[10-Q] North European Oil Royalty Trust Quarterly Earnings Report

Rhea-AI Filing Summary

North European Oil Royalty Trust (NRT) reported higher royalty receipts and distributions in the third quarter and first nine months of fiscal 2025. For the third quarter ended July 31, 2025, total royalty income was $2,617,231 (up 6.5%) and net income was $2,459,107 (up 6.1%). The Trustees declared a distribution of $0.26 per unit for the quarter versus $0.21 a year earlier, with 9,190,590 units outstanding.

For the nine months ended July 31, 2025, total royalty income rose to $5,594,229 (+9.4%) and net income to $5,005,581 (+10.5%). Distributions per unit for the nine months were $0.50 versus $0.46. Results were driven primarily by higher gas prices and a stronger average euro/dollar exchange rate; natural gas accounted for about 93% of cumulative royalty income in fiscal 2025. Financial statements are prepared on a modified cash basis and reflect significant concentration of royalty economics in western Oldenburg, which supplies a small share of sales but the majority of royalties.

Positive

• Total royalty income increased to $2,617,231 in Q3 (+6.5%) and $5,594,229 for the nine months (+9.4%).
• Net income rose to $2,459,107 in Q3 (+6.1%) and $5,005,581 for the nine months (+10.5%).
• Distributions per unit increased to $0.26 in Q3 (vs $0.21) and $0.50 for nine months (vs $0.46).
• Revenue drivers were clear: higher gas prices and a stronger euro/dollar exchange rate boosted USD receipts.

Negative

• High concentration of royalty economics in western Oldenburg: a small share of sales produced ~77.5% of gas royalties in the quarter.
• Depletion and operator-dependence risk: the Trust’s assets are depleting and it relies on operating companies for development and production.
• Significant prior-period adjustments affected receipts: $1,815,276 of negative adjustments in the first nine months of fiscal 2025.
• Exposure to currency and geopolitical risks noted by management, including impacts from the war in Ukraine and exchange rate fluctuations.

Insights

Financial Analyst

TL;DR: Royalties and distributions rose materially on higher gas prices and FX, boosting cash available for unit holders.

The Trust shows clear quarter-over-quarter and year-over-year improvement: Q3 royalty income increased 6.5% to $2.62M and nine-month net income rose 10.5% to $5.01M. Distributions per unit increased to $0.26 for the quarter and $0.50 for the nine months. Drivers called out by management are higher German Border Import gas prices and a stronger euro versus the dollar, both of which directly increase USD royalty proceeds. Cash flow metrics reflect these gains, and no capital expenditures are required because the Trust is a passive holder of overriding royalty rights.

Industry Specialist

TL;DR: Performance is positive but dependent on a concentrated royalty base and external operating activity in Oldenburg.

Management highlights that western Oldenburg supplies a minority of total gas volumes but generated roughly 77.5% of gas royalties in the quarter, demonstrating high royalty-rate concentration. The Trust also notes depletion risk, reliance on operator activity, sensitivity to exchange rates, and the potential impact of sour-gas processing availability. These are material operational and market dependencies that can cause volatility in future distributions even if current results are favorable.

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  July 31, 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 Jurisdiction of       I.R.S. Employer Identification No.

of Incorporation or Organization    

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

Address of Principal Executive 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 July 31, 2025

PART I -- FINANCIAL INFORMATION

Item 1. Financial Statements.

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

	2025	2024
ASSETS
Current assets -- Cash and cash equivalents	$4,241,370	$1,625,343
Producing gas and oil royalty rights, net of amortization   (Notes 1 and 2)	1	1
Total Assets	$4,241,371	$1,625,344
LIABILITIES AND TRUST CORPUS
Current liabilities -- Distributions to be paid to unit owners	$2,389,553	$183,812
Trust corpus (Notes 1 and 2)	1	1
Undistributed earnings	1,851,817	1,441,531
Total Liabilities and Trust Corpus	$4,241,371	$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 JULY 31, 2025 AND 2024 (Unaudited)

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

	2025	2024
Gas, sulfur and oil royalties received	$2,617,231	$2,457,422
Interest income	25,220	26,394
Trust Income	$2,642,451	$2,483,816
Operating expenses	(180,178)	(164,223)
Related party expenses (Note 3)	(3,166)	(1,499)
Trust Expenses	(183,344)	(165,722)
Net Income	$2,459,107	$2,318,094
Net income per unit	$0.27	$0.25
Distributions per unit paid or to be paid to unit owners	$0.26	$0.21
Units outstanding at end of period	9,190,590	9,190,590

STATEMENTS OF REVENUE COLLECTED AND EXPENSES PAID (NOTE 1)FOR THE NINE MONTHS ENDED JULY 31, 2025 AND 2024 (Unaudited)

	2025	2024
Gas, sulfur and oil royalties received	$5,594,229	$5,115,099
Interest income	58,180	50,187
Trust Income	$5,652,409	$5,165,286
Operating expenses	(640,011)	(629,235)
Related party expenses (Note 3)	(6,817)	(4,973)
Trust Expenses	(646,828)	(634,208)
Net Income	$5,005,581	$4,531,078
Net income per unit	$0.54	$0.49
Distributions per unit paid or to be paid to unit owners	$0.50	$0.46
Units outstanding at end of period	9,190,590	9,190,590

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

STATEMENTS OF UNDISTRIBUTED EARNINGS (NOTE 1)FOR THE NINE MONTHS ENDED JULY 31, 2025 AND 2024(Unaudited)

	2025	2024
Balance, beginning of period	$1,441,531	$795,201
Net income	5,005,581	4,531,078
	6,447,112	5,326,279
Less:
Current year distributions paid or to be paid to unit owners	4,595,295	4,227,671
Balance, end of period	$1,851,817	$1,098,608

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

STATEMENTS OF CHANGES IN CASH AND CASH EQUIVALENTS (NOTE 1)FOR THE NINE MONTHS ENDED JULY 31, 2025 AND 2024(Unaudited)

	2025	2024
Sources of Cash and Cash Equivalents:
Gas, sulfur and oil royalties received	$5,594,229	$5,115,099
Interest income	58,180	50,187
	5,652,409	5,165,286
Uses of Cash and Cash Equivalents:
Payment of Trust expenses	646,828	634,208
Distributions paid	2,389,554	2,297,647
	3,036,382	2,931,855
Net increase (decrease) in cash and cash equivalents during the period	2,616,027	2,233,431
Cash and cash equivalents, beginning of period	1,625,343	795,201
Cash and cash equivalents, end of period	$4,241,370	$3,028,632

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. 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 defined as amounts deposited in bank accounts and amounts invested in certificates of deposit and U. S. Treasury 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 with specific provisions of the Trust Agreement. In addition, the Trust held Euros 15,000, the equivalent of $17,143, in its German bank account at July 31, 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 July 31, 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 expenses, the Trust reimbursed the Managing Director $3,166 and $1,499 in the third quarter of fiscal 2025 and 2024, respectively, and $6,817 and $4,973 in the first nine 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 substantially all the funds 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 or leases in the Federal Republic of Germany. The actual concession or leases are held either by Mobil Erdgas-Erdol GmbH ("Mobil Erdgas"), a German operating subsidiary of the ExxonMobil Corporation ("ExxonMobil"), or by 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 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.

Mobil Erdgas and BEB Erdgas 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 monthly royalties to the Trust based on their sales of natural gas, sulfur and oil. Of these three products, natural gas provided approximately 93% of the cumulative royalty income received in 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.

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 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 royalties from gas well gas and oil well gas, which together accounted for approximately 99% 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 the Mobil Agreement.

The Trust is also entitled under an agreement with 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 of the sulfur royalty is conditioned upon sales of sulfur by 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 nine months of fiscal 2025, the Trust received $188,724 in sulfur royalties under the Mobil Sulfur Agreement from a combination of previous quarters and corrections uncovered during the royalty examination process. In the first nine months of fiscal 2024, the Trust received $68,205 in sulfur royalties under the Mobil Sulfur Agreement.

Under another set of 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 royalties to be paid to the Trust.

The Mobil and OEG Agreements as amended established a new base for the 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 is increased by 1% and 3%, respectively, for the royalty calculations. This change reduces the scope and cost of the accounting examination, eliminates ongoing disputes with OEG and Mobil regarding sales to related parties, and 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 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 receives reports from EMPG with respect to current and planned drilling and exploration efforts. EMPG 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: Third Quarter of Fiscal 2025 Versus Third Quarter of Fiscal 2024

Total royalty income received during the third quarter of fiscal 2025 was derived from sales of gas, sulfur, and oil from the Trust's overriding royalty areas in Germany during the second calendar quarter of 2025. A distribution of 26 cents per unit was paid on August 27, 2025 to owners of record as of August 15, 2025. Comparisons of total royalty income and net income for the third quarter of fiscal 2025 and 2024 are shown below.

	3rd Fiscal Quarter Ended 7/31/2025	3rd Fiscal Quarter Ended 7/31/2024	Percentage Change
Total Royalty Income	$2,617,231	$2,457,422	+6.5%
Net Income	$2,459,107	$2,318,094	+6.1%
Distributions per Unit	$0.26	$0.21	+23.8%

The increase in total royalty income for the third quarter of fiscal 2025 in comparison to the third quarter of fiscal 2024 resulted from the increase in gas prices and the higher average exchange rate applied to the royalty conversions. Total royalty income reflects the inclusion of positive and/or negative adjustments that the operators make during the quarter based upon their corrected royalty calculations for the prior periods, as well as the inclusion of Mobil sulfur royalties. In the third quarter of fiscal 2025, total royalty income was not affected by any prior period adjustments. An overpayment of Mobil royalties of $30,047 was offset against the Mobil sulfur royalty payment of $61,282, which yielded a royalty payment of $31,235. An overpayment of Euros 8,705 under the OEG royalty will be carried over to the fourth quarter of fiscal 2025. In the third quarter of fiscal 2024, total royalty income was not affected because there were no prior period adjustments. Due to an overpayment of Mobil royalties (Euros 395,842) during the third quarter of fiscal 2024, the Mobil sulfur royalty (Euros 39,943) was not be paid until the fourth quarter of fiscal 2024. In addition, there was an overpayment of OEG royalties (Euros 201,509) during the third quarter of fiscal 2024.

The following table is intended to illustrate trends based on actual gas sales in each fiscal quarter. Gas royalties shown in the table below are determined based on the actual physical gas sales that occurred during the second calendar quarter of 2025 and the average German Border Import gas Price for the period of February 2025 through April 2025.

Quarterly Gas Data Providing Basis for Fiscal Quarter Royalties

Mobil Agreement	2nd Calendar Quarter Ended 6/30/2025	2nd Calendar Quarter Ended 6/30/2024	Percentage Change
Gas Sales (Bcf) 1	2.873	3.073	-6.5%	Gas Prices2 (Ecents/Kwh)3	4.46	3.25	+37.2%	Average Exchange Rate4	1.14	1.08	+5.6%
Gas Royalties	$1,680,818	$1,228,023	+36.9%
Gas Prices ($/Mcf)5	$14.63	$9.99	+46.4%
OEG Agreement
Gas Sales (Bcf)	9.858	10.455	-5.7%
Gas Prices (Ecents/Kwh)	4.55	3.31	+37.5%
Average Exchange Rate	1.14	1.08	+5.6%
Gas Royalties	$769,494	$521,713	+47.5%
Gas Prices ($/Mcf)	$14.50	$9.95	+45.7%

Footnotes

1. Billion cubic feet

2. Gas prices derived from February-April period

3. Euro cents per kilowatt hour

4. Based on average Euro/dollar exchange rates of cumulative royalty transfers

5. Dollars per thousand cubic feet

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 June 30, 2025, gas sales from western Oldenburg accounted for only 29.1% of all gas sales from the Oldenburg concession. However, royalties on these gas sales provided approximately 77.5%, or $1,906,880 out of $2,459,191, of all royalties attributable to gas.

Trust expenses for the third quarter of fiscal 2025 increased 10.6%, or $17,622, to $183,344 compared to $165,722 for the third quarter of fiscal 2024. The increase in expenses for the third quarter of fiscal 2025 reflects higher Trustee fees as specified by the provisions of the Trust Agreement and the timing of the payment of mailing expenses. The Trust received interest income in the amount of $25,220 and $26,394 during the third quarters of fiscal 2025 and 2024 respectively.

The current Statement of Assets, Liabilities and Trust Corpus of the Trust at July 31, 2025, compared to that at fiscal year-end (October 31, 2024), shows an increase in assets due to the absence of negative adjustments and higher royalty receipts during the third quarter of fiscal 2025.

Results: First Nine Months of Fiscal 2025 Versus First Nine Months of Fiscal 2024

Total royalty income received during the first nine months of fiscal 2025 was derived from sales of gas, sulfur and oil from the Trust's overriding royalty areas in Germany during the fourth calendar quarter of 2024 and the first and second calendar quarters of 2025. Comparisons of total royalty income and net income for the first nine months of fiscal 2025 and 2024 are shown below.

	Nine Months Ended 7/31/2025	Nine Months Ended 7/31/2024	Percentage Change
Total Royalty Income	$5,594,229	$5,115,099	+9.4%
Net Income	$5,005,581	$4,531,078	+10.5%
Distributions per Unit	$0.50	$0.46	+8.7%

The increase in total royalty income in the first nine months of fiscal 2025 from the first nine months of fiscal 2024 resulted from higher gas prices under both the Mobil and OEG Agreements. Total royalty income also reflects the inclusion of various positive and negative adjustments that the operators made during the nine-month period, including adjustments from prior periods, as well as the inclusion of Mobil sulfur royalties. During the first nine months of fiscal 2025, total royalty income was reduced because there were prior and current period negative adjustments totaling $1,815,276 but was increased by Mobil sulfur royalties of $188,724. During the first nine months of fiscal 2024, total royalty income declined reflecting prior period negative adjustments totaling $2,150,743 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 of the fiscal nine-month periods shown. Gas royalties for the nine-month periods shown in the table below are determined based on the actual physical gas sales that occurred during the period from October 1, 2024 through June 30, 2025 and the average German Border Import gas Price for the period of August 1, 2024 through April 30, 2025.

Gas Data Providing Basis for Fiscal Nine-Month Period Royalties

Mobil Agreement	Nine Months Ended 6/30/2025	Nine Months Ended 6/30/2024	Percentage Change
Gas Sales (Bcf)	8.935	9.531	-6.3%	Gas Prices(Ecents/Kwh)	4.28	3.76	+13.8%	Average Exchange Rate	1.09	1.08	+0.9%
Gas Royalties Payable	$4,767,339	$4,413,216	+8.0%
Gas Prices ($/Mcf)	$13.34	$11.58	+15.2%
OEG Agreement
Gas Sales (Bcf)	30.265	32.409	-6.6%
Gas Prices (Ecents/Kwh)	4.37	3.84	+13.8%
Average Exchange Rate	1.12	1.07	+4.7%
Gas Royalties Payable	$1,519,557	$1,270,460	+19.6%
Gas Prices ($/Mcf)	$14.29	$11.33	+26.1%

For the nine months ended June 30, 2025, gas sales from western Oldenburg accounted for only 29.5% of all gas sales from the Oldenburg concession. However, royalties on these gas sales provided approximately 79.8%, or $4,142,237 out of $5,193,271, of all royalties attributable to gas sales from the Oldenburg concession.

Trust expenses for the first nine months of fiscal 2025 increased 2.0% or $12,620 to $646,828 compared to $634,208 for the prior fiscal year's equivalent period. The increase in expenses for the first nine months of fiscal 2025 reflects higher Trustee fees as specified by the provisions of the Trust Agreement and higher transfer agent fees. Trust interest income received during the first nine months of fiscal 2025 increased to $58,180 in comparison to $50,187 received in the first nine months of fiscal 2024 due to higher net income.

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 geopolitical conflict, such as 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.

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 of the Trust's disclosure controls and procedures as of July 31, 2025 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 July 31, 2025.

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

(c) Insider Trading Arrangements

During the quarter ended July 31, 2025, none of our directors or officers (as defined in Section 16 of the Securities Exchange Act of 1934, as amended), adopted 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).

None.

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

August 29, 2025

FAQ

What were NRT's total royalty receipts for Q3 2025 and how did they change year-over-year?

Total royalty income for Q3 2025 was $2,617,231, an increase of 6.5% from $2,457,422 in Q3 2024.

How much net income did NRT report for the nine months ended July 31, 2025?

Net income for the nine months ended July 31, 2025 was $5,005,581, up 10.5% from $4,531,078 a year earlier.

What distributions did NRT pay per unit in Q3 2025 and for the nine months?

The distribution paid in Q3 2025 was $0.26 per unit. Distributions per unit for the nine months totaled $0.50.

How many units are outstanding and how is net income per unit calculated?

There are 9,190,590 units outstanding. Net income per unit is based on the number of units outstanding at period end ($0.27 per unit reported for the quarter).

What are the main risks the Trust identifies that could affect future royalties?

Key risks disclosed include depleting assets, dependence on operating companies to perform development, gas price and exchange rate volatility, and geopolitical uncertainty such as the war in Ukraine.