Panel issued its decisions with respect to the Hugoton Royalty Trust. On January 20, 2021, the Panel issued its Corrected Interim Final Award (i) reject[ing] the Trusts contention that XTO has no right
under the Conveyance to charge the [Hugoton Royalty] Trust with amounts XTO paid under section 1.18(a)(i) as royalty obligations to settle the Chieftain litigation and (ii) stating [t]he next phase will determine how much of
the Chieftain settlement can be so charged, if any of it can be, in the exercise of the right found by the Panel. Following briefing by both parties, on May 18, 2021, the Panel issued its second interim final award over the amount
of XTO Energys settlement in the Chieftain class action lawsuit that can be charged to the [Hugoton Royalty] Trust as a production cost. The Panel has stayed proceedings. The allocation of a portion of the Chieftain settlement to
the Trust, if ever, will be considered if the arbitration re-commences.  33




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CROSS TIMBERS ROYALTY TRUST NOTES TO FINANCIAL STATEMENTS(Continued)  Other Several states have enacted legislation requiring state income tax withholding from payments made to nonresident recipients of oil and gas proceeds.
After consultation with its tax counsel, the Trustee believes that it is not required to withhold on payments made to the unitholders. However, regulations are subject to change by the various states, which could change this conclusion. Should
amounts be withheld on payments made to the Trust or the unitholders, distributions to the unitholders would be reduced by the required amount, subject to the filing of a claim for refund by the Trust or unitholders for such amount. 7. Excess Costs 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 other conveyances. The following summarizes excess costs activity, cumulative excess costs balances and accrued interest to be recovered by conveyance as calculated by XTO
Energy:  UnderlyingTX WI


OK WI


TotalCumulative excess costs remaining at 12/31/20

$
2,283,825


$
187,544


$
2,471,369Net excess costs (recovery) for the quarter ended 3/31/21


(2,479
)


95,110



92,631Net excess costs (recovery) for the quarter ended 6/30/21


43,640



(282,654
)


(239,014
)Net excess costs (recovery) for the quarter ended 9/30/21


(138,207
)






(138,207
)Net excess costs (recovery) for the quarter ended 12/31/21


3,580,678







3,580,678Cumulative excess costs remaining at 12/31/21


5,767,457







5,767,457Accrued interest at 12/31/21


537,349







537,349Total remaining to be recovered at 12/31/21

$
6,304,806


$



$
6,304,806NPITX WI


OK WI


TotalCumulative excess costs remaining at 12/31/20

$
1,712,869


$
140,658


$
1,853,527Net excess costs (recovery) for the quarter ended 3/31/21


(1,859
)


71,332



69,473Net excess costs (recovery) for the quarter ended 6/30/21


32,730



(211,990
)


(179,260
)Net excess costs (recovery) for the quarter ended 9/30/21


(103,656
)






(103,656
)Net excess costs (recovery) for the quarter ended 12/31/21


2,685,509







2,685,509Cumulative excess costs remaining at 12/31/21


4,325,593







4,325,593Accrued interest at 12/31/21


403,012







403,012Total remaining to be recovered at 12/31/21

$
4,728,605


$



$
4,728,605 For the year ended December 31, 2021, excess costs on properties underlying the Texas working interest conveyance
increased by $3,483,632 ($2,612,724 net to the Trust). This includes net excess costs of $3,580,678 ($2,685,509 net to the Trust) for the quarter ended December 31, 2021 primarily because of the reversal of oil sales volumes by the oil
purchaser of the North Cowden Unit in fourth quarter 2021. These oil sales were subsequently paid by the operator in first quarter 2022. For the
year ended December 31, 2021, net recoveries of excess costs were $187,544 ($140,658 net to the Trust) and recoveries of accrued interest were $6,719 ($5,039 net to the Trust) on properties underlying the Oklahoma working interest. Underlying cumulative excess costs for the Texas working interest conveyance remaining as of December 31, 2021 totaled $6.3 million
($4.7 million net to the Trust), including accrued interest of $0.5 million ($0.4 million net to the Trust).  34




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CROSS TIMBERS ROYALTY TRUST NOTES TO FINANCIAL STATEMENTS(Continued)  8. Supplemental Oil and Gas Reserve Information (Unaudited) Oil and Natural Gas Reserves Proved oil and gas
reserves have been estimated by independent petroleum engineers. Proved reserves are those quantities of oil and natural gas, which, by analysis of geoscience and engineering data can be estimated with reasonable certainty to be economically
producible from a given date forward, from known reservoirs and under existing economic conditions, operating methods, and government regulation before the time at which contracts providing the right to operate expire, unless evidence indicates that
renewal is reasonably certain. Proved developed reserves are the quantities expected to be recovered through existing wells with existing equipment and operating methods in which the cost of the required equipment is relatively minor compared with
the cost of a new well. Due to the inherent uncertainties and the limited nature of reservoir data, such estimates are subject to change as additional information becomes available. The reserves actually recovered and the timing of production of
these reserves may be substantially different from the original estimate. Revisions result primarily from new information obtained from development drilling and production history and from changes in economic factors. Standardized Measure The standardized measure of
discounted future net cash flows and changes in such cash flows are prepared using assumptions required by the Financial Accounting Standards Board. Such assumptions include the use of 12-month average prices
for oil and gas, based on the first-day-of-the-month price for each month in the period,
and year end costs for estimated future development and production expenditures to produce the proved reserves, including recovery of cumulative excess costs remaining at year end. Future net cash flows are discounted at an annual rate of 10%. No
provision is included for federal income taxes since future net cash flows are not subject to taxation at the trust level. The standardized measure
does not represent XTO Energys or the Trustees estimate of future cash flows or the value of proved oil and gas reserves. Probable and possible reserves, which may become proved in the future, are excluded from the calculations.
Furthermore, prices used to determine the standardized measure are influenced by supply and demand as affected by recent economic conditions as well as other factors and may not be the most representative in estimating future revenues or reserve
data. Estimated costs to plug and abandon wells on the underlying working interest properties at the end of their productive lives have not been
deducted from cash flows since this is not a legal obligation of the Trust. These costs are the legal obligation of XTO Energy as the owner of the underlying working interests and will only be deducted from net proceeds payable to the Trust if net
proceeds from the related conveyance exceed such costs when paid, subject to excess cost carryforward provisions (Note 3). Because overhead costs
charged by XTO Energy are deducted in the calculation of net proceeds, the standardized measure for the underlying properties and net profits interests have been reduced by these estimated overhead costs. See Note 5 to Financial Statements under
Item 8, Financial Statements and Supplementary Data for more information on overhead costs charged by XTO Energy. Oil prices used to
determine the standardized measure were based on average realized oil prices of $63.88 per Bbl in 2021, and $36.21 per Bbl in 2020. The weighted average realized gas prices used to determine the standardized measure were $5.68 per Mcf in 2021, and
$2.44 per Mcf in 2020. Reserve quantities and revenues for the net profits interests were estimated from projections of reserves and revenues
attributable to the underlying properties. Since the Trust has defined net profits interests, the Trust does not own a specific percentage of the oil and gas reserves. Oil and gas reserves are allocated to the net profits interests by dividing Trust
net cash inflows by 12-month average oil and gas prices. Any fluctuations in 12-month average prices or estimated costs will result in revisions to the estimated reserve
quantities allocated to the net profits interests, which may not correlate with revisions of underlying proved reserves. Significant revisions in reserves could potentially impact the pace of the amortization of the net profits interests.  35




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##### Table of Contents

CROSS TIMBERS ROYALTY TRUST NOTES TO FINANCIAL STATEMENTS(Continued)  Proved Reserves  Net Profits Interests


UnderlyingProperties90% NetProfits Interests


75% NetProfits Interests


Total(in thousands)

Oil(Bbls)


Gas(Mcf)


Oil(Bbls)


Gas(Mcf)


Oil(Bbls)


Gas(Mcf)


Oil(Bbls)


Gas(Mcf)Balance, December 31, 2019


898



14,537



104



25



1,002



14,562



2,096



16,473Extensions, additions and discoveries


21



202











21



202



24



225Revisions of prior estimates


(58
)


(509
)


(83
)


(22
)


(141
)


(531
)


(417
)


(849
)Production


(56
)


(1,347
)


(14
)


(1
)


(70
)


(1,348
)


(199
)


(1,241
)Balance, December 31, 2020


805



12,883



7



2



812



12,885



1,504



14,608Extensions, additions and discoveries


48



206











48



206



53



229Revisions of prior estimates


221



287



257



70



478



357



1,036



410Production


(39
)


(826
)


(21
)


(1
)


(60
)


(827
)


(93
)


(939
)Balance, December 31, 2021


1,035



12,550



243



71



1,278



12,621



2,500



14,308 Extensions, additions and discoveries of proved gas reserves are primarily because of development in the Mid-Continent area. Revisions of prior estimates are primarily related to changes in prices and costs. Proved Developed
Reserves  Net Profits Interests


UnderlyingProperties90% NetProfits Interests


75% NetProfits Interests


Total(in thousands)

Oil(Bbls)


Gas(Mcf)


Oil(Bbls)


Gas(Mcf)


Oil(Bbls)


Gas(Mcf)


Oil(Bbls)


Gas(Mcf)December 31, 2020


805



12,883



7



2



812



12,885



1,504



14,608December 31, 2021


1,035



12,550



243



71



1,278



12,621



2,500



14,308  36




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CROSS TIMBERS ROYALTY TRUST NOTES TO FINANCIAL STATEMENTS(Continued)  Standardized Measure of Discounted Future Net Cash Flows from Proved Reserves  90% Net Profits Interests


75% Net Profits Interests


TotalDecember 31


December 31


December 31(in thousands)

2021


2020


2021


2020


2021


2020Net Profits InterestsFuture cash inflows

$
136,925


$
60,329


$
15,958


$
252


$
152,883


$
60,581Future production taxes


(11,977
)


(5,248
)


(1,149
)


(18
)


(13,126
)


(5,266
)Future net cash flows


124,948



55,081



14,809



234



139,757



55,31510% discount factor


(62,722
)


(26,475
)


(5,987
)


(31
)


(68,709
)


(26,506
)Standardized measure

$
62,226


$
28,606


$
8,822


$
203


$
71,048


$
28,809Underlying PropertiesFuture cash inflows


$
240,951


$
90,122Future costs



(82,377
)


(28,608
)Future net cash flows



158,574



61,51410% discount factor



(77,571
)


(29,459
)Standardized measure


$
81,003


$
32,055Changes in Standardized Measure of Discounted Future Net
Cash Flows from Proved Reserves90% Net Profits Interests


75% Net Profits Interests


Total(in thousands)

2021


2020


2021


2020


2021


2020Net Profits InterestsStandardized measure, January 1

$
28,606


$
41,100


$
203


$
3,516


$
28,809


$
44,616Extensions, additions and discoveries


2,542



589











2,542



589Accretion of discount


2,450



3,507



17



308



2,467



3,815Revisions of prior estimates, changes in price and other


34,835



(11,980
)


9,834



(2,923
)


44,669



(14,903
)Net profits income


(6,207
)


(4,610
)


(1,232
)


(698
)


(7,439
)


(5,308
)Standardized measure, December 31

$
62,226


$
28,606


$
8,822


$
203


$
71,048


$
28,809Underlying PropertiesStandardized measure, January 1


$
32,055


$
50,386Revisions:Prices and costs



35,184



(11,006
)Quantity estimates



16,963



(6,116
)Accretion of discount



2,745



4,308Future development costs



(153
)


(121
)Other



(76
)


3Net revisions



54,663



(12,932
)Extensions, additions and discoveries



2,824



654Production



(8,692
)


(6,174
)Development costs



153



121Net change



48,948



(18,331
)Standardized measure, December 31


$
81,003


$
32,055  37




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CROSS TIMBERS ROYALTY TRUST NOTES TO FINANCIAL STATEMENTS(Continued)  9. Quarterly Financial Data (Unaudited) The following is a summary of net profits income, distributable income and distributable income per unit by quarter for 2021 and 2020:  Net ProfitsIncome


DistributableIncome


DistributableIncome perUnit2021First Quarter

$
1,355,441


$
1,039,350


$
0.173225Second Quarter


1,791,664



1,669,458



0.278243Third Quarter


2,455,493



2,301,702



0.383617Fourth Quarter


1,835,853



1,662,792



0.277132$
7,438,451


$
6,673,302


$
1.1122172020First Quarter

$
2,023,519


$
1,808,934


$
0.301489Second Quarter


1,255,092



1,108,992



0.184832Third Quarter


829,258



613,992



0.102332Fourth Quarter


1,200,380



1,142,754



0.190459$
5,308,249


$
4,674,672


$
0.779112 10. Other Proceeds The
calculation of net profits income for the year ended December 31, 2021 included an expense adjustment from XTO Energy of $33,956 ($30,560 net to the Trust). The calculation of net profits income for the year ended December 31, 2020 included $145,282 ($129,526 net to the Trust) from XTO Energy due to
interest received on past due payments of $343,852 ($308,239 net to the Trust), partially offset by an expense adjustment of $198,570 ($178,713 net to the Trust). 11. Administration Expense Administrative expenses are
incurred so that the Trustee may meet its reporting obligations to the unitholders and regulatory entities and otherwise manage the administrative functions of the Trust. These obligations include, but are not limited to, all expenses, taxes,
compensation to the Trustee for managing the Trust, fees to consultants, accountants, attorneys, transfer agents, other professional and expert persons, expenses for clerical and other administrative assistance, and fees and expenses for all other
services. See Item 11. Executive Compensation, for further information on the remuneration received by the Trustee.  38




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ITEM 9.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.  ITEM 9A.
CONTROLS AND PROCEDURES Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures The Trustee conducted an evaluation of the Trusts disclosure controls and procedures, as such term is defined under
Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended. Based on this evaluation, the Trustee has concluded that the Trusts disclosure controls and procedures were
effective as of the end of the period covered by this annual report. In its evaluation of disclosure controls and procedures, the Trustee has relied, to the extent considered reasonable, on information provided by XTO Energy. Trustees Report on Internal Control Over Financial Reporting The Trustee is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) promulgated under the Securities Exchange Act of 1934, as amended. The Trustee conducted an evaluation of the effectiveness of the Trusts internal control over financial reporting based on the
criteria established in Internal Control Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on the Trustees evaluation under the framework in
Internal Control Integrated Framework (2013), the Trustee concluded that the Trusts internal control over financial reporting was effective as of December 31, 2021. Changes in Internal Control Over Financial Reporting There were no changes in the Trusts internal control over financial reporting during the quarter ended December 31, 2021 that have materially
affected, or are reasonably likely to materially affect, the Trusts internal control over financial reporting.  ITEM 9B.
OTHER INFORMATION None.  ITEM 9C.
DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS Not applicable.  39




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PART III  ITEM 10.
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE  (a)
Directors, Officers and Committees. The Trust has no directors, executive officers, audit committee, audit
committee financial expert, compensation committee or nominating committee. The Trustee is a corporate trustee which may be removed, with or without cause, by the affirmative vote of the holders of a majority of all the units then outstanding.  (b)
Section16 (a) Beneficial Ownership Reporting Compliance. Section 16(a) of the Securities
Exchange Act of 1934 requires that directors, officers, and beneficial owners of more than 10% of the registrants equity securities file initial reports of beneficial ownership and reports of changes in beneficial ownership with the Securities
and Exchange Commission and the New York Stock Exchange. To the Trustees knowledge, based solely on the information furnished to the Trustee, the Trustee is unaware of any person that failed to file on a timely basis reports required by
Section 16(a) filing requirements with respect to the Trust units of beneficial interest during and for the year ended December 31, 2021.  (c)
Code of Ethics. Because the Trust has no employees, it does not have a code of ethics. Employees of the Trustee,
Simmons Bank, must comply with the banks code of ethics which may be found at ir.simmonsbank.com/govdocs.  ITEM 11.
EXECUTIVE COMPENSATION  (a)
Compensation Committee Interlocks and Insider Participation/Compensation Committee Report.The Trust has no
officers or directors and is administered by a trustee. The Trust does not have a compensation committee or maintain any equity compensation plans and there are no units reserved for issuance under such plans.  (b)
Compensation of the Trustee. The Trustee received the following annual compensation for the fiscal years ended
December 31, 2020 through December 31, 2021 as specified in the Trust indenture:  2021


2020Simmons Bank, Trustee (1)

$
85,862


$
77,027  (1)
Under the Trust indenture, the trustee is entitled to an administrative fee of: (i) 1/20 of 1% of the first
$100 million of the annual gross revenue of the Trust, and 1/30 of 1% of the annual gross revenue of the Trust in excess of $100 million, and (ii) trustees standard hourly rates for time in excess of 300 hours annually.  ITEM 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED UNITHOLDER MATTERS  (a)
Equity Compensation Plans and Trust Repurchases.The Trust has no equity compensation plans. The Trust has not
repurchased any units during the fourth quarter of fiscal 2021.  (b)
Security Ownership of Certain Beneficial Owners. The Trustee is not aware of any person who beneficially owns more
than 5% of the outstanding units.  (c)
Security Ownership of Management. The Trust has no directors or executive officers. The Trustee does not
beneficially own any units in the Trust.  (d)
Changes in Control. The Trustee knows of no arrangements which may subsequently result in a change in control of
the Trust.  ITEM 13.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE The underlying properties from which the net profits interests were carved are currently owned by XTO Energy or other
affiliated companies of ExxonMobil. Approximately 35 of the underlying royalty interests burden working interests in properties operated by XTO
Energy. XTO Energy operates the Hewitt Unit which is one of the properties underlying the Oklahoma 75% net profits interests. Other than these properties, XTO Energy and ExxonMobil do not operate or control any of the underlying properties or
related working interests.  40




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##### Table of Contents

In computing net proceeds for the 75% net profits interests (Note 3), XTO Energy deducts an overhead
charge as reimbursement for costs associated with monitoring these interests. This overhead charge at December 31, 2021 was approximately $44,269 per month, or $531,227 annually (net to the Trust of $33,202 per month, or $398,420 annually), and
is subject to annual adjustment based on an oil and gas industry index. XTO Energy deducts a monthly overhead charge for reimbursement of
administrative expenses as operator of the Hewitt Unit, which is one of the properties underlying the Oklahoma 75% net profits interests. As of December 31, 2021, this charge was approximately $30,000 per month, or $360,000 annually (net to the
Trust of $22,500 per month, or $270,000 annually), and is subject to annual adjustment based on an oil and gas industry index. The calculation of
net profits income for the year ended December 31, 2021 included an expense adjustment from XTO Energy of $33,956 ($30,560 net to the Trust). On June 25, 2010, XTO Energy became a wholly owned subsidiary of Exxon Mobil Corporation. As of March 10, 2022, XTO Energy did not own any units. See Item 11, Executive Compensation, for the remuneration received by the Trustee for the fiscal years ended December 31, 2020 through
December 31, 2021. As noted in Item 10, Directors, Executive Officers and Corporate Governance, the Trust has no directors, executive
officers, audit committee, audit committee financial expert, compensation committee or nominating committee. The Trustee is a corporate trustee which may be removed, with or without cause, by the affirmative vote of the holders of a majority of all
the units then outstanding.  ITEM 14.
PRINCIPAL ACCOUNTANT FEES AND SERVICES Fees for services performed by PricewaterhouseCoopers LLP for the years ended December 31, 2021 and 2020 are:  2021


2020Audit fees-PwC

$
193,834


$
172,300Audit-related fees






Tax fees






All other fees






$
193,834


$
172,300 The Trust does not have an audit committee. Any pre-approval and approval of all
services performed by the principal auditor or any other professional services firms and related fees are granted by the Trustee.  41




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##### Table of Contents

PART IV  ITEM 15.
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES  (a)
The following documents are filed as a part of this report:  1.
Financial Statements (included in Item 8 of this report) Report of Independent Registered Public Accounting Firm Statements of Assets, Liabilities and Trust Corpus at December 31, 2021 and 2020 Statements of Distributable Income for the years ended December 31, 2021 and 2020 Statements of Changes in Trust Corpus for the years ended December 31, 2021 and 2020 Notes to Financial Statements  2.
Financial Statement Schedules Financial statement schedules are omitted because of the absence of conditions under which they are required or because the required
information is given in the financial statements or notes thereto.  3.
Exhibits  (4) (a)
Cross Timbers Royalty Trust Indenture amended and restated on January 13, 1992 by NationsBank, N.A., as
Trustee, heretofore filed as Exhibit 3.1 to the Trusts Registration Statement No. 33-44385 filed with the Securities and Exchange Commission on February 19, 1992, is incorporated herein by
reference. (P)  (b)
Net Overriding Royalty Conveyance (Cross Timbers Royalty Trust, 90% - Texas) from South Timbers Limited Partnership, West
Timbers Limited Partnership, North Timbers Limited Partnership, East Timbers Limited Partnership, Hickory Timbers Limited Partnership, and Cross Timbers Partners, L.P. (predecessors of XTO Energy) to NCNB Texas National Bank, as Trustee, dated
February 12, 1991 (without Schedules A and B), heretofore filed as Exhibit 10.1 to the Trusts Registration Statement No. 33-44385 filed with the Securities and Exchange Commission on
February 19, 1992, is incorporated herein by reference. (P)  (c)
Correction to Net Overriding Royalty Conveyance (Cross Timbers Royalty Trust, 90% - Texas) from South Timbers Limited
Partnership, West Timbers Limited Partnership, North Timbers Limited Partnership, East Timbers Limited Partnership, Hickory Timbers Limited Partnership, and Cross Timbers Partners, L.P. (predecessors of XTO Energy) to NCNB Texas National Bank, as
Trustee, dated September 23, 1991 (without Schedules A and B), heretofore filed as Exhibit 10.2 to the Trusts Registration Statement No. 33-44385 filed with the Securities and Exchange
Commission on February 19, 1992, is incorporated herein by reference. (P)  (d)
Net Overriding Royalty Conveyance (Cross Timbers Royalty Trust, 75% - Texas) from South Timbers Limited Partnership, West
Timbers Limited Partnership, North Timbers Limited Partnership, East Timbers Limited Partnership, Hickory Timbers Limited Partnership, and Cross Timbers Partners, L.P. (predecessors of XTO Energy) to NCNB Texas National Bank, as Trustee, dated
February 12, 1991 (without Schedules A and B), heretofore filed as Exhibit 10.5 to the Trusts Registration Statement No. 33-44385 filed with the Securities and Exchange Commission on
February 19, 1992, is incorporated herein by reference. (P)  (23)
Consent of Miller and Lents, Ltd.  (31)
Rule 13a-14(a)/15d-14(a) Certification  (32)
Section 1350 Certification  (99.1)
Miller and Lents, Ltd. Report  42




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Copies of the above Exhibits are available to any unitholder, at the actual cost of reproduction, upon
written request to the Trustee, Simmons Bank, 2911 Turtle Creek Blvd, Suite 850, Dallas, Texas 75219.  (P)
Paper exhibits.  43




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SIGNATURES Pursuant to the requirements of Section 13 or 15(d) 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.  CROSS TIMBERS ROYALTY TRUSTBy SIMMONS BANK, TRUSTEEBy

/S/ NANCY WILLISNancy WillisVice PresidentEXXON MOBIL CORPORATIONDate: March 29, 2022



By

/S/ DAVID LEVYDavid LevyVice President - Upstream Business Services (The Trust has no directors or executive officers.)  44