Executive Summary

Q3 2024 distribution was $0.00 per unit as the average daily closing WTI stayed below the break‑even level; Per Barrel Royalty was negative at $(18.31) and average net production was 59.6 mb/d .
The Trustee reiterated termination risk: unless net revenues in Q4 2024 exceed $1.0 million, the Trust will terminate on December 31, 2024 and commence wind‑up on January 1, 2025 .
Administrative expenses were funded from the cash reserve; cash earnings for Q3 were a loss of $(272) thousand and no distribution was paid .
Stock reaction catalysts: persistent zero distributions, explicit termination timeline, and production decline vs rising chargeable costs drive narrative fragility and potential delisting risk if unit price breaches NYSE minimum .

What Went Well and What Went Wrong

What Went Well

Cash reserve remains available to support administrative expenses; cash and equivalents were $4,265k at quarter end and reserve was ~$4.1M, with trustee intent to evaluate adequacy and potentially replenish if future royalties occur .
Clear disclosure of mechanics: WTI, adjusted chargeable costs, and production taxes are transparently reported, anchoring investor expectations; management emphasized that payments cannot be less than zero per quarter .
Operational clarity: average net production metrics disclosed each quarter (Q1–Q3), enabling tracking of decline rates and payout prospects .

What Went Wrong

No royalty payment received; distribution was $0.00 per unit as the Per Barrel Royalty remained negative due to WTI below break‑even and higher adjusted chargeable costs .
Administrative expenses increased YoY (Q3 2024: $329k vs $157k), contributing to cash earnings loss and depletion of the reserve .
Termination risk escalated: explicit guidance that the Trust will terminate absent >$1.0M net revenues in Q4; ongoing production below 90kb/d and scheduled cost increases impair payout visibility .

Financial Results

Trust Financials (Modified Cash Basis)

Metric (USD)	Q3 2023	Q3 2024
Royalty revenues	$0	$0
Interest income	$71	$57
Administrative expenses	$(157)	$(329)
Cash earnings (loss)	$(86)	$(272)
Cash distributions	$0	$0
Cash distributions per unit	$0.00	$0.00
Units outstanding	21,400,000	21,400,000

Key Payout Determinants (Per‑Barrel Components)

Metric	Q1 2024	Q2 2024	Q3 2024
Average WTI Price ($/bbl)	$77.01	$80.62	$75.20
Average Adjusted Chargeable Costs ($/bbl)	$89.61	$90.69	$90.90
Average Production Taxes ($/bbl)	$2.69	$2.83	$2.61
Average Per Barrel Royalty ($/bbl)	$(15.28)	$(12.89)	$(18.31)
Average Net Production (mb/d)	66.8	61.5	59.6

Year‑on‑Year Comparison of Underlying Q2 Inputs (used for Q3 distributions)

Metric	Q2 2023	Q2 2024
Average WTI Price ($/bbl)	$73.76	$80.62
Adjusted Chargeable Costs ($/bbl)	$81.38	$90.69
Average Production Taxes ($/bbl)	$2.57	$2.83
Average Per Barrel Royalty ($/bbl)	$(10.19)	$(12.89)
Average Net Production (mb/d)	65.9	61.5

Distribution Schedule

Quarter	Ex‑Dividend Date	Record Date	Payable Date	Dividend Rate ($/Unit)
Q1 2024	April 12, 2024	April 15, 2024	None	$0.00
Q2 2024	July 12, 2024	July 15, 2024	None	$0.00
Q3 2024	October 14, 2024	October 15, 2024	None	$0.00

No segment reporting is applicable; the Trust’s sole asset is the overriding royalty interest on specified Prudhoe Bay production .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Quarterly cash distribution	Q3 2024	n/a	$0.00 per unit; no payable date	Maintained zero
Trust termination threshold	FY 2024	Terminate if net revenues < $1.0M for two successive years	Will terminate on Dec 31, 2024 unless Q4 net revenues > $1.0M	Reiterated with explicit timing
Cash reserve target	Ongoing	Target ~$6.0M (since 2021)	Balance ~$4.1M at 09/30/24; Trustee may withhold future royalties to replenish	Lower actual level; potential replenishment
Administrative expenses	Q3 2024	n/a	$155,847 paid from reserve in Q3	n/a
NYSE listing risk	Ongoing	n/a	Potential delisting if price < $1.00 for 30 days; limited Trustee remedies	New/heightened disclosure

Earnings Call Themes & Trends

No earnings call transcript was published for Q3 2024; themes are drawn from the 8‑K and 10‑Q.

Topic	Previous Mentions (Q2 & Q1)	Current Period (Q3)	Trend
WTI vs break‑even	Q1 and Q2 press releases: WTI below break‑even, negative Per Barrel Royalty	WTI averaged $75.20; below break‑even; Per Barrel Royalty $(18.31)	Persistently negative; deeper deficit
Production trend	Q1: 66.8 mb/d; Q2: 61.5 mb/d	Q3: 59.6 mb/d; continued decline; below 90kb/d structurally	Ongoing decline
Cost inflation (chargeable costs)	2024 chargeable cost reset to $37.50 with CPI factor	Adjusted chargeable costs $90.90; YoY +11.4% in Q2 inputs	Higher cost headwind
Taxes	Production taxes persisted; minimum tax framework	$2.61 per barrel; minimum tax basis continues	Stable to slightly lower q/q
Termination/wind‑up	Not explicit in Q1/Q2 press releases	Explicit: terminate Dec 31, 2024 absent >$1.0M net revenues in Q4; wind‑up from Jan 1, 2025	Elevated risk
Listing risk	n/a	NYSE minimum price deficiency risk; Trustee lacks tools like reverse split	New disclosure

Management Commentary

“The average daily closing WTI price was below the ‘break‑even’ price for the quarter, resulting in a negative value for the payment calculation… [and] the payment… may not be less than zero.”
“Unless the net revenues from the Royalty Interest for the quarter ended December 31, 2024, exceed $1.0 million, the Trust will terminate on December 31, 2024… and the Trustee will commence the process to wind‑up the Trust effective as of January 1, 2025.”
“Average net production… was less than 90,000 barrels per day… and HNS expects that average net production… will be less than 90,000 barrels a day in future years.”
“The Trustee intends to continue to evaluate the adequacy of the cash reserve and may, at any time without notice to the Unit holders, increase or decrease the amount of the cash reserve…”
“From the beginning of the third quarter of 2024… WTI… on average was below the break‑even level necessary for the Trust to receive a Per Barrel Royalty…”

Q&A Highlights

No earnings call or Q&A session was provided in the period; investor communications were via the 8‑K and 10‑Q disclosures .

Estimates Context

Wall Street consensus (EPS, revenue) via S&P Global was unavailable for BPT for quarterly comparison; the Trust does not report GAAP EPS and distributes cash based on royalty receipts, which were zero this quarter.
Given no distributions and negative Per Barrel Royalty, any prior expectations for payouts would need to be revised to $0.00 until WTI meaningfully exceeds the break‑even level and/or adjusted chargeable costs decline .

Key Takeaways for Investors

Distributions remain at $0.00; payout visibility hinges on WTI moving materially above the break‑even while production and cost inflation headwinds persist .
Termination is imminent absent >$1.0M net revenues in Q4 2024; plan scenarios accordingly for wind‑up, potential final distribution net of reserve replenishment and overpayment adjustment .
Production continues to decline (59.6 mb/d in Q3), structurally below 90kb/d, increasing sensitivity to WTI and chargeable costs .
Adjusted chargeable costs rose into 2024 (CPI factor and scheduled reset), widening the gap to WTI and suppressing royalty generation .
Administrative expenses and reserve dynamics matter; the Trustee may withhold any future royalties to rebuild reserve before paying distributions .
Listing risk on NYSE is non‑trivial given unit price constraints and limited Trustee tools; OTC transition would reduce liquidity and increase volatility .
Tactical posture: without a sustained WTI uplift and improved cost/tax dynamics, near‑term catalysts skew negative; any surprise royalty receipt in Q4 would be offset first by expenses and reserve replenishment .

BP PRUDHOE BAY ROYALTY TRUST (BPT)·Q3 2024 Earnings Summary