Financial Performance - Royalty revenues for the year ended December 31, 2024, were $0, a significant decrease from $6,640,000 in 2023 and $82,283,000 in 2022, indicating a substantial drop in revenue generation [256]. - Cash earnings for 2024 resulted in a loss of $1,143,000, compared to cash earnings of $5,600,000 in 2023 and $80,888,000 in 2022, reflecting a negative trend in profitability [256]. - Cash distributions for 2024 were $0, down from $6,365,000 in 2023 and $80,823,000 in 2022, indicating a complete halt in distributions to unit holders [256]. - The Trust's future cash inflows for 2024 are projected to be $0, indicating a significant decline in expected revenue [296]. - The Trust's net increase (decrease) during the year for 2023 was $(56,751,000), indicating a challenging financial environment [296]. Asset and Reserve Changes - As of December 31, 2024, total assets of BP Prudhoe Bay Royalty Trust were $4,159,000, a decrease from $5,302,000 in 2023, representing a decline of approximately 21.5% [253]. - The trust corpus decreased to $3,627,000 at the end of 2024 from $4,964,000 in 2023, marking a decline of approximately 27% [258]. - As of December 31, 2024, the net proved reserves of oil and condensate attributable to the Trust are estimated to be 0 million barrels, down from 8.232 million barrels in 2022 [295]. - Proved developed reserves as of December 31, 2022, were 7.862 million barrels, with no proved developed reserves reported for 2023 and 2024 [298]. Revenue and Production Insights - The standardized measure of discounted future net cash flow relating to proved reserves for 2022 was $56,751,000, with future cash inflows of $61,169,000 and a 10% annual discount of $4,418,000 [296]. - The total production for the year ending December 31, 2022, was 4,169,000 barrels, contributing to the overall reserve estimates [298]. - The average net production of crude oil and condensate from proved reserves allocated to the Trust was less than 90,000 barrels per day during certain quarters [286]. - The negative revision in year-end 2023 reserves was due to a decrease in the WTI price from $93.67 per barrel in 2022 to $78.22 per barrel [300]. Operational and Administrative Aspects - Accrued expenses increased to $532,000 in 2024 from $338,000 in 2023, indicating rising operational costs [253]. - The Trust's administrative expenses for the fiscal year 2023 were $1,327,000, with the highest expense recorded in Q2 at $587,000 [290]. - The trust maintained effective internal control over financial reporting as of December 31, 2024, according to the independent auditor's opinion [244]. Trust Structure and Limitations - The trust's passive nature limits its ability to engage in borrowing transactions, with the trustee only able to borrow as necessary to pay liabilities [231]. - The trust's royalty interest is based on a per barrel royalty of 16.4246% on the lesser of 90,000 barrels or the average actual daily net production, which is subject to production risks [261]. Historical Context and Trends - The Trust did not receive any royalty payments for the four quarters of 2020 and the first quarter of 2021 due to lower oil prices and increased chargeable costs [269]. - The Trust's cash reserve was increased to approximately $6,000,000 in 2021 to ensure liquidity [271]. - In the first quarter of 2023, the Trust received a royalty payment of $6.640 million, which included an overpayment adjustment of $27,000 [286]. - The Trust's total cash earnings for the fiscal year 2023 were $6,363,000, with cash distributions amounting to $6,365,000 [290]. - Royalty revenues for the fiscal year 2022 totaled $82,282,000, with the highest quarterly revenue of $30,341,000 in Q3 [290]. - The average WTI price for 2022 was $93.67 per barrel, which contributed to a positive revision in reserves from 2021 to 2022 [300]. - The net changes in prices and production costs resulted in a decrease of $63,330,000 in 2023, reflecting the impact of lower oil prices [296].
BP Prudhoe Bay Royalty Trust(BPT) - 2024 Q4 - Annual Report