VOC Energy Trust Quarterly Report (Form 10-Q)
VOC Energy Trust reported distributable income of $1.445 million for the three months ended March 31, 2025, compared to $3.23 million for the same period in 2024. The trust’s distributable income was impacted by a decrease in income from net profits interest, which was $1.898 million for the three months ended March 31, 2025, compared to $3.604 million for the same period in 2024. The trust’s general and administrative expenses increased to $412,521 for the three months ended March 31, 2025, compared to $356,459 for the same period in 2024. As of March 31, 2025, the trust had cash and cash equivalents of $1.786 million and an investment in net profits interest of $140.591 million, resulting in a total asset value of $11.471 million. The trust’s trust corpus, which represents the value of the trust’s units, was $11.471 million as of March 31, 2025, compared to $11.871 million as of December 31, 2024.
Results of Operations
The following is a summary of the key points from the financial report regarding the Trust’s results of operations for the quarters ended March 31, 2025 and 2024:
Sales Volumes and Prices
- Oil sales volumes decreased by 6.2% from 116,405 Bbls in Q1 2024 to 109,158 Bbls in Q1 2025.
- Natural gas sales volumes decreased by 1.9% from 67,921 Mcf in Q1 2024 to 66,598 Mcf in Q1 2025.
- The average price for oil decreased by 16.8% from $81.39 per Bbl in Q1 2024 to $67.71 per Bbl in Q1 2025.
- The average price for natural gas decreased by 20.7% from $3.24 per Mcf in Q1 2024 to $2.57 per Mcf in Q1 2025.
Revenues and Costs
- Total gross proceeds decreased by 22.0% from $9,694,535 in Q1 2024 to $7,561,618 in Q1 2025, due to the decreases in sales volumes and prices.
- Lease operating expenses decreased by 12.2% from $3,907,650 in Q1 2024 to $3,431,201 in Q1 2025.
- Production and property taxes increased by 0.9% from $834,484 in Q1 2024 to $842,349 in Q1 2025.
- Development expenses increased by 104.5% from $447,259 in Q1 2024 to $914,543 in Q1 2025, primarily due to three significant workovers.
Net Profits Interest Income
- The excess of revenues over direct operating expenses and development costs decreased by 47.3% from $4,505,142 in Q1 2024 to $2,373,525 in Q1 2025.
- The Trust’s 80% net profits interest decreased by 47.3% from $3,604,114 in Q1 2024 to $1,898,820 in Q1 2025.
- Distributable income decreased by 55.3% from $3,230,000 in Q1 2024 to $1,445,000 in Q1 2025.
Liquidity and Capital Resources
- The Trustee holds a $1.175 million cash reserve for future known, anticipated or contingent expenses or liabilities of the Trust.
- VOC Brazos has provided a $1.7 million letter of credit to protect the Trust against the risk of insufficient cash to pay future expenses.
- The Trustee may increase or decrease the cash reserve amount and the rate at which funds are withheld to build the reserve.
- VOC Brazos may establish an additional cash reserve of up to $1 million to reduce the impact on distributions of uneven capital expenditure timing.
Outlook The Trust’s financial performance is heavily dependent on oil and natural gas prices and production volumes, which can be volatile and unpredictable. The Trust’s future outlook will largely depend on the ability of VOC Brazos to maintain production levels and control costs amid fluctuating market conditions.
