Cross Timbers Royalty Trust

Climate Impact & Sustainability Data (2022, 2023)

Fluctuations in oil and natural gas prices due to various uncontrollable factors (geopolitical instability, economic conditions, weather, etc.)
Higher production and development costs without concurrent revenue increases, especially for 75% net profits interests.
Government actions to discourage oil and gas production or promote alternatives.
Operational risks and hazards associated with oil and gas development and transportation.
Potential cybersecurity disruptions.
Depletion of assets over time.
XTO Energy's potential transfer of its interest in underlying properties without Trust consent.
Potential abandonment of properties by XTO Energy or other operators.
Potential sale of net profits interests and termination of the Trust.
Limited voting rights for unitholders and limited ability to enforce rights against operators.
Financial information not prepared in accordance with U.S. GAAP.
Uncertainty regarding the limited liability of Trust unitholders.
Risks associated with drilling oil and natural gas wells.
Complex federal, state, and local laws and regulations.
Cash held by the Trustee not insured by the FDIC.
Potential impact of legislative changes on tax treatment of Trust units.

XTO Energy maintains robust cybersecurity protocols.
The Trustee maintains robust cybersecurity protocols.
The Trustee establishes cash reserves for contingencies.
The Trust may borrow funds to pay liabilities if fully repaid before further distributions.

Lower gas prices
Decreased oil production
Increased production expenses
Increased taxes, transportation and other costs
Government action, policies or regulations designed to discourage production, reduce demand for, or promote alternatives to oil and gas
War, terrorism, geopolitical hostilities, and other military actions or political instability
Operational risks and hazards associated with the development and operations of the underlying properties
Cybersecurity disruptions
Risks relating to the creditworthiness of third parties
Depletion of assets
Complex federal, state and local laws and regulations

XTO Energy’s defensive preparedness includes multi-layered technological capabilities designed to prevent and detect cybersecurity disruptions; non-technological measures such as threat information sharing with governmental and industry groups; internal training and awareness campaigns including routine testing of employee awareness and business preparedness for response and recovery.
The Trustee also maintains robust cybersecurity protocols including, but not limited to, technological capabilities that prevent and detect disruptions; computer workstations and programs protected with passwords and passphrases, as well as employee training throughout the year on banking regulations and cybersecurity followed up by testing of that knowledge.