VOC Energy Trust (VOC) Bundle
A Brief History of VOC Energy Trust
VOC Energy Trust was established to acquire and hold a term net profits interest that allows it to receive 80% of the net proceeds from oil and natural gas production from properties located primarily in Kansas and Texas. The Trust was created in 2011, and its operational framework is based on the rights granted to it under its governing documents.
Financial Performance Overview
As of September 30, 2024, VOC Energy Trust reported significant financial metrics that highlight its operational performance. The following table summarizes the key financial data for the three and nine months ended September 30, 2024, compared to the same periods in 2023.
| Financial Metrics | Three Months Ended Sept 30, 2024 | Three Months Ended Sept 30, 2023 | Nine Months Ended Sept 30, 2024 | Nine Months Ended Sept 30, 2023 |
|---|---|---|---|---|
| Income from Net Profits Interest | $3,398,618 | $3,787,151 | $10,380,195 | $12,337,945 |
| Distributable Income | $3,060,000 | $3,570,000 | $9,350,000 | $11,390,000 |
| Average Oil Price (per Bbl) | $78.36 | $71.49 | $77.10 | $76.18 |
| Average Natural Gas Price (per Mcf) | $2.74 | $2.91 | $3.03 | $5.44 |
| Total Gross Proceeds | $9,270,907 | $9,240,585 | $27,041,669 | $29,793,178 |
Operational Highlights
For the nine months ended September 30, 2024, the Trust reported a total oil sales volume of 342,945 barrels, which represented a decline of 8.5% compared to the 374,744 barrels sold in the same period of 2023. Natural gas sales also decreased to 198,544 Mcf from 229,109 Mcf, reflecting a 13.3% drop year-over-year.
The average price for oil increased by 1.2% to $77.10 per barrel, while the average price for natural gas fell significantly by 44.3% to $3.03 per Mcf. This price fluctuation contributed to a total gross revenue decline of 9.2%, from $29,793,178 in 2023 to $27,041,669 in 2024.
Cash Reserves and Distributions
As of September 30, 2024, VOC Energy Trust maintained cash reserves of $1,779,712, including a cash reserve of $1.0 million for future development and operational expenses. The Trust made quarterly distributions of $3,060,000, or $0.18 per Trust Unit, to its unitholders during the third quarter of 2024, reflecting a slight decrease from the prior year’s distributions of $3,570,000, or $0.21 per Trust Unit.
The following table outlines the Trust's distributions per Trust unit for the first three quarters of 2024 and 2023:
| Quarter | Distribution Amount | Distribution Per Trust Unit |
|---|---|---|
| Q1 2024 | $3,230,000 | $0.19 |
| Q2 2024 | $3,060,000 | $0.18 |
| Q3 2024 | $3,060,000 | $0.18 |
| Q1 2023 | $3,910,000 | $0.23 |
| Q2 2023 | $3,910,000 | $0.23 |
| Q3 2023 | $3,570,000 | $0.21 |
Future Outlook
Looking ahead, VOC Energy Trust continues to navigate the challenges posed by market fluctuations and operational constraints, as evidenced by the impact of severe weather events in early 2024 that affected production capabilities. The Trust remains focused on maintaining its financial health and returning value to its unitholders through prudent management of its resources.
A Who Owns VOC Energy Trust (VOC)
Ownership Structure
As of September 30, 2024, VOC Energy Trust has a total of 17,000,000 Units of Beneficial Interest outstanding. The Trust was created to hold a term net profits interest in oil and natural gas properties owned by VOC Brazos Energy Partners, L.P. (VOC Brazos), which is a privately held limited partnership. The Trust receives 80% of the net proceeds from VOC Brazos' production.
Major Shareholders
The primary ownership of VOC Energy Trust is distributed among the Trust unitholders, which include institutional and retail investors. As of the latest reports, detailed ownership percentages by major shareholders are not publicly disclosed. However, the Trust is managed by a Trustee, The Bank of New York Mellon Trust Company, N.A., which oversees the financial operations and distributions.
Financial Performance
For the nine months ended September 30, 2024, VOC Energy Trust reported the following financial metrics:
| Metric | 2024 Amount | 2023 Amount |
|---|---|---|
| Income from Net Profits Interest | $10,380,195 | $12,337,945 |
| Distributable Income | $9,350,000 | $11,390,000 |
| Total Gross Proceeds | $27,041,669 | $29,793,178 |
| Cash and Cash Equivalents | $1,779,712 | $1,429,301 |
| General and Administrative Expenses | $679,784 | $868,648 |
Distributions to Unitholders
In 2024, VOC Energy Trust made the following distributions to its unitholders:
| Quarter | Distribution Amount | Distribution per Unit |
|---|---|---|
| Q1 2024 | $3,230,000 | $0.19 |
| Q2 2024 | $3,060,000 | $0.18 |
| Q3 2024 | $3,060,000 | $0.18 |
Cash Reserves
As of September 30, 2024, the Trustee held $1.0 million as a cash reserve for future development, maintenance, or operating expenditures. The cash reserves are intended to ensure the Trust can meet future obligations without impacting distributions to unitholders.
Market Performance
The Trust's performance is closely tied to the market prices of oil and natural gas. As of September 30, 2024, the average sales prices were:
| Product | Average Price |
|---|---|
| Oil (per Bbl) | $77.10 |
| Natural Gas (per Mcf) | $3.03 |
The average sales prices indicate a modest increase in oil prices compared to the previous year, while natural gas prices have significantly decreased.
VOC Energy Trust (VOC) Mission Statement
VOC Energy Trust is dedicated to maximizing the long-term value of its assets for the benefit of its unitholders through the efficient management of its net profits interest in oil and natural gas production. The Trust aims to provide consistent cash distributions while maintaining a strong financial position and ensuring responsible operational practices.
Key Financial Data
| Financial Metric | 2024 (Nine Months Ended September 30) | 2023 (Nine Months Ended September 30) |
|---|---|---|
| Oil Sales Volume (Bbl) | 342,945 | 374,744 |
| Natural Gas Sales Volume (Mcf) | 198,544 | 229,109 |
| Total Gross Proceeds | $27,041,669 | $29,793,178 |
| Production and Development Costs | $14,066,425 | $14,370,747 |
| Excess of Revenues over Direct Operating Expenses | $12,975,244 | $15,422,431 |
| Net Profits Interest Income | $10,380,195 | $12,337,945 |
| Distributable Income | $9,350,000 | $11,390,000 |
| Distributions per Trust Unit | $0.55 | $0.67 |
Recent Operational Performance
During the nine months ended September 30, 2024, the average price for oil increased to $77.10 per Bbl, while the average price for natural gas decreased to $3.03 per Mcf. The Trust experienced a decrease in total sales volume, which impacted overall gross proceeds.
Quarterly Distributions
| Quarter | Distribution Amount | Distribution per Trust Unit | Payment Date |
|---|---|---|---|
| Q1 2024 | $3,230,000 | $0.19 | February 14, 2024 |
| Q2 2024 | $3,060,000 | $0.18 | May 15, 2024 |
| Q3 2024 | $3,060,000 | $0.18 | August 14, 2024 |
Cash and Assets
| Asset Category | Value as of September 30, 2024 | Value as of December 31, 2023 |
|---|---|---|
| Cash and Cash Equivalents | $1,779,712 | $1,429,301 |
| Investment in Net Profits Interest | $140,591,606 | $140,591,606 |
| Accumulated Amortization and Impairment | ($130,006,693) | ($128,648,342) |
| Total Assets | $12,364,625 | $13,372,565 |
Operational Challenges
The Trust faced operational challenges during the nine months ended September 30, 2024, including a decrease in sales volumes attributed to severe winter storms that curtailed production in certain areas. The production and property taxes decreased by 14.9% to $1,557,681 compared to the previous year.
Future Outlook
VOC Energy Trust continues to focus on maintaining strong financial performance while navigating market fluctuations and operational challenges. The Trust is committed to maximizing unitholder value through strategic management of its net profits interest in oil and natural gas production.
How VOC Energy Trust (VOC) Works
Overview of Operations
VOC Energy Trust is a statutory trust that derives its income primarily from a term net profits interest in oil and natural gas production properties. The Trust was established to hold this interest and distribute the net proceeds to its unitholders.
Financial Performance
As of September 30, 2024, VOC Energy Trust reported the following key financial metrics:
| Financial Metric | Q3 2024 | Q3 2023 | YTD 2024 | YTD 2023 |
|---|---|---|---|---|
| Income from Net Profits Interest | $3,398,618 | $3,787,151 | $10,380,195 | $12,337,945 |
| Distributable Income | $3,060,000 | $3,570,000 | $9,350,000 | $11,390,000 |
| Cash on Hand | $1,779,712 | N/A | N/A | N/A |
| General & Administrative Expenses | $202,488 | $257,220 | $679,784 | $868,648 |
| Distributions per Trust Unit | $0.18 | $0.21 | $0.55 | $0.67 |
Production Data
For the nine months ended September 30, 2024, VOC Energy Trust reported the following production volumes:
| Production Type | Volume (Units) | Change from 2023 |
|---|---|---|
| Oil (Bbl) | 342,945 | -8.5% |
| Natural Gas (Mcf) | 198,544 | -13.3% |
| Total (BOE) | 376,036 | -9.0% |
Revenue Breakdown
The Trust's gross proceeds from oil and natural gas sales for the nine months ended September 30, 2024, are as follows:
| Revenue Source | Amount | Change from 2023 |
|---|---|---|
| Oil Sales | $26,440,170 | -7.4% |
| Natural Gas Sales | $601,499 | -51.8% |
| Total Gross Proceeds | $27,041,669 | -9.2% |
Operating Expenses
The operating costs associated with the Trust for the nine months ended September 30, 2024, are detailed below:
| Expense Type | Amount | Change from 2023 |
|---|---|---|
| Lease Operating Expenses | $11,004,093 | -1.9% |
| Production and Property Taxes | $1,557,681 | -14.9% |
| Development Expenses | $1,504,651 | +13.4% |
| Total Operating Expenses | $14,066,425 | -2.1% |
Distribution History
The Trust has made quarterly distributions in 2024 as follows:
| Quarter | Distribution Amount | Per Trust Unit |
|---|---|---|
| Q1 2024 | $3,230,000 | $0.19 |
| Q2 2024 | $3,060,000 | $0.18 |
| Q3 2024 | $3,060,000 | $0.18 |
Cash Reserves and Borrowing
As of September 30, 2024, the Trust held cash reserves of $1,779,712, which includes a cash reserve established for future development and maintenance expenses. The Trust has not engaged in borrowing during the reporting period.
Net Profits Interest Structure
The Trust operates under an 80% net profits interest model, receiving 80% of the net proceeds from oil and gas production. This structure is designed to provide stable income to unitholders based on the performance of the underlying properties without direct involvement in operational management.
How VOC Energy Trust (VOC) Makes Money
Revenue Generation from Net Profits Interest
The primary source of revenue for VOC Energy Trust derives from its net profits interest in oil and natural gas production through VOC Brazos Energy Partners, L.P. The Trust receives 80% of the net proceeds from the sale of oil and natural gas produced from the underlying properties.
| Period | Oil Sales Volume (Bbl) | Natural Gas Sales Volume (Mcf) | Total Gross Proceeds | Income from Net Profits Interest | Distributable Income |
|---|---|---|---|---|---|
| Three months ended September 30, 2024 | 116,006 | 65,815 | $9,270,907 | $3,398,618 | $3,060,000 |
| Three months ended September 30, 2023 | 126,373 | 70,964 | $9,240,585 | $3,787,151 | $3,570,000 |
| Nine months ended September 30, 2024 | 342,945 | 198,544 | $27,041,669 | $10,380,195 | $9,350,000 |
| Nine months ended September 30, 2023 | 374,744 | 229,109 | $29,793,178 | $12,337,945 | $11,390,000 |
Operating Expenses
The Trust incurs several operating expenses, which are deducted from gross proceeds to determine distributable income. Key expenses include lease operating expenses, production and property taxes, and development costs.
| Expense Type | Three Months Ended September 30, 2024 | Three Months Ended September 30, 2023 | Nine Months Ended September 30, 2024 | Nine Months Ended September 30, 2023 |
|---|---|---|---|---|
| Lease Operating Expenses | $3,784,091 | $3,553,191 | $11,004,093 | $11,213,378 |
| Production and Property Taxes | $539,469 | $657,484 | $1,557,681 | $1,830,926 |
| Development Expenses | $699,074 | $295,971 | $1,504,651 | $1,326,443 |
Financial Performance Overview
For the nine months ended September 30, 2024, the Trust reported total gross proceeds of $27,041,669, a decrease of $2,751,509 or 9.2% from the prior year. This decline is attributed to reduced sales volumes and fluctuating market prices for natural gas.
Quarterly Distributions to Unitholders
The Trust distributes available funds to unitholders quarterly, based on the net profits received from VOC Brazos. The following table summarizes the distribution amounts for 2024:
| Quarter | Distribution Amount | Distribution Per Trust Unit |
|---|---|---|
| Q1 2024 | $3,230,000 | $0.19 |
| Q2 2024 | $3,060,000 | $0.18 |
| Q3 2024 | $3,060,000 | $0.18 |
Current Financial Position
As of September 30, 2024, the Trust held cash and cash equivalents amounting to $1,779,712, which includes a reserve of $1.0 million for future development and operational expenses. The investment in net profits interest was recorded at $140,591,606, with no impairments noted during the reporting period.
The Trust's financials reflect a cumulative receipt of 80% of the net proceeds from approximately 9.0 million barrels of oil equivalent (MMBoe) since inception, indicating a robust but fluctuating revenue stream tied to the performance of the underlying oil and gas properties.
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Resources:
- VOC Energy Trust (VOC) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of VOC Energy Trust (VOC)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View VOC Energy Trust (VOC)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.