# Report to Unit Owners

_Source: `DeepSeekOCR_Ardian_pruned_1k/energy-oil-gas-e-p/NYSE_NRT_2021/NYSE_NRT_2021.mmd` · pages 1-7_

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Report to Unit Owners ..... 1-2
Description of Trust Assets ..... 3
Management's Discussion and Analysis ..... 4-7
Critical Accounting Policies ..... 8
Report of Independent Registered Public Accounting Firm ..... 9-10
Financial Statements ..... 11-12
Notes to Financial Statements ..... 13-15
Disclosure Controls and Procedures ..... 16
Internal Control over Financial Reporting ..... 16
Trustees, Administration and Important Contacts ..... 17
2021 Tax Letter (Removable) ..... 18-21

## IMPORTANT TAX INFORMATION

For your convenience, the information necessary to prepare your 2021 tax return is included in the removable "2021 Tax Letter" on Pages 18 through 21.
Please note that there will be no separate mailing of the tax letter.
The 2021 Tax Letter is also available at the Trust's website, www.neort.com.

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## Report to Unit Owners:

## FOURTH QUARTER 2021

Net income for the Trust for the fourth quarter of fiscal 2021 was \(1,302,678, an increase of 495.79% from net income of \)218,649 for the fourth quarter of fiscal 2020. The Trust receives nearly all of its royalties under two royalty agreements. The Mobil Agreement is the 4% royalty rate agreement covering gas sales from the western half of a concession in the Federal Republic of Germany (the "Oldenburg concession"). The OEG Agreement is the 0.6667% royalty rate agreement covering gas sales from the entire Oldenburg concession. Total royalties under the Mobil Agreement, including sulfur royalties under the 2% Mobil Sulfur Agreement, for the fourth quarter of fiscal 2021 were reduced by negative adjustments from prior periods of (\(120,777), as compared to negative adjustments totaling (\)483,809) for the fourth quarter of fiscal 2020. Total royalties under the OEG Agreement for the fourth quarter of fiscal 2021 were reduced by negative adjustments from prior periods of (\(70,329), as compared to negative adjustments of (\)213,393) for the fourth quarter of fiscal 2020. Net income in the fourth quarter of 2021 was higher than the fourth quarter of 2020 due to the impact of these prior period adjustments as well as increases in both gas prices and gas sales. Gas sales were higher due to the combination of increased demand resulting from the reduced economic impact of COVID-19 and the uninterrupted operation of Grossenketen during the fourth quarter of fiscal 2021. The relevant details for the fourth quarters of fiscal 2021 and 2020 for gas sales under the Mobil and OEG Agreements are shown in the table below.

<table><tr><td colspan="4">Quarterly Gas Data Providing Basis for Fiscal Quarter Royalties</td></tr><tr><td></td><td>3rd Calendar Quarter Ended 9/30/2021</td><td>3rd Calendar Quarter Ended 9/30/2020</td><td>Percentage Change</td></tr><tr><td>Mobil Agreement:</td><td></td><td></td><td></td></tr><tr><td>Gas Sales (Bcf \( ^{1} \) )</td><td>3.985</td><td>3.186</td><td>+25.08%</td></tr><tr><td>Gas Prices \( ^{2} \)  (Ecents/kWh \( ^{3} \) )</td><td>1.9573</td><td>0.9255</td><td>+111.49%</td></tr><tr><td>Average Exchange Rate \( ^{4} \)</td><td>1.1703</td><td>1.1761</td><td>-0.49%</td></tr><tr><td>Gas Royalties</td><td>1,043,662</td><td>395,791</td><td>+163.69%</td></tr><tr><td>OEG Agreement:</td><td></td><td></td><td></td></tr><tr><td>Gas Sales (Bcf)</td><td>13.365</td><td>10.601</td><td>+26.07%</td></tr><tr><td>Gas Prices (Ecents/kWh)</td><td>1.9961</td><td>0.9438</td><td>+111.50%</td></tr><tr><td>Average Exchange Rate</td><td>1.1714</td><td>1.1730</td><td>-0.14%</td></tr><tr><td>Gas Royalties</td><td>441,458</td><td>97,128</td><td>+354.51%</td></tr></table>

 \( ^{1} \) Billion cubic feet  \( ^{2} \) Gas prices derived from May-July period  \( ^{3} \) Euro cents per Kilowatt hour

 \( ^{4} \) Based on average Euro/dollar exchange rates of cumulative royalty transfers

## FISCAL 2021 REPORT

For fiscal 2021, the Trust's total royalty income increased 13.64% to \(4,602,410 from \)4,050,017 in fiscal 2020. The increase in royalty income was the result of a combination of factors including the reduction in the economic impact of COVID-19, higher gas prices and higher average exchange rates in comparison to fiscal 2020. As in prior years, the Trust receives information concerning adjustments from the operating companies based on their final calculations of royalties payable during the previous periods as well as other required adjustments. During fiscal 2021 and 2020, these adjustments decreased royalty income by $696,189 and decreased royalty income by

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\(653,916, respectively. During fiscal 2021 and 2020, Mobil sulfur royalties totaled \)178,367 and $71,280, respectively. The total distribution for fiscal 2021 was \(0.47 per unit compared to \)0.32 per unit for fiscal 2020.

The Trust's German consultant periodically contacts the representatives of the operating companies to inquire about their planned and proposed drilling and geophysical work and other general matters. The following represents a summary of the most recent information the Trust's German consultant received from representatives of the operating companies' unified exploration and production venture, ExxonMobil Production Deutschland GmbH ("EMPG"). The Trust is not able to confirm the accuracy of any of the information supplied by the operating companies. In addition, the operating companies are not required to take any of the actions outlined and, if they change their plans with respect to any such actions, they are not obligated to inform the Trust. Information on wells that are not named or are in preliminary planning stages is not divulged by EMPG.

EMPG has not planned any new wells for calendar year 2022. On the exploration side, there has been no major work initiated. Desktop studies are continuing to satisfy mining authorities.

The operator has performed a study, The Sour Gas Study, dealing with all matters which could help to optimize the tail end production from all sour gas wells in the gas fields of Oldenburg concessions. The focus of the study was on how to optimize the gas compression in the flowline grids from each well to the gathering stations, compressor stations and finally towards the processing plant in Grossenketen. Some optimization potential has been found.

Grossenketen plant operation will soon be reduced to one train from the current two trains in parallel thus optimizing cost and efficiency.

It is expected that the Trust's consultant will learn additional details about The Sour Gas Study and its impact when he meets EMPG in March 2022.

Based on the limited information available, Graves & Co. Consulting LLC, the Trust's petroleum consultant ("Graves & Co."), has prepared and submitted their report on the cost depletion percentage applicable to Trust unit owners for calendar 2021. The 2021 cost depletion percentage of 17.7008% and related tax information is contained in the removable "2021 Tax Letter" on Pages 19 through 22 of this report. The calculation of the cost depletion percentage is based on Graves & Co.'s estimate of remaining net proved producing reserves as of October 1, 2021. (The complete text of the report is available in the Trust's 2021 Report on Form 10-K as exhibit 99.1.) The report indicates that net Trust gas reserves increased 20.05% to 5.431 Bcf from 4.524 Bcf on net sales for 2021 of 0.882 Bcf and a positive reserve adjustment of 1.789 Bcf.

Respectfully submitted,

December 30, 2021

John R. Van Kirk
Managing Director