NORTH EUROPEAN OIL ROYALTY TRUST ANNOUNCES THE DISTRIBUTION FOR THE FIRST QUARTER OF FISCAL 2025

Rhea-AI Summary

North European Oil Royalty Trust (NYSE:NRT) has declared a quarterly distribution of $0.04 per unit for the first quarter of fiscal 2025, payable on February 26, 2025, to unitholders of record on February 14, 2025.

The reduced distribution primarily resulted from substantial negative adjustments from calendar 2023 under both the Mobil and OEG royalty agreements. The negative carry-over adjustment from 2023 completely eliminated all first quarter fiscal 2025 royalty payments under the OEG royalty agreement, with a residual negative balance affecting February 2025's scheduled payment. For the Mobil royalty, the negative carry-over adjustment was fully offset through a reduction in December 2024's scheduled royalty payment.

Positive

• None.

Negative

• Quarterly distribution decreased to $0.04 per unit
• Complete elimination of Q1 2025 OEG royalty payments due to negative adjustment
• Residual negative balance affecting February 2025 OEG royalty payment
• Reduction in Mobil royalty payment for December 2024

Insights

Financial Analyst

The announced quarterly distribution of $0.04 per unit for Q1 FY2025 signals significant challenges for North European Oil Royalty Trust. The substantial negative adjustments from 2023 have created a cascading effect on the trust's distribution capacity, with two critical implications:

First, the complete elimination of OEG royalty payments for Q1 FY2025, with spillover effects into February 2025, indicates a severe disruption in one of the trust's key revenue streams. The fact that negative adjustments were large enough to not only eliminate current payments but also affect future periods is particularly concerning.

Second, while the Mobil royalty agreement's negative adjustment was fully absorbed in December 2024, the dual impact on both major royalty streams suggests underlying structural challenges in the trust's royalty calculation mechanisms. The timing of this announcement, coming amid broader market uncertainty in the energy sector, places additional pressure on the trust's ability to maintain consistent distributions.

For stakeholders, this development necessitates a reevaluation of income expectations from the trust. The residual negative balance carrying forward to February 2025 suggests that distribution normalization may take several quarters, as the trust works through these adjustment periods. Investors should pay particular attention to the upcoming 10-Q report for a more detailed understanding of the factors driving these negative adjustments and their potential long-term implications for the trust's distribution capacity.

KEENE, N.H., Jan. 31, 2025 /PRNewswire/ -- The Trustees of North European Oil Royalty Trust (NYSE-NRT) announced today a quarterly distribution of $0.04 per unit for the first quarter of fiscal 2025, payable on February 26, 2025 to owners of record on February 14, 2025. 

In accordance with the agreements between the Trust and the operating companies, the Trust's monthly scheduled royalty payments are paid based on the amount of royalties that were payable to the Trust in the prior calendar quarter.  For the quarter ending January 31, 2025, the reduction in the amount of the distribution payable largely resulted from the substantial negative adjustment from calendar 2023 under both the Mobil and OEG royalty agreements.  The negative carry-over adjustment from calendar 2023 eliminated all first quarter fiscal 2025 royalty payments under the OEG royalty with a small residual negative balance that will partially reduce OEG's scheduled royalty payment in February 2025.  The negative carry-over adjustment from calendar 2023 was fully offset with a reduction of the scheduled royalty payment under the Mobil royalty in December 2024.  Further details will be available in the 10-Q scheduled to be released on or about February 28, 2025.

Contact – John R. Van Kirk, Managing Director, telephone: (732) 741-4008, email: jvankirk@neort.com.  The Trust's press releases and other pertinent information are available on the Trust's website: www.neort.com.

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 Russia's invasion of Ukraine.  Any forward-looking statement speaks only as of the date on which such statement is made, and the Trust does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made.

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SOURCE North European Oil Royalty Trust

FAQ

What is NRT's quarterly distribution amount for Q1 2025?

North European Oil Royalty Trust announced a quarterly distribution of $0.04 per unit for the first quarter of fiscal 2025.

When is NRT's Q1 2025 distribution payable?

The distribution is payable on February 26, 2025, to owners of record on February 14, 2025.

How did the 2023 negative adjustments affect NRT's OEG royalty payments?

The negative carry-over adjustment from 2023 eliminated all Q1 fiscal 2025 OEG royalty payments and will partially reduce February 2025's payment.

What was the impact of 2023 adjustments on NRT's Mobil royalty payments?

The negative carry-over adjustment from 2023 was fully offset through a reduction in the December 2024 scheduled royalty payment under the Mobil royalty agreement.