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Here are 1-2 brief analogies to describe Cross Timbers Royalty Trust (CRT):

• A Real Estate Investment Trust (REIT), but focused on oil and gas mineral rights rather than physical properties.
• Similar to a music publishing company that collects royalties from songs, but earning income from oil and gas production instead.

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• Royalty Income Distributions: Cross Timbers Royalty Trust holds net overriding royalty interests in certain oil and natural gas properties and distributes the net proceeds from hydrocarbon sales from these properties directly to its unitholders.

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Cross Timbers Royalty Trust (CRT) is a statutory trust, not an operating company that engages in the direct sale of goods or services to customers. Therefore, CRT does not have "major customers" in the traditional sense.

Instead, CRT's income is derived from royalty payments on the production and sale of oil and natural gas from certain properties in which it holds net overriding royalty interests. These royalty payments are made by the operating company responsible for extracting and selling the oil and gas.

The primary operating company that makes these royalty payments to Cross Timbers Royalty Trust is XTO Energy Inc., a subsidiary of ExxonMobil Corporation (NYSE: XOM).

It is important to note that XTO Energy Inc. is not a "customer" in the sense of purchasing products or services from CRT. Rather, XTO Energy Inc. is the primary source of the royalty income distributed by the trust to its unitholders, based on the underlying oil and gas production.

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• Bank of America Corporation (symbol: BAC)
• Ernst & Young LLP

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Cross Timbers Royalty Trust (CRT) operates as an express trust and does not have a traditional management team with a CEO or CFO in the same way an operating company would. Instead, its administrative functions, including collecting net profits income and distributing it to unitholders, are performed by a Trustee. Argent Trust Company, a Tennessee chartered trust company, currently serves as the Trustee for Cross Timbers Royalty Trust, having been appointed on December 30, 2022, after Simmons Bank resigned.

The following individuals are key members of the leadership team at Argent Institutional Trust Company, part of Argent Financial Group, which acts as the Trustee for Cross Timbers Royalty Trust:

Steven B. Eason, Chief Executive Officer, Argent Institutional Trust Company

Steven B. Eason serves as the Chief Executive Officer of Argent Institutional Trust Company and is also the President of Corporate Trust. In this capacity, he is responsible for overseeing all fiduciary products, which encompass sales, marketing, service delivery, and financial performance.

Deborah George, Chief Financial Officer, Argent Institutional Trust Company

Deborah George holds the position of Chief Financial Officer at Argent Institutional Trust Company (AITC). Her responsibilities include the financial reporting to both executive management and the board of directors of AITC.

Anthony Guthrie, Executive Chairman, Argent Institutional Trust Company | President, Argent Financial Group

Anthony Guthrie is the Executive Chairman of Argent Institutional Trust Company and also serves as the President of Argent Financial Group. He provides executive leadership for Argent Institutional Trust Company, which was formed from TMI Holdings, Inc. and TMI Trust Company after they joined Argent in 2023.

Chris Teevan, Chief Operating Officer, Argent Financial Group and Argent Institutional Trust Company

Chris Teevan is the Chief Operating Officer for both Argent Financial Group and Argent Institutional Trust Company, which was formerly TMI Trust Company. He joined TMI Holdings, Inc. as Vice Chairman in 2017 and subsequently became the Chief Operating Officer of TMI Holdings and TMI in 2019.

Kevin M. Dobrava, Managing Director, Director of Corporate Trust Services, Argent Institutional Trust Company

Kevin M. Dobrava is a Managing Director and the Director of Corporate Trust Services at Argent Institutional Trust Company. He is recognized for his extensive experience as both a leader and an administrator within the Corporate Trust industry.

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The key risks to the business of Cross Timbers Royalty Trust (CRT) primarily stem from its nature as a royalty trust with depleting assets and exposure to volatile commodity markets.

1. Declining Production and Depletion of Reserves: A primary risk for Cross Timbers Royalty Trust is the natural decline in the production from its underlying oil and gas properties, leading to the depletion of reserves. The Trust anticipates an average annual decrease in its oil and gas production of 6% to 8% over the long term, which poses a significant challenge to future returns and distributions. For instance, between year-end 2022 and 2023, gas and oil reserves for the underlying properties saw a decrease of 23% and 25%, respectively. This long-term decay of producing fields is an inherent headwind for the Trust.
2. Volatile Oil and Natural Gas Prices: The monthly cash distributions from Cross Timbers Royalty Trust are highly dependent on the prices realized from the sale of natural gas and oil. These prices are subject to wide fluctuations due to numerous uncontrollable factors. Any significant decline in current or anticipated long-term oil and natural gas prices can materially and adversely affect the amount of economically viable production, the Trust's net profits, and consequently, the cash available for distribution to unitholders. The ongoing global transition towards clean energy sources also introduces a likelihood of decreasing fossil fuel prices in the coming years.
3. Rising Operational and Development Costs: The net profits income received by the Trust is reduced by production expenses and development costs associated with the underlying properties. There is a risk that if these costs exceed the revenues generated from the properties, particularly for the 75% net profits interests, the Trust may not receive income from those properties until all excess costs, including accrued interest, have been recovered from future net proceeds. This situation has occurred historically for some of the Trust's properties, highlighting the impact that increased expenses can have on distributable income.

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The increasing pressure from Environmental, Social, and Governance (ESG) investing criteria and broader societal shifts towards decarbonization present a clear emerging threat. This trend can lead to a shrinking investor base and lower valuations for entities focused solely on fossil fuel assets, regardless of underlying commodity prices, as capital increasingly flows towards more sustainable investments.

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The U.S. oil and gas market size was calculated at USD 1.55 trillion in 2024, grew to USD 1.61 trillion in 2025, and is projected to reach approximately USD 2.24 trillion by 2034, expanding at a Compound Annual Growth Rate (CAGR) of 3.75% between 2025 and 2034.

Specifically, Cross Timbers Royalty Trust's assets include 90% net profits interests in royalty and overriding royalty interest properties in Texas, Oklahoma, and New Mexico. Additionally, it holds 75% net profits working interests in properties in Texas and Oklahoma. Most of the income from the 90% net profits interests originates from long-lived gas properties in the San Juan Basin of northwestern New Mexico. The 75% net profits interests are primarily from oil-producing properties. In 2024, oil constituted 72% of CRT's total revenues, while gas made up 28%.

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The Cross Timbers Royalty Trust (CRT) operates as a pass-through entity with static assets, meaning it does not engage in new property acquisitions, customer expansion, or product development. Consequently, its future revenue growth is primarily influenced by external factors impacting its existing oil and natural gas interests. Based on recent reports and its business model, the expected drivers of future revenue over the next 2-3 years are:

1. Fluctuations in Oil Prices: Oil comprised 72% of the Trust's total revenues in 2024, making its income highly sensitive to global oil market dynamics. Changes in the average realized price of oil directly impact the net profits the Trust receives from its underlying properties.
2. Fluctuations in Natural Gas Prices: Natural gas accounted for 28% of CRT's total revenues in 2024. Similar to oil, the average realized price of natural gas significantly affects the Trust's revenue, particularly from its long-lived gas properties in the San Juan Basin, which are less subject to production or development costs.
3. Production Volumes from Underlying Properties: While the Trust faces a natural production decline rate of 6-8% per year across its oil and gas properties, actual production volumes will be a key driver. Higher volumes, as seen in Q1 2025 where oil and gas volumes grew, can partially offset dipped average realized prices and contribute to distributable cash flow.
4. Management of Production and Development Costs for Working Interests: The Trust holds a 75% net profit interest in working interest properties where unit holders share in production expense and development costs. While the 90% net profits interests are not subject to these costs, increased development costs, as experienced in 2024, can reduce the net profits available for distribution from the working interest properties, thereby impacting overall revenue.

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Share Repurchases

No share repurchases or authorizations for future repurchases were identified for Cross Timbers Royalty Trust over the last 3-5 years. As a royalty trust, CRT typically distributes its net profits to unitholders and does not engage in share buybacks.

Share Issuance

Cross Timbers Royalty Trust has not issued new shares over the last 3-5 years. The Trust was established in 1991, and its underlying assets are static, meaning no additional properties can be added through share issuance. The number of outstanding shares has remained constant at 6.00 million units.

Inbound Investments

No significant inbound investments by third-parties in Cross Timbers Royalty Trust were identified. As a pass-through entity, the Trust's primary function is to collect and distribute net profits income from its existing royalty interests.

Outbound Investments

No instances of Cross Timbers Royalty Trust making strategic investments in other companies were identified. Royalty trusts like CRT typically do not engage in such outbound investment activities.

Capital Expenditures

Cross Timbers Royalty Trust reported no direct capital expenditures from 2020 through 2024, with projections also showing zero for upcoming years through 2029. The Trust's 90% net profits interests are not subject to production or development costs. While the 75% net profits interests are subject to production and development costs, these are incurred by the operator (XTO Energy) and reduce the net profits distributed to the Trust, rather than being capital expenditures made by the Trust itself.