VOC Energy Trust(VOC) - 2025 Q2 - Quarterly Report

PART I—FINANCIAL INFORMATION Item 1. Financial Statements. This section presents the Trust's unaudited interim financial statements, covering distributable income, assets, trust corpus, and key notes STATEMENTS OF DISTRIBUTABLE INCOME Distributable Income Summary | Item | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Income from net profits interest | $2,484,950 | $3,377,463 | $4,383,770 | $6,981,577 | | Cash on hand withheld for Trust expenses | (61,059) | (196,626) | (102,358) | (214,281) | | General and administrative expenses | (213,891) | (120,837) | (626,412) | (477,296) | | Distributable income | $2,210,000 | $3,060,000 | $3,655,000 | $6,290,000 | | Distributions per Trust unit | $0.13 | $0.18 | $0.215 | $0.37 | STATEMENTS OF ASSETS AND TRUST CORPUS Assets and Trust Corpus | Item | June 30, 2025 (Unaudited) | December 31, 2024 | | :-------------------------------- | :------------------------ | :---------------- | | ASSETS | | | | Cash and cash equivalents | $1,847,035 | $1,744,677 | | Investment in net profits interest | 140,591,606 | 140,591,606 | | Accumulated amortization and impairment | (131,345,148) | (130,464,406) | | Total assets | $11,093,493 | $11,871,877 | | TRUST CORPUS | | | | Trust corpus | $11,093,493 | $11,871,877 | STATEMENTS OF CHANGES IN TRUST CORPUS Changes in Trust Corpus Summary | Item | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Trust corpus, beginning of period | $11,471,407 | $12,928,840 | $11,871,877 | $13,372,565 | | Income from net profits interest | 2,484,950 | 3,377,463 | 4,383,770 | 6,981,577 | | Cash distributions | (2,210,000) | (3,060,000) | (3,655,000) | (6,290,000) | | Trust expenses | (213,891) | (120,837) | (626,412) | (477,296) | | Amortization of net profits interest | (438,973) | (438,298) | (880,742) | (899,678) | | Trust corpus, end of period | $11,093,493 | $12,687,168 | $11,093,493 | $12,687,168 | NOTES TO FINANCIAL STATEMENTS These notes explain the Trust's financial statements, covering organization, accounting policies, investment, and distributions - The Trust was formed on November 3, 2010, to acquire and hold a term net profits interest representing the right to receive 80% of the net proceeds from production from oil and natural gas properties held by VOC Brazos and VOC Kansas[14][16] - The net profits interest is passive and terminates on the later of December 31, 2030, or when 8.5 MMBoe (net profits interest equivalent) have been produced from the underlying properties[16] - As of June 30, 2025, 7.5 MMBoe (unaudited) in respect of the net profits interest have been cumulatively produced since inception[17] - The Trust uses a modified cash basis of accounting, permitted for royalty trusts by SEC Staff Accounting Bulletin Topic 12:E, where revenues and expenses are recognized when cash is received or paid[21][22] - No impairment of the investment in net profits interest was recorded during the quarters ended June 30, 2025, or 2024[23] - The Trust is a Delaware statutory trust and is not required to pay federal or state income taxes[29] Note 1. Organization of the Trust - The Trust was formed on November 3, 2010, to acquire and hold a term net profits interest representing the right to receive 80% of the net proceeds from production from oil and natural gas properties held by VOC Brazos and VOC Kansas[14][16] - The net profits interest is passive and terminates on the later of December 31, 2030, or when 8.5 MMBoe (net profits interest equivalent) have been produced from the underlying properties[16] - As of June 30, 2025, 7.5 MMBoe (unaudited) in respect of the net profits interest have been cumulatively produced since inception[17] Note 2. Basis of Presentation - The unaudited interim financial statements are prepared pursuant to SEC rules, omitting certain annual disclosures[19] - Financial statements require estimates and assumptions, and actual results may differ from these estimates[20] Note 3. Trust Accounting Policies - The Trust uses the modified cash basis of accounting, recognizing receipts and expenses when paid, which aligns with SEC guidance for royalty trusts[21][22] - Amortization of the investment in net profits interest is recorded on a unit-of-production method and charged directly to Trust corpus, not reducing distributable income[21] - No impairment of the investment in net profits interest was identified during the quarters ended June 30, 2025, or 2024[23] Note 4. Investment in Net Profits Interest - The net profits interest was recorded at VOC Brazos' historical cost of $140,591,606 on May 10, 2011[26] Initial Investment in Net Profits Interest Calculation | Item | Amount | | :-------------------------------- | :------------- | | Oil and gas properties | $197,270,173 | | Accumulated depreciation and depletion | (17,681,155) | | Hedge liability | (1,717,713) | | 20-year asset retirement liability | (2,131,797) | | Net property to be conveyed | 175,739,508 | | Times 80% net profits interest to Trust | $140,591,606 | Note 5. Income from Net Profits Interest Income from Net Profits Interest | Item | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Excess of revenues over direct operating expenses