# EDGAR Filing Document

**Accession Number:** 0000862022
**File Stem:** 0001193125-23-011789
**Filing Date:** 2023-1
**Character Count:** 13774
**Document Hash:** 9e2f45090feb08b8426cf28b168c2dc8
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001193125-23-011789.hdr.sgml**: 20230120

**ACCESSION NUMBER**: 0001193125-23-011789

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 2

**CONFORMED PERIOD OF REPORT**: 20230120

**ITEM INFORMATION**: Results of Operations and Financial Condition

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230120

**DATE AS OF CHANGE**: 20230120

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** HUGOTON ROYALTY TRUST
- **CENTRAL INDEX KEY:** 0000862022
- **STANDARD INDUSTRIAL CLASSIFICATION:** OIL ROYALTY TRADERS [6792]
- **IRS NUMBER:** 586379215
- **STATE OF INCORPORATION:** TX
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-10476
- **FILM NUMBER:** 23540155

**BUSINESS ADDRESS:**
- **STREET 1:** C/O SIMMONS BANK TRUSTEE
- **STREET 2:** 2911 TURTLE CREEK BLVD., SUITE 850
- **CITY:** DALLAS
- **STATE:** TX
- **ZIP:** 75219
- **BUSINESS PHONE:** 972-919-1360

**MAIL ADDRESS:**
- **STREET 1:** C/O SIMMONS BANK TRUSTEE
- **STREET 2:** 2911 TURTLE CREEK BLVD., SUITE 850
- **CITY:** DALLAS
- **STATE:** TX
- **ZIP:** 75219

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**UNITED STATES** 

**SECURITIES AND EXCHANGE COMMISSION** 

**WASHINGTON, DC 20549** 

**FORM 8-K** 

**CURRENT REPORT** 

**PURSUANT TO SECTION 13 OR 15(D) OF THE** 

**SECURITIES EXCHANGE ACT OF 1934** 

Date of report (Date of earliest event reported): **January 20, 2023**

**HUGOTON ROYALTY TRUST** 

(Exact Name of Registrant as Specified in Its Charter)

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| | | |
|:---|:---|:---|
| **Texas** | **1-10476** | **58-6379215** |
| (State or other jurisdiction of<br>Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |

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**Simmons Bank** 

**Trustee** 

**2911 Turtle Creek Blvd, Suite 850** 

**Dallas, Texas 75219** 

(Address of Principal Executive Offices) (Zip Code)

Registrant's Telephone Number, Including Area Code **(855) 588-7839**

(Former Name or Former Address, if Changed Since Last Report) **NONE**

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

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

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

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

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

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act:

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| | | |
|:---|:---|:---|
| **Title of each class** | **Trading symbol** | **Name of each exchange on which registered** |
| **Units of Beneficial Interest** | **HGTXU** | **OTCQB** |

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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

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. ☐

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**Item 2.02. Results of Operations and Financial Condition.** 

On January 20, 2023, the Registrant issued a news release announcing its monthly cash distribution to unitholders of record on January 31, 2023. A copy of the news release is furnished as Exhibit 99.1.

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

**Item 9.01. Financial Statements and Exhibits.** 

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| | |
|:---|:---|
| (d) | Exhibits. |
|  | Exhibit 99.1 [News Release dated January 20, 2023](d744461dex991.htm) |

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**SIGNATURES** 

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

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| | | |
|:---|:---|:---|
|  | HUGOTON ROYALTY TRUST | HUGOTON ROYALTY TRUST |
|  | By: SIMMONS BANK, TRUSTEE | By: SIMMONS BANK, TRUSTEE |
| Date: January 20, 2023 | By: | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;/s/ TOD MILLER |
|  |  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Tod Miller |
|  |  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Regional President Trust Division |
|  | EXXON MOBIL CORPORATION | EXXON MOBIL CORPORATION |
|  | By: | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;/s/ DAVID LEVY |
|  |  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;David Levy |
|  |  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Vice President – Upstream Business Services |

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## Exhibit 99.1

**EXHIBIT 99.1** 

**[NEWS RELEASE LETTERHEAD OF HUGOTON ROYALTY TRUST APPEARS HERE]** 

**HUGOTON ROYALTY TRUST** 

**DECLARES JANUARY CASH DISTRIBUTION** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Dallas, Texas, January 20, 2023** – Hugoton Royalty Trust (the "Trust") (OTCQB:HGTXU) announced today a cash distribution to the holders of its units of beneficial interest of $0.043362 per unit, payable on February 14, 2023, to unitholders of record on January 31, 2023. The following table shows underlying gas and oil sales and average prices attributable to the net overriding royalty for both the current month and prior month. Underlying gas and oil sales volumes attributable to the current month were primarily produced in November.

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| | | | | |
|:---|:---|:---|:---|:---|
|  | Underlying Sales | Underlying Sales | | |
|  | Volumes *<sup>(a)</sup>* | Volumes *<sup>(a)</sup>* | Average Price | Average Price |
|  | Gas | Oil | Gas | Oil |
|  | (Mcf) | (Bbls) | (per Mcf) | (per Bbl) |
|  Current Month Distribution | 786000 | 15000 | $6.28 | $83.94 |
|  Prior Month Distribution | 834000 | 16000 | $5.75 | $84.21 |

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

XTO Energy has advised the Trustee that it has deducted development costs of $12,000, production expense of $1,569,000 and overhead of $1,041,000 in determining the royalty calculation for the Trust for the current month.

<u>Development Costs</u> 

As previously disclosed, XTO Energy has advised the Trustee that it has elected to participate in the development of a non-operated well in Major County, Oklahoma. As of the date hereof, no development costs have been charged to the Trust related to this non-operated well. The Trustee and XTO Energy will continue to provide material updates in subsequent communications.

<u>Excess Costs</u> 

XTO Energy has advised the Trustee that excess costs were $38,000 on properties underlying the Kansas net profits interests. Underlying cumulative excess costs remaining on the Kansas net profits interests total $38,000.

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<u>Arbitration</u> 

As previously disclosed, XTO Energy advised the Trustee that it reached a settlement with the plaintiffs in the *Chieftain* class action royalty case. On July 27, 2018, the final plan of allocation was approved by the court. Based on the final plan of allocation, XTO Energy advised the Trustee that it believes approximately $24.3 million in additional production costs should be allocated to the Trust. On May 2, 2018, the Trustee submitted a demand for arbitration seeking a declaratory judgment that the *Chieftain* settlement 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 Trust's payments now or in the future as a result of the *Chieftain* litigation. The Trust and XTO Energy conducted the interim hearing on the claims related to the *Chieftain* settlement on October 12-13, 2020. In the arbitration, the Trustee contended that the approximately $24.3 million allocation related to the *Chieftain* settlement was not a production cost and, therefore, there should not be a related adjustment to the Trust's share of net proceeds. However, XTO Energy contended that the approximately $24.3 million was a production cost and should reduce the Trust's share of net proceeds.

On January 20, 2021, the arbitration 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 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 Trust as a production cost. The Panel in its decision has ruled that out of the $80 million settlement, the "Trust is obligated to pay its share under the Conveyance of the $48 million that was received by the plaintiffs in the *Chieftain* lawsuit by virtue of the settlement of that litigation. The Trust is not obligated by the Conveyance to pay any share of the $32 million received by the lawyers for the plaintiffs in the *Chieftain* lawsuit by virtue of the settlement." XTO Energy and the Trustee are in the process of determining the portion of the $48 million that is allocable to Trust properties to be charged as an excess cost to the Trust, but estimate it to be approximately $14.6 million net to the Trust.

The reduction in the Trust's share of net proceeds from the portion of the settlement amount the Panel has ruled may be charged against the Oklahoma conveyance would result in excess costs under the Oklahoma conveyance that would likely result in no distributions under the Oklahoma conveyance while these excess costs are recovered. This award completes the portion of the arbitration related to the *Chieftain* settlement. Excess costs on any individual conveyance would not affect net proceeds to the Trust on any of the other remaining conveyances.

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Other Trustee claims related to disputed amounts on the computation of the Trust's net proceeds for 2014 through 2019 and 2021 were bifurcated from the initial arbitration. Pursuant to the purchase and sale agreement entered into between the Trustee and XTO Energy, the parties had agreed to stay the arbitration from the date of execution of the purchase and sale agreement to the earlier of the termination of the purchase and sale agreement or closing date of the sale of assets. Effective August 22, 2022, the Trustee and XTO Energy mutually agreed to terminate the purchase and sale agreement. As a result of the termination, the stay of these arbitration proceedings between XTO Energy and the Trustee with respect to the Trust is lifted. The arbitration proceedings have recommenced and the hearing is currently scheduled for May 30-31, 2023.

For more information on the Trust, please visit our website at <u>www.hgt-hugoton.com</u>.

***Statements made in this press release regarding future events or conditions are forward looking statements. Actual future results, including development costs and timing, and future net profits, could differ materially due to changes in natural gas and oil prices and other economic conditions affecting the gas and oil industry and other factors described in Part I, Item 1A of the Trust's Annual Report on Form 10-K for the year ended December 31, 2021.***

\* \* \*

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| | | |
|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Contacts: | Hugoton Royalty Trust<br> 855-588-7839 |  |
|  | Nancy Willis<br> Vice President<br> Argent Trust Company, Agent for the Trustee | Tod Miller<br> Regional President Trust Division<br> Simmons Bank, Trustee |

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