VOC Energy Trust Reports Quarterly Results for the Three and Nine Months Ended September 30, 2024

Results of Operations

The report provides a summary of the Trust’s financial performance for the quarters and nine months ended September 30, 2024 and 2023.

Quarterly Results (Q3 2024 vs. Q3 2023)

• Total gross proceeds from oil and natural gas sales were $9,270,907 in Q3 2024, a slight increase of 0.3% from $9,240,585 in Q3 2023.
• The increase in gross proceeds was due to a 9.6% rise in the average oil price to $78.36 per barrel, partially offset by decreases in oil and natural gas sales volumes of 8.2% and 7.3% respectively.
• Lease operating expenses increased by 6.5% to $3,784,091, while production and property taxes decreased by 17.9% to $539,469.
• Development expenses increased significantly by 136.2% to $699,074 due to higher development activity.
• The excess of revenues over direct operating and development costs decreased by 10.3% to $4,248,273, resulting in a 10.3% decline in the Trust’s 80% net profits interest to $3,398,618.
• After Trustee holdbacks and administrative expenses, distributable income for Q3 2024 was $3,060,000, down 14.3% from $3,570,000 in Q3 2023.

Year-to-Date Results (9M 2024 vs. 9M 2023)

• Total gross proceeds declined 9.2% to $27,041,669, driven by 8.5% and 13.3% decreases in oil and natural gas sales volumes respectively.
• The average oil price increased 1.2% to $77.10 per barrel, but the average natural gas price plummeted 44.3% to $3.03 per Mcf.
• Lease operating expenses decreased 1.9% to $11,004,093, while production and property taxes fell 14.9% to $1,557,681.
• Development expenses rose 13.4% to $1,504,651 due to increased activity.
• The excess of revenues over direct operating and development costs declined 15.9% to $12,975,244, leading to a 15.9% drop in the Trust’s 80% net profits interest to $10,380,195.
• After Trustee holdbacks and administrative expenses, distributable income for the first 9 months of 2024 was $9,350,000, down 17.9% from $11,390,000 in the same period of 2023.

Liquidity and Capital Resources

• The Trust’s only use of cash is for distributions to unitholders and administrative expenses.
• The Trustee holds a $1.175 million cash reserve and a $1.7 million letter of credit from VOC Brazos to cover future known, anticipated or contingent expenses.
• VOC Brazos may establish an additional $1 million cash reserve to manage uneven capital expenditure timing, which was fully utilized as of September 30, 2024.
• The Trust does not expect future costs to change significantly compared to recent historical levels, aside from general oilfield service cost fluctuations.

Outlook

The report includes a note on forward-looking statements, cautioning that actual results may differ materially from expectations due to various risk factors disclosed in the Trust’s previous filings.