UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2026


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period to

Commission File Number: 1-8424

SABINE ROYALTY TRUST

(Exact name of registrant as specified in its charter)


Texas	75-6297143
( State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
Argent Trust Company 3838 Oak Lawn Ave, Suite 1720 Dallas, Texas 75219-4518
(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (855) 588-7839

Securities registered pursuant to Section 12(b) of the Act:


	Trading Symbol(s)	Name of each exchange on which registered
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 (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☐ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		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.☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes☐ No ☒

Number of units of beneficial interest outstanding at May 08, 2026: 14,579,345

Table of Contents

TABLE OF CONTENTS


PART I — FINANCIAL INFORMATION		3
	Item 1. Financial Statements	3
	Item 2. Trustee’s Discussion and Analysis of Financial Condition and Results of Operations	12
	Item 3. Quantitative and Qualitative Disclosures About Market Risk	14
	Item 4. Controls and Procedures	14
PART II — OTHER INFORMATION		15
	Item 1. Legal Proceedings	15
	Item 1A. Risk Factors	15
	Item 5. Other Information	15
	Item 6. Exhibits	15
SIGNATURES		16
EX-31
EX-32

Table of Contents

SABINE ROYALTY TRUST

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements.

The condensed financial statements included herein have been prepared by Argent Trust Company, as Trustee (the “Trustee”) of Sabine Royalty Trust (the “Trust”), pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in annual financial statements have been condensed or omitted pursuant to such rules and regulations, although the Trustee believes that the disclosures are adequate to make the information presented not misleading. The condensed financial statements of the Trust presented herein are unaudited. It is suggested that these condensed financial statements and notes thereto be read in conjunction with the financial statements and notes thereto included in the Trust’s latest annual report on Form 10-K. The December 31, 2025 condensed statement of assets, liabilities and trust corpus is derived from the audited statement of assets, liabilities and trust corpus as of that date. In the opinion of the Trustee, all adjustments necessary to present fairly the assets, liabilities and trust corpus of the Trust as of March 31, 2026, and the distributable income and the changes in trust corpus for the three months ended March 31, 2026 and 2025, have been included. The distributable income for such interim periods is not necessarily indicative of the distributable income for the full year. Unless specified otherwise, all amounts included herein are presented in US dollars.


	Page
Condensed Statements of Assets, Liabilities, and Trust Corpus	4
Condensed Statements of Distributable Income (Unaudited)	5
Condensed Statements of Changes in Trust Corpus (Unaudited)	6

Table of Contents

SABINE ROYALTY TRUST

CONDENSED STATEMENTS OF ASSETS, LIABILITIES, AND TRUST CORPUS


			March 31,		December 31,
			2026		2025
	Note		(UNAUDITED)
Assets
Cash and short-term investments			$	8,255,112	$	7,574,257
Royalty interests in oil and gas properties (less accumulated amortization of $22,327,768 and $22,325,577 at March 31, 2026 and December 31, 2025)				67,417		69,608
Total Assets			$	8,322,529	$	7,643,865
Liabilities and Trust Corpus
Trust expenses payable		4	$	369,804	$	289,128
Other payables		4		1,057,425		507,158
Total liabilities				1,427,229		796,286
Contingencies		5
Trust corpus — 14,579,345 units of beneficial interest authorized and outstanding				6,895,300		6,847,579
Total Liabilities and Trust Corpus			$	8,322,529	$	7,643,865

The accompanying notes are an integral part of these condensed financial statements.

Table of Contents

SABINE ROYALTY TRUST

CONDENSED STATEMENTS OF DISTRIBUTABLE INCOME (UNAUDITED)


		Three Months Ended March 31,
	Notes	2026			2025
Royalty income		$	14,191,624		$	19,394,566
Interest income			72,749			106,960
Total			14,264,373			19,501,526
General and administrative expenses	6		(1,222,077	)		(1,355,043	)
Distributable income		$	13,042,296		$	18,146,483
Distributable income per unit (14,579,345 units outstanding)	1,3,5	$	0.89		$	1.24

The accompanying notes are an integral part of these condensed financial statements.

Table of Contents

SABINE ROYALTY TRUST CONDENSED

STATEMENTS OF CHANGES IN TRUST CORPUS (UNAUDITED)


			Three Months Ended March 31,
	Note		2026			2025
Trust corpus, beginning of period			$	6,847,579		$	8,706,932
Amortization of royalty interests				(2,191	)		(3,537	)
Distributable income				13,042,296			18,146,483
Distributions		3		(12,992,384	)		(17,335,862	)
Trust corpus, end of period			$	6,895,300		$	9,514,016
Distributions per unit (14,579,345 units outstanding)		3	$	0.89		$	1.19

The accompanying notes are an integral part of these condensed financial statements.

Table of Contents

NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

1. TRUST ORGANIZATION AND PROVISIONS

Sabine Royalty Trust (the “Trust”) was established by the Sabine Corporation Royalty Trust Agreement (the “Trust Agreement”), made and entered into effective as of December 31, 1982, to receive a distribution from Sabine Corporation (“Sabine”) of royalty and mineral interests, including landowner’s royalties, overriding royalty interests, minerals (other than executive rights, bonuses and delay rentals), production payments and any other similar, nonparticipator interests, in certain producing and proved undeveloped oil and gas properties located in Florida, Louisiana, Mississippi, New Mexico, Oklahoma and Texas (the “Royalties”).

Certificates evidencing units of beneficial interest (the “Units”) in the Trust were mailed on December 31, 1982, to Sabine’s shareholders of record on December 23, 1982, on the basis of one Unit for each share of Sabine’s outstanding common stock.

In May 1988, Sabine was acquired by Pacific Enterprises. Through a series of mergers, Sabine was merged into Pacific Enterprises Oil Company (USA) (“Pacific (USA)”), which in turn was merged and consolidated into Sempra Energy, effective January 1, 1993. As of August 1, 2006, Sempra Energy sold its various interests and rights to Providence Energy Corporation (“Providence”). Providence in turn transferred its interests and rights to RJ Holdings, Inc. (“RJ Holdings”) as of June 1, 2021. These transactions had no effect on the Units. RJ Holdings, as successor to Sabine, has assumed by operation of law all of Sabine’s rights and obligations with respect to the Trust. References herein to RJ Holdings shall be deemed to include Sabine where appropriate.

In connection with the transfer of the Royalties to the Trust upon its formation, Sabine had reserved to itself all executive rights, including rights to execute leases and to receive bonuses and delay rentals. Through a series of mergers, Sabine was merged into Pacific (USA), which in turn was merged and consolidated into Sempra Energy, effective January 1, 1993. In January 1993, Pacific (USA) completed the sale of substantially all of Pacific (USA)’s producing oil and gas assets to Hunt Oil Company. The sale did not include executive rights relating to the Royalty properties, and ownership of such rights by Pacific (USA) (now PEC Minerals LP) was not affected by the sale. The Trustee currently reviews all leases executed on the Trust’s behalf.

The wells on the properties conveyed to the Trust are operated by many companies including large, established companies such as BP Amoco, Chevron, ConocoPhillips and ExxonMobil. The Trustee believes these operators utilize the recovery methods best suited for the particular formations on which the properties are located.

Argent Trust Company (the “Trustee”), acts as trustee of the Trust. The terms of the Trust Agreement provide, among other things, that:

•

The Trust shall not engage in any business or commercial activity of any kind or acquire assets other than those initially transferred to the Trust.

•

The Trustee may not sell all or any part of its assets unless approved by the holders of a majority of the outstanding Units in which case the sale must be for cash and the proceeds, after satisfying all existing liabilities, promptly distributed to Unit holders.

•

The Trustee may establish a cash reserve for the payment of any liability that is contingent or uncertain in amount or that otherwise is not currently due or payable.

•

The Trustee will use reasonable efforts to cause the Trust and the Unit holders to recognize income and expenses on monthly record dates.

•

The Trustee is authorized to borrow funds to pay liabilities of the Trust provided that such borrowings are repaid in full before any further distributions are made to Unit holders.

•

The Trustee will make monthly cash distributions to Unit holders of record on the monthly record date (see Note 3).

On November 4, 2021, Simmons Bank, as trustee, announced that it had entered into an agreement with Argent Trust Company, a Tennessee chartered trust company (“Argent”), pursuant to which Simmons Bank would be resigning as trustee of the Trust and would nominate Argent as successor trustee of the Trust. Simmons Bank’s resignation as trustee, and Argent’s appointment as successor trustee, became effective December 30, 2022.

The defined term “Trustee” as used herein shall refer to Southwest Bank for periods from May 30, 2014 through February 19, 2018, shall refer to Simmons Bank for periods on and after February 20, 2018 through December 29, 2022, and shall refer to Argent for periods on and after December 30, 2022.

Because of the passive nature of the Trust and the restrictions and limitations on the powers and activities of the Trustee contained in the Trust Agreement, the Trustee does not consider any of the officers and employees of the Trustee to be “officers” or “executive officers” of the Trust as such terms are defined under applicable rules and regulations adopted under the Securities Exchange Act of 1934.

The proceeds of production from the Royalties are receivable from hundreds of separate payors. In order to facilitate creation of the Trust and to avoid the administrative expense and inconvenience of daily reporting to Unit holders, the conveyances by Sabine of the Royalties located in five of the six states provided for the execution of an escrow agreement by Sabine and the initial trustee of the Trust, in its capacities as trustee of the Trust and as escrow agent. The conveyances by Sabine of the Royalties located in Louisiana provided for the execution of a substantially identical escrow agreement by Sabine and a Louisiana bank in the capacities of escrow agent and of trustee under the name of Sabine Louisiana Royalty Trust. Sabine Louisiana Royalty Trust, the sole beneficiary of which is the Trust, was established in order to avoid uncertainty under Louisiana law as to the legality

Table of Contents

of the Trustee’s holding record title to the Royalties located in Louisiana. The Trust now only has one escrow agent, which is the Trustee, and a single escrow agreement.

Pursuant to the terms of the escrow agreement and the conveyances of the properties by Sabine, the proceeds of production from the Royalties for each calendar month, and interest thereon, are collected by the Trustee, as escrow agent, and are paid to and received by the Trust only on the next monthly record date. The Trustee, as escrow agent, has agreed to endeavor to assure that it incurs and pays expenses and fees for each calendar month only on the next monthly record date. The Trust Agreement also provides that the Trustee is to endeavor to assure that income of the Trust will be accrued and received and expenses of the Trust will be incurred and paid only on each monthly record date. Assuming that the escrow agreement is recognized for federal income tax purposes and that the Trustee is able to control the timing of income and expenses, as stated above, cash and accrual basis Unit holders should be treated as realizing income only on each monthly record date. The Trustee is treating the escrow agreement as effective for federal income tax purposes. However, for financial reporting purposes, royalty and interest income are recorded in the calendar month in which the amounts are received by either the escrow agent or the Trust.

Distributable income as determined for financial reporting purposes for a given quarter will not usually equal the sum of distributions made during that quarter. Distributable income for a given quarter will approximate the sum of the distributions made during the last two months of such quarter and the first month of the next quarter.

2. ACCOUNTING POLICIES

Basis of Accounting

The condensed financial statements of the Trust are prepared on the following modified cash basis of accounting and are not intended to present financial position and results of operations in conformity with accounting principles generally accepted in the United States of America (“GAAP”):

•

Royalty income, net of severance and ad valorem taxes, and interest income are recognized in the month in which amounts are received by the Trust, pending verification of ownership and title.

•

Trust expenses, consisting principally of routine general and administrative costs, include payments made during the accounting period. Expenses are accrued to the extent of amounts that become payable on the next monthly record date following the end of an accounting period. Reserves for liabilities that are contingent or uncertain in amount may also be established if considered necessary.

•

Royalties that are producing properties are amortized using the unit-of-production method. This amortization is shown as a reduction of Trust corpus.

•

Distributions to Unit holders are recognized when declared by the Trustee (see Note 3).

The condensed financial statements of the Trust differ from financial statements prepared in conformity with accounting principles generally accepted in the United States of America because of the following:

•

Royalty income is recognized in the month received, pending verification of ownership and title, rather than in the month of production.

•

Expenses other than those expected to be paid on the following monthly record date are not accrued.

•

Amortization of the Royalties is shown as a reduction to Trust corpus and not as a charge to operating results.

•

Reserves may be established for contingencies that would not be recorded under accounting principles generally accepted in the United States of America.

This comprehensive basis of accounting other than GAAP corresponds to the accounting permitted for royalty trusts by the U.S. Securities and Exchange Commission, as specified by Staff Accounting Bulletin Topic 12:E, Financial Statements of Royalty Trusts. The Trustee believes such information includes all the disclosures necessary to make the information presented not misleading. The information furnished reflects all adjustments which are, in the opinion of the Trustee, necessary for a fair presentation of the results for the interim periods presented. The financial information should be read in conjunction with the financial statements and notes thereto included in the Trust’s Annual Report on Form 10-K for the year ended December 31, 2025. The Trust considers all highly liquid investments with a maturity of three months or less to be cash equivalents. Royalty interests in oil and gas properties are reviewed for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. If circumstances require the royalty interests in oil and gas properties to be tested for possible impairment, the Trust first compares undiscounted cash flows expected to be generated by the royalty interests in oil and gas properties to its carrying value. If the carrying value of the royalty interests in oil and gas properties is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying value exceeds its fair value. The fair value of the royalty interests in oil and gas properties is measured using valuation techniques consistent with the income approach, converting future cash flows to a single discounted amount.

Table of Contents

Use of Estimates

The preparation of condensed financial statements in conformity with the basis of accounting described above requires the Trustee to make estimates and assumptions that affect reported amounts of certain assets, liabilities, income and expenses as of and for the reporting periods. Actual results may differ from such estimates.

Distributable Income per Unit

Basic distributable income per Unit is computed by dividing distributable income by the weighted average number of Units outstanding. Distributable income per Unit assuming dilution is computed by dividing distributable income by the weighted average number of Units and equivalent Units outstanding. The Trust had no equivalent Units outstanding for any period presented. Therefore, basic distributable income per Unit and distributable income per Unit assuming dilution are the same.

New Accounting Pronouncements

There are no new pronouncements that are expected to have a significant impact on the Trust’s financial statements.

Federal Tax Considerations

The Internal Revenue Service (the “Service”) has ruled that the Trust is classified as a grantor trust for federal income tax purposes and therefore is not subject to federal income tax at the trust level. The Unit holders are considered, for federal income tax purposes, to own the Trust’s income and principal as though no trust were in existence. Accordingly, no provision for federal income tax expense has been made in these financial statements. The income of the Trust will be deemed to have been received or accrued by each Unit holder at the time such income is received or accrued by the Trust (on the applicable monthly record date) if the escrow arrangement discussed in Note 1 to these financial statements is respected by the Service. If the escrow arrangement is not respected for federal income tax purposes, Unit holders would be deemed to receive or accrue income from production from the royalty properties (and interest income) on a daily basis, in accordance with their method of accounting, when the proceeds from production and interest thereon were received or accrued by the escrow agent. The Trustee is treating the escrow arrangement as effective for federal income tax purposes and furnishes tax information to Unit holders on that basis.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law. The OBBBA includes significant federal income tax provisions, such as the permanent extension of the income tax rates set by the Tax Cuts and Jobs Act, the continued suspension of miscellaneous itemized deductions and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. Each Unit holder should consult their own tax advisor regarding the potential tax consequences of the OBBBA and its impact on such person’s ownership of Trust Units.

State Tax Considerations

The Trust holds properties located in Florida, Louisiana, Mississippi, New Mexico, Oklahoma, and Texas. Unit holders should consult the Trust’s latest annual report on Form 10-K for a summary of tax matters.

Florida does not impose an individual income tax. Florida imposes an income tax on resident and nonresident corporations (except for S corporations not subject to the built-in-gains tax or passive investment income tax), which will apply to royalty income allocable to a corporate Unit holder from properties located within Florida.

Louisiana, Mississippi, New Mexico and Oklahoma each impose an income tax applicable to both resident and nonresident individuals and/or corporations (subject to certain exceptions for S corporations and limited liability companies, depending on their treatment for federal tax purposes), which will apply to royalty income allocable to a Unit holder from properties located within these states. New Mexico and Oklahoma impose a withholding tax on payments to nonresidents of oil and gas proceeds derived from royalty interests. To reduce the administrative burden imposed by these rules, the Trustee has opted to allow the payors of oil and gas proceeds to withhold on royalty payments made to the Trust. The Trust files New Mexico tax returns, obtains a refund, and distributes that refund to Unit holders. Unit holders who transfer their Units before the New Mexico tax refunds are received by the Trust or after the refunds are received but before the next monthly record date will not receive any portion of the refund. As a result, such Unit holders may effectively incur a double tax — first, through the reduced distribution received from the Trust (as withholding at the Trust level reduces the amount of cash available for distribution) and second, by the tax payment made directly to New Mexico taxing authorities with the filing of their New Mexico income tax returns. With respect to Oklahoma, the Trust has historically filed Oklahoma tax returns, claimed and received refunds for withholding tax and distributed these refunds to Unit holders. However, beginning in 2018 through 2023, the Trust’s refund claims were denied, as the Oklahoma Tax Commission determined that the Trust does not qualify for an exemption from withholding in Oklahoma. For 2024 and forward, pursuant to guidance from the Oklahoma Tax Commission, the Trustee will include Oklahoma source income and related withholding tax on the Trust’s Oklahoma tax return. The excess withholding tax, if any, is refunded to the Trustee and distributed to Unit holders.

Texas does not impose an individual income tax. Texas imposes a franchise tax at a rate of 0.75% on gross revenues less certain deductions, as specifically set forth in the Texas franchise tax statutes. Entities subject to the Texas franchise tax generally include trusts and most other types of entities that provide limited liability protection, unless otherwise exempt. Trusts that receive at least 90% of their federal gross income from certain passive sources, including royalties from mineral properties and other non-operated mineral interest income, and do not receive more than 10% of their income from operating an active trade or business generally are exempt from the Texas franchise tax as “passive entities.” The Trust has been and expects to continue to be exempt from Texas franchise tax as a passive entity. Because the Trust should be exempt from Texas franchise tax at the Trust level as a passive entity, each Unit holder that is a taxable entity under the Texas franchise tax generally will be required to include its portion of

Table of Contents

Trust revenues in its own Texas franchise tax computation. This revenue is sourced to Texas under provisions of the Texas Administrative Code providing that such income is sourced according to the principal place of business of the Trust, which is Texas.

Unit holders should consult their tax advisor regarding the possible state tax implications of owning Trust Units.

3. DISTRIBUTION TO UNIT HOLDERS

The amount to be distributed to Unit holders (“Monthly Income Amount”) is determined on a monthly basis. The Monthly Income Amount is an amount equal to the sum of cash received by the Trust during a monthly period (the period commencing on the day after a monthly record date and continuing through and including the next succeeding monthly record date) attributable to the Royalties, any reduction in cash reserves and any other cash receipts of the Trust, including interest, reduced by the sum of liabilities paid and any increase in cash reserves. Due to the fact that oil and natural gas prices have been unusually volatile in recent history, the Trustee maintains an expense reserve. The expense reserve was established to allow the Trustee to pay general and administrative expenses even if there were not sufficient funds generated from monthly royalty income to pay such expenses. Unit holders of record as of the monthly record date (the 15th day of each calendar month except in limited circumstances) are entitled to have distributed to them the calculated Monthly Income Amount for such month on or before 10 business days after the monthly record date. The Monthly Income Amount per Unit is declared by the Trust no later than 10 days prior to the monthly record date.

The cash received by the Trust from purchasers of the Trust’s oil and gas production consists of gross sales of production less applicable severance taxes and ad valorem taxes.

4. PAYABLES

Payables consist primarily of royalty receipts suspended pending verification of ownership interest or title, as well as amounts the Trustee has reserved for payments of other expenses.

The Trustee believes that these payables represent an ordinary operating condition of the Trust and that such payables will be paid or released in the normal course of business with the exception of amounts reserved for payment of expenses.

5. CONTINGENCIES

Contingencies related to the royalty properties that are unfavorably resolved would generally be reflected by the Trust as reductions to future royalty income payments to the Trust with corresponding reductions to cash distributions to Unit holders. The Trustee is not aware of any such items as of March 31, 2026.

6. TRUSTEE FEES


	Three Months ended March 31,
	2026		2025
Trustee Fee	$	130,118	$	142,952
Escrow Agent Fee		390,351		428,855
Trustee Bonus Fee (1)		91,320		92,271
Total Fees	$	611,789	$	664,078

(1) Per the Sabine Trust Agreement, Exhibit C II. (4), this bonus is limited to the sum of “...(a) 100% of Cost Savings to the extent that they represent 10% or less of the Estimated Annual Administrative Costs for any accounting year and (b) 50% of Cost Savings to the extent that they represent more than 10% of the Estimated Annual Administrative Cost for any accounting year.” In 2025, the sum of the cost savings calculated in accordance with the preceding sentence was approximately $256,000, which resulted in a bonus to the Trustee of approximately $365,000. This bonus will be taken each month in the amount of approximately $30,000, from February 2026 until January 2027.

7. SUBSEQUENT EVENTS

Subsequent events are evaluated through the issuance of the financial statements. Subsequent to March 31, 2026, the Trust declared the following distributions:


Notification Date	Monthly Record Date	Payment Date	Distribution per Unit
April 2, 2026	April 15, 2026	April 29, 2026	$	0.324970
May 5, 2026	May 15, 2026	May 29, 2026	$	0.497900

Table of Contents

* * * * *

Table of Contents

Item 2. Trustee’s Discussion and Analysis of Financial Condition and Results of Operations, Liquidity and Capital Resources

Liquidity and Capital Resources

The Trust makes monthly distributions to the holders of Units of the excess of the preceding month’s royalty income received over expenses incurred. Upon receipt, royalty income is invested in short-term investments until its subsequent distribution. In accordance with the Trust Agreement, the Trust’s only long-term assets consist of royalty interests in producing and proved undeveloped oil and gas properties. Although the Trust is permitted to borrow funds if necessary to continue its operations, borrowings are not anticipated in the foreseeable future. Accordingly, the Trust is dependent on receipt of royalty income to generate excess cash flows utilized in making distributions. These cash flows are largely dependent on such factors as oil and gas prices and production volumes, which are influenced by many factors beyond the control of the Trust. The Trust does not undertake capital projects or make capital expenditures, and is not liable for any production costs or liabilities attributable to the Royalty Properties.

Commodity Prices

The Trust’s income and monthly distributions are heavily influenced by commodity prices. Commodity prices may fluctuate widely in response to (i) relatively minor changes in the supply of and demand for oil and natural gas, (ii) market uncertainty and (iii) a variety of additional factors that are beyond the Trustee’s control. The price of oil and natural gas showed strength in early 2026, with oil prices rising primarily due to improving demand expectations, continued production discipline among major exporting countries, and geopolitical tensions, including ongoing conflicts in key producing regions, that heightened concerns over potential supply disruptions. Natural gas prices rose in the first quarter of 2026 amid tighter market conditions and increased demand. Colder-than-normal winter weather led to higher consumption and reduced inventory levels, while increased liquefied natural gas exports and supply constraints in certain regions further contributed to higher prices during the first quarter of 2026. Factors which may affect commodity prices are discussed below and under “Item 1A—Risk Factors” in the Trust’s Form 10-K for the year ended December 31, 2025. Factors that may impact future commodity prices, including the price of oil and natural gas, include but are not limited to:

•

political conditions in major oil producing regions, especially in the Middle East and Eastern Europe;

•

worldwide economic and geopolitical conditions;

•

weather conditions;

•

trade barriers and tariffs;

•

public health concerns;

•

the supply and price of domestic and foreign crude oil or natural gas;

•

the level of consumer demand;

•

the price and availability of alternative fuels;

•

the proximity to, and capacity of, transportation facilities;

•

the effect of worldwide energy conservation measures and governmental policies and regulatory incentives for investment in non-fossil fuel energy sources; and

•

the nature and extent of governmental regulation and taxation.

Although we cannot predict the occurrence of events that may affect future commodity prices or the degree to which these prices will be affected, gas royalty income for a given period generally relates to production three months prior to the period and crude oil royalty income for a given period generally relates to production two months prior to the period and will generally approximate current market prices in the geographic region of the production at the time of production. When crude oil and natural gas prices decline, the Trust is affected in two ways. First, distributable income from the Royalty properties is reduced. Second, exploration and development activity by operators on the Royalty properties may decline as some projects may become uneconomic and are either delayed or eliminated. It is impossible to predict future crude oil and natural gas price movements, and this reduces the predictability of future cash distributions to Unit holders.

Results of Operations

Distributable income consists of royalty income plus interest income plus any decrease in cash reserves established by the Trustee less general and administrative expenses of the Trust less any increase in cash reserves established by the Trustee. Distributable income for the three months ended March 31, 2026, was $13,042,296, or $0.89 per unit. Royalty income for the three months ended March 31, 2026, amounted to $14,191,624

while interest income was $72,749. General and administrative expenses totaled $1,222,077 for the three months ended March 31, 2026.

Distributions during the period were $0.321550, $0.283370, and $0.286230 per Unit payable to Unit holders of record on January 15, February 17, and March 16, 2026, respectively.

Royalty income for the quarter ended March 31, 2026, decreased approximately $5,203,000, or 27%, compared with the first quarter of 2025. This decrease was primarily due to lower production of both oil and natural gas ($7.0 million), lower miscellaneous and settlement income ($0.7 million), and lower oil prices ($0.5 million), partially offset by higher natural gas prices ($2.3 million) and lower operating expenses and taxes ($0.7 million).

Table of Contents

Compared to the preceding quarter ended December 31, 2025, royalty income increased by approximately $631,000, or 5%, mainly due to higher natural gas prices ($1.0 million), along with lower operating expenses and taxes ($2.4 million). These increases were partially offset by lower production of oil and natural gas ($1.8 million), along with lower oil prices ($1.0 million).

The following tables illustrate average prices received for the periods discussed above and the related oil and gas production volume:


			Quarter Ended
	March 31,		March 31,		December 31,
	2026		2025		2025
Production
Oil (Bbls)		139,120		211,707		150,309
Gas (Mcfs)		2,838,284		3,883,612		3,243,044
Average Realized Price
Oil (per Bbl)	$	56.91	$	59.17	$	63.19
Gas (per Mcf)	$	2.78	$	2.19	$	2.47

Oil royalty income for the three months ended March 31, 2026, related primarily to production for November 2025 through January 2026. The average price of oil as reported by NYMEX for that time period was $59.29 per barrel. The average price of oil was $72.74 per barrel for January through March 2026. Gas royalty income received for the three months ended March 31, 2026, related primarily to production for October through December 2025. The average price of gas reported by Henry Hub for the same time period was $3.35 per thousand cubic feet (“Mcf”). The average price of gas for Henry Hub was $4.24 per Mcf for January through March 2026. As of April 27, 2026, the price of gas reported by Henry Hub was $2.45 per Mcf and the price of oil reported by NYMEX was $99.89 per barrel. It is difficult to estimate future prices of oil and gas, and any assumptions concerning future prices may prove to be incorrect.

Interest income for the quarter ended March 31, 2026, decreased approximately $34,200 compared with the first quarter of 2025. Compared to the preceding quarter ended December 31, 2025, interest income decreased approximately $16,800. Changes in interest income are the result of changes in interest rates and funds available for investment.

General and administrative expenses decreased approximately $133,000 for the three months ended March 31, 2026, compared to the same time period in 2025 due to a decrease in Escrow Agent/Trustee fees of approximately $52,300, professional and legal fees of approximately $24,100, unitholder services cost of approximately $53,400 and miscellaneous expenses of approximately $3,200.

Compared to the previous quarter ended December 31, 2025, general and administrative expenses increased approximately $327,400. This increase was primarily due to an increase in professional and legal fees of approximately $225,500, and unitholder services costs of approximately $150,600. These increases were partially offset by a decrease in Escrow Agent/Trustee/Bonus fees of approximately $9,800, and miscellaneous and other expenses of approximately $39,100.

•

Royalty income is recognized in the month received, pending verification of ownership and title, rather than in the month of production.

•

Expenses other than those expected to be paid on the following monthly record date are not accrued.

•

Amortization of the Royalties is shown as a reduction to Trust corpus and not as a charge to operating results.

•

Reserves may be established for contingencies that would not be recorded under accounting principles generally accepted in the United States of America.

Critical Accounting Policies and Estimates

A disclosure of critical accounting policies and the more significant judgments and estimates used in the preparation of the Trust’s financial statements is included in Item 7 of the Trust’s Annual Report on Form 10-K for the year ended December 31, 2025. There have been no significant changes to the critical accounting policies during the three months ended March 31, 2026.

Distributable Income per Unit

Table of Contents

New Accounting Pronouncements

There are no new pronouncements that are expected to have a significant impact on the Trust’s financial statements.

Forward Looking Statements

This Report includes “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, which are intended to be covered by the safe harbor created thereby. All statements other than statements of historical fact included in this Report are forward-looking statements. Although the Trustee believes that the expectations reflected in such forward-looking statements are reasonable, such expectations are subject to numerous risks and uncertainties and the Trustee can give no assurance that they will prove correct. There are many factors, none of which are within the Trustee’s control, that may cause such expectations not to be realized, including, among other things, factors identified in the Trust’s most recent Annual Report on Form 10-K affecting oil and gas prices and the recoverability of reserves, general economic conditions, actions and policies of petroleum-producing nations and other changes in the domestic and international energy markets.

The Trust has an Internet website and has made available its annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to such reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act at http://www.sbr-sabine.com as soon as reasonably practicable after such information is electronically filed with or furnished to the SEC.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

The Trust invests in no derivative financial instruments and has no foreign operations or long-term debt instruments. Other than the Trust’s ability to periodically borrow money as necessary to pay expenses, liabilities and obligations of the Trust that cannot be paid out of cash held by the Trust, the Trust is prohibited from engaging in borrowing transactions. The amount of any such borrowings is unlikely to be material to the Trust. The Trust periodically holds short-term investments acquired with funds held by the Trust pending distribution to Unit holders and funds held in reserve for the payment of Trust expenses and liabilities. Because of the short-term nature of these borrowings and investments and certain limitations upon the types of such investments which may be held by the Trust, the Trustee believes that the Trust is not subject to any material interest rate risk.

Item 4. Controls and Procedures.

As of the end of the period covered by this report, the Trustee carried out an evaluation of the effectiveness of the design and operation of the Trust’s disclosure controls and procedures pursuant to Exchange Act Rules 13a-15 and 15d-15. Based upon that evaluation, the Trustee concluded that the Trust’s disclosure controls and procedures are effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by the Trust in the reports that it files or submits under the Securities Exchange Act of 1934 and are effective in ensuring that information required to be disclosed by the Trust in the reports that it files or submits under the Securities Exchange Act of 1934 is accumulated and communicated to the Trustee to allow timely decisions regarding required disclosure. There has not been any change in the Trust’s internal control over financial reporting during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Trust’s internal control over financial reporting.

On May 14, 2013, the Committee of Sponsoring Organizations of the Treadway Commission issued an updated version of its Internal Control – Integrated Framework (the “2013 Framework”). Originally, issued in 1992, the framework helps organizations design, implement and evaluate the effectiveness of internal control concepts and simplify their use and application. The Trustee has transitioned fully to the 2013 Framework and is utilizing this framework in its evaluation of the Trust’s internal control over financial reporting.

Table of Contents

PART II — OTHER INFORMATION

Item 1. Legal Proceedings.

Not applicable.

Item 1A. Risk Factors.

Risk factors relating to the Trust are contained in Item 1A of the Trust’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025. No material change to such risk factors has occurred during the three months ended March 31, 2026. Items 2-4 not applicable.

Item 2-4. Not applicable

Item 5. Other Information.

(c) The Trust does not have any directors or officers, and as a result, no such persons adopted or terminated any Rule 10b5-1 trading arrangement or any non-Rule 10b5-1 trading arrangement, as defined in Item 408(a) of Regulation S-K.

Item 6. Exhibits.

Exhibit Number and Description


4(a)*	Sabine Corporation Amended and Restated Royalty Trust Agreement effective as of May 22, 2014

(b)**	Amendment No. 1 to the Amended and Restated Royalty Trust Agreement of Sabine Royalty Trust, dated May 2, 2022

(c)***	Sabine Corporation Louisiana Royalty Trust Agreement effective as of December 31, 1982, by and between Sabine Corporation and Hibernia National Bank in New Orleans, as trustee, and joined by InterFirst Bank Dallas, N.A., as trustee. (P)

31	Trustee Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32	Trustee Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

99	Item 1A and 7 to the Annual Report on Form 10-K for Sabine Royalty Trust filed with the Securities and Exchange Commission on February, 27, 2026 (incorporated herein by reference).

* Exhibit 4(a) is incorporated herein by reference to Exhibit 4(a) of the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2014.

** Exhibit 4(b) is incorporated herein by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K, filed May 6, 2022.

*** Exhibit 4(c) is incorporated herein by reference to Exhibit 4(b) of the Registrant’s Annual Report on Form 10-K for the year ended December 31, 1993.

(P)

Paper exhibits.

Table of Contents

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:		Argent Trust Company, Trustee

By:		/s/ Nancy Willis
		Nancy Willis
		Director of Royalty Trust Services

Date: May 08, 2026

(The Trust has no directors or executive officers.)

SABINE ROYALTY TRUST 10-Q