What changed in this filing

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Item 1. Financial Statements

2021-08-12 compared with 2021-05-14 · 232 added, 142 removed, 215 unchanged (63% of the section changed)

3 unchanged sentences

Three months ended

Six months ended

Income from net profits interest

Cash on hand used for Trust expenses

Cash on hand used (withheld) for Trust expenses

General and administrative expenses (1)

Distributable income

Distributions

per Trust unit (17,000,000 Trust units issued and outstanding at March 31, 2021 and 2020)

Includes $26,685 and $51,320 paid to VOC Brazos Energy Partners, LP (“VOC Brazos”) during the three months ended March 31, 2021 and 2020, respectively, and $37,500 paid to The Bank of New York Mellon Trust Company, N.A.

during each of the three months ended March 31, 2021 and 2020.

Distributions per Trust unit (17,000,000 Trust units issued and outstanding at June 30, 2021 and 2020)

Includes $27,750 and $0 paid to VOC Brazos Energy Partners, LP (“VOC Brazos”) during the three months ended June 30, 2021 and 2020, respectively, and $54,435 and $51,320 during the six months ended June 30, 2021 and 2020, respectively.

Also includes $37,500 paid to The Bank of New York Mellon Trust Company, N.A.

during each of the three-month periods ended June 30, 2021 and 2020 and $75,000 during each of the six-month periods ended June 30, 2021 and 2020, respectively.

CONDENSED STATEMENTS OF ASSETS AND TRUST CORPUS

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(122,182,408 )

Trust corpus, 17,000,000 Trust units issued and outstanding at March 31, 2021and December 31, 2020

Trust corpus, 17,000,000 Trust units issued and outstanding at June 30, 2021 and December 31, 2020

CONDENSED STATEMENTS OF CHANGES IN TRUST CORPUS

Three months ended

Six months ended

Trust corpus, beginning of period

Income from net profits interest

Cash distribution

Cash distributions

Trust expenses

Amortization of net profits interest (includes impairment expense of $41,261,354 in 2020)

Amortization of net profits interest (includes impairment expense

of $41,261,354 during the six months ended June 30, 2020)

(43,401,355 )

3 unchanged sentences

VOC ENERGY TRUST

NOTES TO CONDENSED FINANCIAL STATEMENTS

NOTES TO CONDENSED FINANCIAL

Organization of the Trust

VOC Energy Trust (the “Trust”) is

a statutory trust formed on November 3, 2010 (capitalized on December 17, 2010), under the Delaware Statutory Trust Act pursuant

VOC Energy Trust (the “Trust”) is a

statutory trust formed on November 3, 2010 (capitalized on December 17, 2010), under the Delaware Statutory Trust Act pursuant

to a Trust Agreement dated November 3, 2010 (as amended and restated on May 10, 2011, the “Trust Agreement”) among

20 unchanged sentences

properties.”

The net profits interest is passive in nature,

and the Trustee has no management control over and no responsibility relating to the operation of the underlying properties.

The net profits

interest entitles the Trust to receive 80% of the net proceeds attributable to VOC Brazos’

interest from the sale of production

from the underlying properties during the term of the Trust.

The net profits interest will terminate on the later to occur of (1) December 31,

2030 or (2) the time when 10.6 million barrels of oil equivalent (“MMBoe”) (which is the equivalent of 8.5 MMBoe in respect

of the net profits interest) have been produced from the underlying properties and sold, and the Trust will soon thereafter wind up its

affairs and terminate.

The Trustee can authorize the Trust to borrow

money to pay administrative or incidental expenses of the Trust that exceed cash held by the Trust.

The Trustee may authorize the Trust

to borrow from the Trustee or the Delaware Trustee as a lender provided the terms of the loan are similar to the terms it would grant

to a similarly situated commercial customer with whom it did not have a fiduciary relationship.

The Trustee may also deposit funds awaiting

distribution in an account with itself and make other short-term investments with the funds distributed to the Trust.

net profits interest is passive in nature, and the Trustee has no management control over and no responsibility relating to the operation

of the underlying properties.

The net profits interest entitles the Trust to receive 80% of the net proceeds attributable to VOC Brazos’

interest from the sale of production from the underlying properties during the term of the Trust.

The net profits interest will terminate

on the later to occur of (1) December 31, 2030 or (2) the time when 10.6 million barrels of oil equivalent (“MMBoe”)

(which is the equivalent of 8.5 MMBoe in respect of the net profits interest) have been produced from the underlying properties and sold,

and the Trust will soon thereafter wind up its affairs and terminate.

As of June 30, 2021, cumulatively, since inception,

the Trust has received payment for 80% of the net proceeds attributable to VOC Brazos’

interest from the sale of 7.2 MMBoe of production

from the underlying properties (which is the equivalent of 5.8 MMBoe in respect of the net profits interest).

The Trustee can authorize the Trust to borrow money

to pay administrative or incidental expenses of the Trust that exceed cash held by the Trust.

The Trustee may authorize the Trust to borrow

from the Trustee or the Delaware Trustee as a lender provided the terms of the loan are similar to the terms it would grant to a similarly

situated commercial customer with whom it did not have a fiduciary relationship.

The Trustee may also deposit funds awaiting distribution

in an account with itself and make other short-term investments with the funds distributed to the Trust.

Basis of Presentation

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and Trust Corpus as of December 31, 2020, which has been derived from audited financial statements, and the unaudited interim condensed

financial statements as of March 31, 2021 and for the three-month periods ended March 31, 2021 and 2020, have been prepared

pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”).

Accordingly, certain information

and note disclosures normally included in annual financial statements have been condensed or omitted pursuant to those rules and

financial statements as of June 30, 2021 and for the three- and six-month periods ended June 30, 2021 and June 30, 2020,

have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”).

certain information and note disclosures normally included in annual financial statements have been condensed or omitted pursuant to those

rules and regulations.

The preparation of financial statements requires

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The Trust uses the modified cash basis of accounting

to report receipts of the term net profits interest and payments of expenses incurred.

The term net profits interest represents the right

to receive revenues (oil and natural gas sales), less direct operating expenses (lease operating expenses, lease maintenance, lease overhead,

and production and property taxes) and an adjustment for lease equipment costs and lease development expenses (which are capitalized in

financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.

GAAP”)) of the underlying properties, times 80%.

Actual cash receipts may vary due to timing delays of actual cash receipts from

the property operators or purchasers and due to wellhead and pipeline volume balancing agreements or practices.

The actual cash distributions

of the Trust will be made based on the terms of the conveyance creating the Trust’s net profits interest.

Expenses of the Trust,

which include accounting, engineering, legal and other professional fees, Trustee fees, an administrative fee paid to VOC Brazos and out-of-pocket

to report receipts of the net profits interest and payments of expenses incurred.

The net profits interest represents the right to receive

revenues (oil and natural gas sales), less direct operating expenses (lease operating expenses, lease maintenance, lease overhead, and

production and property taxes) and an adjustment for lease equipment costs and lease development expenses (which are capitalized in financial

statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.

GAAP”))

of the underlying properties, times 80%.

Actual cash receipts may vary due to timing delays of actual cash receipts from the property

operators or purchasers and due to wellhead and pipeline volume balancing agreements or practices.

The actual cash distributions of the

Trust will be made based on the terms of the conveyance that created the Trust’s net profits interest.

Expenses of the Trust, which

include accounting, engineering, legal and other professional fees, Trustee fees, an administrative fee paid to VOC Brazos and out-of-pocket

expenses, are recognized when paid.

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The impairment was charged directly to Trust corpus and did not affect distributable

There was no impairment of the investment in the net profits interest during the quarter ended March 31, 2021.

No new accounting pronouncements have been adopted

or issued during the quarter ended March 31, 2021 that would impact the financial statements of the Trust.

or issued during the quarter ended June 30, 2021 that would impact the financial statements of the Trust.

Investment in Net Profits Interest

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Three months ended

Six months ended

Excess of revenues over direct operating expenses and lease equipment and development costs(1)

3 unchanged sentences

Income from net profits interest(3)

Excess of revenues over direct operating expenses and lease equipment and development costs reflect expenses and costs incurred by VOC Brazos during the September through November production period.

Excess of revenues over direct operating expenses and lease equipment and development costs reflect expenses and costs incurred by VOC Brazos during each of the December through February production periods for the three months ended June 30 and during each of the September through February production periods for the six months ended June 30.

Pursuant to the terms of the conveyance of the net profits interest, lease equipment and development costs are to be deducted when calculating the distributable income to the Trust.

Pursuant to the terms of the conveyance of the net profits interest, VOC Brazos can reserve up to $1.0 million for future development, maintenance or operating expenditures at any time.

During the three months ended March 31, 2021 and 2020, VOC Brazos did not withhold or release any dollar amounts due to the Trust from the reserve.

The reserve balance was $1,000,000 at March 31, 2021 and 2020, respectively.

During the three months ended June 30, 2021 and 2020, and the six months ended June 30, 2021 and 2020, VOC Brazos did not withhold or release any dollar amounts due to the Trust from the reserve.

The reserve balance was $1,000,000 at June 30, 2021 and 2020, respectively.

The income from net profits interest is based upon the cash receipts from VOC Brazos for the oil and gas production.

The revenues from oil production are typically received by VOC Brazos one month after production;

thus, the cash received by the Trust during the three months ended March 31, 2021 substantially represents production by VOC Brazos from September 2020 through November 2020.

The cash received by the Trust during the three months ended March 31, 2020 substantially represents production by VOC Brazos from September 2019 through November 2019.

For the three months ended March 31, 2021

thus, the cash received by the Trust during the three months ended June 30, 2021 substantially represents production by VOC Brazos from December 2020 through February 2021, and the cash received by the Trust during the three months ended June 30, 2020 substantially represents production by VOC Brazos from December 2019 through February 2020.

The cash received by the Trust during the six months ended June 30, 2021 substantially represents production by VOC Brazos from September 2020 through February 2021, and the cash received by the Trust during the six months ended June 30, 2020 substantially represents production by VOC Brazos from September 2019 through February 2020.

For the three and six months ended June 30,

2021 and 2020, MV Purchasing, LLC, an affiliate of VOC Brazos, purchased a significant portion of the production of the underlying properties.

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Such distribution included the net proceeds of production collected by VOC Brazos from October 1, 2020 through December 31,

The second quarterly distribution during 2021 was

$2,040,000, or $0.12 per Trust Unit, and was made on May 14, 2021 to Trust unitholders owning Trust Units as of April 30, 2021.

Such distribution included the net proceeds of production collected by VOC Brazos from January 1, 2021 through March 31, 2021.

The first quarterly distribution during 2020 was

1 unchanged sentence

Such distribution included the net proceeds of production collected by VOC Brazos from October 1, 2019 through December 31,

The second quarterly distribution during 2020 was

$510,000, or $0.03 per Trust Unit, and was made on May 15, 2020 to Trust unitholders owning Trust Units as of April 30, 2020.

Such distribution included the net proceeds of production collected by VOC Brazos from January 1, 2020 through March 31, 2020.

Advance for Trust Expenses

1 unchanged sentence

is allowed to borrow money to pay Trust expenses.

During the three months ended March 31, 2021 and 2020, there were no borrowings

During the three and six months ended June 30, 2021 and 2020, there were no borrowings

or amounts owed for money borrowed in previous quarters.

2 unchanged sentences

Subsequent Events

On April 20, 2021, the Trust announced a

Trust distribution of net profits for the first quarterly payment period ended March 31, 2021.

Unitholders of record on April 30,

2021 will receive a distribution amounting to $2,040,000, or $0.12 per Trust Unit, which will be paid on May 14, 2021.

Trustee’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion of the Trust’s

financial condition and results of operations should be read in conjunction with the financial statements and notes thereto.

The Trust’s

purpose is, in general, to hold the net profits interest, to distribute to the Trust unitholders cash that the Trust receives in respect

of the net profits interest and to perform certain administrative functions in respect of the net profits interest and the Trust Units.

The Trust derives substantially all of its income and cash flows from the net profits interest.

All information regarding operations has

been provided to the Trustee by VOC Brazos.

On July 20, 2021, the Trust announced a Trust

distribution of net profits for the second quarterly payment period ended June 30, 2021.

Unitholders of record on July 30, 2021

will receive a distribution amounting to $2,720,000, or $0.16 per Trust Unit, which will be paid on August 13, 2021.

Trustee’s Discussion and Analysis of Financial Condition

and Results of Operations.

The following discussion of the Trust’s financial

condition and results of operations should be read in conjunction with the financial statements and notes thereto.

The Trust’s purpose

is, in general, to hold the net profits interest, to distribute to the Trust unitholders cash that the Trust receives in respect of the

net profits interest and to perform certain administrative functions in respect of the net profits interest and the Trust Units.

derives substantially all of its income and cash flows from the net profits interest.

All information regarding operations has been provided

to the Trustee by VOC Brazos.

The 2020 outbreak of the novel form of coronavirus known as COVID-19 and its development into a global pandemic

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After April 28,

2020, the WTI price started increasing slowly and averaged $40.18 for the months of September 2020 through November 2020 ,

which is the production period represented in the cash received by the Trust for the quarter ended March 31, 2021.

As of April 2021,

the WTI price has increased to pre-COVID levels .

Nevertheless, prices could decline again, and the Trust’s

quarterly cash distibutions could similarly decline, depending on future actions by OPEC or the future course of the ongoing COVID-19

2020, the WTI price started increasing and has returned to pre-COVID levels .

Nevertheless, prices could

decline again, and the Trust’s quarterly cash distibutions could similarly decline, depending on future actions by OPEC or the future

course of the ongoing COVID-19 pandemic.

of Net Profits Interest.

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The impairment was charged directly to Trust corpus and did not affect distributable income.

was no impairment of the investment in the net profits interest during the quarter ended March 31, 2021.

Results of Operations

Results of Operations for the Quarters Ended

March 31, 2021 and 2020

The following is a summary of income from net

profits interest received by the Trust for the three months ended March 31, 2021 and 2020 consisting of the January distribution

for each respective year:

Results of Operations for the Quarters Ended June 30,

2021 and 2020

The following is a summary of income from net profits

interest received by the Trust for the three months ended June 30, 2021 and 2020 consisting of the April distribution for each

respective year:

Three months ended

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The cash received by the Trust from VOC Brazos

during the quarter ended March 31, 2021 substantially represents the production by VOC Brazos from September 2020 through November 2020.

The cash received by the Trust from VOC Brazos during the quarter ended March 31, 2020 substantially represents the production by

VOC Brazos from September 2019 through November 2019.The revenues from oil production are typically received by VOC Brazos one

during the quarter ended June 30, 2021 substantially represents the production by VOC Brazos from December 2020 through February 2021.

The cash received by the Trust from VOC Brazos during the quarter ended June 30, 2020 substantially represents the production by

VOC Brazos from December 2019 through February 2020.

The revenues from oil production are typically received by VOC Brazos one

month after production.

Oil and natural gas sales were $5,151,821 for the three months ended March 31, 2021, a decrease of $3,218,436

or 38.5% from $8,370,257 for the three months ended March 31, 2020.

Revenues are a function of oil and natural gas sales prices and

volumes sold.

The decrease in gross proceeds was due to a decrease in oil sales volumes, partially offset by an increase in natural gas

sales volumes during the first quarter of 2021, compounded by a decrease in market prices for oil during the first quarter of 2021.

the three months ended March 31, 2021, oil sales volumes were 136,583 Bbls for the three months ended March 31, 2021, a decrease

of 17,192 Bbls or 11.2% from 153,775 Bbls for the three months ended March 31, 2020, while natural gas sales volumes were 95,986

Mcf, an increase of 5,501 Mcf or 6.1% from 90,485 Mcf for the same period in 2020.

During the three months ended March 31, 2021,

the average price for oil decreased 31.9% to $36.26 per Bbl and the average price for natural gas remained the same at $2.07 per Mcf.

Lease operating expenses were $2,691,487 for the three months ended March 31, 2021, a decrease of $806,039 or 23.0% from $3,497,526

for the three months ended March 31, 2020.

Production and property taxes were $751,557 for the three months ended March 31,

Oil and natural gas sales were $6,123,007 for the three months ended June 30, 2021, a decrease of $3,351,829

or 35.4% from $9,474,836 for the three months ended June 30, 2020.

Revenues are a function of oil and natural gas sales volumes and

prices received.

The decrease in gross proceeds was due to decreases in oil and natural gas sales volumes and a decrease in market prices

for oil sales partially offset by an increase in market prices for natural gas sales during the second quarter of 2021.

During the three

months ended June 30, 2021, the average price for oil decreased 10.0% to $48.53 per Bbl and the average price for natural gas increased

19.1% to $2.81 per Mcf.

Oil sales volumes were 121,019 Bbls for the three months ended June 30, 2021, a decrease of 50,169 Bbls or

29.3% from 171,188 Bbls for the three months ended June 30, 2020, while natural gas sales volumes were 89,151 Mcf, a decrease of

13,152 Mcf or 12.9% from 102,303 Mcf for the same period in 2020.

Lease operating expenses were $2,803,042 for the three months ended June 30, 2021, a decrease of $226,650 or 7.5% from $3,029,692

for the three months ended June 30, 2020.

Production and property taxes were $120,097 for the three months ended June 30, 2021,

a decrease of $361,781 or 75.1% from $481,878 for the same period in 2020.

Such decrease is primarily due to a $98,007 or 40.7%

decrease in production taxes due to lower sales volumes and sales prices and a decrease in property taxes of $44,887 or 6.9%.

expenses were $1,014,161 for the three months ended March 31, 2021, a decrease of $372,544 or 26.9% from $1,386,705 for the same

period in 2020.

Such decrease was primarily due to decreased development expenses during the three months ended March 31, 2021, compared

to the three months ended March 31, 2020.

Such decrease is the result of a decrease of $202,611 in property

taxes resulting primarily from a timing difference as to when payments are normally made and a decrease of $159,170 or 57.3% in production

taxes due to lower sales volumes for oil and natural gas.

Development expenses were $283,643 for the three months ended June 30,

2021, a decrease of $3,882,579 or 93.2% from $4,166,222 for the same period in 2020.

Such decrease was primarily due to payments totaling

$4,046,455 made to the operator for previously unpaid costs associated with the Hawkwood Development Wells from net revenue received from

the Hawkwood Development wells during the three months ended June 30, 2020.

See “Liquidity and Capital Resources”

for further discussion.

of revenues over direct operating expenses and lease equipment and development costs .

The excess of revenues over direct operating

expenses and lease equipment and development costs from the underlying properties was $694,616 for the three months ended March 31,

2021, a decrease of $1,896,959 or 73.2% from $2,591,575 for the three months ended March 31, 2020.

expenses and lease equipment and development costs from the underlying properties was $2,916,225 for the three months ended June 30,

2021, an increase of $1,119,181 or 62.3% from $1,797,044 for the three months ended June 30, 2020.

The Trust’s 80% net profits

interest of these totals were $555,693 and $2,073,260, respectively.

During the three months ended March 31, 2021 and 2020, VOC Brazos

interest of these totals was $2.332,980 and $1,437,635, respectively.

During the three months ended June 30, 2021 and 2020, VOC Brazos

did not withhold or release any dollar amounts due to the Trust from the previously established cash reserve for future development, maintenance

or operating expenditures, which resulted in income from the net profits interest of $2,332,980 and $1,437,635 for such periods, respectively.

These amounts were reduced by a Trust holdback for future expenses of $45,693 and $203,260 for the three months ended March 31, 2021

These amounts were reduced by a Trust holdback for future expenses of $292,980 and $927,635 for the three months ended June 30, 2021

and 2020, respectively.

The Trustee paid general and administrative expenses of $396,399 for the three months ended March 31, 2021,

an increase of $105,941 from $290,458 for the three months ended March 31, 2020.

This increase was primarily due to the differences

in timing of receipt and payment of recurring general and administrative expenses.

These factors resulted in distributable income for

the three months ended March 31, 2021 of $510,000, a decrease of $1,360,000 from $1,870,000 for the three months ended March 31,

This decrease of $634,655 is primarily the result of the inclusion in 2020 of an amount estimated to be sufficient

to pay estimated Trust expenses through approximately April 2021.

The Trustee paid general and administrative expenses of $165,446

for the three months ended June 30, 2021, a decrease of $66,445 from $231,891 for the three months ended June 30, 2020.

decrease was primarily due to the differences in timing of receipt and payment of recurring general and administrative expenses.

factors resulted in distributable income for the three months ended June 30, 2021 of $2,040,000, an increase of $1,530,000 from $510,000

for the three months ended June 30, 2020.

Results of Operations for the Six Months Ended June 30, 2021

The following is a summary of income from net profits

interest received by the Trust for the six months ended June 30, 2021 and 2020 consisting of the January and April distributions

for each respective year:

Six months ended

Sales volumes:

Natural gas (Mcf)

Average sales prices:

Oil (per Bbl)

Natural gas (per Mcf)

Gross proceeds:

Natural gas sales

Total gross proceeds

Production and development costs:

Lease operating expenses

Production and property taxes

Development expenses

Excess of revenues over direct operating expenses and lease equipment and development costs

Times net profits interest over the term of the Trust

Income from net profits interest before reserve adjustments

VOC Brazos reserve for future development, maintenance or operating expenditures

Income from net profits interest

The cash received by the Trust from VOC Brazos

during the six months ended June 30, 2021 substantially represents the production by VOC Brazos from September 2020 through

February 2021.

The cash received by the Trust from VOC Brazos during the six months ended June 30, 2020 substantially

represents the production by VOC Brazos from September 2019 through February 2020.

The revenues from oil production are typically

received by VOC Brazos one month after production.

Oil and natural gas sales were $11,274,828 for the six months ended June 30, 2021, a decrease of $6,570,265

or 36.8% from $17,845,093 for the six months ended June 30, 2020.

Revenues are a function of oil and natural gas sales prices

and volumes sold.

The decrease in gross proceeds was due to decreases in oil and natural gas sales volumes and a decrease in market

prices for oil sales partially offset by an increase in market prices for natural gas sales during the first six months of 2021.

the six months ended June 30, 2021, the average price for oil decreased 21.6% to $42.02 per Bbl and the average price for natural

gas increased 9.5% to $2.43 per Mcf.

Oil sales volumes were 257,602 Bbls for the six months ended June 30, 2021, a decrease of 67,361

Bbls or 20.7% from 324,963 Bbls for the six months ended June 30, 2020, while natural gas sales volumes were 185,137 Mcf, a decrease

of 7,651 Mcf or 4.0% from 192,788 Mcf for the same period in 2020.

Lease operating expenses were $5,494,529 for the six months ended June 30, 2021, a decrease of $1,032,689 or 15.8% from $6,527,218

for the six months ended June 30, 2020.

Production and property taxes were $871,654 for the six months ended June 30, 2021,

a decrease of $504,675 or 36.7% from $1,376,329 for the six months ended June 30, 2020.

Such decrease is primarily due to a decrease

of $247,498 or 28.9% in property taxes resulting primarily from a timing difference as to when payments are normally made and a decrease

of $257,177 or 49.6% in production taxes due to lower sales volumes for oil and natural gas.

Development expenses were $1,297,804 for

the six months ended June 30, 2021, a decrease of $4,255,123 or 76.6% from $5,552,927 for the same period in 2020.

Such decrease

was primarily due to payments totaling $4,650,763 made to the operator for previously unpaid costs associated with the Hawkwood Development

Wells from net revenue received from the Hawkwood Development Wells during the six months ended June 30, 2020.

See “Liquidity

and Capital Resources”

below for further discussion.

of revenues over direct operating expenses and lease equipment and development costs .

The excess of revenues over direct

operating expenses and lease equipment and development costs from the underlying properties was $3,610,841 for the six months ended June 30,

2021, a decrease of $777,778 or 17.7% from $4,388,619 for the six months ended June 30, 2020.

The Trust’s 80% net profits

interest of these totals was $2,888,673 and $3,510,895, respectively.

During the six months ended June 30, 2021 and 2020, VOC Brazos

did not withhold or release any dollar amounts due to the Trust from the previously established cash reserve for future development, maintenance

or operating expenditures, which resulted in income from the net profits interest of $2,888,673 and $3,510,895 for such periods, respectively.

These amounts were further reduced by a Trust holdback for future expenses of $338,673 and $1,130,895 for the six months ended June 30,

2021 and 2020, respectively.

This decrease of $792,222 is primarily the result of the inclusion in 2020 of an amount estimated to be sufficient

to pay estimated Trust expenses through approximately April 2021.

The Trustee paid general and administrative expenses of $561,845

for the six months ended June 30, 2021, an increase of $39,496 from $522,349 for the six months ended June 30, 2020.

increase was primarily due to the differences in timing of receipt and payment of recurring general and administrative expenses.

factors resulted in distributable income of $2,550,000 for the six months ended June 30, 2021 and $2,380,000 for the six months ended

June 30, 2020.

Liquidity and Capital Resources

9 unchanged sentences

that the Trustee decides to reserve for future development, maintenance or operating expenses.

As of March 31, 2021, $252,298 was

As of June 30, 2021, $379,832 was

held by the Trustee as such a reserve.

2 unchanged sentences

If the Trust borrows funds, the Trust unitholders will not receive distributions until the borrowed funds are repaid.

During the three months ended March 31, 2021 and 2020, there were no such borrowings.

VOC Brazos has provided a letter of credit

in the amount of $1,700,000 to the Trustee to protect the Trust against the risk that it does not have sufficient cash to pay future expenses.

During the three and six months ended June 30, 2021 and 2020, there were no such borrowings.

VOC Brazos has provided a letter of

credit in the amount of $1,700,000 to the Trustee to protect the Trust against the risk that it does not have sufficient cash to pay future

Income to the Trust from the net profits interest

8 unchanged sentences

reduce the impact on distributions of uneven capital expenditure timing.

The cash reserve balance was $1,000,000 at March 31, 2021

The cash reserve balance was $1,000,000 at June 30, 2021

and 2020, respectively.

2018, VOC Brazos entered into a joint venture agreement with Hawkwood Energy East Texas, LLC (“Hawkwood”).

Under the terms

of the joint venture agreement, Hawkwood carried VOC Brazos for its share of drilling and completion costs for four wells in the Lower

Woodbine Organic Shale (the “Hawkwood Earning Wells”).

In exchange, Hawkwood earned a working interest representing 50% of

VOC Brazos’

interest in each Hawkwood Earning Well and up to a 50% interest in VOC Brazos’

acreage in the south half of the

Kurten Woodbine Unit.

After the Hawkwood Earning Wells were completed, Hawkwood had the right to propose and drill up to eight wells in

the Lower Woodbine Organic Shale (“LWOS”) in 2019 and twelve LWOS wells in 2020, with no contractual limitation of the number

of wells per year to propose and drill after 2020 (collectively, the “Hawkwood Development Wells”).

In 2019, Hawkwood drilled

and completed four Hawkwood Development Wells.

VOC Brazos is paying Vess Oil, as the operator, for its share of costs and related interest

in the Hawkwood Development Wells, as net revenue from each of the wells is received, thereby having no current effect on Trust distributions.

The remaining balance was paid in full on December 31, 2020.

No new Hawkwood Development Wells were drilled in 2020 or through

the date of this Form 10-Q.

In 2018, VOC Brazos entered into a joint venture

agreement with Hawkwood Energy East Texas, LLC (“Hawkwood”).

Under the terms of the joint venture agreement, Hawkwood carried

VOC Brazos for its share of drilling and completion costs for four wells in the Lower Woodbine Organic Shale (the “Hawkwood Earning

Wells”).

In exchange, Hawkwood earned a working interest representing 50% of VOC Brazos’

interest in each Hawkwood Earning

Well and up to a 50% interest in VOC Brazos’

acreage in the south half of the Kurten Woodbine Unit.

After the Hawkwood Earning Wells

were completed, Hawkwood had the right to propose and drill up to eight wells in the Lower Woodbine Organic Shale (“LWOS”)

in 2019 and twelve LWOS wells in 2020, with no contractual limitation of the number of wells per year to propose and drill after 2020

(collectively, the “Hawkwood Development Wells”).

In 2019, Hawkwood drilled and completed four Hawkwood Development Wells.

VOC Brazos was paying Vess Oil, as the operator, for its share of costs and related interest in the Hawkwood Development Wells, as net

revenue from each of the wells was received, thereby having no current effect on Trust distributions.

The remaining balance was paid in

full on December 31, 2020.

No new Hawkwood Development Wells were drilled in 2020 or through the date of this Form 10-Q.

Note Regarding Forward-Looking Statements

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this Form 10-Q, including without limitation the statements under “Trustee’s Discussion and Analysis of Financial Condition

and Results of Operations”

are forward-looking statements.

and Results of Operations”, are forward-looking statements.

Although VOC Brazos advised the Trust that it believes that the expectations

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Important factors that could cause actual results to differ materially from expectations (“Cautionary Statements”)

are disclosed in the Trust’s Annual Report on Form 10-K for the year ended December 31, 2020 (the “Form 10-K”),

including under the section “Item 1A.

are disclosed in this Form 10-Q and in the Trust’s Annual Report on Form 10-K for the year ended December 31, 2020

(the “Form 10-K”), including under the section “Item 1A.

Risk Factors”.

All subsequent written and oral forward-looking statements attributable

to the Trust or persons acting on its behalf are expressly qualified in their entirety by the Cautionary Statements.

All subsequent written and oral

forward-looking statements attributable to the Trust or persons acting on its behalf are expressly qualified in their entirety by the

Cautionary Statements.

Quantitative and Qualitative Disclosures About Market Risk.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements