VOC Energy Trust (VOC): Marketing Mix Analysis [11-2024 Updated]

As we dive into the marketing mix of VOC Energy Trust (VOC) for 2024, we'll explore how this unique entity stands out in the oil and natural gas sector. With a passive net profits interest structure and a focus on mature fields in Kansas and Texas, VOC's strategy is both distinct and effective. From their operational footprint to pricing strategies, discover how VOC navigates the complexities of the energy market while maintaining transparency and engagement with its unitholders.

VOC Energy Trust (VOC) - Marketing Mix: Product

Interests in oil and natural gas properties

VOC Energy Trust primarily focuses on the production and development of oil and natural gas properties, specifically in Kansas and Texas. The Trust's operations are centered around the net profits interest derived from these properties, which allows it to benefit significantly from the sales of oil and natural gas produced from the underlying assets.

Passive net profits interest structure

The Trust operates under a passive net profits interest structure, entitling it to receive 80% of the net proceeds from the production of oil and natural gas. This structure is designed to minimize operational responsibilities while maximizing income from the underlying properties, providing a consistent revenue stream to the Trust and its unitholders.

80% of net proceeds from production sales

As of September 30, 2024, the Trust reported income from net profits interest amounting to $10,380,195 for the nine months ended September 30, 2024. This marks a decrease from $12,337,945 for the same period in 2023, reflecting the Trust's consistent entitlement to 80% of the net proceeds from production sales.

Focus on mature fields in Kansas and Texas

The Trust's portfolio is concentrated in mature oil and gas fields located in Kansas and Texas. These fields have historically provided stable production volumes but have seen fluctuations. For instance, as of September 30, 2024, the cumulative production from these properties reached 9.0 million barrels of oil equivalent (MMBoe), translating to approximately 7.2 MMBoe attributable to the Trust's net profits interest.

Significant production volume of 9.0 MMBoe to date

The production statistics indicate that VOC Energy Trust has accumulated a total production volume of 9.0 MMBoe to date, with production volumes for the nine months ended September 30, 2024, reported as follows:

This production volume reflects a decrease from the previous year, where oil production was 374,744 Bbl and natural gas production was 229,109 Mcf for the same period.

Overall, the product element of VOC Energy Trust's marketing mix is characterized by its focused strategy on oil and natural gas properties, a passive income model through net profits interest, and a solid production history, particularly in the mature fields of Kansas and Texas.

VOC Energy Trust (VOC) - Marketing Mix: Place

Operations primarily in Texas and Kansas

VOC Energy Trust operates primarily in the states of Texas and Kansas, focusing on the production of oil and natural gas. The Trust holds a net profits interest in properties managed by VOC Brazos Energy Partners, L.P., which is responsible for the operational management and development of these resources.

Properties managed by VOC Brazos Energy Partners, L.P.

The properties that are managed by VOC Brazos encompass a substantial portion of the oil and gas reserves located in Texas and Kansas. As of September 30, 2024, the investment in net profits interest was valued at $140,591,606, reflecting the value of the oil and gas properties under management.

Sales to MV Purchasing, LLC under short-term arrangements

Sales of the produced oil and gas are primarily made to MV Purchasing, LLC, an affiliate of VOC Brazos. These sales are conducted under short-term contracts that range from one to six months, utilizing market-sensitive pricing mechanisms.

Utilization of market-sensitive pricing for sales

The pricing for the sales to MV Purchasing is sensitive to market fluctuations, allowing VOC Energy Trust to adjust pricing based on current market conditions. For the nine months ended September 30, 2024, the average sales price for oil was $77.10 per barrel, while the average price for natural gas was $3.03 per Mcf.

Distribution channels through direct sales contracts

VOC Energy Trust utilizes direct sales contracts as its primary distribution channel. These contracts are structured to ensure that the produced resources are sold efficiently and effectively to MV Purchasing, optimizing the logistics and distribution process. The gross proceeds from oil and natural gas sales for the nine months ended September 30, 2024, amounted to $27,041,669, a decrease of 9.2% from $29,793,178 in the same period of 2023.

As of September 30, 2024, the total assets of VOC Energy Trust were reported as $12,364,625. The Trust continues to focus on enhancing its distribution channels and optimizing its operations to maximize efficiency and customer satisfaction.

VOC Energy Trust (VOC) - Marketing Mix: Promotion

Limited direct marketing efforts due to passive nature

VOC Energy Trust operates under a passive investment structure, which limits its direct marketing initiatives. The Trust primarily relies on the performance of its underlying assets rather than engaging in active promotion to attract new investors or unitholders.

Emphasis on financial transparency to unitholders

The Trust prioritizes financial transparency, providing comprehensive financial disclosures to its unitholders. This includes detailed reports on the Trust's financial performance, ensuring that unitholders are well-informed about their investments.

Quarterly distribution announcements to Trust unitholders

VOC Energy Trust announces quarterly distributions to its unitholders based on the net profits interest from its operations. As of 2024, the distribution amounts are as follows:

Financial reports detailing performance metrics

The Trust publishes detailed financial reports that outline key performance metrics, including income from net profits interest and total sales. For the nine months ended September 30, 2024, the financial performance metrics are as follows:

Engagement with investors through public filings

VOC Energy Trust engages with its investors through regular public filings, including Form 10-K and Form 10-Q reports, which provide insights into financial performance, operational updates, and market conditions. The Trust's filings as of September 30, 2024, reveal a total of 17,000,000 Trust Units outstanding, reflecting its commitment to maintaining open lines of communication with unitholders.

VOC Energy Trust (VOC) - Marketing Mix: Price

Average Oil Price

The average oil price per barrel (Bbl) for 2024 is $77.10, compared to $76.18 in 2023. This slight increase indicates a marginal growth in the market price of oil, impacting the revenue streams for VOC Energy Trust.

Average Natural Gas Price

The average natural gas price per thousand cubic feet (Mcf) for 2024 is $3.03, a significant decrease from $5.44 in 2023. This decline in natural gas prices may affect the company's overall profitability and pricing strategy.

Gross Proceeds from Oil Sales

VOC Energy Trust reported gross proceeds from oil sales amounting to $26.4 million for 2024. This figure reflects the company's revenue generation capability from oil production.

Decrease in Total Gross Proceeds

There has been a 9.2% decrease in total gross proceeds compared to the prior year. This decline may suggest challenges in market demand or increased competition affecting pricing strategies.

Distributable Income

The distributable income for the third quarter of 2024 stands at $3.06 million. This amount highlights the net income available for distribution to shareholders, which is crucial for evaluating the company's financial health.

In summary, VOC Energy Trust's marketing mix for 2024 showcases a focused strategy leveraging its strong product offerings and established operational base in Texas and Kansas. The Trust's passive structure limits direct promotional efforts but emphasizes financial transparency and consistent engagement with investors. Despite facing a 9.2% decrease in total gross proceeds, the average oil price remains robust at $77.10 per barrel, highlighting the potential for recovery and growth in the upcoming periods. The combination of these elements positions VOC Energy Trust to navigate market fluctuations effectively while maintaining value for its unitholders.

Updated on 16 Nov 2024

Resources:

1. 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.
2. 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.