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Hugoton Royalty Trust Message Board

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  • doc111 Jun 21, 2012 2:46 PM Flag


    I am Long since 10 million worth of shares picked up by Simpson ( ?2009) & relied on guidance in annual reports( under litigation) stating that they were optimistic, but even an adverse ruling would not affect distributions. I relied on that. I do not know weather Simpson sold his shares prior to the settlement or still has them but that would be of interest. Please inform us of any known filings

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    • Doc,

      I think you may be off by a factor of 10 on the number of HGT units Bob Simpson, Founder and Chairman of Board of XTO, owned in 2009 - he owned 1 million. It's hard to tell what happens in the last three years and after XTO is bought up by XOM. No SEC Form4 record of sale on EDGAR, but he is not listed as a major holder either on your Yahoo menu. As to whether Bob Simpson would have XTO or his HGT interests as a priority, keep in mind Bob Simpson may have had a preference for keeping profits at XTO, the company he founded and was negotiating to sell for the highest possible price (think it was $31 billion?) in 2009-2010, rather than passing that cash flow through to land royalty owners and HGT unit holders.

      Yes, the 2011 Annual report implies a strong case you shouldn't worry about but you may have missed a later paragraph on page 36 ending with:

      “XTO Energy has informed the trustee that, although the amount of any reduction in net proceeds is not presently
      determinable, in its management’s opinion, the amount is not currently expected to be material to the trust’s financial
      position or liquidity though it could be material to the trust’s annual distributable income. Additionally, it could result
      in costs exceeding revenues on the properties underlying the Oklahoma and Kansas net profit interests for one or more
      monthly distributions, depending on the size of the judgment or settlement, if any, and the net proceeds being paid at
      that time.”

      That doesn't sound too "optimistic" for future distributions, more like buried CYA by auditors and XTO against impending settlements.

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