**UNITED STATESSECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

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**FORM 10-K**

**(Mark One)**

**x**                              ANNUALREPORT TO SECTION 13 OR 15(d) OF THE SECURITIES ACT OF 1934

**forThe Fiscal Year Ended December 31, 2006**

**o**                                 TRANSITIONREPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGEACT OF 1934

**forthe transition periodfrom                            to                            **

**Commission File Number 1-33219**

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**MV OIL TRUST**

(Exact name of registrantas specified in its charter)

| **Delaware**                    | ** ** | **06-6554331**      |
|---------------------------------|------------|---------------------|
| (State or other jurisdiction of |       | (I.R.S. Employer    |
| incorporation or organization)  |       | Identification No.) |

 

| **The Bank of New York Trust Company, N.A., Trustee** | ** ** | ** ** |
|-------------------------------------------------------|------------|------------|
| **Global Corporate Trust**                            |       |       |
| **919 Congress**                                      |       |       |
| **Austin, Texas**                                     |       | **78701**  |
| (Address of principal executive offices)              |       | (Zip Code) |

 

Registrant’s telephonenumber, including area code: **(800) 852-1422**

Securities registeredpursuant to Section 12(b) of the Act:

| **Title of Each Class**       |   | **Name of  Each Exchange on which Registered** |
|-------------------------------|--------|------------------------------------------------|
| Units of  Beneficial Interest |   | New York Stock  Exchange                       |

 

Securities registered pursuant to Section 12(g) ofthe Act:

**None**

(Title of class)

Indicate by check mark if theregistrant is a well-known seasoned issuer, as defined in Rule 405 of theSecurities Act. Yes o  No x.

Indicate by check mark if theregistrant is not required to file reports pursuant to Section 13 or Section15(d) of the Act. Yes o  No x.

Indicate by check markwhether the registrant (1) has filed all reports required to be filed by Section 13or 15(d) of the Securities Exchange Act of 1934 during the preceding12 months (or for such shorter period that the Registrant was required tofile such reports), and (2) has been subject to such filing requirementsfor the past 90 days. Yes o  No x

Indicate by check mark ifdisclosure of delinquent filers pursuant to Item 405 of Regulation S-K isnot contained herein, and will not be contained, to the best of registrant’sknowledge, in definitive proxy or information statements incorporated byreference in Part III of this Form 10-K or any amendment tothis Form 10-K. x

Indicate by check markwhether the registrant is a large accelerated filer, an accelerated filer, or anon-accelerated filer. See definition of “accelerated filer and largeaccelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer  o    Acceleratedfiler  o    Non-acceleratedfiler  x

Indicate by check markwhether the registrant is a shell company (as defined in Rule 12b-2of the Act). Yes x  No o

The aggregate market value ofthe 11,500,000 Units of Beneficial Interest in MV Oil Trust held bynon-affiliates as of the last business day of the registrant’s most recentlycompleted second fiscal quarter is not determinable because the units were notissued until January 24, 2007.

Indicate the number of sharesoutstanding of each of the registrant’s classes of common stock, as of thelatest practicable date.

As of March 15, 2007, 11,500,000Units of Beneficial Interest in MV Oil Trust were outstanding.

**Documents Incorporated ByReference: None**

 

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**TABLE OF CONTENTS**

|                                               | ** ** |                                                                                                                        | **Page**   |
|-----------------------------------------------|------------|------------------------------------------------------------------------------------------------------------------------|------------|
| ** **                                    | ** ** | **PART I**                                                                                                        | ** ** |
| Forward-Looking  Statements                   | 1          |
| Glossary of Certain Oil and Natural Gas Terms | 2          |
| Item 1.                                       |       | Business                                                                                                               | 6          |
|                                          |       | General                                                                                                                | 6          |
|                                          |       | Description  of the Trust Units                                                                                        | 8          |
|                                          |       | Computation  of Net Proceeds                                                                                           | 9          |
|                                          |       | Federal  Income Tax Matters                                                                                            | 13         |
|                                          |       | Description of the Underlying Properties                                                                               | 14         |
| Item 1A.                                      |       | Risk  Factors                                                                                                          | 28         |
| Item 1B.                                      |       | Unresolved  Staff Comments                                                                                             | 38         |
| Item 2.                                       |       | Properties                                                                                                             | 38         |
| Item 3.                                       |       | Legal Proceedings                                                                                                      | 38         |
| Item 4.                                       |       | Submission  of Matters to a Vote of Security Holders                                                                   | 38         |
| ** **                                    | ** ** | **PART II**                                                                                                       | ** ** |
| Item 5.                                       |       | Market for the  Registrant’s Common Equity, Related Unitholder Matters and Issuer Purchases  of Equity Securities | 38         |
| Item 6.                                       |       | Selected Financial  Data                                                                                               | 40         |
| Item 7.                                       |       | Management’s  Discussion and Analysis of Financial Condition and Results   of Operation                           | 40         |
| Item 7A.                                      |       | Quantitative  and Qualitative Disclosures About Market Risk                                                            | 47         |
| Item 8.                                       |       | Financial  Statements and Supplementary Data                                                                           | 48         |
| Item 9.                                       |       | Changes in and  Disagreements with Accountants on Accounting and Financial Disclosure                                  | 64         |
| Item 9A.                                      |       | Controls and  Procedures                                                                                               | 64         |
| Item 9B.                                      |       | Other Information                                                                                                      | 64         |
| ** **                                    | ** ** | **PART III**                                                                                                      | ** ** |
| Item 10.                                      |       | Directors,  Executive Officers and Corporate Governance                                                                | 65         |
| Item 11.                                      |       | Executive  Compensation                                                                                                | 65         |
| Item 12.                                      |       | Security Ownership  of Certain Beneficial Owners and Management and Related Stockholder Matters                        | 65         |
| Item 13.                                      |       | Certain  Relationships and Related Transactions, and Director Independence                                             | 66         |
| Item 14.                                      |       | Principal  Accounting Fees and Services                                                                                | 67         |
| ** **                                    | ** ** | **PART IV**                                                                                                       | ** ** |
| Item 15.                                      |       | Exhibits,  Financial Statement Schedules                                                                               | 67         |
| SIGNATURES                                    | 68         |

 

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**FORWARD-LOOKINGSTATEMENTS**

This Annual Report on Form 10-K  contains forward-looking statementsabout MV Partners, LLC, which we refer to herein as “MV Partners,” and MV OilTrust, which we refer to herein as the “trust,” that are subject to risks anduncertainties and that are intended to qualify for the safe harbors fromliability established by the Private Securities Litigation Reform Act of 1995and Section 21E of the Securities Exchange Act of 1934. All statementsother than statements of historical fact included in this document, including,without limitation, statements under “Business” and “Risk Factors” regardingthe financial position, business strategy, production and reserve growth, andother plans and objectives for the future operations of MV Partners and thetrust are forward-looking statements. Such statements may be influencedby factors that could cause actual outcomes and results to differ materiallyfrom those projected. Forward-looking statements are subject to risks anduncertainties and include statements pertaining to future developmentactivities and costs and other statements in this Form 10-K that areprospective and constitute forward-looking statements.

When used in thisdocument, the words “believes,” “expects,” “anticipates,” “intends” or similarexpressions are intended to identify such forward-looking statements. Thefollowing important factors, in addition to those discussed elsewhere in this Form10-K, could affect the future results of the energy industry in general, and MVPartners and the trust in particular, and could cause actual results to differmaterially from those expressed in such forward-looking statements:

·       risksincident to the drilling and operation of oil and natural gas wells;

·       futureproduction and development costs;

·       theeffect of existing and future laws and regulatory actions;

·       theeffect of changes in commodity prices, the impact of the hedge contractsentered into by MV Partners that relate to a portion of the oil production fromthe underlying properties and conditions in the capital markets;

·       competitionfrom others in the energy industry;

·       uncertaintyof estimates of oil and natural gas reserves and production; and

·       inflation.

This Form 10-K describes other important factors thatcould cause actual results to differ materially from expectations of MVPartners and the trust, including under the heading “Risk Factors.” All writtenand oral forward-looking statements attributable to MV Partners or thetrust or persons acting on behalf of MV Partners or the trust are expresslyqualified in their entirety by such factors.

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**GLOSSARYOF CERTAIN OIL AND NATURAL GAS TERMS**

In this Form 10-K the following terms have themeanings specified below.

*Bbl*—One stock tank barrel, or 42 U.S. gallons liquidvolume, of crude oil or other liquid hydrocarbons.

*Boe*—One stock tank barrel of oil equivalent,computed on an approximate energy equivalent basis that one Bbl of crude oilequals six Mcf of natural gas and one Bbl of crude oil equals 1.54 Bbls ofnatural gas liquids.

*Btu or British Thermal Unit*—Thequantity of heat required to raise the temperature of one pound of water onedegree Fahrenheit.

*Completion*—The installation ofpermanent equipment for the production of oil or natural gas, or in the case ofa dry hole, the reporting of abandonment to the appropriate agency.

*Developed Acreage*—The number ofacres that are allocated or assignable to productive wells or wells capable ofproduction.

*Development Well*—A well drilledinto a proved oil or natural gas reservoir to the depth of a stratigraphichorizon known to be productive.

*Estimated Future Net Revenues*—Alsoreferred to as “estimated future net cash flows.” The result of applyingcurrent prices of oil, natural gas and natural gas liquids to estimated futureproduction from oil, natural gas and natural gas liquids proved reserves,reduced by estimated future expenditures, based on current costs to beincurred, in developing and producing the proved reserves, excluding overhead.

*Farm-in or Farm-out Agreement*—Anagreement under which the owner of a working interest in an oil or natural gaslease typically assigns the working interest or a portion of the workinginterest to another party who desires to drill on the leased acreage.Generally, the assignee is required to drill one or more wells in order to earnits interest in the acreage. The assignor usually retains a royalty orreversionary interest in the lease. The interest received by an assignee is a“farm-in” while the interest transferred by the assignor is a “farm-out.”

*Field*—An area consisting ofeither a single reservoir or multiple reservoirs, all grouped on or related tothe same individual geological structural feature and/or stratigraphiccondition.

*Gross Acres or Gross Wells*—Thetotal acres or wells, as the case may be, in which a working interest is owned.

*MBbl*—One thousand barrels ofcrude oil or other liquid hydrocarbons.

*MBoe*—One thousand barrels of oilequivalent.

*Mcf*—One thousand standard cubicfeet of natural gas.

*MMBbls*—One million barrels ofcrude oil or other liquid hydrocarbons.

*MMBoe*—One million barrels of oilequivalent.

*MMcf*—One million standard cubicfeet of natural gas.

*Net Acres or Net Wells*—The sum ofthe fractional working interests owned in gross acres or wells, as the case maybe.

*Net Profits Interest*—Anonoperating interest that creates a share in gross production from anoperating or working interest in oil and natural gas properties. The share ismeasured by net profits from the sale of production after deducting costsassociated with that production.

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*Net Revenue Interest*—An interestin all oil, natural gas and natural gas liquids produced and saved from, orattributable to, a particular property, net of all royalties, overridingroyalties, net profits interests, carried interests, reversionary interests andany other burdens to which the person’s interest is subject.

*Plugging and Abandonment*—Activitiesto remove production equipment and seal off a well at the end of a well’seconomic life.

*Proved Developed Non-Producing Reserves*—Proveddeveloped reserves expected to be recovered from zones behind casing in existingwells.

*Proved Developed Producing Reserves*—Proveddeveloped reserves that are expected to be recovered from completion intervalscurrently open in existing wells and capable of production to market.

*Proved Developed Reserves*—Has themeaning given to such term in Rule 4-10(a)(3) ofRegulation S-X, which defines proved developed reserves as:

Proved developed oil and gas reserves are reservesthat can be expected to be recovered through existing wells with existingequipment and operating methods. Additional oil and gas expected to be obtainedthrough the application of fluid injection or other improved recoverytechniques for supplementing the natural forces and mechanisms of primaryrecovery should be included as proved developed reserves only after testing bya pilot project or after the operation of an installed program has confirmedthrough production response that increased recovery will be achieved.

*Proved Reserves*—Has the meaninggiven to such term in Rule 4-10(a)(2) of Regulation S-X,which defines proved developed reserves as:

Proved oil and gasreserves are the estimated quantities of crude oil, natural gas, and naturalgas liquids which geological and engineering data demonstrate with reasonablecertainty to be recoverable in future years from known reservoirs underexisting economic and operating conditions, i.e., prices and costs as of thedate the estimate is made. Prices include consideration of changes in existingprices provided only by contractual arrangements, but not on escalations based uponfuture conditions.

(i)            Reservoirs areconsidered proved if economic producibility is supported by either actualproduction or conclusive formation test. The area of a reservoir consideredproved includes (A) that portion delineated by drilling and defined bygas-oil and/or oil-water contacts, if any, and (B) the immediatelyadjoining portions not yet drilled, but which can be reasonably judged aseconomically productive on the basis of available geological and engineeringdata. In the absence of information on fluid contacts, the lowest knownstructural occurrence of hydrocarbons controls the lower proved limit of thereservoir.

(ii)        Reserves which can beproduced economically through application of improved recovery techniques (suchas fluid injection) are included in the proved classification when successfultesting by a pilot project, or the operation of an installed program in thereservoir, provides support for the engineering analysis on which the projector program was based.

(iii)    Estimates of proved reservesdo not include the following: (A) Oil that may become available from knownreservoirs but is classified separately as indicated additional reserves;(B) crude oil, natural gas, and natural gas liquids, the recovery of whichis subject to reasonable doubt because of uncertainty as to geology, reservoircharacteristics, or economic factors; (C) crude oil, natural gas, andnatural gas liquids, that may occur in undrilled prospects; and (D) crudeoil, natural gas, and natural gas liquids, that may be recovered from oilshales, coal, gilsonite and other such sources.

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*ProvedUndeveloped Reserves*—Has the meaning given to such term inRule 4-10(a)(4) of Regulation S-X, which defines proveddeveloped reserves as:

Proved undeveloped oil and gas reserves are reservesthat are expected to be recovered from new wells on undrilled acreage, or fromexisting wells where a relatively major expenditure is required forrecompletion. Reserves on undrilled acreage shall be limited to those drillingunits offsetting productive units that are reasonably certain of productionwhen drilled. Proved reserves for other undrilled units can be claimed onlywhere it can be demonstrated with certainty that there is continuity ofproduction from the existing productive formation. Under no circumstancesshould estimates for proved undeveloped reserves be attributable to any acreagefor which an application of fluid injection or other improved recoverytechnique is contemplated, unless such techniques have been proved effective byactual tests in the area and in the same reservoir.

*PV-10*—The present value ofestimated future net revenues using a discount rate of 10% per annum.

*Recompletion*—The completion forproduction of an existing well bore in another formation from which that wellhas been previously completed.

*Reservoir*—A porous and permeableunderground formation containing a natural accumulation of producible oiland/or gas that is confined by impermeable rock or water barriers and isindividual and separate from other reservoirs.

*Standardized Measure of Discounted Future Net CashFlows*—Also referred to herein as “standardized measure.” Itis the present value of estimated future net revenues computed by discountingestimated future net revenues at a rate of 10% annually.

The Financial Accounting Standards Board requiresdisclosure of standardized measure of discounted future net cash flows relatingto proved oil and gas reserve quantities, per paragraph 30 of Statement ofFinancial Accounting Standards No. 69, as follows:

A standardizedmeasure of discounted future net cash flows relating to an enterprise’sinterests in (a) proved oil and gas reserves and (b) oil and gassubject to purchase under long-term supply, purchase, or similar agreements andcontracts in which the enterprise participates in the operation of theproperties on which the oil or gas is located or otherwise serves as theproducer of those reserves shall be disclosed as of the end of the year. Thestandardized measure of discounted future net cash flows relating to those twotypes of interests in reserves may be combined for reporting purposes. Thefollowing information shall be disclosed in the aggregate and for eachgeographic area for which reserve quantities are disclosed:

a.      Futurecash inflows. These shall be computed by applying year-end prices of oil andgas relating to the enterprise’s proved reserves to the year- end quantities ofthose reserves. Future price changes shall be considered only to the extentprovided by contractual arrangements in existence at year-end.

b.      Futuredevelopment and production costs. These costs shall be computed by estimatingthe expenditures to be incurred in developing and producing the proved oil andgas reserves at the end of the year, based on year-end costs and assuming continuationof existing economic conditions. If estimated development expenditures aresignificant, they shall be presented separately from estimated productioncosts.

c.      Futureincome tax expenses. These expenses shall be computed by applying the appropriateyear-end statutory tax rates, with consideration of future tax rates alreadylegislated, to the future pretax net cash flows relating to the enterprise’sproved oil and gas reserves, less the tax basis of the properties involved. Thefuture income tax expenses shall give effect to tax deductions, tax credits andallowances relating to the enterprise’s proved oil and gas reserves.

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d.      Futurenet cash flows. These amounts are the result of subtracting future developmentand production costs and future income tax expenses from future cash inflows.

e.      Discount.This amount shall be derived from using a discount rate of 10 percent ayear to reflect the timing of the future net cash flows relating to proved oiland gas reserves.

f.       Standardizedmeasure of discounted future net cash flows. This amount is the future net cashflows less the computed discount.

*Working Interest*—Also called anoperating interest. The right granted to the lessee of a property to explorefor and to produce and own oil, gas or other minerals. The working interestowner bears the exploration, development and operating costs on either a cash,penalty or carried basis.

*Workover*—Operations on aproducing well to restore or increase production.

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**PART I**

**Item 1.        *Business***

**General**

MV Oil Trust, which werefer to as the “trust,” was formed in August 2006, by MV Partners, LLC,which we refer to as “MV Partners.”

The trust is a statutory trust created under theDelaware Statutory Trust Act. The business and affairs of the trust are managedby The Bank of New York Trust Company, N.A., as trustee. The trust maintainsits offices at the office of the trustee, at 919 Congress Avenue, Austin, Texas78701. The telephone number of the trustee is 1-800-852-1422. In addition,Wilmington Trust Company acts as the Delaware trustee of the trust. TheDelaware trustee has only minimal rights and duties as are necessary to satisfythe requirements of the Delaware Statutory Trust Act.

The trustee does not maintain a website for filings bythe trust with the Securities and Exchange Commission, which we refer to as the“SEC.”  Electronic filings by the trustwith the SEC are available free of charge through the SEC’s website at www.sec.gov*.*

As of December 31,2006, the trust had no assets other than $1,000 cash and had conducted nooperations other than in connection with the initial public offering of theunits of beneficial interest in the trust, which are referred to herein as the“trust units.” On January 24, 2007, MV Partners and the trustcompleted the initial public offering of trust units. In connection with thecompletion of the initial public offering of trust units, on January 24,2007, MV Partners conveyed a term net profits interest to the trust thatrepresents the right to receive 80% of the net proceeds (calculated asdescribed below) from all of MV Partners’ interests in oil and natural gasproperties as of January 24, 2007, which is referred to herein as the “netprofits interest.” These properties are located in the Mid-Continent region inthe States of Kansas and Colorado. MV Partners’ net interests in suchproperties, after deduction of all royalties and other burdens on productionthereon as of January 24, 2007, is referred to herein as the “underlyingproperties.” As of December 31, 2006, the underlying properties producedpredominantly oil from approximately 996 wells, and the projected reserve lifeof the underlying properties was in excess of 50 years. Based on the summaryprepared by Cawley, Gillespie & Associates, Inc. of its reserve report asof December 31, 2006 for the underlying properties, which summary is includedunder Item 1 of this Form 10-K and is referred to herein as the “reservereport,” the net profits interest would entitle the trust to receive netproceeds from the sale of production of not less than 11.5 MMBoe of provedreserves during the term of the trust, calculated as 80% of the proved reservesattributable to the underlying properties expected to be produced during theterm of the trust. Of these reserves, approximately 87% were classified asproved developed producing reserves as of December 31, 2006. Production fromthe underlying properties for the year ended December 31, 2006, wasapproximately 98% oil and approximately 2% natural gas and natural gas liquids.The underlying properties are all located in mature fields that arecharacterized by long production histories and numerous additional development opportunitiesto help reduce the natural decline in production from the underlyingproperties.

The net profits interestwill terminate on the later to occur of (1) June 30, 2026, or (2) thetime when 14.4 MMBoe have been produced from the underlying properties and sold(which amount is the equivalent of 11.5 MMBoe in respect of the trust’s rightto receive 80% of the net proceeds from the underlying properties pursuant tothe net profits interest). The gross proceeds used to calculate the net profitsinterest is based on prices realized for oil, natural gas and natural gasliquids attributable to the underlying properties for each calendar quarterduring the term of the net profits interest. MV Partners deducts from the grossproceeds all hedge payments made by MV Partners to hedge contractcounterparties upon monthly settlements of existing hedge contracts andderivatives to which MV Partners was a party as of January 24, 2007, which isreferred to herein as the “hedge contracts.” In addition, in connection with theconveyance of the net profits interest, on January 24, 2007, MV Partners alsoassigned to the trust the right to receive 80% of all amounts payable to MVPartners from hedge contract counterparties upon monthly 

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settlementsof the hedge contracts. In calculating the net proceeds used to calculate thenet profits interest, MV Partners deducts from the gross proceeds from theunderlying properties all lease operating expenses, maintenance expenses andcapital expenditures (including the cost of workovers and recompletions,drilling costs and development costs), amounts that may be reserved for futurecapital expenditures (which reserve amounts may not exceed $1.0 million inthe aggregate at any given time), post-production costs and production andproperty taxes paid by MV Partners.

Net proceeds payable tothe trust depend upon production quantities, sales prices of oil, natural gasand natural gas liquids, and costs to develop and produce the oil, natural gasand natural gas liquids. If at any time costs should exceed gross proceeds,neither the trust nor the trust unitholders would be liable for the excesscosts; the trust, however, would not receive any net proceeds until future netproceeds exceed the total of those excess costs, plus interest at the primerate.

The trust will makequarterly cash distributions of substantially all of its quarterly cashreceipts, after deduction of fees and expenses for the administration of thetrust, to holders of its trust units during the term of the trust. The firstquarterly distribution was $1.0122 per trust unit and was made on February 23,2007 to trust unitholders owning trust units on February 15, 2007. Thetrust’s first quarterly distribution consisted of an amount in cash paid by MVPartners equal to the amount that would have been payable to the trust had thenet profits interest been in effect during the period from July 1, 2006through December 31, 2006. Furthermore, this cash payment included 80% ofall amounts paid to MV Partners from hedge contract counterparties forsettlements related to the period from July 1, 2006 through December 31,2006. As a result of the long period of time that was included in the firstquarterly distribution, subsequent quarterly distributions are likely to beless than the initial distribution. The second quarterly distribution isexpected to be made on or about April 25, 2007 to trust unitholders owningtrust units on April 16, 2007. The second quarterly distribution willconsist of the net proceeds of production collected from January 24, 2007until March 31, 2007, together with 80% of all amounts payable to MVPartners from hedge contract counterparties during such period resulting fromthe monthly settlements of the hedge contracts. In addition, in connection withthe trust’s second quarterly distribution, MV Partners will pay the trust anamount equal to the amount that would have been payable to the trust as of January 24,2007 had the net profits interest been in effect since January 1, 2007.Furthermore, this cash payment by MV Partners will include 80% of all amountspaid to MV Partners from hedge contract counterparties for settlements relatedto the period from January 1, 2007 to January 24, 2007. Becausepayments to the trust will be generated by depleting assets and the trust has afinite life with the production from the underlying properties diminishing overtime, a portion of each distribution will represent a return of the originalinvestment in the trust units.

The business and affairsof the trust are managed by the trustee, and MV Partners and its affiliateshave no ability to manage or influence the operations of the trust. Theproperties comprising the underlying properties for which MV Partners isdesignated as the operator are currently operated on a contract operator basisby Vess Oil Corporation, which we refer to as “Vess Oil,” and Murfin DrillingCompany, Inc., which we refer to as “Murfin Drilling,” each of which is anaffiliate of MV Energy, LLC, the sole manager of MV Partners.

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**Description of theTrust Units**

Each trust unit is a unitof the beneficial interest in the trust and is entitled to receive cashdistributions from the trust on a pro rata basis. Each trust unitholder has thesame rights regarding each of his trust units as every other trust unitholderhas regarding his units. The trust units are in book-entry form only and arenot represented by certificates. The trust had 11,500,000 trust unitsoutstanding as of March 15, 2007.

**Distributions andIncome Computations**

Each quarter, the trusteewill determine the amount of funds available for distribution to the trustunitholders. Available funds are the excess cash, if any, received by the trustfrom the net profits interest, payments from the hedge contracts and othersources (such as interest earned on any amounts reserved by the trustee) thatquarter, over the trust’s liabilities for that quarter. Available funds will bereduced by any cash the trustee decides to hold as a reserve against futureliabilities. It is expected that quarterly cash distributions during the termof the trust, other than the first quarterly cash distribution, will be made bythe trustee on or before the 25th day of the month following the end of eachquarter to the trust unitholders of record on the 15th day of the month following the end of eachquarter (or the next succeeding business day). The first distribution was$1.0122 per unit and was made on February 23, 2007 to trust unitholdersowning trust units on February 15, 2007.

Unless otherwise advisedby counsel or the IRS, the trustee will treat the income and expenses of thetrust for each quarter as belonging to the trust unitholders of record on thequarterly record date. For, federal income tax purposes, trust unitholders musttake into account items of income, gain, loss, deduction and credit consistentwith their methods of accounting and without regard to the taxable year oraccounting method employed by the trust and without regard to the quarter thetrust makes distributions related to those items to the trust unitholders. Variancesbetween taxable income and cash distributions may occur. For example, thetrustee could establish a reserve in one quarter using funds that would beincluded in income in the quarter in which the reserve is created but may notresult in a tax deduction or a distribution until a later quarter or possiblyin a later taxable year. Similarly, the trustee could also make a payment inone quarter that would be amortized for income tax purposes over severalquarters. See “—Federal Income Tax Matters.”

**Periodic Reports**

The trustee will file allrequired trust federal and state income tax and information returns. Thetrustee will prepare and mail to trust unitholders annual reports that trustunitholders need to correctly report their share of the income and deductionsof the trust. The trustee will also cause to be prepared and filed reportsrequired to be filed under the Securities Exchange Act of 1934, as amended, andby the rules of any securities exchange or quotation system on which thetrust units are listed or admitted to trading, and will also cause the trust tocomply with all of the provisions of the Sarbanes-Oxley Act, includingbut not limited to, establishing, evaluating and maintaining a system ofinternal controls over financial reporting in compliance with the requirementsof Section 404 thereof.

Each trust unitholder andhis representatives may examine, for any proper purpose, during reasonablebusiness hours, the records of the trust and the trustee.

**Liability of TrustUnitholders**

Under the DelawareStatutory Trust Act, trust unitholders are entitled to the same limitation ofpersonal liability extended to stockholders of private corporations for profitunder the General Corporation Law of the State of Delaware. No assurance can begiven, however, that the courts in jurisdictions outside of Delaware will giveeffect to such limitation.

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**Voting Rights ofTrust Unitholders**

**The trustee or trust unitholdersowning at least 10% of the outstanding trust units may call meetings of trustunitholders. The trust is responsible for all costs associated with calling ameeting of trust unitholders unless such meeting is called by the trustunitholders, in which case the trust unitholders are responsible for all costsassociated with calling such meeting of trust unitholders. Meetings must beheld in such location as is designated by the trustee in the notice of suchmeeting. The trustee must send written notice of the time and place of themeeting and the matters to be acted upon to all of the trust unitholders atleast 20 days and not more than 60 days before the meeting. Trust unitholdersrepresenting a majority of trust units outstanding must be present orrepresented to have a quorum. Each trust unitholder is entitled to one vote foreach trust unit owned.**

**Unlessotherwise required by the trust agreement, a matter may be approved ordisapproved by the vote of a majority of the trust units held by the trustunitholders at a meeting where there is a quorum. This is true even if amajority of the total trust units did not approve it. The affirmative vote ofthe holders of a majority of the outstanding trust units is required to:**

**·****     **dissolvethe trust;

**·****     **removethe trustee or the Delaware trustee;

**·****     **amendthe trust agreement (except with respect to certain matters that do notadversely affect the rights of trust unitholders in any material respect);

**·****     **mergeor consolidate the trust with or into another entity; or

**·****     **approvethe sale of all or any material part of the assets of the trust.

In addition, certainamendments to the trust agreement may be made by the trustee without approvalof the trust unitholders. The trustee must consent before all or any part ofthe trust assets can be sold except in connection with the dissolution of thetrust or limited sales directed by MV Partners in conjunction with its sale ofunderlying properties.

**Duration of theTrust; Sale of the Net Profits Interest**

**Thetrust will remain in existence until the later to occur of (1) June 30, 2026,or (2) the time when 14.4 MMBoe have been produced from the underlyingproperties and sold (which amount is the equivalent of 11.5 MMBoe in respect ofthe trust's right to receive 80% of the net proceeds from the underlyingproperties pursuant to the net profits interest). The trust will dissolve priorto its termination if:**

**·****     **thetrust sells the net profits interest;

**·****     **annualgross proceeds attributable to the net profits interest are less than $1million for each of two consecutive years;

**·****     **theholders of a majority of the outstanding trust units vote in favor ofdissolution; or

**·****     **judicialdissolution of the trust.

**Thetrustee would then sell all of the trust's assets, either by private sale orpublic auction, and distribute the net proceeds of the sale to the trustunitholders.**

**Computation of Net Proceeds**

The provisions of theconveyance governing the computation of the net proceeds are detailed andextensive. The following information summarizes the material informationcontained in the conveyance 

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relatedto the computation of the net proceeds. For more detailed provisions concerningthe net profits interest, you should read the conveyance, which is referencedas an exhibit to this Form 10-K.

**Net ProfitsInterest**

The term net profits interest was conveyed to thetrust by MV Partners on January 24, 2007 by means of a conveyanceinstrument that has been recorded in the appropriate real property records ineach county in Kansas and Colorado where the oil and natural gas properties towhich the underlying properties relate are located. The net profits interestburdens the net interests owned by MV Partners in the properties comprising theunderlying properties in existence as of January 24, 2007.

The amounts paid to the trust for the net profitsinterest are based on the definitions of “gross proceeds” and “net proceeds”contained in the conveyance and described below. Under the conveyance, netproceeds are computed quarterly, and 80% of the aggregate net proceedsattributable to a computation period will be paid to the trust on or before the25th day of the month following the computationperiod. MV Partners will not pay to the trust any interest on the net proceedsheld by MV Partners prior to payment to the trust. The trustee will makedistributions to trust unitholders quarterly. See “—Description of the TrustUnits—Distributions and Income Computations.”

“Gross proceeds”means:

·       theaggregate amount received by MV Partners from sales of oil, natural gas andnatural gas liquids produced from the underlying properties (other than amountsreceived for certain future non-consent operations), *less*

·       theaggregate amounts paid by MV Partners upon settlement of the hedge contracts ona quarterly basis, as specified in the hedge contracts.

Gross proceeds does not include consideration for thetransfer or sale of any underlying property by MV Partners or any subsequentowner to any new owner unless the net profits interest is released (as ispermitted in certain circumstances). Gross proceeds also does not include anyamount for oil, natural gas or natural gas liquids lost in production ormarketing or used by the owner of the underlying properties in drilling,production and plant operations. Gross proceeds includes payments for futureproduction if they are not subject to repayment in the event of insufficientsubsequent production.

“Net proceeds”means gross proceeds less the following:

·       allpayments to mineral or landowners, such as royalties or other burdens againstproduction, delay rentals, shut-in oil and natural gas payments, minimumroyalty or other payments for drilling or deferring drilling;

·       anytaxes paid by the owner of an underlying property to the extent not deducted incalculating gross proceeds, including estimated and accrued general property(ad valorem), production, severance, sales, gathering, excise and other taxes;

·       anyextraordinary taxes or windfall profits taxes that may be assessed in thefuture that are based on profits realized or prices received for productionfrom the underlying properties;

·       costspaid by an owner of a property comprising the underlying properties under anyjoint operating agreement;

·       allother costs and expenses, capital costs and liabilities of exploring for,drilling, recompleting, workovers, operating and producing oil, natural gas andnatural gas liquids, including allocated expenses such as labor, vehicle andtravel costs and materials and any plugging and abandonment liabilities (net ofany capital costs for which a reserve had already been made to the extent such 

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capital costs are incurredduring the computation period) other than costs and expenses for certain futurenon-consent operations;

·       costsor charges associated with gathering, treating and processing oil, natural gasand natural gas liquids;

·       anyoverhead charge incurred pursuant to any operating agreement relating to anunderlying property, including the overhead fee payable by MV Partners to VessOil and Murfin Drilling as described below;

·       costspaid to counterparties under the hedge contracts or to the persons that providecredit to maintain any hedge contracts, excluding any hedge settlement amounts;

·       amountspreviously included in gross proceeds but subsequently paid as a refund,interest or penalty;

·       costsand expenses for renewals or extensions of leases; and

·       atthe option of MV Partners (or any subsequent owner of the underlyingproperties), amounts reserved for approved capital expenditure projects,including well drilling, recompletion and workover costs, which amounts will atno time exceed $1.0 million in the aggregate, and will be subject to thelimitations described below.

During each twelve-month period beginning on thelater to occur of (1) June 30, 2023 and (2) the time when 13.2MMBoe have been produced from the underlying properties and sold (which is theequivalent of 10.6 MMBoe in respect of the net profits interest) (in eithercase, the “Capital Expenditure Limitation Date”), the sum of the capitalexpenditures and amounts reserved for approved capital expenditure projects forsuch twelve-month period may not exceed the Average Annual CapitalExpenditure Amount. The “Average Annual Capital Expenditure Amount” means thequotient of (x) the sum of the capital expenditures and amounts reservedfor approved capital expenditure projects with respect to the three twelve-monthperiods ending on the Capital Expenditure Limitation Date, divided by(y) three. Commencing on the Capital Expenditure Limitation Date, and eachanniversary of the Capital Expenditure Limitation Date thereafter, the AverageAnnual Capital Expenditure Amount will be increased by 2.5% to account forexpected increased costs due to inflation.

As is customary in the oil and natural gas industry,MV Partners pays an overhead fee to Vess Oil and Murfin Drilling to operate theunderlying properties on behalf of MV Partners. The operating activitiesinclude various engineering, accounting and administrative functions. The feeis based on a monthly charge per active operated well, which totaled $2.2 millionin 2006 for all of the properties comprising the underlying properties forwhich MV Partners was designated as the operator. The fee is adjusted annuallyand will increase or decrease each year based on changes in the year-end indexof average weekly earnings of crude petroleum and natural gas workers.

In the event that the net proceeds for any computationperiod is a negative amount, the trust will receive no payment for that period,and any such negative amount plus accrued interest will be deducted from grossproceeds in the following computation period for purposes of determining thenet proceeds for that following computation period.

Gross proceeds and netproceeds are calculated on a cash basis, except that certain costs, primarilyad valorem taxes and expenditures of a material amount, may be determined on anaccrual basis.

**Hedge Contracts**

MVPartners has entered into certain hedge contracts and derivative arrangementsrelated to the oil production from the underlying properties for the years 2007through 2010. For the years 2007 and 2008, 

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MV Partners has entered into swap contracts andcostless collars at prices ranging from $56 to $68 per barrel of oil that hedgeapproximately 83% to 85% of expected production from the underlying propertiesthat are classified as proved developed producing in the reserve report. Forthe years 2009 and 2010, MV Partners has entered into swap contracts at pricesranging from $63 to $71 per barrel of oil that hedge approximately 80% ofexpected production from the underlying properties that are classified asproved developed producing in the reserve report. MV Partners has assignedto the trust the right to receive 80% of all payments payable toMV Partners from hedge contract counterparties upon monthly settlements ofthe hedge contracts. From January 1, 2007 through December 31, 2010,MV Partners’ crude oil price risk management positions in swap contracts andcollar arrangements are as follows:

| ** **                                 | ** ** | **Fixed Price Swaps** | ** ** | **Collars**         | ** ** |
|--------------------------------------------|------------|---------------------------------|------------|---------------------|------------|
| ** **                                 | ** ** | ** **                      | ** ** | **Weighted**        | ** ** | ** ** | ** ** | **Weighted Average  Price  (Per Bbl)** | ** ** |
| **Year Ended December 31,** | ** ** | ** **                      | ** ** | **Volumes  (Bbls)** | ** ** | **Average Price  (Per Bbl)** | ** ** | **Volumes  (Bbls)** | ** ** | **Floor** | ** ** | **Ceiling** | ** ** |
| 2007                                       |       | 687,000                         |       |                | 62.52      |   |   | 120,000 |   | $ | 61.00 |   | $ | 68.00 |   |
| 2008                                       |       | 779,000                         |       |                | 58.79      |   |   | — |   | — |   | — |   |
| 2009                                       |       | 678,000                         |       |                | 66.24      |   |   | — |   | — |   | — |   |
| 2010                                       |       | 637,800                         |       |                | 65.03      |   |   | — |   | — |   | — |   |
|                                            |            |                                 |            |                     |            |  |  |  |  |  |  |  |  |  |  |  |  |

 

**AdditionalProvisions**

If a controversyarises as to the sales price of any production, then for purposes ofdetermining gross proceeds:

·       amountswithheld or placed in escrow by a purchaser are not considered to be receivedby the owner of the underlying property until actually collected;

·       amountsreceived by the owner of the underlying property and promptly deposited with anonaffiliated escrow agent will not be considered to have been received untildisbursed to it by the escrow agent; and

·       amountsreceived by the owner of the underlying property and not deposited with anescrow agent will be considered to have been received.

The trustee is not obligated to return any cashreceived from the net profits interest. Any overpayments made to the trust byMV Partners due to adjustments to prior calculations of net proceeds orotherwise will reduce future amounts payable to the trust until MV Partnersrecovers the overpayments plus interest at the prime rate.

The conveyance generally permits MV Partners totransfer without the consent or approval of the trust unitholders all or anypart of its interest in the underlying properties, subject to the net profitsinterest. The trust unitholders are not entitled to any proceeds of a sale ortransfer of MV Partners’ interest unless the trust is required to sell the netprofits interest as to such interest. Following a sale or transfer, theunderlying properties will continue to be subject to the net profits interest,and the net proceeds attributable to the transferred property will becalculated as part of the computation of net proceeds described in this Form 10-K.

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In addition, MV Partners may, without the consent ofthe trust unitholders, require the trust to release the net profits interestassociated with any lease that accounts for less than or equal to 0.25% of thetotal production from the underlying properties in the prior 12 months andprovided that the net profits interest covered by such releases cannot exceed,during any 12-month period, an aggregate fair market value to the trustof $500,000. These releases will be made only in connection with a sale by MVPartners of the relevant underlying properties and are conditioned upon thetrust receiving an amount equal to the fair value to the trust of such netprofits interest. Any net sales proceeds paid to the trust are distributable totrust unitholders for the quarter in which they are received.

As the designated operator of a property comprisingthe underlying properties, MV Partners may enter into farm-out,operating, participation and other similar agreements to develop the property.MV Partners may enter into any of these agreements without the consent orapproval of the trustee or any trust unitholder.

MV Partners and any transferee of an underlyingproperty will have the right to abandon any well or property if it reasonablybelieves the well or property ceases to produce or is not capable of producingin commercially paying quantities. In making such decisions, MV Partners or anytransferee of an underlying property is required under the applicableconveyance to act as a reasonably prudent operator in the State of Kansas underthe same or similar circumstances would act if it were acting with respect toits own properties, disregarding the existence of the net profits interest as aburden on such property. Upon termination of the lease, the portion of the netprofits interest relating to the abandoned property will be extinguished.

MV Partners must maintainbooks and records sufficient to determine the amounts payable for the net profitsinterest to the trust. Quarterly and annually, MV Partners must deliver to thetrustee a statement of the computation of the net proceeds for each computationperiod. The trustee has the right to inspect and copy the books and recordsmaintained by MV Partners during normal business hours and upon reasonablenotice.

**Federal Income Tax Matters**

Tax counsel to the trust advised the trust at the timeof formation that, for federal income tax purposes, in its opinion the trustwill be treated as a grantor trust and not as an unincorporated businessentity. No ruling has been or will be requested from the IRS with respect tothe federal income tax treatment of the trust, including as to the status ofthe trust as a grantor trust for such purposes. Thus, no assurance can beprovided that the tax treatment of the trust would be sustained by a court ifcontested by the IRS or another tax authority. As a grantor trust, the trustwill not be subject to federal income tax at the trust level. Rather, eachtrust unitholder will be considered for federal income tax purposes to own itsproportionate share of the trust’s assets directly as though no trust were inexistence. Thus, each trust unitholder will be subject to tax on itsproportionate share of the income and gain attributable to the assets of thetrust and will be entitled to claim its proportionate share of the deductionsand expenses attributable to the assets of the trust, subject to applicablelimitations, in accordance with the trust unitholder’s tax method of accountingand without regard to the taxable year or accounting method employed by thetrust.

On the basis of that advice, the trust will fileannual information returns reporting to the trust unitholders all items ofincome, gain, loss, deduction and credit. The trust will allocate items ofincome, gain, loss, deductions and credits to trust unitholders based on recordownership at each quarterly record date. It is possible that the IRS or anothertax authority could disagree with this allocation method and could assert thatincome and deductions of the trust should be determined and allocated on adaily, prorated or other basis, which could require adjustments to the taxreturns of the trust unitholders affected by the issue and result in anincrease in the administrative expense of the trust in subsequent periods.

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Tax counsel to the trust also advised the trust at thetime of formation that, for federal income tax purposes, based uponrepresentations made by MV Partners regarding the expected economic life of theunderlying properties and the expected duration of the net profits interest, inits opinion the net profits interest should be treated as a “productionpayment” under Section 636 of the Internal Revenue Code of 1986, as amended, orotherwise as a debt instrument. On the basis of that advice, the trust willtreat the net profits interest as indebtedness subject to tax regulationsapplicable to contingent payment debt instruments, and by purchasing trustunits, a trust unitholder will agree to be bound by the trust’s application ofthose regulations, including the trust’s determination of the rate at whichinterest will be deemed to accrue on the net profits interest. A trustunitholder may obtain the projected payment schedule for the net profitsinterest by submitting a request for such information to MV Partners at 250 N.Water, Suite 300, Wichita, Kansas 67202, Attention: President. No assurance canbe given that the IRS or another taxing authority will not assert that the netprofits interest should be treated differently. Any such different treatmentcould affect the timing and character of income, gain or loss in respect of an investmentin trust units and could require a trust unitholder to accrue income at a ratedifferent than that determined by the trust.

Tax counsel to the trustadvised the trust at the time of formation that, for federal income tax purposes,in its opinion the net profits interest should not be integrated with the hedgecontracts. Although not definitively addressed by existing authorities, the federalincome tax treatment of the net profits interest could be adversely affected bythe right to receive payments under the hedge contracts. Specifically, theright to receive payments on the hedge contracts could be integrated with thenet profits interest and deemed to be a source other than production forrepayment of the net profits interest, which characterization could adverselyaffect the treatment of the net profits interest as a production payment, andthus a debt instrument, for federal income tax purposes.

**Description of the Underlying Properties**

The underlying properties consist of MV Partners’ netinterests in all of its oil and natural gas properties as of January 24,2007, which properties are located in the Mid-Continent region in the States ofKansas and Colorado. Affiliates of MV Partners are currently the operators orcontract operators of substantially all of the properties comprising theunderlying properties.

MV Partners’ interests in the properties comprisingthe underlying properties require MV Partners to bear its proportionate share,along with the other working interest owners, of the costs of development andoperation of such properties. The properties comprising the underlyingproperties are burdened by non-working interests owned by third parties,consisting primarily of royalty interests retained by the owners of the landsubject to the working interests. These landowners’ royalty interests typicallyentitle the landowner to receive 12.5% of the revenue derived from oil andnatural gas production resulting from wells drilled on the landowner’s land,without any deduction for drilling costs or other costs related to productionof oil and natural gas. A working interest percentage represents a workinginterest owner’s proportionate ownership interest in a property in relation toall other working interest owners in that property, whereas a net revenueinterest percentage is a working interest owner’s percentage of productionafter reducing such percentage by the percentage of burdens on such productionsuch as royalties and overriding royalties.

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Based on the reserve report, the net profits interestwould entitle the trust to receive net proceeds from the sale of production of notless than 11.5 MMBoe of proved reserves attributable to the underlyingproperties expected to be produced during the term of the net profits interest,calculated as 80% of the proved reserves attributable to the underlyingproperties expected to be produced during the term of the net profits interest.The reserves attributable to the underlying properties include all reservesexpected to be economically produced during the life of the properties, whereasthe trust is entitled to only receive 80% of the net proceeds from the sale ofproduction of oil, natural gas and natural gas liquids attributable to theunderlying properties during the term of the net profits interest.

The Mid-Continent regionis a mature producing region with well-known geologic characteristics. Most ofthe production from the underlying properties consists of desirable crude oilof a quality level between sweet and sour with 33 to 34 gravity averages. Mostof the producing wells to which the underlying properties relate are relativelyshallow, ranging from 600 to 4,500 feet, and many are completed to multipleproducing zones. In general, the producing wells to which the underlyingproperties relate have stable production profiles and their production isgenerally long-lived, often with total projected economic lives in excess of50 years.

**Reserves**

Cawley, Gillespie & Associates, Inc., independentpetroleum and geological engineers, estimated oil, natural gas and natural gasliquid reserves attributable to the underlying properties as of December 31,2006. Numerous uncertainties are inherent in estimating reserve volumes andvalues, and the estimates are subject to change as additional informationbecomes available. The reserves actually recovered and the timing of productionof the reserves may vary significantly from the original estimates.

The discounted estimated future net revenues presentedbelow were prepared using assumptions required by the SEC. Except to the extentotherwise described below, these assumptions include the use of pricesfor oil, natural gas and natural gas liquids as of December 31, 2006, of $56.81per Bbl of oil, $4.74 per Mcf of natural gas and $43.85 per Bbl of natural gasliquids, net of pricing differentials, as well as costs for estimated futuredevelopment and production expenditures to produce the proved reserves as of December 31,2006. Because oil, natural gas and natural gas liquid prices are influenced bymany factors, use of prices as of December 31, 2006, as required by theSEC, may not be the most accurate basis for estimating future revenues ofreserve data. Future net cash flows are discounted at an annual rate of 10%.There is no provision for federal or state income taxes with respect to thefuture net cash flows attributable to the underlying properties because futurenet revenues are not subject to taxation at the MV Partners or trust level.

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*Proved Reserves of Underlying Properties.**  *The following table sets forth, as of December 31,2006, certain estimated proved reserves, estimated future net revenues and thediscounted present value thereof attributable to the underlying properties derivedfrom the reserve report. A summary of the reserve report is included belowunder “—Summary Reserve Report.”

| ** **                                   | ** ** | **Underlying  Properties(1)**                                                            | ** ** | **80% of Underlying  Properties(2)** | ** ** |
|----------------------------------------------|------------|------------------------------------------------------------------------------------------|------------|------------------------------------------------|------------|
| ** **                                   | ** ** | **(in thousands, except Bbl, Mcf   and Boe amounts)** | ** ** |
| Proved Reserves:                             |       |                                                                                     |       |                                           |       |   |   |   |   |
| Oil (MBbls)                                  |       |                                                                                     | 17,789     |                                           |       |   | 11,213 |   |   |
| Natural gas (MMcf)                           |       |                                                                                     | 1,283      |                                           |       |   | 929 |   |   |
| Natural gas liquids  (MBbls)                 |       |                                                                                     | 103        |                                           |       |   | 70 |   |   |
| Oil equivalents (MBoe)                       |       |                                                                                     | 18,070     |                                           |       |   | 11,413 |   |   |
| Future net revenues                          |       |                                                                                     | $          | 554,320                                        |       |   |   | $ | 389,546 |   |   |
| Discounted estimated  future net revenues(3) |       |                                                                                     | $          | 275,108                                        |       |   |   | $ | 215,384 |   |   |
| Standardized measure(4)                      |       |                                                                                     | $          | 275,108                                        |       |   |   | $ | 215,384 |   |   |

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(1)          Reserve volumes andestimated future net revenues for underlying properties reflect volumes andrevenues attributable to MV Partners’ net interests in the properties comprisingthe underlying properties.

(2)          Reflects 80% of provedreserves attributable to the underlying properties expected to be producedwithin the term of the net profits interest based on the reserve report.

(3)   The presentvalue of future net revenues for the underlying properties was determined usinga discount rate of 10% per annum.

(4)          As of December 31,2006, MV Partners was structured as a limited liability company that was taxedas a partnership for federal income tax purposes. Accordingly, no provision forfederal or state income taxes has been provided because taxable income waspassed through to the members of MV Partners. Therefore, the standardizedmeasure of the underlying properties is equal to the PV-10, which totaled$275.1 million as of December 31, 2006.

Information concerning historical changes in netproved reserves attributable to the underlying properties, and the calculationof the standardized measure of discounted future net revenues related thereto,is contained in Note C to the statements of revenue and direct operating expensesfor the underlying properties included in this Form 10-K. MV Partners hasnot filed reserve estimates covering the underlying properties with any otherfederal authority or agency.

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Thefollowing table summarizes the changes in estimated proved reserves of theunderlying properties for the periods indicated.

| ** **                                          | ** ** | **Underlying Properties** | ** ** |
|-----------------------------------------------------|------------|--------------------------------|------------|
| ** **                                          | ** ** | **Oil  (MBbl)**                | ** ** | **Natural Gas  (MMcf)** | ** ** | **Natural Gas  Liquids  (MBbl)** | ** ** | **Oil Equivalents  (MBoe)** | ** ** |
| Balance, January 1,  2004                      |       | 15,596                         |       |   | 1,526 |   |   |   | 114 |   |   |   | 15,924 |   |   |
| Revisions, extensions, discoveries and additions    |       | 1,447                          |       |   | (283 | ) |   |   | (1 | ) |   |   | 1,399 |   |   |
| Production                                          |       | (1,127                         | )          |   | (104 | ) |   |   | (5 | ) |   |   | (1,147 | ) |   |
| Balance,  December 31, 2004                    |       | 15,915                         |       |   | 1,139 |   |   |   | 108 |   |   |   | 16,176 |   |   |
| Revisions, extensions, discoveries and additions(1) |       | 3,049                          |       |   | 309 |   |   |   | 5 |   |   |   | 3,104 |   |   |
| Production                                          |       | (1,058                         | )          |   | (89 | ) |   |   | (5 | ) |   |   | (1,076 | ) |   |
| Balance,  December 31, 2005                    |       | 17,906                         |       |   | 1,359 |   |   |   | 109 |   |   |   | 18,203 |   |   |
| Revisions, extensions, discoveries and additions    |       | 907                            |       |   | 25 |   |   |   | — |   |   |   | 911 |   |   |
| Production                                          |       | (1,024                         | )          |   | (101 | ) |   |   | (6 | ) |   |   | (1,045 | ) |   |
| Balance, December 31,  2006                    |       | 17,789                         |       |   | 1,283 |   |   |   | 103 |   |   |   | 18,070 |   |   |
| Proved Developed  Reserves:                         |       |                           |       |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance,  December 31, 2003                    |       | 14,913                         |       |   | 1,349 |   |   |   | 114 |   |   |   | 15,212 |   |   |
| Balance,  December 31, 2004                    |       | 15,317                         |       |   | 1,139 |   |   |   | 108 |   |   |   | 15,577 |   |   |
| Balance,  December 31, 2005                    |       | 15,888                         |       |   | 1,063 |   |   |   | 109 |   |   |   | 16,136 |   |   |
| Balance, December 31,  2006                    |       | 15,828                         |       |   | 1,283 |   |   |   | 103 |   |   |   | 16,109 |   |   |

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(1)          Reserverevisions in 2005 reflect the increase in crude oil prices during the yearwhich has lengthened the economic life of the underlying properties and therebyincreased recoverable reserves. In addition, in 2005 MV Partners expanded thescope of its maintenance and development project scheduling from a forwardrange of 24 to 36 months to 60 months, which also increasedrecoverable reserves. This expanded scope reflects management’s budgetedproject activity over the 60 month period commencing January 1, 2006.The expanded scope accommodates additional infield drilling, recompletion andworkover projects in the El Dorado Area in addition to 14 Bemis infielddrilling locations that have been further refined by recent 3-D seismicactivity.

**Producing Acreageand Well Counts**

For the following data, “gross” refers to the totalwells or acres in which MV Partners owns a working interest and “net” refers togross wells or acres multiplied by the percentage working interest owned by MVPartners. Although many of MV Partners’ wells produce both oil and natural gas,a well is categorized as an oil well or a natural gas well based upon the ratioof oil to natural gas production.

Theunderlying properties are interests in developed properties located in oil andnatural gas producing regions of Kansas and eastern Colorado. The following isa summary of the approximate acreage of the underlying properties at December 31,2006. Undeveloped acreage is not significant.

| ** **             | ** ** | **Gross**   | ** ** | **Net** | ** ** |
|------------------------|------------|-------------|------------|---------|------------|
| ** **             | ** ** | **(acres)** | ** ** |
| El Dorado Area         |       | 15,405      |       | 15,393  |       |
| Northwest Kansas  Area |       | 11,885      |       | 11,840  |       |
| Other                  |       | 20,350      |       | 16,649  |       |
| Total                  |       | 47,640      |       | 43,882  |       |

 

The following is a summaryof the producing wells on the underlying properties as of December 31,2006:

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| ** **  | ** ** | **Operated Wells** | ** ** | **Non-Operated Wells** | ** ** | **Total** | ** ** |
|-------------|------------|-------------------------|------------|-----------------------------|------------|-----------|------------|
| ** **  | ** ** | **Gross**               | ** ** | **Net**                     | ** ** | **Gross** | ** ** | **Net** | ** ** | **Gross** | ** ** | **Net** | ** ** |
| Oil         |       |                    | 918        |                        |       | 902       |       |   | 72 |   |   |   | 10 |   |   |   | 990 |   |   | 912 |   |
| Natural gas |       |                    | 5          |                        |       | 4         |       |   | 1 |   |   |   | — |   |   |   | 6 |   |   | 4 |   |
| Total       |       |                    | 923        |                        |       | 906       |       |   | 73 |   |   |   | 10 |   |   |   | 996 |   |   | 916 |   |

 

Thefollowing is a summary of the number of developmental wells drilled by MVPartners on the underlying properties during the last three years. MV Partnersdid not drill any exploratory wells during the periods presented.

| ** **        | ** ** | **Year Ended December 31,** | ** ** |
|-------------------|------------|--------------------------------------------|------------|
| ** **        | ** ** | **2004**                                   | ** ** | **2005** | ** ** | **2006** | ** ** |
| ** **        | ** ** | **Gross**                                  | ** ** | **Net** | ** ** | **Gross** | ** ** | **Net** | ** ** | **Gross** | ** ** | **Net** | ** ** |
| Completed:        |       |                                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Oil wells         |       |                                       | 8          |   |   |   | 8 |   |   |   | 6 |   |   | 6 |   |   | 10 |   |   |   | 10 |   |   |
| Natural gas wells |       |                                       | —     |   |   |   | — |   |   |   | — |   |   | — |   |   | — |   |   |   | — |   |   |
| Non-productive    |       |                                       | 1          |   |   |   | 1 |   |   |   | 1 |   |   | 0.9 |   |   | — |   |   |   | — |   |   |
| Total             |       |                                       | 9          |   |   |   | 9 |   |   |   | 7 |   |   | 6.9 |   |   | 10 |   |   |   | 10 |   |   |

 

During the year ended December 31, 2006, MVPartners drilled, completed and commenced production with respect to 10 wellson the underlying properties. MV Partners commenced drilling on one additional wellin the El Dorado Area near the end of 2006 and has commenced completion operations.MV Partners also drilled two additional Bemis Field wells which were completedin the first quarter of 2007.

Thefollowing table shows the average sales prices per Bbl of oil and Mcf ofnatural gas produced and the production costs and production and property taxesper Boe for the underlying properties. Sales volumes for natural gas liquidsduring the periods presented were not significant. Average prices do notinclude the effect of hedge and other derivative activity.

| ** **                               | ** ** | **Year Ended December 31,** | ** ** |
|------------------------------------------|------------|--------------------------------------------|------------|
| ** **                               | ** ** | **2004**                                   | ** ** | **2005** | ** ** | **2006** | ** ** |
| Sales prices:                            |       |                                       |       |   |   |   |   |
| Oil (per Bbl)                            |       | $                                          | 39.37      |   | $ | 54.21 |   | $ | 62.65 |   |
| Natural gas (per  Mcf)                   |       | $                                          | 5.51       |   | $ | 6.83 |   | $ | 5.63 |   |
| Lease operating  expense (per Boe)       |       | $                                          | 9.09       |   | $ | 10.51 |   | $ | 11.17 |   |
| Lease maintenance  (per Boe)             |       | $                                          | 1.27       |   | $ | 1.78 |   | $ | 2.07 |   |
| Lease overhead  (per Boe)                |       | $                                          | 1.76       |   | $ | 1.92 |   | $ | 2.13 |   |
| Production and property  taxes (per Boe) |       | $                                          | 1.21       |   | $ | 1.74 |   | $ | 3.31 |   |

 

**Major ProducingAreas**

Approximately 62% of thenet acres included in the underlying properties are located in the El DoradoArea, which is located in southeastern Kansas, and in the Northwest KansasArea. The properties comprising the underlying properties are all located inmature fields that are characterized by long production histories. Theproperties provide continual workover and developmental opportunities which MV Partnershas pursued to reduce the natural decline in production from the underlyingproperties.

*El Dorado Area*

The properties comprising the underlying propertieslocated in the El Dorado Area are operated on behalf of MV Partners by Vess Oiland are located in the El Dorado, Augusta and the Valley Center 

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Fields. Vess Oil hasactively pursued infill drilling, well re-entries, plugback and deepeningrecompletion operations, various types of restimulation work and equipmentoptimization programs to reduce the natural decline in production from thesefields.

*ElDorado Field.**  *TheEl Dorado Field is located atop the Nemaha Ridge in Central Butler County,Kansas and was first discovered in 1915. Up to 15 horizons have been reportedto contain hydrocarbons, ranging from the Admire Sands, at a depth of 650 feet,to the Arbuckle Dolomite, at a depth of 2,500 feet. The primary producingintervals are the Admire, Lansing-Kansas City, Viola, Simpson andArbuckle. Cumulative production of all producers from the El Dorado Field hasexceeded 300 MMBbls of oil with production peaking between 1916 and 1918 at116,000 Bbls per day in 1918.

*AugustaField.**  *TheAugusta Field is on a trend similar to the nearby El Dorado Field and strikesnortheast parallel to the Nemaha Ridge. The field was first discovered in 1914and covers approximately 10 square miles of Butler County, Kansas. The primaryproducing interval has been the Arbuckle with additional production coming fromthe Simpson and Lansing-Kansas City intervals. Cumulative production ofall producers from the Augusta Field has exceeded 48 MMBbls of oil. The AugustaField is largely an extension of the El Dorado Field and has very similargeological characteristics.

MV Partners has provided the following information tothe trustee. Vess Oil has maintained constant activity in these fields toincrease production. Vess Oil plans to drill 20 infill developmental wells inthe Arbuckle, Lansing-Kansas City and Simpson intervals and 12 infilldevelopmental wells in the Whitecloud interval in the El Dorado area during thenext five years. Vess Oil also plans to maintain its 11 well annualrecompletion and workover program over the next five years. Vess Oil recentlyreceived approval from the Kansas Corporation Commission for water injectioninto the Whitecloud formation and has commenced a waterflood program to enhanceproduction from this reservoir. Vess Oil has completed two active injectionwells and plans to convert additional wells as the infill developmentaldrilling program proceeds. Vess Oil has extended the Admire productionfacilities in the Oil Hill area, which has enabled reactivation of 3 wells and2 recompletions.

*Valley Center Field.**  *The Valley Center Field was first discoveredin 1928 and covers approximately 60 square miles of Sedgwick County, Kansas.Production is primarily from the Viola interval, which is located at an averagedepth of 2,500 feet. Cumulative production of all producers from the ValleyCenter Field has exceeded 25 MMBbls of oil. The Valley Center Field has similargeological characteristics as the El Dorado Field.

*Northwest KansasArea*

Each of Vess Oil and Murfin Drilling operate leases onbehalf of MV Partners included in the properties comprising the underlyingproperties that are located in the Northwest Kansas Area. The primary fields inthis area are the Bemis-Shutts, Trapp, Ray and Hansen Fields. Vess Oiland Murfin Drilling have actively pursued polymer treatments, stimulationworkovers and recompletion operations to reduce the natural decline inproduction from these fields.

*Bemis-ShuttsField.**  *TheBemis-Shutts Field is located on the Fairport Anticline within theCentral Kansas Uplift and was first discovered in 1928. The field consists of17,080 acres in northeastern Ellis and southeastern Rooks Counties, Kansas.Production has been from multiple pay zones with the primary formation beingthe Arbuckle interval at a depth of 3,300 feet and the Lansing-Kansas Cityinterval at a depth of 2,800 feet. Cumulative production of all producers fromthe Bemis-Shutts Field has exceeded 248 MMBbls of oil.

Both Vess Oil and Murfin Drilling have pursued polymertreatment programs with success in the Bemis-Shutts Field and plan tocontinue these workovers. MV Partners recently conducted a 3-D seismicsurvey over a large portion of the field to further define the boundaries ofthe Arbuckle structure in the 

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field and to evaluateundrilled infill locations. This data has been processed and over 14 potentialinfill drilling locations have been identified. Infill drilling started withtwo wells drilled in 2006 and was completed in the first quarter of 2007.

*TrappField.**  *TheTrapp Field consists of 35,900 acres in Russell and Barton Counties, Kansas andwas first discovered in 1929. Production has primarily been from the Lansing-KansasCity and Shawnee limestones and the Arbuckle dolomite. Cumulative production ofall producers from the Trapp Field has exceeded 239 MMBbls of oil.

Murfin Drilling operates the leases held by MVPartners in the Trapp Field. Murfin Drilling has informed the trustee that, overthe next three years, Murfin Drilling plans to restimulate 12 producing wellsand drill one development well in the field and recomplete three wells in othernearby zones.

*Hansenand Ray Fields.**  *TheHansen Field is located along the crest of the Stuttgart-HuffstutorAnticline and was first discovered in 1943. Production from this field hasprimarily come from the Lansing-Kansas City limestone. Cumulativeproduction of all producers from the Hansen Field has exceeded 9.2 MMBbls ofoil.

The Ray Field is located on the eastern flank of theCentral Kansas Uplift and was first discovered in 1940. Production hasprimarily been from the Arbuckle dolomite and the Gorham sands with additionalproduction from the Lansing-Kansas City interval along the eastern flankof the field. Cumulative production of all producers from the Ray Field hasexceeded 18 MMBbls of oil.

The Hansen and Ray Fields consist of over 7,000 acresin Philips and Norton Counties, Kansas. Murfin Drilling operates the leasesheld by MV Partners in the Hansen and Ray Fields. Murfin Drilling has informedthe trustee that, during the next three years, Murfin Drilling plans toreactivate one producer well and drill one development well.

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**Summary ReserveReport**

**PETROLEUM CONSULTANTS**

| **AUSTIN OFFICE:**               | **MAIN OFFICE:**                    | **HOUSTON OFFICE:**       |
|----------------------------------|-------------------------------------|---------------------------|
| 9601  AMBERGLEN BLVD., SUITE 117 | 306 WEST 7TH STREET, SUITE 302 | 1000 LOUISIANA, SUITE 625 |
| AUSTIN,  TEXAS 78729             | FORT WORTH, TEXAS 76102-4987        | HOUSTON, TEXAS 77002-5008 |
| (512)  249-7000                  | (817) 336-2461                      | (713) 651-9944            |
| FAX  (512) 233-2618              | FAX (817) 877-3728                  | FAX (713) 651-9980        |

 

March 13, 2007

Bankof New York Trust Company, N.A.    as Trustee of MV Oil TrustAttn: Mike Ulrich919 Congress AvenueAustin, Texas 78701

| Re:    | Evaluation Summary                             | *Pursuant to the Guidelines of  the*      |
|--------|------------------------------------------------|-------------------------------------------|
|   | ***MV  Oil Trust Net Profits Interests***      | *Securities and Exchange  Commission for* |
|   | Total Proved Reserves                          | *Reporting Corporate Reserves and*        |
|   | Certain Oil and Gas  Assets – KS & CO | *Future Net Revenue*                      |
|   | As of December 31, 2006                        |                                      |

 

Gentlemen:

As requested, we are submitting our estimates of totalproved reserves and forecasts of economics attributable to MV Oil Trust(“Trust”) term net profits interests in all oil and gas properties owned by MVPartners, LLC (“Company”). This report includes results for the SEC pricescenario, and a composite summary of the proved reserves and economics ispresented below.

| ** **                             | ** **   | ** **  | ** **   | **Proved**      | ** **   | **Proved**        | ** **    | ** **      | ** **   | ** **   | ** **     |
|----------------------------------------|--------------|-------------|--------------|-----------------|--------------|-------------------|---------------|-----------------|--------------|--------------|----------------|
| ** **                             | ** **   | ** **  | ** **   | **Developed**   | ** **   | **Developed**     | ** **    | **Proved**      | ** **   | **Total**    | ** **     |
| ** **                             | ** **   | ** **  | ** **   | **Producing**   | ** **   | **Non-Producing** | ** **    | **Undeveloped** | ** **   | **Proved**   | ** **     |
| Net Reserves                           |         |        |         |            |         |              |          |            |         |         |           |   |   |   |   |
| Oil                                    |         | - MBBL      |         | 11,678.8        |         |              | 265.4         |            |         |         | 1,900.3        |   |   | 13,844.5 |   |
| Gas                                    |         | - MMCF      |         | 1,004.6         |         |              | 149.1         |            |         |         | 0.0            |   |   | 1,153.7 |   |
| NGL                                    |         | - MBBL      |         | 87.3            |         |              | 0.0           |            |         |         | 0.0            |   |   | 87.3 |   |
| Revenue                                |         |        |         |            |         |              |          |            |         |         |           |   |   |   |   |
| Oil                                    |         | - M$        |         | 663,471.4       |         |              | 15,075.6      |            |         |         | 107,957.7      |   |   | 786,504.8 |   |
| Gas                                    |         | - M$        |         | 4,762.6         |         |              | 710.9         |            |         |         | 0.0            |   |   | 5,473.5 |   |
| NGL                                    |         | - M$        |         | 3,826.6         |         |              | 0.0           |            |         |         | 0.0            |   |   | 3,826.6 |   |
| Severance Taxes                        |         | - M$        |         | 4,059.8         |         |              | 557.5         |            |         |         | 4,689.3        |   |   | 9,306.6 |   |
| Ad Valorem Taxes                       |         | - M$        |         | 20,047.0        |         |              | 466.5         |            |         |         | 3,238.7        |   |   | 23,752.3 |   |
| Operating Expenses                     |         | - M$        |         | 190,120.6       |         |              | 3,267.2       |            |         |         | 16,209.4       |   |   | 209,597.1 |   |
| Workover Expenses                      |         | - M$        |         | 15,311.8        |         |              | 0.0           |            |         |         | 0.0            |   |   | 15,311.8 |   |
| COPAS                                  |         | - M$        |         | 36,696.8        |         |              | 265.3         |            |         |         | 1,992.1        |   |   | 38,954.2 |   |
| Investments                            |         | - M$        |         | 0.0             |         |              | 1,205.6       |            |         |         | 15,124.7       |   |   | 16,330.3 |   |
| *80% NPI  Net Operating Income (BFIT)* | * *     | *- M$*      | * *     | *324,659.8*     | * *     | * *          | *8,019.5*     |            | * *     | * *     | *53,362.8*     |   | * * | *386,042.1* | * * |
| ***80% NPI Disc. @ 10%***              | *** *** | ***-  M$*** | *** *** | ***181,207.1*** | *** *** | *** ***      | ***4,442.4*** |            | *** *** | *** *** | ***29,200.6*** |   | *** *** | ***214,850.1*** | *** *** |

 

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The discounted cash flowvalue shown above should not be construed to represent an estimate of the fairmarket value by Cawley, Gillespie & Associates, Inc.

**Net ProfitsCalculations**

Thenet profits interests entitle the Trust to receive 80% of the net proceeds attributableto the Company interest from the sale of production from the underlyingproperties. The net profits interests will terminate on the later to occur of (1)June 30, 2026, or (2) the time when 14.4 million barrels of oil equivalent (“MMBOE”)have been produced from the underlying properties and sold, and the trust willsoon thereafter wind up its affairs and terminate. For this report, it wasestimated that the Trust would terminate June 30, 2026 based on the calculationthat 14.4 MMBOE would have been produced from the underlying properties andsold (which amount is the equivalent of 11.5 MMBOE in respect of the trust’sright to receive 80% of the net proceeds from the underlying propertiespursuant to the net profits interest) prior to this date. The cash flow tablesin this report reflect this termination date.

Future Net Cash Flows and 10% Discounted Cash Flows wereestimated by simply multiplying the Company cash flows by 80% to determine netproceeds. Only the values shown in the table above as “*80% NPI NetOperating Income (BFIT)”*and**“*80% NPI Disc @ 10%*” represent the Trust share. All othervalues shown in the table above represent the Company share through  June 30, 2025.

**Hydrocarbon Pricing**

As requested, oil and gas prices were adjusted to theNYMEX December 29th,2006 closing WTI Cushing oil price of $61.06 per BBL and Henry Hub natural gasprice of $5.475 per MMBTU. Prices were not escalated in accordance withSecurities and Exchange Commission (“SEC”) guidelines. 

Oil price differentialswere forecast at -$4.25 per BBL for all properties and were not escalated. Gasand NGL price differentials were forecast on a per property basis as providedby the Company and were also not escalated. Gas price differentials includeadjustments for transportation and basis differential. Gas prices were furtheradjusted with a heating value (BTU content) applied on a per-property basis. 

**Expenses and Taxes**

Lease operating expenses, workover expenses, COPASoverhead charges and investments were forecast on a per property basis asfurnished by the Company. Workover expenses were forecast at $86.00 per monthper net well for all producing properties. Expenses and investments were heldconstant in accordance with SEC guidelines.

Severance tax rates wereapplied at normal state percentages of oil and gas revenue, except for thoseKansas producing properties that are severance tax exempt. Ad valorem taxes of3.0% of total revenue were applied to each property as provided by the Company.Oil and gas conservation tax rates were applied to all Kansas properties atrates of $0.0547 per BBL and $0.00913 per MCF, respectively.

**Miscellaneous**

Anon-site field inspection of the properties has *not*been performed nor has the mechanical operation or condition of the wells andtheir related facilities been examined, nor have the wells been tested byCawley, Gillespie & Associates, Inc. Possible environmental liabilityrelated to the properties has *not* beeninvestigated nor considered. The cost of plugging and the salvage value ofequipment at abandonment have *not* beenincluded except as noted above.

Theproved reserve classifications used herein conform to the criteria of theSecurities and Exchange Commission. The reserves and economics are predicatedon regulatory agency classifications, rules, policies, laws, taxes androyalties in effect on the effective date, except as noted herein. The possibleeffects of changes in legislation or other Federal or State restrictive actionshave not been considered. All reserve 

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estimates represent our best judgment based on dataavailable at the time of preparation, and assumptions as to future economic andregulatory conditions. It should be realized that the reserves actuallyrecovered, the revenue derived therefrom and the actual cost incurred could bemore or less than the estimated amounts.

Thereserve estimates and forecasts were based upon interpretations of factual datafurnished by the Company. Production data, ownership information, pricedifferentials, expense data and tax details were furnished by the Company, andwere accepted as furnished. To some extent, information from public records wasused to check and/or supplement these data. The basic engineering andgeological data were utilized subject to third party reservations andqualifications. Nothing has come to our attention, however, that would cause usto believe that we are not justified in relying on such data.

This report was preparedfor the exclusive use of MV Partners, LLC and MV Oil Trust.  Third parties should not rely on it withoutthe written consent of the above and Cawley, Gillespie & Associates,Inc.  We areindependent registered professional engineers and geologists.  We do not own an interest in the properties,MV Partners, LLC or MV Oil Trust and are not employed on a contingent basis.  Our work papers and relateddata are available for inspection and review by authorized, interested parties.

|        |       | Yours very truly,                            |
|--------|------------|----------------------------------------------|
|   |       |                                              |
|   |       | W. Todd Brooker, P.E.                        |
|   |       | Vice President                               |
|   | ** ** | **CAWLEY, GILLESPIE & ASSOCIATES, INC.** |

 

**Marketing and Post-Production Services**

Pursuant to the terms ofthe conveyance that created the net profits interest, MV Partners has theresponsibility to market, or cause to be marketed, the oil, natural gas andnatural gas liquid production attributable to the underlying properties. Theterms of the conveyance that created the net profits interest do not permit MVPartners to charge any marketing fee when determining the net proceeds uponwhich the net profits interest are calculated. As a result, the net proceeds tothe trust from the sales of oil, natural gas and natural gas liquid productionfrom the underlying properties are determined based on the same price that MVPartners receives for oil, natural gas and natural gas liquid productionattributable to MV Partners’ remaining interest in the underlying properties.

MV Partners currentlysells all of its oil production to third-party crude oil purchasers,including to three oil refineries located in McPherson, El Dorado andCoffeyville, Kansas, at market prices. A substantial portion of the crude oilproduced from the underlying properties is sold to Eaglwing, L.P. andSemCrude, L.P. The members of MV Energy, LLC and certain members of MVPartners’ other member, VAP-I, LLC, including each of Messrs. Vess andMurfin, own minority interests in Eaglwing and SemCrude. Each of thesepurchasers buys crude oil from MV Partners at market prices, and MV Partnersdoes not have a contract with either purchaser for the sale of crude oilproduction. MV Partners does not believe that the loss of either of theseparties as a purchaser of crude oil production from the underlying propertieswould have a material impact on the business or operations of MV Partners orthe underlying properties.

Oil production istypically transported by truck from the field to the closest gathering facilityor refinery. MV Partners sells the majority of the oil production from theunderlying properties under short-term arrangements using market sensitivepricing. The price received by MV Partners for the oil production from theunderlying properties is usually based on the NYMEX price applied to equaldaily quantities on the month of delivery that is then reduced fordifferentials based upon delivery location and 

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oilquality. The average differential for oil production during the year endedDecember 31, 2006 was $3.57 per barrel, though MV Partners expects thatdifferential to increase in the future.

All natural gas producedby MV Partners is marketed and sold to third- party purchasers. Thenatural gas is sold on a contract basis and, in all but one case, the contractsare in their secondary terms and are on a month-to-month basis. In all cases,the contract price is based on a percentage of a published regional indexprice, after adjustments for Btu content, transportation and related charges.

**Sale and Abandonment of Underlying Properties**

MV Partners and anytransferee of any of the underlying properties will have the right to abandonits interest in any well or property comprising a portion of the underlyingproperties if, in its opinion, such well or property ceases to produce or isnot capable of producing in commercially paying quantities. To reduce oreliminate the potential conflict of interest between MV Partners and the trustin determining whether a well is capable of producing in commercially payingquantities, MV Partners is required under the conveyance to act as a reasonablyprudent operator in the State of Kansas under the same or similar circumstanceswould act if it were acting with respect to its own properties, disregardingthe existence of the net profits interest as a burden on such property. For theyears ended December 31, 2004, 2005 and 2006, MV Partners plugged and abandoned12, 17 and 14 wells, respectively, based on its determination that such wellswere no longer economic to operate.

MV Partners generally maysell all or a portion of its interests in the underlying properties, subject toand burdened by the net profits interest, without the consent of the trustunitholders. In addition, MV Partners may, without the consent of the trustunitholders, require the trust to release the net profits interest associatedwith any lease that accounts for less than or equal to 0.25% of the totalproduction from the underlying properties in the prior 12 months and providedthat the net profits interest covered by such releases cannot exceed, duringany 12-month period, an aggregate fair market value to the trust of $500,000.These releases will be made only in connection with a sale by MV Partners ofthe relevant underlying properties and are conditioned upon the trust receivingan amount equal to the fair value to the trust of such net profits interest.Any net sales proceeds paid to the trust are distributable to trust unitholdersfor the quarter in which they are received.

**Title to Properties**

The properties comprisingthe underlying properties are subject to certain burdens that are described inmore detail below. To the extent that these burdens and obligations affect MVPartners' rights to production and the value of production from the underlyingproperties, they have been taken into account in calculating the trust'sinterests and in estimating the size and the value of the reserves attributableto the underlying properties.

MVPartners' interests in the oil and natural gas properties comprising theunderlying properties are typically subject, in one degree or another, to oneor more of the following:

**·****     **royalties,overriding royalties and other burdens, express and implied, under oil andnatural gas leases;

**·****     **overridingroyalties, production payments and similar interests and other burdens createdby MV Partners or its predecessors in title;

**·****     **avariety of contractual obligations arising under operating agreements, farm-outagreements, production sales contracts and other agreements that may affect theunderlying properties or their title;

**·****     **liensthat arise in the normal course of operations, such as those for unpaid taxes,statutory liens securing unpaid suppliers and contractors and contractual liensunder operating agreements that 

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are not yetdelinquent or, if delinquent, are being contested in good faith by appropriateproceedings;

**·****     **pooling,unitization and communitization agreements, declarations and orders;

**·****     **easements,restrictions, rights-of-way and other matters that commonly affect property;

**·****     **conventionalrights of reassignment that obligate MV Partners to reassign all or part of aproperty to a third party if MV Partners intends to release or abandon suchproperty; and

**·****     **rightsreserved to or vested in the appropriate governmental agency or authority tocontrol or regulate the underlying properties and the net profits interesttherein.

MV Partners has informedthe trustee that MV Partners believes that the burdens and obligationsaffecting the properties comprising the underlying properties are conventionalin the industry for similar properties. MV Partners also has informed thetrustee that MV Partners believes that the existing burdens and obligations donot, in the aggregate, materially interfere with the use of the underlyingproperties and do not materially adversely affect the value of the net profitsinterest.

MV Partners acquired theunderlying properties in two transactions, the first of which was in 1998 whenit acquired a substantial portion of the underlying properties from a major oiland gas company and the second of which was in 1999 when it acquired theremaining portion of the underlying properties from a large independent oil andgas company. At the time of its acquisition of the underlying properties, MVPartners undertook a thorough title examination of the underlying properties.

MV Partners has recordedthe conveyance of the net profits interest in Kansas in the real propertyrecords in each Kansas county where the properties are located. MV Partners hasinformed the trustee that MV Partners believes that the delivery and recordingof the conveyance constituted fully conveyed and vested property interests inthe trust under Kansas law. Although no assurance can be given, MV Partners hasinformed the trustee that MV Partners believes that, if, during the term of thetrust, MV Partners becomes involved as a debtor in a bankruptcy proceeding, theconveyance of the net profits interest, as vested and recorded propertyinterests, cannot be avoided by a bankruptcy trustee. If in such a proceeding adetermination were made that the conveyance constitutes an executory contractand the net profits interest is not a fully conveyed property interest underthe laws of Kansas, and if such contract were not to be assumed in a bankruptcyproceeding involving MV Partners, the trust would be treated as an unsecuredcreditor of MV Partners with respect to such net profits interest in thepending bankruptcy proceeding.

Oil and gas leases arereal property interests under Colorado law. Net profits interests arenon-operating, non-possessory interests carved out of the oil and gas leaseholdestate, but Colorado courts have not directly determined whether a net profitsinterest is a real or a personal property interest. MV Partners believes thatit is possible that the net profits interest may not be treated as a realproperty interest under the laws of Colorado. MV Partners has recorded theconveyance of the net profits interest in the real property records of Coloradoin accordance with local recording acts. MV Partners has informed the trusteethat MV Partners believes that, if, during the term of the trust, MV Partnersbecomes involved as a debtor in a bankruptcy proceeding, the net profitsinterest relating to the underlying properties located in Colorado should betreated as a fully conveyed personal property interest under the laws ofColorado. In such a proceeding, however, a determination could be made that theconveyance constitutes an executory contract and the net profits interest isnot a fully conveyed personal property interest under the laws of Colorado, andif such contract were not to be assumed in a bankruptcy proceeding involving MVPartners, the trust would be treated as an unsecured creditor of MV Partnerswith respect to such net profits interest in the pending bankruptcy proceeding.Although no assurance can be given, MV Partners does not believe that theconveyance of the net profits interest relating to the underlying propertieslocated in Colorado should be subject to rejection in a bankruptcy proceedingas an executory contract.

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**Competition andMarkets**

The oil and natural gas industry is highlycompetitive. MV Partners competes with major oil and natural gas companies andindependent oil and natural gas companies for oil and natural gas, equipment,personnel and markets for the sale of oil and natural gas. Many of thesecompetitors are financially stronger than MV Partners, but even financiallytroubled competitors can affect the market because of their need to sell oiland natural gas at any price to attempt to maintain cashflow. The trust issubject to the same competitive conditions as MV Partners and other companiesin the oil and natural gas industry.

Oil and natural gas compete with other forms of energyavailable to customers, primarily based on price. These alternate forms ofenergy include electricity, coal and fuel oils. Changes in the availability orprice of oil, natural gas or other forms of energy, as well as businessconditions, conservation, legislation, regulations and the ability to convertto alternate fuels and other forms of energy may affect the demand for oil andnatural gas.

Future price fluctuationsfor oil, natural gas and natural gas liquids will directly impact trustdistributions, estimates of reserves attributable to the trust’s interests andestimated and actual future net revenues to the trust. In view of the manyuncertainties that affect the supply and demand for oil and natural gas,neither the trust nor MV Partners can make reliable predictions of future oiland natural gas supply and demand, future product prices or the effect offuture product prices on the trust.

**EnvironmentalMatters and Regulation**

*General*.   Theoperations of the properties comprising the underlying properties are subjectto stringent and complex federal, state and local laws and regulationsgoverning environmental protection as well as the discharge of materials intothe environment. These laws and regulations may, among other things:

·       restrictthe types, quantities and concentration of various substances that can bereleased into the environment in connection with oil and natural gas drillingand production activities;

·       limitor prohibit drilling activities on certain lands lying within wilderness,wetlands and other protected areas; and

·       requireremedial measures to mitigate pollution from former and ongoing operations,such as requirements to close pits and plug abandoned wells.

These laws, rules andregulations may also restrict the rate of oil and natural gas production belowthe rate that would otherwise be possible. The regulatory burden on the oil andnatural gas industry increases the cost of doing business in the industry andconsequently affects profitability. Additionally, Congress and federal andstate agencies frequently revise environmental laws and regulations, and anychanges that result in more stringent and costly waste handling, disposal andcleanup requirements for the oil and natural gas industry could have asignificant impact on the operating costs of the properties comprising theunderlying properties.

The following is a summaryof the existing laws, rules and regulations to which the operations of theproperties comprising the underlying properties are subject that are materialto the operation of the underlying properties.

*Waste Handling.*   TheResource Conservation and Recovery Act, or RCRA, and comparable state statutes,regulate the generation, transportation, treatment, storage, disposal andcleanup of hazardous and non-hazardous wastes. Under the auspices of thefederal Environmental Protection Agency, or EPA, the individual statesadminister some or all of the provisions of RCRA, sometimes in conjunction withtheir own, more stringent requirements. Drilling fluids, produced waters andmost of the other wastes associated with the exploration, development andproduction of crude oil or natural gas are currently regulated under RCRA’snon-hazardous waste provisions. However, it is possible that certain oil andnatural gas exploration and production wastes now classified as non-hazardouscould be classified as 

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hazardous wastes inthe future. Any such change could result in an increase in the costs to manageand dispose of wastes, which could have a material adverse effect on the cashdistributions to the trust unitholders.

*Comprehensive EnvironmentalResponse, Compensation and Liability Act.*   TheComprehensive Environmental Response, Compensation and Liability Act, orCERCLA, also known as the Superfund law, imposes joint and several liability,without regard to fault or legality of conduct, on classes of persons who areconsidered to be responsible for the release of a hazardous substance into theenvironment. These persons include the owner or operator of the site where therelease occurred, and anyone who disposed or arranged for the disposal of ahazardous substance released at the site. Under CERCLA, such persons may besubject to joint and several liability for the costs of cleaning up thehazardous substances that have been released into the environment, for damagesto natural resources and for the costs of certain health studies. In addition,it is not uncommon for neighboring landowners and other third-parties tofile claims for personal injury and property damage allegedly caused by thehazardous substances released into the environment.

The properties comprisingthe underlying properties may have been used for oil and natural gasexploration and production for many years. Although MV Partners believes thatit has utilized operating and waste disposal practices that were standard inthe industry at the time, hazardous substances, wastes or hydrocarbons may havebeen released on or under the properties, or on or under other locations,including off-site locations, where such substances have been taken fordisposal. In addition, the properties comprising the underlying properties mayhave been operated by third parties or by previous owners or operators whosetreatment and disposal of hazardous substances, wastes or hydrocarbons was notunder MV Partners’ control. These properties and the substances disposed orreleased on them may be subject to CERCLA, RCRA and analogous state laws. Undersuch laws, MV Partners could be required to remove previously disposedsubstances and wastes, remediate contaminated property, or perform remedialplugging or pit closure operations to prevent future contamination.

*Water Discharges.*   TheFederal Water Pollution Control Act, or the Clean Water Act, and analogousstate laws, impose restrictions and strict controls with respect to thedischarge of pollutants, including spills and leaks of oil and othersubstances, into waters of the United States. The discharge of pollutants intoregulated waters is prohibited, except in accordance with the terms of a permitissued by the EPA or an analogous state agency. Federal and state regulatoryagencies can impose administrative, civil and criminal penalties fornon-compliance with discharge permits or other requirements of the Clean WaterAct and analogous state laws and regulations.

*Air Emissions.*   TheFederal Clean Air Act, and comparable state laws, regulate emissions of variousair pollutants through air emissions permitting programs and the imposition ofother requirements. In addition, the EPA has developed, and continues todevelop, stringent regulations governing emissions of toxic air pollutants atspecified sources. Federal and state regulatory agencies can imposeadministrative, civil and criminal penalties for non-compliance with airpermits or other requirements of the federal Clean Air Act and associated statelaws and regulations.

*OSHA and Other Laws andRegulation.*   MV Partners is subject to therequirements of the federal Occupational Safety and Health Act, or OSHA, andcomparable state statutes. The OSHA hazard communication standard, the EPAcommunity right-to-know regulations under the Title III of CERCLA and similarstate statutes require that MV Partners organize and/or disclose informationabout hazardous materials used or produced in its operations. MV Partnersbelieves that it is in substantial compliance with these applicablerequirements and with other OSHA and comparable requirements.

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The Kyoto Protocol to the United Nations FrameworkConvention on Climate Change became effective in February 2005. Under theProtocol, participating nations are required to implement programs to reduceemissions of certain gases, generally referred to as greenhouse gases, that aresuspected of contributing to global warming. The United States is not currentlya participant in the Protocol, and Congress has not actively considered recentproposed legislation directed at reducing greenhouse gas emissions. However,there has been support in various regions of the country for legislation thatrequires reductions in greenhouse gas emissions, and some states have alreadyadopted legislation addressing greenhouse gas emissions from various sources,primarily power plants. The oil and natural gas industry is a direct source ofcertain greenhouse gas emissions, namely carbon dioxide and methane, and futurerestrictions on such emissions could impact the future operations of theproperties comprising the underlying properties. The operations of theproperties comprising the underlying properties are not adversely impacted bythe current state and local climate change initiatives and, at this time, it isnot possible to accurately estimate how potential future laws or regulationsaddressing greenhouse gas emissions would impact the operations of theproperties.

MV Partners believes thatit is in substantial compliance with all existing environmental laws andregulations applicable to the current operations of the properties comprisingthe underlying properties and that its continued compliance with existingrequirements will not have a material adverse effect on the cash distributionsto the trust unitholders. For instance, MV Partners did not incur any materialcapital expenditures for remediation or pollution control activities for theyear ended December 31, 2006. Additionally, MV Partners has informed thetrust that MV Partners is not aware of any environmental issues or claims thatwill require material capital expenditures during 2007. However, there is noassurance that the passage of more stringent laws or regulations in the futurewill not have a negative impact on the operations of the properties comprisingthe underlying properties and the cash distributions to the trust unitholders.

**Item 1A.**                *Risk Factors*

***The amounts of thecash distributions by the trust are subject to fluctuation as a result ofchanges in oil, natural gas and natural gas liquid prices.***

The reservesattributable to the underlying properties and the quarterly cash distributionsof the trust are highly dependent upon the prices realized from the sale ofoil, natural gas and natural gas liquids. Prices of oil, natural gas andnatural gas liquids can fluctuate widely on a quarter-to-quarter basis inresponse to a variety of factors that are beyond the control of the trust andMV Partners. These factors include, among others:

·       politicalconditions or hostilities in oil and natural gas producing regions, includingthe Middle East and South America;

·       weatherconditions or force majeure events;

·       levelsof supply of and demand for oil, natural gas and natural gas liquids;

·       U.S.and worldwide economic conditions;

·       theprice and availability of alternative fuels;

·       theproximity to, and capacity of, refineries and gathering and transportationfacilities; and

·       energyconservation and environmental measures.

Moreover, government regulations, such as regulationof natural gas gathering and transportation and possible price controls, canaffect commodity prices in the long term.

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Recent oil prices have been high compared tohistorical prices. For example, the NYMEX crude oil spot prices per Bbl were $32.55,$43.46, $61.04 and $61.05 as of December 31, 2003, 2004, 2005 and 2006,respectively, and during 2006 ranged from a high of $77.03 to a low of $55.81.

MV Partners has entered into hedge contracts relatingto a portion of the oil volumes expected to be produced from the underlyingproperties, and has assigned to the trust the right to receive 80% of theproceeds from these contracts. These hedge contracts, however, do not cover allof the oil volumes that are expected to be produced during the term of thetrust. Furthermore, MV Partners has not entered into any hedge contractsrelating to oil volumes expected to be produced after 2010, and the terms ofthe conveyance of the net profits interest prohibit MV Partners from enteringinto new hedging arrangements for the benefit of the trust. As a result, theamounts of the cash distributions may fluctuate significantly after 2010 as aresult of changes in commodity prices because there will be no hedge contractsin place to reduce the effects of any changes in commodity prices. In addition,the hedge contracts are subject to counterparty nonperformance and other risks.For a discussion of the hedge contracts, see “Management’s Discussion and Analysisof Financial Condition and Results of Operation—Hedge and Derivative Contracts.”

Lower prices of oil,natural gas and natural gas liquids will reduce the amount of the net proceedsto which the trust is entitled and may ultimately reduce the amount of oil,natural gas and natural gas liquids that is economic to produce from theunderlying properties. As a result, the operator of any of the underlyingproperties could determine during periods of low commodity prices to shut in orcurtail production from wells on the underlying properties. In addition, theoperator of the underlying properties could determine during periods of lowcommodity prices to plug and abandon marginal wells that otherwise may havebeen allowed to continue to produce for a longer period under conditions ofhigher prices. Because the underlying properties are mature, with many of thembeing in production since the early 1900’s, decreases in commodity prices couldhave a more significant effect on the economic viability of these properties ascompared to more recently discovered properties. The commodity pricesensitivity of these mature wells is due to a culmination of factors that varyfrom well-to-well, including the additional costs associated with waterhandling and disposal, chemicals, surface equipment maintenance, downholecasing repairs and reservoir pressure maintenance activities that are necessaryto maintain production. As a result, the volatility of commodity prices maycause the amount of future cash distributions to trust unitholders tofluctuate, and a substantial decline in the price of oil, natural gas ornatural gas liquids will reduce the amount of cash available for distributionto the trust unitholders.

***Actual reserves andfuture net revenues may be less than current estimates of proved reserves,which could reduce cash distributions by the trust and the value of thetrust units.***

The value of thetrust units and the amount of future cash distributions to the trust unitholderswill depend upon, among other things, the accuracy of the production andreserves estimated to be attributable to the underlying properties and the netprofits interest. Estimating production and reserves is inherently uncertain.Ultimately, actual production, revenues and expenditures for the underlyingproperties will vary both positively and negatively from estimates and thosevariations could be material. Petroleum engineers consider many factors andmake assumptions in estimating production and reserves. Those factors andassumptions include:

·       historicalproduction from the area compared with production rates from other producingareas;

·       theassumed effect of governmental regulation; and

·       assumptionsabout future prices of oil, natural gas and natural gas liquids, production anddevelopment expenses, gathering and transportation costs, severance and excisetaxes and capital expenditures.

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Changes in these assumptions can materially increaseor decrease production and reserve estimates.

The estimated reservesattributable to the net profits interest and the estimated future net revenuesattributable to the net profits interest are based on estimates of reservequantities and revenues for the underlying properties. See “Business—TheUnderlying Properties—Reserves” for a discussion of the method of allocatingproved reserves to the underlying properties and the net profits interest. Thequantities of reserves attributable to the underlying properties and the netprofits interest may decrease in the future as a result of future decreases inthe price of oil, natural gas or natural gas liquids.

***Risks associatedwith the production, gathering, transportation and sale of oil, natural gas andnatural gas liquids could adversely affect cash distributions by the trust.***

The revenues of the trust,the value of the trust units and the amount of cash distributions to the trustunitholders depend upon, among other things, oil, natural gas and natural gasliquid production and prices and the costs incurred by MV Partners to developand exploit oil and natural gas reserves attributable to the underlyingproperties. Drilling, production or transportation accidents that temporarilyor permanently halt the production and sale of oil, natural gas and natural gasliquids at any of the underlying properties will reduce trust distributions byreducing the amount of net proceeds available for distribution. For example,accidents may occur that result in personal injuries, property damage, damageto productive formations or equipment and environmental damages. Any costsincurred by MV Partners in connection with any such accidents that are notinsured against will have the effect of reducing the net proceeds available fordistribution to the trust. In addition, curtailments or damage to pipelinesused by MV Partners to transport oil, natural gas and natural gas liquidproduction to markets for sale could reduce the amount of net proceedsavailable for distribution. Any such curtailment or damage to the gatheringsystems used by MV Partners could also require MV Partners to find alternativemeans to transport the oil, natural gas and natural gas liquid production fromthe underlying properties, which alternative means could require MV Partners toincur additional costs that will have the effect of reducing net proceedsavailable for distribution.

***The trust and thepublic trust unitholders have no voting or managerial rights with respect to MVPartners, the operator of the underlying properties. As a result, public trustunitholders have no ability to influence the operation of the underlyingproperties.***

Oil and natural gas properties are typically managedpursuant to an operating agreement among the working interest owners of oil andnatural gas properties. The typical operating agreement contains procedureswhereby the owners of the working interests in the property designate one ofthe interest owners to be the operator of the property. Under thesearrangements, the operator is typically responsible for making all decisionsrelating to drilling activities, sale of production, compliance with regulatoryrequirements and other matters that affect the property.

MV Partners is currentlydesignated as the operator of substantially all of the properties comprisingthe underlying properties. MV Partners has contracted with two of itsaffiliates, Vess Oil and Murfin Drilling, to operate these properties on itsbehalf. Neither the trustee nor the public trust unitholders has anycontractual ability to influence or control the field operations of, sale ofoil and natural gas from, or future development of, these properties. Also, thepublic trust unitholders have no voting rights with respect to MV Partners and,therefore, have no managerial, contractual or other ability to influence MVPartners’ or its affiliates’ activities as operator of the oil and natural gasproperties to which substantially all the underlying properties relate.

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***Shortages of oilfield equipment, services and qualified personnel available to MV Partners couldreduce the amount of cash available for distribution.***

The demand for qualifiedand experienced field personnel to drill wells and conduct field operations,geologists, geophysicists, engineers and other professionals in the oil andnatural gas industry can fluctuate significantly, often in correlation with oiland natural gas prices, causing periodic shortages. Historically, there havebeen shortages of drilling rigs and other oilfield equipment as demand for rigsand equipment has increased along with the number of wells being drilled. Thesefactors also cause significant increases in costs for equipment, services andpersonnel. Higher oil and natural gas prices generally stimulate demand andresult in increased prices for drilling rigs, crews and associated supplies,equipment and services. As part of its development plan for the underlyingproperties, MV Partners expects to drill approximately 60 development wells andconduct recompletion and workover operations on existing wells included in the underlyingproperties over the five years ending December 31, 2011. See “Management’sDiscussion and Analysis of Financial Condition and Results of Operation—PlannedDevelopment and Workover Program” for a description of MV Partners’ developmentplans. Shortages of field personnel and equipment or price increases couldsignificantly decrease the amount of cash available for distribution to thetrust unitholders, or restrict the ability of MV Partners to drill the wellsand conduct the operations which it currently has planned for the underlyingproperties.

***MV Partners maytransfer all or a portion of the underlying properties at any time, subject tospecified limitations, and MV Partners may abandon individual wells orproperties that it reasonably believes to be uneconomic. Under thesecircumstances, trust unitholders have no ability to prevent MV Partnersfrom transferring the underlying properties to another operator, even if thetrust unitholders do not believe that operator would operate the underlyingproperties in the same manner as MV Partners.***

MV Partners may at any time transfer all or part ofthe underlying properties. Trust unitholders are not entitled to vote on anytransfer of the underlying properties, and the trust will not receive anyproceeds from any such transfer, except in the limited circumstances when thenet profits interest is released in connection with such transfer, in whichcase the trust will receive an amount equal to the fair market value of the netprofits interest released. See “Business—Description of the UnderlyingProperties—Sale and Abandonment of Underlying Properties.” Following anymaterial sale or transfer of any of the underlying properties, such underlyingproperties will continue to be subject to the net profits interest of thetrust, and the net proceeds attributable to the transferred property will becalculated as part of the computation of net proceeds described in this Form 10-K.MV Partners may delegate to the transferee responsibility for all of MVPartners’ obligations relating to the net profits interest on the portion ofthe underlying properties transferred.

MV Partners or anytransferee of the underlying properties may abandon any well or property if itreasonably believes that the well or property can no longer produce oil ornatural gas in commercially economic quantities. This could result intermination of the net profits interest relating to the abandoned well orproperty. In making such decisions, MV Partners and any such transferee will berequired under the applicable conveyance to act as a reasonably prudentoperator in the State of Kansas under the same or similar circumstances wouldact if it were acting with respect to its own properties, disregarding theexistence of the net profits interest as a burden on such property.

***The reservesattributable to the underlying properties are depleting assets and productionfrom those reserves will diminish over time. Furthermore, the trust isprecluded from acquiring other oil and natural gas properties or net profitsinterests to replace the depleting assets and production.***

The net proceeds payable to the trust from the netprofits interest are derived from the sale of oil, natural gas and natural gasliquids produced from the underlying properties and proceeds, if any, receivedby MV Partners upon settlement of the hedge contracts. The reservesattributable to the underlying 

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properties are depletingassets, which means that the reserves attributable to the underlying propertieswill decline over time. As a result, the quantity of oil and natural gasproduced from the underlying properties is expected to decline over time. Basedon the estimated production volumes in the reserve report, the oil and naturalgas production from proved reserves attributable to the underlying propertiesis projected to decline at an average annual rate of approximately 3.5% overthe next 20 years assuming no additional development drilling or othercapital expenditures are made after 2010 on the underlying properties. Theanticipated rate of decline is an estimate and actual decline rates may varyfrom those estimated. The net profits interest will terminate on the later tooccur of (1) June 30, 2026, or (2) the time when 14.4 MMBoe havebeen produced from the underlying properties and sold (which amount is theequivalent of 11.5 MMBoe in respect of the trust’s right to receive 80% ofthe net proceeds from the underlying properties pursuant to the net profitsinterest).

Future maintenance projects on the underlyingproperties beyond those which are currently estimated may affect the quantityof proved reserves that can be economically produced from the underlyingproperties. The timing and size of these projects will depend on, among otherfactors, the market prices of oil, natural gas and natural gas liquids. Inaddition, because MV Partners has agreed to limit the amount of capitalexpenditures that may be taken into account in calculating net proceedsattributable to the net profits interest during a specified period precedingthe termination of the net profits interest, MV Partners may choose to delaycertain capital projects that may otherwise benefit the trust unitholders untilthe termination of the net profits interest. If operators of the wells to whichthe underlying properties relate do not implement required maintenance projectswhen warranted, the future rate of production decline of proved reserves may behigher than the rate currently expected by MV Partners or estimated in thereserve report.

The trust agreement provides that the trust’s businessactivities are limited to owning the net profits interest and any activityreasonably related to such ownership, including activities required orpermitted by the terms of the conveyance related to the net profits interest.As a result, the trust is not permitted to acquire other oil and natural gasproperties or net profits interests to replace the depleting assets andproduction attributable to the net profits interest.

Because the net proceeds payable to the trust are derivedfrom the sale of depleting assets, the portion of the distributions tounitholders attributable to depletion may be considered a return of capital asopposed to a return on investment. Eventually, the net profits interest maycease to produce in commercial quantities and the trust may, therefore, ceaseto receive any distributions of net proceeds therefrom.

***The amount of cash available for distribution by thetrust will be reduced by the amount of any production and development costs,taxes, costs and payments made with respect to the hedge contracts, capitalexpenditures and post-production costs.***

Production and developmentcosts on the underlying properties are deducted in the calculation of thetrust’s share of net proceeds. In addition, production and property taxes andany costs or payments associated with the hedge contracts, capital expendituresor post-production costs are deducted in the calculation of the trust’s shareof net proceeds. Accordingly, higher or lower production and developmentexpenses, taxes, capital expenditures and post-production costs will directlydecrease or increase the amount received by the trust in respect of its netprofits interest. For a summary of these costs for the last three years, see “Business—TheUnderlying Properties—Producing Acreage and Well Counts.” Historical costs maynot be indicative of future costs.

If development andproduction costs of the underlying properties exceed the proceeds of productionfrom the underlying properties, the trust will not receive net proceeds fromthose properties until future proceeds from production exceed the total of theexcess costs plus accrued interest during the deficit period. Developmentactivities may not generate sufficient additional revenue to repay the costs.

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***The trustee may,under certain circumstances, sell the net profits interest and dissolve thetrust prior to the expected termination of the trust. As a result, trustunitholders may not recover their investment.***

The trustee must sell the net profits interest if theholders of a majority of the trust units approve the sale or vote to dissolvethe trust. The trustee must also sell the net profits interest if the annualgross proceeds from the underlying properties attributable to the net profitsinterest are less than $1.0 million for each of any two consecutive years.The sale of the net profits interest will result in the dissolution of thetrust. The net proceeds of any such sale will be distributed to the trustunitholders.

The net profits interestwill terminate on the later to occur of (1) June 30, 2026, or (2) thetime when 14.4 MMBoe have been produced from the underlying properties and sold(which amount is the equivalent of 11.5 MMBoe in respect of the trust’s rightto receive 80% of the net proceeds from the underlying properties pursuant tothe net profits interest). The trust unitholders are not entitled to receiveany net proceeds from the sale of production from the underlying propertiesfollowing the termination of the net profits interest. Therefore, the marketprice of the trust units will likely diminish towards the end of the term ofthe net profits interest because the cash distributions from the trust willcease at the termination of such net profits interest and the trust will haveno right to any additional production from the underlying properties after theterm of the net profits interest.

***The disposal by thetwo members of MV Partners of their remaining trust units may reduce the marketprice of the trust units.***

As of the date thisForm 10-K, the two members of MV Partners, MV Energy and VAP-I, ownedapproximately 25% of the outstanding trust units. The two members ofMV Partners may use some or all of the remaining trust units they own fora number of corporate purposes, including:

·       sellingthem for cash; and

·       exchangingthem for interests in oil and natural gas properties or securities of oil andnatural gas companies.

If they sell additionaltrust units or exchange trust units in connection with acquisitions, thenadditional trust units will be available for sale in the market. The sale ofadditional trust units may reduce the market price of the trust units. MV Partnersand its members have entered into lock-up agreements that prohibit them fromselling any trust units until July 18, 2007 without the consent of RaymondJames & Associates, Inc., acting as representative of the severalunderwriters in connection with the initial public offering of the trust units.MV Partners and the trust have entered into a registration rightsagreement pursuant to which the trust has agreed to file a registrationstatement or a shelf registration statement to register the resale of theremaining trust units held by MV Partners and any transferee of the trustunits upon request by such holders. See “Certain Relationships and RelatedTransactions—Registration Rights.”

***The market price for the trust units may not reflectthe value of the net profits interest held by the trust.***

The trading price forpublicly traded securities similar to the trust units tends to be tied torecent and expected levels of cash distributions. The amounts available fordistribution by the trust will vary in response to numerous factors outside thecontrol of the trust, including prevailing prices for sales of oil, natural gasand natural gas liquid production from the underlying properties. Consequently,the market price for the trust units may not necessarily be indicative of thevalue that the trust would realize if it sold the net profits interest to athird-party buyer. In addition, such market price may not necessarilyreflect the fact that since the assets of the trust are depleting assets, aportion of each cash distribution paid on the trust units should be consideredby investors as a return of capital, with the remainder being considered as 

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a returnon investment. As a result, distributions made to a unitholder over the life ofthese depleting assets may not equal or exceed the purchase price paid by theunitholder.

***Conflicts of interest could arise between MV Partnersand the trust unitholders.***

The interests of MVPartners and the interests of the trust and the trust unitholders with respectto the underlying properties could at times differ. As a working interest ownerin the properties comprising the underlying properties, MV Partners could haveinterests that conflict with the interests of the trust and the trustunitholders. For example:

·       MVPartners’ interests may conflict with those of the trust and the trustunitholders in situations involving the development, maintenance, operation orabandonment of the underlying properties. MV Partners may make decisions withrespect to development expenditures that adversely affect the underlyingproperties. These decisions include reducing development expenditures on theseproperties, which could cause oil and natural gas production to decline at afaster rate and thereby result in lower cash distributions by the trust in thefuture, or increasing development expenditures on the underlying propertiesduring the final years of the term of the trust, which expenditures willbenefit the unitholders only to the extent that they reduce the natural declinein oil and natural gas production during the term of the trust by an amountthat more than offsets the cost of these development expenditures.

·       MVPartners may sell some or all of the underlying properties and such sale maynot be in the best interests of the trust unitholders. In the event MV Partnerssells all or any portion of the underlying properties, the purchaser of suchunderlying properties will acquire such underlying properties subject to thenet profits interest relating thereto and, in connection therewith, suchpurchaser will be subject to the same standards of conduct with respect todevelopment, operation and abandonment of such underlying properties as areimposed on MV Partners. MV Partners also has the right, subject to significantlimitations as described herein, to cause the trust to release all or a portionof the net profits interest in connection with a sale of a portion of theunderlying properties to which such net profits interest relates. In such anevent, the trust is entitled to receive its proportionate share of the proceedsfrom the sale attributable to the net profits interest released. See “Business—Descriptionof the Underlying Properties—Sale and Abandonment of Underlying Properties.”

In making decisions withrespect to the development, operation, abandonment or sale of the underlyingproperties, MV Partners and any successor operator will be required under theapplicable conveyance to act as a reasonably prudent operator in the State ofKansas under the same or similar circumstances would act if it were acting withrespect to its own properties, disregarding the existence of the net profitsinterest. Except for specified matters that require approval of the trustunitholders, the documents governing the trust do not provide a mechanism forresolving these conflicting interests.

***The trust is managed by a trustee who cannot bereplaced except at a special meeting of trust unitholders.***

The business and affairsof the trust are managed by the trustee. The voting rights of a trustunitholder are more limited than those of stockholders of most publiccorporations. For example, there is no requirement for annual meetings of trustunitholders or for an annual or other periodic re-election of the trustee. Thetrust agreement provides that the trustee may only be removed and replaced bythe holders of a majority of the outstanding trust units at a special meetingof trust unitholders called by either the trustee or the holders of not lessthan 10% of the outstanding trust units. MV Energy and VAP-I collectivelyown approximately 25% of the outstanding trust units. As a result, it will bedifficult to remove or replace the trustee, particularly without the approvalof the members of MV Partners.

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***Trust unitholders have limited ability to enforceprovisions of the net profits interest.***

The trust agreementpermits the trustee to sue MV Partners or any other future owner of theunderlying properties on behalf of the trust to enforce the terms of theconveyance creating the net profits interest. If the trustee does not takeappropriate action to enforce provisions of the conveyance, recourse of thetrust unitholders would be limited to bringing a lawsuit against the trustee tocompel the trustee to take specified actions. The trust agreement expresslylimits the trust unitholders’ ability to directly sue MV Partners or any otherthird party other than the trustee. As a result, the unitholders will not beable to sue MV Partners or any future owner of the underlying properties toenforce these rights.

***Courts outside ofDelaware may not recognize the limited liability of the trust unitholdersprovided under Delaware law.***

Under the DelawareStatutory Trust Act, trust unitholders are entitled to the same limitation ofpersonal liability extended to stockholders of private corporations under theGeneral Corporation Law of the State of Delaware. Courts in jurisdictionsoutside of Delaware, however, may not give effect to such limitation.

***The operations ofthe properties comprising the underlying properties may result in significantcosts and liabilities with respect to environmental and operational safetymatters, which could reduce the amount of cash available for distribution totrust unitholders.***

Significant costs and liabilities can be incurred as aresult of environmental and safety requirements applicable to the oil andnatural gas exploration, development and production activities of theproperties comprising the underlying properties. These costs and liabilitiescould arise under a wide range of federal, state and local environmental andsafety laws and regulations, including regulations and enforcement policies,which have tended to become increasingly strict over time. Failure to complywith these laws and regulations may result in the assessment of administrative,civil and criminal penalties, imposition of cleanup and site restoration costsand liens, and to a lesser extent, issuance of injunctions to limit or ceaseoperations. In addition, claims for damages to persons or property may resultfrom environmental and other impacts of the operations of the propertiescomprising the underlying properties.

Strict, joint and several liability may be imposedunder certain environmental laws, which could cause liability for the conductof others or for the consequences of one’s own actions that were in compliancewith all applicable laws at the time those actions were taken. New laws,regulations or enforcement policies could be more stringent and imposeunforeseen liabilities or significantly increase compliance costs. If it werenot possible to recover the resulting costs through insurance or increasedrevenues, this could have a material adverse effect on the cash distributionsto the trust unitholders. Please read “Business—Description of the UnderlyingProperties—Environmental Matters and Regulation” for more information.

***The operations of the properties comprising theunderlying properties are subject to complex federal, state, local and otherlaws and regulations that could adversely affect the cash distributions to thetrust unitholders.***

The exploration,development and production operations of the underlying properties are subjectto complex and stringent laws and regulations. In order to conduct theoperations of the underlying properties in compliance with these laws andregulations, MV Partners must obtain and maintain numerous permits, approvalsand certificates from various federal, state, local and governmentalauthorities. MV Partners may incur substantial costs and experience delays inorder to maintain compliance with these existing laws and regulations, whichcould decrease the cash distributions to the trust unitholders. In addition,the costs of compliance may increase or the operations of the underlyingproperties may be otherwise adversely affected if existing laws and regulationsare revised or reinterpreted, or if new laws and regulations become applicableto such operations. Such costs could have a material adverse effect on the cashdistributions to the trust unitholders.

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The operations of theunderlying properties are subject to federal, state and local laws andregulations as interpreted and enforced by governmental authorities possessingjurisdiction over various aspects of the exploration for, and the productionof, oil and natural gas. Failure to comply with such laws and regulations, asinterpreted and enforced, could have a material adverse effect on the cashdistributions to the trust unitholders. Please read “Business—Description ofthe Underlying Properties—Environmental Matters and Regulation.”

***The trust has not requested a ruling from the IRSregarding the tax treatment of ownership of the trust units, and MV Partners isnot aware of any trust units or similar securities issued by other issuers thatare subject to the same tax treatment expected to be accorded to the trustunits. If the IRS were to determine (and be sustained in that determination)that the trust is not a grantor trust for federal income tax purposes, or thatthe net profits interest is not a debt instrument for federal income taxpurposes, the trust unitholders may receive different and less advantageous taxtreatment than that described in this Form 10-K.***

MV Partners is not awareof any trust units or similar securities representing interests in an entitytreated as a grantor trust for federal income tax purposes where the entityholds as its principal asset a production payment treated for federal incometax purposes as a debt instrument that is subject to the Treasury regulationsgoverning contingent payment debt instruments.

If the net profitsinterest were not treated as a debt instrument, or if the trust were nottreated as a grantor trust, for federal income tax purposes, the tax treatmentof tax items in respect of an investment in trust units may be affected. Theeffects of this different tax treatment may be less advantageous to trustunitholders.

Neither MV Partners nor thetrustee has requested a ruling from the IRS regarding these tax questions, andneither MV Partners nor the trust can assure the trust unitholders that such aruling would be granted if requested or that the IRS will not challenge these positionson audit. See “Business—Federal Income Tax Matters” regarding all of thevarious matters under this risk factor.

***The trust’s net profits interest may be characterizedas an executory contract in bankruptcy, which could be rejected in bankruptcy,thus relieving MV Partners from its obligations to make payments to the trustwith respect to the net profits interest.***

MV Partners has recordedthe conveyance of the net profits interest in Kansas in the real propertyrecords in each Kansas county where the properties are located. MV Partners hasinformed the trustee that MV Partners believes that the delivery and recordingof the conveyance constitute fully conveyed and vested property interests inthe trust under Kansas law. If in a bankruptcy proceeding in whichMV Partners becomes involved as a debtor a determination were made thatthe conveyance constitutes an executory contract and the net profits interestis not fully conveyed property interests under the laws of Kansas, and if suchcontract were not to be assumed in a bankruptcy proceeding involving MVPartners, the trust would be treated as an unsecured creditor of MV Partnerswith respect to such net profits interest in the pending bankruptcy proceeding.

Oil and gas leases arereal property interests under Colorado law. The net profits interest is anon-operating, non-possessory interest carved out of the oil and gas leaseholdestate, but Colorado courts have not directly determined whether a net profitsinterest is a real or a personal property interest. MV Partners has informedthe trustee that MV Partners believes that it is possible that the net profitsinterest may not be treated as a real property interest under the laws ofColorado. MV Partners has recorded the conveyance of the net profits interestin the real property records of Colorado in accordance with local recordingacts. MV Partners has informed the trustee that MV Partners believes that, if,during the term of the trust, MV Partners becomes involved as a debtor in abankruptcy proceeding, the net profits interest relating to the underlyingproperties located in Colorado should be treated as a fully conveyed personalproperty interest under the laws of Colorado. In such a proceeding, however, adetermination could be 

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madethat the conveyance constitutes an executory contract and the net profitsinterest is not a fully conveyed personal property interest under the laws ofColorado, and if such contract were not to be assumed in a bankruptcyproceeding involving MV Partners, the trust would be treated as an unsecured creditorof MV Partners with respect to such net profits interest in the pendingbankruptcy proceeding.

***If the financial position of MV Partners degradesin the future, MV Partners may not be able to satisfy its obligations tothe trust.***

MV Partners is a privatelyheld limited liability company engaged in the exploration, development,production, gathering and aggregation and sale of oil and natural gas,primarily in the Mid-Continent region in the United States, and it isresponsible for operating substantially all of the underlying properties. Theoperating agreement of MV Partners provides that Vess Oil and Murfin Drillingwill operate the underlying properties on behalf of MV Partners for which MVPartners is designated as the operator. The conveyance provides that MVPartners is obligated to market, or cause to be marketed, the productionrelated to the underlying properties. In addition, MV Partners is obligated toconvey to the trust 80% of all proceeds it receives upon settlement of the hedgecontracts.

MV Partners has enteredinto hedge contracts with institutional counterparties, consisting of swapcontracts and costless collar arrangements, to reduce the exposure of therevenue from oil production from the underlying properties to fluctuations incrude oil prices in order to achieve more predictable cash flow. The crude oilswap contracts and costless collar arrangements will settle based on theaverage of the settlement price for each commodity business day in the contractmonth. In a swap transaction, the counterparty is required to make a payment toMV Partners for the difference between the fixed price and the settlement priceif the settlement price is below the fixed price. MV Partners is required tomake a payment to the counterparty for the difference between the fixed priceand the settlement price if the settlement price is above the fixed price. In acollar arrangement, the counterparty is required to make a payment to MVPartners for the difference between the fixed floor price and the settlementprice if the settlement price is below the fixed floor price. MV Partners isrequired to make a payment to the counterparty for the difference between thefixed ceiling price and the settlement price if the settlement price is abovethe fixed ceiling price. For a detailed description of the terms of these hedgecontracts, please read “Management’s Discussion and Analysis of FinancialCondition and Results of Operation—Hedge and Derivative Contracts.”

The ability of MV Partnersto perform its obligations related to the operation of the underlyingproperties, its obligations to counterparties related to the hedge contractsand its obligations to the trust with respect to the hedge contracts willdepend on MV Partners’ future financial condition and economic performance,which in turn will depend upon the supply and demand for oil and natural gas,prevailing economic conditions and upon financial, business and other factors,many of which are beyond the control of MV Partners. If the obligation of MVPartners to convey 80% of the proceeds it receives upon settlement of the hedgecontracts were not assumed in a bankruptcy proceeding involving MV Partners,the trust would not be entitled to receive future payments from MV Partnersfrom the settlement of the hedge contracts.

***The trust’s receipt of payments based on the hedgecontracts depends upon the financial position of the hedge contractcounterparties. A default by any of the hedge contract counterparties couldreduce the amount of cash available for distribution to the trust unitholders.***

In the event that any ofthe counterparties to the hedge contracts default on their obligations to makepayments to MV Partners and the trust under the hedge contracts, the cashdistributions to the trust unitholders would likely be materially reduced asthe hedge payments are intended to provide additional cash to the trust duringperiods of lower crude oil prices.

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**Item 1B.     *Unresolved Staff Comments*****.**

None.

**Item2.        *Properties.***

Reference is made to “Item1—Business”, which is incorporated herein by reference.

**Item3.        *LegalProceedings*.**

Currently, there are notany legal proceedings pending to which the trust is a party or of which any ofits property is the subject.

**Item4.        *Submissionof Matters to a Vote of Security Holders.***

There were no matterssubmitted to a vote of security holders during the fourth quarter of 2006.

**PART II**

**Item 5.**                        *Market for the Registrant’s Common Equity, Related Unitholder Matters and Issuer Purchases ofEquity Securities*

The trustunits commenced trading on the New York Stock Exchange on January 19, 2007under the symbol “MVO.” Prior to January 19, 2007, there was noestablished public trading market for the trust units. The high and low salesprices and distributions per unit for the first quarter of 2007, were asfollows:

| **2007**                                                      | ** ** | ** ** | ** ** | **High** | ** ** | **Low** | ** ** |
|---------------------------------------------------------------|------------|------------|------------|----------|------------|---------|------------|
| First Quarter  (January 19, 2007 through March 30, 2007) |       | $          | 25.09      |     | $          | 20.10   |       |
|                                                               |            |            |            |          |            |         |            |  |  |

 

At March 30, 2007,the 11,500,000 units outstanding were held by 3 unitholders of record.

**Distributions**

Each quarter, the trustee will determine the amount offunds available for distribution to the trust unitholders. Available funds arethe excess cash, if any, received by the trust from the net profits interest,payments from the hedge contracts and other sources (such as interest earned onany amounts reserved by the trustee) that quarter, over the trust’s liabilitiesfor that quarter. Available funds will be reduced by any cash the trusteedecides to hold as a reserve against future liabilities. It is expected thatquarterly cash distributions during the term of the trust, other than the firstquarterly cash distribution, will be made by the trustee on or before the 25thday of the month following the end of each quarter to the trust unitholders ofrecord on the 15th day of the month following the end of each quarter (or the nextsucceeding business day). 

During the year endedDecember 31, 2006, the trust did not make any cash distributions. OnFebruary 23, 2007, the trust made its first quarterly cash distribution,equal to $11,639,799, or $1.0122 per trust unit, to trust unitholders owningtrust units on February 15, 2007. The trust’s first quarterly distributionconsisted of an amount in cash paid by MV Partners equal to the amount thatwould have been payable to the trust had the net profits interest been ineffect during the period from July 1, 2006 through December 31, 2006.This cash payment included 80% of all amounts paid to MV Partners from hedgecontract counterparties for settlements related to the period from July 1,2006 through December 31, 2006.

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**Equity CompensationPlans**

The trust does not haveany employees and, therefore, does not maintain any equity compensation plans.

**Recent Sales ofUnregistered Securities**

In connection with thecompletion of the initial public offering of the trust units and the conveyanceof the net profits interest by MV Partners to the trust, on January 24,2007 the trust issued 11,500,000 trust units to MV Partners in exchange for theexecution and delivery of the conveyance of the net profits interest, the administrativeservices agreement and the assignment of the interest in the hedge contracts. Formore information regarding the administrative services agreement, see “CertainRelationships and Related Transactions, and Director Independence—AdministrativeServices Agreement.” The sale of the trust units to MV Partners was exempt fromregistration by virtue of Section 4(2) of the Securities Act of 1933.

**Use of Proceedsfrom Registered Offering of Securities**

On December 29, 2006, the registration statementon Form S-1 (Registration No. 333-136609) filed by MVPartners and the trust in connection with the initial public offering of thetrust units was declared effective by the SEC. The registration statementregistered 7,500,000 trust units to be sold in the offering and an additional1,125,000 trust units that were subject to the underwriters’ options topurchase additional units to cover over-allotments. All 8,625,000 trust unitswere sold in the offering. The underwriters for the offering were RaymondJames & Associates, Inc., A.G. Edwards &Sons, Inc., RBC Capital Markets Corporation and Oppenheimer & Co.Inc. The sale of 8,062,500 trust units occurred on January 24, 2007 andthe sale of 562,500 trust units occurred on January 31, 2007.

Thetrust did not receive any proceeds from the initial public offering of trustunits. The following table shows for each selling unitholder the number oftrust units sold, the aggregate public offering price, the aggregateunderwriting discounts and commissions paid and the aggregate net proceeds,before expenses, received by each selling unitholder:

| ** **  | ** ** | **No. of Trust  Units Sold** | ** ** | **Aggregate Public  Offering Price** | ** ** | **Aggregate  Underwriting  Discounts and  Commissions** | ** ** | **Aggregate Net  Proceeds** | ** ** |
|-------------|------------|---------------------------------------------|------------|------------------------------------------------|------------|--------------------------------------------------------------|------------|----------------------------------|------------|
| MV Partners |       |                                        | 7,500,000  |                                           |       |                                                         | $          | 150,000,000                      |       |   |   | $ | 9,750,000 |   |   | $ | 140,250,000 |   |
| MV Energy   |       |                                        | 562,500    |                                           |       |                                                         | $          | 11,250,000                       |       |   |   | $ | 731,250 |   |   | $ | 10,518,750 |   |
| VAP-I       |       |                                        | 562,500    |                                           |       |                                                         | $          | 11,250,000                       |       |   |   | $ | 731,250 |   |   | $ | 10,518,750 |   |

 

All underwriting discountsand commissions were incurred or reimbursed by MV Partners. Additional expensesof approximately $3.1 million incurred in connection with the initial publicoffering of trust units were borne solely by MV Partners. MV Partners, MVEnergy and VAP-I used the net proceeds from the initial public offering torepay approximately $60.5 million of indebtedness and accrued interest of MVPartners under its former and its current bank credit facilities and theremaining $97.7 million was used to repurchase the ownership interest ofone of the members of VAP-I and for distributions to the members of MVPartners.

**Purchases of EquitySecurities**

There were no purchases oftrust units by the trust or any affiliated purchaser during the fourth quarterof the year ended December 31, 2006.

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**Item 6.**                        *Selected Financial Data.*

Thetrust was formed on August 3, 2006. The conveyance of the net profitsinterest, however, did not occur until January 24, 2007. As a result, thetrust did not recognize any income or make any distributions during the yearended December 31, 2006. The following table sets forth selected data forthe trust as of December 31, 2006 and for the period from August 3,2006 to December 31, 2006 based on the audited statements of assets andtrust corpus as of December 31, 2006.

| ** **                           | ** ** | **For the Year Ended  December 31, 2006** | ** ** |
|--------------------------------------|------------|--------------------------------------------------------------------|------------|
| Net profits  income                  |       |                                                               | $          | — |   |   |
| Distributable  income                |       |                                                               | —     |   |   |
| Distributable  income per trust unit |       |                                                               | —     |   |   |
| Distributions per  trust unit        |       |                                                               | —     |   |   |
| Total assets at year-end             |       |                                                               | $          | 1,000 |   |   |

 

**Item7.****                        *Management’s Discussion and Analysis of Financial Condition and Resultsof Operation*****.**

The trust was formed onAugust 3, 2006. The conveyance of the net profits interest, however, didnot occur until January 24, 2007. As a result, the trust did not recognizeany income or make any distributions during the year ended December 31,2006. The trust does not conduct any operations or activities. The trust’spurpose is, in general, to hold the net profits interest and the assignedinterest in the hedge contracts, to distribute to the trust unitholders cash thatthe trust receives in respect of the net profits interests and the assignedinterest in the hedge contracts and to perform certain administrative functionsin respect of the net profits interest and the trust units. The trust derivessubstantially all of its income and cash flows from the net profits interestand the hedge contracts.

**Critical AccountingPolicies**

The following discussion under this Item 7“Management’s Discussion and Analysis of Financial Condition and Results ofOperation” relates to the historical results of the underlying properties priorto the conveyance of the net profits interest to the trust on January 24,2007.  The trust’s financial statementsin future reports will be prepared on the following basis:

(a)          Net profits are recordedwhen received, including the effect of negative or positive adjustments, by thetrustee on the last business day of each calendar quarter; and

(b)         Trust general andadministrative expenses are recorded when paid.

This manner of reporting income and expenses isconsidered to be the most meaningful because the quarterly distributions to trustunitholders are based on net cash receipts received from MV Partners. Thefinancial statements of the trust differ from financial statements prepared inaccordance with generally accepted accounting principles, because, under suchprinciples, net profits and general and administrative expenses of the trust fora quarter would be recognized on an accrual basis.

The trustee has no authority over, and has notevaluated and makes no statement concerning, the internal control over financialreporting of MV Partners.

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**Historical Resultsof the Underlying Properties**

Thefollowing table sets forth revenues, direct operating expenses and the excessof revenues over direct operating expenses relating to the underlyingproperties for the three years in the period ended December 31, 2006,derived from the underlying properties’ audited statements of historicalrevenues and direct operating expenses included in “Item 8. FinancialStatements and Supplementary Data” of this Form 10-K. Because the net profitsinterest had not been conveyed to the trust as of December 31, 2006 andbecause the trust had not engaged in any activities other than organizationalactivities prior to December 31, 2006, the trust is providing financialinformation with respect to the underlying properties so that investors canreview the historical results of the underlying properties. The historicalresults of the underlying properties are not indicative of the futuredistributions of the trust, and such historical results do not give effect tothe conveyance of the net profits interest and related transactions thatoccurred on January 24, 2007.

| ** **                                         | ** ** | **Year ended December 31,** | ** ** |
|----------------------------------------------------|------------|--------------------------------------------|------------|
| ** **                                         | ** ** | **2004**                                   | ** ** | **2005** | ** ** | **2006** | ** ** |
| ** **                                         | ** ** | **(in thousands)**                    | ** ** |
| Revenues:                                          |       |                                       |       |   |   |   |   |
| Oil sales                                          |       | $                                          | 44,364     |   | $ | 57,353 |   | $ | 64,150 |   |
| Natural gas sales                                  |       | 571                                        |       | 609 |   | 572 |   |
| Natural gas liquid sales                           |       | 294                                        |       | 312 |   | 311 |   |
| Hedge and other derivative activity                |       | (14,403                                    | )          | (22,319 | ) | (14,394 | ) |
| Total                                              |       | 30,826                                     |       | 35,955 |   | 50,639 |   |
| Direct operating expenses:                         |       |                                       |       |   |   |   |   |
| Lease operating expenses                           |       | 10,430                                     |       | 11,307 |   | 11,676 |   |
| Lease maintenance                                  |       | 1,454                                      |       | 1,916 |   | 2,162 |   |
| Lease overhead                                     |       | 2,015                                      |       | 2,068 |   | 2,224 |   |
| Production and property tax                        |       | 1,389                                      |       | 1,867 |   | 3,459 |   |
| Total                                              |       | 15,288                                     |       | 17,158 |   | 19,521 |   |
| Excess of  revenues over direct operating expenses |       | $                                          | 15,538     |   | $ | 18,797 |   | $ | 31,118 |   |

 

MV Partners has historically entered into certainhedging arrangements and other derivatives to reduce the exposure of therevenues from oil production for the underlying properties to fluctuations incrude oil prices. In addition, MV Partners was required under the terms of itsoriginal agreement of limited partnership to hedge approximately 80% of itsexpected annual proved producing reserves. As a result of the repurchase of thelimited partner interest in MV Partners in 2005 as described in “MV Partners,”this requirement is no longer in effect. From 2004 to 2006 approximately 73% to84% of the actual oil production volumes were subject to these hedgingarrangements with settlement prices ranging from $20.10 to $63.96 per barrel.During that same period, the average NYMEX price per barrel of crude oil wasbetween $31.07 and $66.22. These hedging arrangements have now expired and willnot impact the amount of cash available for distribution to the trust. Thesettlement prices of the existing hedge contracts range from $56 to $71 and aremore consistent with current crude oil prices.

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Thefollowing table provides oil and natural gas sales volumes, average salesprices and capital expenditures relating to the underlying properties for thethree years in the period ended December 31, 2006. Sales volumes fornatural gas liquids during the periods presented were not significant. Averageprices do not include the effect of hedge and other derivative activity.

| ** **                            | ** ** | **Year ended  December 31,** | ** ** |
|---------------------------------------|------------|----------------------------------------|------------|
| ** **                            | ** ** | **2004**                               | ** ** | **2005** | ** ** | **2006** | ** ** |
| Operating data:                       |       |                                   |       |   |   |   |   |
| Sales volumes:                        |       |                                   |       |   |   |   |   |
| Oil (MBbls)                           |       | 1,127                                  |       | 1,058 |   | 1,024 |   |
| Natural gas (MMcf)                    |       | 104                                    |       | 89 |   | 102 |   |
| Average Prices:                       |       |                                   |       |   |   |   |   |
| Oil (per Bbl)                         |       | $                                      | 39.37      |   | $ | 54.21 |   | $ | 62.65 |   |
| Natural gas (per Mcf)                 |       | $                                      | 5.51       |   | $ | 6.83 |   | $ | 5.63 |   |
| Capital  expenditures (in thousands): |       |                                   |       |   |   |   |   |
| Property acquisition                  |       | $                                      | 1,380      |   | $ | 1,895 |   | $ | 1,714 |   |
| Well development                      |       | 297                                    |       | 381 |   | 1,315 |   |
| Total                                 |       | $                                      | 1,677      |   | $ | 2,276 |   | $ | 3,029 |   |

 

**Discussion and Analysis of Historical Results of theUnderlying Properties**

*Comparison of Results of the Underlying Properties forthe Years Ended December 31, 2006 and 2005*

Excess of revenues overdirect operating expenses for the underlying properties was $31.1 millionfor the year ended December 31, 2006, compared to $18.8 million forthe year ended December 31, 2005. The increase was primarily a result ofan increase in the average price received for the oil and natural gas sold, aswell as a reduction in hedge and other derivative expense. This was partiallyoffset by an increase in direct operating expenses.

*Revenues.*   Revenuesfrom oil, natural gas and natural gas liquid sales increased $6.8 millionbetween the periods. This increase in revenues was primarily the result of anincrease in the average price received for crude oil sold from $54.21 per Bblfor the year ended December 31, 2005 to $62.65 per Bbl for the year ended December 31,2006. The increase in revenues was impacted by a decrease in the average pricereceived for natural gas sold from $6.83 per Mcf for the year ended December 31,2005 to $5.63 per Mcf for the year ended December 31, 2006, as well as asmall increase in volumes sold.

*Hedge and other derivativeactivity.*   Hedge and other derivative activityexpense decreased from $22.3 million for the year ended December 31, 2005 to $14.4 millionfor the year ended December 31, 2006. This decrease in hedge and otherderivative activity expense of $7.9 million for the year endedDecember 31, 2006 was due to a $7.8 million decrease in realizedhedge losses and a small decrease in ineffectiveness of hedges and otherderivatives then in place being recorded to the expense account for the year.

The decrease in realized hedgelosses was due to the higher settlement price of hedges in place for 2006. Theweighted average settlement price of hedges and other derivatives for 2006 was$50.73 compared to $28.60 for 2005. The average NYMEX price per Bbl of crudeoil for 2006 was $66.22 compared to $56.57 for 2005.

At December 31, 2006,MV Partners recorded a $0.7 million expense for ineffectiveness of hedgesand other derivatives compared to a $0.8 million expense atDecember 31, 2005.

*Prices.*   Theaverage price received for the crude oil sold increased primarily as a resultof an increase in the oil price index on which the sales prices for a majorityof the oil production were based. The average price for natural gas solddecreased as a result of a decrease in the natural gas price index on which thesales prices for a majority of the natural gas production were based.

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*Volumes.*   Thesmall decrease in overall production sales volumes was less than the naturaldecline of the underlying properties. The additional production to partiallyoffset the natural decline of the underlying properties during the year ended December 31,2006 compared to the year ended December 31, 2005 is primarilyattributable to lower production caused by an ice storm in Kansas during thefirst quarter of 2005 and the results of MV Partners’ development program in 2006.

*Directoperating expenses.*   Direct operating expensesincreased from $17.2 million for the year ended December 31, 2005 to$19.5 million for the year ended December 31, 2006. This increase wasprimarily a result of an increase in production and property tax, casing repairto several wells, repair and cleanout of a salt water disposal system well andcontinuing restoration of wells from inactive status to producing status.

*Leasemaintenance expense.*   The increase in lease maintenanceexpense was primarily due to the timing of scheduled projects in 2006.

*Production and propertytaxes.*   Production and property taxes increasedas a result of the increases in the price of crude oil and in revenues from oil,natural gas and natural gas liquid sales, on which these taxes are based.

*Comparison ofResults of the Underlying Properties for the Years Ended December 31, 2005and 2004*

Excess of revenues over direct operating expenses forthe underlying properties was $18.8 million for the year endedDecember 31, 2005, compared to $15.5 million for the year endedDecember 31, 2004. The increase was primarily a result of an increase inthe average price received for the oil and natural gas sold. This was partiallyoffset by a decrease in production and an increase in direct operatingexpenses.

*Revenues.*   Revenuesfrom oil, natural gas and natural gas liquid sales increased $13.0 millionbetween the periods. This increase in revenues was primarily the result of anincrease in the average price received for crude oil sold from $39.37 per Bblfor the year ended December 31, 2004 to $54.21 per Bbl for the year endedDecember 31, 2005. The increase in revenues was also the result of anincrease in the average price received for natural gas sold from $5.51 per Mcffor the year ended December 31, 2004 to $6.83 per Mcf for the year endedDecember 31, 2005.

*Hedgeand other derivative activity.*   Hedge and otherderivative activity expense increased from $14.4 million for the yearended December 31, 2004 to $22.3 million for the year ended December 31,2005. This increase was due primarily to the higher average NYMEX settle pricefor the year ended December 31, 2005 of $56.57 compared to $41.38 for theyear ended December 31, 2004. The weighted average hedge price for 2005was $28.60 compared to $24.02 for 2004. A small increase was due toineffectiveness of hedges currently in place being recorded to the expenseaccount. In the year ended December 31, 2005, a $0.8 million expensefor ineffectiveness was recorded compared to no ineffective portion for theyear ended December 31, 2004.

*Prices.*   Theaverage price received for crude oil and natural gas sold increased primarilyas a result of an increase in the oil price and natural gas price indices onwhich the sales prices for a majority of the production were based.

*Volumes.*   Thedecrease in oil, natural gas and natural gas liquid sales volumes wasattributable to the natural decline of proved producing volumes along with a 2%production loss due to widespread ice storms in January and February of2005. These declines were in part offset by the results of MV Partners’development program in 2005.

*Directoperating expenses.*   Direct operating expensesincreased from $15.3 million for the year ended December 31, 2004 to$17.2 million for the year ended December 31, 2005. This increase wasprimarily a result of increased costs of primary vendors who rely on large usesof hydrocarbon products such as (1) pumpers (gasoline), (2) utilities(cost of fuel), (3) treating chemicals (hydrocarbon base) and (4) pulling

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units (fuel surcharge).This increase was also supplemented by wage increases associated with theincreased demand for oilfield employees and increases in the price of steel fortubular and other metal products.

*Leasemaintenance expense.*   Reactivating shut-in wellsaccounted for the largest part of the increase in lease maintenance expensesduring 2005. The same factors described above in direct operating expensesconcerning increased costs of primary vendors also contributed to the increasein lease maintenance expense.

*Production and propertytaxes.*   Production and property taxes increased$0.5 million as a result of the increase in revenues from oil, natural gasand natural gas liquid sales and increased equipment value on which these taxesare based.

**Liquidity andCapital Resources**

Other than trust administrative expenses, includingany reserves established by the trustee for future liabilities, the trust’sonly use of cash is for distributions to trust unitholders. Administrativeexpenses include payments to the trustee as well as an annual administrativefee to MV Partners pursuant to the administrative services agreement. Eachquarter, the trustee determines the amount of funds available for distribution.Available funds are the excess cash, if any, received by the trust from the netprofits interest, payments from the hedge contracts and other sources (such asinterest earned on any amounts reserved by the trustee) that quarter, over thetrust’s liabilities for that quarter. Available funds are reduced by any cashthe trustee decides to hold as a reserve against future liabilities. Thetrustee may borrow funds required to pay liabilities if the trustee determinesthat the cash on hand and the cash to be received are insufficient to cover thetrust’s liability. If the trustee borrows funds, the trust unitholders will notreceive distributions until the borrowed funds are repaid.

Royalty income to the trust is based on thecalculation and definitions of “gross proceeds” and “net proceeds” contained inthe conveyance.

As substantially all of the underlying properties arelocated in mature fields, MV Partners does not expect future costs for theunderlying properties to change significantly as compared to recent historicalcosts other than increases due to increases in the cost of oilfield servicesgenerally. However, see “—Planned Development and Workover Program” below.

The trust does not haveany transactions, arrangements or other relationships with unconsolidatedentities or persons that could materially affect the trust’s liquidity or theavailability of capital resources.

**Planned Developmentand Workover Program**

Since acquiring the underlying properties in 1998 and1999, MV Partners has implemented a development program on the propertiescomprising the underlying properties to further develop proved undevelopedreserves and help offset the natural decline in production. These activitiesincluded recompletion of certain existing wells into new producing horizons,workovers of existing wells and the drilling of infill development wells.

The development program that MV Partnerscurrently intends to implement over the five years ending December 31, 2011with respect to the underlying properties categorized as proved undevelopedreserves consists of drilling 60 development wells, 59 recompletion andworkover projects, 9 polymer stimulations and 1 waterflood project. Thedevelopment program that MV Partners currently intends to implement overthe next five years with respect to the underlying properties categorized asproved developed non-producing reserves consists of 5 well reactivationprojects, 2 injection well workover projects, 1 recompletion project and28 well workover projects.

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Recently, MV Partners undertook a 3-D seismic surveycovering several leases constituting a part of the underlying properties. Theseleases have over 30 undrilled offset locations of varying quality based onoffset production and subsurface mapping. The 3-D data was utilized to refinethe subsurface mapping with respect to the size of mapped sink holes and definesmaller structural features along the edges of the main formation reservoir.Using this data, MV Partners has scheduled the drilling of 14 provedundeveloped locations over the five years ending December 31, 2011. In thefuture, MV Partners plans to expand its 3-D seismic program into other fieldsconstituting a part of the underlying properties.

MV Partners expects total capital expenditures for theunderlying properties during the five years ending December 31, 2011 willbe approximately $16.3 million. Of this total, MV Partners contemplatesspending approximately $12.2 million to drill approximately 60 developmentwells in ten project areas and approximately $4.1 million for recompletionand workovers of existing wells. MV Partners expects that these capitalprojects will add production that will partially offset the natural decline inproduction otherwise expected to occur with respect to the underlyingproperties. The trust is not directly obligated to pay any portion of anycapital expenditures made with respect to the underlying properties; however,capital expenditures made by MV Partners with respect to the underlyingproperties will be deducted from the gross proceeds in calculating the netproceeds from which cash will be paid to the trust. As a result, the trust willindirectly bear an 80% (subject to certain limitations during the final threeyears of the trust, as described above under “Business—Computation of NetProceeds—Net Profits Interest”) share of any capital expenditures made withrespect to the underlying properties. Accordingly, higher or lower capitalexpenditures will, in general, directly decrease or increase, respectively, thecash received by the trust in respect of its net profits interest. As the cashreceived by the trust in respect of the net profits interest will be reduced bythe trust's pro rata share of these capital expenditures, MV Partners expectsthat it will incur capital expenditures with respect to the underlyingproperties throughout the term of the trust on a basis that balances the impactof the capital expenditures on current cash distributions to the trustunitholders with the longer term benefits of increased oil and natural gasproduction expected to result from the capital expenditures. In addition, MVPartners may establish a capital reserve of up to $1.0 million in theaggregate at any given time to reduce the impact on distributions of unevencapital expenditure timing.

MV Partners, as the operator of the underlyingproperties, is entitled to make all determinations related to capitalexpenditures with respect to the underlying properties, and there are nolimitations on the amount of capital expenditures that MV Partners may incurwith respect to the underlying properties, except as described above under “Business—Computation of Net Proceeds—NetProfits Interest.” As the trust unitholders would not be expected tofully realize the benefits of capital expenditures made with respect to theunderlying properties towards the end of the term of the trust, during eachtwelve-month period beginning on the later to occur of(1) June 30, 2023 and (2) the time when 13.2 MMBoe have beenproduced from the underlying properties and sold (which is the equivalent of10.6 MMBoe in respect of the net profits interest), capital expenditures thatmay be taken into account in calculating net proceeds attributable to the netprofits interest will be limited to the average annual capital expendituresduring the preceding three years, as adjusted for inflation. See “Business—Computationof Net Proceeds—Net Profits Interest.”

**Off-Balance SheetArrangements**

The trust has nooff-balance sheet arrangements. The trust has not guaranteed the debt of anyother party, nor does the trust have any other arrangements or relationshipswith other entities that could potentially result in unconsolidated debt,losses or contingent obligations.

**ContractualObligations**

As of December 31, 2006, the trust had noobligations or commitments to make future contractual payments.

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**Hedge and Derivative Contracts**

The revenues derived fromthe underlying properties depend substantially on prevailing crude oil and, toa lesser extent, natural gas and natural gas liquid prices. As a result,commodity prices also affect the amount of cash flow available for distributionto the trust unitholders. Lower prices may also reduce the amount of oil,natural gas and natural gas liquids that MV Partners can economically produce.MV Partners sells the oil, natural gas and natural gas liquid production fromthe underlying properties under floating market price contracts each month. MVPartners has entered into the hedge and other derivative contracts to reducethe exposure of the revenues from oil production from the underlying propertiesfrom 2007 through 2010 to fluctuations in crude oil prices and to achieve morepredictable cash flow. However, these contracts limit the amount of cashavailable for distribution if prices increase. The hedge and other derivativecontracts consist of fixed price swap contracts and costless collararrangements that have been placed with major trading counterparties who MVPartners believes represent minimal credit risks. MV Partners cannot provideassurance, however, that these trading counterparties will not become creditrisks in the future.

The crude oil swap contracts and costless collararrangements will settle based on the average of the settlement price for eachcommodity business day in the contract month. In a swap transaction, thecounterparty is required to make a payment to MV Partners for the differencebetween the fixed price and the settlement price if the settlement price isbelow the fixed price. MV Partners is required to make a payment to thecounterparty for the difference between the fixed price and the settlementprice if the settlement price is above the fixed price. In a collararrangement, the counterparty is required to make a payment to MV Partners forthe difference between the fixed floor price and the settlement price if thesettlement price is below the fixed floor price. MV Partners is required tomake a payment to the counterparty for the difference between the fixed ceilingprice and the settlement price if the settlement price is above the fixedceiling price. Neither party is required to make a payment if the settlementprice falls between the fixed floor and ceiling prices. From January 1,2007 through December 31, 2010, MV Partners’ crude oil price riskmanagement positions in swap contracts and collar arrangements are as follows:

|                     | ** ** | **Fixed Price Swaps** | ** ** | **Collars**                       | ** ** |
|---------------------|------------|---------------------------------|------------|-----------------------------------|------------|
| ** **          | ** ** | **Volumes**                     | ** ** | **Weighted   Average Price** | ** ** | **Volumes** | ** ** | **Weighted Average   Price   (Per Bbl)** | ** ** |
| **Month**           | ** ** | ** **                      | ** ** | **(Bbls)**                        | ** ** | **(Per Bbl)** | ** ** | **(Bbls)** | ** ** | **Floor** | ** ** | **Ceiling** | ** ** |
| January 2007   |       | 16,000                          |       |                              | $          | 58.31 |   |   |   | 10,000 |   |   | $ | 61.00 |   | $ | 68.00 |   |
| February 2007  |       | 61,000                          |       |                              | 63.33      |   |   |   | 10,000 |   |   | 61.00 |   | 68.00 |   |
| March 2007     |       | 61,000                          |       |                              | 63.21      |   |   |   | 10,000 |   |   | 61.00 |   | 68.00 |   |
| April 2007     |       | 61,000                          |       |                              | 63.08      |   |   |   | 10,000 |   |   | 61.00 |   | 68.00 |   |
| May 2007       |       | 61,000                          |       |                              | 62.92      |   |   |   | 10,000 |   |   | 61.00 |   | 68.00 |   |
| June 2007      |       | 61,000                          |       |                              | 62.76      |   |   |   | 10,000 |   |   | 61.00 |   | 68.00 |   |
| July 2007      |       | 61,000                          |       |                              | 62.61      |   |   |   | 10,000 |   |   | 61.00 |   | 68.00 |   |
| August 2007    |       | 61,000                          |       |                              | 62.47      |   |   |   | 10,000 |   |   | 61.00 |   | 68.00 |   |
| September 2007 |       | 61,000                          |       |                              | 62.33      |   |   |   | 10,000 |   |   | 61.00 |   | 68.00 |   |
| October 2007   |       | 61,000                          |       |                              | 62.18      |   |   |   | 10,000 |   |   | 61.00 |   | 68.00 |   |
| November 2007  |       | 61,000                          |       |                              | 62.04      |   |   |   | 10,000 |   |   | 61.00 |   | 68.00 |   |
| December 2007  |       | 61,000                          |       |                              | 61.89      |   |   |   | 10,000 |   |   | 61.00 |   | 68.00 |   |
| January 2008   |       | 106,167                         |       |                              | 60.42      |   |   |   | — |   |   | — |   | — |   |
| February 2008  |       | 61,167                          |       |                              | 58.53      |   |   |   | — |   |   | — |   | — |   |
| March 2008     |       | 61,167                          |       |                              | 58.53      |   |   |   | — |   |   | — |   | — |   |
| April 2008     |       | 61,167                          |       |                              | 58.53      |   |   |   | — |   |   | — |   | — |   |
| May 2008       |       | 61,167                          |       |                              | 58.53      |   |   |   | — |   |   | — |   | — |   |
| June 2008      |       | 61,167                          |       |                              | 58.53      |   |   |   | — |   |   | — |   | — |   |
| July 2008      |       | 61,167                          |       |                              | 58.53      |   |   |   | — |   |   | — |   | — |   |
| August 2008    |       | 61,167                          |       |                              | 58.53      |   |   |   | — |   |   | — |   | — |   |
|                     |            |                                 |            |                                   |            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

46

----

 

| September 2008 |   | 61,167 |   |   | $58.53 |   |   |   | — |   |   | $— |   | $— |   |
|---------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|---------|--------|---------|--------|
| October 2008   |   | 61,167 |   |   | 58.53  |   |   |   | — |   |   | —  |   | —  |   |
| November 2008  |   | 61,167 |   |   | 58.53  |   |   |   | — |   |   | —  |   | —  |   |
| December 2008  |   | 61,167 |   |   | 58.53  |   |   |   | — |   |   | —  |   | —  |   |
| January 2009   |   | 56,500 |   |   | 66.24  |   |   |   | — |   |   | —  |   | —  |   |
| February 2009  |   | 56,500 |   |   | 66.24  |   |   |   | — |   |   | —  |   | —  |   |
| March 2009     |   | 56,500 |   |   | 66.24  |   |   |   | — |   |   | —  |   | —  |   |
| April 2009     |   | 56,500 |   |   | 66.24  |   |   |   | — |   |   | —  |   | —  |   |
| May 2009       |   | 56,500 |   |   | 66.24  |   |   |   | — |   |   | —  |   | —  |   |
| June 2009      |   | 56,500 |   |   | 66.24  |   |   |   | — |   |   | —  |   | —  |   |
| July 2009      |   | 56,500 |   |   | 66.24  |   |   |   | — |   |   | —  |   | —  |   |
| August 2009    |   | 56,500 |   |   | 66.24  |   |   |   | — |   |   | —  |   | —  |   |
| September 2009 |   | 56,500 |   |   | 66.24  |   |   |   | — |   |   | —  |   | —  |   |
| October 2009   |   | 56,500 |   |   | 66.24  |   |   |   | — |   |   | —  |   | —  |   |
| November 2009  |   | 56,500 |   |   | 66.24  |   |   |   | — |   |   | —  |   | —  |   |
| December 2009  |   | 56,500 |   |   | 66.24  |   |   |   | — |   |   | —  |   | —  |   |
| January 2010   |   | 53,150 |   |   | 65.03  |   |   |   | — |   |   | —  |   | —  |   |
| February 2010  |   | 53,150 |   |   | 65.03  |   |   |   | — |   |   | —  |   | —  |   |
| March 2010     |   | 53,150 |   |   | 65.03  |   |   |   | — |   |   | —  |   | —  |   |
| April 2010     |   | 53,150 |   |   | 65.03  |   |   |   | — |   |   | —  |   | —  |   |
| May 2010       |   | 53,150 |   |   | 65.03  |   |   |   | — |   |   | —  |   | —  |   |
| June 2010      |   | 53,150 |   |   | 65.03  |   |   |   | — |   |   | —  |   | —  |   |
| July 2010      |   | 53,150 |   |   | 65.03  |   |   |   | — |   |   | —  |   | —  |   |
| August 2010    |   | 53,150 |   |   | 65.03  |   |   |   | — |   |   | —  |   | —  |   |
| September 2010 |   | 53,150 |   |   | 65.03  |   |   |   | — |   |   | —  |   | —  |   |
| October 2010   |   | 53,150 |   |   | 65.03  |   |   |   | — |   |   | —  |   | —  |   |
| November 2010  |   | 53,150 |   |   | 65.03  |   |   |   | — |   |   | —  |   | —  |   |
| December 2010  |   | 53,150 |   |   | 65.03  |   |   |   | — |   |   | —  |   | —  |   |

 

MV Partners has agreed toconvey to the trust 80% of all proceeds that it receives upon settlement of thehedge contracts. There are certain risks associated with this conveyance in theevent that MV Partners becomes involved as a debtor in bankruptcy proceedings.See “Risk Factors—If the financial position of MV Partners degrades in thefuture, MV Partners may not be able to satisfy its obligations to the trust.”In addition, the aggregate amounts paid by MV Partners on settlement of thehedge contracts will be deducted from the gross proceeds available for paymentto the trust under the net profits interest. See “Business—Computation of NetProceeds—Net Profits Interest.”

***Item 7A*.  Quantitative and Qualitative Disclosures AboutMarket Risk**

The only assets of andsources of income to the trust are the net profits interest, which generallyentitle the trust to receive 80% of the net proceeds from oil and gasproduction from the underlying properties, and the trust’s interest in thehedge contracts, which generally entitle the trust to receive 80% of anyproceeds received by MV Partners from the settlement of certain hedges inexistence on January 24, 2007. Consequently, the trust is exposed tomarket risk from fluctuations in oil and gas prices. For more informationregarding the hedge contracts, please see “Management’s Discussion and Analysisand Results of Operation—Hedge and Derivative Contracts.”  Although the trust may borrow money to payexpenses of the trust, the amount of any such borrowings is unlikely to bematerial to the trust. As a result, the trust is not subject to any materialinterest rate market risk.

47

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***Item 8*.  Financial Statements and Supplementary Data.**

**Report ofIndependent Registered Public Accounting Firm**

To the Members ofMV Partners, LLC

We have audited the accompanying statements ofhistorical revenues and direct operating expenses of the Underlying Properties(the “Properties”) of MV Partners, LLC (formerly MV Partners, LP) (the “Company”)for each of the three years in the period ended December 31, 2006. Thesestatements are the responsibility of the Company’s management. Ourresponsibility is to express an opinion on these statements based on ouraudits.

We conducted our audits in accordance with thestandards of the Public Company Accounting Oversight Board (United States).Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of materialmisstatement. The Company is not required to have, nor were we engaged toperform, an audit of the Company’s internal control over financial reporting.Our audits included consideration of internal control over financial reportingas a basis for designing audit procedures that are appropriate in thecircumstances, but not for the purpose of expressing an opinion on theeffectiveness of the Company’s internal control over financial reporting.Accordingly, we express no such opinion. An audit also includes examining, on atest basis, evidence supporting the amounts and disclosures in the financialstatements, assessing the accounting principles used and significant estimatesmade by management, as well as evaluating the overall presentation of thestatements. We believe that our audits provide a reasonable basis for ouropinion.

The accompanying statements were prepared for the purposeof complying with the rules and regulations of the Securities and ExchangeCommission as described in Note B to the statements and are not intendedto be a complete presentation of the Company’s interests in the Properties.

In our opinion, thestatements referred to above present fairly, in all material respects, thehistorical revenues and direct operating expenses, described in Note B, ofthe Properties for each of the three years in the period ended December 31,2006, in conformity with accounting principles generally accepted in the UnitedStates of America.

/s/ Grant Thornton LLPGrant Thornton LLP

Wichita, KansasMarch 30, 2007

48

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**UnderlyingProperties**

**STATEMENTS OFHISTORICAL REVENUESAND DIRECT OPERATING EXPENSES**

| ** **                                         | ** ** | **Year ended December 31,** | ** ** |
|----------------------------------------------------|------------|--------------------------------------------|------------|
| ** **                                         | ** ** | **2004**                                   | ** ** | **2005** | ** ** | **2006** | ** ** |
| Revenues                                           |       |                                       |       |   |   |   |   |
| Oil sales                                          |       | $                                          | 44,363,815 |   | $ | 57,353,041 |   | $ | 64,149,793 |   |
| Natural gas sales                                  |       | 570,634                                    |       | 608,830 |   | 572,320 |   |
| Natural gas liquid sales                           |       | 293,948                                    |       | 311,916 |   | 310,731 |   |
| Hedge and other derivative activity                |       | (14,402,644                                | )          | (22,318,871 | ) | (14,393,657 | ) |
| Total revenues                                     |       | 30,825,753                                 |       | 35,954,916 |   | 50,639,187 |   |
| Direct operating  expenses                         |       |                                       |       |   |   |   |   |
| Lease operating expenses                           |       | 10,429,962                                 |       | 11,307,182 |   | 11,676,322 |   |
| Lease maintenance                                  |       | 1,453,895                                  |       | 1,916,009 |   | 2,162,289 |   |
| Lease overhead                                     |       | 2,014,514                                  |       | 2,068,378 |   | 2,223,397 |   |
| Production and property tax                        |       | 1,389,287                                  |       | 1,866,426 |   | 3,459,075 |   |
| Total direct operating expenses                    |       | 15,287,658                                 |       | 17,157,995 |   | 19,521,083 |   |
| Excess of revenues over  direct operating expenses |       | $                                          | 15,538,095 |   | $ | 18,796,921 |   | $ | 31,118,104 |   |

 

The accompanying notes are an integral part of this statement.

49

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**Underlying Properties**

**NOTES TO STATEMENTS OF HISTORICAL REVENUES AND DIRECT OPERATING EXPENSES**

**For the years ended December 31, 2004, 2005 and 2006**

**NOTE A—PROPERTIES**

The underlying propertiesconsist of working interests owned by MV Partners, LLC (formerly MV Partners,LP) (“MV”) located in Colorado, Kansas and Oklahoma (in 2004 only with respectto Oklahoma).

**NOTE B—BASIS OFPRESENTATION**

The accompanying statements of historical revenues anddirect operating expenses were derived from the historical accounting recordsof MV and reflect the historical revenues and direct operating expensesdirectly attributable to the underlying properties for the years and periodsdescribed herein. Such amounts may not be representative of future operations.The statements do not include depreciation, depletion and amortization, generaland administrative expenses, interest expense or other expenses of an indirectnature. The amounts represent MV’s net interest in the wells.

Historical financial statements representing financialposition, results of operations and cash flows required by generally acceptedaccounting principles are not presented as such information is not readilyavailable on an individual property basis and not meaningful to the underlyingproperties. Accordingly, the statements of historical revenues and directoperating expenses are presented in lieu of the financial statements requiredunder Rule 3-05 of Securities and Exchange CommissionRegulation S-X.

The accompanying statements of historical revenues anddirect operating expenses included herein were prepared on an accrual basis.Revenue from oil, gas and natural gas liquid sales is recognized when sold.

MV has entered into certain swap and collar agreementsto mitigate the effects of fluctuations in the prices of crude oil. Theseagreements involve the exchange of amounts based on a fluctuating oil price foramounts based on a fixed oil price over the life of the agreement, without anexchange of the notional amount upon which the payments are based. MV accountsfor the swap agreements as cash flow hedges. The effective portion of the gainor loss on the swap agreement is recorded in earnings as the underlying hedgeditem affects income. This effective portion, the ineffective portion of theunrealized gain or loss on the derivative instrument and the change in theunrealized gain or loss on the collar agreements are reflected as hedge andother derivative activity in the accompanying statements of historical revenuesand direct operating expenses.

The process of preparing financial statements inconformity with generally accepted accounting principles requires the use ofestimates and assumptions regarding certain types of revenues and expenses.Such estimates primarily relate to unsettled transactions and events as of thedate of the financial statements. Accordingly, upon settlement, actual resultsmay differ from estimated amounts.

**NOTE C—DISCLOSURES ABOUTOIL AND GAS ACTIVITIES (UNAUDITED)**

The estimates of proved reserves and relatedvaluations were based on the reports of Cawley, Gillespie & Associates, Inc.,independent petroleum and geological engineers, in accordance with theprovisions of Statement of Financial Accounting StandardsNo. 69 (SFAS No. 69), *Disclosures about Oil andGas Producing Activities*. Users of this information should be awarethat the process of estimating quantities of “proved” and “proved developed”natural gas, natural gas liquids and crude oil reserves is very complex,requiring significant subjective decisions in the evaluation of all 

50

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**Underlying Properties**

**NOTES TO STATEMENTS OF HISTORICAL REVENUES AND DIRECT OPERATING EXPENSES (Continued)**

**For the years ended December 31, 2004, 2005 and 2006**

**NOTEC—DISCLOSURES ABOUT OIL AND GAS ACTIVITIES (UNAUDITED) (Continued)**

available geological,engineering and economic data for each reservoir. The data for a givenreservoir may also change substantially over time as a result of numerousfactors, including additional development activity, evolving production historyand continual reassessment of the viability of production under varyingeconomic conditions. Consequently, material revisions to existing reserveestimates occur from time to time.

The oil and gas reservesare attributable solely to properties within the United States. A summary ofthe changes in quantities of proved oil, gas and natural gas liquid reserves ofthe underlying properties for the years ended December 31, 2004, 2005 and2006 are as follows:

| ** **                          | ** ** | **Oil  (Bbls)** | ** ** | **Gas  (Mcf)** | ** ** | **NGL  (Bbls)** | ** ** |
|-------------------------------------|------------|-----------------|------------|----------------|------------|-----------------|------------|
| Balance at January 1,  2004    |       | 15,595,780      |       | 1,525,563      |       | 114,025         |       |
| Revisions of previous  estimates    |       | 1,444,657       |       | (282,855       | )          | (875            | )          |
| Purchase of minerals in  place      |       | 16,127          |       | —         |       | —          |       |
| Extensions and  discoveries         |       | 846             |       | —         |       | —          |       |
| Sales of minerals in  place         |       | (15,448         | )          | —         |       | —          |       |
| Production                          |       | (1,126,812      | )          | (103,540       | )          | (4,674          | )          |
| Balance at  December 31, 2004  |       | 15,915,150      |       | 1,139,168      |       | 108,476         |       |
| Revisions of previous  estimates(1) |       | 3,053,651       |       | 309,242        |       | 5,492           |       |
| Sales of minerals in  place         |       | (5,155          | )          | —         |       | —          |       |
| Production                          |       | (1,057,906      | )          | (89,117        | )          | (4,575          | )          |
| Balance at  December 31, 2005  |       | 17,905,740      |       | 1,359,293      |       | 109,393         |       |
| Revisions of previous  estimates    |       | 906,676         |       | 25,239         |       | 188             |       |
| Production                          |       | (1,023,875      | )          | (101,062       | )          | (6,571          | )          |
| Balance at  December 31, 2006  |       | 17,788,541      |       | 1,283,470      |       | 103,010         |       |
| Proved developed  reserves:         |       |            |       |           |       |            |       |
| December 31, 2004              |       | 15,317,009      |       | 1,139,168      |       | 108,476         |       |
| December 31, 2005              |       | 15,888,099      |       | 1,062,701      |       | 109,393         |       |
| December 31, 2006              |       | 15,827,881      |       | 1,283,470      |       | 103,010         |       |

----

(1)          Reserve revisions in2005 reflect the increase in crude oil prices during the year which haslengthened the economic life of the underlying properties and thereby increasedrecoverable reserves. In addition, in 2005 MV Partners expanded the scope ofits maintenance and development project scheduling from a forward range of 24to 36 months to 60 months, which also increased recoverable reserves.This expanded scope reflects management’s budgeted project activity over the60 month period commencing January 1, 2006. The expanded scope accommodatesadditional infield drilling, recompletion and workover projects in the ElDorado Area in addition to 14 Bemis infield drilling locations that havebeen further refined by recent 3-D seismic activity.

51

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**Underlying Properties**

**NOTES TO STATEMENTS OF HISTORICAL REVENUES AND DIRECT OPERATING EXPENSES (Continued)**

**For the years ended December 31, 2004, 2005 and 2006**

**NOTEC—DISCLOSURES ABOUT OIL AND GAS ACTIVITIES (UNAUDITED) (Continued)**

The following information was developed usingprocedures prescribed by SFAS No. 69. The standardized measure ofdiscounted future net cash flows should not be viewed as representative of thecurrent value of the underlying properties. It and the other informationcontained in the following tables may be useful for certain comparativepurposes, but should not be solely relied upon in evaluating the underlyingproperties or their performance.

Management believes that, in reviewing the informationthat follows, the following factors should be taken into account:

·       futurecosts and sales prices will probably differ from those required to be used inthese calculations;

·       actualrates of production achieved in future years may vary significantly from therates of production assumed in the calculations;

·       a10% discount rate may not be reasonable as a measure of the relative riskinherent in realizing future net oil and gas reserves; and

·       incometaxes are not taken into consideration because MV is a pass-thru entityfor tax purposes.

Under the standardized measure, future cash inflowswere estimated by applying year-end oil and gas prices, adjusted for locationand quality differences, to the estimated future production of year-end provedreserves. Future cash inflows do not reflect the impact of future productionthat is subject to open hedge and other derivative positions. Future cashinflows were reduced by estimated future development, abandonment andproduction costs based on year-end costs to arrive at net cash flows. Use of a10% discount rate and year-end prices and costs are required by SFAS No. 69.

Ingeneral, management does not rely on the following information in makinginvestment and operating decisions. Such decisions are based upon a wide rangeof factors, including estimates of probable and possible as well as provedreserves and varying price and cost assumptions considered more representativeof a range of possible economic conditions that may be anticipated. The standardizedmeasure of discounted future net cash flows relating to proved oil and gasreserves are as follows at December 31:

|                                                           | ** ** | **2004**     | ** **  | **2005**     | ** ** | **2006**      | ** ** |
|-----------------------------------------------------------|------------|--------------|-------------|--------------|------------|---------------|------------|
| Future cash  inflows                                      |       | $            | 669,493,400 |         | $          | 1,050,284,000 |       | $ | 1,021,164,125 |   |
| Production                                                |       | (299,008,800 | )           | (395,987,600 | )          | (450,513,427  | )          |
| Development and  abandonment                              |       | (3,260,000   | )           | (16,513,600  | )          | (16,330,323   | )          |
| Future net cash  flows                                    |       | 367,224,600  |        | 637,782,800  |       | 554,320,375   |       |
| Less effect of  10% discount factor                       |       | (185,616,900 | )           | (333,250,300 | )          | (279,212,531  | )          |
| Standardized measure of  discounted future net cash flows |       | $            | 181,607,700 |         | $          | 304,532,500   |       | $ | 275,107,844 |   |

 

52

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**Underlying Properties**

**NOTES TO STATEMENTS OF HISTORICAL REVENUES AND DIRECT OPERATING EXPENSES (Continued)**

**For the years ended December 31, 2004, 2005 and 2006**

**NOTEC—DISCLOSURES ABOUT OIL AND GAS ACTIVITIES (UNAUDITED) (Continued)**

Future cash flows as shown above were reported withoutconsideration for the effects of hedge and other derivative transactionsoutstanding at each period end. If the effects of hedge and other derivativetransactions were included in the computation, then future cash flows wouldhave decreased by $14,175,700 and $7,655,100 in 2004 and 2005, respectively,and increased by $4,802,718 in 2006.

The changes instandardized measure of discounted future net cash flows relating to proved oiland gas reserves are as follows:

| ** **                                                                          | ** ** | **2004**    | ** **  | **2005**    | ** ** | **2006**    | ** ** |
|-------------------------------------------------------------------------------------|------------|-------------|-------------|-------------|------------|-------------|------------|
| Standardized  measure—beginning of year                                        |       | $           | 121,336,400 |        | $          | 181,607,700 |       | $ | 304,532,500 |   |
| Sales of oil and gas produced, net of production  costs                             |       | (29,940,739 | )           | (41,115,792 | )          | (45,511,761 | )          |
| Net change in prices and production costs                                           |       | 57,356,656  |        | 94,091,763  |       | (37,195,285 | )          |
| Extensions and discoveries                                                          |       | 17,355      |        | —      |       | —      |       |
| Changes in estimated future development costs                                       |       | (349,338    | )           | (11,516,747 | )          | (3,005,440  | )          |
| Development costs incurred during the period which  reduce future development costs |       | 165,000     |        | —      |       | 3,007,100   |       |
| Revisions of previous quantity estimates                                            |       | 15,933,831  |        | 53,096,437  |       | 14,355,279  |       |
| Accretion of discount                                                               |       | 12,133,640  |        | 18,160,770  |       | 30,453,250  |       |
| Purchase of reserves in place                                                       |       | 146,696     |        | —      |       | —      |       |
| Sales of reserves in place                                                          |       | (136,766    | )           | (22,001     | )          | —      |       |
| Changes in production rates and other                                               |       | 4,944,965   |        | 10,230,370  |       | 8,472,201   |       |
| Standardized measure—end  of year                                              |       | $           | 181,607,700 |        | $          | 304,532,500 |       | $ | 275,107,844 |   |

 

Averageprices in effect at December 31, 2004, 2005 and 2006 used in determiningfuture net revenues related to the standardized measure calculation are asfollows:

| ** **    | ** ** | **2004** | ** ** | **2005** | ** ** | **2006** | ** ** |
|---------------|------------|----------|------------|----------|------------|----------|------------|
| Oil (per Bbl) |       | $        | 41.46      |     | $          | 57.79    |       | $ | 56.81 |   |
| Gas (per Mcf) |       | $        | 5.18       |     | $          | 7.89     |       | $ | 4.74 |   |
| NGL (per Bbl) |       | $        | 34.62      |     | $          | 43.74    |       | $ | 43.85 |   |

 

53

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**Report ofIndependent Registered Public Accounting Firm**

To the Trustee and UnitholdersMV Oil Trust

We have audited the accompanying statement of assetsand trust corpus of MV Oil Trust (the “Trust”) as of December 31, 2006.This financial statement is the responsibility of the Trust’s trustee. Ourresponsibility is to express an opinion on this financial statement based onour audit.

We conducted our audit in accordance with the standardsof the Public Company Accounting Oversight Board (United States). Thosestandards require that we plan and perform the audit to obtain reasonableassurance about whether the statement of assets and trust corpus is free ofmaterial misstatement. The Trust is not required to have, nor were we engagedto perform, an audit of its internal control over financial reporting. Ouraudit included consideration of internal control over financial reporting as abasis for designing audit procedures that are appropriate in the circumstances,but not for the purpose of expressing an opinion on the effectiveness of theTrust’s internal control over financial reporting. Accordingly, we express nosuch opinion. An audit also includes examining, on a test basis, evidencesupporting the amounts and disclosures in the statement of assets and trustcorpus, assessing the accounting principles used and significant estimates madeby management, as well as evaluating the overall statement of assets and trustcorpus presentation. We believe that our audit provides a reasonable basis forour opinion.

As described in Note B to the statement of assetsand trust corpus, this statement has been prepared on a cash basis ofaccounting, which is a comprehensive basis of accounting other than accountingprinciples generally accepted in the United States of America.

In our opinion, thestatement of assets and trust corpus referred to above presents fairly, in allmaterial respects, the financial position of the Trust as of December 31,2006, on the basis of accounting described in Note B.

/s/ Grant Thornton LLPGrant Thornton LLP

Wichita, KansasMarch 30, 2007

54

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**MV OIL TRUSTSTATEMENT OF ASSETS AND TRUST CORPUS**

| ** **       | ** ** | **December 31,  2006** | ** ** |
|------------------|------------|-----------------------------|------------|
| **ASSETS**       | ** ** |
| Cash             |       |                        | $          | 1,000 |   |   |
| **TRUST CORPUS** | ** ** |
| Trust Corpus     |       |                        | $          | 1,000 |   |   |

 

The accompanying notes are an integral part of this financial statement.

55

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**MV Oil Trust NOTES TO STATEMENT OF ASSETS AND TRUST CORPUS**

**NOTE A—ORGANIZATION OF THETRUST**

MV Oil Trust (the “Trust”) is a statutory trust formedon August 3, 2006, under the Delaware Statutory Trust Act pursuant to aTrust Agreement (the “Trust Agreement”) among MV Partners, LLC (“MV Partners”)as trustor, The Bank of New York 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 netprofits interest for the benefit of the Trust unitholders pursuant to aconveyance from MV Partners to the Trust. The term net profits interest is aninterest in underlying properties consisting of MV Partner’s net interests inall of its oil and natural gas properties located in the Mid-Continent regionin the states of Kansas and Colorado (the “underlying properties”). These oiland gas properties include approximately 996 producing oil and gas wells.

The net profits interest is passive in nature and thetrustee will have no management control over and no responsibility relating tothe operation of the underlying properties. The net profits interest entitlesthe Trust to receive 80% of the net proceeds attributable to MV Partners’interest from the sale of production from the underlying properties. The netprofits interest will terminate on the later to occur of (1) June 30,2026 or (2) the time when 14.4 million barrels of oil equivalent havebeen produced from the underlying properties and sold, and the Trust will soonthereafter wind up its affairs and terminate.

The Trustee can authorizethe Trust to borrow money to pay trust administrative or incidental expensesthat exceed cash held by the Trust. The Trustee may authorize the Trust toborrow from the Trustee or the Delaware Trustee as a lender provided the termsof the loan are similar to the terms it would grant to a similarly situatedcommercial customer with whom it did not have a fiduciary relationship. TheTrustee may also deposit funds awaiting distribution in an account with itselfand make other short term investments with the funds distributed to the Trust.

**NOTE B—TRUST ACCOUNTINGPOLICIES**

A summary of thesignificant accounting policies of the Trust follows.

1.                 *Basis ofaccounting*

The Trust uses the cash basis of accounting to reportTrust receipts of the term net profits interest, receipts under the hedge andother derivative contracts and payments of expenses incurred. The term netprofits interest is revenues (oil, gas and natural gas liquid sales net of anypayments made in connection with the settlement of the hedge and otherderivative contracts) less direct operating expenses (lease operating expenses,lease maintenance, lease overhead, and production and property taxes) and anadjustment for lease equipment cost and lease development expenses (which arecapitalized in financial statements prepared in accordance with generally acceptedaccounting principles) of the underlying properties times 80% (term net pofitsinterest percentage). In addition, the trust will be entitled to receive 80% ofall payments received by MV Partners upon settlement of the hedge and otherderivative contracts. Actual cash receipts may vary due to timing delays ofactual cash receipts from the property operators or purchasers and due to wellheadand pipeline volume balancing agreements or practices. The actual cashdistributions of the Trust will be made based on the terms of the conveyancecreating the Trust’s net profits interest which is on a cash basis ofaccounting.

Amortization of the investment in net profits interestcalculated on a unit-of-production basis is charged directly to trust corpus.

56

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**MV Oil Trust NOTES TO STATEMENT OF ASSETS AND TRUST CORPUS (Continued)**

**NOTEB—TRUST ACCOUNTING POLICIES (Continued)**

This comprehensive basis of accounting other than GAAPcorresponds to the accounting permitted for royalty trusts by the U.S.Securities and Exchange Commission as specified by Staff Accounting BulletinTopic 12:E, Financial Statements of Royalty Trusts.

Investment in thenet profits interest is periodically assessed to determine whether itsaggregate value has been impaired below its total capitalized cost based on theunderlying properties. The Trust will provide a write-down to its investment inthe net profits interest to the extent that total capitalized costs, lessaccumulated depreciation, depletion and amortization, exceed undiscountedfuture net revenues attributable to the proved oil and gas reserves of theunderlying properties.

2.      *Use of estimates*

The preparation of the statementof assets and trust corpus requires the Trustee to make estimates andassumptions that affect the reported amount of assets and liabilities and thereported amounts of revenues and expenses during the reporting period. Actualresults could differ from those estimates.

**NOTE C—INCOME TAXES**

Tax counsel to the Trustadvised the Trust at the time of formation that, under then current tax laws, inits opinion the net profits interest should be treated as a debt instrument forfederal income tax purposes, and the Trust should be required to treat aportion of each payment it receives with respect to the net profits interest asinterest income in accordance with the “noncontingent bond method” under theoriginal issue discount rules contained in the Internal Revenue Code of1986, as amended, and the corresponding regulations. Tax counsel to the Trustalso advised the Trust at the time of formation that in its opinion the Trustwill be treated as a grantor trust for federal income tax purposes. On thebasis of this advice, trust unitholders will be considered to own and receivethe trust’s assets and income and will be directly taxable thereon as if notrust were in existence.

**NOTE D—DISTRIBUTIONS TOUNITHOLDERS**

The Trustee determines for each quarter the amountavailable for distribution to the Trust unitholders. This distribution isexpected to be made on or before the 25th day of the month following the end ofeach quarter to the Trust unitholders of record on the 15th day of the monthfollowing the end of each quarter (or the next succeeding business day). Suchamounts will be equal to the excess, if any, of the cash received by the Trustduring the preceeding quarter, over the liabilities of the Trust paid duringsuch quarter, subject to adjustments for changes made by the Trustee duringsuch quarter in any cash reserves established for future liabilities of theTrust.

**NOTE E—PUBLIC OFFERING ANDSUBSEQUENT EVENT**

On December 29, 2006, the registration statement onForm S-1 (Registration No. 333-136609) filed by MV Partners and the Trust inconnection with the initial public offering of the trust units was declared effectiveby the SEC. The registration statement registered for sale to the public8,625,000 trust units of MV Oil Trust in the aggregate. On January 24,2007, MV Oil Trust issued 11,500,000 trust units to MV Partners in exchange forthe conveyance by MV Partners of the net profits interest discussed in Note Aas well as interests in certain hedge contracts entered into by MV Partners.Immediately thereafter, MV Partners sold 7,500,000 of the Trust units in theoffering at a price of $20 per unit and the remaining 4,000,000 pro rata toeach of the members of MV Partners at a price of $20 per unit. Immediately 

57

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**MV Oil Trust NOTES TO STATEMENT OF ASSETS AND TRUST CORPUS (Continued)**

**NOTEE—PUBLIC OFFERING AND SUBSEQUENT EVENT (Continued)**

following the sale by MVPartners to its members, the members of MV Partners sold in the offering562,500 trust units in the aggregate at a price of $20 per unit. OnJanuary 31, 2007, the members of MV Partners sold in the offering anadditional 562,500 trust units in the aggregate at a price of $20 per unit.

The first quarterlydistribution was $1.0122 per Trust unit and was made on February 23, 2007 toTrust unit holders owning Trust units as of February 15, 2007. Thisdistribution consisted of an amount in cash paid by MV Partners equal to theamount that would have been payable to the Trust had the net profits interestbeen in effect during the period from July 1, 2006 through December 31, 2006.Furthermore, this cash payment included 80% of all amounts paid to/by MVPartners from/to hedge contract counterparties for settlements related to theperiod from July 1, 2006 to December 31, 2006. The second quarterlydistribution is expected to be made on or about April 25, 2007 and will includethe net proceeds of production collected from January 1, 2007 through March 31,2007, including all hedge contract settlements.

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**MV Oil Trust**

UNAUDITED PRO FORMA FINANCIAL INFORMATION

The following unaudited pro forma statement of assetsand trust corpus and unaudited pro forma statement of distributable income forthe Trust have been prepared to illustrate the conveyance of the term netprofits interest in the underlying properties to the Trust by MV Partners, LLC.The unaudited pro forma statement of assets and trust corpus presents the statementof assets and trust corpus of the Trust as of December 31, 2006, givingeffect to the net profits interest conveyance which actually occurred inJanuary 2007 as if it occurred on December 31, 2006. The unaudited proforma statement of distributable income for the year ended December 31,2006, gives effect to the net profits interest conveyance as if it occurred onJanuary 1, 2006, reflecting only pro forma adjustments expected to have acontinuing impact on the combined results.

These unaudited pro forma financial statements are forinformational purposes only. They do not purport to present the results thatwould have actually occurred had the net profits interest conveyance beencompleted on the assumed dates or for the period presented, or which may berealized in the future.

To produce the pro forma financial information,management made certain estimates. The accompanying unaudited pro formastatement of assets and trust corpus assumes a December 31, 2006 issuanceof 11,500,000 trust units at $20.00 per unit which actually occurred in January2007. The accompanying unaudited pro forma statement of distributable incomefor the year ended December 31, 2006 has been prepared assuming trustformation and net profits interest conveyance on January 1, 2006.

**These estimates are based on the most recently availableinformation from the actual net profits interest conveyance that took place inJanuary 2007. To the extent there are significant changes in these amounts, theassumptions and estimates herein could change significantly. The unaudited proforma statement of assets and trust corpus and unaudited pro forma statement ofdistributable income should be read in conjunction with the historical auditedstatements of the Trust and the Underlying Properties, including the relatednotes, included in this Form 10-K.**

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**MV Oil Trust**Unaudited Pro Forma Statement of Assets and Trust CorpusDecember 31, 2006

| ** **                                     | ** ** | **Historical** | ** ** | **Adjustments** | ** ** | **Pro Forma** | ** ** |
|------------------------------------------------|------------|----------------|------------|-----------------|------------|--------------------|------------|
| **ASSETS**                                     |       |           |       |            |       |               |       |   |   |
| Cash                                           |       |           | $          | 1,000           |       |               | $          | — |   | $ | 1,000 |   |
| Investment in Net  Profits Interest            |       |           | —     |            |       | 50,383,675         | (a)        | 50,383,675 |   |
|                                           |       |           | $          | 1,000           |       |               | $          | 50,383,675 |   | $ | 50,384,675 |   |
| **TRUST  CORPUS**                              |       |           |       |            |       |               |       |   |   |
| 11,500,000 Trust Units  Issued and Outstanding |       |           | $          | 1,000           |       |               | $          | 50,383,675 |   | $ | 50,384,675 |   |

The accompanying notes are an integral part of the unaudited pro forma financial information.

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**MV Oil Trust**Unaudited Pro Forma Statement Of Distributable IncomeFor the year ended December 31, 2006 

| ** **                                                                       | ** ** | **Year ended**   | ** ** |
|----------------------------------------------------------------------------------|------------|-----------------------|------------|
| ** **                                                                       | ** ** | **December 31,** | ** ** |
| ** **                                                                       | ** ** | **2006**              | ** ** |
| **Historical results**                                                           |       |                  |       |
| Income from the net profits interests and hedge and  other derivative activities |       | 22,471,372            |       |
| **Pro Forma Adjustments**                                                        |       |                  |       |
| Less trust general and administative expenses                                    |       | 60,000                | (b)        |
| Distributable income                                                             |       | $                     | 22,411,372 |   |
| Distributable  income per unit                                                   |       | $                     | 1.95       |   |

 

The accompanying notes are an integral part of the unaudited pro forma financial information.

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**MV Oil Trust NOTES TO UNAUDITED PRO FORMA FINANCIAL INFORMATION**

**NOTE A—BASIS OFPRESENTATION**

MV Oil Trust (the “Trust”) will own a term net profitsinterest in oil and gas producing properties located in Kansas and Colorado andowned by MV Partners, LLC. (“MV Partners”). The term net profits interestentitles the Trust to receive 80% of the net proceeds attributable to MVPartners’ interest from the sale of production from these properties. The netprofits interest will terminate on the later to occur of (1) June 30,2026 or (2) the time when 14.4 million barrels of oil equivalent have beenproduced from the underlying properties and sold, and the Trust will soonthereafter wind up its affairs and terminate.

The unaudited pro forma financial information assumesthe issuance of 11,500,000 trust units at $20.00 per unit which actuallyoccurred in January 2007.

The Trust was formed onAugust 3, 2006 under Delaware law to acquire and hold the net profitsinterest for the benefit of the holders of the trust units. The net profitsinterest is passive in nature and the trustee has no management control overand no responsibility relating to the operation of the underlying properties.

**NOTE B—TRUSTACCOUNTING POLICIES**

These unaudited pro forma statements are preparedusing the accrual basis information from the historical revenue and directoperating expenses of the underlying properties. The Trust uses the cash basisof accounting to report Trust receipts of the term net profits interest andpayments of expenses incurred. Actual cash receipts may vary due to timingdelays of actual cash receipts from the property operators or purchasers anddue to wellhead and pipeline volume balancing agreements or practices. Theactual cash distributions of the Trust will be made based on the terms of theconveyance creating the Trust’s net profits interest which is on a cash basisof accounting. An adjustment is made for the lease equipment cost and leasedevelopment expenses which will reduce the cash distributions but are not shownas expenses on the accrual basis historical data.

Investment in the net profits interest is****recorded initially at the historic cost of MV Partners and****periodically assessed to determine whether its aggregatevalue has been impaired below its total capitalized cost based on theunderlying properties. The Trust will provide a write-down to its investment inthe net profits interest to the extent that total capitalized costs, lessaccumulated depreciation, depletion and amortization, exceed undiscountedfuture net revenues attributable to the proved oil and gas reserves of theunderlying properties.

MV Partners believes that the assumptions used providea reasonable basis for presenting the significant effects directly attributableto this transaction.

This unaudited pro formafinancial information should be read in conjunction with the statement of historicalrevenues and direct operating costs for the underlying properties and relatednotes for the periods presented.

**NOTE C—INCOME TAXES**

The Trust is a Delawarestatutory trust and is not required to pay federal or state income taxes.Accordingly, no provision for federal or state income taxes has been made.

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**MV Oil Trust NOTES TO UNAUDITED PRO FORMA FINANCIAL INFORMATION (Continued)**

**NOTE D—INCOME FROM NET PROFITS INTEREST AND HEDGE ANDOTHER**DERIVATIVEACTIVITIES

| ** **                                                                                                                 | ** ** | **Year ended**   | ** ** |
|----------------------------------------------------------------------------------------------------------------------------|------------|-----------------------|------------|
| ** **                                                                                                                 | ** ** | **December 31,** | ** ** |
| ** **                                                                                                                 | ** ** | **2006**              | ** ** |
| Excess of  revenues over direct operating expenses of Underlying Properties including  hedge and other derivative activity |       | $                     | 31,118,104 |   |
| Lease equipment  and development costs(1)                                                                                  |       | (3,028,889            | )          |
| Excess of  revenues over direct operating expenses and lease equipment and development  costs                              |       | 28,089,215            |       |
| Times net profit  interest over the term of the Trust                                                                      |       | 80                    | %          |
| Income from net profits  interest and hedge and other derivative activities                                                |       | $                     | 22,471,372 |   |

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(1)          Perterms of the net profits interest, lease equipment and development costs are tobe deducted when calculating the distributable income to the Trust.

**NOTE E—PRO FORMAADJUSTMENTS**

(a)           MV Partners will conveythe net profits interest to the Trust in exchange for 11,500,000 trust units.

Thenet profits interest is recorded at the historical cost of****MVPartners (except for the hedge which is valued at the close of business onJanuary 23, 2007, the day before the actual conveyance of the net profitsinterest) and is calculated as follows:

| Oil and gas  properties                               |   | $           | 96,210,819 |   |
|-------------------------------------------------------|--------|-------------|------------|--------|
| Accumulated depreciation,  depletion and amortization |   | (40,468,762 | )          |
| Hedge asset                                           |   | 7,237,537   |       |
| Net property  value to be conveyed                    |   | 62,979,594  |       |
| Times 80% net profits  interest to Trust              |   | $           | 50,383,675 |   |

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(b)          The Trust will pay anannual administrative fee to MV Partners, which fee is assumed to total $60,000in 2006 and will increase by 4% each year beginning in January 2007.

Additionally, the Trustestimates $600,000 annually for general and administrative expenses, whichincludes the annual fee to the Trustees, legal fees, accounting fees,engineering fees, printing costs and other expenses properly chargeable to theTrust. If the estimated expenses were included in the unaudited pro formastatement of distributable income, the distributable income would be $21,811,372or $1.90 per unit for the year ended December 31, 2006.

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***Item 9*.  Changes in and Disagreements with Accountantson Accounting and Financial Disclosure.**

None.

***Item 9A*. Controls and Procedures.**

*Evaluationof disclosure controls and procedures.*   Thetrustee maintains disclosure controls and procedures designed to ensure thatinformation to be disclosed by the trust in the reports that it files orsubmits under the Securities Exchange Act of 1934, as amended, is recorded,processed, summarized and reported within the time periods specified in therules and regulations promulgated by the Securities and ExchangeCommission. Disclosure controls and procedures include controls and proceduresdesigned to ensure that information required to be disclosed by the trust isaccumulated and communicated by MV Partners to The Bank of New York TrustCompany, N.A., as trustee of the trust, and its employees who participate inthe preparation of the trust’s periodic reports as appropriate to allow timelydecisions 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 andprocedures. Mike Ulrich, as Trust Officer and trustee, has concluded that thedisclosure controls and procedures of the trust are effective.

Due to the contractualarrangements of (i) the trust agreement and (ii) the conveyance ofthe net profits interest, the trustee relies on (A) information providedby MV Partners, including historical operating data, plans for future operatingand capital expenditures, reserve information and information relating toprojected production, and (B) conclusions and reports regarding reservesby the trust’s independent reserve engineers. See Item 1A. Risk Factors “—TheTrust and the public trust unitholders have no voting or managerial controlwith respect to MV Partners, the operator of the underlying properties. As aresult, public trust unitholders have no ability to influence the operation ofthe underlying properties.” in this Form 10-K, and “Management’sDiscussion and Analysis of Financial Condition and Results of Operation” for adescription of certain risks relating to these arrangements and reliance oninformation when reported by MV Partners to the trustee and recorded in thetrust’s results of operation.

*Internal ControlOver Financial Reporting*

This Form 10-K does not include a report of thetrust’s assessment regarding internal control over financial reporting or anattestation report of the trust’s registered public accounting firm due to atransition period established by rules of the SEC for newly public entities.

*Changes in InternalControl Over Financial Reporting.**  *During the year endedDecember 31, 2006, there has been no change in the trustee’s internalcontrol over financial reporting that has materially affected, or is reasonablylikely to materially affect, the trustee’s internal control over financial reportingrelating to the trust. The trustee notes for purposes of clarification that ithas no authority over, and makes no statement concerning, the internal controlover financial reporting of MV Partners.

***Item 9B*.  Other Information.**

None.

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**PART III**

***Item 10*.  Directors, Executive Officers and CorporateGovernance.**

The trust has no directorsor executive officers. The trustee is a corporate trustee that may be removedby the affirmative vote of the holders of not less than a majority of theoutstanding trust units at a meeting at which a quorum is present.

**Section 16(a)Beneficial Ownership Reporting Compliance**

During the year endedDecember 31, 2006, the trust did not have a class of equity securitiesregistered under Section 12 of the Securities Exchange Act of 1934.

**Audit Committee andNominating Committee**

Because the trust does nothave a board of directors, it does not have an audit committee, an auditcommittee 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 bank’s code of ethics.

***Item 11*.  Executive Compensation.**

During the year endedDecember 31, 2006, the trustee did not receive any compensation from thetrust. The trust does not have any executive officers. Because the trust doesnot have a board of directors, it does not have a compensation committee.

***Item 12*.  Security Ownership of Certain BeneficialOwners and Management and Related Stockholder Matters.**

(a)           Security Ownership ofCertain Beneficial Owners.

The following informationhas been taken from filings with the Securities and Exchange Commission on Forms 3and 4.

| **Beneficial Owner** | ** ** | ** ** | ** ** | **Trust Units  Beneficially Owned** | ** ** | **Percent of Class** | ** ** |
|---------------------------|------------|------------|------------|-----------------------------------------------|------------|--------------------------------|------------|
| MV Energy, LLC(1)         |       |       | 2,875,000  |                                          |       |                           | 25.0       | % |   |
| VAP-I, LLC(1)             |       |       | 1,437,500  |                                          |       |                           | 12.5       | % |   |

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(1)          The address of each ofMV Energy and VAP-I is 1700 Waterfront, Building 500, Wichita, Kansas67206.  MV Energy is the managing memberof VAP-I.  As a result, MV Energy hassole voting and investment power with respect to the trust units held byVAP-I.  Each of MV Energy and VAP-I isthe record owner of 1,437,500 trust units.

(b)          Security Ownership ofManagement.

Not applicable.

(c)           Changes in Control.

The registrant knows of no arrangement, including anypledge by any person of securities of the registrant or any of its parents, theoperation of which may at a subsequent date result in a change of control ofthe registrant.

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***Item 13*.  Certain Relationships and RelatedTransactions, and Director Independence.**

Under the terms of theConveyance governing the net profits interest and the assignment of theinterest in the hedge contracts, MV Partners is obligated to make certainpayments to the trust on a quarterly basis. Please see “Business—Computation of Net Proceeds” for more informationabout these agreements.

**AdministrativeServices Agreement**

The trust has entered into an administrative servicesagreement with MV Partners that obligates the trust, throughout the term of thetrust, to pay to MV Partners each quarter an administrative services fee foraccounting, bookkeeping and informational services performed by MV Partners onbehalf of the trust relating to the net profits interest. The annual fee,payable in equal quarterly installments, would have been a total of $60,000 in2006, which will increase by 4% each year starting as of January 2007. Forthe year ended December 31, 2006, the trust paid MV Partners anadministrative services fee of $30,000 to reflect the six months endedDecember 31, 2006. The administrative services agreement will terminateupon the termination of the net profits interest unless earlier terminated bymutual agreement of the trustee and MV Partners.

**Registration Rights**

The trust enteredinto a registration rights agreement with MV Partners in connection with MVPartners' conveyance to the trust of the net profits interest. In theregistration rights agreement, the trust agreed, for the benefit of MV Partnersand any transferee of its trust units (each, a "holder"), to registerthe trust units it holds. Specifically, the trust agreed:

·       subject to certainrestrictions, to use its reasonable best efforts to file a registrationstatement, including, if so requested, a shelf registration statement, with theSEC as promptly as practicable following receipt of a notice requesting thefiling of a registration statement from holders representing a majority of thethen outstanding registrable trust units;

·       to use its reasonable bestefforts to cause the registration statement or shelf registration statement tobe declared effective under the Securities Act as promptly as practicable afterthe filing thereof; and

·       to continuously maintainthe effectiveness of the registration statement under the Securities Act for90 days (or for three years if a shelf registration statement isrequested) after the effectiveness thereof or until the trust units covered bythe registration statement have been sold pursuant to such registrationstatement or until all registrable trust units:

·        have been sold pursuant toRule 144 under the Securities Act if the transferee thereof does notreceive "restricted securities;"

·        have been sold in aprivate transaction in which the transferor's rights under the registrationrights agreement are not assigned to the transferee of the trust units; or

·        become eligible for resalepursuant to Rule 144(k) (or any similar rule then in effect under theSecurities Act).

The holders will have the right to require the trustto file up to three registration statements and will have piggybackregistration rights in certain circumstances.

***In connection with the preparation andfiling of any registration statement, MV Partners will bear all costs andexpenses incidental to any registration statement, excluding certain internalexpenses of the trust, which will be borne by the trustee, and any underwritingdiscounts and commissions, which will be borne by the seller of the trustunits.***

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***Item 14*.  Principal Accountant Fees and Services.**

The trust does not have an audit committee. Anypre-approval and approval of all services performed by the principal auditor orany other professional service firms and related fees are granted by the trustee.

The following tablepresents fees for professional audit services rendered by Grant Thornton LLP forthe audit of the trust’s financial statements for 2006 and fees billed for otherservices rendered by Grant Thornton LLP.

| ** **         | ** ** | **2006** | ** ** |
|--------------------|------------|----------|------------|
| Audit fees         |       | $        | 31,050     |   |
| Audit-related fees |       | —   |       |
| Tax fees           |       | —   |       |
| All other fees     |       | —   |       |
| Total fees         |       | $        | 31,050     |   |

 

**PART IV**

***Item 15*.  Exhibits, Financial Statement Schedules**

*(a)(1)**                   FinancialStatements*

*The following financial statementsare set forth under Part II, Item 8 of this Form 10-K on the pages indicated:*

| ** **                                                                                  | ** ** | **Page in this** | ** ** |
|---------------------------------------------------------------------------------------------|------------|----------------------------|------------|
| ** **                                                                                  | ** ** | **Form 10-K**         | ** ** |
| Report of Independent Registered Public Accounting  Firm                                    |       |                       | 48         |   |   |
| Statements of Historical Revenues and Direct  Operating Expenses—Underlying Properties |       |                       | 49         |   |   |
| Related Notes                                                                               |       |                       | 50         |   |   |
| Report of Independent Registered Public Accounting  Firm                                    |       |                       | 54         |   |   |
| MV Oil Trust  Statement of Assets and Trust Corpus                                          |       |                       | 55         |   |   |
| Related Notes                                                                               |       |                       | 56         |   |   |
| Unaudited Pro Forma Financial Information                                                   |       |                       | 59         |   |   |
| Unaudited Pro Forma Statement of Assets and Trust  Corpus                                   |       |                       | 60         |   |   |
| Unaudited Pro  Forma Statement of Distributable Income                                      |       |                       | 61         |   |   |
| Related Notes                                                                               |       |                       | 62         |   |   |

 

*(a)(2)**                   Schedules*

Schedules have been omitted because they are notrequired, not applicable or the information required has been includedelsewhere herein.

*(a)(3)**                   Exhibits*

See Exhibit Index

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**SIGNATURES**

Pursuantto the requirements of Section 13 or 15(d) of the Securities ExchangeAct of 1934, the registrant has duly caused this report to be signed on itsbehalf by the undersigned, thereunto duly authorized.
|        |     | MV OIL TRUST |
|--------|----------|--------------|
|   |     | By           |   | THE  BANK OF NEW YORK TRUST COMPANY, N.A. |
|   |     | By:          |   | /s/  MIKE ULRICH |
|   |     |         |   | Mike Ulrich |
|   | * * | * *     |   | *Vice  President* |

 

April 2, 2007

The Registrant, MV Oil Trust, has no principalexecutive officer, principal financial officer, board of directors or personsperforming similar functions. Accordingly, no additional signatures areavailable and none have been provided. In signing the report above, the trusteedoes not imply that it has performed any such function or that such functionexists pursuant to the terms of the trust agreement under which it serves.

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**INDEXTO EXHIBITS**

| Exhibit  Number | ** ** | **Description**                                                                                                                                                                                                                                                                                                       |
|-----------------|------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.1             | —     | Certificate of Trust of MV Oil Trust.  (Incorporated herein by reference to Exhibit 3.3 to the Registration  Statement on Form S-1 (Registration No. 333-136609))                                                                                                                                                |
| 3.2             | —     | Amended and Restated  Trust Agreement, dated January 24, 2007, among MV Partners, LLC, The  Bank of New York Trust Company, N.A. and Wilmington Trust Company.  (Incorporated herein by reference to Exhibit 3.1 to our Current Report on  Form 8-K filed on January 25, 2007 (File No. 1-33219)) |
| 10.1            | —     | Conveyance of Net  Profits Interest, dated January 24, 2007, from MV Partners, LLC to The  Bank of New York Trust Company, N.A. as Trustee of MV Oil Trust.  (Incorporated herein by reference to Exhibit 10.1 to our Current Report on  Form 8-K filed on January 25, 2007 (File No. 1-33219))             |
| 10.2            | —     | Administrative Services  Agreement, dated January 24, 2007, by and between MV Partners, LLC and  The Bank of New York Trust Company, N.A. as Trustee of MV Oil Trust.  (Incorporated herein by reference to Exhibit 10.2 to our Current Report on  Form 8-K filed on January 25, 2007 (File No. 1-33219))   |
| 10.3            | —     | Registration Rights  Agreement, dated January 24, 2007, by and between MV Partners, LLC and  The Bank of New York Trust Company, N.A. as Trustee of MV Oil Trust.  (Incorporated herein by reference to Exhibit 4.1 to our Current Report on  Form 8-K filed on January 25, 2007 (File No. 1-33219))        |
| 10.4            | —     | Assignment of Hedge  Proceeds, dated January 24, 2007, by and between MV Partners, LLC and  The Bank of New York Trust Company, N.A. as Trustee of MV Oil Trust.  (Incorporated herein by reference to Exhibit 10.3 to our Current Report on  Form 8-K filed on January 25, 2007 (File No. 1-33219))        |
| 31.1*           | —     | Certificate filed  pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                          |
| 32.1*           | —     | Certificate furnished  pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                      |

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*              Filedherewith.

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