The Final Chapter: BP Prudhoe Bay Royalty Trust Enters Liquidation

The BP Prudhoe Bay Royalty Trust has officially ceased operations and is now in the process of being wound down, marking a definitive end for its shareholders. The trust’s dissolution became effective at midnight on December 31, 2024.

This move concludes an extended period of financial difficulty for the trust, which failed to generate sufficient revenue to meet the thresholds outlined in its governing agreement. Specifically, the entity recorded no income in any quarter during 2023 or 2024. Regular distributions to unitholders had already been halted prior to the formal termination.

Should investors sell immediately? Or is it worth buying BP Prudhoe Bay Royalty?

A direct result of the dissolution has been the suspension of trading for the trust’s units on the New York Stock Exchange. The units are now being quoted on the OTC Pink market under a new ticker symbol. The trustee, The Bank of New York Mellon Trust Company, has initiated the liquidation of the trust's remaining assets. This procedure involves selling all assets except for existing cash reserves, finalizing the trust’s existence.

The Economic Mechanism Behind the Shutdown

The trust’s payout structure was intrinsically linked to crude oil prices. Distributions were only made when the calculated "Per Barrel Royalty" yielded a positive figure. This royalty was derived from the West Texas Intermediate (WTI) price, minus specific costs and taxes. According to disclosures, the average daily WTI closing price consistently remained below the necessary break-even point across multiple periods, including 2023, 2024, and 2025. The trust agreement stipulated that no payment would be made when this calculation resulted in a negative value, which ultimately led to the prolonged revenue drought.