Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 or Houston, Texas 77002 (Address of principal executive offices) (Zip Code) For the transition period from to Commission File Number 1-10243 BP PRUDHOE BAY ROYALTY TRUST (Ex ...

Financial Performance - Royalty revenues for the year ended December 31, 2024, were $0, a significant decrease from $6,640,000 in 2023 and $82,283,000 in 2022, indicating a substantial drop in revenue generation [256]. - Cash earnings for 2024 resulted in a loss of $1,143,000, compared to cash earnings of $5,600,000 in 2023 and $80,888,000 in 2022, reflecting a negative trend in profitability [256]. - Cash distributions for 2024 were $0, down from $6,365,000 in 2023 and $80,823,000 in 2022, indicating a complete halt in distributions to unit holders [256]. - The Trust's future cash inflows for 2024 are projected to be $0, indicating a significant decline in expected revenue [296]. - The Trust's net increase (decrease) during the year for 2023 was $(56,751,000), indicating a challenging financial environment [296]. Asset and Reserve Changes - As of December 31, 2024, total assets of BP Prudhoe Bay Royalty Trust were $4,159,000, a decrease from $5,302,000 in 2023, representing a decline of approximately 21.5% [253]. - The trust corpus decreased to $3,627,000 at the end of 2024 from $4,964,000 in 2023, marking a decline of approximately 27% [258]. - As of December 31, 2024, the net proved reserves of oil and condensate attributable to the Trust are estimated to be 0 million barrels, down from 8.232 million barrels in 2022 [295]. - Proved developed reserves as of December 31, 2022, were 7.862 million barrels, with no proved developed reserves reported for 2023 and 2024 [298]. Revenue and Production Insights - The standardized measure of discounted future net cash flow relating to proved reserves for 2022 was $56,751,000, with future cash inflows of $61,169,000 and a 10% annual discount of $4,418,000 [296]. - The total production for the year ending December 31, 2022, was 4,169,000 barrels, contributing to the overall reserve estimates [298]. - The average net production of crude oil and condensate from proved reserves allocated to the Trust was less than 90,000 barrels per day during certain quarters [286]. - The negative revision in year-end 2023 reserves was due to a decrease in the WTI price from $93.67 per barrel in 2022 to $78.22 per barrel [300]. Operational and Administrative Aspects - Accrued expenses increased to $532,000 in 2024 from $338,000 in 2023, indicating rising operational costs [253]. - The Trust's administrative expenses for the fiscal year 2023 were $1,327,000, with the highest expense recorded in Q2 at $587,000 [290]. - The trust maintained effective internal control over financial reporting as of December 31, 2024, according to the independent auditor's opinion [244]. Trust Structure and Limitations - The trust's passive nature limits its ability to engage in borrowing transactions, with the trustee only able to borrow as necessary to pay liabilities [231]. - The trust's royalty interest is based on a per barrel royalty of 16.4246% on the lesser of 90,000 barrels or the average actual daily net production, which is subject to production risks [261]. Historical Context and Trends - The Trust did not receive any royalty payments for the four quarters of 2020 and the first quarter of 2021 due to lower oil prices and increased chargeable costs [269]. - The Trust's cash reserve was increased to approximately $6,000,000 in 2021 to ensure liquidity [271]. - In the first quarter of 2023, the Trust received a royalty payment of $6.640 million, which included an overpayment adjustment of $27,000 [286]. - The Trust's total cash earnings for the fiscal year 2023 were $6,363,000, with cash distributions amounting to $6,365,000 [290]. - Royalty revenues for the fiscal year 2022 totaled $82,282,000, with the highest quarterly revenue of $30,341,000 in Q3 [290]. - The average WTI price for 2022 was $93.67 per barrel, which contributed to a positive revision in reserves from 2021 to 2022 [300]. - The net changes in prices and production costs resulted in a decrease of $63,330,000 in 2023, reflecting the impact of lower oil prices [296].

Termination of BP Prudhoe Bay Royalty Trust - BP Prudhoe Bay Royalty Trust did not receive a royalty payment for the quarter ended December 31, 2024, and will not make a quarterly cash distribution to unitholders[5] - The Trust terminated at 11:59 PM on December 31, 2024, due to no revenue received for any of the four quarters of 2023 or 2024[5] - The Trust terminated as per the Trust Agreement when net revenues from the Royalty Interest were less than $1.0 million per year for two successive years[12] NYSE Delisting and Compliance Issues - The Trust received a delisting notice from NYSE as the average closing price of its units was less than $1.00 over 30 consecutive trading days[6] - The Trust must regain compliance with NYSE listing standards within six months by achieving a closing unit price of at least $1.00 and an average closing unit price of at least $1.00 over 30 trading days[7] - The Trust has no control over the trading price of its units and cannot take actions like a reverse split without unitholder approval[8] Potential Impact of Delisting - If delisted, the Trust's units may be transferred to the over-the-counter market, potentially affecting market price, trading volume, liquidity, and resale price[10]

Financial Performance - For the quarter ended September 30, 2024, the average WTI price was $75.20, while the average adjusted chargeable costs were $90.90, resulting in an average per barrel royalty of $(18.31)[24]. - The Trust did not receive any royalty payments for the entirety of 2023 and the first three quarters of 2024 due to declining WTI prices and increased chargeable costs[24]. - The average net production for the quarter was 59.6 mb/d, indicating ongoing production levels despite the financial challenges faced by the Trust[24]. - Trust royalty revenues for the third quarter of 2024 were zero, consistent with Q3 2023, due to non-payment of the Per Barrel Royalty[54]. - Royalty revenues for the nine months ended September 30, 2024, decreased to $0, a decline of $6,640 thousand or 100.0% compared to $6,640 thousand in the same period of 2023[59]. - Cash earnings (loss) for the same period were $(1,037) thousand, a decrease of $6,869 thousand or 117.8% from $5,832 thousand in the prior year[59]. - Cash distributions also fell to $0, down $6,365 thousand or 100.0% compared to $6,365 thousand in the previous year[59]. - Administrative expenses for Q3 2024 increased by 109.6% to $329, primarily due to timing of invoices and increased service provider fees[54]. - Administrative expenses increased to $1,223 thousand, reflecting a rise of $199 thousand or 19.4% from $1,024 thousand in the same period of 2023[59]. Trust Operations and Management - The Trust will terminate if net revenues from the Royalty Interest are less than $1.0 million per year for two consecutive years, with a potential termination date of December 31, 2024, if revenues do not exceed this threshold[24]. - The Trustee intends to keep the cash reserve program in place through the winding up of the Trust, with any excess cash reserved to be distributed to unit holders after covering administrative expenses[37]. - The Trustee has the authority to adjust the cash reserve based on the Trust's financial circumstances, which may include increasing or decreasing the reserve without prior notice to unit holders[31]. - The Trust Corpus decreased at the end of the nine months ended September 30, 2024, due to the payment of expenses from cash reserves, slightly offset by an increase in interest income[59]. - The Trust is at risk of delisting from the NYSE if it cannot meet the minimum price requirement of $1.00 per Unit over a consecutive 30 trading day period[68]. - If net revenues from the Royalty Interest do not exceed $1.0 million for the quarter ended December 31, 2024, the Trust will terminate on December 31, 2024[70]. - The termination and winding-up of the Trust may negatively affect Unit prices and increase price volatility[70]. Market Conditions and Risks - The Trust's revenues and operations are significantly affected by fluctuations in oil prices, which are influenced by global supply and demand, geopolitical events, and market conditions[38]. - Forward-looking statements regarding the Trust's performance are subject to various risks, including changes in oil prices and geopolitical developments, which could materially affect future results[25]. - The average WTI crude oil spot price for Q2 2024 was below the "break-even" level necessary for the Trust to receive a Per Barrel Royalty, fluctuating between a high of $86.91 and a low of $73.25[43]. - The average WTI crude oil spot price for Q3 2024 also remained below the "break-even" level, with a high of $83.88 and a low of $65.75[44]. - The U.S. Energy Information Administration forecasts WTI prices to average $71.97 per barrel in Q4 2024 and $73.67 per barrel in Q1 2025, but there is no assurance these prices will be achieved[45]. Production Trends - The average net production of oil and condensate allocated to the Trust from proved reserves was less than 90,000 barrels per day from 2019 through 2024, with expectations to remain below this threshold in future years due to declining production rates[41]. - The average net production from the 1989 Working Interest declined by 6.7% in Q2 2024 compared to Q2 2023, attributed to the declining production rate from the Prudhoe Bay field[52]. - The average net production for the nine-month period ending June 30, 2024, was 65.3 mb/d, a decrease of 5.1% compared to the same period in 2023[57]. Financial Reporting and Controls - The internal control over financial reporting was evaluated as effective as of September 30, 2024, based on COSO criteria[64]. - The average WTI Price for the second quarter of 2024 increased by 9.3% compared to Q2 2023, while Adjusted Chargeable Costs increased by 11.4%[52]. - The average Per Barrel Royalty paid in Q2 2024 was $(12.89), a decrease of $(2.70) or (26.5%) compared to Q2 2023[52].

Royalty Payments - BP Prudhoe Bay Royalty Trust did not receive a royalty payment for Q3 2024[2] - Consequently, there will be no quarterly cash distribution to unitholders for the quarter ended September 30, 2024[2]

Financial Performance - Cash earnings for the three months ended June 30, 2024, were reported at a loss of $494,000, compared to a loss of $445,000 for the same period in 2023[4] - Cash earnings for the six months ended June 30, 2024, reported a loss of $765, a decrease of 112.9% compared to a gain of $5,918 in the same period in 2023[51] - Royalty revenues for the six months ended June 30, 2024, were $0, a 100% decrease from $6,640 in the same period in 2023[51] - Cash distributions for the six months ended June 30, 2024, were $0, while cash distributions per unit for the six months ended June 30, 2023, were $0.2974[4] - The Trust's cash earnings and distributions for the interim periods are not necessarily indicative of the results expected for the full year[11] Assets and Liabilities - As of June 30, 2024, total assets amounted to $4,537,000, a decrease from $5,302,000 as of December 31, 2023, reflecting a decline of approximately 14.4%[3] - The Trust corpus decreased to $4,202,000 from $4,964,000 at the end of 2023, representing a reduction of about 15.4%[6] - The Trust's total liabilities as of June 30, 2024, were $335,000, slightly down from $338,000 at the end of 2023[3] - The Trust's total accrued expenses through June 30, 2024, amounted to $334,765, which were paid from the cash reserve[19] Production and Revenue - As of June 30, 2024, the average daily net production was 61.5 thousand barrels per day, with an average WTI price of $80.62 per barrel[19] - The average adjusted chargeable costs were $90.69 per barrel, resulting in a negative average per barrel royalty of $(12.89)[19] - The Trust did not receive any royalty payments for the first and second quarters of 2024 due to declining WTI prices and increased production costs[19] - HNS's net production of oil and condensate allocated to the Trust has been less than 90,000 barrels per day annually from 2019 through 2024, with expectations of continued decline[35] - The average net production from the 1989 Working Interest declined by 4.1% in the six months ended March 31, 2024, due to the naturally declining production rate from the Prudhoe Bay field[48] Cash Reserve and Liquidity - The cash reserve was increased to approximately $6,000,000 in 2021 to ensure liquidity during periods without revenue[9] - The Trustee intends to continue evaluating the cash reserve adequacy and may adjust it based on prevailing circumstances[9] - The Trust's cash reserve was established to provide liquidity during periods of insufficient revenue from the royalty interest[23] - The cash reserve is intended to cover Administrative Expenses for a two-year period if net revenues from the Royalty Interest fall below $1.0 million per year[28] Market Conditions and Price Fluctuations - The Trust's revenues are significantly affected by fluctuations in oil prices, which are influenced by global supply and demand and geopolitical events[31] - The average WTI crude oil spot price fluctuated between a high of $83.47 and a low of $70.38 per barrel in the first quarter of 2024, remaining below the "break-even" level necessary for the Trust to receive a Per Barrel Royalty[37] - The U.S. Energy Information Administration forecasts WTI prices to average $79.95 per barrel in Q3 2024 and $81.47 per barrel in Q4 2024, but there is no assurance these prices will be met[38] - The average WTI Price for Q1 2024 increased by 1.1% to $77.01 compared to Q1 2023's $76.17[43] - Average WTI Price for the six-month period in 2024 decreased by 2.1% to $77.75 compared to $79.38 in 2023[48] Administrative and Other Expenses - Administrative expenses for the six months ended June 30, 2024, increased by 3.1% to $894 compared to $867 in the same period in 2023[51] - The Trust's financial statements are prepared on a modified cash basis, reflecting the most meaningful representation of cash receipts and distributions[11] Trust Operations and Governance - The Trust's internal control over financial reporting was evaluated as effective as of June 30, 2024[54] - The Trust's termination may occur if net revenues from the royalty interest fall below $1 million per year for two consecutive years[19] - The Trustee increased the cash reserve from $1.27 million by $500,000 in July 2021 and further increased it to $6.0 million in October 2021, fully funded from Royalty Payments[27] - The Trust's royalty interest had a carrying value of $535 million at inception, with accumulated amortization and impairment write-downs reducing its value to zero by December 31, 2010[12]

Core Insights - The energy sector is experiencing a trend of oversold stocks, presenting potential buying opportunities for undervalued companies [1][2] Company Summaries - **Chesapeake Energy (CHK)**: Analyst Neal Dingmann maintained a Buy rating but lowered the price target from $112 to $108. The stock fell approximately 4% over the past five days, with a 52-week low of $72.84. The RSI value is 28.39, and shares closed at $77.79, gaining 0.5% on Friday [1][7] - **EQT Corp (EQT)**: The company reported better-than-expected quarterly results and completed the acquisition of Equitrans, positioning itself as a large-scale, vertically integrated natural gas business. The stock fell around 5% over the past five days, with a 52-week low of $32.07. The RSI value is 27.60, and shares closed at $34.31, down 0.2% on Friday [8] - **Indonesia Energy Corp Ltd (INDO)**: The company completed a 3D seismic recording at its Kruh Block. The stock dipped around 23% over the past month, with a 52-week low of $2.03. The RSI value is 23.28, and shares closed at $2.12, gaining 1% on Friday [9] - **BP Prudhoe Bay Royalty Trust (BPT)**: The company announced that unitholders will not receive a dividend for the quarter ended June 30, 2024. The stock lost around 25% over the past five days, with a 52-week low of $1.54. The RSI value is 23.92, and shares closed at $1.63, down 5.2% on Friday [10]

Royalty Payments - BP Prudhoe Bay Royalty Trust did not receive a royalty payment for Q2 2024[12] - Consequently, there will be no quarterly cash distribution to unitholders for the quarter ended June 30, 2024[12]

Financial Performance - The average daily closing WTI price for the quarter ended March 31, 2024, was $77.01, which was below the break-even price, resulting in a negative payment calculation for the quarter[33]. - The average adjusted chargeable costs were $89.61 per barrel, leading to an average per barrel royalty of $(15.28) for the quarter[35]. - The Trust did not receive Royalty Payments for any quarter of 2023 or the first quarter of 2024 due to declining WTI prices and increased costs[60]. - Royalty revenues for Q1 2024 were $0, reflecting a 100% decrease from $6,640 in Q1 2023[97]. - Cash earnings for Q1 2024 were $(271), a decline of 104.3% from $6,363 in Q1 2023[97]. - Cash distributions for Q1 2024 were $0, down 100% from $6,365 in Q1 2023[97]. - The average WTI price for Q4 2023 was $78.47, a decrease of 4.9% compared to $82.53 in Q4 2022[72]. - Adjusted chargeable costs increased by 12.0% to $82.16 in Q4 2023 from $73.36 in Q4 2022[72]. - Average per barrel royalty paid was $(6.44) in Q4 2023, a decrease of $12.69 compared to $6.25 in Q4 2022, primarily due to lower WTI prices and higher chargeable costs[72]. - Average net production decreased by 3.3% to 67.9 mb/d in Q4 2023 from 70.2 mb/d in Q4 2022[72]. Trust Operations - The Trust's cash reserve was increased to $6.0 million in October 2021, fully funded from the Royalty Payment attributable to the third quarter of 2021[40]. - The Trust's cash reserve is currently maintained at approximately $6.0 million, with the potential for adjustments based on future revenue and expenses[66]. - The Trust's Corpus decreased due to expenses being paid from cash reserves instead of from the Per Barrel Royalty[75]. - The Trust will terminate if net revenues from the Royalty Interest are less than $1.0 million per year for two consecutive years, barring force majeure events[60]. - HNS's net production of oil and condensate allocated to the Trust was less than 90,000 barrels per day annually from 2019 through 2023 and is expected to remain below this threshold in future years[43]. - The Trustee has the authority to borrow or establish a cash reserve under limited circumstances as per the Trust Agreement[63]. Market Influences - The Trust's revenues are significantly affected by fluctuations in crude oil prices, which are influenced by global supply and demand dynamics and geopolitical events[42]. - Future net revenue from the Royalty Interest will depend on WTI prices, which are projected to average $84.76 in Q2 2024 and $85.50 in Q3 2024[92]. Compliance and Reporting - No changes in internal control over financial reporting identified during the last fiscal quarter[100]. - The trust does not prepare financial statements in accordance with generally accepted accounting principles[107]. - No legal proceedings reported[101]. - No risk factors disclosed[102]. - No unregistered sales of equity securities or issuer purchases reported[103]. - No additional signatures provided as the registrant is a trust[110]. - The report was signed on behalf of the registrant as required by the Securities Exchange Act of 1934[109]. - The date of the report is May 9, 2024[111]. - No significant financial data or performance metrics disclosed in the provided content[104]. - No new products, technologies, market expansions, or acquisitions mentioned[106].

Royalty Payments - BP Prudhoe Bay Royalty Trust did not receive a royalty payment for Q1 2024[12] - Consequently, there will be no quarterly cash distribution to unitholders for the quarter ended March 31, 2024[12]