VOC Energy Trust (VOC): Business Model Canvas [11-2024 Updated]
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VOC Energy Trust (VOC) Bundle
Discover the unique business model of VOC Energy Trust (VOC), a key player in the oil and gas sector. This model is designed to create a sustainable income stream for investors through strategic partnerships and efficient management of net profits interest. Learn how VOC balances costs and revenue streams to deliver value to its unitholders, while maintaining transparency and strong communication. Dive into the details of their operations and see how VOC positions itself in the competitive energy market.
VOC Energy Trust (VOC) - Business Model: Key Partnerships
Collaboration with VOC Brazos
VOC Energy Trust collaborates closely with VOC Brazos Energy Partners, L.P., which is pivotal for its operations. The Trust holds an 80% net profits interest in the production from the properties operated by VOC Brazos. As of September 30, 2024, the Trust received $10,380,195 in net profits interest for the nine months ended, compared to $12,337,945 for the same period in 2023, reflecting a decrease of approximately 15.9%.
The cash received from VOC Brazos during the nine months ended September 30, 2024, primarily represents production from September 2023 through May 2024. The Trust's gross proceeds from oil and natural gas sales totaled $27,041,669 for the nine months ended September 30, 2024, marking a decrease of 9.2% from $29,793,178 in the same period in 2023.
Agreements with MV Purchasing, LLC
MV Purchasing, LLC, an affiliate of VOC Brazos, plays a significant role in the Trust's revenue stream by purchasing a substantial portion of the production from the underlying properties. The sales agreements with MV Purchasing are typically short-term, ranging from one to six months, and are structured using market-sensitive pricing. This flexibility allows VOC Energy Trust to adapt to fluctuating market conditions while ensuring consistent revenue.
In the nine months ended September 30, 2024, the average price for oil was $77.10 per barrel, up from $76.18 per barrel in 2023, while the average price for natural gas dropped to $3.03 per Mcf from $5.44 per Mcf. This pricing dynamic affects the overall revenue generated from MV Purchasing, LLC, impacting the Trust's financial performance.
Relationships with Service Providers in Oil and Gas
VOC Energy Trust maintains relationships with various service providers in the oil and gas sector, which are essential for operational efficiency and cost management. For the nine months ended September 30, 2024, the Trust incurred lease operating expenses of $11,004,093, a slight decrease of 1.9% from $11,213,378 in 2023. Additionally, production and property taxes decreased to $1,557,681 from $1,830,926, highlighting effective cost control measures.
Development expenses increased to $1,504,651 in 2024, up 13.4% from $1,326,443 in 2023, indicating an increase in development activity. This uptick in expenses reflects a strategic focus on enhancing production capabilities through partnerships with service providers that facilitate development and operational activities.
| Partnership Type | Details | Financial Impact (2024) |
|---|---|---|
| Collaboration with VOC Brazos | 80% net profits interest in production | $10,380,195 (down 15.9% YoY) |
| Agreements with MV Purchasing, LLC | Short-term agreements for production purchases | Average oil price: $77.10 per barrel |
| Service Providers | Support for operational efficiency and development | Lease operating expenses: $11,004,093 |
VOC Energy Trust (VOC) - Business Model: Key Activities
Management of net profits interest
The VOC Energy Trust operates on an 80% net profits interest model, primarily deriving income from the oil and natural gas production managed by VOC Brazos Energy Partners, L.P. As of September 30, 2024, the Trust reported income from net profits interest of $10,380,195 for the nine months ended, a decrease of 15.9% from $12,337,945 in the same period in 2023. The Trust's gross proceeds from oil and natural gas sales were $27,041,669, down 9.2% from $29,793,178 in the prior year. The Trust’s total assets were valued at $12,364,625 as of September 30, 2024.
Distribution of cash to unitholders
The cash distributions to unitholders are determined based on the available funds after accounting for operational expenses. In 2024, the Trust made several distributions: $3,230,000 (or $0.19 per Trust Unit) on February 14, 2024, followed by distributions of $3,060,000 (or $0.18 per Trust Unit) on May 15, 2024, and again $3,060,000 on August 14, 2024. For the nine months ended September 30, 2024, total distributable income was $9,350,000, compared to $11,390,000 in 2023.
Monitoring production and operational performance
The Trust closely monitors the production and operational performance of the underlying properties managed by VOC Brazos. For the nine months ended September 30, 2024, oil sales volumes were 342,945 Bbl, a decrease of 31,799 Bbl or 8.5% compared to 374,744 Bbl in the same period in 2023. Natural gas sales volumes also declined to 198,544 Mcf, down 30,565 Mcf or 13.3% from 229,109 Mcf in the prior year. The average sales price for oil increased to $77.10 per Bbl, while natural gas averaged $3.03 per Mcf during the same period.
| Measure | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Income from net profits interest | $3,398,618 | $3,787,151 | -10.3% |
| Total gross proceeds | $27,041,669 | $29,793,178 | -9.2% |
| Distributable income | $3,060,000 | $3,570,000 | -14.3% |
| Oil sales volume (Bbl) | 342,945 | 374,744 | -8.5% |
| Natural gas sales volume (Mcf) | 198,544 | 229,109 | -13.3% |
VOC Energy Trust (VOC) - Business Model: Key Resources
Ownership of net profits interest in oil and gas properties
The VOC Energy Trust owns an 80% net profits interest in oil and gas properties primarily located in Kansas and Texas. As of September 30, 2024, the Trust has received payment for 80% of the net proceeds attributable to VOC Brazos’ interest from the sale of 9.0 million barrels of oil equivalent (MMBoe) of production from these underlying properties, which is equivalent to 7.2 MMBoe in respect of the net profits interest.
Financial resources for distributions
For the nine months ended September 30, 2024, the Trust reported gross proceeds from oil and natural gas sales amounting to $27,041,669, a decrease of 9.2% from $29,793,178 for the same period in 2023. The income from net profits interest for the same period was $10,380,195, compared to $12,337,945 in 2023. The distributable income for the nine months ended September 30, 2024 was $9,350,000, down from $11,390,000 for the prior year.
| Metric | 2024 | 2023 |
|---|---|---|
| Gross Proceeds from Oil & Gas Sales | $27,041,669 | $29,793,178 |
| Income from Net Profits Interest | $10,380,195 | $12,337,945 |
| Distributable Income | $9,350,000 | $11,390,000 |
Administrative infrastructure for operations
The Trust incurs general administrative expenses, which were $679,784 for the nine months ended September 30, 2024, a decrease from $868,648 in 2023. The Trust also maintains a cash reserve of approximately $1.175 million for future expenses. As of September 30, 2024, the cash and cash equivalents held by the Trust amounted to $1,779,712. Additionally, the Trust can borrow funds to cover administrative expenses if needed, although there were no borrowings during the reported periods.
| Administrative Metric | 2024 | 2023 |
|---|---|---|
| General Administrative Expenses | $679,784 | $868,648 |
| Cash and Cash Equivalents | $1,779,712 | $1,429,301 |
| Cash Reserve for Future Expenses | $1,175,000 | $1,175,000 |
VOC Energy Trust (VOC) - Business Model: Value Propositions
Steady income stream from oil and gas sales
VOC Energy Trust generates a consistent income stream through its net profits interest in oil and gas production. For the nine months ended September 30, 2024, the total gross proceeds from oil and natural gas sales amounted to $27,041,669, reflecting a decrease of 9.2% from $29,793,178 in the same period of 2023. This decrease was attributed to lower sales volumes and fluctuating market prices for natural gas, despite a slight increase in oil prices.
In terms of sales volumes, VOC sold 342,945 Bbls of oil and 198,544 Mcf of natural gas during the nine months ended September 30, 2024. The average sales price for oil was $77.10 per Bbl, an increase of 1.2% from $76.18 per Bbl in 2023, while the average price for natural gas was $3.03 per Mcf, down from $5.44 in 2023.
Passive investment opportunity for unitholders
VOC Energy Trust represents a passive investment opportunity for its unitholders, allowing them to benefit from the cash flows generated by oil and gas sales without direct involvement in operations. The Trust made distributions of $3,230,000 or $0.19 per Trust Unit for the first quarter of 2024, and $3,060,000 or $0.18 per Trust Unit for both the second and third quarters.
The total distributable income for the nine months ended September 30, 2024, was $9,350,000, a decrease from $11,390,000 in the same period of 2023. This translates to a distribution per Trust Unit of $0.55 for the nine months ended September 30, 2024, compared to $0.67 in 2023.
Transparency in financial reporting and distributions
VOC Energy Trust emphasizes transparency in its financial reporting and distributions, providing unitholders with detailed insights into its operations and financial health. The Trust's financial statements indicate that as of September 30, 2024, the total assets amounted to $12,364,625, with cash and cash equivalents of $1,779,712. The Trust's structure allows for clear communication of income derived from net profits interest, which was $10,380,195 for the nine months ended September 30, 2024.
The Trust's commitment to maintaining a cash reserve of $1.0 million for future expenses further demonstrates its proactive approach to financial management. This reserve is part of the overall strategy to ensure stable distributions to unitholders while safeguarding against future liabilities.
| Financial Metrics | Q3 2024 | Q3 2023 | YTD 2024 | YTD 2023 |
|---|---|---|---|---|
| Oil Sales Volume (Bbl) | 116,006 | 126,373 | 342,945 | 374,744 |
| Natural Gas Sales Volume (Mcf) | 65,815 | 70,964 | 198,544 | 229,109 |
| Total Gross Proceeds | $9,270,907 | $9,240,585 | $27,041,669 | $29,793,178 |
| Distributable Income | $3,060,000 | $3,570,000 | $9,350,000 | $11,390,000 |
| Distribution per Trust Unit | $0.18 | $0.21 | $0.55 | $0.67 |
VOC Energy Trust (VOC) - Business Model: Customer Relationships
Regular communication with unitholders
VOC Energy Trust maintains a consistent communication strategy with its unitholders, ensuring transparency and engagement. As of September 30, 2024, there are 17,000,000 Trust Units outstanding. The Trust provides quarterly updates that include financial performance metrics and operational insights. For the nine months ended September 30, 2024, the Trust reported a distributable income of $9,350,000.
Timely distribution of profits
The Trust adheres to a schedule for the timely distribution of profits to its unitholders. In 2024, the distributions per Trust Unit were as follows:
| Quarter | Distribution Amount | Distribution per Trust Unit | Record Date | Payment Date |
|---|---|---|---|---|
| Q1 2024 | $3,230,000 | $0.19 | January 30, 2024 | February 14, 2024 |
| Q2 2024 | $3,060,000 | $0.18 | April 30, 2024 | May 15, 2024 |
| Q3 2024 | $3,060,000 | $0.18 | July 30, 2024 | August 14, 2024 |
These distributions reflect the Trust's commitment to returning profits to its unitholders promptly.
Updates on operational performance and market conditions
VOC Energy Trust provides regular updates regarding its operational performance and market conditions. For the nine months ended September 30, 2024, the Trust reported:
| Performance Metric | 2024 | 2023 |
|---|---|---|
| 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 |
| Average Oil Price (per Bbl) | $77.10 | $76.18 |
| Average Natural Gas Price (per Mcf) | $3.03 | $5.44 |
The above metrics illustrate a decrease in sales volumes and total gross proceeds compared to the previous year, primarily due to adverse market conditions and operational challenges.
VOC Energy Trust (VOC) - Business Model: Channels
Quarterly financial reports to unitholders
The VOC Energy Trust releases quarterly financial reports that summarize its financial performance and provide insights into revenues, expenses, and distributions. For the third quarter of 2024, the Trust reported income from net profits interest of $3,398,618, a decrease from $3,787,151 in the same quarter of 2023. For the nine months ended September 30, 2024, the income was $10,380,195, down from $12,337,945 in 2023.
| Period | Income from Net Profits Interest (2024) | Income from Net Profits Interest (2023) | Distributable Income (2024) | Distributable Income (2023) |
|---|---|---|---|---|
| Q3 | $3,398,618 | $3,787,151 | $3,060,000 | $3,570,000 |
| 9 Months | $10,380,195 | $12,337,945 | $9,350,000 | $11,390,000 |
Distribution announcements via press releases
VOC Energy Trust communicates distribution announcements through press releases to keep unitholders informed about upcoming payments. The quarterly distributions for 2024 were as follows:
- First quarter: $3,230,000 or $0.19 per Trust Unit, paid on February 14, 2024.
- Second quarter: $3,060,000 or $0.18 per Trust Unit, paid on May 15, 2024.
- Third quarter: $3,060,000 or $0.18 per Trust Unit, paid on August 14, 2024.
- Upcoming fourth quarter: $3,060,000 or $0.18 per Trust Unit, expected to be paid on November 14, 2024.
Investor relations through the Trust’s website
The Trust maintains an investor relations section on its website, providing access to financial documents, performance metrics, and governance information. As of September 30, 2024, the Trust had cash and cash equivalents of $1,779,712, and total assets of $12,364,625. This information is essential for investors to assess the Trust's financial health and operational efficiency.
| Financial Metric | Amount (September 30, 2024) |
|---|---|
| Cash and Cash Equivalents | $1,779,712 |
| Total Assets | $12,364,625 |
| Trust Units Outstanding | 17,000,000 |
VOC Energy Trust (VOC) - Business Model: Customer Segments
Individual investors seeking passive income
VOC Energy Trust primarily attracts individual investors who are interested in earning passive income through quarterly distributions. As of September 30, 2024, the trust reported a distributable income of $9,350,000 for the nine months ended, translating to a distribution of $0.55 per Trust unit . This represents a decrease from $11,390,000 and $0.67 per Trust unit for the same period in 2023 .
Institutional investors looking for energy sector exposure
Institutional investors are another significant customer segment for VOC Energy Trust. The trust's investment structure allows these entities to gain exposure to the energy sector without engaging in the operational aspects of oil and gas production. As of September 30, 2024, there were 17,000,000 Trust units outstanding . The average price for oil during the nine months was $77.10 per barrel, compared to $76.18 in the previous year. This pricing stability is appealing to institutional investors seeking reliable income streams from energy investments.
Financial analysts monitoring energy trusts
Financial analysts represent a critical customer segment, as they evaluate the performance of VOC Energy Trust against industry benchmarks. For the nine months ending September 30, 2024, the total gross proceeds from oil and natural gas sales were $27,041,669, a decrease of 9.2% from $29,793,178 in the same period of 2023. Analysts closely monitor these figures along with costs, which totaled $14,066,425 for the nine months ended September 30, 2024.
| Customer Segment | Key Metrics | Details |
|---|---|---|
| Individual Investors | Distributable Income | $9,350,000 for nine months ended September 30, 2024 |
| Individual Investors | Distribution per Trust Unit | $0.55 for nine months ended September 30, 2024 |
| Institutional Investors | Outstanding Trust Units | 17,000,000 units |
| Institutional Investors | Average Oil Price | $77.10 per barrel for nine months ended September 30, 2024 |
| Financial Analysts | Total Gross Proceeds | $27,041,669 for nine months ended September 30, 2024 |
| Financial Analysts | Total Costs | $14,066,425 for nine months ended September 30, 2024 |
VOC Energy Trust (VOC) - Business Model: Cost Structure
Lease Operating Expenses
Lease operating expenses for VOC Energy Trust amounted to $11,004,093 for the nine months ended September 30, 2024, representing a decrease of $209,285 or 1.9% from $11,213,378 for the same period in 2023.
For the three months ended September 30, 2024, lease operating expenses were $3,784,091, an increase of $230,900 or 6.5% compared to $3,553,191 for the three months ended September 30, 2023.
Administrative Costs Associated with Trust Operations
General and administrative expenses incurred by the Trust totaled $679,784 for the nine months ended September 30, 2024, a decrease of $188,864 from $868,648 during the same period in 2023.
For the three months ended September 30, 2024, general and administrative expenses were $202,488, down from $257,220 for the three months ended September 30, 2023.
Development Expenses for Property Maintenance
Development expenses for the Trust were $1,504,651 for the nine months ended September 30, 2024, an increase of $178,208 or 13.4% from $1,326,443 for the same period in 2023.
For the three months ended September 30, 2024, development expenses were $699,074, an increase of $403,103 or 136.2% from $295,971 for the same period in 2023.
| Expense Type | Q3 2024 Amount | Q3 2023 Amount | 9M 2024 Amount | 9M 2023 Amount |
|---|---|---|---|---|
| Lease Operating Expenses | $3,784,091 | $3,553,191 | $11,004,093 | $11,213,378 |
| Administrative Costs | $202,488 | $257,220 | $679,784 | $868,648 |
| Development Expenses | $699,074 | $295,971 | $1,504,651 | $1,326,443 |
VOC Energy Trust (VOC) - Business Model: Revenue Streams
Income from net profits interest on oil and gas sales
The primary revenue stream for VOC Energy Trust arises from its net profits interest in oil and gas sales. For the nine months ended September 30, 2024, VOC reported income from net profits interest of $10,380,195, compared to $12,337,945 for the same period in 2023. This represents a decrease of 15.9%.
For the three months ended September 30, 2024, the income from net profits interest was $3,398,618, down from $3,787,151 in the prior year, marking a decline of 10.3%.
In terms of sales volumes, VOC sold 342,945 barrels of oil and 198,544 Mcf of natural gas during the nine months of 2024, compared to 374,744 barrels of oil and 229,109 Mcf of natural gas in 2023. The average sales price for oil increased slightly to $77.10 per barrel from $76.18, while the average price for natural gas dropped significantly to $3.03 per Mcf from $5.44.
| Metric | 2024 | 2023 |
|---|---|---|
| Oil Sales Volume (Bbl) | 342,945 | 374,744 |
| Natural Gas Sales Volume (Mcf) | 198,544 | 229,109 |
| Average Oil Price (per Bbl) | $77.10 | $76.18 |
| Average Natural Gas Price (per Mcf) | $3.03 | $5.44 |
| Total Income from Net Profits Interest | $10,380,195 | $12,337,945 |
Distributions from cash reserves
VOC Energy Trust also manages cash reserves, which contribute to its revenue streams. As of September 30, 2024, the Trust held cash and cash equivalents totaling $1,779,712. This included a cash reserve of $1.175 million allocated for future development, maintenance, or operating expenditures. In 2024, the Trust made quarterly distributions amounting to $3,060,000 for the second and third quarters, and $3,230,000 for the first quarter.
The Trust's distributions per unit were $0.19 for the first quarter and $0.18 for the second and third quarters of 2024. Total distributable income for the nine months ended September 30, 2024, was $9,350,000, compared to $11,390,000 for the same period in the previous year.
| 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 |
| Total for 2024 (9 months) | $9,350,000 | $0.55 |
Interest earned on cash held for distributions
The interest earned on cash reserves is another revenue stream for VOC Energy Trust. The Trustee may invest cash held in reserve, which can yield additional income for the Trust. However, specific figures detailing interest earned on cash reserves were not disclosed for the reporting period. The cash reserve balance was maintained at $1.0 million throughout 2024, and any excess cash not required for immediate distributions is typically invested under the terms of the Trust Agreement.
As of the end of September 2024, the interest earned on these reserves contributes indirectly to the overall financial health of the Trust, ensuring liquidity for future distributions and operational expenses.
Updated on 16 Nov 2024
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.