The Texas company that owns royalty interests in the Hugoton field of Southwest Kansas and the San Juan Basin oilfields of New Mexico and southern Colorado announced it will not make any distribution payments for the November.
Mesa Royalty Trust, based in Houston, said there would be no distribution paid for the month ended November 2020 to holders of record as of the close of business Nov. 30, 2020.
The firm explained that costs, charges and expenses attributable to the Trust’s royalty properties and applicable reserves exceeded the revenue from the sale of the oil and natural gas produced from the properties. Mesa Royalty blamed the COVID-19 pandemic for the revenue problems.
“There has been a substantial decrease in oil and natural gas prices in 2020 due in part to significantly decreased demand as a result of the COVID-19 pandemic and an oversupply of crude oil,” stated the firm in making the announcement.
The company wasn’t optimistic that oil and natural gas prices will rebound, stating that they could remain low for an extended period of time “which in turn could have a material adverse effect on Trust distributions.”