Mesa Royalty Trust (MTR) Q3 2024 earnings summary

Executive summary

• Q3 2024 royalty income was $63,966, down from $357,474 YoY; nine-month royalty income was $552,994, down from $2,982,346. Lower gas and NGL prices and production, plus higher costs, drove the decline.

• Q3 distributable income was $54,942, or $0.0295 per unit; after contingent-reserve adjustments, income available for distribution was $10,314, or $0.0055 per unit.

Financial highlights

• Q3 royalty and other income totaled $81,313 vs. $357,474 YoY; interest income was $25,887 vs. $32,329, and G&A expense was $52,258 vs. $31,131.

• Q3 income available before cash reserves was $54,942 vs. $358,672; nine-month distributable income was $400,622 vs. $2,606,218.

• Cash and short-term investments were $1,878,107 at Sept. 30, 2024 vs. $2,096,773 at Dec. 31, 2023; total assets were $3,157,006 vs. $3,407,466.

• Nine-month royalty income fell to $552,994 from $2,982,346 YoY; interest income was $74,532 vs. $75,351, while G&A expense rose to $157,587 from $151,479.

Outlook and guidance

• The Trustee intends to raise the contingent reserve to $2.0 million; additions will vary with circumstances and reduce proceeds available for distributions.

• Future distributions could be substantially reduced or absent if commodity prices weaken or remain volatile, or if royalty income is insufficient to fund the reserve increase.