NORTH EUROPEAN OIL ROYALTY TRUST ANNOUNCES NET INCOME FOR THE THIRD QUARTER OF FISCAL 2023
- None.
- Net income and total royalty income decreased for Q3 2023 compared to Q3 2022
- Trust expenses increased
- Overpayment of royalties in Q3 2023 will eliminate cash distributions for Q4 2023
3rd Fiscal Quarter Ended 7/31/2023 | 3rd Fiscal Quarter Ended 7/31/2022 | Percentage Change | |
Total Royalty Income | - 43.94 % | ||
Net Income | - 46.63 % | ||
Distribution per Unit | - 54.35 % |
Under the Mobil Agreement for the third quarter of fiscal 2023, gas sales declined
Trust expenses for the third quarter of fiscal 2023 increased
Total royalty income received during the first nine months of fiscal 2023 increased in comparison to fiscal 2022 due to higher gas prices under both the Mobil and OEG Agreements during the first nine months of fiscal 2023. The comparison of the relevant periods is shown below.
Nine Months Ended 7/31/2023 | Nine Months Ended 7/31/2022 | Percentage Change | |
Total Royalty Income | + 104.56 % | ||
Net Income | + 109.04 % | ||
Distribution per Unit | + 107.34 % |
Due to the delay in the availability of data regarding gas prices and gas sales used in the formula prescribed under the Mobil and OEG Agreements, the operating companies must use prices and sales from earlier periods in the determination of royalties to be paid to the Trust. At the end of the Trust's fiscal quarters, the operating companies adjust their royalty calculations to reflect the data from the more current periods. For the third quarter of fiscal 2023, the decline in gas prices and gas sales from these earlier periods resulted in the Trust being overpaid. When an overpayment is calculated by the operating companies, the agreements provide for the overpayment to be deducted from the Trust's future royalty payments. The overpayment of royalties during the third fiscal quarter will completely offset the amount of royalties scheduled to be paid to the Trust in the fourth fiscal quarter. This reduction in royalty income is expected to eliminate cash distributions to the unit owners for the fourth quarter of fiscal 2023. The potential impact of any remaining balance of the overpayment and the possible impact on the royalties payable or the cash distributions to be made in any fiscal quarter beyond the fourth quarter of fiscal 2023 cannot be determined with any certainty at this time.
The previously declared distribution of
Forward-Looking Statements
This press release may contain forward-looking statements intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. Such statements address future expectations and events or conditions concerning the Trust, such as statements concerning future gas prices, royalty payments and cash distributions. Many of these statements are based on information provided to the Trust by the operating companies or by consultants using public information sources, are difficult to predict, and are generally beyond the control of the Trust. These statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated in any forward-looking statements. These include: the fact that the assets of the Trust are depleting assets and, if the operators developing the concession do not perform additional development projects, the assets may deplete faster than expected; risks and uncertainties concerning levels of gas production and gas sale prices, general economic conditions, and currency exchange rates; the ability or willingness of the operating companies to perform under their contractual obligations with the Trust; potential disputes with the operating companies and the resolution thereof; and political and economic uncertainty arising from
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SOURCE North European Oil Royalty Trust