SecProbe.io

April 8, 2020

Via E -mail
George R. Bason, Jr., Esq .
Davis Polk & Wardwell LLP
450 Lexington Avenue
New York, New York 10017

Re: Hugoton Royalty Trust
Schedule TO -T
Filed April 1 , 2020 by XTO Energy Inc.
File No. 5-56403

Dear M r. Bason :

We have review ed the above filing and have the following comments.  Some of our
comments may ask you to provide us with information so we may better understand the
disclosure.

Please respond to this letter by amending the filing or providing the requested
information.   If you do not believe our comments apply to the filing person ’s facts and
circumstances or do not believe an amendment is appropriate, please tell us why in your
response.

After reviewing any amendment to the filing and the information you provide in response
to these comments, we may have additional comments.  A ll defined terms used in this letter have
the same meaning as in the Offer to Purchase, unless otherwise indicated.

Offer to Purchase

1. Please provide us with a legal analysis explain ing why Exchange Act Rule 13e -3 is
inapplicable .  In your response, please address why the bidder should not be considered
an “affiliate, ” as defined in Exchange Act Rule 13e -3(a)(1) , given the disclosure in the
last paragraph on page 1 , in the second paragraph following the caption “General ” on
page 19 and in the last parag raph on page 26, and the definition  of “control ,” as define d
in Rule 12b -2 to include “the possession …of the power to direct or cause the direction of
the management and policies of a person, whether through the ownership of securities,  by
contract or otherwise ” (emphasis added).

George R. Bason, Jr., Esq .
Davis Polk & Wardwell LLP
April 8, 2020
Page 2

Conditions of the Offer, page 35

2. Refer to condition s A and C .  A tender offer may be conditioned on a variety of events
and circumstances, provided that such conditions  are drafted with sufficient specificity to
allow for objective verification  that such conditions have been satisfied and to prevent the
Offeror from asserting such conditions  at any time for any reason .  To the extent a bidder
reserves the right to assert an offer condition based upon its “sole judgment ” or its own
action or inaction, without a reasonableness or materiality qualifier , the tender offer could
be viewed  as illusory and thus in contravention of Exchange Act section 14(e).   Please
revise these condition s to remove such implication .

3. Refer to the preceding comment.  The disclosure in condition s A. and B. include  the
language that “there shall be threatened …any action or proceeding …” and  “any
change …shall be threatened …”  With a view towards disclosure, please advise what is
meant by the term “ threatened” and how it may be objectively determinable.

4. While the O ffer may be conditioned on any number of objec tive and clearly -described
conditions, reserving the right to terminate the Offer “regardless of the circumstances
(including any action or inaction by the Offeror or any of its affiliates) giving rise to any
such condition …” potentially renders the Offer illusory because the action or inaction of
the Offeror or its affil iates could serve as jus tification for terminating the Of fer.  To avoid
the Offer potentially constituting an illusory offer in contravention of section 14(e) ,
please revise to remove  the implication that the offer conditions may be triggered by
action or inaction of the Offeror  or any its affil iates.

5. We note the following statement: “ The failure by the Offeror at any time to exercise its
rights under any of the foregoing conditions shall not be deemed a waiver of any such
right s and each such right shall be deemed an ongoing right which  may be asserted at any
time or from time to time.”  This language suggests that if a condition is triggered and the
Offeror  fails to assert the  condition, the Offeror will not lose the righ t to assert the
condition at a later time.  Please note that when a condition is triggered and the Offeror
decides to proceed with the Offer anyway, we believe that this decision is tantamount to a
waiver of the triggered condition(s).  Depending on t he materiality of the waived
condition and the number of days remaining in the Offer, the Offeror may be required to
extend the Offer and recirculate new disclosure to security holders.  Please confirm the
Offeror ’s understanding that if an Offer condition is triggered, the Offeror will notify
shareholders whether or not it has waived such condition.  In addition, when an Offer
condition is triggered by events that occur during the Offer period and before the
expiration of t he Offer, the Offeror should inform holders how it intends to proceed
immediately, rather than waiting until the end of the Offer period, unless the condition is
one where satisfaction of the condition may be determined only upo n expiration. Please
confirm the Offeror ’s understanding in your response letter .

George R. Bason, Jr., Esq .
Davis Polk & Wardwell LLP
April 8, 2020
Page 3

 6. We note the following statement: “Any determination by the Offeror concerning the
events described in this Section shall be final and binding on all parties.” Please revise
this s tatement to include a qualifier indicating that holders are not foreclosed from
challenging the Offeror ’s determination in a court of competent jurisdiction.

*    *    *

We remind you that the filing person is responsible for the accuracy and adequacy of
their disclosures, notwithstanding any review, comments , action or absence of action by the staff.

 Please contact me at (202) 551 -3444 with any questions.

Sincerely,

/s/ Perry J. Hindin

Perry J. Hindin
Special Counsel
Office of Mergers and Acquisitions