Cross Timbers Royalty Trust (CRT) risk factors, FY2025 10-K

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 interests25% rewritten
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 basis33% rewritten