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, 2002 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
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(Exact name of registrant as specified in its charter)
Delaware 22-2084119
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(State of organization) (I.R.S. Employer I.D. No.)
Suite 19A, 43 West Front Street, Red Bank, New Jersey 07701
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(Address of principal executive offices)
(732) 741-4008
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(Registrant's telephone number, including area code)
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
Class Outstanding at August 31, 2002
- ---------------------------- ------------------------------
Units of Beneficial Interest 8,931,414
PART I -- FINANCIAL INFORMATION
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Item 1. Financial Statements
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STATEMENTS OF INCOME AND EXPENSES ON A CASH BASIS (NOTE 1)
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FOR THE THREE MONTHS ENDED JULY 31, 2002 AND 2001
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2002 2001
----------------- -----------------
(unaudited)
German gas, oil and sulfur
royalties received $ 4,580,463 $ 4,983,996
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Interest income 11,874 35,447
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Trust expenses ( 148,634) ( 148,872)
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Net income on a cash basis $ 4,443,703 $ 4,870,571
=========== ===========
Net income per unit on a cash basis $ .50 $ .55
====== ======
Cash distributions paid or to be paid:
Dividends and distributions per unit
paid to former unlocated shareholders .00 .00
Distributions per unit to be paid to
unit owners $ .50 $ .54
====== ======
STATEMENTS OF ASSETS, LIABILITIES AND TRUST CORPUS (NOTE 1)
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JULY 31, 2002 AND OCTOBER 31, 2001
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2002 2001
----------------- -----------------
(unaudited) (audited)
Current assets - - Cash and
cash equivalents (Note 1) $ 4,517,355 $ 5,391,320
Producing gas and oil royalty rights,
net of amortization (Notes 1 and 2) 1 1
----------- -----------
$ 4,517,356 $ 5,391,321
=========== ===========
Current liabilities - - Cash distributions
payable to unit owners $ 4,465,707 $ 5,332,083
Contingent liability (Note 3)
Trust corpus (Notes 1 and 2) 1 1
Undistributed earnings 51,648 59,237
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$ 4,517,356 $ 5,391,321
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The notes to financial statements should be read
in conjunction with these statements.
STATEMENTS OF INCOME AND EXPENSES ON A CASH BASIS (NOTE 1)
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FOR THE NINE MONTHS ENDED JULY 31, 2002 AND 2001
--------------------------------------------------
2002 2001
----------------- -----------------
(unaudited)
German gas, oil and sulfur
royalties received $13,850,314 $17,000,330
----------- -----------
Interest income 48,727 112,366
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Trust expenses ( 420,195) ( 524,110)
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Net income on a cash basis $13,478,846 $16,588,586
=========== ===========
Net income per unit on a cash basis $1.51 $1.87
===== =====
Cash distributions paid or to be paid:
Dividends and distributions per unit
paid to former unlocated shareholders .00 .00
Distributions per unit to be paid
to unit owners $1.51 $1.86
===== =====
The notes to financial statements should be read
in conjunction with these statements.
STATEMENTS OF CHANGES IN CASH AND CASH EQUIVALENTS (NOTE 1)
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FOR THE NINE MONTHS ENDED JULY 31, 2002 AND 2001
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2002 2001
----------------- -----------------
(unaudited)
Sources of cash and cash equivalents:
German gas, oil and sulfur royalties $13,850,314 $17,000,330
Interest income 48,727 112,366
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13,899,041 17,112,696
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Uses of cash and cash equivalents:
Payment of Trust expenses 420,195 524,110
Distributions and dividends paid (Note 3) 14,352,811 14,663,226
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14,773,006 15,187,336
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Net increase(decrease) in cash and
cash equivalents during the period (873,965) 1,925,360
Cash and cash equivalents,
beginning of period 5,391,320 2,946,596
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Cash and cash equivalents,
end of period $ 4,517,355 $ 4,871,956
=========== ===========
STATEMENTS OF UNDISTRIBUTED EARNINGS (NOTE 1)
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FOR THE NINE MONTHS ENDED JULY 31, 2002 AND 2001
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2002 2001
----------------- -----------------
(unaudited)
Balance, beginning of period $ 59,237 $ 13,951
Net income on a cash basis 13,478,846 16,588,586
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13,538,083 16,602,537
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Less:
Dividends and distributions paid to
former unlocated shareholders (Note 3) 0 0
Current year distributions paid or
to be paid to unit owners (Note 3) 13,486,435 16,529,455
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13,486,435 16,529,455
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Balance, end of period $ 51,648 $ 73,082
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The notes to financial statements should be read
in conjunction with these statements.
NORTH EUROPEAN OIL ROYALTY TRUST
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NOTES TO FINANCIAL STATEMENTS
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(Unaudited)
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(1) Summary of significant
accounting policies:
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Basis of accounting -
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The accounts of North European Oil Royalty Trust (the "Trust") are
maintained on a cash basis except 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 cash basis provides a more meaningful
presentation to unit owners of the results of operations of the Trust.
Use of Estimates -
----------------
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amount of assets and
liabilities and the disclosure of contingent assets and liabilities at
the date of the financial statements. Actual results may differ from
those estimates.
Producing gas and oil
royalty rights -
---------------------
The rights to certain gas and oil royalties in Germany were transferred
to the Trust at its inception by North European Oil Company (the
"Company") (see Note 2). At that time the net book value of the
royalty rights was $1,640,060. By 1992, as a result of the
intervening amortization, the net book value of the royalty rights had
been reduced to such a level that the net book value bore no
meaningful relationship to the fair market value of such rights or the
actual amount of proved producing reserves. At that time it was
determined that the remaining net book value of royalty rights was
de minimis and after a final amortization would henceforth be carried
on the books of the Trust at a nominal value of $1.
Federal and state income taxes -
------------------------------
The Trust, as a grantor trust, is exempt from Federal and state income
taxes under a private letter ruling issued by the Internal Revenue
Service.
Cash and cash equivalents -
-------------------------
Included in cash and cash equivalents are amounts deposited in bank
accounts and amounts invested in certificates of deposit and U. S.
Treasury bills with maturities of three months or less.
Net income per unit
on the cash basis -
-------------------
Net income per unit on the cash basis is based upon the number of units
outstanding at the end of the period (see Note 3). As of July 31, 2002
and 2001, there were 8,931,414 and 8,886,804 units of beneficial
interest outstanding respectively.
(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.
(3) Contingent liability:
---------------------
The Trust serves as fiduciary for certain unlocated or unknown
shareholders of North European Oil Corporation (the "Corporation") and
North European Oil Company, corporate predecessors of the Trust. From
the liquidation of the Company to October 31, 2001, 721,364 units were
issued in exchange for Corporate and Company shares and dividends of
$354,101 and distributions of $4,236,544 were paid to former unlocated
Corporation and Company shareholders. For the nine-month period ended
July 31, 2002, there were no units issued in exchanges and no dividends
and no distributions were paid to former unlocated Corporation and
Company shareholders.
On February 26, 1996 the settlement of litigation between the Trust
and the Delaware State Escheator was approved by the Delaware Court of
Chancery. As of that date, there were a total of 875,748 authorized
but unissued units representing the unexchanged shares of the Trust's
predecessor corporations. Out of this total, 760,560 units were
subject to the settlement. Under the settlement, 380,280 units were
issued to the Escheator on April 17, 1996. Of the Trust units
remaining to be issued to the Escheator, approximately 50% (190,128
units) have been issued to the Escheator as of June 30, 2000 and the
remaining balance will be issued by June 30, 2005. Through
June 30, 2000, claims by unlocated or unknown shareholders of the
Trust's corporate predecessors for units and past dividends and
distributions thereon ("Subsequent Claims") were paid by the Escheator
and the Trust on a 50:50 basis. From July 1, 2000 to June 30, 2005,
Subsequent Claims will be paid by the Escheator and the Trust on a
75:25 basis. Any Subsequent Claims will reduce the number of units to
be issued to the Escheator in 2005. Following the final issuance of
units to the Escheator in 2005, the Trust's contingent liability for
past dividends and distributions attributable to all unexchanged
Corporation and Company shares subject to the settlement will be
completely eliminated. Under the terms of the settlement, the maximum
liability of the Escheator for Subsequent Claims is limited to the
value of the units received, plus current distributions on units
retained, less the Escheator's share of Subsequent Claims. As of the
receipt of the August, 2002 distribution, the maximum liability of the
Escheator will be $12,420,360.
In addition to the agreement reached with the Delaware Escheator, on
December 4, 2001 the Trust reached a parallel agreement with the
Administrator of Unclaimed Property, Office of the New York State
Comptroller (the "New York Administrator") covering units for which
owners were unlocated but for whom New York state addresses were shown
in predecessor corporation records. The New York Settlement Agreement
covers 89,220 units attributable to stock ownership by unlocated
shareholders of predecessor corporate entities. Of the units covered
by the Settlement Agreement, 44,610 were issued to the New York
Administrator on December 21, 2001 and the balance of 44,610 will be
issued on or before June 30, 2005. The Settlement Agreement provides
for processing of claims in the period until June 30, 2005 and the
sharing of any costs relating to any claims which are allowed. As of
the receipt of the August, 2002 distribution, the maximum liability
of the New York Administrator will be $905,583.
Under the Trust Agreement as deemed amended by the February 26, 1996
Delaware Court Order, the Trust is not required to make payments of
arrearages of Company dividends or Trust distributions with respect
to units issued or to be issued to the Delaware Escheator or the
New York Administrator. As of July 30, 2002, there remained a total
of 259,176 units that could be issued to unlocated or unknown
Corporation and Company shareholders. Of this total, 234,732 units
are subject to the settlements and remain to be issued to the
Delaware Escheator or the New York Administrator. If all shares,
represented by the units already issued as well as the units
remaining to be issued, were presented for exchange, $487,023 in
dividends and $30,281,066 in distributions would be payable. In the
opinion of the Trustees, based in part on the history of exchanges
during the last ten fiscal years, the maximum liability of the
Delaware Escheator and the New York Administrator would not be less
than their respective share of any subsequent claims. In any
event, the Trust's contingent liability for all claims for arrearages
will be eliminated in 2005.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
-------------------------------------------------
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. 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 any such involvement 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 operating companies, subsidiaries of Exxon Mobil Corp. and the Royal
Dutch Group, pay monthly royalties to the Trust based on their sales of
natural gas, sulfur and oil. The Oldenburg concession is the primary area
from which these products are extracted and provides nearly 100% of all the
royalties received by the Trust. Natural gas provides approximately 98% of
the total royalties. Within the Oldenburg concession there are two
overriding royalty rates in effect on sales of natural gas. The Trust
receives a 4% royalty from the western portion of the concession. The Trust
also receives a 0.6667% royalty (adjusted to account for an agreed portion
of costs), which covers the entire concession. The royalties are initially
paid in Euros and are converted into U.S. dollars at the agreed upon
Euro/dollar exchange rate just prior to their transfer from Germany.
Although the Trust itself does not have access to the specific sales
contracts under which the Oldenburg gas is sold, a third party contractor,
retained by the Trust, examines these contracts periodically. They have
informed the Trust that these contracts contain pricing mechanisms which use
a number of factors with varying time delays to price the gas being sold.
For the Trust there are two elements of these contracts that are very
significant. The first element is the utilization of the price of light
heating oil in Germany as the primary pricing factor in many of these
contracts. The price of light heating oil is in turn affected by the price
of oil on the international market. The second element is a three to six
month delay before changes in pricing factors are translated into changes in
the price of gas.
Net income of the Trust for the third quarter of fiscal 2002, ended
July 31, 2002, was $4,443,703, 8.7% lower than the prior year's period. This
income was primarily derived from royalties paid on sales of gas, sulfur and
oil from the Trust's overriding royalty areas in Germany during the second
calendar quarter of 2002. For the nine month fiscal period ended
July 31, 2002, net income of the Trust decreased 18.7% from $16,588,586 to
$13,478,846. This income was primarily derived from royalties paid on sales
of gas, sulfur and oil from the Trust's overriding royalty areas in Germany
during the fourth calendar quarter of 2001 through the second calendar
quarter of 2002.
The primary factor affecting royalty revenue for the quarter just ended
was the decline in gas prices. With the regularly scheduled maintenance at
the Grossenkneten desulfurization plant shifted to some time in the
August/September 2002 period, the plant was able to operate uninterrupted
during the quarter just ended as compared to the third quarter of fiscal 2001
when maintenance was conducted during May. With the plant operating at full
capacity for the entire period, gas production and sales for both the higher
and lower royalty rate areas posted increases over the prior year. With the
recent weakness in the U.S. equity markets and the perception that the U.S.
economy was not improving as quickly as expected, the Euro was able to
sustain a significant rally, even briefly exceeding parity with the dollar.
While the Euro's value has fallen back somewhat from its recent highs, the
higher value of the Euro increased the amount of dollars received when the
royalties were transferred to the U.S. and converted into dollars. However,
despite the improvement in the value of the Euro and the increases in sales
of gas, these two positive factors could not offset the greater impact of
lower gas prices. For the nine month period a combination of the lower
international oil prices and the weak German economy combined to reduce both
gas prices and the volume of gas sales. The average value of the Euro was
only modestly higher.
Under the higher royalty rate agreement with the German subsidiary of
Exxon Mobil covering western Oldenburg (from which the Trust derives the bulk
of its royalties), average gas prices for the quarter and the nine month
period declined 16.08% and 10.92% respectively from the equivalent period for
the prior year. For the quarter average gas prices fell from 1.7552 Euro
cents per Kilowatt hour ("Ecents/Kwh") to 1.4730 Ecents/Kwh. For the nine
month period average gas prices fell from 1.6317 Euro cents per Kilowatt hour
("Ecents/Kwh") to 1.4535 Ecents/Kwh. Converting these gas prices using the
average exchange rate for the relative period, the average price for gas sold
under the higher royalty rate agreement for the quarter and the nine month
period was $4.03 and $3.77 per Mcf respectively. Under the lower royalty
rate agreement with BEB, a joint venture between Exxon Mobil and the Royal
Dutch Group, covering gas sales from the entire Oldenburg concession, average
gas prices for the quarter declined 26.35% from 1.8718 Ecents/Kwh to 1.3785
Ecents/Kwh. For the nine month period average gas prices declined 15.2% from
1.6882 Ecents/Kwh to 1.4317 Ecents/Kwh. Converting these prices using the
average exchange rate for the relative period, the average price for gas sold
under the lower royalty rate agreement was $3.66 and $3.59 per Mcf for the
quarter and the nine month period respectively.
Except for regular annual maintenance normally scheduled for the lower
demand period during the summer months, the Grossenkneten desulfurization
plant operates at capacity year round. In addition, there are other
maintenance requirements that necessitate a more protracted shutdown. These
extended maintenance requirements historically tend to average every other
year and are timed to coincide with normal annual maintenance. Since
approximately 80% of Oldenburg gas contains some level of hydrogen sulfide,
the sour portion of sour gas, the smooth operation of Grossenkneten is
extremely important to the Trust's royalty stream. During the quarter just
ended overall Oldenburg gas sales increased by 5.77% from 41.72 Billion cubic
feet ("Bcf") to 44.13 Bcf. Gas sales from the higher royalty rate area of
western Oldenburg increased 1.57% from 21.96 Bcf to 22.31 Bcf. At this level
gas sales from western Oldenburg accounted for 50.55% of total Oldenburg gas
sales on a volume basis. For the nine month period overall Oldenburg gas
sales declined by 6.18% from 165.04 Bcf to 154.83 Bcf. Gas sales from the
higher royalty rate area of western Oldenburg declined 7.87% from 74.46 Bcf
to 68.60 Bcf. At this level gas sales from western Oldenburg accounted for
44.31% of total Oldenburg gas sales on a volume basis.
During the quarter just ended the Euro posted its most significant
improvement since beginning its slow climb back towards parity with the
dollar. At a dollar equivalent of $0.9680 in average for the quarter, the
Euro increased by 10.2% from the immediately preceding quarter's average of
$0.8784 and by 12.2% from the third quarter of fiscal 2001's average of
$0.8626. This higher exchange rate had the immediate impact of increasing
the amount of dollars received by the Trust when the royalties, paid in
Euros, were transferred to the United States. For the nine month period the
average value of the Euro was $0.9041, a 1.56% increase from the average
value of $0.8902 for the prior year's nine month period.
Adjusting for the effects of differences in prices and effective
exchange rates, the combination of royalty rates on gas sold from western
Oldenburg results in an effective royalty rate approximately seven times
higher on a cubic foot of gas than a similar cubic foot originating from the
eastern half of Oldenburg. The impact of the combined royalty rate is
illustrated by the fact that out of a total of $4,566,754 in Oldenburg gas
royalties for the quarter just ended, 90.1% or $4,113,252 is attributable to
gas sold under the combined royalty rate in effect in the western area. For
the nine month period out of a total of $13,825,793 in Oldenburg gas
royalties, 86.3% or $11,931,363 is attributable to gas sold under the
combined royalty rate in effect in the western area.
Interest income for the third quarter and the nine month period was
lower due to both reduced funds available for investment and lower interest
rates. Trust expenses for the third quarter were nearly identical with those
of the prior year's period. For the nine month period Trust expenses were
reduced due to the reimbursement by the New York Stock Exchange for expenses
associated with the Trust's symbol change from "NET" to "NRT" on
January 29, 2002.
The current Statement of Assets, Liabilities and Trust Corpus of the
Trust at July 31, 2002, compared to that at fiscal year end
(October 31, 2001), shows a decrease in assets due to lower royalty receipts
during the quarter.
The Trust distribution for the third quarter of fiscal 2002 is $0.50, a
decrease of 7.4% from last year's distribution of $0.54. Cumulative
distributions for the nine month fiscal period are $1.51 compared to $1.86
for the prior year's period.
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
Trust expenses then anticipated. As permitted by the Trust Agreement, no
provision is made for the retention of reserve funds of any kind. If funds
were to be required for payments to owners for shares of the Trust's
predecessor corporations not previously presented for exchange into Trust
units, quarterly distributions would be reduced to the extent required to
provide funds for such payments.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
-----------------------------------------------------------
The Trust does not engage in any trading activities with respect to
possible foreign exchange fluctuations. The Trust does not use any financial
instruments to hedge against possible risks related to foreign exchange
fluctuations. The market risk is negligible because standing instructions
at its German bank require the bank to process transfers of royalty payments
as soon as possible following their receipt.
-----------------------------------
This report on Form 10-Q contains forward looking statements concerning
business, financial performance and financial condition of the Trust. 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 uncertainties concerning levels
of gas production and gas sale prices, general economic conditions and
currency exchange rates. Actual results and events may vary significantly
from those discussed in the forward looking statements.
Part II -- OTHER INFORMATION
----------------------------
Item 5. Other Information.
------------------
In the 10-Q for the second quarter of 2002, we discussed the information
supplied to the Trust by the operating companies with respect to anticipated
drilling planned to be conducted during 2002. After 2001, during which no
drilling had been conducted, we were informed that three wells were scheduled
to be drilled during 2002 and early 2003 and initial planning work for three
future drilling projects would be started as well. The first well mentioned,
a horizontal well Doetlingen Z-13a, had already been started in January 2002
with an expected completion date in May 2002. The stated reason for the
initial postponement of this well from 2001 to 2002 was the complex drilling
problems that it presented. Unfortunately, the operating companies were all
too accurate in their assessment of the problems involved. The well was not
completed until July 2002 and required double drilling. Despite all the
efforts, the productive length of the horizontal deviation was significantly
shorter than expected, reducing the anticipated production rates. Finally,
the additional time and complexity involved with the drilling of this well
exhausted the 2002 Oldenburg drilling budget and caused the postponement of
the other scheduled wells until 2003. However, the operating companies
gained significant practical experience in dealing with the complex drilling
problems associated with this well.
Item 6. Exhibits and Reports on Form 8-K.
---------------------------------
(a) Exhibits.
None.
(b) Reports on Form 8-K.
A Report on Form 8-K dated August 6, 2002 was filed with
Securities and Exchange Commission announcing the
cessation of the service of Arthur Andersen LLP as
auditor for North European Oil Royalty Trust.
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 thereunto duly authorized.
NORTH EUROPEAN OIL ROYALTY TRUST
/s/ John R. Van Kirk
---------------------------------
John R. Van Kirk
Managing Director
Dated: September 13, 2002
CERTIFICATIONS
----------------
Certification of Chief Executive Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, John H. Van Kirk, certify that:
1. I have reviewed this quarterly report on Form 10-Q of North European Oil
Royalty Trust;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period
covered by this quarterly report; and
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this quarterly report.
Date: September 13, 2002
/s/ John H. Van Kirk
-----------------------
John H. Van Kirk
Managing Trustee
(Chief Executive Officer)
Certification of Chief Financial Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, John R. Van Kirk, certify that:
1. I have reviewed this quarterly report on Form 10-Q of North European Oil
Royalty Trust;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period
covered by this quarterly report; and
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this quarterly report.
Date: September 13, 2002
/s/ John R. Van Kirk
-------------------------
John R. Van Kirk
Managing Director
(Chief Financial Officer)
Certification of Chief Executive Officer
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chapter 63,
Title 18 U.S.C. Sec. 1350(a) and (b)), the undersigned hereby certifies that
the Quarterly Report on Form 10-Q for the period ended July 31, 2002 of
North European Oil Royalty Trust ("Trust") fully complies with the
requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act
of 1934 and that the information contained in such Report fairly presents,
in all material respects, the financial condition and results of operations
of the Trust.
Dated: September 13, 2002
/s/ John H. Van Kirk
------------------------
John H. Van Kirk
Managing Trustee
(Chief Executive Officer)
Certification of Chief Financial Officer
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chapter 63,
Title 18 U.S.C. Sec. 1350(a) and (b)), the undersigned hereby certifies that
the Quarterly Report on Form 10-Q for the period ended July 31, 2002 of
North European Oil Royalty Trust ("Trust") fully complies with the
requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act
of 1934 and that the information contained in such Report fairly presents,
in all material respects, the financial condition and results of operations
of the Trust.
Dated: September 13, 2002
/s/ John R. Van Kirk
------------------------
John R. Van Kirk
Managing Director
(Chief Financial Officer)