Mesa Royalty Trust

What they do

The Trust owns an overriding royalty equal to 11.44% of 90% of the Net Proceeds from specified interests in producing oil and gas properties. It has no employees; administrative functions are performed by The Bank of New York Mellon Trust Company, N.A. as Trustee. The Hugoton properties have been operated by Scout Energy Group V, LP since November 2019. The San Juan Basin—Colorado properties are operated by Simcoe (now a subsidiary of Mach Natural Resources LP) and Red Willow, and the San Juan Basin—New Mexico properties were historically operated by ConocoPhillips and XTO.

Revenue drivers

• Hugoton Royalty Properties (Kansas) — The Trust receives 11.44% of 90% of Net Proceeds from these Kansas properties. Operator is Scout Energy Group V, LP.
• San Juan Basin — Colorado Properties — The Trust receives 11.44% of 90% of Net Proceeds from these Colorado properties. Operators are Simcoe, a subsidiary of Mach Natural Resources LP, and Red Willow.
• San Juan Basin — New Mexico Properties — The Trust receives 11.44% of 90% of Net Proceeds from these New Mexico properties. ConocoPhillips operated substantially all of these properties until July 31, 2017, with certain interests assigned to XTO.

Recent performance

On August 21, 2026, the Trust announced there will be no distribution paid for the month of August 2026 because costs, charges and expenses attributable to the royalty properties exceeded revenue from the sale of oil, natural gas and other hydrocarbons. The Trust also stated that distributions are expected to be materially reduced until it increases its cash reserves to a total of $2.0 million. Production and development costs have resulted in substantial accumulated excess production costs, which decrease Trust distributions and in some periods result in no distributions. Proceeds reported by working interest owners for any month are not generally representative of future net proceeds.

Strategy

The Trust's stated priority is to increase its cash reserves to a total of $2.0 million to provide added liquidity; until then, distributions to unitholders are expected to be materially reduced. The Trust does not conduct drilling or development operations. It relies entirely on the working interest owners for operating data and payment of funds relating to the royalty properties. The Trustee has no control over production, commodity prices or the expenses charged by working interest owners.

Risks

• Commodity price volatility — Net Proceeds and distributions are heavily influenced by natural gas and crude oil prices, which fluctuate widely due to factors beyond the Trust's control, including OPEC+ actions, weather, and geopolitical conflict.
• Excess production costs — Substantial accumulated excess production costs charged by working interest owners reduce Trust distributions and can result in no distribution in some periods, as occurred for August 2026.
• No distribution risk — The Trust announced no distribution for August 2026, and stated distributions are expected to be materially reduced until cash reserves reach $2.0 million.
• Reliance on working interest owners — The Trust has no employees and no control over operations, historical operating data, or receipt and payment of funds by working interest owners; it cannot assure that errors or adjustments by those owners will not affect future royalty income.

Outlook

The Trust expects distributions to be materially reduced until it increases its cash reserves to a total of $2.0 million. It states that proceeds reported by working interest owners for any month are not generally representative of future net proceeds. The Trust also states that production and development costs have resulted in substantial accumulated excess production costs, which will decrease Trust distributions and in some periods may result in no Trust distributions. No assurances can be given that expectations will prove correct.