881787--3/16/2006--CROSS_TIMBERS_ROYALTY

related topics

{interest, director, officer}

{gas, price, oil}

{loss, insurance, financial}

{operation, natural, condition}

{tax, income, asset}

{operation, international, foreign}

The market price for the trust units may not reflect the value of the net profits interests held by the trust. Oil and natural gas prices fluctuate due to a number of uncontrollable factors, and any decline will adversely affect the net proceeds payable to the trust and trust distributions. Higher production expense and/or development costs, without concurrent increases in revenue, will directly decrease the net proceeds payable to the trust from the properties underlying the 75% net profits interests. Proved reserve estimates depend on many assumptions that may turn out to be inaccurate. Any material inaccuracies in reserve estimates or underlying assumptions could cause the quantities and net present value of the reserves to be overstated. Operational risks and hazards associated with the development of the underlying properties may decrease trust distributions. Trust unitholders and the trustee have no influence over the operations on, or future development of, the underlying properties. The assets of the trust represent interests in depleting assets and, if XTO Energy and any other operators developing the underlying properties do not perform additional development projects, the assets may deplete faster than expected. Eventually, the assets of the trust will cease to produce in commercial quantities and the trust will cease to receive proceeds from such assets. Terrorism and continued geopolitical hostilities could adversely affect trust distributions or the market price of the trust units. XTO Energy may transfer its interest in the underlying properties without the consent of the trust or the trust unitholders. The operators of any underlying property may abandon the property, thereby terminating the related net profits interest payable to the trust. The net profits interests can be sold and the trust would be terminated. Trust unitholders have limited voting rights and have limited ability to enforce the trust s rights against the current or any future operators of the underlying properties. Financial information of the trust is not prepared in accordance with GAAP. The limited liability of trust unitholders is uncertain. Drilling oil and natural gas wells is a high-risk activity and subjects the trust to a variety of factors that it cannot control. The underlying properties are subject to complex federal, state and local laws and regulations that could adversely affect net proceeds payable to the trust and trust distributions.

Full 10-K form ▸

881787--3/16/2006--CROSS_TIMBERS_ROYALTY_TRUST