North European Oil Royalty Trust Announces Net Income Of $9,536,014 For Q1 FY23

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. 

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 [email protected]. The Trust's press releases and other pertinent information are also available on the Trust's website.