VOC Energy Trust: 10-Q Filing Summary
Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended June 30, 2026, for VOC Energy Trust, a Delaware statutory trust. The Trust holds an 80% net profits interest in oil and natural gas properties operated by VOC Brazos Energy Partners, LP, primarily in Texas and Kansas. The Trust is a passive entity with no management control over operations. As of August 10, 2026, there were 17,000,000 Units of Beneficial Interest outstanding. The Trust is classified as a non-accelerated filer and a smaller reporting company.
Key Financial Metrics
| Metric | Three Months Ended June 30, 2026 | Six Months Ended June 30, 2026 |
|---|---|---|
| Income from Net Profits Interest | $1,700,695 | $3,286,819 |
| Distributable Income | $1,615,000 | $3,145,000 |
| Distributions per Unit | $0.095 | $0.185 |
| General & Administrative Expenses | $327,961 | $639,611 |
| Cash and Cash Equivalents | $1,528,847 | $1,528,847 (Balance Sheet) |
| Total Assets | $9,069,571 | $9,069,571 (Balance Sheet) |
| Debt / Borrowings | $0 | $0 |
Note: The Trust holds a $1.175 million cash reserve for future expenses and is backed by a $1.7 million letter of credit from VOC Brazos.
Material Changes vs. Prior Period
- Revenue Decline: Income from the net profits interest decreased by 31.6% ($980,318) for the quarter and 25.0% ($1,371,188) for the six months compared to the same periods in 2025.
- Price and Volume Impact: The decline was driven by lower average oil prices (down 16.4% QoQ to $57.95/Bbl) and reduced production volumes (oil down 5.6% QoQ). Natural gas prices increased slightly (4.5% QoQ to $3.73/Mcf) but could not offset the oil decline.
- Cost Reductions: Lease operating expenses decreased by 13.5% QoQ, and development expenses dropped 34.0% QoQ due to reduced workovers. However, production and property taxes increased 73.8% QoQ due to higher property tax assessments.
- Distributable Income: Total distributable income fell 26.9% for the quarter and 14.0% for the six months year-over-year.
Outlook, Risks, and Unusual Items
- Subsequent Event: On July 20, 2026, the Trust announced a distribution of $0.28 per unit ($4,760,000 total) for the quarter ended June 30, 2026, payable on August 14, 2026.
- Reserve Status: VOC Brazos maintained its $1.0 million reserve for future development and operating expenditures; no funds were withheld or released from this reserve during the period.
- Liquidity: The Trust had no borrowings during the period. The Trustee maintains a cash reserve of $1.175 million to cover future liabilities.
- Risks: The Trust relies entirely on VOC Brazos for production data and cash flows. The Trustee has no control over operations. The net profits interest will terminate on the later of December 31, 2030, or when 10.6 million barrels of oil equivalent (MMBoe) are produced. As of June 30, 2026, 9.9 MMBoe have been produced.
Investor Verification Checklist
- Production Volumes: Verify the reported decline in oil and gas sales volumes against independent production data for VOC Brazos properties.
- Commodity Pricing: Confirm the average realized prices for oil ($57.95/Bbl) and natural gas ($3.73/Mcf) against market benchmarks for the relevant production period (Dec 2025–Feb 2026).
- Property Tax Assessments: Investigate the 73.8% increase in production and property taxes to understand the specific assessment changes driving this cost increase.
- Reserve Depletion: Monitor the cumulative production (9.9 MMBoe) relative to the termination threshold (10.6 MMBoe) to assess the remaining life of the Trust.
- Subsequent Distribution: Confirm the payment of the $0.28 per unit distribution announced for the Q2 2026 period.