VOC Energy Trust (VOC) Q4 2024 earnings summary

Executive summary

• The 80% net profits interest generated $13.6 million in 2024, down from $16.5 million in 2023; distributable income fell to $12.41 million from $15.215 million.

• Quarterly distributions totalled $0.730 per unit in 2024, compared with $0.895 in 2023; the interest is scheduled to terminate by December 31, 2030 under the year-end reserve forecast.

• Cumulative production payments reached 7.3 MMBoe of the Trust’s 8.5 MMBoe entitlement by December 31, 2024.

Financial highlights

• 2024 oil and gas gross proceeds were $35.79 million, down 7.6% YoY; lower sales volumes and natural gas prices more than offset higher oil prices.

• Oil sales volume fell 7.9% to 456,682 Bbl and natural gas volume declined to 263,696 Mcf; average prices were $76.66/Bbl and $2.95/Mcf, respectively.

• Lease operating expenses rose 2.0% to $14.55 million; production and property taxes declined 13.9% to $1.76 million, while development expenses increased 32.4% to $2.45 million.

• Excess revenues after direct operating and development costs fell 17.2% to $17.03 million; administrative expenses were $897,342, down from $1.06 million in 2023.

Outlook and guidance

• Reserve-based production is forecast to decline at an average 7.4% annually over 20 years, assuming planned development through 2032 and no further development thereafter.

• Expected development spending totals $36.4 million through 2032: $34.5 million for eight Texas wells, plus $0.8 million for conversions and workovers; Kansas spending through 2027 is estimated at $1.1 million.

• The year-end reserve estimate projects termination on December 31, 2030, before the 10.6 MMBoe production threshold is reached.