Executive Summary

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. 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 of the funds on hand after provision is made for Trust expenses then anticipated.

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 engaging in such activities 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 properties of the Trust, which the Trust and Trustees hold pursuant to the Trust Agreement on behalf of the unit owners, are overriding royalty rights on sales of gas, sulfur and oil under certain concessions or leases in the Federal Republic of Germany. The actual leases or concessions are held either by Mobil Erdgas-Erdol GmbH ("Mobil Erdgas"), a German operating subsidiary of the Exxon Mobil Corp. ("Exxon Mobil"), or by Oldenburgische Erdolgesellschaft ("OEG"). The Oldenburg concession is the primary area from which the natural gas, sulfur and oil are extracted and provides nearly 100% of all the royalties received by the Trust. The Oldenburg concession (1,398,000 acres) covers virtually the entire former Principality of Oldenburg and is located in the federal state of Lower Saxony.

In 2002, Mobil Erdgas and BEB Erdgas und Erdol GmbH ("BEB"), a joint venture of Exxon Mobil and the Royal Dutch/Shell Group of Companies, formed a company ExxonMobil Production Deutschland GmbH ("EMPG"), a unified exploration and production venture, to carry out all exploration, drilling and production activities. All sales activities are still handled by the operating companies, either Mobil Erdgas or BEB.

The operating companies pay monthly royalties to the Trust based on their sales of natural gas, sulfur and oil. Of these three products, natural gas provided approximately 94.76% of the total royalties in the quarter just ended. The amount of royalties paid to the Trust is primarily based on four factors: the amount of gas sold, the price of that gas, the area from which the gas is sold, and the exchange rate.

Effective with the Trust's third quarter of fiscal 2010, a new royalty payment schedule was fully implemented. At approximately the 25th of the months of January, April, July and October, the operating companies calculate the amount of gas sold during the previous calendar quarter and determine the amount of royalties that were payable to the Trust based on those sales. This amount forms the basis for royalty payments for the Trust's upcoming fiscal quarter and for any adjustment for the prior calendar quarter. For example, on January 25th the operating companies calculate gas sales and attributable royalties payable for the months of October through December. This amount is divided into thirds and forms the monthly royalty payments

(payable on the 15th of each month) to the Trust for its fiscal quarter running from February through April. Continuing in this example, at the same time that the operating companies determine the actual amount of royalties that were payable for the months of October through December, they look at the actual amount of royalties that were paid to the Trust during the months of November through January and calculate the difference between what was payable and what was paid. Additional amounts payable by the operating companies would be paid immediately in January and any overpayment would be deducted from the February payment. The operating companies continue their calculations through the calendar year. In September of each year, the operating companies make the final determination of any necessary royalty adjustments for the prior calendar year. The Trust's German accountants have completed their examination of the royalty calculations covering calendar years 2009 and 2010 and no substantive errors were discovered.

There are two types of natural gas found within the Oldenburg concession, sweet gas and sour gas. Sweet gas has little or no contaminants and needs no treatment before it can be sold. In recent years sweet gas has assumed the role of swing producer. During periods of high demand, the production of sweet gas is increased as necessary. During the summer months, sweet gas production is reduced due to a general decline in demand. Sour gas, in comparison, must be processed at either the Grossenkneten or the Norddeutsche Erdgas-Aufbereitungs GmbH ("NEAG") desulfurization plants before it can be sold. The desulfurization process removes hydrogen sulfide and other contaminants. The hydrogen sulfide in gaseous form is converted to sulfur in a solid form and sold separately. For efficiency purposes, the desulfurization plants are operated at capacity on a continual basis. Any excess production from the plants is stored in underground storage for higher demand periods. As needed, the operators conduct maintenance on the plants, generally during the summer months when demand is lower. EMPG has indicated that it will be conducting scheduled maintenance work at the Grossenkneten desulfurization plant during the period from September 4 to October 11, 2012. If the operator is consistent with past practice, overall production during this maintenance period would be reduced by approximately one-third.

Under one set of rights covering the western part of the Oldenburg concession (approximately 662,000 acres), the Trust receives a royalty payment of 4% on gross receipts from sales by Mobil Erdgas of gas well gas, oil well gas, crude oil and condensate (the "Mobil Agreement"). Under the Mobil Agreement, there is no deduction of costs prior to the calculation of royalties from gas well gas and oil well gas, which together account for approximately 98% of all the royalties under this agreement. Historically, the Trust has received significantly greater royalty payments under the Mobil Agreement (as compared to the OEG Agreement described below) due to the higher royalty rate specified by that agreement.

The Trust is also entitled under the Mobil Agreement to receive a 2% royalty on gross receipts of sales of sulfur obtained as a by-product of sour gas produced from the western part of Oldenburg. The payment of the sulfur royalty is conditioned upon sales of sulfur by Mobil Erdgas at a selling price above an agreed upon base price. This base price is adjusted annually by an inflation index. In the first nine months of fiscal 2012 and 2011, the Trust received $425,001 and $318,061, respectively, in sulfur royalties under the Mobil Agreement. The Trust was entitled to receive a sulfur royalty payment during the quarter just ended. However, due to an error, the Mobil-Erdgas sulfur payment of $191,311 for the Trust's third fiscal quarter was delayed until early in the Trust's fourth fiscal quarter.

Under another set of rights covering the entire Oldenburg concession and pursuant to the agreement with OEG, the Trust receives royalties at the rate of 0.6667% on gross receipts from sales by BEB of gas well gas, oil well gas, crude oil, condensate and sulfur (removed during the processing of sour gas) less a certain allowed deduction of costs (the "OEG Agreement"). Under the OEG Agreement, 50% of the field handling, treatment and transportation costs, as reported for state royalty purposes, are deducted from the gross sales receipts prior to the calculation of the royalty to be paid to the Trust.

In 2008, NV Nederlandse Gasunie (the state owned Dutch gas distribution company) completed the purchase of BEB's North German gas distribution and transmission network. At the request of the Trustees and in conjunction with its biennial examination of the operating companies for the 2009-2010 period, the Trust's German accountants confirmed that transportation costs continued in accordance with the authorized indexed flat rate throughout this period and that the method of royalty calculation has not been affected by this pipeline sale.

Under the Mobil and OEG Agreements, the gas is sold to various distributors under long term contracts which delineate, among other provisions, the timing, manner, volume and price of the gas sold. The pricing mechanisms contained in these contracts include a delay factor of three to six months and use the price of light heating oil in Germany as one of the primary pricing components. Since Germany must import a large percentage of its energy requirements, the U.S. dollar price of oil on the international market has a significant impact on the price of light heating oil and a delayed impact on the price of gas. The Trust does not have access to the specific sales contracts under which gas from the Oldenburg concession is sold. Working under a confidentiality agreement with the operating companies, the Trust's German accountant examines these contracts periodically on behalf of the Trust to verify the correctness of application of the Agreement formulas for the computation of royalty payments.

For unit owners, changes in the dollar value of the Euro have both an immediate and long-term impact. The immediate impact is from the exchange rate that is applied at the time the royalties, paid to the Trust in Euros, are converted into U.S. dollars at the time of their transfer from Germany to the United States. In relation to the dollar, a stronger Euro would yield more dollars and a weaker Euro would yield less dollars. The long-term impact relates to the mechanism of gas pricing contained in the gas sales contracts negotiated by the operating companies. These gas sales contracts often use the price of German light heating oil as one of the primary pricing factors by which the price of gas is determined. The price of German light heating oil, which is a refined product, is largely determined by the price of the imported crude oil from which it was refined. Oil on the international market is priced in dollars. However, when oil is imported into Germany it is purchased in Euros, and at this point the dollar value of the Euro becomes relevant. A weaker Euro would buy less oil making that oil and the subsequently refined light heating oil more expensive. A stronger Euro would buy more oil making that oil and the subsequently refined light heating oil less expensive. Since changes in the price of German light heating oil are subsequently reflected in the price of gas through the gas sales contracts, the dollar/Euro relationship can make the prices of gas higher or lower. The changes in gas prices that result from changes in the prices of German light heating oil are only reflected after a built-in delay of three to six months as specified in the individual gas sales contracts.

Seasonal demand factors affect the income from royalty rights insofar as they relate to energy demands and increases or decreases in prices, but on average they are generally not material to the regular annual income received under the Trust's royalty rights.

The Trust has no means of ensuring continued income from overriding royalty rights at their present level or otherwise. The Trust's consultant in Germany provides general information to the Trust on the German and European economies and energy markets. This information provides a context in which to evaluate the actions of the operating companies. The Trust's consultant receives reports from EMPG with respect to current and planned drilling and exploration efforts. However, EMPG continues to limit the information flow to that which is required by German law.

The low level of administrative expenses of the Trust limits the effect of inflation on its financial condition. Sustained price inflation, which would be reflected in sales prices, along with sales volumes, form the basis on which the royalties paid to the Trust are computed. The impact of inflation or deflation on energy prices in Germany is delayed by the use, in certain long-term gas sales contracts, of a delay factor of three to six months prior to the application of any changes in light heating oil prices to gas prices.

Results: Third Quarter Fiscal 2012 Versus Third Quarter Fiscal 2011

For the third quarter of fiscal 2012, the Trust's net income was $5,589,094, a decrease of 14.89% from the net income of $6,566,627 for the third quarter of fiscal 2011. Gross royalties received for the third quarter of fiscal 2012 were $5,846,833, a decrease of 13.31% as compared to $6,744,676 for the third quarter of fiscal 2011. These royalties were derived from sales of gas, sulfur and oil from the Trust's overriding royalty areas in Germany during the second calendar quarter of 2012. A distribution of 61 cents per unit has been paid on August 29, 2012 to owners of record as of August 10, 2012.

-----------------------------------------------------------------------------
                              3rd Fiscal Qtr.    3rd Fiscal Qtr.   Percentage
                              Ended 7/31/2012    Ended 7/31/2011     Change
-----------------------------------------------------------------------------
Total Royalties Received        $5,846,833         $6,744,676       - 13.31%
Net Income                      $5,589,094         $6,566,627       - 14.89%
Distribution per Unit             $0.61              $0.71          - 14.08%
-----------------------------------------------------------------------------

The amount of gas royalties payable to the Trust is based primarily on four factors: the amount of gas sold, the price of that gas, the area from which the gas is sold and the exchange rate. Gas royalty income under both the Mobil and the OEG Agreements in the third quarter of 2012 (as shown in the table below) was lower in comparison to income received during the third quarter of 2011 due primarily to a combination of lower gas sales and lower average Euro/dollar exchange rates in the third quarter of 2012. For comparison purposes to equivalent U.S. measurements, gas prices in Ecents/Kwh are converted using the average exchange rate into the more familiar term of dollars per thousand cubic feet ($/Mcf).

-----------------------------------------------------------------------------
                          3rd Fiscal Qtr.      3rd Fiscal Qtr.     Percentage
Mobil Agreement           Ended 7/31/2012      Ended 7/31/2011       Change
-----------------------------------------------------------------------------
Gas Sales (Bcf)(1)             9.140               10.671           - 14.35%
Gas Prices (Ecents/Kwh)(2)    2.6666               2.3838           + 11.86%
Average Exchange Rate(3)      1.2530               1.4091           - 11.08%
Gas Royalties              $3,510,504           $4,114,508          - 14.68%
Gas Prices ($/Mcf)            $ 9.60               $ 9.64           -  0.41%
-----------------------------------------------------------------------------
OEG Agreement
-----------------------------------------------------------------------------
Gas Sales (Bcf)               26.254               29.595           - 11.29%
Gas Prices (Ecents/Kwh)       2.5079               2.5379           -  1.18%
Average Exchange Rate         1.2488               1.4148           - 11.73%
Gas Royalties              $1,391,324           $1,830,995          - 24.01%
Gas Prices ($/Mcf)            $ 8.77               $10.05           - 12.74%
-----------------------------------------------------------------------------

(1) Billion cubic feet
(2) Euro cents per Kilowatt hour
(3) Based on average exchange rates of cumulative royalty transfers

If we exclude the effects of differences in prices and average exchange rates, the combination of royalty rates on gas sold from western Oldenburg results in an effective royalty rate approximately seven times higher than the royalty rate on gas sold from eastern Oldenburg. This is of particular significance to the Trust since gas sold from western Oldenburg provides the bulk of royalties paid to the Trust. For the quarter just ended, gas sales from western Oldenburg accounted for only 34.82% of all gas sales. However, royalties on these gas sales provided approximately 81.17% or $4,497,280 out of a total of $5,540,292 attributable to gas sales from the Oldenburg concession.

Per the terms of the Trust Agreement, excess funds temporarily held by the Trust are held in a money market account or are invested in certificates of deposit or U.S. Treasury Bills. For the quarter just ended, Trust interest income remained at a relatively minor level due to the low interest rates applicable during the period and the reduced funds available for investment.

Trust expenses for the third quarter of fiscal 2012 increased 41.25% or $78,208 to $267,816 in comparison to the prior year's equivalent period. This increase in expenses is due to legal costs (including fees payable upon dismissal thereof) associated with the litigation in Germany and the conclusion of the royalty examination for 2009-2010.

The current Statement of Assets, Liabilities and Trust Corpus of the Trust at July 31, 2012, compared to that at fiscal year-end (October 31, 2011), shows a decrease in assets due to lower royalty receipts during the third quarter of fiscal 2012.

Results: First Nine Months of Fiscal 2012 Versus First Nine Months of

For the first nine months of fiscal 2012, the Trust's net income was $17,930,472, a decrease of 2.18% from the net income of $18,329,759 for the first nine months of fiscal 2011. Gross royalties received for the first nine months of fiscal 2012 were $18,826,729, a decrease of 1.46% as compared to $19,106,466 for the first nine months of fiscal 2011. These royalties were primarily derived from sales of gas, sulfur and oil from the Trust's overriding royalty areas in Germany during the fourth calendar quarter of 2011 and the first two calendar quarters of 2012. For the nine month periods ended July 31, 2012 and 2011, total distributions were equal to $1.95 and $1.99 per unit, respectively.

-----------------------------------------------------------------------------
                                Nine Months        Nine Months     Percentage
                              Ended 7/31/2012    Ended 7/31/2011     Change
-----------------------------------------------------------------------------
Total Royalties Received        $18,826,729        $19,106,466      -  1.46%
Net Income                      $17,930,472        $18,329,759      -  2.18%
Distributions per Unit             $1.95              $1.99         -  2.01%
-----------------------------------------------------------------------------

Gas royalty income under both the Mobil and the OEG Agreements in the first nine months of 2012 (as shown in the table below) was lower in comp- arison to income received during the first nine months of 2011 due primarily to a combination of lower gas sales and lower average exchange rates. These two factors more than offset an increase in gas prices. For comparison purposes to equivalent U.S. measurements, gas prices in Ecents/Kwh are converted using the average exchange rate into more familiar terms ($/Mcf).

-----------------------------------------------------------------------------
                            Nine Months          Nine Months       Percentage
Mobil Agreement           Ended 7/31/2012      Ended 7/31/2011       Change
-----------------------------------------------------------------------------
Gas Sales (Bcf)               28.521               33.434           - 14.69%
Gas Prices (Ecents/Kwh)       2.8004               2.4221           + 15.62%
Average Exchange Rate         1.2871               1.3820           -  6.87%
Gas Royalties              $11,807,667          $12,851,624         -  8.12%
Gas Prices ($/Mcf)            $10.35               $ 9.61           +  7.70%
-----------------------------------------------------------------------------
OEG Agreement
-----------------------------------------------------------------------------
Gas Sales (Bcf)               80.545               89,905           - 10.41%
Gas Prices (Ecents/Kwh)       2.8399               2.5873           +  9.76%
Average Exchange Rate         1.2871               1.3858           -  7.12%
Gas Royalties              $5,045,294           $5,572,880          -  9.47%
Gas Prices ($/Mcf)            $10.22               $10.04           +  1.79%
-----------------------------------------------------------------------------

For the nine months just ended, gas sales from western Oldenburg accounted for only 35.41% of all gas sales. However, royalties on these gas sales provided approximately 80.40% or $14,130,906 out of a total of $17,576,318 attributable to gas sales from the Oldenburg concession.

Interest income was higher reflecting the shift to a money market account for holding funds prior to the distribution. Interest income for the nine month period of fiscal 2012 increased 107.53% to $31,634 from $15,243 in the first nine month period of fiscal 2011.

Trust expenses for the nine month period of fiscal 2012 increased 17.17% or $135,941 to $927,891 in comparison to $791,950 for the prior fiscal year's equivalent period. This increase in expenses is due to legal costs associated with the litigation in Germany (including fees payable upon dismissal thereof) and the conclusion of the royalty examination for 2009- 2010.

This report on Form 10-Q may contain forward-looking statements intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. Such statements address future expectations and events or conditions concerning 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:

1. risks and uncertainties concerning levels of gas production and gas sale prices, general economic conditions and currency exchange rates;

2. the ability or willingness of the operating companies to perform under their contractual obligations with the Trust;

3. ongoing litigation and other potential disputes with the operating companies and the resolution thereof; and

4. the risk factors set forth under Item 1A of the Trust's Annual Report on Form 10-K for the year ended October 31, 2011.

All such factors are difficult to predict, contain uncertainties that may materially affect actual results, and are generally beyond the control of the Trust. New factors emerge from time to time and it is not possible for the Trust to predict all such factors or to assess the impact of each such factor on the Trust. Any forward-looking statement speaks only as of the date on which such statement is made, and the Trust does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made.