Item 9A. Controls and Procedures
Item 9A. Controls and Procedures.
Evaluation of disclosure controls and procedures. The Trustee maintains disclosure controls and procedures designed to ensure that information to be disclosed by the Trust in the reports that it files or submits under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the rules and regulations promulgated by the SEC. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed by the Trust is accumulated and communicated by VOC Brazos to The Bank of New York Mellon Trust Company, N.A., as trustee of the Trust, and its employees who participate in the preparation of the Trust’s periodic reports as appropriate to allow timely decisions regarding required disclosure.
As of the end of the period covered by this report, the Trustee carried out an evaluation of the Trust’s disclosure controls and procedures. Elaina Rodgers, as Trust Officer of the Trustee, has concluded that the disclosure controls and procedures of the Trust are effective.
Due to the contractual arrangements of (i) the Trust Agreement and (ii) the Conveyance, the Trustee relies on (A) information provided by VOC Brazos, including historical operating data, plans for future operating and capital expenditures, reserve information and information relating to projected production, and (B) conclusions and reports regarding reserves by the Trust’s independent reserve engineers. See “Item 1A. Risk Factors — Risks Related to the Structure of the Trust — Neither the Trust nor the Trust’s unitholders have the ability to influence VOC Brazos or control the operations or development of the Underlying Properties” in this Form 10-K, and “Item 7. Trustee’s Discussion and Analysis of Financial Condition and Results of Operations” for a description of certain risks relating to these arrangements and reliance on information when reported by VOC Brazos to the Trustee and recorded in the Trust’s results of operations.
Changes in Internal Control Over Financial Reporting. During the fourth quarter ended December 31, 2024, there has been no change in the Trustee’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Trustee’s internal control over financial reporting. The Trustee notes for purposes of clarification that it has no authority over, and makes no statement concerning, the internal control over financial reporting of VOC Brazos.
Trustee’s Report on Internal Control Over Financial Reporting. The Trustee is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f), by the Trust. The Trust’s internal control over financial reporting is a process designed under the supervision of the Trustee to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Trust’s financial statements for external purposes in accordance with the accounting permitted for royalty trusts by the SEC as specified by Staff Accounting Bulletin Topic 12:E, Financial Statements of Royalty Trusts, which is a comprehensive basis of accounting other than generally accepted accounting principles.
As of December 31, 2024, the Trustee assessed the effectiveness of the Trust’s internal control over financial reporting based on the criteria for effective internal control over financial reporting established in “Internal Control — Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on that assessment, the Trustee determined that the Trust maintained effective internal control over financial reporting as of December 31, 2024, based on those criteria.
Item 9B. Other Information.
Rule 10b5-1 Trading Plans. During the three months ended December 31, 2024, no officer or employee of the Trustee who performs policy-making functions for the Trust adopted, modified, or terminated any Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement, as such terms are defined in Item 408(a) of Regulation S-K, with respect to the Trust Units.
Item 9C. Disclosures Regarding Foreign Jurisdictions that Prevent Inspections.
Not applicable.
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PART III
Item 10.
Directors, Executive Officers and Corporate Governance.
The Trust has no directors or executive officers. The Trustee is a corporate trustee that may be removed by the affirmative vote of the holders of not less than a majority of the outstanding Trust Units at a meeting at which a quorum is present.
Audit Committee and Nominating Committee
Because the Trust does not have a board of directors, it does not have an audit committee, an audit committee financial expert or a nominating committee.
Code of Ethics
The Trust does not have a principal executive officer, principal financial officer, principal accounting officer or controller and, therefore, has not adopted a code of ethics applicable to such persons. However, employees of the Trustee must comply with the code of ethics of The Bank of New York Mellon Trust Company, N.A.
Insider Trading Policy
Because the Trust has no directors, officers or employees, and because the Trustee does not have the authority under the terms of the Trust Agreement to engage in transactions in the Trust Units on behalf of the Trust, the Trust has not adopted an insider trading policy applicable to such persons or to the Trust itself. It is the policy of the Trustee that any transaction in Trust Units by any officer or employee of the Trustee who performs policy-making functions for the Trust must comply with the insider trading policies of The Bank of New York Mellon Corporation, the parent corporation of The Bank of New York Mellon Trust Company, N.A.
Item 11.
Executive Compensation.
During the years ended December 31, 2022, 2023 and 2024, the Trustee received compensation from the Trust in the amount of $150,000 for each year. The Trust does not have any executive officers. Because the Trust does not have a board of directors, it does not have a compensation committee.
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Unitholder Matters.
(a)
Security Ownership of Certain Beneficial Owners.
The following table sets forth certain information regarding the beneficial ownership of the Trust Units as of March 20, 2025 by each person who, to the Trust’s knowledge, beneficially owns more than 5% of the outstanding Trust Units.
Beneficial Owner
Trust Units
Beneficially
Owned
Percent of
Class (1)
VOC Partners, LLC (2)
4,252,250
25.0 %
Robert J. Raymond (3)
1,856,962
10.9 %
(1)
Based on 17,000,000 Trust Units outstanding as of March 20, 2025.
(2)
The information is based on a Schedule 13D filing with the SEC on August 18, 2011. The address of the beneficial owner is 1700 Waterfront Parkway, Building 500, Wichita, KS 67206.
(3)
The information is based on a Schedule 13G dated February 8, 2019 filed jointly by Robert J. Raymond (“Raymond”), RR Advisors, LLC (“Advisors”), RCH Black Fund GP, L.P. (“RCH GP”), and RCH Black Fund, L.P. (“RCH LP” and, together with Raymond, Advisors and RCH GP, the “Reporting
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Persons”). The principal business address of the Reporting Persons is 3953 Maple Avenue, Suite 180, Dallas, Texas 75219. According to the filing, Raymond has sole voting power and dispositive power with respect to 202,056 Trust Units; Raymond and Advisors each have shared voting and dispositive power with respect to 1,654,906 Trust Units; and RCH GP and RCH LP each have shared voting and dispositive power with respect to 1,619,837 Trust Units. According to the filing, each Reporting Person expressly disclaims (a) the existence of any group and (b) beneficial ownership with respect to any Trust Units other than the Trust Units owned of record by such Reporting Person.
(b)
Security Ownership of Management.
Not applicable.
(c)
Changes in Control.
The registrant knows of no arrangement, including any pledge by any person of securities of the registrant or any of its parents, the operation of which may at a subsequent date result in a change of control of the registrant.
Item 13.
Certain Relationships and Related Transactions, and Director Independence.
Under the terms of the Conveyance governing the net profits interest, VOC Brazos is obligated to make certain payments to the Trust on a quarterly basis. Please see “Item 1. Business — Computation of Net Proceeds” for more information about these agreements.
Administrative Services Agreement
The Trust has entered into an administrative services agreement with VOC Brazos that obligates the Trust, throughout the term of the Trust, to pay to VOC Brazos each quarter an administrative services fee for accounting, bookkeeping and informational services performed by VOC Brazos on behalf of the Trust relating to the net profits interest. The annual fee is payable in equal quarterly installments and increases by 4% each year. For 2022, 2023 and 2024, $114,330, $118,902 and $123,659, respectively, was paid to VOC Brazos as administrative fees. The administrative services agreement will terminate upon the termination of the net profits interest unless earlier terminated by mutual agreement of the Trustee and VOC Brazos.
Registration Rights
The Trust entered into a registration rights agreement with VOC Brazos in connection with VOC Brazos’ conveyance to the Trust of the net profits interest. In the registration rights agreement, the Trust agreed, for the benefit of VOC Brazos and any transferee of its Trust Units (each, a “holder”), to register the Trust Units it holds. Specifically, the Trust agreed:
•
subject to certain restrictions, to use its reasonable best efforts to file a registration statement, including, if so requested, a shelf registration statement, with the SEC as promptly as practicable following receipt of a notice requesting the filing of a registration statement from holders representing a majority of the then outstanding registrable Trust Units;
•
to use its reasonable best efforts to cause the registration statement or shelf registration statement to be declared effective under the Securities Act as promptly as practicable after the filing thereof; and
•
to continuously maintain the effectiveness of the registration statement under the Securities Act for 90 days (or for three years if a shelf registration statement is requested) after the effectiveness thereof or until the Trust Units covered by the registration statement have been sold pursuant to such registration statement or until all registrable Trust Units:
•
have been sold pursuant to Rule 144 under the Securities Act if the transferee thereof does not receive “restricted securities;”
•
have been sold in a private transaction in which the transferor’s rights under the registration rights agreement are not assigned to the transferee of the Trust Units; or
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•
become eligible for resale pursuant to Rule 144(k) (or any similar rule then in effect under the Securities Act).
The holders will have the right to require the Trust to file up to three registration statements and will have piggyback registration rights in certain circumstances.
In connection with the preparation and filing of any registration statement, VOC Brazos will bear all costs and expenses incidental to any registration statement, excluding certain internal expenses of the Trust, which will be borne by the Trustee, and any underwriting discounts and commissions, which will be borne by the seller of the Trust Units.
Item 14.
Principal Accountant Fees and Services.
The Trust does not have an audit committee. Any pre-approval and approval of all services performed by the principal auditor or any other professional service firms and related fees are granted by the Trustee.
The following table presents fees for professional audit services rendered by Grant Thornton LLP for the audit of the Trust’s financial statements for 2023 and 2024 and fees billed for other services rendered by Grant Thornton LLP.
2023
2024
Audit fees
$
266,646
$
275,348
Audit related fees
—
—
Tax fees
—
—
All other fees
—
—
Total fees
$
266,646
$
275,348
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PART IV
Item 15. Exhibit and Financial Statement Schedules
(a)(1) Financial Statements
The following financial statements are set forth under Part II, Item 8 of this Form 10-K on the pages indicated:
Page in this
Form 10-K
VOC Energy Trust
Report of Independent Registered Public Accounting Firm (PCAOB ID
Number 248)
54
Statements of Assets and Trust Corpus
55
Statements of Distributable Income
55
Statements of Changes in Trust Corpus
55
Notes to Financial Statements
56
(a)(2) Schedules
Schedules have been omitted because they are not required, not applicable or the information required has been included elsewhere herein.
(a)(3) Exhibits
Exhibit
Number
Description
3.1
—
Certificate of Trust of VOC Energy Trust. (Incorporated herein by reference to Exhibit 3.4 to the Registration Statement on Form S-1, filed on December 30, 2010 (Registration No. 333-171474))
3.2
—
Amended and Restated Trust Agreement of VOC Energy Trust, dated as of May 10, 2011, among VOC Brazos Energy Partners, L.P., The Bank of New York Mellon Trust Company, N.A., as Trustee of VOC Energy Trust, and Wilmington Trust Company, as Delaware Trustee of VOC Energy Trust. (Incorporated herein by reference to Exhibit 3.1 to the Trust’s Current Report on Form 8-K filed on May 10, 2011 (File No. 001-35160))
4.1
—
Registration Rights Agreement, dated as of May 10, 2011, by and between VOC Partners, LLC and VOC Energy Trust. (Incorporated herein by reference to Exhibit 4.1 to the Trust’s Current Report on Form 8-K filed on May 10, 2011 (File No. 0001-35160))
4.2
—
Description of Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934 (Incorporated herein by reference to Exhibit 4.2 to the Trust’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019 (File No. 001-35160))
10.1
—
Conveyance of Term Net Profits Interest and Assignment of Pre-Effective Time Payment, dated as of May 10, 2011, from VOC Brazos Energy Partners, L.P. and VOC Kansas Energy Partners, LLC, to The Bank of New York Mellon Trust Company, N.A. in its capacity as Trustee of VOC Energy Trust. (Incorporated herein by reference to Exhibit 10.1 to the Trust’s Current Report on Form 8-K filed on May 10, 2011 (File No. 001-35160))
10.2
—
Administrative Services Agreement, dated May 10, 2011, by and between VOC Brazos Energy Partners, L.P. and The Bank of New York Mellon Trust Company, N.A., in its capacity as Trustee of VOC Energy Trust. (Incorporated herein by reference to Exhibit 10.2 to the Trust’s Current Report on Form 8-K filed on May 10, 2011 (File No. 001-35160))
31.1*
—
Certification filed pursuant to Section 302 of the Sarbanes Oxley Act of 2002
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Exhibit
Number
Description
32.1*
—
Certification furnished pursuant to Section 906 of the Sarbanes Oxley Act of 2002
97.1
—
VOC Energy Trust Clawback Policy. (Incorprated herein by reference to Exhibit 97.1 to the Trust’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (File No. 1-35160))
99.1*
—
Report of Cawley, Gillespie & Associates, Inc., Petroleum Consultants
*
Filed or furnished herewith.
Item 16. Form 10-K Summary
None.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
VOC ENERGY TRUST
By:
THE BANK OF NEW YORK MELLON
TRUST COMPANY, N.A., AS TRUSTEE
By
/s/ ELAINA C. RODGERS
Elaina C. Rodgers
Vice President
March 20, 2025
The Registrant, VOC Energy Trust, has no principal executive officer, principal financial officer, board of directors or persons performing similar functions. Accordingly, no additional signatures are available and none have been provided. In signing the report above, the Trustee does not imply that it has performed any such function or that such function exists pursuant to the terms of the Trust Agreement under which it serves.
72
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.