Cross Timbers Royalty Trust (CRT) risk factors, FY2024 10-K

Cross Timbers Royalty Trust's FY2024 10-K, filed Mar 27, 2025, lists 21 risk factors. There is no earlier 10-K to compare against, so the most company-specific risks are listed below.

Open CRT in Gloom →
Cross Timbers Royalty Trust's chart, financials and news, free in your browser.Open CRT in Gloom →
Risk factors listed
210 groups
Section length
4k wordsItem 1A

Cross Timbers Royalty Trust's biggest risks in the FY2024 10-K

  • Trust distributions depend entirely on commodity prices and production expenses managed by third-party operator XTO Energy.
  • Unitholders have limited control, no voting rights on property transfers, and face non-GAAP financial reporting.
  • The trust terminates if gross revenues fall below one million dollars over two years.

The risks most specific to Cross Timbers Royalty Trust

  • 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

    Monthly cash distributions depend entirely on volatile oil and natural gas prices outside the control of the Trust and XTO Energy.

  • 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

    Higher production expenses or development costs directly decrease the net proceeds payable to the Trust from the 75% net profits interests.

  • The Trust may be subject to attempted cybersecurity disruptions from a variety of sources including state-sponsored actors

    XTO Energy may experience cybersecurity disruptions from state-sponsored actors and other sources that could impact operations.

  • Trust unitholders and the Trustee have no influence over the operations on, or future development of, the underlying properties

    Unitholders and the Trustee have no influence over the operations or future development of the underlying properties managed by XTO Energy.

  • XTO Energy may transfer its interest in the underlying properties without the consent of the Trust or the Trust unitholders

    XTO Energy may transfer its interest in underlying properties without the consent or vote of the Trust or unitholders.

  • 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

    Operators may abandon wells or properties without unitholder consent if they cease to produce in commercially economic quantities, terminating the related net profits interest.

  • 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 will terminate if it fails to generate at least $1,000,000 in gross revenues per year over any successive two-year period.

  • Financial information of the Trust is not prepared in accordance with U.S. GAAP

    Financial statements are prepared on a modified cash basis rather than U.S. GAAP.

  • The limited liability of Trust unitholders is uncertain

    Trust unitholders lack the corporate liability shield and have uncertain limited liability protection.

All 21 risk factors

Headings as the filing states them, in filing order.

Other

  1. 01The market price for the Trust units may not reflect the value of the net profits interests held by the Trust
  2. 02Current 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
  3. 03Higher 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
  4. 04Government 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
  5. 05War, terrorism, geopolitical hostilities, and other military actions or political instability could adversely affect Trust distributions or the market price of the Trust units
  6. 06Proved 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
  7. 07Operational risks and hazards associated with the development and operations of the underlying properties may decrease Trust distributions
  8. 08The Trust may be subject to attempted cybersecurity disruptions from a variety of sources including state-sponsored actors
  9. 09Future net profits may be subject to risks relating to the creditworthiness of third parties
  10. 10Trust unitholders and the Trustee have no influence over the operations on, or future development of, the underlying properties
  11. 11XTO Energy may transfer its interest in the underlying properties without the consent of the Trust or the Trust unitholders
  12. 12XTO Energy or any other operator of any underlying property may abandon the property, thereby terminating the related net profits interest payable to the Trust
  13. 13The 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
  14. 14Trust 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
  15. 15Financial information of the Trust is not prepared in accordance with U.S. GAAP
  16. 16The limited liability of Trust unitholders is uncertain
  17. 17Drilling oil and natural gas wells is a high-risk activity and subjects the Trust to a variety of factors that it cannot control
  18. 18costs of, or shortages or delays in the availability of, drilling rigs, labor, tubular materials, and equipment
  19. 19The 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
  20. 20Cash held by the Trustee is not insured by the Federal Deposit Insurance Corporation
  21. 21The tax treatment of an investment in Trust units could be affected by recent and potential legislative changes, possibly on a retroactive basis

Other Cross Timbers Royalty Trust 10-Ks

  • FY2025 10-K risk factors
    21 risks2 reworded

    Tax risk was updated to include the One Big Beautiful Bill Act signed into law on July 4, 2025. Expense and development cost disclosures were updated with specific historical deficit periods for Texas and Oklahoma working interests through 2025.

    Filed Mar 27, 2026

About this page

The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.