Royalty Payments - BP Prudhoe Bay Royalty Trust did not receive a royalty payment for Q3 2024[2] - Consequently, there will be no quarterly cash distribution to unitholders for the quarter ended September 30, 2024[2]

Financial Performance - Cash earnings for the three months ended June 30, 2024, were reported at a loss of $494,000, compared to a loss of $445,000 for the same period in 2023[4] - Cash earnings for the six months ended June 30, 2024, reported a loss of $765, a decrease of 112.9% compared to a gain of $5,918 in the same period in 2023[51] - Royalty revenues for the six months ended June 30, 2024, were $0, a 100% decrease from $6,640 in the same period in 2023[51] - Cash distributions for the six months ended June 30, 2024, were $0, while cash distributions per unit for the six months ended June 30, 2023, were $0.2974[4] - The Trust's cash earnings and distributions for the interim periods are not necessarily indicative of the results expected for the full year[11] Assets and Liabilities - As of June 30, 2024, total assets amounted to $4,537,000, a decrease from $5,302,000 as of December 31, 2023, reflecting a decline of approximately 14.4%[3] - The Trust corpus decreased to $4,202,000 from $4,964,000 at the end of 2023, representing a reduction of about 15.4%[6] - The Trust's total liabilities as of June 30, 2024, were $335,000, slightly down from $338,000 at the end of 2023[3] - The Trust's total accrued expenses through June 30, 2024, amounted to $334,765, which were paid from the cash reserve[19] Production and Revenue - As of June 30, 2024, the average daily net production was 61.5 thousand barrels per day, with an average WTI price of $80.62 per barrel[19] - The average adjusted chargeable costs were $90.69 per barrel, resulting in a negative average per barrel royalty of $(12.89)[19] - The Trust did not receive any royalty payments for the first and second quarters of 2024 due to declining WTI prices and increased production costs[19] - HNS's net production of oil and condensate allocated to the Trust has been less than 90,000 barrels per day annually from 2019 through 2024, with expectations of continued decline[35] - The average net production from the 1989 Working Interest declined by 4.1% in the six months ended March 31, 2024, due to the naturally declining production rate from the Prudhoe Bay field[48] Cash Reserve and Liquidity - The cash reserve was increased to approximately $6,000,000 in 2021 to ensure liquidity during periods without revenue[9] - The Trustee intends to continue evaluating the cash reserve adequacy and may adjust it based on prevailing circumstances[9] - The Trust's cash reserve was established to provide liquidity during periods of insufficient revenue from the royalty interest[23] - The cash reserve is intended to cover Administrative Expenses for a two-year period if net revenues from the Royalty Interest fall below $1.0 million per year[28] Market Conditions and Price Fluctuations - The Trust's revenues are significantly affected by fluctuations in oil prices, which are influenced by global supply and demand and geopolitical events[31] - The average WTI crude oil spot price fluctuated between a high of $83.47 and a low of $70.38 per barrel in the first quarter of 2024, remaining below the "break-even" level necessary for the Trust to receive a Per Barrel Royalty[37] - The U.S. Energy Information Administration forecasts WTI prices to average $79.95 per barrel in Q3 2024 and $81.47 per barrel in Q4 2024, but there is no assurance these prices will be met[38] - The average WTI Price for Q1 2024 increased by 1.1% to $77.01 compared to Q1 2023's $76.17[43] - Average WTI Price for the six-month period in 2024 decreased by 2.1% to $77.75 compared to $79.38 in 2023[48] Administrative and Other Expenses - Administrative expenses for the six months ended June 30, 2024, increased by 3.1% to $894 compared to $867 in the same period in 2023[51] - The Trust's financial statements are prepared on a modified cash basis, reflecting the most meaningful representation of cash receipts and distributions[11] Trust Operations and Governance - The Trust's internal control over financial reporting was evaluated as effective as of June 30, 2024[54] - The Trust's termination may occur if net revenues from the royalty interest fall below $1 million per year for two consecutive years[19] - The Trustee increased the cash reserve from $1.27 million by $500,000 in July 2021 and further increased it to $6.0 million in October 2021, fully funded from Royalty Payments[27] - The Trust's royalty interest had a carrying value of $535 million at inception, with accumulated amortization and impairment write-downs reducing its value to zero by December 31, 2010[12]

Core Insights - The energy sector is experiencing a trend of oversold stocks, presenting potential buying opportunities for undervalued companies [1][2] Company Summaries - **Chesapeake Energy (CHK)**: Analyst Neal Dingmann maintained a Buy rating but lowered the price target from $112 to $108. The stock fell approximately 4% over the past five days, with a 52-week low of $72.84. The RSI value is 28.39, and shares closed at $77.79, gaining 0.5% on Friday [1][7] - **EQT Corp (EQT)**: The company reported better-than-expected quarterly results and completed the acquisition of Equitrans, positioning itself as a large-scale, vertically integrated natural gas business. The stock fell around 5% over the past five days, with a 52-week low of $32.07. The RSI value is 27.60, and shares closed at $34.31, down 0.2% on Friday [8] - **Indonesia Energy Corp Ltd (INDO)**: The company completed a 3D seismic recording at its Kruh Block. The stock dipped around 23% over the past month, with a 52-week low of $2.03. The RSI value is 23.28, and shares closed at $2.12, gaining 1% on Friday [9] - **BP Prudhoe Bay Royalty Trust (BPT)**: The company announced that unitholders will not receive a dividend for the quarter ended June 30, 2024. The stock lost around 25% over the past five days, with a 52-week low of $1.54. The RSI value is 23.92, and shares closed at $1.63, down 5.2% on Friday [10]

Royalty Payments - BP Prudhoe Bay Royalty Trust did not receive a royalty payment for Q2 2024[12] - Consequently, there will be no quarterly cash distribution to unitholders for the quarter ended June 30, 2024[12]

Financial Performance - The average daily closing WTI price for the quarter ended March 31, 2024, was $77.01, which was below the break-even price, resulting in a negative payment calculation for the quarter[33]. - The average adjusted chargeable costs were $89.61 per barrel, leading to an average per barrel royalty of $(15.28) for the quarter[35]. - The Trust did not receive Royalty Payments for any quarter of 2023 or the first quarter of 2024 due to declining WTI prices and increased costs[60]. - Royalty revenues for Q1 2024 were $0, reflecting a 100% decrease from $6,640 in Q1 2023[97]. - Cash earnings for Q1 2024 were $(271), a decline of 104.3% from $6,363 in Q1 2023[97]. - Cash distributions for Q1 2024 were $0, down 100% from $6,365 in Q1 2023[97]. - The average WTI price for Q4 2023 was $78.47, a decrease of 4.9% compared to $82.53 in Q4 2022[72]. - Adjusted chargeable costs increased by 12.0% to $82.16 in Q4 2023 from $73.36 in Q4 2022[72]. - Average per barrel royalty paid was $(6.44) in Q4 2023, a decrease of $12.69 compared to $6.25 in Q4 2022, primarily due to lower WTI prices and higher chargeable costs[72]. - Average net production decreased by 3.3% to 67.9 mb/d in Q4 2023 from 70.2 mb/d in Q4 2022[72]. Trust Operations - The Trust's cash reserve was increased to $6.0 million in October 2021, fully funded from the Royalty Payment attributable to the third quarter of 2021[40]. - The Trust's cash reserve is currently maintained at approximately $6.0 million, with the potential for adjustments based on future revenue and expenses[66]. - The Trust's Corpus decreased due to expenses being paid from cash reserves instead of from the Per Barrel Royalty[75]. - The Trust will terminate if net revenues from the Royalty Interest are less than $1.0 million per year for two consecutive years, barring force majeure events[60]. - HNS's net production of oil and condensate allocated to the Trust was less than 90,000 barrels per day annually from 2019 through 2023 and is expected to remain below this threshold in future years[43]. - The Trustee has the authority to borrow or establish a cash reserve under limited circumstances as per the Trust Agreement[63]. Market Influences - The Trust's revenues are significantly affected by fluctuations in crude oil prices, which are influenced by global supply and demand dynamics and geopolitical events[42]. - Future net revenue from the Royalty Interest will depend on WTI prices, which are projected to average $84.76 in Q2 2024 and $85.50 in Q3 2024[92]. Compliance and Reporting - No changes in internal control over financial reporting identified during the last fiscal quarter[100]. - The trust does not prepare financial statements in accordance with generally accepted accounting principles[107]. - No legal proceedings reported[101]. - No risk factors disclosed[102]. - No unregistered sales of equity securities or issuer purchases reported[103]. - No additional signatures provided as the registrant is a trust[110]. - The report was signed on behalf of the registrant as required by the Securities Exchange Act of 1934[109]. - The date of the report is May 9, 2024[111]. - No significant financial data or performance metrics disclosed in the provided content[104]. - No new products, technologies, market expansions, or acquisitions mentioned[106].

Royalty Payments - BP Prudhoe Bay Royalty Trust did not receive a royalty payment for Q1 2024[12] - Consequently, there will be no quarterly cash distribution to unitholders for the quarter ended March 31, 2024[12]

Asset Transactions - BP Prudhoe Bay Royalty Trust sold its Alaska assets to Hilcorp Alaska, LLC for a total consideration of $5.6 billion, completed on June 30, 2020[8]. Royalty Interest and Production - The Trust holds a Royalty Interest of 16.4246% on the lesser of the first 90,000 barrels of actual average daily net production or the actual average daily net production from BP Alaska's working interest in the Prudhoe Bay oil field[17]. - Royalty Production is calculated as 16.4246% of the lesser of the first 90,000 barrels of actual average daily net production or the actual average daily net production from the 1989 Working Interests[46]. - The Trust's Royalty Interest is based on HNS's ownership interest in the oil rim participating area of 50.68% as of February 28, 1989[81]. - The Trust's Royalty Interest does not include production from other oil fields within the Prudhoe Bay Unit[78]. - HNS's share of net oil production allocated to the 1989 Working Interests was 65.3 thousand barrels per day in 2023, down from 75.5 thousand barrels per day in 2019, reflecting a decrease of about 13.4%[93]. - The average well production rate declined from 163 barrels per day in 2019 to 147 barrels per day in 2023, representing a decrease of approximately 9.8% over the five-year period[91]. Financial Performance - The Trust's total assets decreased from $6,067,000 in 2022 to $5,302,000 in 2023, a decline of about 12.6%[108]. - The Trust's cash and cash equivalents increased significantly from $132,000 in 2022 to $5,302,000 in 2023[108]. - The Trust's total liabilities rose from $280,000 in 2022 to $338,000 in 2023, an increase of approximately 20.7%[108]. - Royalty revenues for 2023 were $6,640,000, a significant decrease from $82,283,000 in 2022, and down from $9,417,000 in 2021[112]. - Cash earnings for 2023 were $5,600,000, a drastic decline from $80,888,000 in 2022 and $7,811,000 in 2021[115]. - Cash distributions for 2023 totaled $6,365,000, compared to $80,823,000 in 2022 and $2,007,000 in 2021[115]. - Cash distributions per unit for 2023 were $0.2974, significantly lower than $3.7768 in 2022 and $0.0938 in 2021[112]. - The Trust did not receive any net revenues attributable to any quarter in 2023, marking a continuation of revenue challenges[119]. - The Trust's cash reserve is believed to be sufficient to cover fees and expenses for the next 12 months[119]. Costs and Taxes - Chargeable Costs per barrel increased from $23.75 in 2019 to $34.75 in 2023, with a projected increase to $37.50 in 2024[49]. - The Per Barrel Royalty is determined by the WTI Price minus Chargeable Costs and Production Taxes[47]. - Production Taxes for the Trust's Royalty Production are calculated based on the relevant quarter's tax minus allowable monthly stair-step per-barrel tax credits[54]. - HNS's production taxes for Q3 2023 were $2.90 per average barrel royalty[63]. - The average WTI price for Q2 2023 was $73.76, with production taxes at $2.57 per average barrel royalty[63]. - HNS's production taxes for Q1 2023 were $2.67 per average barrel royalty[63]. Trust Operations and Governance - The Trust has no employees; all administrative functions are performed by the Trustee, which incurs liabilities primarily related to administrative expenses[26][27]. - The Trustee is authorized to borrow or sell Trust assets to pay liabilities if cash on hand is insufficient, with no distributions to Unit holders until borrowings are repaid[30]. - The Trust Agreement is irrevocable, and amendments can only be made with the approval of a majority of the outstanding Units, ensuring protection for Unit holders[32]. - The Trust's operations are passive, with no rights to take oil and gas in kind or influence operational decisions regarding HNS's working interest[25]. - Unit holders possess limited voting rights compared to shareholders, with no requirement for annual meetings[41]. - The Trust has no independent directors and is administered by the Trustee under the Trust Agreement[177]. - The Trust has not authorized any units for issuance under equity compensation plans[172]. Financial Reporting and Compliance - The Trust's financial statements are prepared on a modified cash basis, reflecting the most meaningful representation of cash receipts and distributions[121]. - The Trust's financial statements are not prepared in accordance with generally accepted accounting principles in the U.S.[101]. - The Trust maintained effective internal control over financial reporting as of December 31, 2023, according to the independent auditor's opinion[103]. - The Trust's internal control over financial reporting was evaluated as effective as of December 31, 2023[154]. - There were no changes in accountants or disagreements with accountants during the two fiscal years ended December 31, 2023[148]. Future Outlook and Risks - Future Royalty Payments may be affected by projected production declines and changes in oil prices[205]. - The Trust will terminate if net revenues from the Royalty Interest fall below $1,000,000 per year for two consecutive years, unless affected by a "force majeure" event[34]. - Significant geopolitical events, including conflicts and sanctions, may impact crude oil prices and market stability[203]. - The Trust's estimated life and reserve values fluctuate based on WTI price changes and other factors[204]. - The EIA forecasts Brent crude oil prices to average approximately $82 per barrel in 2024[202]. Reserves and Production Estimates - Net proved reserves of oil and condensate attributable to the Trust as of December 31, 2023, were estimated to be 0 million barrels, compared to 8.232 million barrels in 2022[141]. - Proved developed reserves as of December 31, 2022, were 7,862 thousand barrels[145]. - Proved undeveloped reserves as of December 31, 2022, were 370 thousand barrels[145]. - The standardized measure of discounted future net cash flow relating to proved reserves was $56,751,000 as of December 31, 2022[143]. - The Trust's estimated reserve volumes are based on an average WTI price of $78.22 per barrel for the 12-month period prior to December 31, 2023[194]. Trustee Fees and Audit - Trustee's fees for the year ended December 31, 2023, were $213,378, a decrease from $215,538 in 2022[171]. - Total fees paid to KPMG LLP for audit services in 2023 amounted to $196,500, consistent with 2022[178].

In 2023, energy enterprises grappled with a formidable challenge, a stark departure from the robust rally witnessed in the two preceding years. The Energy Select Sector SPDR Fund (NYSEARCA:XLE), a vital benchmark, mirrored the plight of the doomed oil stocks with a 2.33% share price decline in the tumultuous past year. As we look ahead to 2024, projections indicate that crude oil prices will stabilize around the $80 per barrel range. Although the Organization of the Petroleum Exporting Countries and its all ...

Table of Contents 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 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 or | --- | --- | |----------------------------------------------------------------------------------------------------------------------------------|-------------------- ...

Asset Sales - BP announced the sale of its Alaska assets for a total consideration of $5.6 billion to Hilcorp Alaska, LLC, with the acquisition completed on June 30, 2020[71]. Oil Price Fluctuations - The Trust did not receive Royalty Payments for the first or second quarters of 2023 due to declining WTI prices and increased Average Adjusted Chargeable Costs[74]. - The average WTI Price for the first quarter of 2023 decreased by 19.4% compared to the first quarter of 2022, leading to a 133.1% decrease in the average Per Barrel Royalty[90]. - The average WTI Price for the six-month period in 2023 decreased by 7.3% compared to the same period in 2022, resulting in a $13.17 decrease in the Average Per Barrel Royalty[93]. - The Trust's revenues are significantly affected by fluctuations in oil prices, with the average WTI price forecasted to be approximately $73.32 per barrel in Q3 2023 and $74.97 per barrel in Q4 2023[86]. - Royalty revenues, cash earnings, and cash distributions decreased due to a decline in average WTI Price and an increase in Adjusted Chargeable Costs during the three months ended June 30, 2023[109]. - Average WTI Price for the six months ended March 31, 2023 was $79.38, a decrease of $6.24 or 7.3% compared to $85.62 in the same period in 2022[110]. Production and Revenue Declines - HNS's net production of oil and condensate allocated to the Trust was less than 90,000 barrels per day on an annual basis from 2018 to 2023, with expectations of continued decline[84]. - Production Taxes decreased by 21.9% in the first quarter of 2023 due to the decline in average WTI Price[90]. - The average net production from the 1989 Working Interest declined by 3.0% for the six months ended June 30, 2023, due to the naturally declining production rate from the Prudhoe Bay field[93]. - Average Per Barrel Royalty paid dropped to $3.16, a significant decrease of $13.17 or 80.6% compared to $16.33 in the same period last year[110]. - Average net production decreased to 70.3 mb/d, down by 2.2 mb/d or 3.0% from 72.5 mb/d in the same period in 2022[110]. Financial Control and Performance - The Trust's internal control over financial reporting was evaluated as effective as of June 30, 2023, based on COSO criteria[97]. - The Trust's internal control over financial reporting has not materially changed during the last fiscal quarter[116]. - The Trust will terminate if net revenues from the Royalty Interest are less than $1.0 million per year for two consecutive years, barring force majeure events[74]. - The Trust Corpus decreased at the end of the six months ended June 30, 2023, primarily due to the payment of expenses from cash reserves instead of from the Per Barrel Royalty[112]. - Administrative Expenses increased during the three months ended June 30, 2023, due to timing differences in invoice payments[109]. - There was an increase in interest income, which slightly offset the decrease in Trust Corpus[112]. - The overall financial performance reflects challenges in the market, particularly with fluctuating oil prices and rising operational costs[112]. Cost Adjustments - Adjusted Chargeable Costs increased to $76.89, reflecting a rise of $10.68 or 16.1% from $66.21 in the prior year[110].