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U.S. Royalty Trusts

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U.S. Royalty Trusts are another 'pass through' vehicle available to get income from the corporation to the individual with only 1 level of taxation (the individual income tax).

IN GENERAL

Trusts have no employees

Own no land or any other hard asset, except the right to receive either a percentage of net income or revenue from a production asset someone else owns

Trusts have a finite life--either when a certain amount of asset (oil, gas etc) has been extracted from the ground, a certain period of time has passed or in some cases determined upon the death of certain individuals


Below is our Master List of U.S Royalty Trusts

The Trust listed below trade on various stock exchanges in the United States

Trusts trade on the basis of income--thus it is important to know not just what the most recent income is, but what income the immediate quarters just ahead are expected to generate.

Understand the terms of the Trust.  On most of the trust websites you can find the terms of the trust.  Since trusts have a finite life you must know the details of the trust.  Depending on the most recent distribution for a buying decision is a certain way to lose money on your trust investment.

Most trusts pay a monthly distribution (although some are monthly)

Navigation

Clicking on the trust ticker Symbol will take you to the trust website. 

Trust Distributions most Recently Updated 4/29/2014

BP Prudhoe Bay Royalty Trust   (ticker:BPT)

BPT holds an overriding royalty interest constituting a non-operational interest in minerals in the Prudhoe Bay oil field on the North Slope of Alaska.  The field extends approximately 12 miles by 27 miles containing approximately 150,000 productive acres.  

The trust shall end when 60% of unit holders vote to end it OR when net revenue from Royalties is less than $1,000,000/year for 2 consecutive years (2012 net income was  approximately $200,000,000)

Chesapeake Granite Wash Trust (ticker:CHKR)

Chesapeake Granite Wash Trust is a Delaware statutory trust formed in June 2011 to own (a) royalty interests to be conveyed to the trust by Chesapeake in 69 existing horizontal wells in the Colony Granite Wash play located in Washita County in western Oklahoma (the Producing Wells), and (b) royalty interests in 118 horizontal development wells (calculated as described under The Development Wells beginning on page 4) to be drilled exclusively in the Colony Granite Wash (the Development Wells) on properties within an Area of Mutual Interest (as such area may be extended as described below, the AMI). The AMI is limited to only the Colony Granite Wash formation and is depicted by the area identified in the inside front cover of this prospectus, currently consisting of approximately 45,400 gross acres (28,700 net acres) held by Chesapeake. The Colony Granite Wash is a formation encountered at depths between approximately 11,500 feet and 13,000 feet that lies between the top of the Des Moines formation (or top of Colony Granite Wash) and the top of the Prue formation (or base of Colony Granite Wash). Chesapeake intends to drill, or cause to be drilled, the Development Wells from proved undeveloped (PUD) drilling locations in the AMI by June 30, 2015 and is obligated to complete such drilling by June 30, 2016.

NOTE THAT THIS TRUST END JUNE 30, 2031

In normal circumstances this trust will end on the above date and the term royalties will revert to Chesapeake Energy and the Perpetual Royalties will be sold and the proceeds paid to the unitholders

The Trust Document is Here

Cross Timbers Royalty Trust (ticker:CRT)

Cross Timbers operates as a express trust in the United States.  The company holds a 90% net profit interests in various producing and non producing royalty and overriding royalty interest properties in Texas, Oklahoma and New Mexico.  It also holds a 75% net profit interest in certain non operated working interest properties in Texas and Oklahoma.  Cross Timbers was founded in 1991 and is based in Dallas, Tx.

Trust Termination

In general the trust will terminate upon the affirmation of 80% of the unit holders.  Additionally the trust will move to liquidation if gross revenue of the trust are less than 1 million dollars for 2 years in a row.  The royalty interests will be sold (for cash) and the proceeds distributed to the unit holders.

For 2012 gross revenues were over $15,000,000

The Trust offering prospectus is here

Dominion Resources Black Warrior Trust (ticker:DOM)

Dominion Resources Black Warrior Trust operates as a grantor trust in the U.S.  It acquires and holds overriding royalty interests burdening proved natural gas properties located in the Pottsville coal formation of the Black Warrior Basin, Tuscalloosa County, and Alabama, which are owned by Dominion Black Warrior Basin Inc.  As of December 31, 2006, the companys properties comprised approximately 34,212 gross acres of land that contained 532 gas producing wells.  The company was founded in 1994 and is headquartered in Dallas.

Trust Termination

The Trust is somewhat complex.  The trust may be terminated by a 2/3rds vote of the unit holders .  Additionally it may be terminated if the royalties received are less than 1.2 times the administrative costs of the trust for 2 consecutive quarters.  There are added ways in which the trust can end so you must do a close reading of the trust document.

On May 19, 2011 the Trustee estimated 5-7 years of life left in the trust.

At trust termination the remaining assets will be sold and proceeds distributed to the unitholders.

Trust Document