What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-11-09 compared with 2023-08-10 · 274 added, 230 removed, 204 unchanged (71% of the section changed)

3 unchanged sentences

Three months ended

Six months ended

September 30,

Nine months ended

September 30,

Income from net profits interest

Cash on hand withheld for Trust expenses

General and administrative expenses (1)

Cash on hand used (withheld) for Trust expenses

and administrative expenses (1)

Distributable income

Distributions per Trust unit (17,000,000 Trust units issued and outstanding at June 30, 2023 and 2022)

(1) Includes $30,014 and $28,860 paid to VOC Brazos Energy Partners, LP (“VOC Brazos”) during the three months ended June 30,

2023 and 2022, respectively, and $58,874 and $56,610 during the six months ended June 30, 2023 and 2022, respectively.

Distributions

per Trust unit (17,000,000 Trust units issued and outstanding at September 30, 2023 and 2022)

(1) Includes $30,014 and $28,860 paid to VOC Brazos Energy Partners, LP (“VOC

Brazos”) during the three months ended September 30, 2023 and 2022, respectively, and $88,888

and $85,470 during the nine months ended September 30, 2023 and 2022, 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, 2023 and 2022

and $75,000 during each of the six-month periods ended June 30, 2023 and 2022.

during each of the three months ended September 30,

2023 and 2022 and $112,500 during each of the nine months ended September 30, 2023 and 2022, respectively.

CONDENSED STATEMENTS OF ASSETS AND TRUST CORPUS

September 30,

Cash and cash equivalents

3 unchanged sentences

(126,792,167 )

Trust corpus, 17,000,000 Trust units issued and outstanding at June 30, 2023 and December 31, 2022

corpus, 17,000,000 Trust units issued and outstanding at September 30, 2023 and December 31, 2022

CONDENSED STATEMENTS OF CHANGES IN TRUST CORPUS

Three months ended

Six months ended

September 30,

Nine months ended

September 30,

Trust corpus, beginning of period

1 unchanged sentence

Cash distributions

(11,390,000 )

(15,470,000 )

Trust expenses

Amortization of net profits interest

of net profits interest

Trust corpus, end of period

4 unchanged sentences

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

VOC Brazos Energy Partners, L.P., a Texas limited partnership (“VOC Brazos”), as trustor, The Bank of New York Mellon Trust

Company, N.A., as Trustee (the “Trustee”), and Wilmington Trust Company, as Delaware Trustee (the “Delaware Trustee”).

VOC Brazos Energy Partners, L.P., a Texas limited partnership (“VOC Brazos”), as trustor, The Bank of New York Mellon

Trust Company, N.A., as Trustee (the “Trustee”), and Wilmington Trust Company, as Delaware Trustee (the “Delaware Trustee”).

The Trust was created to acquire and hold a term net profits interest for the benefit of the Trust unitholders.

18 unchanged sentences

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’

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

interest from the sale of production

4 unchanged sentences

wind up its affairs and terminate.

As of June 30, 2023, cumulatively, since inception,

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

interest from the sale of 8.4 MMBoe of production

from the underlying properties (which is the equivalent of 6.7 MMBoe (unaudited) 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.

As of September 30, 2023, cumulatively,

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

interest from the sale

of 8.5 MMBoe of production from the underlying properties (which is the equivalent of 6.8 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

1 unchanged sentence

and Trust Corpus as of December 31, 2022, which has been derived from audited financial statements, and the unaudited interim condensed

financial statements as of June 30, 2023 and for the three- and six-month periods ended June 30, 2023 and 2022, 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 September 30, 2023 and for the three- and nine-month periods ended September 30, 2023 and 2022,

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

20 unchanged sentences

The actual cash distributions of the

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

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

Expenses of the Trust, which

6 unchanged sentences

Such amortization does not reduce distributable income, rather it is charged directly to Trust corpus.

This comprehensive basis of accounting other than

GAAP corresponds to the accounting permitted for royalty trusts by the SEC as specified by Staff Accounting Bulletin Topic 12:E,

Financial Statements of Royalty Trusts.

This comprehensive basis of accounting other

GAAP corresponds to the accounting permitted for royalty trusts by the SEC as specified by Staff Accounting Bulletin Topic

12:E, Financial Statements of Royalty Trusts.

Investment in the net profits interest was recorded

5 unchanged sentences

There was no impairment of the investment in the net profits interest

during the quarters ended June 30, 2023 or 2022.

No new accounting pronouncements were adopted or

issued during the quarter ended June 30, 2023 that would impact the financial statements of the Trust.

during the quarters ended September 30, 2023 or 2022.

No new accounting pronouncements were adopted

or issued during the quarter ended September 30, 2023 that would impact the financial statements of the Trust.

Investment in Net Profits Interest

The net profits interest was recorded at the historical

cost of VOC Brazos on May 10, 2011, the date of the conveyance of the net profits interest to the Trust, and was calculated as follows:

The net profits interest was recorded at the

historical cost of VOC Brazos on May 10, 2011, the date of the conveyance of the net profits interest to the Trust, and was calculated

Oil and gas properties

9 unchanged sentences

Three months ended

Six months ended

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

September 30,

Nine months ended

September 30,

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

Times 80% net profits interest to Trust

Income from net profits interest before reserve adjustments

VOC Brazos reserve for future development, maintenance or operating expenditures (2)

Income from net profits interest (3)

(1) 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.

(2) 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 June 30, 2023 and 2022, and the six months ended

June 30, 2023 and 2022, VOC Brazos did not withhold or release any dollar amounts due to the Trust from the reserve.

balance was $1.0 million at June 30, 2023 and 2022.

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

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 June 30, 2023 substantially represents production by VOC Brazos from December 2022 through February 2023,

and the cash received by the Trust during the three months ended June 30, 2022 substantially represents production by VOC Brazos

from December 2021 through February 2022.

The cash received by the Trust during the six months ended June 30, 2023

substantially represents production by VOC Brazos from September 2022 through February 2023, and the cash received by the Trust

during the six months ended June 30, 2022 substantially represents production by VOC Brazos from September 2021 through February 2022.

For the three and six months ended June 30,

Income from net

profits interest before reserve

Brazos reserve for future development, maintenance or operating expenditures (2)

from net profits interest (3)

(1) 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

March through May production periods for the three months ended September 30

and during each of the September through May production periods for the nine months

ended September 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.

(2) 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 September 30, 2023 and 2022,

and the nine months ended September 30, 2023 and 2022, VOC Brazos did not withhold or

release any dollar amounts due to the Trust from the reserve.

The reserve balance was $1.0 million

at September 30, 2023 and 2022.

(3) 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 September 30, 2023 substantially represents production by VOC

Brazos from March 2023 through May 2023, and the cash received by the Trust during

the three months ended September 30, 2022 substantially represents production by VOC

Brazos from March 2022 through May 2022.

The cash received by the Trust during

the nine months ended September 30, 2023 substantially represents production by VOC

Brazos from September 2022 through May 2023, and the cash received by the Trust

during the nine months ended September 30, 2022 substantially represents production

by VOC Brazos from September 2021 through May 2022.

For the three and nine months ended September 30,

2023 and 2022, MV Purchasing, LLC, an affiliate of VOC Brazos, purchased a significant portion of the production of the underlying properties.

4 unchanged sentences

Distributions to Unitholders

Brazos makes quarterly payments of the net profits interest to the Trust.

The Trustee determines for each quarter the amount available

for distribution to the Trust unitholders.

This distribution is expected to be made on or before the 45th day following the end of each

quarter to the Trust unitholders of record on the 30th day of the month following the end of each quarter (or the next succeeding business

Such amounts will be equal to the excess, if any, of the cash received by the Trust relating to the preceding quarter, over the

expenses of the Trust paid for such quarter, subject to adjustments for changes made by the Trustee during such quarter in any cash reserves

established for future expenses of the Trust.

Beginning in the first quarter of 2022, the Trustee withheld a portion of the proceeds

otherwise available for distribution each quarter to build a reserve of approximately $1.175 million for the payment of future known,

anticipated or contingent expenses or liabilities of the Trust.

The Trustee may increase or decrease the targeted amount at any time and

may increase or decrease the rate at which it is withholding funds to build the cash reserve at any time, without advance notice to the

VOC Brazos makes quarterly payments of the net

profits interest to the Trust.

The Trustee determines for each quarter the amount available for distribution to the Trust unitholders.

This distribution is expected to be made on or before the 45th day following the end of each quarter to the Trust unitholders of record

on the 30th day of the month following the end of each quarter (or the next succeeding business day).

Such amounts will be equal to the

excess, if any, of the cash received by the Trust relating to the preceding quarter, over the expenses of the Trust paid for such quarter,

subject to adjustments for changes made by the Trustee during such quarter in any cash reserves established for future expenses of the

Beginning in the first quarter of 2022, the Trustee withheld a portion of the proceeds otherwise available for distribution each

quarter to build a reserve of $1.175 million for the payment of future known, anticipated or contingent expenses or liabilities of the

The targeted $1.175 million cash reserve was fully funded by February 2023 and is included in cash and cash equivalents on

the accompanying Condensed Statements of Assets and Trust Corpus.

The Trustee may increase or decrease the targeted amount at any time

and may increase or decrease the rate at which it withholds funds to build the cash reserve at any time, without advance notice to the

Cash held in reserve will be invested as required by the Trust Agreement.

2 unchanged sentences

unitholders, together with interest earned on the funds.

The targeted $1.175 million cash reserve was fully funded by February 2023

and is included in cash and cash equivalents on the accompanying Condensed Statements of Assets and Trust Corpus.

The first quarterly distribution during 2023 was

$3,910,000, or $0.23 per Trust Unit, and was made on February 14, 2023 to Trust unitholders owning Trust Units as of January 30,

The first quarterly distribution during 2023

was $3,910,000, or $0.23 per Trust Unit, and was made on February 14, 2023 to Trust unitholders owning Trust Units as of January 30,

Such distribution included the net proceeds of production collected by VOC Brazos from October 1, 2022 through December 31,

1 unchanged sentence

targeted reserve was fully funded.

The second quarterly distribution during 2023 was

$3,910,000, or $0.23 per Trust Unit, and was made on May 12, 2023 to Trust unitholders owning Trust Units as of May 1, 2023.

The second quarterly distribution during 2023

was $3,910,000, or $0.23 per Trust Unit, and was made on May 12, 2023 to Trust unitholders owning Trust Units as of May 1,

Such distribution included the net proceeds of production collected by VOC Brazos from January 1, 2023 through March 31,

The first quarterly distribution during 2022 was

$4,250,000, or $0.25 per Trust Unit, and was made on February 14, 2022 to Trust unitholders owning Trust Units as of February 1,

The third quarterly distribution during 2023

was $3,570,000, or $0.21 per Trust Unit, and was made on August 14, 2023 to Trust unitholders owning Trust Units as of August 1,

Such distribution included the net proceeds of production collected by VOC Brazos from April 1, 2023 through June 30,

The first quarterly distribution during 2022

was $4,250,000, or $0.25 per Trust Unit, and was made on February 14, 2022 to Trust unitholders owning Trust Units as of February 1,

Such distribution included the net proceeds of production collected by VOC Brazos from October 1, 2021 through December 31,

2021 and was net of $182,917 withheld by the Trustee towards the building of the cash reserve described above.

The second quarterly distribution during 2022 was

$4,760,000, or $0.28 per Trust Unit, and was made on May 13, 2022 to Trust unitholders owning Trust Units as of May 2, 2022.

The second quarterly distribution during 2022

was $4,760,000, or $0.28 per Trust Unit, and was made on May 13, 2022 to Trust unitholders owning Trust Units as of May 2,

Such distribution included the net proceeds of production collected by VOC Brazos from January 1, 2022 through March 31,

2022 and was net of $182,917 withheld by the Trustee towards the building of the cash reserve described above.

The third quarterly distribution during 2022

was $6,460,000, or $0.38 per Trust Unit, and was made on August 12, 2022 to Trust unitholders owning Trust Units as of August 1,

Such distribution included the net proceeds of production collected by VOC Brazos from April 1, 2022 through June 30,

2022 and was net of $221,666 withheld by the Trustee towards the building of the cash reserve described above.

Advance for Trust Expenses

1 unchanged sentence

is allowed to borrow money to pay Trust expenses.

During the three and six months ended June 30, 2023 and 2022, there were no borrowings

or amounts owed for money borrowed in previous quarters.

Under the terms of the Trust Agreement, VOC Brazos has provided a letter of credit

in the amount of $1.7 million to the Trustee to protect the Trust against the risk that it does not have sufficient cash to pay future

During the three and nine months ended September 30, 2023 and 2022, there were

no borrowings or amounts owed for money borrowed in previous quarters.

Under the terms of the Trust Agreement, VOC Brazos has provided

a letter of credit in the amount of $1.7 million to the Trustee to protect the Trust against the risk that it does not have sufficient

cash to pay future expenses.

Subsequent Events

On July 20, 2023, the Trust announced a Trust

distribution of net profits for the second quarterly payment period ended June 30, 2023.

Unitholders of record on July 31, 2023

will receive a distribution amounting to $3,570,000, or $0.21 per Trust Unit, which will be paid on August 14, 2023.

On October 19, 2023, the Trust announced

a Trust distribution of net profits for the fourth quarterly distribution during 2022.

Unitholders of record on October 30, 2023

will receive a distribution amounting to $3,825,000, or $0.225 per Trust Unit, which will be paid on November 14, 2023.

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 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.

Results of Operations

Results of Operations for the Quarters Ended June 30,

Results of Operations for the Quarters Ended September 30,

2023 and 2022

The following is a summary of income from net profits

interest received by the Trust for the three months ended June 30, 2023 and 2022 consisting of the April distribution for each

respective year:

The following is a summary of income from net

profits interest received by the Trust for the three months ended September 30, 2023 and 2022 consisting of the July distribution

for each respective year:

Three months ended

September 30,

Sales volumes:

10 unchanged sentences

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

Excess of revenues over

direct operating expenses and lease equipment and development costs

net profits interest over the term of the Trust

Income from net profits

interest before reserve adjustments

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 quarter ended June 30, 2023 substantially represents the production by VOC Brazos from December 2022 through February 2023.

The cash received by the Trust from VOC Brazos during the quarter ended June 30, 2022 substantially represents the production

by VOC Brazos from December 2021 through February 2022.

The revenues from oil production are typically received by VOC Brazos

one month after production.

Oil and natural gas sales were $9,357,015 for the three months ended June 30, 2023, a decrease of $1,017,544

or 9.8% from $10,374,559 for the three months ended June 30, 2022.

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

volumes sold.

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

gas sales volumes during the second quarter of 2023.

During the three months ended June 30, 2023, the average price for oil decreased

6.0% to $74.16 per Bbl and the average price for natural gas decreased 16.6% to $5.37 per Mcf.

Oil sales volumes were 120,771 Bbls for

the three months ended June 30, 2023, a decrease of 4,168 Bbls or 3.3% from 124,939 Bbls for the three months ended June 30,

2022, while natural gas sales volumes were 74,644 Mcf, a decrease of 5,779 Mcf or 7.2% from 80,423 Mcf for the same period in 2022.

Lease operating expenses were $3,637,884 for the three months ended June 30, 2023, an increase of $391,355 or 12.1% from $3,246,529

for the three months ended June 30, 2022.

Production and property taxes were $279,484 for the three months ended June 30, 2023,

a decrease of $38,935 or 12.2% from $318,419 for the same period in 2022.

Such decrease is the result of a $33,493 decrease in production

taxes, primarily due to lower sales prices, and a $5,442 decrease in property taxes.

Development expenses were $162,095 for the three

months ended June 30, 2023, a decrease of $168,540 or 51.0% from $330,635 for the same period in 2022.

Such decrease was primarily

due to decreased development expenses during the three months ended June 30, 2023, compared to the three months ended June 30,

during the quarter ended September 30, 2023 substantially represents the production by VOC Brazos from March 2023 through May 2023.

The cash received by the Trust from VOC Brazos during the quarter ended September 30, 2022 substantially represents the production

by VOC Brazos from March 2022 through May 2022.

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

after production.

Oil and natural gas sales were $9,240,585 for the three months ended September 30, 2023, a decrease of $4,962,665

or 34.9% from $14,203,250 for the three months ended September 30, 2022.

Revenues are a function of oil and natural gas volumes

sold and prices received.

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

for oil and natural gas sales during the third quarter of 2023.

During the three months ended September 30, 2023, the average price

for oil decreased 31.7% to $71.49 per Bbl and the average price for natural gas decreased 56.2% to $2.91 per Mcf.

Oil sales volumes were

126,373 Bbls for the three months ended September 30, 2023, a decrease of 4,645 Bbls or 3.5% from 131,018 Bbls for the

three months ended September 30, 2022, while natural gas sales volumes were 70,964 Mcf, a decrease of 3,235 Mcf or 4.4% from 74,199

Mcf for the same period in 2022.

Lease operating expenses were $3,553,191 for the three months ended September 30, 2023, a decrease of $298,404 or 7.7% from $3,851,595

for the three months ended September 30, 2022.

Production and property taxes were $657,484 for the three months ended September 30,

2023, an increase of $11,916 or 1.8% from $645,568 for the same period in 2022.

Such increase is the result of an increase of $152,694

or 59.7% in property taxes, partially offset by a decrease of $140,778 or 36.1% in production taxes due primarily to lower sales volumes

and sales prices for oil and natural gas.

Development expenses were $295,971 for the three months ended September 30, 2023, a decrease

of $788,601 or 72.7% from $1,084,572 for the same period in 2022.

Such decrease was primarily due to a decrease in drilling activity

and development expenses, during the three months ended September 30, 2023, compared to the three months ended September 30,

2022, a period that included drilling costs associated with two horizontal wells in Texas.

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 $5,277,552 for the three months ended June 30,

2023, a decrease of $1,201,424 or 18.5% from $6,478,976 for the three months ended June 30, 2022.

The Trust’s 80% net profits

interest of these totals was $4,222,042 and $5,183,181, respectively.

During the three months ended June 30, 2023 and 2022, 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 $4,222,042 and $5,183,181 for such periods, respectively.

These amounts were reduced by a Trust holdback for current estimated Trust expenses of $312,042 and $240,264 for the three months ended

June 30, 2023 and 2022, respectively, and a Trust holdback for future estimated Trust expenses of $182,917 for the three months ended

June 30, 2022.

The Trustee paid general and administrative expenses of $235,865 for the three months ended June 30, 2023, a

decrease of $1,334 from $237,199 for the three months ended June 30, 2022.

These factors resulted in distributable income for the

three months ended June 30, 2023 of $3,910,000, a decrease of $850,000 from $4,760,000 for the three months ended June 30, 2022.

Results of Operations for the Six Months Ended June 30, 2023

The following is a summary of income from net profits

interest received by the Trust for the six months ended June 30, 2023 and 2022 consisting of the January and April distributions

for each respective year:

Six months ended

expenses and lease equipment and development costs from the underlying properties was $4,733,939 for the three months ended September 30,

2023, a decrease of $3,887,576 or 45.1% from $8,621,515 for the three months ended September 30, 2022.

The Trust’s 80% net

profits interest of these totals was $3,787,151 and $6,897,212, respectively.

During the three months ended September 30, 2023 and

2022, 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 $3,787,151 and $6,897,212

for such periods, respectively.

These amounts were reduced by a Trustee holdback for current estimated Trust expenses of $217,151 and

$215,546 for the three months ended September 30, 2023 and 2022, respectively, and a Trustee holdback for future estimated Trust

expenses of $221,666 for the three months ended September 30, 2022.

The Trustee paid general and administrative expenses of $257,220

for the three months ended September 30, 2023, an increase of $95,896 from $161,324 for the three months ended September 30,

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

These factors resulted in distributable income for the three months ended September 30, 2023 of $3,570,000, a decrease

of $2,890,000 from $6,460,000 for the three months ended September 30, 2022.

Results of Operations for the Nine Months Ended September 30,

2023 and 2022

The following is a summary of income from net

profits interest received by the Trust for the nine months ended September 30, 2023 and 2022 consisting of the January, April and

July distributions for each respective year:

Nine months ended

September 30,

Sales volumes:

10 unchanged sentences

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

Excess of revenues over

direct operating expenses and lease equipment and development costs

net profits interest over the term of the Trust

Income from net profits

interest before reserve adjustments

Brazos reserve for future development, maintenance or operating expenditures

from net profits interest

The cash received by the Trust from VOC Brazos

during the six months ended June 30, 2023 substantially represents the production by VOC Brazos from September 2022 through

February 2023.

The cash received by the Trust from VOC Brazos during the six months ended June 30, 2022 substantially

represents the production by VOC Brazos from September 2021 through February 2022.

during the nine months ended September 30, 2023 substantially represents the production by VOC Brazos from September 2022 through

The cash received by the Trust from VOC Brazos during the nine months ended September 30, 2022 substantially

represents the production by VOC Brazos from September 2021 through May 2022.

The revenues from oil production are typically

received by VOC Brazos one month after production.

Oil and natural gas sales were $20,552,593 for the six months ended June 30, 2023, a decrease of $329,032

or 1.6% from $20,881,625 for the six months ended June 30, 2022.

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, partially offset by increases

in market prices for oil and natural gas during the six months ended June 30, 2023.

During the six months ended June 30, 2023,

the average price for oil increased 3.1% to $78.56 per Bbl and the average price for natural gas increased 7.9% to $6.58 per Mcf.

sales volumes were 248,371 Bbls for the six months ended June 30, 2023, a decrease of 12,330 Bbls or 4.7% from 260,701 Bbls for the

six months ended June 30, 2022, while natural gas sales volumes were 158,145 Mcf, a decrease of 6,910 Mcf or 4.2% from 165,055 Mcf

for the same period in 2022.

Lease operating expenses were $7,660,187 for the six months ended June 30, 2023, an increase of $954,764 or 14.2% from $6,705,423

for the six months ended June 30, 2022.

Production and property taxes were $1,173,442 for the six months ended June 30, 2023,

an increase of $189,232 or 19.2% from $984,210 for the six months ended June 30, 2022.

Such increase is the result of a $194,674

increase in production taxes, primarily due to higher sales prices, partially offset by a $5,442 decrease in property taxes.

expenses were $1,030,472 for the six months ended June 30, 2023, an increase of $207,689 or 25.2% from $822,783 for the same period

Of this increase, approximately $200,000 is associated with the completion costs of two horizontal wells in Texas with the remainder

being attributable to increased development expenses during the six months ended June 30, 2023, compared to the six months ended

June 30, 2022.

Oil and natural gas sales were $29,793,178 for the nine months ended September 30, 2023, a decrease of

$5,291,697 or 15.1% from $35,084,875 for the nine months ended September 30, 2022.

Revenues are a function of oil and natural

gas volumes sold and prices received.

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

and in market prices for oil and natural gas sales during the nine months ended September 30, 2023.

During the nine months

ended September 30, 2023, the average price for oil decreased 11.1% to $76.18 per Bbl and the average price for natural gas decreased

13.2% to $5.44 per Mcf.

Oil sales volumes were 374,744 Bbls for the nine months ended September 30, 2023, a decrease of 16,975 Bbls

or 4.3% from 391,719 Bbls for the nine months ended September 30, 2022, while natural gas sales volumes were 229,109 Mcf, a decrease

of 10,145 Mcf or 4.2% from 239,254 Mcf for the same period in 2022.

Lease operating expenses were $11,213,378 for the nine months ended September 30, 2023, an increase of $656,360 or 6.2% from $10,557,018

for the nine months ended September 30, 2022.

Production and property taxes were $1,830,926 for the nine months ended September 30,

2023, an increase of $201,148 or 12.3% from $1,629,778 for the nine months ended September 30, 2022.

Such increase is the result

of an increase of $357,641 or 56.3% in property taxes, partially offset by a decrease of $156,493 or 15.7% in production taxes due primarily

to lower sales volumes and sales prices for oil and natural gas.

Development expenses were $1,326,443 for the nine months ended September 30,

2023, a decrease of $580,912 or 30.5% from $1,907,355 for the same period in 2022.

Such decrease was primarily due to a decrease in drilling

activity and development expenses, during the nine months ended September 30, 2023, compared to the nine months ended September 30,

2022, a period that included drilling costs associated with two horizontal wells in Texas.

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 $10,688,492 for the six months ended June 30,

2023, a decrease of $1,680,717 or 13.6% from $12,369,209 for the six months ended June 30, 2022.

The Trust’s 80% net profits

interest of these totals was $8,550,794 and $9,895,367, respectively.

During the six months ended June 30, 2023 and 2022, 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 $8,550,794 and $9,895,367 for such periods, respectively.

These amounts were reduced by a Trust holdback for current estimated Trust expenses of $499,764 and $519,533 for the six months ended

June 30, 2023 and 2022, respectively, and a Trust holdback for future estimated Trust expenses of $231,030 and $365,834 for the six

months ended June 30, 2023 and 2022, respectively.

The Trustee paid general and administrative expenses of $611,428 for the six months

ended June 30, 2023, an increase of $464 from $610,964 for the six months ended June 30, 2022.

These factors resulted in

distributable income of $7,820,000 for the six months ended June 30, 2023 and $9,010,000 for the six months ended June 30, 2022.

operating expenses and lease equipment and development costs from the underlying properties was $15,422,431 for the nine months ended

September 30, 2023, a decrease of $5,568,293 or 26.5% from $20,990,724 for the nine months ended September 30, 2022.

Trust’s 80% net profits interest of these totals was $12,337,945 and $16,792,579, respectively.

During the nine months ended September 30,

2023 and 2022, 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 $12,337,945

and $16,792,579 for such periods, respectively.

These amounts were reduced by a Trustee holdback for current estimated Trust expenses

of $716,915 and $735,079 for the nine months ended September 30, 2023 and 2022, respectively, and a Trustee holdback for future

estimated Trust expenses of $231,030 and $587,500 for the nine months ended September 30, 2023 and 2022, respectively.

paid general and administrative expenses of $868,648 for the nine months ended September 30, 2023, an increase of $96,360 from $772,288

for the nine months ended September 30, 2022.

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 of $11,390,000 for the nine months ended

September 30, 2023 and $15,470,000 for the nine months ended September 30, 2022.

Liquidity and Capital Resources

9 unchanged sentences

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

As of June 30, 2023, $1,368,243 was

held by the Trustee as such a reserve.

Trustee may cause the Trust to borrow funds required to pay expenses if the Trustee determines that the cash on hand and the cash to be

received are insufficient to cover the Trust’s expenses.

If the Trust borrows funds, the Trust unitholders will not receive

distributions until the borrowed funds are repaid.

During the three and six months ended June 30, 2023 and 2022, there were

no such borrowings.

VOC Brazos has provided a letter of credit in the amount of $ 1.7 million to the Trustee to protect the Trust

against the risk that it does not have sufficient cash to pay future expenses.

As of September 30, 2023, $1,328,174

was held by the Trustee as such a reserve.

The Trustee may cause the Trust to borrow funds

required to pay expenses if the Trustee determines that the cash on hand and the cash to be received are insufficient to cover the Trust’s

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

the three and nine months ended September 30, 2023 and 2022, there were no such borrowings.

VOC Brazos has provided a letter of

credit in the amount of $1.7 million to the Trustee to protect the Trust against the risk that it does not have sufficient cash

to pay future expenses.

Beginning in the first quarter of 2022, the Trustee

3 unchanged sentences

million letter of credit described above.

The Trustee may increase or decrease the targeted amount at any time and may increase or decrease

the rate at which it is withholding funds to build the cash reserve at any time, without advance notice to the unitholders.

in reserve will be invested as required by the Trust Agreement.

Any cash reserved in excess of the amount necessary to pay or provide

for the payment of future known, anticipated or contingent expenses or liabilities eventually will be distributed to unitholders, together

with interest earned on the funds.

The targeted $1.175 million cash reserve was fully funded as of January 30, 2023.

Trustee may increase or decrease the targeted amount at any time and may increase or decrease the rate at which it withholds funds to

build the cash reserve at any time, without advance notice to the unitholders.

Cash held in reserve will be invested as required by the

Trust Agreement.

Any cash reserved in excess of the amount necessary to pay or provide for the payment of future known, anticipated or

contingent expenses or liabilities eventually will be distributed to unitholders, together with interest earned on the funds.

Income to the Trust from the net profits interest

3 unchanged sentences

As substantially all of the underlying properties

are located in mature fields, VOC Brazos does not expect future costs for the underlying properties to change significantly compared to

recent historical costs other than changes due to fluctuations in the general cost of oilfield services.

are located in mature fields, VOC Brazos does not expect future costs for the underlying properties to change significantly compared

to recent historical costs other than changes due to fluctuations in the general cost of oilfield services.

VOC Brazos may establish

1 unchanged sentence

reduce the impact on distributions of uneven capital expenditure timing.

The cash reserve balance was $1.0 million at June 30, 2023

The cash reserve balance was $1.0 million at September 30,

2023 and 2022.

Note Regarding Forward-Looking Statements

6 unchanged sentences

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

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

reflected in the forward-looking statements contained herein are reasonable, no assurance can be given that such expectations will prove

to have been correct.

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

are disclosed in this Form 10-Q and in the Trust’s Annual Report on Form 10-K for the year ended December 31, 2022

Although VOC Brazos advised the Trust that it believes that the

expectations reflected in the forward-looking statements contained herein are reasonable, no assurance can be given that such expectations

will prove to have been correct.

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

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

2022 (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.

2 unchanged sentences

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