UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 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): May 5, 2020

 

 

SABINE ROYALTY TRUST

(Exact name of Registrant as specified in its charter)

 

 

 

Texas   1-8424   75-6297143

(State or other jurisdiction of

incorporation or organization)

 

(Commission

File Number)

 

(I.R.S. Employer

Identification No.)

Simmons Bank

Park Place

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

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

 

 

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.):

 

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:

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange on which registered

Units of Beneficial Interest   SBR   New York Stock Exchange

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.  ☐

 

 

 


Item 2.02.

Results of Operations and Financial Condition.

On May 5, 2020, the Registrant issued a press release announcing its monthly cash distribution to unitholders of record on May 15, 2020. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

This Report on Form 8-K is being furnished pursuant to Item 2.02, Results of Operations and Financial Condition. The information furnished is not deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, is not subject to the liabilities of that section and is not deemed incorporated by reference in any filing under the Securities Act of 1933, as amended.

 

Item 9.01.

Financial Statements and Exhibits.

 

  d.

Exhibits

 

  99.1

Press Release dated May 5, 2020.


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 thereunto duly authorized.

 

SABINE ROYALTY TRUST
By: SIMMONS BANK, TRUSTEE
       By:   /s/ RON E. HOOPER
    Ron E. Hooper
    SVP Royalty Trust Management

Date: May 5, 2020

EX-99.1

Exhibit 99.1

Sabine Royalty Trust

News Release

SABINE ROYALTY TRUST ANNOUNCES

MONTHLY CASH DISTRIBUTION FOR MAY 2020

Dallas, Texas, May 5, 2020 – Simmons Bank, as Trustee of the Sabine Royalty Trust (NYSE: SBR), today declared a cash distribution to the holders of its units of beneficial interest of $0.151710 per unit, payable on May 29, 2020, to unit holders of record on May 15, 2020. Sabine’s cash distribution history, current and prior year financial reports and tax information booklets, a link to filings made with the Securities and Exchange Commission and more can be found on its website at http://www.sbr-sabine.com/. Also, printed reports can be requested and mailed free of charge.

During the month of April, the respective shelter-at-home/work-from-home orders across the spectrum of the industry has significantly affected the posting of revenues for the Trust, until the following month of May. As adjustments are made accordingly, the functions of the Trust are still being performed, although on a delay basis. We will continue to strive to make the operations of the Trust and its associates, as fluid as possible.

Also, the impact of the precipitous drop in energy pricing are not reflected in this month’s revenue, however will be seen in the months to come. With the assets of the Royalty Trust being almost true royalty interest ownership of established production streams, production should continue, however the over-supply of existing industry inventories will affect the ability to transport on down the production stream. As the result of these aforementioned factors, various producers/operators/purchasers may not be able to continue as they have been and could affect payment to the Trust. We are taking steps to monitor those various entities as they have a direct relationship with the Trust. The ownership of the Trust’s various royalty interests should not be diminished, as that will continue.

The distribution reflects primarily the oil production for February 2020 and the gas production for January 2020. Preliminary production volumes are approximately 38,002 barrels of oil and 374,983 Mcf of gas. Preliminary prices are approximately $52.37 per barrel of oil and $1.85 per Mcf of gas.

The table below compares this month’s production and prices to the previous month’s:

 

     Net to Trust Sales
Volumes
     Average Price  
     Oil
(bbls)
     Gas
(Mcf)
     Oil
(per bbl)
     Gas
(per Mcf)
 

Current Month

     38,002        374,983      $ 52.37      $ 1.85  

Prior Month

     56,112        616,497      $ 57.68      $ 1.96  

Revenues are only distributed after they are received, verified and posted. Most energy companies normally issue payment of royalties on or about the 25th of every month, and depending on mail delivery, a varying amount of royalties are not received until after the revenue posting on the last business day of the month. The revenues received after that date will be posted within 30 days of receipt.

Due to the timing of the end of the month of April, approximately $5,145,000 of revenue received will be posted in the following month of May in addition to normal receipts during May. Since the close of business in April and prior to this press release, there has been approximately $408,000 in revenue received.

Sabine Royalty Trust, as it does after the end of each year, had a year-end Reserve Report prepared in accordance with the Securities and Exchange Commission’s requirements. This report provides an evaluation of the estimated asset value as of December 31 of each year, which can be used to estimate the remaining life of the Trust.


The estimated net proved reserves, as of January 1, 2020, attributable to the Trust from the properties appraised are approximately 7.1 million barrels of oil and 35.4 billion cubic feet of gas with a future net value of approximately $322,126,000 with a discounted value at 10% of $158,710,000. With these estimated quantities of this year’s reserve estimate of 7.1 million barrels of oil and 35.4 billion cubic feet of gas remaining, it could be estimated that the Trust still has a life span of 9 to 12 years. The report is an exhibit to the Trust’s Annual Report on Form 10-K that was filed on March 2, 2020 and is available to all unitholders at this time on the SEC website and Sabine’s website.

The 2019 Annual Report with Form 10-K and the January 1, 2020 Reserve Summary is available on the Sabine website at http://www.sbr-sabine.com/.

*        *         *

 

Contact:    Ron Hooper
   SVP, Royalty Trust Services
   Simmons Bank
   Toll Free (855) 588-7839