VOC Energy Trust Reports 17.5% Decrease in Net Profits Interest for Fiscal Year 2024

VOC Energy Trust has reported its financial performance for the fiscal year ending December 31, 2024, revealing a total income from net profits interest of $13.6 million, a decrease of 17.5% from $16.5 million in 2023. The Trust's revenues were primarily driven by oil and natural gas sales, which totaled $35.8 million, down 7.6% from $38.7 million in the previous year. This decline was attributed to reduced sales volumes and fluctuating market prices, with oil sales volumes decreasing by 7.9% to 456,682 barrels, while natural gas sales volumes fell to 263,696 Mcf, a drop of 34,232 Mcf from the prior year.

The Trust's operational metrics indicate a significant reduction in production, with the average price for oil increasing slightly to $76.66 per barrel, while the average price for natural gas decreased sharply by 37% to $2.95 per Mcf. The Trust's lease operating expenses rose to $14.6 million, reflecting a 2% increase from the previous year, primarily due to higher costs of oilfield goods and services. In contrast, production and property taxes decreased by 13.9% to $1.8 million, attributed to lower sales volumes.

Strategically, VOC Brazos, the Trust's managing entity, has been focusing on development and workover programs to mitigate the natural decline in production from its properties in Kansas and Texas. The company plans to invest approximately $36.4 million in development expenditures through 2032, which includes drilling new wells and recompleting existing ones. However, the Trust's ability to generate cash distributions is constrained by the depleting nature of its assets, as over 92% of the estimated oil recovery has already been extracted.

As of December 31, 2024, the Trust's total assets were valued at $11.9 million, down from $13.4 million in 2023, with cash and cash equivalents amounting to $1.7 million. The Trust has established a cash reserve of $1.175 million to cover future expenses, which may impact cash distributions to unitholders. The Trust's future outlook remains cautious, with the potential for further declines in production and revenues due to market volatility and operational challenges. The Trust is set to continue making quarterly cash distributions, although these may fluctuate based on the performance of the underlying properties and market conditions.