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VOC Energy Trust Announces Trust Quarterly Distribution
Rhea-AI Impact
(Neutral)
Rhea-AI Sentiment
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Rhea-AI Summary
VOC Energy Trust announced a second quarterly net profits distribution of $6,460,000 or $0.38 per unit for the period ending June 30, 2022. Unitholders of record on August 1, 2022 will receive payment on August 12, 2022. The distribution is based on cash flow from operations, with oil sales reaching $13,709,782 at an average price of $104.64 per barrel and natural gas sales totaling $493,468 at $6.65 per Mcf. A cash reserve is being established to cover future expenses.
Positive
Total gross proceeds for the quarter reached $14,203,250.
The distribution of $6,460,000 reflects healthy cash flow generated from operations.
Negative
The Trust is withholding $221,666 from the proceeds for future expenses, potentially limiting cash available to unitholders.
The announcement includes forward-looking statements that carry inherent risks related to drilling operations and commodity payments.
HOUSTON--(BUSINESS WIRE)--
VOC Energy Trust (NYSE: VOC) announced the Trust distribution of net profits for the second quarterly payment period ended June 30, 2022.
Unitholders of record on August 1, 2022 will receive a distribution amounting to $6,460,000 or $0.38 per unit, payable August 12, 2022.
Volumes, average sales prices and net profits for the payment period were:
Sales volumes:
Oil (Bbl)
131,018
Natural gas (Mcf)
74,199
Total (BOE)
143,385
Average sales prices:
Oil (per Bbl)
$
104.64
Natural gas (per Mcf)
$
6.65
Gross proceeds:
Oil sales
$
13,709,782
Natural gas sales
493,468
Total gross proceeds
$
14,203,250
Costs:
Lease operating expenses
$
3,851,595
Production and property taxes
645,568
Development expenses
1,084,572
Total costs
$
5,581,735
Net proceeds
$
8,621,515
Percentage applicable to Trust’s Net Profits Interest
80
%
Net profits interest
$
6,897,212
Increase in cash reserve held by VOC Brazos Energy Partners, L.P.
0
Total cash proceeds available for the Trust
$
6,897,212
Provision for current estimated Trust expenses
(215,546
)
Amount withheld for future Trust expenses
(221,666
)
Net cash proceeds available for distribution
$
6,460,000
As previously disclosed, in November 2021, the Trustee notified VOC Brazos Energy Partners, L.P. (“VOC Brazos”) that the Trustee intends to build a reserve for the payment of future known, anticipated or contingent expenses or liabilities, commencing with the distribution payable in the first quarter of 2022. The Trustee intends to withhold a portion of the proceeds otherwise available for distribution each quarter to gradually build a cash reserve to approximately $1.175 million. This amount is in addition to the letter of credit in the amount of $1.7 million provided to the Trustee by VOC Partners to protect the Trust against the risk that it does not have sufficient cash to pay future expenses. The Trustee may increase or decrease the targeted amount at any time and may increase or decrease the rate at which it is withholding funds to build the cash reserve at any time, without advance notice to the unitholders. Cash held in reserve will be invested as required by the Trust Agreement. Any cash reserved in excess of the amount necessary to pay or provide for the payment of future known, anticipated or contingent expenses or liabilities eventually will be distributed to unitholders, together with interest earned on the funds. The Trustee has elected to withhold $221,666 from the proceeds otherwise available for distribution this quarter, for a total amount of $587,500 withheld to date.
This press release contains forward-looking statements. Although VOC Brazos has advised the Trust that VOC Brazos believes that the expectations contained in this press release are reasonable, no assurances can be given that such expectations will prove to be correct. The announced distributable amount is based on the amount of cash received or expected to be received by the Trustee from the underlying properties on or prior to the record date with respect to the quarter ended June 30, 2022. Any differences in actual cash receipts by the Trust could affect this distributable amount. Other important factors that could cause these statements to differ materially include the actual results of drilling operations, risks inherent in drilling and production of oil and gas properties, the ability of commodity purchasers to make payment, the effect, impact, potential duration or other implications of the COVID-19 pandemic, actions by the members of the Organization of Petroleum Exporting Countries, and other risk factors described in the Trust’s Annual Report on Form 10-K for the year ended December 31, 2021 filed with the Securities and Exchange Commission. Statements made in this press release are qualified by the cautionary statements made in these risk factors. The Trust does not intend, and assumes no obligations, to update any of the statements included in this press release.
