10-Q 1 tenq2q25.htm

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549

FORM 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~January~~April 3130, 2025 or

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission File Number 1-8245

NORTH EUROPEAN OIL ROYALTY TRUST

(Exact name of registrant as specified in its charter)

Delaware 22-2084119

State or ~~Other~~other ~~Jurisdiction~~jurisdiction of I.R.S. Employer Identification No.

~~of Incorporation~~incorporation or ~~Organization~~organization

5 N. Lincoln Street, Keene, N.H. 03431

Address of ~~Principal~~principal ~~Executive~~executive ~~Offices~~offices Zip Code

(732) 741-4008

(Registrant's telephone number, including area code)

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 (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ___

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes X No ___

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer Accelerated filer

Non-accelerated filer X Smaller reporting company X

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ___ No X

9,190,590 Units of Beneficial Interest Outstanding as of ~~January~~April 3130, 2025

PART I -- FINANCIAL INFORMATION

Item 1. Financial Statements.

STATEMENTS OF ASSETS, LIABILITIES AND TRUST CORPUS (NOTE 1)APRIL 30, 2025 AND OCTOBER 31, 2024(Unaudited)

	2025	2024
ASSETS
Current assets -- Cash and cash equivalents	$13,~~726~~620,~~999~~381	$1,625,343
Producing gas and oil royalty rights, net of amortization (Notes 1 and 2)	1	1
Total Assets	$13,~~727~~620,~~000~~382	$1,625,344
LIABILITIES AND TRUST CORPUS
Current liabilities -- Distributions to be paid to unit owners,	$367,624	$183,812
Current liabilities -- Distributions to be paid to unit owners	$1,838,118	$183,812
Trust corpus (Notes 1 and 2)	1	1
Undistributed earnings	1,~~359~~782,~~375~~263	1,441,531
Total Liabilities and Trust Corpus	$13,~~727~~620,~~000~~382	$1,625,344

The accompanying notes are an integral part of these financial statements.

STATEMENTS OF REVENUE COLLECTED AND EXPENSES PAID (NOTE 1)FOR THE THREE MONTHS ENDED APRIL 30, 2025 AND 2024 (Unaudited)

	2025	2024

Gas, sulfur and oil royalties received $2,471,301 $2,232,767 Interest income 19,224 16,333 Trust Income 2,490,525 2,249,100 Operating expenses (227,821) (213,679) Related party expenses (Note 3) (1,698) (1,522) Trust Expenses (229,519) (215,201) Net Income $2,261,006 $2,033,899 Net income per unit $0.25 $0.22 Distributions per unit paid or to be paid to unit owners $0.20 $0.20

The accompanying notes are an integral part of these financial statements.

STATEMENTS OF REVENUE COLLECTED AND EXPENSES PAID (NOTE 1)FOR THE SIX MONTHS ENDED APRIL 30, 2025 AND 2024 (Unaudited)

	2025	2024
Balance, beginning of period	$1,441,531	$795,201
Gas, sulfur and oil royalties received	$2,976,998	$2,657,677
Net income	285,468	179,085
Interest income	32,960	23,793
	1,726,999	974,286
Trust Income	$3,009,958	$2,681,470
Less:
Operating expenses	(459,833)	(465,012)
Current year distributions paid or to be paid to unit owners	367,624	459,529
Related party expenses (Note 3)	(3,651)	(3,474)
Balance, end of period	$1,359,375	$514,757
Trust Expenses	(463,484)	(468,486)
Net Income	$2,546,474	$2,212,984
Net income per unit	$0.28	$0.24
Distributions per unit paid or to be paid to unit owners	$0.24	$0.25

The accompanying notes are an integral part of these financial statements.

STATEMENTS OF UNDISTRIBUTED EARNINGS (NOTE 1)FOR THE SIX MONTHS ENDED APRIL 30, 2025 AND 2024(Unaudited)

	2025	2024
Sources of Cash and Cash Equivalents:
Balance, beginning of period	$1,441,531	$795,201
Gas, sulfur and oil royalties received	$505,697	$424,910
Net income	2,546,474	2,212,984
Interest income	13,736	7,460
	3,988,005	3,008,185
	519,433	432,370
Less:
Uses of Cash and Cash Equivalents:
Current year distributions paid or to be paid to unit owners	2,205,742	2,297,647
Payment of Trust expenses	233,965	253,285
Balance, end of period	$1,782,263	$710,538
Distributions paid	183,812	0
	417,777	253,285
Net increase (decrease) in cash and cash equivalents during the period	101,656	179,085
Cash and cash equivalents, beginning of period	1,625,343	795,201
Cash and cash equivalents, end of period	$1,726,999	$974,286

The accompanying notes are an integral part of these financial statements.

STATEMENTS OF CHANGES IN CASH AND CASH EQUIVALENTS (NOTE 1)FOR THE SIX MONTHS ENDED APRIL 30, 2025 AND 2024(Unaudited)

	2025	2024
Sources of Cash and Cash Equivalents:
Gas, sulfur and oil royalties received	$2,976,998	$2,657,677
Interest income	32,960	23,793
	3,009,958	2,681,470
Uses of Cash and Cash Equivalents:
Payment of Trust expenses	463,484	468,486
Distributions paid	551,436	459,529
	1,014,920	928,015
Net increase (decrease) in cash and cash equivalents during the period	1,995,038	1,753,455
Cash and cash equivalents, beginning of period	1,625,343	795,201
Cash and cash equivalents, end of period	$3,620,381	$2,548,656

The accompanying notes are an integral part of these financial statements.

NORTH EUROPEAN OIL ROYALTY TRUST

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

(1) Summary of significant accounting policies:

Basis of accounting -

The accompanying financial statements of North European Oil Royalty Trust (the "Trust") are prepared in accordance with the rules and regulations of the ~~Securities and Exchange Commission~~SEC. Financial statement balances and financial results are presented on a modified cash basis of accounting, which is a comprehensive basis of accounting other than accounting principles generally accepted in the United States ("GAAP basis"). In the opinion of management, all adjustments that are considered necessary for a fair presentation of these financial statements, including adjustments of a normal, recurring nature, have been included.

On a modified cash basis, revenue is earned when cash is received and expenses are incurred when cash is paid. GAAP basis financial statements disclose revenue as earned and expenses as incurred, without regard to receipts or payments. The modified cash basis of accounting is utilized to permit the accrual for distributions to be paid to unit owners (those distributions approved by the Trustees for the Trust). The Trust's distributable income represents royalty income received by the Trust during the period plus interest income less any expenses incurred by the Trust, all on a cash basis. In the opinion of the Trustees, the use of the modified cash basis of accounting provides a more meaningful presentation to unit owners of the results of operations of the Trust.

The results of any interim period are not necessarily indicative of the results to be expected for the fiscal year. These financial statements should be read in conjunction with the financial statements that were included in the Trust's Annual Report on Form 10-K for the year ended October 31, 2024 (the "2024 Form 10-K"). The Statements of Assets, Liabilities and Trust Corpus included herein contain information from the Trust's 2024 Form 10-K.

Producing gas and oil royalty rights -

The rights to certain gas and oil royalties in Germany were transferred to the Trust at their net book value by North European Oil Company (the "Company") (see Note 2). The net book value of the royalty rights has been reduced to one dollar ($1) in view of the fact that the remaining net book value of royalty rights is de minimis relative to annual royalties received and distributed by the Trust and does not bear any meaningful relationship to the fair value of such rights or the actual amount of proved producing reserves.

Federal and state income taxes -

The Trust, as a grantor trust, is exempt from federal income taxes under a private letter ruling issued by the Internal Revenue Service. The Trust has no state income tax obligations.

Cash and cash equivalents -

Cash and cash equivalents ~~are~~ are defined as amounts deposited in bank accounts and amounts invested in in certificates of deposit and U. S. Treasury ~~bills~~Bills with original maturities generally of three months or less from the date of purchase. The investment options available to the Trust are limited in ~~accordance~~ accordance with specific provisions of the Trust Agreement. ~~As of January 31, 2025, the uninsured amount held in the Trust's U.S. bank accounts was $1,461,400.~~ In addition, the Trust held Euros 15,000, the equivalent of $1517,~~599~~021, in its German bank account at ~~January~~April 3130, 2025.

Net income per unit -

Net income per unit is based upon the number of units outstanding at the end of the period. As of both ~~January~~April 3130, 2025 and 2024, there were 9,190,590 units of beneficial interest outstanding.

New accounting pronouncements -

The Trust is not aware of any recently issued, but not yet effective, accounting standards that would be expected to have a significant impact on the Trust's financial position or results of operations.

(2) Formation of the Trust:

The Trust was formed on September 10, 1975. As of September 30, 1975, the Company was liquidated and the remaining assets and liabilities of the Company, including its royalty rights, were transferred to the Trust. The Trust, on behalf of the owners of beneficial interest in the Trust, holds overriding royalty rights covering gas and oil production in certain concessions or leases in the Federal Republic of Germany. These rights are held under contracts with local German exploration and development subsidiaries of ExxonMobil Corporation and the Royal Dutch/Shell Group of Companies. Under these contracts, the Trust receives various percentage royalties on the proceeds of the sales of certain products from the areas involved. At the present time, royalties are received for sales of gas well gas, oil well gas, crude oil, condensate and sulfur.

(3) Related party transactions:

John R. Van Kirk, the Managing Director of the Trust, is reimbursed by the Trust for office expenses at cost. For such office expenses, the Trust reimbursed the Managing Director $1,~~953~~698 and $1,~~952~~522 in the ~~first~~second quarter of fiscal 2025 and 2024, respectively. For such office expenses, the Trust reimbursed the Managing Director $3,651 and $3,474 in the first six months of fiscal 2025 and 2024, respectively.

(4) Employee benefit plan:

The Trust has established a savings incentive match plan for employees (SIMPLE IRA) that is available to both employees of the Trust, one of whom is the Managing Director. The Trustees have authorized the Trust to make contributions to the accounts of the employees, on a matching basis, of up to 3% of cash compensation paid to each employee for the 2025 and 2024 calendar years.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

Executive Summary

The Trust is a passive fixed investment trust which holds overriding royalty rights, receives income under those rights from certain operating companies, pays its expenses and distributes the remaining net funds to its unit owners. As mandated by the Trust Agreement, distributions of income are made on a quarterly basis. These distributions, as determined by the Trustees, ~~constitute~~ constitute substantially all the funds ~~available~~on hand after provision is made for anticipated Trust expenses.

The Trust does not engage in any business or extractive operations of any kind in the areas over which it holds royalty rights and is precluded from engaging in such activities by the Trust Agreement. There are no requirements, therefore, for capital resources with which to make capital expenditures or investments in order to continue the receipt of royalty revenues by the Trust.

The properties of the Trust, which the Trust and Trustees hold pursuant to the Trust Agreement on behalf of the unit owners, are overriding royalty rights on sales of gas, sulfur and oil under a concession ~~and~~or leases in the Federal Republic of Germany. The actual concession ~~(the~~or ~~"Oldenburg concession") and~~ leases are held either by Mobil Erdgas-Erdol GmbH ("Mobil Erdgas"), a German operating subsidiary of the ExxonMobil Corporation ("ExxonMobil"), or by ~~Oldenburgische~~ Oldenburgische Erdolgesellschaft ("OEG"). As a result of direct and indirect ownership, ExxonMobil owns two-thirds of OEG and the Royal Dutch/Shell Group of Companies owns one-third of OEG. BEB Erdgas und Erdol GmbH ("BEB"), a joint venture in which ExxonMobil and the Royal Dutch/Shell Group each own 50%, administers the concession held by OEG. The Oldenburg concession is the primary area from which the natural gas, sulfur and oil are extracted and currently provides 100% of all the royalties received by the Trust. The Oldenburg concession, at ~~approximately~~ approximately 1,386,000 acres, covers virtually the entire former Grand Duchy of Oldenburg and is in the German federal state of Lower Saxony. None of the leases are active or productive.

~~In 2002,~~ Mobil Erdgas and BEB Erdgas und Erdol GmbH, formed a company, ExxonMobil Production Deutschland GmbH ("EMPG"), to carry out all exploration, drilling and production activities. All sales activities are still handled by the operating companies, either Mobil Erdgas or BEB.

The operating companies ~~pay~~ pay monthly royalties to the Trust based on their sales of natural gas, sulfur and oil. Of these three products, natural gas provided approximately 8292% of the cumulative royalty income received in ~~fiscal~~ fiscal 2025. The amount of royalties paid to the Trust is primarily based on four factors: the amount of gas sold, the price of that gas, the area from which the gas is sold, and the exchange rate.

On or about the 20th of ~~the~~ the months of January, April, July and October of each year, the ~~operating~~ operating companies determine the amount of royalties that were payable to the Trust based on applicable sales during the relevant period. This amount is paid out to the Trust in three monthly installments as royalty payments (payable on or about the 15th of each month) during its upcoming fiscal quarter. In addition, the operating companies review the actual amount of royalties that were paid to the Trust for the ~~that~~prior ~~period~~quarter and calculate the difference between the amounts paid and the amounts payable. Any additional amounts payable by the operating companies would be paid immediately and any overpayment would be deducted from the ~~scheduled monthly~~payment ~~royalty payments~~ for the first month of the following fiscal quarter. In September of each year, the operating companies make the final determination of any necessary underpayment or overpayment of royalties for the prior calendar year. The Trust's independent accountants based in Germany review the royalty calculations on a biennial basis~~. The~~ ~~next examination~~and ~~for~~will ~~both~~commence ~~calendar~~their examination for 2023 and 2024 ~~will begin~~ in October 2025.

There are two types of natural gas found within the Oldenburg concession, sweet gas and sour gas. Sweet gas has little or no contaminants and needs very minor treatment before it can be sold. Sour gas, in comparison, must be processed at the Grossenkneten desulfurization plant before it can be sold. The desulfurization process removes hydrogen sulfide and other contaminants. The hydrogen sulfide in gaseous form is ~~converted~~ converted to sulfur in a solid form and sold separately. With full operation of the plant, raw gas input capacity stands at approximately 200 million cubic feet utilizing the single remaining processing unit. It is expected that the single unit will be sufficient to handle sour gas production through-put from the concession. It is also expected that operating expenses in the future will be somewhat reduced by using a single processing unit. Since sour gas accounts for 71% of overall gas sales and 97% of western gas sales, any future shutdown could significantly impact royalty income. The Trust has insufficient data to predict whether, when, and to what extent any future shutdown may occur.

Under one set of rights covering the western part of the Oldenburg concession (approximately 662,000 acres), the Trust receives a royalty payment of 4% on gross receipts from sales by Mobil Erdgas of gas well gas, oil well gas, crude oil and condensate (the "Mobil Agreement"). Under the Mobil Agreement, there is no deduction of costs prior to the calculation of of royalties from gas well gas and oil well gas, which together ~~accounted~~ accounted for 96approximately 98% of the cumulative royalty income received under this agreement in fiscal 2025. Historically, the Trust has received significantly greater royalty payments under the Mobil Agreement, as compared to the OEG Agreement described below, due to the higher royalty rate specified by ~~that agreement~~the Mobil Agreement.

The Trust is also ~~entitled~~ entitled under ~~the~~an ~~Mobil~~agreement ~~Sulfur~~with ~~Agreement~~Mobil to receive a 2% royalty on gross receipts of sales of sulfur obtained as a by-product of sour gas produced from the western part of Oldenburg ("the Mobil Sulfur Agreement"). The ~~payment~~ payment of the sulfur royalty is conditioned upon sales of sulfur by ~~Mobil~~ Mobil Erdgas at a selling price above an agreed upon base price. This base price is adjusted annually by an inflation index. In the first six ~~fiscal~~months ~~quarter~~ of fiscal 2025, the Trust received $70127,~~202~~442 in sulfur royalties ~~from~~under athe ~~combination~~Mobil ofSulfur ~~sulfur~~Agreement ~~royalties~~from ~~payable~~a ~~for~~combination ~~the~~of ~~third~~previous quarters and ~~fourth~~corrections ~~quarters~~uncovered ofduring ~~calendar~~the ~~2024~~royalty examination process. In the first ~~quarter~~ six months of fiscal 2024, the Trust received $68,205 in sulfur royalties under ~~this~~the ~~agreement~~Mobil Sulfur Agreement.

Under another set of ~~rights~~ rights covering the entire Oldenburg concession and pursuant to the agreement with OEG, the Trust receives royalties at the rate of 0.6667% on gross receipts from sales by BEB of gas well gas, oil well gas, crude oil, condensate and sulfur (removed during the processing of sour gas) less a certain allowed deduction of costs (the "OEG Agreement"). Under the OEG Agreement, 50% of the field handling and treatment costs, as reported for state royalty purposes, are deducted from the gross sales receipts prior to the calculation of the ~~royalty~~royalties to be paid to the Trust.

InThe ~~2016, the~~ Mobil and ~~OEG~~ OEG Agreements ~~were~~as amended, ~~establishing~~established a new base for the ~~determination~~ determination of gas prices upon which the Trust's royalties are calculated. This change reflects a shift to the prices calculated for the German Border Import gas Price ("GBIP"). The average GBIP used under the Mobil and OEG Royalty Agreements ~~has~~is ~~been and will continue to be~~ increased by 1% and 3%, respectively, for the royalty calculations. This change reduces ~~was intended to reduce~~ the scope and cost of the accounting examination, eliminates ~~eliminate~~ ongoing disputes with OEG and Mobil regarding sales to related parties, and ~~reduce~~reduces prior year adjustments to the normally scheduled year-end reconciliation. The pricing basis has eliminated certain costs (transportation and plant gas storage), that were previously ~~deductible~~deducted prior to the royalty calculation under the OEG Agreement.

For unit owners, changes in the currency exchange rate between the U.S. Dollar and the Euro have an immediate impact. This impact occurs at the time the royalties, which are paid to the Trust in Euros, are converted into U.S. Dollars at the applicable exchange rate and promptly transferred from Germany to the Trust's bank account in the United States. In relation to the U.S. Dollar, a stronger Euro would yield more U.S. Dollars and a weaker Euro would yield less U.S. Dollars.

The Trust's consultant in Germany provides general information to the Trust on the German and European economies and energy markets as well as monitoring the continuing impact of the war in Ukraine and ongoing efforts by the European governments to respond to the economic impacts of the war. This information provides a context in which to evaluate the actions of the operating companies. The Trust's ~~consultant~~ consultant receives reports from EMPG with respect to current and planned drilling and exploration efforts. EMPG has not ~~drilled any new wells since 2014 and has not~~ scheduled any new gas well drilling through 2025. EMPG and the operating companies continue to limit the information flow to that which is required by German law, and the Trust is not able to confirm the accuracy of any of the information supplied by EMPG or the operating companies.

Results: ~~First~~Second Quarter of Fiscal 2025 versus ~~First~~Second Quarter of Fiscal 2024

Total royalty income ~~received~~ received during the ~~first~~second quarter of fiscal 2025 was ~~derived~~based ~~from sales~~upon ofactual ~~gas,~~royalties received ~~sulfur~~by ~~and oil from~~ the Trust's ~~overriding royalty areas in Germany~~ during the ~~fourth~~first calendar quarter of ~~2024~~2025. ~~The~~A distribution of $0.0420 per unit was paid on ~~February~~May 2628, 2025 to owners of record as of ~~February~~May 1416, 2025. Comparisons of total royalty income received and net income for the ~~first~~second quarter of fiscal 2025 and 2024 are shown below.

	1st Fiscal Quarter Ended 1/31/2025	1st Fiscal Quarter Ended 1/31/2024	Percentage Change
	2nd Fiscal Quarter Ended 4/30/2025	2nd Fiscal Quarter Ended 4/30/2024	Percentage Change
Total Royalty Income	$~~505~~2,~~697~~471,301	$~~424~~2,~~910~~232,767	+1910.07%
Net Income	$~~285~~2,~~468~~261,006	$~~179~~2,~~085~~033,899	+5911.42%
Distributions per Unit	$0.04	$0.05	-20.0%
Distribution per Unit	$0.20	$0.20	0.0%

~~From~~The aincrease ~~low~~in ~~point~~total royalty income for the second quarter of fiscal 2025 in comparison to the ~~third~~second quarter of fiscal 2024 ~~gas~~resulted ~~prices~~from ~~have~~the ~~risen~~royalty ~~steadily~~payments based ~~and~~on the higher gas prices ~~applicable~~and tohigher average exchange rates experienced during the current quarter. Total royalty income can potentially include positive and/or negative adjustments that the operators made during the quarter based upon their corrected royalty calculations for the ~~first~~prior periods, as well as the inclusion of Mobil sulfur royalties. In the second quarter of fiscal 2025, ~~seem~~total toroyalty income ~~have~~was ~~stabilized. The~~reduced ~~bulk~~by ofa negative carryover under the OEG royalty agreement ~~overpayments~~of ~~from~~$45,000 ~~calendar~~but ~~2023~~was ~~have~~increased ~~largely~~by ~~been~~Mobil ~~offset~~sulfur inroyalties ~~the~~of $57,240. In ~~first~~the second quarter of fiscal ~~2025~~2024, ~~and~~total ~~will~~royalty beincome ~~fully~~was ~~offset~~reduced ~~with~~by ~~OEG's~~a ~~scheduled~~negative carryover under the OEG royalty ~~payment~~agreement inof ~~mid-February~~$214,362 and was unchanged by Mobil sulfur royalties of $0.

~~Total~~The ~~royalty~~following ~~income~~table ~~often~~is ~~includes~~intended ~~positive~~to ~~and~~illustrate ~~negative~~trends ~~adjustments~~based ~~that~~on ~~the~~actual ~~operators~~gas ~~made during~~sales ~~the~~in each quarter. Gas ~~based~~royalties ~~upon~~are ~~their~~determined ~~corrected~~based ~~royalty~~on ~~calculations for~~ the ~~prior~~actual ~~periods,~~physical asgas sales ~~well~~that asoccurred ~~Mobil~~during ~~sulfur royalties. In~~ the first calendar quarter of ~~fiscal~~ 2025, ~~total~~and ~~royalty income was reduced by prior period adjustments for calendar 2023 totaling $2,485,712,~~ the ~~bulk~~average ofGerman ~~which~~Border ~~arose~~Import ~~due to the large~~ gas ~~price~~Price ~~swings caused by the war in Ukraine and Germany's reaction. Mobil sulfur royalties added $70,202 to the total~~ for the ~~quarter. In~~period ~~the first quarter~~ of ~~fiscal 2024,~~November ~~total royalty income was reduced by negative adjustments~~2024 ~~carrying~~through ~~over~~January ~~from the prior quarter totaling $1,944,954~~2025. ~~Mobil sulfur royalties from both prior quarters and prior years added $68,205 to the total for the quarter.~~

Quarterly Gas Data Providing Basis for Fiscal Quarter Royalties

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. In September 2024, the Trust was notified of negative year-end adjustments for calendar 2023 under both royalty agreements. Under the OEG royalty agreement, the negative adjustment eliminated the scheduled royalty payments for October through January, as well as the positive adjustments for the 3rd and 4th quarters for calendar 2024. The remaining negative adjustment of approximately Euros 40,200 will be offset against the February scheduled royalty payment. Under the Mobil royalty agreement, the negative adjustment eliminated the scheduled royalty payments for October and November and the positive adjustment for the 3rd calendar quarter of 2024, but was finally offset against the December scheduled royalty payment. Reflecting both higher prices and the small negative adjustment remaining under the OEG royalty, the Trustees anticipate a higher distribution in the second quarter of 2025 compared to the first quarter of fiscal 2025.

Mobil Agreement	1st Calendar Quarter Ended 3/31/2025	1st Calendar Quarter Ended 3/31/2024	Percentage Change
Gas Sales (Bcf)¹	2.863	3.236	-11.5%	Gas Prices²(Ecents/Kwh)³	4.5308	4.1601	+8.9%	Average Exchange Rate⁴	1.0878	1.0714	+1.5%
Gas Royalties Payable in Dollars	$1,616,397	$1,649,119	-2.0%
Gas Prices ($/Mcf)⁵	$14.11	$12.74	+10.8%

OEG Agreement
Gas Sales (Bcf)	9.858	10.870	-9.3%
Gas Prices (Ecents/Kwh)	4.6205	4.2425	+8.9%
Average Exchange Rate	1.0926	1.0715	+2.0%
Gas Royalties Payable in Dollars	$750,063	$748,747	+0.2%
Gas Prices ($/Mcf)	$14.08	$12.70	+10.9%

~~The~~Footnotes ~~table~~1. ~~below~~Billion iscubic ~~intended~~feet ~~to illustrate~~2. ~~trends~~Gas ~~based~~prices onderived ~~actual~~from ~~gas~~November-January ~~sales~~period ~~in each quarter~~3. ~~Gas~~ ~~royalties shown~~Euro incents ~~the~~per ~~table~~kilowatt ~~below~~hour ~~are~~4. ~~determined~~Based ~~based~~ on ~~the actual physical gas sales that occurred during the fourth calendar quarters of 2024 and 2023 and the~~ average ~~German~~Euro/dollar ~~Border~~exchange ~~Import~~rates ~~gas Price for the periods~~ of ~~August through~~cumulative ~~October~~royalty ~~2024~~transfers ~~and 2023~~5. NoDollars ~~adjustments~~per ~~for~~thousand ~~prior~~cubic ~~periods are reflected in the gas royalties.~~ feet

Mobil Agreement	4th Calendar Quarter Ended 12/31/2024	4th Calendar Quarter Ended 12/31/2023	Percentage Change
Gas Sales (Bcf) 1	3.199	3.223	-0.7%	Gas Prices2 (Ecents/Kwh)3	3.8837	3.8530	+0.8%	Average Exchange Rates4	1.0341	1.0816	-4.4%
Gas Royalties Payable in Euros	Euros 1,421,601	Euros 1,420,221	+0.1%
Gas Prices ($/Mcf)5	$11.49	$11.92	-3.6%
OEG Agreement
Gas Sales (Bcf)	10.549	11.085	-4.8%
Gas Prices (Ecents/Kwh)	3.9606	3.9293	+0.8%
Average Exchange Rates	0	0	0.0%
Gas Royalties Payable in Euros	Euros 621,016	Euros 654,224	-5.1%
Gas Prices ($/Mcf)	$0.00	$0.00	0.0%

Excluding the effects of differences in prices and average exchange rates, the combination of royalty rates on gas sold from western Oldenburg results in an effective royalty rate approximately seven times higher than the royalty rate on gas sold from eastern Oldenburg. This is of particular significance to the Trust since gas sold from western Oldenburg provides the bulk of royalties paid to the Trust. For the calendar quarter ended March 31, 2025, gas sales from western Oldenburg accounted for only 29% of all gas sales from the Oldenburg concession. However, royalties on these gas sales provided approximately 78%, or $1,615,410 out of $1,819,549, in Oldenburg royalties attributable to gas.

~~Footnotes~~Trust 1.expenses ~~Billion~~for ~~cubic~~the ~~feet~~second quarter 2of fiscal 2025 increased 6.7%, ~~Gas~~or ~~prices~~$14,318, ~~derived~~to $229,519 from $215,201 ~~August-October~~in ~~period~~the 3second quarter of fiscal 2024. The ~~Euro~~increase ~~cents~~in ~~per~~expenses reflects ~~kilowatt~~the ~~hour~~timing 4.of ~~Based~~payments onrelated ~~average~~to ~~Euro/dollar~~the ~~exchange~~biennial ~~rates~~examination of the ~~cumulative~~ royalty ~~transfers~~payments 5by the accounting firm retained by the Trust in Germany. Trust ~~Dollars~~interest ~~per~~income ~~thousand~~received ~~cubic~~in ~~feet~~the second quarter of fiscal 2025 increased to $19,224 in comparison to $16,333 received in the second quarter of fiscal 2024 due to more funds available.

~~Excluding~~The ~~the~~current ~~effects~~Statement of ~~differences~~ ~~in prices and average exchange rates~~Assets, ~~the combination of~~ ~~royalty~~Liabilities ~~rates~~and on gas sold from western Oldenburg results in an effective royalty rate approximately seven times higher than the royalty rate on gas sold from eastern Oldenburg. This is of particular significance to the Trust ~~since~~Corpus ~~gas sold from western Oldenburg provides the bulk~~ of ~~royalties~~ ~~paid to~~ the Trust~~. For~~ ~~the~~at ~~first~~April ~~quarter~~30, ~~of fiscal~~ 2025, ~~gas~~ ~~sales~~compared ~~from western Oldenburg accounted for only 30.3% of all gas sales from the Oldenburg concession. However, due~~ to ~~the absence of any~~ ~~royalty~~that ~~payments~~at ~~under~~fiscal ~~the~~year-end ~~OEG~~(October ~~Agreement~~31, ~~gas~~2024), ~~royalties~~shows ~~paid~~an ~~under~~increase ~~the~~in ~~Mobil~~assets ~~Agreement~~primarily ~~accounted~~to reserve for ~~100%~~present ofand ~~all~~future ~~gas royalties~~liabilities.

~~Trust~~Results: First ~~expenses~~Six ~~for~~Months ~~the first quarter~~ of ~~fiscal~~Fiscal 2025 ~~decreased by 7.6%, or $19,320, to $233,965 from~~versus ~~$253,285~~First ~~for~~Six ~~the~~Months ~~first quarter~~ of ~~fiscal~~Fiscal 2024 ~~due to it being an off year for the biennial royalty examination by the Trust's German accounting counselors.~~

~~The~~Total ~~current~~royalty ~~Statements~~income received during the first six months of ~~Assets,~~fiscal 2025 increased in comparison to the ~~Liabilities~~first six months of fiscal 2024 based on several factors: (1) gas prices under both the Mobil and ~~Trust~~the ~~Corpus~~OEG ofAgreements were higher in average for the first ~~Trust~~six atmonths ~~January~~of ~~31,~~fiscal 2025,; ~~compared~~(2) tothe Mobil sulfur royalties were ~~that~~$59,237 athigher for the first six months of fiscal ~~year-end~~2025; and (~~October~~3) 31while during both six month periods there were no OEG royalties during the first quarters, the ~~2024)~~residual negative balance impacting the second quarter of fiscal 2025 was $169,231 ~~shows~~lower anthan ~~increase~~the inresidual ~~assets~~negative ~~due~~balance impacting the second quarter toof ~~higher~~fiscal 2024. Comparisons of total royalty ~~receipts~~income ~~during~~received and net income for the first ~~quarter~~six months of fiscal 2025 and 2024 are shown below.

	Six Months Ended 4/30/2025	Six Months Ended 4/30/2024	Percentage Change
Total Royalty Income	$2,976,298	$2,657,677	+12.0%
Net Income	$2,546,474	$2,212,984	+15.1%
Distribution per Unit	$0.24	$0.25	-4.0%

Total royalty income can potentially include positive and/or negative adjustments that the operators made during the quarter based upon their corrected royalty calculations for the prior periods, as well as the inclusion of Mobil sulfur royalties. During the first six months of fiscal 2025, total royalty income was reduced because there were prior period adjustments totaling $2,567,090 and was increased by Mobil sulfur royalties of $127,442. During the first six months of fiscal 2024, total royalty income was reduced because there were prior period negative adjustments totaling $2,152,016 but was increased by Mobil sulfur royalties of $68,205.

The following table is intended to illustrate trends based on actual gas sales in each quarter. Gas royalties for the first six months of fiscal 2025 are determined based on the actual physical gas sales that occurred during the fourth calendar quarter of 2024 and the first calendar quarter of 2025 and the average German Border Import gas Price for the period of August 2024 through January 2025.

Gas Data Providing Basis for Six-Month Fiscal Period Royalties

Mobil Agreement	Six Months Ended 3/31/2025	Six Months Ended 3/31/2024	Percentage Change
Gas Sales (Bcf)	6.062	6.459	-6.1%	Gas Prices(Ecents/Kwh)	4.1894	4.0068	+4.6%	Average Exchange Rate	1.0616	1.0763	-1.4%
Gas Royalties Payable in Dollars	$3,086,521	$3,185,192	-3.1%
Gas Prices ($/Mcf)	$12.73	$12.33	+3.2%

OEG Agreement
Gas Sales (Bcf)	20.407	21.955	-7.1%
Gas Prices (Ecents/Kwh)	4.2790	4.0844	+4.8%
Average Exchange Rate	1.0926	1.0715	+2.0%
Gas Royalties Payable in Dollars	$750,063	$748,747	+0.2%
Gas Prices ($/Mcf)	$14.08	$12.70	+10.9%

For the six months ended 3/31/2025, gas sales from western Oldenburg accounted for only 29.7% of all gas sales from the Oldenburg concession. However, royalties on these gas sales provided approximately 81.8%, or $2,031,473 out of $2,235,613, of all royalties attributable to gas sales from the Oldenburg concession.

Trust expenses for the first six months of fiscal 2025 decreased 1.1%, or $5,002, to $463,484 from $468,486 for the first six months of fiscal 2024. The decrease in expenses reflects the biennial nature of costs associated with the royalty examination in Germany and the reduced costs for the first six months of fiscal 2025 in comparison. Trust interest income received during the first six months of fiscal 2025 increased to $32,960 in comparison to $23,793 received in the first six months of fiscal 2024 due to more funds available.

Report on Drilling and Geophysical Work

The Trust's German consultant has been in contact with representatives of ExxonMobil Production Gesellschaft ("EMPG") for technical discussions regarding EMPG's future drilling and geophysical work. The following is a summary of these discussions with some additional comments from the Trust's German consultant. The Trust is not able to confirm the accuracy of any of the information supplied by the operating companies. In addition, the operating companies are not obligated to take any of the actions outlined and, if they change their plans with respect to any such actions, they are not obligated to inform the Trust.

The Trust's German consultant advised the Trust that, in these discussions, EMPG has indicated that it will not be drilling any wells during 2025. In order to keep production decline as low as possible, workovers of existing wells, maintenance of all installations and small stimulations measures will help to maximize performance and production.

This report on Form 10-Q may contain forward-looking statements intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are forward-looking. Such statements address future expectations and events or conditions concerning the Trust. You can identify many forward-looking statements by words such as "may," "will," "would," "should," "could," "expects," "aim," "anticipates," "believes," "estimates," "intends," "plan," "predict," "project," "seek," "potential," "opportunities" and other similar expressions and the negatives of such expressions. However, not all forward-looking statements contain these words. 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:

•- 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 ~~the~~geopolitical conflict, insuch ~~Ukraine~~as ~~and~~Russia's ~~the~~invasion ~~Middle East~~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.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

The Trust is a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended, and is not required to provide the information required under this item.

Item 4. Controls and Procedures.

The Trust maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed by the Trust is recorded, processed, summarized, accumulated, and communicated to its management, which consists of the Managing Director, to allow timely decisions regarding required disclosure, and reported within the time periods specified in the Securities and Exchange Commission's rules and forms.

The Managing Director has performed an evaluation of the effectiveness of the design and ~~operation~~ operation of the Trust's disclosure controls and procedures as of ~~January~~ 31April 30, 2024 based on the criteria for effective internal control over financial reporting described in the standards promulgated by the Public Company Accounting Oversight Board and the Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on that evaluation, the Managing Director concluded that the Trust's disclosure controls and procedures were effective as of ~~January~~ 31April 30, 2025.

There have been no changes in in the Trust's internal control over financial reporting identified in in connection with the evaluation described above that occurred during the second ~~first~~ quarter of fiscal 2025 that have materially affected or are reasonably likely to materially affect the Trust's internal ~~control~~ control over financial reporting.

PART II -- OTHER INFORMATION

Item 1. Legal Proceedings.

The Trust is not a party to any pending legal proceedings.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds..

Not applicable.

Item 3. Defaults Upon Senior Securities.

Not applicable.

Item 4. Mine Safety Disclosure.

Not applicable.

Item 5. Other Information.

During the quarter ended ~~January~~April 3130, ~~2024~~ 2025, none of our directors or officers (as defined in Section 16 of the Securities Exchange Act of 1934, as amended), adopted or or terminated a "Rule 10b5-1 trading arrangement" or a "non-Rule 10b5-1 trading arrangement" (each as defined in Item 408(a) and (c), respectively, of Regulation S-K).

Item 6. Exhibits.

Exhibit 31. Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Exhibit 32. Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

SIGNATURE

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~~May 2830, 2025

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