The following discussion should be read in conjunction with the trustee's discussion and analysis contained in the trust's 2008 annual report, as well as the condensed financial statements and notes thereto included in this quarterly report on Form 10-Q. The trust's Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to those reports are available on the trust's web site at www.hugotontrust.com.

Distributable Income

For the quarter ended March 31, 2009, net profits income was $5,777,425, as compared to $22,035,854 for first quarter 2008. Decreased net profits income is primarily the result of lower oil and gas prices. See "Net Profits Income" below.

After adding interest income of $132 and deducting administration expense of $312,197, distributable income for the quarter ended March 31, 2009 was $5,465,360, or $0.136634 per unit of beneficial interest. Changes in interest income are attributable to fluctuations in net profits income and interest rates. Administration expense for the quarter increased from the prior year quarter primarily because of the timing of expenditures. For first quarter 2008, distributable income was $21,769,160, or $0.544229 per unit.

Distributions to unitholders for the quarter ended March 31, 2009 were:

                                                        Distribution
                  Record Date        Payment Date         per Unit

               January 30, 2009    February 13, 2009   $     0.032755
               February 27, 2009   March 13, 2009            0.056158
               March 31, 2009      April 14, 2009            0.047721

                                                       $     0.136634

Net Profits Income

Net profits income is recorded when received by the trust, which is the month following receipt by XTO Energy, and generally two months after oil and gas production. Net profits income is generally affected by three major factors:

- oil and gas sales volumes,

- oil and gas sales prices, and

- costs deducted in the calculation of net profits income.

The following is a summary of the calculation of net profits income received by the trust:

                                               Three Months
                                            Ended March 31 (a)            Increase
                                           2009             2008         (Decrease)
     Sales Volumes
     Gas (Mcf) (b)
     Underlying properties                7,110,265        7,167,588              (1 )%
     Average per day                         77,285           77,909              (1 )%
     Net profits interests                1,453,926        3,077,479             (53 )%

     Oil (Bbls) (b)
     Underlying properties                   64,618           74,221             (13 )%
     Average per day                            702              807             (13 )%
     Net profits interests                   14,489           34,865             (58 )%

     Average Sales Prices
     Gas (per Mcf)                     $       3.97     $       6.49             (39 )%
     Oil (per Bbl)                     $      44.95     $      94.27             (52 )%

     Revenues
     Gas sales                         $ 28,196,191     $ 46,498,407             (39 )%
     Oil sales                            2,904,317        6,996,443             (58 )%
     Total Revenues                      31,100,508       53,494,850             (42 )%

     Costs
     Taxes, transportation and other      3,785,880        5,453,571             (31 )%
     Production expense                   5,527,988        6,070,014              (9 )%
     Development costs (c)               12,000,000       11,250,000               7 %
     Overhead                             2,564,859        2,312,889              11 %
     Excess costs (d)                             -          863,558            (100 )%
     Total Costs                         23,878,727       25,950,032              (8 )%

     Net Proceeds                         7,221,781       27,544,818             (74 )%

     Net Profits Percentage                      80 %             80 %

     Net Profits Income                $  5,777,425     $ 22,035,854             (74 )%

(a) Because of the two-month interval between time of production and receipt of net profits income by the trust, oil andgas sales for the quarter ended March 31 generally representproduction for the period November through January.

(b) Oil and gas sales volumes are allocated to the net profits interests based upon a formula that considers oil and gas prices and the total amount of production expense and development costs. Changes in any of these factors may result in disproportionate fluctuations in volumes allocated to the net profits interests. Therefore, comparative discussion of oil and gas sales volumes is based on the underlying properties.

(c) See Note 2 to Condensed Financial Statements.

(d) See Note 4 to Condensed Financial Statements.

The following are explanations of significant variances on the underlying properties from first quarter 2008 to first quarter 2009:

Sales Volumes

Gas sales volumes decreased 1% and oil sales volumes decreased 13% from first quarter 2008 to first quarter 2009. Decreased gas sales volumes are primarily because of natural production decline, partially offset by increased production from new wells and workovers. Decreased oil sales volumes are primarily because of the timing of cash receipts and natural production decline, partially offset by increased production from new wells and workovers.

Sales Prices

Gas

The first quarter 2009 average gas price was $3.97 per Mcf, a 39% decrease from the first quarter 2008 average gas price of $6.49 per Mcf. Due to concerns of oversupply from shale gas development, declining demand due to the U.S. recession, falling oil prices and increased gas storage, recent gas prices have declined. Prices will continue to be affected by weather, oil prices, the U.S. economy, the level of North American production, storage levels and import levels of liquified natural gas. Natural gas prices are expected to remain volatile. The first quarter 2009 gas price is primarily related to production from November 2008 through January 2009, when the average NYMEX price was $6.50 per MMBtu. The average NYMEX price for February and March 2009 was $4.27 per MMBtu. At April 16, 2009, the average NYMEX futures price for the following twelve months was $4.76 per MMBtu. Recent trust gas prices have averaged approximately 38% lower than the NYMEX price.

Oil

The first quarter 2009 average oil price was $44.95 per Bbl, a 52% decrease from the first quarter 2008 average oil price of $94.27 per Bbl. Lower demand as a result of the U.S. recession and slowing global economy, the tightened credit markets and rising crude oil supplies have caused recent oil prices to decline. Oil prices are expected to remain volatile. The first quarter 2009 oil price is primarily related to production from November 2008 through January 2009, when the average NYMEX price was $46.91 per Bbl. The average NYMEX price for February and March 2009 was $43.77 per Bbl. At April 16, 2009, the average NYMEX futures price for the following twelve months was $57.67 per Bbl. Recent trust oil prices have averaged approximately 8% lower than the NYMEX price.

Costs

Taxes, Transportation and Other

Taxes, transportation and other decreased 31% for the first quarter primarily because of decreased production taxes related to lower oil and gas revenues.

Production

Production expense decreased 9% for the first quarter primarily because of decreased repairs and maintenance costs, mechanical and marketing rebates and fuel costs, partially offset by increased compressor costs.

Development

Development costs deducted in the calculation of net profits income are based on the development budget. These development costs for first quarter 2009 increased 7% from the prior year quarter primarily because of the timing of development activity. During the first three months of 2009, one well was completed on the underlying properties and three wells were pending completion at March 31.

As of December 31, 2008, cumulative actual costs exceeded cumulative budgeted costs by approximately $7.3 million. In calculating net profits income for the quarter ended March 31, 2009, XTO Energy deducted budgeted development costs of $12 million. After considering actual development costs of $8.3 million for the quarter, cumulative budgeted costs deducted exceeded actual costs by $3.6 million. First quarter actual development costs primarily relate to disbursements for development activity in fourth quarter 2008.

XTO Energy has advised the trustee that revised total 2009 budgeted development costs for the underlying properties are approximately $20 million. The 2009 budget year generally coincides with the trust distribution months from April 2009 through March 2010. The monthly development cost deduction will be reevaluated by XTO Energy and revised as necessary, based on the 2009 budget and the timing and amount of actual expenditures. See Note 2 to Condensed Financial Statements.

Overhead

Overhead increased 11% primarily because of the annual rate adjustment based on an industry index.

Excess Costs

Costs exceeded revenues by $853,468 ($682,774 net to the trust) on properties underlying the Wyoming net profits interests in November and December 2007. Limited pipeline capacity and moderate regional demand led to lower realized gas prices for production in the Rocky Mountain region. These lower gas prices caused costs to exceed revenues on properties underlying the Wyoming net profits interest, however, these excess costs did not reduce net proceeds from the remaining conveyances. XTO Energy advised the trustee that with the onset of winter demand and the completion of the first phase of a major pipeline expansion in January 2008, Rocky Mountain gas prices increased and the excess costs, plus accrued interest of $10,090 ($8,072 net to the trust), was fully recovered by February 2008.

Pending Securities and Exchange Commission Rule

In December 2008, the Securities and Exchange Commission (SEC) released Final Rule, Modernization of Oil and Gas Reporting. The new disclosure requirements include provisions that permit the use of new technologies to determine proved reserves if those technologies have been demonstrated empirically to lead to reliable conclusions about reserves volumes. The new requirements also will allow companies to disclose their probable and possible reserves to investors. In addition, the new disclosure requirements require companies to: (a) report the independence and qualifications of its reserves preparer or auditor; (b) file reports when a third party is relied upon to prepare reserves estimates or conducts a reserves audit; and (c) report oil and gas reserves using an average price based upon the prior 12-month period rather than year-end prices. The new disclosure requirements are effective for financial statements for fiscal years ending on or after December 31, 2009. The effect of adopting the SEC rule has not been determined, but it is not expected to have a significant effect on the trust's reported financial position or distributable income.

Forward-Looking Statements

This Form 10-Q includes "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact included in this Form 10-Q, including, without limitation, statements regarding the net profits interests, underlying properties, development activities, annual and monthly development, production and other costs and expenses, oil and gas prices and differentials to NYMEX prices, supply shortages, future drilling, workover and restimulation plans, distributions to unitholders and industry and market conditions, are forward-looking statements that are subject to risks and uncertainties which are detailed in Part I, Item 1A of the trust's Annual Report on Form 10-K for the year ended December 31, 2008, which is incorporated by this reference as though fully set forth herein. Although XTO Energy and the trustee believe that the expectations reflected in such forward-looking statements are reasonable, neither XTO Energy nor the trustee can give any assurance that such expectations will prove to be correct.