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): December 4, 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 December 4, 2020, the Registrant issued a press release announcing its monthly cash distribution to unitholders of record on December 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
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: December 4, 2020
Exhibit 99.1
Sabine Royalty Trust
|
News Release
|
SABINE ROYALTY TRUST ANNOUNCES
MONTHLY CASH DISTRIBUTION FOR DECEMBER 2020
Dallas, Texas, December 4, 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 $0.124040 per unit, payable on December 29, 2020, to unit holders of record on December 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/. Additionally, printed reports can be requested and are mailed free of charge.
During the month of November, 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 November. As adjustments are made accordingly, the functions of the Trust are still being performed, although on a delayed basis. We will continue to strive to make the operations of the Trust and its providers, as fluid as possible.
Also, the impact of the precipitous drop in energy pricing are not reflected in this month’s revenue, however it has been seen in the previous months. 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.
This distribution reflects primarily the oil production for September 2020 and the gas production for August 2020. Preliminary production volumes are approximately 49,182 barrels of oil and 761,607 Mcf of gas. Preliminary prices are approximately $38.40 per barrel of oil and $1.68 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 |
49,182 | 761,607 | $ | 38.40 | $ | 1.68 | ||||||||||
| Prior Month |
54,132 | 619,545 | $ | 37.23 | $ | 1.45 | ||||||||||
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 November, approximately $671,000 of revenue received will be posted in the following month of December in addition to normal receipts during December. Since the close of business in November and prior to this press release, there has been approximately $555,000 in revenue received.
Approximately $722,000 for 2020 Ad Valorem taxes was deducted from this month’s distribution as compared to $922,000 this time last year. These payments are normal expenditures at this time of year.
The 2020 tax information packets are expected to begin mailing directly to unitholders in early March 2021. A copy of Sabine’s 2020 tax information booklet will be posted on Sabine’s website by March 1, 2021. In addition to the tax booklet the Sabine website will also offer two simple calculators for computing the income and expense amounts and the cost depletion. The calculators are currently expected to be updated with the 2020 tax information by February 26, 2021.
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 |