XTO Energy Inc. entered into a purchase and sale agreement to acquire Substantially All of the Assets of Hugoton Royalty Trust and Royalty Interest from Hugoton Royalty Trust (OTCPK:HGTX.U) for $6.6 million.
July 19, 2021
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XTO Energy Inc. entered into a purchase and sale agreement to acquire Substantially All of the Assets of Hugoton Royalty Trust and Royalty Interest from Hugoton Royalty Trust (OTCPK:HGTX.U) for $6.6 million on February 2, 2021. On February 2, 2021, the Trustee received multiple bids for the Trust's assets, including an all cash offer from XTO Energy for $6,000,000. On February 9, 2021, XTO Energy communicated an offer to the Trustee, increasing its all cash purchase price to $6,600,000. On July 2, 2021, XTO Energy signed the agreement. Concurrently with the execution of this agreement by XTO Energy and Hugoton Royalty Trust, XTO Energy shall deliver to Hugoton Royalty Trust a performance guarantee deposit equal to 10% of the purchase price. The Deposit shall be paid by XTO Energy to Hugoton Royalty Trust by means of a completed federal funds transfer. The purchase price is subject to adjustments. The consummation of the sale of the assets is subject to the satisfaction of customary closing conditions, including approval of the sale from holders of units of beneficial interest in the Trust holding units representing 80% or more of all the units outstanding, or a final judicial determination authorizing the trustee to consummate the sale of the assets. The Trustee intends to call a special meeting of Unit holders for the purpose of approving the sale of assets. As per filing on October 14, 2021, the transaction is subject to Unit holders approval. If Unit Holder approval is not obtained at the Special Meeting, the Trustee may seek court approval to complete the Sale or terminate the Trust. Execution of the purchase and sale agreement followed a process previously announced by the Trust whereby trustee had engaged a third party to market the Trust's assets. As of November 19, 2021, The trustee has called a special meeting of unit holders on December 10, 2021 for the purpose of approving the sale of assets. As of December 20, 2021, the acquisition was not approved by unitholders.
Amy R. Curtis from Thompson & Knight, LLP served as a legal advisor for Hugoton Royalty Trust. EnergyNet.com, LLC acted as financial advisor to Hugoton Royalty.
Hugoton Royalty Trust (the Trust) is an express trust, which is created pursuant to the Trust Indenture between XTO Energy Inc. (XTO Energy). XTO Energy conveyed to the Trust 80% net profits interests in certain predominantly natural gas producing working interest properties in Kansas, Oklahoma, and Wyoming under three separate conveyances. The net profits interests entitle the Trust to receive 80% of the net proceeds from the sale of oil and gas from the underlying properties. The net profits interests are the principal asset of the Trust. The Trust collects and distributes to unitholders monthly net profits income related to the 80% net profits interests. XTO Energy is a producer in the Ringwood, Northwest Okeene and Cheyenne Valley fields of Major County, the Northeast Cedardale field of Woodward County and the Elk City field of Beckham County. Argent Trust Company serves as the trustee of the Trust.
XTO Energy Inc. entered into a purchase and sale agreement to acquire Substantially All of the Assets of Hugoton Royalty Trust and Royalty Interest from Hugoton Royalty Trust (OTCPK: HGTX.U) for $6.6 million.
HUGOTON ROYALTY TRUST 
