North European Oil Royalty Trust(NRT) - 2024 Q1 - Quarterly Report

Financial Performance - Total royalty income for the first quarter of fiscal 2024 was $424,910, a decrease of 95.6% compared to $9,765,883 in the first quarter of fiscal 2023[40] - Net income for the first quarter of fiscal 2024 was $179,085, down 98.1% from $9,536,014 in the same period last year[40] - Distributions per unit dropped to $0.05 in the first quarter of fiscal 2024, a decline of 95.0% from $1.00 in the first quarter of fiscal 2023[40] - The Trust's expenses for the first quarter of fiscal 2024 were $253,285, virtually unchanged from $252,792 in the first quarter of fiscal 2023[47] Gas Production and Sales - Natural gas accounted for approximately 82% of cumulative royalty income received in fiscal 2024[28] - Gas sales under the Mobil Agreement for the fourth calendar quarter of 2023 were 3.223 Bcf, a decrease of 8.4% from 3.519 Bcf in the fourth calendar quarter of 2022[44] - Gas prices under the Mobil Agreement fell to $11.92 per Mcf, down 72.5% from $43.32 per Mcf in the previous year[44] - Gas royalties payable in Euros under the Mobil Agreement decreased by 75.1% to €1,420,221 from €5,695,101 year-over-year[44] Future Outlook - The Trust anticipates a higher distribution in the second quarter of 2024 compared to the first quarter of fiscal 2024 due to stabilized gas prices and offsetting overpayments[42] Risks and Uncertainties - The Trust's assets are depleting, and if operators do not undertake additional development projects, depletion may occur faster than anticipated[50] - Risks include fluctuations in gas production levels, gas sale prices, general economic conditions, and currency exchange rates[50] - The Trust faces uncertainties regarding the operating companies' ability to fulfill contractual obligations[50] - Potential disputes with operating companies may arise, impacting operations[50] - Geopolitical conflicts, such as Russia's invasion of Ukraine, contribute to political and economic uncertainty[50] - The Trust is classified as a smaller reporting company and is not required to provide detailed market risk disclosures[52] Currency Exchange - The average exchange rate for the Euro to U.S. Dollar was 1.0816 in the fourth calendar quarter of 2023, reflecting a 1.0% increase from 1.0706 in the same quarter of 2022[44]