VOC Energy Trust Announces Trust Quarterly Distribution

Rhea-AI Summary

VOC Energy Trust (NYSE: VOC) announced a distribution of net profits for the quarterly payment period ended December 31, 2023. Unitholders of record on January 30, 2024, will receive a distribution of $3,230,000 or $0.19 per unit, payable February 14, 2024. The sales volumes, average sales prices, and net profits for the payment period were also disclosed. VOC Brazos Energy Partners, L.P. expects the distribution of net profits for the quarterly payment period ending March 31, 2024, to be impacted by severe winter storms in Kansas and Texas, resulting in the curtailment of production on certain underlying properties.

Insights

Financial Analyst

The announced distribution of net profits by VOC Energy Trust represents a tangible return to unitholders, which is a critical aspect of the value proposition for investors in income-generating assets like energy trusts. The distribution amount of $0.19 per unit is a direct reflection of the Trust's operational performance, influenced by the sales volumes and average sales prices of oil and natural gas. Analyzing the gross proceeds against the total costs, including lease operating expenses, production and property taxes and development expenses, reveals the efficiency and cost-effectiveness of the Trust's operations.

Furthermore, the Trust's ability to maintain an 80% net profits interest is significant as it indicates a substantial portion of the net proceeds is allocated to the Trust, enhancing the potential distributions to unitholders. However, the impact of severe winter storms on production must be considered, as it introduces a degree of uncertainty regarding future distributions. The deferral of approximately 12,500 to 15,000 net barrels of oil could affect the Trust's financials in the short term, but the expectation of restored production by the end of January 2024 mitigates long-term concerns.

Market Research Analyst

It is important to contextualize the distribution news within the broader energy market, where prices and production can be volatile due to external factors such as weather events. The adverse impact of severe winter storms on production highlights the vulnerability of energy operations to environmental conditions. This not only affects the Trust's immediate output but also has potential ripple effects on the market, particularly if such events are widespread across the region.

Investors should monitor the frequency and severity of such disruptions as they may signal a need for increased investment in infrastructure resilience or alternative production strategies. Additionally, the market's reaction to the announcement could provide insights into investor sentiment regarding short-term risks versus long-term stability and profitability of energy trusts in the face of environmental uncertainties.

Energy Sector Analyst

Understanding the specifics of energy production and the impact of environmental factors is crucial in the energy sector. The conversion of sales volumes from barrels of oil (Bbl) and thousand cubic feet of natural gas (Mcf) to barrels of oil equivalent (BOE) is a standard practice that allows for a more comprehensive comparison of energy production across different hydrocarbons. The reported average sales prices of oil and natural gas provide a snapshot of the market conditions during the payment period and are essential for evaluating the Trust's revenue potential.

The detailed breakdown of costs offers insight into the operational challenges faced by VOC Energy Trust. Lease operating expenses are a significant portion of the total costs and their management is key to maintaining profitability. The deferral of production due to winter storms, while temporary, serves as a reminder of the operational risks inherent in the energy sector. The ability of VOC Brazos to quickly restore production and mitigate the effects of such disruptions will be a testament to the resilience and adaptability of their operations.

HOUSTON--(BUSINESS WIRE)-- VOC Energy Trust (NYSE: VOC) announced the Trust distribution of net profits for the quarterly payment period ended December 31, 2023.

Unitholders of record on January 30, 2024 will receive a distribution amounting to $3,230,000 or $0.19 per unit, payable February 14, 2024.

Volumes, average sales prices and net profits for the payment period were:

Sales volumes:
Oil (Bbl)		116,405
Natural gas (Mcf)		67,921
Total (BOE)		127,725
Average sales prices:
Oil (per Bbl)		$	81.39
Natural gas (per Mcf)		$	3.24
Gross proceeds:
Oil sales		$	9,474,489
Natural gas sales			220,046
Total gross proceeds		$	9,694,535
Costs:
Lease operating expenses		$	3,907,650
Production and property taxes			834,484
Development expenses			447,259
Total costs		$	5,189,393
Net proceeds		$	4,505,142
Percentage applicable to Trust’s Net Profits Interest		80		%
Net profits interest		$	3,604,114
Increase in cash reserve held by VOC Brazos Energy Partners, L.P.			0
Total cash proceeds available for the Trust		$	3,604,114
Provision for current estimated Trust expenses			(374,114	)
Net cash proceeds available for distribution		$	3,230,000

VOC Brazos Energy Partners, L.P. (“VOC Brazos”) has advised the Trust that it expects the distribution of net profits for the quarterly payment period ending March 31, 2024 will be adversely impacted by the recent severe winter storms that have affected Kansas and Texas and resulted in the curtailment of production on certain of the underlying properties. The snow and ice associated with these storms disabled electrical power to the affected underlying properties for an extended period, rendering some properties inaccessible, and generally created difficult working conditions. VOC Brazos currently estimates that production from the underlying properties of approximately 12,500 to 15,000 net barrels of oil during the payment period ending March 31, 2024 has been deferred as the result of this curtailment. VOC Brazos expects that most of the curtailed production should be restored by the end of January 2024 and that the storm effects on production from the underlying properties should be greatly reduced during the quarterly payment period ending June 30, 2024.

This press release contains forward-looking statements, including statements regarding the expected impact of severe winter storms on production from the underlying properties and future distributions of net profits. 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 December 31, 2023. 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, 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, 2022 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240119015679/en/

VOC Energy Trust

The Bank of New York Mellon Trust Company, N.A., as Trustee

Elaina Rodgers

(713) 483-6020

Source: VOC Energy Trust

FAQ

What is the distribution amount for the quarterly payment period ended December 31, 2023?

The distribution amount for the quarterly payment period ended December 31, 2023, is $3,230,000 or $0.19 per unit, payable February 14, 2024.

When will the unitholders of record receive the distribution?

Unitholders of record on January 30, 2024, will receive the distribution.

How were the sales volumes, average sales prices, and net profits for the payment period?

The sales volumes, average sales prices, and net profits for the payment period were: Oil (Bbl) 116,405, Natural gas (Mcf) 67,921, Total (BOE) 127,725, Oil sales $9,474,489, Natural gas sales $220,046, Total gross proceeds $9,694,535, Net proceeds $4,505,142, and Net profits interest $3,604,114.

How has the recent severe winter storms impacted VOC Brazos Energy Partners, L.P.?

VOC Brazos Energy Partners, L.P. expects the distribution of net profits for the quarterly payment period ending March 31, 2024, to be adversely impacted by severe winter storms that have affected Kansas and Texas, resulting in the curtailment of production on certain underlying properties.