North European Oil Royalty Trust 8-K, filed Feb 15, 2023
North European Oil Royalty Trust (NRT)
About this 8-K
North European Oil Royalty Trust filed this 8-K on February 15, 2023, reporting on events of January 31, 2023.
Items reported
- Item 2.02: Financial results
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND
EXCHANGE COMMISSION
WASHINGTON,
DC 20549
FORM 8-K
NORTH EUROPEAN OIL
ROYALTY TRUST
Delaware 1-8245 22-2084119
State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation File Number) Identification No.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2.below):
[ ] Written communications
pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant
to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement
communication pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement
communication pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol(s) Name of each exchange on which registered
Units of Beneficial Interest NRT New York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR Section 230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR Section 240.12b-2).
Emerging growth company [ ]
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Item 2.02. Results of Operations and Financial Condition.
On February 14, 2023, North European Oil Royalty Trust issued a press release via PR Newswire announcing the Trust's net income for the first quarter of fiscal 2023. Furnished herewith is a copy of the press release, which is incorporated by reference herein.
Item 9.01. Financial Statements and Exhibits.
(c) ExhibitsThe following exhibit is furnished herewith:
Exhibit 99. A press release dated February 14, 2023 disseminated through PR Newswire announcing the net income for North European Oil Royalty Trust for the first quarter of fiscal 2023.
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
NORTH EUROPEAN OIL ROYALTY TRUST
(Registrant)
/s/ John R. Van Kirk
John R. Van Kirk
Managing Director
February 15, 2023
Exhibit 99
PR NEWSWIRE
Keene, N.H. February 14, 2023 - North European Oil Royalty Trust (NYSE-NRT) (the "Trust") reported its net income for the first quarter of fiscal 2023 which appears in the table below compared to its net income for the first quarter of fiscal 2022. Total royalty income often includes positive and negative adjustments that the operators made during the quarter based upon their corrected royalty calculations for the prior periods, as well as Mobil sulfur royalties. Total royalty income for the first quarter of fiscal 2023 was not affected because there were no prior period adjustments. In addition, due to sulfur prices falling below the required threshold, there were no Mobil sulfur royalties. Total royalty income for the first quarter of fiscal 2022 was also not affected because there were no prior period adjustments, but was increased by Mobil sulfur royalties of $59,517.
| 1st Fiscal Quarter Ended 1/31/2023 | 1st Fiscal Quarter Ended 1/31/2022 | Percentage Change | |
|---|---|---|---|
| Total Royalty Income | $9,765,883 | $2,546,539 | +283.50% |
| Net Income | $9,536,014 | $2,351,819 | +305.47% |
| Distributions per Unit | $1.00 | $0.25 | +300.00% |
Despite the lingering economic effects caused by COVID-19 and the ongoing political and economic consequences of Russia's invasion of Ukraine, the German energy market was able, in the short-term, to address the energy shortfall caused by the severe reduction in Russian exports to Germany. This reduction in supply resulted in an increased demand for gas from other sources in order to provide sufficient gas supplies to get through the winter period of peak demand. The steps taken by Germany to stockpile sufficient gas supplies resulted in the increase in gas prices for the August-October 2022 period used in this quarter's royalty calculation and led to the increase in total royalty income between the first quarter of fiscal 2022 and the first quarter of fiscal 2023. Under the Mobil Agreement for the first quarter of fiscal 2023, gas prices, gas sales, and the average exchange rate showed percentage changes of +362.89%, -14.28% and -4.89%, respectively, in comparison to the first quarter of fiscal 2022. In a corresponding comparison under the OEG Agreement, gas prices, gas sales, and the average exchange rate showed percentage changes of +362.89%, -7.80% and -4.93%, respectively.
Trust expenses for the first quarter of fiscal 2023 increased 29.67%, or $57,835, to $252,792 from $194,957 for the first quarter of fiscal 2022. The increase in expenses reflects increased Trustee fees as specified by the Trust Agreement, increased fees associated with the Trust's petroleum consultant, and the preparation and mailing of the annual meeting materials.
The Trust's monthly royalty payments are paid prospectively based on the amount of royalties payable to the Trust in the prior quarter. End of quarter royalty adjustments result from the need to align prospective royalty payments from the operating companies with actual royalties that should have been paid. When actual prices and volumes are reported, there will be a positive reconciliation in the current quarter or a negative reconciliation in the subsequent quarter. Primarily as a result of the recent decline in gas prices, it is now anticipated that royalty payments to the Trust will be subject to a negative adjustment in the third fiscal quarter (May-July 2023). This will likely substantially reduce quarter-over-quarter cash distributions to the unit owners for at least the third quarter.
The previously declared distribution of $1.00 per unit will be paid on February 28, 2023 to owners of record as of February 17, 2023. Comprehensive details will be available in the Trust's 10-Q filing available through the SEC or on the Trust's website, www.neort.com, on or about February 28, 2023. For further information, contact John R. Van Kirk, Managing Director, at (732) 741-4008 or via e-mail at jvankirk@neort.com. The Trust's press releases and other pertinent information are also available on the Trust's website.
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. 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:
• risks and uncertainties concerning levels of gas production and gas sale prices, general economic conditions, currency exchange rates, and the overall impact of the novel coronavirus identified as COVID-19;
• 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.
All such factors are difficult to predict, contain uncertainties that may materially affect actual results, and are generally beyond the control of the Trust. New factors emerge from time to time and it is not possible for the Trust to predict all such factors or to assess the impact of each such factor on the Trust. 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.