VOC Energy Trust(US:VOC)2024-03-20 20:15Financial Performance - Distributable income for 2023 was $15,215,000, down 29.9% from $21,675,000 in 2022[314] - Income from net profits interest for 2023 was $16,459,918, a decrease of 30.2% compared to $23,594,050 in 2022[314] - Distributions per Trust Unit decreased from $1.275 in 2022 to $0.895 in 2023, a reduction of 29.8%[314] - The Trust's expenses increased from $957,377 in 2022 to $1,064,494 in 2023, an increase of 11.2%[314] - The Trust's distributions to unitholders for the quarter ended September 30, 2023, amounted to $3.825 million[345] - A distribution of $3,230,000, or $0.19 per unit, was announced for Trust unitholders, based on net proceeds from production collected from October 1, 2023, to December 31, 2023[354] Asset and Reserve Changes - Total assets decreased from $15,048,316 in 2022 to $13,372,565 in 2023, a decline of approximately 11.1%[312] - Trust corpus at the end of 2023 was $13,372,565, down from $15,048,316 at the end of 2022, reflecting a decrease of 11.1%[316] - As of December 31, 2023, the Trust's proved reserves were 2,278,818 barrels of oil and 1,356,031 Mcf of gas, totaling 2,504,823 Boe[361] - The Trust recognized a net decrease in reserves of 423,537 Boe for 2023, attributed to production and negative revisions due to increased development costs[365] - The Trust's total proved undeveloped reserves as of December 31, 2023, were 452,570 Boe, reflecting a decrease from previous years[361] Cash Flow and Financial Projections - Future cash inflows from proved reserves were estimated at $175,123,174 for 2023, with production costs of $76,651,487 and development costs of $29,432,877, resulting in future net cash flows of $69,038,810[367] - The standardized measure of discounted future net cash flows decreased to $50,167,818 by the end of 2023, down from $98,381,229 at the end of 2022[368] Operational Developments - VOC Brazos sold 35% of the production from the Underlying Properties to MV Purchasing for each year from 2021 to 2023 under short-term arrangements[341] - VOC Brazos is evaluating the economic benefits of developing the LWOS, which may increase development costs and temporarily reduce cash available for distribution to Trust unitholders[351] - VOC Brazos will continue to assess strategies and capital plans to fund development for the Trust amid rising costs and production challenges[351] Trust Structure and Governance - The Trust will dissolve prior to the liquidation date if certain conditions are met, including a majority vote from Trust Unit holders[323] - The joint venture agreement with Hawkwood allows for no contractual limitation on the number of wells to propose and drill after 2020[349] Cash Management - The Trust has established a cash reserve of approximately $1.175 million, fully funded by February 2023, for future expenses[343] - The Trust has a cash reserve of approximately $1.175 million built to cover future expenses, in addition to a $1.7 million letter of credit provided by VOC Brazos[353] Pricing and Market Conditions - The average oil price for 2023 was $75.24 per barrel, while the average gas price was $1.76 per Mcf[368]