Profile: North European Oil Royalty Trust (NRT.N)
18 Dec 2013
North European Oil Royalty Trust (the Trust) is a grantor trust, which 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. The rights are held under contracts with local German exploration and development subsidiaries of ExxonMobil Corp. (ExxonMobil) and the Royal Dutch/Shell Group of Companies (Royal Dutch/Shell Group). Under these contracts, the Trust receives various percentage royalties on the proceeds of the sales of certain products from the areas involved. As of October 31, 2011, royalties were received for sales of gas well gas, oil well gas, crude oil, distillate and sulfur. Neither the Trust nor the trustees on behalf of the Trust conduct any active business activities or operations. The function of the trustees is to monitor, verify, collect, hold, invest and distribute the royalty payments made to 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 certain concessions or leases in the Federal Republic of Germany. The actual leases or concessions are held either by Mobil Erdgas-Erdol GmbH (Mobil Erdgas), a German operating subsidiary of 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 owns one-third of OEG. BEB Erdgasund Erdol GmbH (BEB), a joint venture in which ExxonMobil and the Royal Dutch/Shell Group each own 50%, administers the concession held by OEG. 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 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, treatment and transportation costs as reported for state royalty purposes are deducted from the gross sales receipts prior to the calculation of the royalty to be paid to the Trust. In addition to the Oldenburg area, the Trust also holds overriding royalties at various rates on a number of leases of various sizes in other areas of northwest Germany. The Oldenburg concession (1,398,000 acres), covering virtually the entire former Grand Duchy of Oldenburg and located in the federal state of Lower Saxony, provides nearly 100% of the royalties received by the Trust.
North European Oil Royalty Trust
SUITE 19A, 43 WEST FRONT STREET
RED BANK NJ 07701