Financial Performance - Cash earnings for the three months ended March 31, 2025, were a loss of $490,000 compared to a loss of $271,000 for the same period in 2024, indicating a worsening of 80.8%[12] - The Trust's administrative expenses increased to $532,000 in the first quarter of 2025 from $338,000 in the same quarter of 2024, marking a rise of 57.5%[12] - There were no royalty revenues distributed in either the first quarter of 2025 or the first quarter of 2024, resulting in a cash loss of $490, an increase of 80.8% from the previous year[83] - The average Per Barrel Royalty for the fourth quarter of 2024 was negative $23.19, primarily due to increased Adjusted Chargeable Costs and decreased Average WTI Price[80] Asset and Liability Changes - As of March 31, 2025, total assets decreased to $3,669,000 from $4,159,000 as of December 31, 2024, representing a decline of approximately 11.8%[10] - The Trust corpus at the end of the period was $3,081,000, down from $4,475,000 at the end of the same period in 2024, reflecting a decrease of 31.1%[15] - The Trust's total liabilities increased to $588,000 as of March 31, 2025, compared to $532,000 as of December 31, 2024, an increase of 10.5%[10] Revenue and Royalty Issues - No royalty revenues were recorded for the quarters ended in 2023, 2024, and the first quarter of 2025, leading to a total of zero revenues for these periods[30] - The Trust did not receive any revenues attributable to any of the four quarters of 2023 and 2024, leading to its termination on December 31, 2024[48] - The Trust has not received any revenues from the Royalty Interest since the first quarter of 2021 until July 2021, when it received approximately $3.2 million[60] Termination and Future Outlook - The Trust's termination process commenced on December 31, 2024, due to the absence of revenues for two consecutive years[25] - The Trust's termination process will incur costs related to professional evaluations, legal fees, and other necessary expenses[63] - HNS's average net production of oil and condensate allocated to the Trust was less than 90,000 barrels per day from 2020 through the first quarter of 2025, and is expected to remain below this threshold in future years[69] Oil Price and Production Insights - For the quarter ended March 31, 2025, the average WTI price was $71.50, while average adjusted chargeable costs were $98.89, resulting in an average per barrel royalty of $(29.85)[52] - The average WTI crude oil spot price for the fourth quarter of 2024 was $70.32, a decrease of 10.4% compared to $78.47 in the fourth quarter of 2023[80] - The average net production from the 1989 Working Interest declined by 4.9% from 67.9 mb/d in the fourth quarter of 2023 to 64.6 mb/d in the fourth quarter of 2024[80] - The U.S. Energy Information Administration forecasts WTI prices to average $60.85 per barrel in Q2 2025 and $58.00 per barrel in Q3 2025[73] Cash Reserves and Distributions - The Trust has not made any cash distributions since the first quarter of 2023, maintaining a cash reserve to cover administrative expenses[12] - The Trust's cash reserve was evaluated to be approximately $6,000,000 in 2021, but has since been drawn down due to lack of revenue[29] - The Trust's cash reserve was increased to approximately $6.0 million to cover administrative expenses and potential termination costs[64] - The Trustee paid all accrued expenses of the Trust through March 31, 2025, totaling $531,612 from the cash reserve[51] Internal Controls and Risk Management - The Trust's internal control over financial reporting was deemed effective as of March 31, 2025, based on the COSO criteria[87] - The Trust has no foreign operations and holds no long-term debt instruments, minimizing exposure to interest rate and foreign currency risks[84] - The Trustee has the authority to borrow or establish a cash reserve under limited circumstances as per the Trust Agreement[57] Market Influences - The Trust's revenues and results of operations are significantly affected by fluctuations in oil prices, which are influenced by global supply and demand and geopolitical events[66]
BP Prudhoe Bay Royalty Trust(BPT) - 2025 Q1 - Quarterly Report