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UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549



FORM 10-K



(Mark One)ý

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2016o

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period
from                                     to


Commission file number 001-35160



VOC ENERGY TRUST(Exact name of registrant as specified in its charter)



Delaware(State or other jurisdiction of
incorporation or organization)

80-6183103(I.R.S. Employer
Identification No.)The Bank of New York MellonTrust Company, N.A., TrusteeGlobal Corporate Trust919 CongressAustin, Texas

78701(Address of principal executive offices)

(Zip Code)


Registrant's
telephone number, including area code:(855) 802-1094

Securities
registered pursuant to Section 12(b) of the Act:



Title of Each Class

Name of Each Exchange on which RegisteredUnits of Beneficial Interest

New York Stock Exchange


Securities
registered pursuant to Section 12(g) of the Act:None

Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities
Act. Yes o    No ý

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the
Act. Yes o    No ý

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the
past 90 days. Yes ý    No o

Indicate by checkmark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit and post such files). Yes o    No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not
contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. ý

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the
definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):



Large accelerated filer o

Accelerated filer o

Non-accelerated filer ý (Do not check if a
smaller reporting company)

Smaller reporting company o


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

The aggregate market value of the 12,747,750 Units of Beneficial Interest in VOC Energy Trust held by non-affiliates of the registrant, computed using the closing
sales price of $3.30 on June 30, 2016, was approximately $42,067,575.

Indicate
the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date. As of March 15, 2017, 17,000,000 Units of
Beneficial Interest in VOC Energy Trust were outstanding.

DOCUMENTS
INCORPORATED BY REFERENCE:None





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PageFORWARD LOOKING STATEMENTS

1GLOSSARY OF CERTAIN OIL AND NATURAL GAS TERMS

1PART I

6Item 1.

Business

6Item 1A.

Risk Factors

29Item 1B.

Unresolved Staff Comments

41Item 2.

Properties

41Item 3.

Legal Proceedings

41Item 4.

Mine Safety Disclosures

41PART II

42Item 5.

Market for the Registrant's Common Equity, Related Unitholder Matters and Issuer Purchases of Equity Securities

42Item 6.

Selected Financial Data

42Item 7.

Trustee's Discussion and Analysis of Financial Condition and Results of Operations

43Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

50Item 8.

Financial Statements and Supplementary Data

51Item 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

65Item 9A.

Controls and Procedures

65Item 9B.

Other Information

67PART III

67Item 10.

Directors, Executive Officers and Corporate Governance

67Item 11.

Executive Compensation

67Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Unitholder Matters

67Item 13.

Certain Relationships and Related Transactions, and Director Independence

68Item 14.

Principal Accountant Fees and Services

69PART IV

70Item 15.

Exhibits, Financial Statement Schedules

70Item 16

Form 10-K Summary

71SIGNATURES

72


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FORWARD LOOKING STATEMENTS

This Annual Report on Form 10-K, which we refer to as this "Form 10-K," contains forward looking statements about VOC Brazos
Energy Partners, L.P., a Texas limited partnership, which we refer to as "VOC Brazos," and VOC Energy Trust, which we refer to herein as the "trust," that are subject to risks and uncertainties
and that are intended to qualify for the safe harbors from liability established by the Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934,
as amended, which we refer to as the "Exchange Act". All statements other than statements of historical fact included in this document, including, without limitation, statements under "Business" and
"Risk Factors" regarding the financial position, business strategy, production and reserve growth, and other plans and objectives for the future operations of VOC Brazos and the trust, are
forward-looking statements. Such statements may be influenced by factors that could cause actual outcomes and results to differ materially from those projected. Forward-looking statements are subject
to risks and uncertainties and include statements pertaining to future development activities and costs and other statements in this Form 10-K that are prospective and constitute
forward-looking statements.

When
used in this document, the words "believes," "expects," "anticipates," "intends" or similar expressions are intended to identify such forward-looking statements. The following
important factors,
in addition to those discussed elsewhere in this Form 10-K, could affect the future results of the energy industry in general, and VOC Brazos and the trust in particular, and could cause actual
results to differ materially from those expressed in such forward looking statements:



This
Form 10-K describes other important factors that could cause actual results to differ materially from expectations of VOC Brazos and the trust, including under the heading
"Risk Factors." All written and oral forward-looking statements attributable to VOC Brazos or the trust or persons acting on behalf of VOC Brazos or the trust are expressly qualified in their entirety
by such factors.

GLOSSARY OF CERTAIN OIL AND NATURAL GAS TERMS

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

BblOne stock tank barrel, or 42 U.S. gallons liquid volume, 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 oil equals six Mcf of natural
gas and one Bbl of crude oil equals 1.54 Bbls of natural gas liquids.

Btu or British Thermal UnitThe quantity of heat required to raise the temperature of one pound of water one degree Fahrenheit.

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CompletionThe installation of permanent equipment for the production of oil or natural gas, or, in the case of a dry well, the reporting to the
appropriate authority that the well has been abandoned.

Developed AcreageThe number of acres that are allocated or assignable to productive wells or wells capable of production.

Development WellA well drilled within the proved area of an oil or natural gas reservoir to the depth of a stratigraphic horizon known to be
productive.

DUCsDrilled but uncompleted. A well that has been drilled but has not undergone the final steps of perforating/acidizing or hydraulic fracturing and
procedures necessary to place the well on production.

Estimated Future Net RevenuesAlso referred to as "estimated future net cash flows." The result of applying current prices of oil and natural gas to
estimated future production from oil and
natural gas proved reserves, reduced by estimated future expenditures, based on current costs to be incurred, in developing and producing the proved reserves.

FieldAn area consisting of a single reservoir or multiple reservoirs all grouped on or related to the same individual geological structural feature
and/or stratigraphic condition. There may be two or more reservoirs in a field that are separated vertically by intervening impervious, strata, or laterally by local geologic barriers, or by both.
Reservoirs that are associated by being in overlapping or adjacent fields may be treated as a single or common operational field. The geological terms structural feature and stratigraphic condition
are intended to identify localized geological features as opposed to the broader terms of basins, trends, provinces, plays, areas-of-interest, etc.

Gross Acres or Gross WellsThe total acres or wells, as the case may be, in which a working interest is owned.

Henry HubA distribution hub on the natural gas pipeline system in Erath, Louisiana. It is the pricing point for natural gas futures contracts traded
on the New York Mercantile Exchange and the over the counter swaps traded on the Intercontinental Exchange, Spot and future natural gas prices set at Henry Hub are denominated in USD per MMBtu.

MBblOne thousand barrels of crude oil or other liquid hydrocarbons.

MBoeOne thousand barrels of oil equivalent.

McfOne thousand standard cubic feet of natural gas.

MMBblsOne million barrels of crude oil or other liquid hydrocarbons.

MMBoeOne million barrels of oil equivalent.

MMBtuOne million British Thermal Units.

MMcfOne million standard cubic feet of natural gas.

Net Acres or Net WellsThe sum of the fractional working interests owned in gross acres or wells, respectively.

Net Profits InterestA nonoperating interest that creates a share in gross production from an operating or working interest in oil and natural gas
properties. The share is measured by net profits from the sale of production after deducting costs associated with that production.

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Net Revenue InterestAn interest in all oil and natural gas produced and saved from, or attributable to, a particular property, net of all royalties,
overriding royalties, net profits interests, carried interests, reversionary interests and any other burdens to which the person's interest is subject.

NYMEXNew York Mercantile Exchange.

Plugging and AbandonmentActivities to remove production equipment and seal off a well at the end of a well's economic life.

Proved Developed Non-Producing ReservesProved developed reserves expected to be recovered from zones behind casing in existing wells.

Proved Developed Oil and Gas ReservesProved Oil and Gas Reserves that can be expected to be recovered:



Proved Developed Producing ReservesProved developed reserves that are expected to be recovered from completion intervals currently open in existing
wells and capable of production to market.

Proved Oil and Gas ReservesThose quantities of oil and gas that, by analysis of geoscience and engineering data, can be estimated with reasonable
certainty to be economically produciblefrom a given date forward, from known reservoirs, and under existing economic conditions, operating methods, and government
regulationsprior to the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether deterministic or
probabilistic methods are used for the estimation. The project to extract the hydrocarbons must have commenced or the operator must be reasonably certain that it will commence the project within a
reasonable time.



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Proved Undeveloped Oil and Gas ReservesProved Oil and Gas Reserves that are expected to be recovered from new wells on undrilled acreage, or from
existing wells where a relatively major expenditure is required for recompletion.



PV-10The present value of estimated future net revenues using a discount rate of 10% per annum.

RecompletionThe process of re-entering an existing wellbore that is either producing or not producing and completing new reservoirs in an attempt to
establish or increase existing production.

ReservoirA porous and permeable underground formation containing a natural accumulation of producible oil and/or natural gas that is confined by
impermeable rock or water barriers and is individual and separate from other reservoirs.

Standardized Measure of Discounted Future Net Cash FlowsAlso referred to herein as "standardized measure." It is the present value of estimated
future net revenues computed by discounting estimated future net revenues at a rate of 10% annually.

The
Financial Accounting Standards Board requires disclosure of standardized measure of discounted future net cash flows relating to proved oil and gas reserve quantities per accounting
literature for extractive activitiesoil and gas, as follows: A standardized measure of discounted future net cash flows relating to an enterprise's interests in (a) proved oil and
gas reserves and (b) oil and gas subject to purchase under long-term supply, purchase, or similar agreements and contracts in which the enterprise participates in the operation of the
properties on which the oil or gas is located or otherwise serves as the producer of those reserves shall be disclosed as of the end of the year. The standardized measure of discounted future net cash
flows relating to those two types of interests in reserves may be combined for reporting purposes. The following information shall be disclosed in the aggregate and for each geographic area for which
reserve quantities are disclosed:



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Working InterestAlso called an operating interest. The right granted to the lessee of a property to explore for and to produce and own oil, gas or
other minerals. The working interest owner bears the exploration, development and operating costs on either a cash, penalty or carried basis.

WorkoverOperations on a producing well to restore or increase production.

WTI CushingWest Texas Intermediate, a type of crude oil used as a benchmark in oil pricing and the underlying commodity of the New York Mercantile
Exchange's oil future contracts for delivery at Cushing, Oklahoma.

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PART I

Item 1.    Business.

General

VOC Energy Trust, which we refer to as the "trust," was formed in November 2010, by VOC Brazos Energy Partners, L.P., which we refer to
as "VOC Brazos." Much of the information disclosed herein has been provided to the trust by VOC Brazos, including information associated with the underlying properties such as production and well
counts, major producing areas, customer relationships, competition, marketing and post-production services, and certain information on which reserve data is based.

The
trust is a statutory trust created under the Delaware Statutory Trust Act. The business and affairs of the trust are managed by The Bank of New York Mellon Trust Company, N.A., as
trustee. The trust maintains its offices at the office of the trustee, at 919 Congress Avenue, Austin, Texas 78701. The telephone number of the trustee is 1-855-802-1094. In addition,
Wilmington Trust Company acts as the Delaware trustee of the trust. The Delaware trustee has only minimal rights and duties as are necessary to satisfy the requirements of the Delaware Statutory Trust
Act. The trust does not have any employees and the business and affairs of the trust are managed by the trustee.

The
trustee does not maintain a website for filings by the trust with the Securities and Exchange Commission, which we refer to as the "SEC." Electronic filings by the trust with the SEC
are available free of charge through the SEC's website at www.sec.gov and athttp://voc.investorhq.businesswire.com.

On
May 10, 2011, VOC Brazos and the trust completed an initial public offering of units of beneficial interest in the trust, which are referred to herein as the "trust units." In
connection with the closing of the initial public offering, on May 10, 2011, VOC Brazos conveyed a net profits interest to the trust, which entitles the trust to receive 80% of the net proceeds
(calculated as described below) from the sale and production of substantially all of the interests in oil and natural gas properties in the states of Kansas and Texas held by VOC Brazos as of
May 10, 2011, which is referred herein as the "net profits interests." VOC Brazos' net interests in such properties, after deduction of all royalties and other burdens on production thereon as
of May 10, 2011, is referred to herein as the "underlying properties." As of December 31, 2016, the underlying properties included interests in 808 gross (496.6 net) producing wells and
included 90,212 gross (55,851.6 net) acres. The net profits interest will terminate on the later to occur of (1) December 31, 2030, or (2) the time from and after
January 1, 2011 when 10.6 MMBoe have been produced from the underlying properties and sold (which amount is the equivalent of 8.5 MMBoe in respect of the trust's right to receive 80% of the net
proceeds from the underlying properties pursuant to the net profits interest), and the trust will soon thereafter wind up its affairs and terminate. As of December 31, 2016, cumulatively, since
inception, the trust has received payment for approximately 3.6 MMBoe of the trust's 8.5 MMBoe interest.

The
trust will make quarterly cash distributions of substantially all of its quarterly cash receipts, after deducting the trust's administrative expenses, on or about 45 days
following the completion of each quarter through (and including) the quarter ending December 31, 2030. Because payments to the trust
will be generated by depleting assets and the trust has a finite life with the production from the underlying properties diminishing over time, a portion of each distribution will represent a return
of the original investment in the trust units.

The
amount of trust revenues and cash distributions to trust unitholders will depend on, among other things:



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The
trust was created to acquire and hold the net profits interest for the benefit of the trust unitholders. The net profits interest is passive in nature and neither the trust nor the
trustee has any control over or responsibility for costs relating to the operation of the underlying properties. The business and affairs of the trust are managed by the trustee, and neither VOC
Brazos nor any of its affiliates has the ability to manage or influence the operations of the trust. Vess Oil Corporation, which we refer to as "Vess Oil," L.D. Drilling, Inc. and Davis
Petroleum, Inc., which are collectively referred to herein as the "VOC Operators," are currently the operator or contract operator of substantially all of the underlying properties. VOC Brazos
does not, as a matter of course, make public projections as to future sales, earnings or other results relating to the underlying properties.

Description of the Trust Units

Each trust unit is a unit of beneficial interest in the trust and is entitled to receive cash distributions from the trust on a pro rata basis.
Each trust unitholder has the same rights regarding each of his trust units as every other trust unitholder has regarding his units. The trust units are in book-entry form only and are not represented
by certificates. The trust had 17,000,000 trust units outstanding as of March 15, 2017.

Distributions and Income Computations

Each quarter, the trustee will determine the amount of funds available for distribution to the trust unitholders. Available funds are the excess
cash, if any, received by the trust from the net profits interest and other sources (such as interest earned on any amounts reserved by the trustee) in that quarter, over the trust's expenses for that
quarter. Available funds will be reduced by any cash the trustee decides to hold as a reserve against future expenses. It is expected that quarterly cash distributions during the term of the trust
will be made by the trustee on or before the 45th day following the end of each quarter to the trust unitholders of record on the 30th day following the end of each quarter (or the next
succeeding business day).

Unless
otherwise advised by counsel or the Internal Revenue Service, which we refer to herein as the "IRS," the trustee will treat the income and expenses of the trust for each quarter
as belonging to the trust unitholders of record on the quarterly record date. For federal income tax purposes, trust unitholders must take into account items of income, gain, loss, deduction and
credit consistent with their methods of accounting and without regard to the taxable year or accounting method employed by the trust and without regard to the quarter in which the trust makes
distributions related to those items to the trust unitholders. Variances between taxable income and cash distributions may occur. For
example, the trustee could establish a reserve in one quarter using funds that would be included in income in the quarter in which the reserve is created but may not result in a tax deduction or a
distribution until a later quarter or possibly in a later taxable year. Similarly, the trustee could also make a payment in one quarter that would be amortized for income tax purposes over several
quarters. See "Federal Income Tax Matters."

Periodic Reports

The trustee files all required trust federal and state income tax and information returns. The trustee prepares and provides the tax information
that trust unitholders need to correctly report their share of the income and deductions of the trust. The trustee also causes to be prepared and filed

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reports
required to be filed under the Exchange Act and by the rules of any securities exchange or quotation system on which the trust units are listed or admitted to trading, and also causes the
trust to comply with the provisions of The Sarbanes-Oxley Act of 2002, including but not limited to, by establishing, evaluating and maintaining a system of internal controls over financial reporting
in compliance with the requirements of Section 404 thereof.

Each
trust unitholder and his representatives may examine, for any proper purpose, during reasonable business hours, the records of the trust and the trustee.

Liability of Trust Unitholders

Under the Delaware Statutory Trust Act, trust unitholders are entitled to the same limitation of personal liability extended to stockholders of
private corporations for profit under the General Corporation Law of the State of Delaware. No assurance can be given, however, that the courts in jurisdictions outside of Delaware will give effect to
such limitation.

Voting Rights of Trust Unitholders

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

Unless
otherwise required by the trust agreement, a matter may be approved or disapproved by the vote of a majority of the trust units held by the trust unitholders at a meeting where
there is a quorum. This is true even if a majority of the total trust units did not approve it. The affirmative vote of the holders of a majority of the outstanding trust units is required
to:



In
addition, certain amendments to the trust agreement may be made by the trustee without approval of the trust unitholders. The trustee must consent before all or any part of the trust
assets can be sold except in connection with the dissolution of the trust or limited sales directed by VOC Brazos in conjunction with its sale of underlying properties.

Duration of the Trust; Sale of the Net Profits Interest

The trust will remain in existence until the later to occur of (1) December 31, 2030 or (2) the time when 10.6 MMBoe (which
is the equivalent of 8.5 MMBoe in respect of the trust's right to receive 80% of the net proceeds from the underlying properties pursuant to the net profits interest) have been produced and sold. The
trust will dissolve prior to its termination if:



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Upon
dissolution, the trustee would sell all of the trust's assets, either by private sale or public auction, and distribute the net proceeds of the sale to the trust unitholders.

Computation of Net Proceeds

The provisions of the conveyance governing the computation of the net proceeds are detailed and extensive. The following information summarizes
the material information contained in the conveyance related to the computation of the net proceeds. For more detailed provisions concerning the net profits interest, please see the conveyance, which
is referenced as an exhibit to this Form 10-K.

Net Profits Interest

The net profits interest was conveyed to the trust by VOC Brazos on May 10, 2011 by means of a conveyance instrument that has been
recorded in the appropriate real property records in each of Kansas and Texas where the oil and natural gas properties to which the underlying properties relate are located. The net profits interest
burdens the net interest owned by VOC Brazos in the underlying properties in existence as of May 10, 2011.

The
amounts paid to the trust for the net profits interest are based on the definitions of "gross proceeds" and "net proceeds" contained in the conveyance and described below. Under the
conveyance, net proceeds are computed quarterly, and 80% of the aggregate net proceeds attributable to a computation period will be paid to the trust on or before the 30th day of the month
following the computation period. VOC Brazos will not pay to the trust any interest on the net proceeds held by VOC Brazos prior to payment to the trust. The trustee will make distributions to trust
unitholders quarterly, if sufficient funds are available. See "Description of the Trust UnitsDistributions and Income Computations."

"Gross
proceeds" means the aggregate amount received by VOC Brazos from sales of oil and natural gas produced from the underlying properties (other than amounts received for certain
future non-consent operations). However, gross proceeds does not include consideration for the transfer or sale of any underlying property by VOC Brazos or any subsequent owner to any new owner. Gross
proceeds also does not include any amount for oil or natural gas lost in production or marketing or used by the owner of the underlying properties in drilling, production and plant operations. Gross
proceeds includes payments for future production if they are not subject to repayment in the event of insufficient subsequent production.

"Net
proceeds" means gross proceeds less the following:



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Certain
non-production revenues, including salvage value for equipment related to plugged and abandoned wells, as detailed in the conveyance, offset the costs outlined above in
calculating the net proceeds. If any excess amounts have not been used to offset costs at the time when the later to occur of (1) December 31, 2030 or (2) the time when 10.6 MMBoe
(which is the equivalent of 8.5 MMBoe in respect of the net profits interest) have been produced from the underlying properties and sold, then trust unitholders will not be entitled to receive the
benefit of such excess amounts.

During
each twelve-month period beginning on the later to occur of (1) December 31, 2027 and (2) the time when 9.8 MMBoe have been produced from the underlying
properties and sold (which is the equivalent of 7.8 MMBoe in respect of the net profits interest), which we refer to, in either case, as the "Capital Expenditure Limitation Date," the sum of the
development expenditures and amounts reserved for approved development expenditure projects for such twelve-month period may not exceed the Average Annual Capital Expenditure Amount. The "Average
Annual Capital Expenditure Amount" means the quotient of (x) the sum of the development expenditures and amounts reserved for approved development expenditure projects with respect to the three
twelve- month periods ending on the Capital Expenditure Limitation Date, divided by (y) three. Commencing on the Capital Expenditure Limitation Date, and each anniversary of the Capital
Expenditure Limitation Date thereafter, the Average Annual Capital Expenditure Amount will be increased by 2.5% to account for expected increased costs due to inflation.

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As
is customary in the oil and natural gas industry, VOC Brazos pays an overhead fee to the VOC Operators to operate the underlying properties on behalf of VOC Brazos. The operating
activities include various engineering, accounting and administrative functions. The fee is based on a monthly
charge per active operated well, which totaled $1.7 million and $1.7 million paid to the VOC Operators in 2015 and 2016, respectively, for all of the underlying properties for which VOC
Brazos was designated as the operator. The fee is adjusted annually and will increase or decrease each year based on changes in the Overhead Adjustment Index ("OAI") published by the Council of
Petroleum Accountants Society ("COPAS") for that year.

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

Gross
proceeds and net proceeds are calculated on a cash receipts and cash disbursements basis except that certain costs, primarily ad valorem taxes and expenditures of a material
amount, may be determined on an accrual basis.

Additional Provisions

If a controversy arises as to the sales price of any production, then for purposes of determining gross
proceeds:



The
trustee is not obligated to return any cash received from the net profits interest. Any overpayments made to the trust by VOC Brazos due to adjustments to prior calculations of net
proceeds or otherwise will reduce future amounts payable to the trust until VOC Brazos recovers the overpayments plus interest at the prime rate.

The
conveyance generally permits VOC Brazos to transfer without the consent or approval of the trust unitholders all or any part of its interest in the underlying properties, subject to
the net profits interest. The trust unitholders are not entitled to any proceeds of a sale or transfer of VOC Brazos' interest unless certain conditions set forth in the following paragraph are
satisfied. Except in certain cases where the net profits interest is released, following a sale or transfer, the underlying properties will continue to be subject to the net profits interest, and the
net proceeds attributable to the transferred property will be calculated as part of the computation of net proceeds described in this Form 10-K.

In
addition, VOC Brazos may, without the consent of the trust unitholders, require the trust to release the net profits interest associated with any lease that accounts for less than or
equal to 0.25% of the total production from the underlying properties in the prior 12 months and provided that the net profits interest covered by such releases cannot exceed, during any
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 VOC Brazos to a non-affiliate of the relevant underlying
properties and are conditioned upon the trust receiving an 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
unitholders for the quarter in which they are received.

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

VOC
Brazos and any transferee of an underlying property will have the right to abandon its interest in any well or property if it reasonably believes the well or property ceases to
produce or is not capable of producing in commercially paying quantities. In making such decisions, VOC Brazos or any transferee of an underlying property is required under the applicable conveyance
to operate, or to use commercially reasonable efforts to cause the operators of the underlying properties to operate these properties as would a reasonably prudent operator in the State of Kansas or
Texas under the same or similar circumstances would act if it were acting with respect to its own properties, disregarding the existence of the net profits interest as a burden on such property. Upon
termination of the lease, the portion of the net profits interest relating to the abandoned property will be extinguished.

VOC
Brazos must maintain books and records sufficient to determine the amounts payable for the net profits interest to the trust. Quarterly and annually, VOC Brazos must deliver to the
trustee a
statement of the computation of the net proceeds for each computation period. The trustee has the right to inspect and copy the books and records maintained by VOC Brazos during normal business hours
and upon reasonable notice.

Federal Income Tax Matters

The following is a summary of certain U.S. federal income tax matters that may be relevant to trust unitholders. This summary is based upon
current provisions of the Internal Revenue Code of 1986, as amended, which we refer to as the "Code," existing and proposed Treasury regulations thereunder and current administrative rulings and court
decisions, all of which are subject to changes that may or may not be retroactively applied. No attempt has been made in the following summary to comment on all U.S. federal income tax matters
affecting the trust or the trust unitholders.

The
summary is limited to trust unitholders who are individual citizens or residents of the United States. Accordingly, the following summary has limited application to domestic
corporations and persons subject to specialized federal income tax treatment.Each trust unitholder should consult his own tax advisor with respect to his particular
circumstances.

Classification and Taxation of the Trust

Tax counsel to the trust advised the trust at the time of formation that, for federal income tax purposes, in its opinion the trust will be
treated as a grantor trust and not as an unincorporated business entity. No ruling has been or will be requested from the IRS with respect to the federal income tax treatment of the trust, including
as to the status of the trust as a grantor trust for such purposes. Thus, no assurance can be provided that the tax treatment of the trust would be sustained by a court if contested by the IRS or
another taxing authority. The remainder of the discussion below is based on tax counsel's opinion, at the time of formation, that the trust will be classified as a grantor trust for federal income tax
purposes. As a grantor trust, the trust will not be subject to federal income tax at the trust level. Rather, each trust unitholder will be considered for federal income tax purposes to own its
proportionate share of the trust's assets directly as though no trust were in existence. The income of the trust is deemed to be received or accrued by the trust unitholder at the time such income is
received or accrued by the trust, rather than when distributed by the trust. Each trust unitholder will be subject to tax on its proportionate share of the income and gain attributable to the assets
of the trust and will be entitled to claim its proportionate share of the deductions and expenses attributable to the assets of the trust, subject to applicable limitations, in accordance with the
trust

12

---



Table of Contents

unitholder's
tax method of accounting and without regard to the taxable year or accounting method employed by the trust.

The
trust will allocate items of income, gain, loss, deductions and credits to trust unitholders based on record ownership at each quarterly record date. It is possible that the IRS or
another taxing authority could disagree with this allocation method and could assert that income and deductions of the trust should be determined and allocated on a daily, prorated or other basis,
which could require adjustments to the tax returns of the trust unitholders affected by this issue and result in an increase in the administrative expense of the trust in subsequent periods.

Classification of the Net Profits Interest

Tax counsel to the trust also advised the trust at the time of formation that, for federal income tax purposes, based upon representations made
by VOC Brazos regarding the expected economic life of the underlying properties and the expected duration of the net profits interest, in its opinion the net profits interest should be treated as a
"production payment" under Section 636 of the Code or otherwise as a debt instrument. On the basis of that advice, the trust will treat the net profits interest as indebtedness subject to
Treasury regulations applicable to contingent payment debt instruments, and by purchasing trust units, a trust unitholder will agree to be bound by the trust's application of those regulations,
including the trust's determination of the rate at which interest will be deemed to accrue on the net profits interest. No assurance can be given that the IRS or another taxing authority will not
assert that the net profits interest should be treated differently. Any such different treatment could affect the amount, timing and character of income, gain or loss in respect of an investment in
trust units and could require a trust unitholder to accrue income at a rate different than that determined by the trust.

Widely Held Fixed Investment Trust Reporting Information

The trustee assumes that some trust units are held by middlemen, as such term is broadly defined in Treasury regulations (and includes
custodians, nominees, certain joint owners, and brokers holding an interest for a custodian in street name). Therefore, the trustee considers the trust to be a non-mortgage widely held fixed
investment trust ("WHFIT") for U.S. federal income tax purposes. The Bank of New York Mellon Trust Company, N.A., 919 Congress Avenue, Austin, Texas 78701,
telephone number 1-855-802-1094, is the representative of the trust that will provide tax information in accordance with applicable Treasury regulations governing the information reporting
requirements of the trust as a WHFIT. Notwithstanding the foregoing, the middlemen holding trust units on behalf of trust unitholders, and not the trustee of the trust, are solely responsible for
complying with the information reporting requirements under the Treasury regulations with respect to such trust units, including the issuance of IRS Forms 1099 and certain written tax
statements. Trust unitholders whose trust units are held by middlemen should consult with such middlemen regarding the information that will be reported to them by the middlemen with respect to the
trust units. Any generic tax information provided by the trustee of the trust is intended to be used only to assist trust unitholders in the preparation of their federal and state income tax returns.

Available Trust Tax Information

In compliance with the reporting requirements for WHFITs and the dissemination of trust tax reporting information, the trustee provides a
generic tax information reporting booklet that is intended to be used only to assist unitholders in the preparation of their 2016 federal and state income tax returns. The projected payment schedule
for the net profits interest is included with the tax information booklet. This tax information booklet can be obtained
athttp://voc.investorhq.businesswire.com.

13

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Table of Contents

Description of the Underlying Properties

The underlying properties consist of VOC Brazos' net interests in substantially all of its oil and natural gas properties after deduction of all
royalties and other burdens on production thereon as of May 10, 2011, which properties are located in the states of Kansas and Texas. The VOC Operators are currently the operators or contract
operators of substantially all of the underlying properties.

VOC
Brazos' interests in the properties comprising the underlying properties require VOC Brazos to bear its proportionate share along with the other working interest owners of the costs
of development and operation of such properties. The underlying properties are burdened by non-working interests owned by third parties consisting primarily of overriding royalty and royalty interests
retained by the
owners of the land subject to the working interests. These landowners' royalty interests typically entitle the landowner to receive 12.5% of the revenue derived from oil and natural gas production
resulting from wells drilled on the landowner's land, without any deduction for drilling costs or other costs related to production of oil and natural gas. A working interest percentage represents a
working interest owner's proportionate ownership interest in a property in relation to all other working interest owners in that property, whereas a net revenue interest percentage is a working
interest owner's percentage of production after reducing such percentage by the percentage of burdens on such production such as royalties and overriding royalties.

Based
on the reserve report, the net profits interest would entitle the trust to receive net proceeds from the sale of production of not less than 10.6 MMBoe of proved reserves
attributable to the underlying properties expected to be produced over the term of the trust. The trust is entitled to receive 80% of the net proceeds from the sale of production of oil and natural
gas attributable to the underlying properties that are produced during the term of the trust, whereas total reserves as reflected on the summary reserve reports and attributable to the underlying
properties include all reserves expected to be economically produced during the economic life of the properties.

In
general, the producing wells included in the underlying properties have stable production profiles and their production is long-lived. Based on the reserve report, annual production
from the underlying properties is expected to decline at an average annual rate of 6.5% over the next 20 years assuming no additional development drilling or other development expenditures are
made on the underlying properties after 2020. VOC Brazos expects total development expenditures for the underlying properties through December 31, 2020 will be approximately
$38.0 million, which it expects will partially offset the natural decline in production otherwise expected to occur with respect to the underlying properties as described in more detail below.

Reserves

The engineering department of Vess Oil Corporation, who serves as contract operator for VOC Brazos, maintains oversight and compliance
responsibility for the internal reserve estimate process and, in accordance with internal policies and procedures, provides appropriate data to independent third party engineers for the annual
estimation of year-end reserves. This engineering department accumulates historical production data for the underlying properties, calculates historical lease operating expenses and differentials,
updates working interests and net revenue interests, and obtains logs, 3-D seismic and other geological and geophysical information. This data is forwarded to Cawley, Gillespie &
Associates, Inc., which we refer to as "CG&A," thereby allowing CG&A to prepare estimated proved reserves in their entirety based on such data.

Estimates
of the proved oil and gas reserves attributable to the trust as of December 31, 2014, 2015 and 2016 are based on reports prepared by CG&A. CG&A has been in business
since 1961 and serves many organizations and individuals in the petroleum industry, including owners and operators of oil
and gas properties, exploration groups, planners, and professionals in investment and finance. One of the principal businesses of CG&A is providing detailed assessment of producing reservoirs. CG&A is

14

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Table of Contents

an
independent firm of petroleum engineers, geologists, geophysicists and petrophysicists and does not own an interest in the underlying properties and is not employed on a contingent basis.
Mr. W. Todd Brooker, Senior Vice President, is the technical person at CG&A who is primarily responsible for overseeing CG&A's preparation of the reserve estimates. Mr. Brooker is a
graduate of the University of Texas at Austin with a Bachelor of Science degree in Petroleum Engineering and has 25 years of experience in petroleum engineering. He is a licensed professional
engineer in the State of Texas (License #83462).

Oil
and gas proved reserves are disclosed by significant geographic area, using the 12-month average beginning-of-month price for the year, based on the use of reliable technologies to
estimate proved oil and gas reserves, if those technologies have been demonstrated to result in reliable conclusions about reserves volumes. Reserve and related information for 2014, 2015 and 2016 is
presented consistent with these requirements.

Proved Reserves of VOC Energy Trust.The following table sets forth, as of December 31, 2016, estimated proved reserves
attributable to the
trust derived from the reserve report. A summary of the reserve report is included below.



Oil
(MBbls)

Natural
gas
(MMcf)

Oil
equivalents
(MBoe)Proved Developed


3,667


1,311


3,886Proved Undeveloped


1,172


711


1,290Total Proved


4,838


2,021


5,176


Information
concerning historical changes in net proved reserves attributable to the trust, and the calculation of the standardized measure of discounted future net revenues related
thereto, is contained in Note J to the financial statements of the trust included in this Form 10-K. VOC Brazos has not filed reserve estimates covering the underlying properties with
any other federal authority or agency.

15

---



Table of Contents

The
following table summarizes the changes in estimated proved reserves of the trust for the periods indicated.



VOC Energy TrustOil
(MBbl)

Natural
Gas
(MMcf)

Oil
Equivalents
(MBoe)Proved Reserves:Balance, December 31, 2013


6,511


3,684


7,125Revisions of previous estimates


733


707


851Production(1)


(574
)

(421
)

(644
)​
​
​
​
​
​
​
​
​
​
​Balance, December 31, 2014


6,670


3,970


7,332Revisions of previous estimates


(729
)

(1,070
)

(907
)Production(1)


(493
)

(329
)

(548
)​
​
​
​
​
​
​
​
​
​
​Balance, December 31, 2015


5,448


2,571


5,877Revisions of previous estimates


(160
)

(278
)

(206
)Production(1)


(450
)

(272
)

(495
)​
​
​
​
​
​
​
​
​
​
​Balance, December 31, 2016


4,838


2,021


5,176​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​Proved Developed Reserves:Balance, December 31, 2013


5,650


3,251


6,191​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​Balance, December 31, 2014


5,240


3,209


5,775​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​Balance, December 31, 2015


4,288


1,682


4,569​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​Balance, December 31, 2016


3,667


1,311


3,886​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​Proved Undeveloped Reserves:Balance, December 31, 2013


863


433


935​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​Balance, December 31, 2014


1,430


761


1,557Proved undeveloped reserves converted to proved developed by drilling


0


0


0Additional proved undeveloped reserves added


98


164


125Revisions of previous estimates


(368
)

(35
)

(374
)​
​
​
​
​
​
​
​
​
​
​Balance, December 31, 2015


1,160


890


1,308Proved undeveloped reserves converted to proved developed by drilling


(35
)

0


(35
)Additional proved undeveloped reserves added


54


0


54Revisions of previous estimates


(7
)

(179
)

(37
)​
​
​
​
​
​
​
​
​
​
​Balance, December 31, 2016


1,172


711


1,290​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​


(1)Reflects
sales volumes produced during the noted year regardless whether royalty payments thereon have been remitted to the Trust by VOC Brazos.


None
of the proved undeveloped reserves have remained undeveloped for five years or more after they were initially disclosed as proved undeveloped reserves.

The
reserves above represent the trust's 80% net profits interest in the underlying properties for the remainder of the term of the trust.

16

---



Table of Contents

The
following table sets forth the estimates of total proved reserves and forecasts of economics attributable to the underlying properties as of December 31, 2016 for the
remainder of the term of the trust, as presented in the summary prepared by CG&A of its reserve report as of December 31, 2016 for the trust. The estimates of proved reserves have not been
filed with or included in reports to any federal authority or agency. The discounted cash flow value shown in the table is not intended to represent the current market value of the trust's estimated
oil and natural gas reserves.



Proved
Developed
Producing

Proved
Developed
Non-Producing

Proved
Undeveloped

Total
Proved(dollars in thousands)Net ReservesOil (MBbl)


4,268.1


316.1


1,464.5


6,048.7Gas (MMcf)


1,576.3


62.1


888.9


2,527.3RevenueOil

$
166,075.2

$
12,437.0

$
58,469.2

$
236,981.4Gas


3,309.3


152.0


2,176.8


5,638.2Severance Taxes


4,502.3


513.9


2,751.7


7,768.0Ad Valorem Taxes


4,402.6


406.7


1,979.1


6,788.4Operating Expenses


88,501.4


850.5


4,219.2


93,571.1Workover Expenses


11,744.3


231.9


0.0


11,976.2COPAS Overhead


10,918.6


361.9


388.6


11,669.1Investments


0.0


1,717.8


36,253.8


37,971.680% Net Profits Interest Net Operating Income (NPI)(1)

$
39,452.2

$
6,805.0

$
12,043.0

$
58,300.180% NPI(2)

$
26,120.7

$
4,164.2

$
4,037.8

$
34,322.7


(1)Before
interest and taxes.(2)Discounted
at 10%.


The
net profits interest entitles the trust to receive 80% of the net proceeds attributable to the underlying properties. The net profits interest will terminate on the later to occur of
(1) December 31, 2030, or (2) the time when 10.6 MMBoe have been produced from the underlying properties and sold, and the trust will soon thereafter wind up its affairs and
terminate. Based on the reserve report for the year ended December 31, 2016, CG&A estimated that the trust would terminate December 31, 2030 based on the calculation that 10.6 MMBoe
would have been produced from the underlying properties and sold (which amount is the equivalent of 8.5 MMBoe in respect of the trust's right to receive 80% of the net proceeds from the underlying
properties pursuant to the net profits interest) prior to this date.

Oil
and gas prices were adjusted to a WTI Cushing oil price of $42.75 per Bbl and a Henry Hub natural gas price of $2.481 per MMBtu. As specified by the SEC, these prices are 12-month
averages based upon the price on the first day of each month during 2016. The price adjustments were based on oil price differentials forecast at $5.50 per Bbl for the Kansas
underlying properties, $2.50 per Bbl for the Kurten (Woodbine) Field wells in Texas, $1.50 per Bbl for the Sand Flat Unit wells in Texas and $2.50
per Bbl for all other Texas underlying properties. Oil price differentials were not escalated. Gas price differentials were forecast on a per property basis as provided by VOC Brazos and were also not
escalated. Price differentials include adjustments for transportation and basis differential. Gas prices were further adjusted with a heating value (Btu content) applied on a per-property basis.
Operating expenses, workover expenses, COPAS overhead charges and investments were forecast on a per
property basis as furnished by VOC Brazos. Expenses and investments were held constant in accordance with SEC rules and guidelines. For Kansas properties, severance taxes were applied at

17

---



Table of Contents

4.33 percent
of revenue until exemption levels were forecasted to be reached. The severance tax rate was dropped to zero (0) when a rate of six (6) Bbl/day per well were reached
or when gross gas production value reached $87/day per gas well. Severance taxes were forecasted at 4.6 percent of oil revenue and 7.5 percent of gas revenue for properties in Texas. Ad
valorem taxes for Kansas properties were applied at 6.0 percent of revenue, but dropped to 2.0 percent as properties qualified for the tax exemption. Kansas oil and gas conservation
taxes were included within the severance tax estimates. Ad valorem taxes were applied at 3.29 percent of revenue (after severance taxes) for the Texas properties.

The
estimates of proved oil and natural gas reserves attributable to the underlying properties are based on estimates prepared by CG&A. Rules and guidelines established by the SEC
regarding the present value of future net revenues were used to prepare these reserve estimates. Oil and natural gas reserve engineering is a subjective process of estimating underground accumulations
of oil and natural gas that cannot be measured in an exact manner, and estimates of other engineers might differ materially from those included in the report. The accuracy of any reserve estimate is a
function of the quality of available data and engineering, and estimates may justify revisions based on the results of drilling, testing, and production activities. Accordingly, reserve estimates are
inherently imprecise and should not be construed as representing the actual quantities of future production or cash flows to be realized from oil and natural gas properties or the fair market value of
such properties.

Producing Acreage and Well Counts

For the following data, "gross" refers to the total wells or acres in which VOC Brazos owns a working interest and "net" refers to gross wells
or acres multiplied by the percentage working interest owned by VOC Brazos. Although many of VOC Brazos' wells produce both oil and natural gas, a well is categorized as an oil well or a natural gas
well based upon the ratio of oil to natural gas production.

The
underlying properties are interests in developed properties located in oil and natural gas producing regions of Kansas and Texas. The following is a summary of the approximate
acreage of the underlying properties at December 31, 2016.



Gross

Net(acres)Developed Acreage:Kansas


66,519


39,010.3Texas


23,693


16,841.3​
​
​
​
​
​
​
​Total


90,212


55,851.6​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​Undeveloped Acreage:





​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​


The
following is a summary of the producing wells on the underlying properties as of December 31, 2016:



Operated Wells

Non-Operated
Wells

TotalGross

Net

Gross

Net

Gross

NetOil


754


478.6


33


7.5


787


486.1Natural gas


17


9.4


4


1.1


21


10.5​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​Total


771


488.0


37


8.6


808


496.6​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​


18

---



Table of Contents

The
following is a summary of the number of developmental wells drilled by VOC Brazos on the underlying properties during the last three years. VOC Brazos did not drill any exploratory
wells during the periods presented.



Year Ended December 31,2014

2015

2016Gross

Net

Gross

Net

Gross

NetCompleted:Oil wells


2


1.5








1


1Natural gas wells

















Non-productive


1


0.7











​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​Total


3


2.2








1


1​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​


As
of December 31, 2016, no wells were being drilled but VOC had two DUCs. Capital expenditures associated with converting proved undeveloped reserves to proved developed reserves
for the year ended December 31, 2016 were $187,981. VOC Brazos continues to develop further proved undeveloped reserves pursuant to its planned development and workover program. See "Trustee's
Discussion and Analysis of Financial Condition and Results of OperationsPlanned Development and Workover Program."

The
following table shows the average sales prices per Bbl of oil and Mcf of natural gas produced and the production costs and production and property taxes per Boe received by the trust
from the underlying properties. Average prices do not include the effect of hedge and other derivative activity.



Year Ended December 31,2014

2015

2016Sales prices:Oil (per Bbl)

$
95.29

$
56.02

$
37.58Natural gas (per Mcf)

$
4.96

$
3.20

$
1.83Lease operating expense (per Boe)

$
18.35

$
19.32

$
18.29Production and property taxes (per Boe)

$
6.17

$
5.57

$
3.18


19

---



Table of Contents

Major Producing Areas

The following table summarizes the estimated proved reserves by operating area attributable to the underlying properties according to the
reserve report and the corresponding pre-tax PV-10 value as of December 31, 2016.



Proved Reserves(1)Operating Area

Oil
(MBbls)

Natural
Gas
(MMcf)

Total
(MBoe)

% of
Total
Reserves

Pre-Tax
PV-10%
Value(2)

% of
Pre-Tax
PV-10%
Value(In Thousands)Kansas (171 Fields)Fairport


569


0


569


6.9
%
$
4,330


9.7
%Marcotte


240


0


240


2.9


2,106


4.7Chase-Silica


254


0


254


3.1


2,101


4.7Codell


113


0


113


1.4


1,405


3.1Bindley


175


0


175


2.1


1,093


2.4Mueller


103


0


103


1.2


1,024


2.3Wesley


80


0


80


1.0


830


1.9Griston SW


39


0


39


0.5


564


1.3Adell Northwest


62


0


62


0.7


526


1.2Miner


55


0


55


0.7


398


0.9Zurich


38


0


38


0.5


392


0.9Otis-Albert


36


0


36


0.4


371


0.8Rosa Northwest


40


0


40


0.5


352


0.8Other


1,201


1,077


1,380


16.6


654


1.4​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​Kansas Total


3,005


1,077


3,184


38.5


16,146


36.1Texas (3 Fields)Kurten


3,336


2,038


3,676


44.4


16,063


35.9Hitts Lake North


751


0


751


9.1


8,920


19.9Sand Flat


663


0


663


8.0


3,607


8.1​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​Texas Total


4,750


2,038


5,090


61.5


28,590


63.9​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​Total


7,755


3,115


8,274


100.0
%
$
44,736


100.0
%​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​


(1)In
accordance with the rules and regulations promulgated by the SEC, the proved reserves presented above were determined using the twelve month unweighted arithmetic
average of the first-day-of-the-month price for the period from January 1, 2016 through December 1, 2016 without giving effect to any hedge transactions, and were held constant for the
life of the properties. This yielded a price for oil of $42.75 per barrel and a price for natural gas of $2.48 per MMBtu.(2)Because
the trust bears no federal tax expense and taxable income is passed through to the unitholders of the trust, no provision for federal or state income taxes
is included in the summary reserve reports and therefore the standardized measure of discounted future net cash flows attributable to the underlying properties is equal to the pre-tax PV-10 value.
PV-10 may not be considered a GAAP financial measure as defined by the SEC and is derived from the standardized measure of discounted future net cash flows, which is the most directly comparable GAAP
financial measure. The pre-tax PV-10 value and the standardized measure of discounted future net cash flows do not purport to present the fair value of the oil and natural gas reserves attributable to
underlying properties.


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Kansas.As of December 31, 2016, proved reserves attributable to the portion of the Kansas underlying properties were approximately
3.2 MMBoe
and were located in three primary areas: the Central Kansas Uplift, Western Kansas and South Central Kansas. As of December 31, 2016, the VOC Operators operated 95.9% of the total proved
reserves attributable to the Kansas underlying properties based on PV-10 value.

The
major fields in the Central Kansas Uplift include Fairport Field, Chase-Silica Field and Marcotte Field, all of which are producing primarily from the Arbuckle and Lansing Kansas
City zones. The major fields in Western Kansas include the Bindley, Moore-Johnson and Wesley fields, which are producing primarily from the Mississippian, Morrow, Lansing Kansas City and Cherokee
zones. The major fields in South Central Kansas include the Gerberding, Spivey Grabs and Alford fields, which are producing primarily from the Mississippian, Simpson and Lansing Kansas City zones.

Texas.As of December 31, 2016, proved reserves attributable to the Texas underlying properties were approximately 5.1 MMBoe and
are located
in two areas: Central Texas and East Texas. As of December 31, 2016, the VOC Operators operated approximately 99.8% of the total proved reserves attributable to the Texas underlying properties
based on PV-10 value.

Central
Texas production is attributable to the Kurten Woodbine Unit, which is producing primarily from the EagleBine Interval, Buda and Georgetown zones. East Texas properties include
the Sand Flat field and Hitts Lake North field, each of which is producing primarily from the Paluxy and Chisum zones.

The
following table summarizes the production by product for the years indicated for the only field, Kurten, that contains 15% or more of total proved reserves attributable to the
underlying properties from the above table:



Oil
(MBbl)

Natural
Gas
(MMcf)

Oil
Equivalents
(MBoe)2014


187


197


2202015


140


137


1632016


152


160


179


Marketing and Post-Production Services

Pursuant to the terms of the conveyance that created the net profits interest, VOC Brazos has the responsibility to market, or cause to be
marketed, the oil and natural gas production attributable to the underlying properties. The terms of the conveyance that created the net profits interest do not permit VOC Brazos to charge any
marketing fee when determining the net proceeds upon which the net profits interest is calculated. As a result, the net proceeds to the trust from the sales of oil and natural gas production from the
underlying properties are determined based on the same price that VOC Brazos receives for oil and natural gas production attributable to VOC Brazos' remaining interest in the underlying properties.

Texas
is a mature oil producing state with a well-developed crude oil refining, transportation and marketing infrastructure. According to the Texas Railroad Commission, more than 5,000
operators reported aggregate oil production of approximately 1.021 billion barrels for the State of Texas during 2016. There were 29 operating oil refineries located in Texas in 2016 with
combined capacity to refine over 5.45 million barrels of oil per day. With oil production in the state of Texas averaging approximately 2.80 million barrels of oil per day, Texas
refineries are net importers of crude oil. As a
result, oil producers in Texas benefit from competitive marketing conditions for their oil production as a result of the high demand from the crude oil marketing companies and refineries located in
Texas.

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Kansas
is a mature oil producing state with a well-developed transportation infrastructure for crude oil transportation and marketing. According to the Kansas Geological Society, more
than 2,100 operators reported aggregate oil production of approximately 38.4 million barrels for the state of Kansas in 2016. Kansas is home to three oil refineries located in McPherson, El
Dorado and Coffeyville, Kansas. These refineries have combined capacity to refine over 300,000 barrels of oil per day. With oil production in the state of Kansas averaging approximately 105,000
barrels of oil per day, Kansas is a net importer of crude oil. As a result, Kansas operators benefit from the competitive marketing conditions for their oil production as a result of the high demand
from the refineries located in Kansas.

Vess
Oil Corporation generally sells production from the underlying properties to several purchasers, including MV Purchasing LLC, an affiliate of VOC Brazos, which we refer to as
"MV Purchasing," under short-term arrangements using market sensitive pricing. These sales to purchasers are under terms ranging from one month to six months, using market sensitive pricing. Five
purchasers, including MV Purchasing, have been purchasing substantially all of the crude oil production, and a substantial portion of the crude oil production may continue be acquired by one or more
single purchasers. For the years ended December 31, 2014, 2015 and 2016, MV Purchasing purchased 35%, 37% and 31%, respectively, of the production sold from the underlying properties. VOC
Brazos does not believe that loss of any of these parties as a purchaser would have a material adverse impact on the business of VOC Brazos, as substitute purchasers are generally available; however,
a purchaser's failure to pay for purchased crude oil could have a significant adverse impact on VOC Brazos' business.

Oil
production is typically transported by truck from the field to the closest gathering facility or refinery. VOC Brazos sells the majority of the oil production from the underlying
properties under short-term arrangements using market sensitive pricing. The price received by VOC Brazos for the oil production from the underlying properties is usually based on the NYMEX price
applied to equal daily quantities on the month of delivery, which price is then reduced for differentials based upon delivery location and oil quality. The average differential for oil production
during the years ended December 31, 2014, 2015 and 2016 received by the trust from the underlying properties were $4.88, $4.48 and $3.98 per barrel, respectively.

All
natural gas produced by VOC Brazos is marketed and sold to third-party purchasers. The natural gas is sold on a contract basis and, in all but two cases, the contracts are 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 index price, after adjustments for Btu content, transportation and
related charges.

Vess
Oil Corporation has committed to sell all of its natural gas production attributable to the Kurten Woodbine Unit in Texas to ETC Texas Pipeline, Ltd., on a year-to-year basis
effective October 1, 2014. Vess Oil Corporation has also committed to sell to ONEOK Field Services Company, L.L.C. all of its natural gas production attributable to nine wells in Kingman and
Barber Counties, Kansas on a month-to-month basis effective as of August 31, 2015.

VOC
Brazos does not have any volume commitments or take or pay arrangements.

Sale and Abandonment of Underlying Properties

VOC Brazos and any transferee of any of an underlying property will have the right to abandon its interest in any well or property if it
reasonably believes a well or property ceases to produce or is not capable of producing in commercially paying quantities. To reduce the potential conflict of interest between VOC Brazos and the trust
in determining whether a well is capable of producing in commercially paying quantities, VOC Brazos is required under the applicable conveyance to use commercially reasonable efforts to cause the
operators of the underlying properties to operate these properties as would a reasonably prudent operator acting with respect to its own properties, disregarding the existence of the net profits
interest as a burden on such property. Upon termination of

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the
lease, the portion of the net profits interest relating to the abandoned property will be extinguished. For the years ended December 31, 2014, 2015 and 2016, VOC Brazos plugged and
abandoned 26, 14 and 13 wells, respectively, located on leases within the underlying properties based on its determination that such wells could no longer produce oil or natural gas in commercially
economic quantities.

VOC
Brazos generally may sell all or a portion of its interests in the underlying properties, subject to and burdened by the net profits interest, without the consent of the trust
unitholders. In addition, VOC Brazos may, without the consent of the trust unitholders, require the trust to release the net profits interest associated with any lease that accounts for less than or
equal to 0.25% of the total production from the underlying properties in the prior 12 months and provided that the net profits interest covered by such releases cannot exceed, during any
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 VOC Brazos to a non-affiliate of the relevant underlying
properties and are conditioned upon the trust receiving an 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
unitholders for the quarter in which they are received. Net sales
proceeds of $229,344 and $0 were paid to the trust during 2015 and 2016, respectively, for its share of interest in certain underlying properties that were sold. VOC Brazos has not identified any of
the underlying properties for sale as of December 31, 2016.

Title to Properties

The underlying properties are subject to certain burdens that are described in more detail below. To the extent that these burdens and
obligations affect VOC Brazos' rights to production and the value of production from the underlying properties, they have been taken into account in calculating the trust's interests and in estimating
the size and the value of the reserves attributable to the underlying properties.

VOC
Brazos' interests in the oil and natural gas underlying properties are typically subject, in one degree or another, to one or more of the
following:



VOC
Brazos has informed the trustee that VOC Brazos believes that the burdens and obligations affecting the underlying properties are conventional in the industry for similar properties.
VOC Brazos

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also
has informed the trustee that VOC Brazos believes that the existing burdens and obligations do not, in the aggregate, materially interfere with the use of the underlying properties and do not
materially adversely affect the value of the net profits interest.

VOC
Brazos recorded the conveyance of the net profits interest in Kansas and Texas in the real property records in each Kansas or Texas county in which the underlying properties are
located. Although under Texas law it is well-established that the recording in the appropriate real property records of an interest such as the net profits interest constitutes the conveyance of a
fully vested real property interest to the trust, the law in Kansas is less certain. VOC Brazos and the trust believe that
the recording in the appropriate real property records in Kansas of the net profits interest should constitute the conveyance of a fully vested real property interest, interests in hydrocarbons in
place or to be produced or a production payment as such is defined under the United States Bankruptcy Code. In a bankruptcy of VOC Brazos, creditors of VOC Brazos would be able to claim the net
profits interest as an asset of the bankruptcy estate to satisfy obligations to them if the conveyance of the net profits interest did not constitute the conveyance of a real property interest or
interests in hydrocarbons in place or to be produced under applicable state law or a production payment, in which case the trust would be an unsecured creditor of VOC Brazos at risk of losing the
entire value of the net profits interest to senior creditors.

VOC
Brazos believes that its title to the underlying properties is, and the trust's title to the net profits interest is, good and defensible in accordance with standards generally
accepted in the oil and gas industry, subject to such exceptions as are not so material to detract substantially from the use or value of such properties or royalty interests. Please see
"Item 1A. Risk FactorsThe trust units may lose value as a result of title deficiencies with respect to the underlying properties."

Competition and Markets

The oil and natural gas industry is highly competitive. VOC Brazos competes with major oil and natural gas companies and independent oil and
natural gas companies for oil and natural gas, equipment, personnel and markets for the sale of oil and natural gas. Many of these competitors are financially stronger than VOC Brazos, but even
financially troubled competitors can affect the market because of their need to sell oil and natural gas at any price to attempt to maintain cash flow. The trust is subject to the same competitive
conditions as VOC Brazos and other companies in the oil and natural gas industry.

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

Future
price fluctuations for oil and natural gas will directly impact trust distributions, estimates of reserves attributable to the trust's interests and estimated and actual future
net revenues to the trust. In view of the many uncertainties that affect the supply and demand for oil and natural gas, neither the trust nor VOC Brazos can make reliable predictions of future oil and
natural gas supply and demand, future product prices or the effect of future product prices on the trust.

Regulation

The production of oil and gas from the underlying properties is affected by many state and federal regulations with respect to allowable rates
of production, drilling permits, well spacing, marketing, environmental matters and pricing. Future regulations could change allowable rates of production or the manner in which oil and gas operations
may be lawfully conducted.

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Historically, the transportation and sale for resale of natural gas in interstate commerce has been regulated by the Federal Energy Regulatory
Commission, or FERC, under the Natural Gas Act of 1938, or NGA, the Natural Gas Policy Act of 1978, or NGPA, and regulations issued under those statutes. Over the last two decades, the FERC has issued
orders and adopted regulations resulting in a restructuring of the natural gas industry. The principal elements of this restructuring were the requirement that interstate pipelines separate, or
"unbundle," into individual components the various services offered on their systems, with all transportation services to be provided on a non-discriminatory basis, and the prohibition against an
interstate pipeline providing gas sales services except through separately organized affiliates. In various rulemaking proceedings following its initial unbundling requirement, the FERC has refined
its regulatory program applicable to interstate pipelines in various respects, and it has announced that it will continue to monitor these and other regulations to determine whether further changes
are needed. In addition to rulemaking proceedings, the FERC establishes new policies and regulations through policy statements and adjudications of
individual pipeline matters. Further, additional changes to regulations may occur based on actions taken by the United States Congress and/or the courts.

In
the past, the federal government has regulated the prices at which natural gas could be sold. While sales by producers of natural gas can currently be made at market prices, Congress
could reenact price controls in the future. Deregulation of wellhead natural gas sales began with the enactment of the NGPA and culminated in adoption of the Natural Gas Wellhead Decontrol Act which
removed all price controls affecting wellhead sales of natural gas effective January 1, 1993.

Sales
of crude oil, condensate, and natural gas liquids are not currently regulated and are made at negotiated prices. Nevertheless, Congress could reenact price controls in the future.
Sales of crude oil are affected by the availability, terms and cost of transportation. The transportation of oil in common carrier pipelines is subject to rate and access regulation. The FERC
regulates interstate oil pipeline transportation rates under the Interstate Commerce Act. In general, interstate oil pipeline rates must be just and reasonable and may not be unduly discriminatory or
confer any undue preference upon any shopper. Rates generally are cost-based, although settlement rates agreed to by all shippers are permitted and market-based rates may be permitted in certain
circumstances.

Although
the price at which VOC Brazos sells oil and natural gas is not currently subject to federal rate regulation and, for the most part, is not subject to state regulation, with
regard to physical sales of natural gas and oil, VOC Brazos is required to observe anti-market manipulation laws and related regulations enforced by the FERC and/or the Commodity Futures Trading
Commission, or the CFTC, and the Federal Trade Commission, or FTC. If VOC Brazos were to violate the anti-market manipulation laws and regulations, VOC Brazos could also be subject to related
third-party damage claims by, among others, sellers, royalty owners and taxing authorities.

As
to these various developments, VOC Brazos has advised the trust that the on-going and evolving nature of these regulatory initiatives makes it impossible to predict their ultimate
impact on the prices, markets or terms of sale of natural gas related to the trust.



In general, the jurisdictions in which royalty properties are located have statutory provisions regulating the production and sale of crude oil
and natural gas. The regulations often require permits for the drilling of wells but extend also to the spacing of wells, the prevention of waste of oil and gas resources, the rate of production,
prevention and clean-up of pollution and other matters.

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General.The operations of the underlying properties are subject to stringent and complex federal, regional, state and local laws and
regulations
governing environmental protection as well as the discharge of materials into the environment. These laws and regulations may impose significant obligations on VOC Brazos' operations, including
requirements to, among other things:



Failure
to comply with environmental laws and regulations may result in the assessment of administrative, civil and criminal sanctions, including monetary penalties, the imposition of
investigatory and remedial obligations, and the issuance of injunctions limiting or prohibiting some or all of VOC Brazos' operations. Moreover, these laws, rules and regulations may restrict the rate
of oil and natural gas production below the rate that would otherwise be possible. The regulatory burden on the oil and natural gas industry increases the cost of doing business in the industry and
consequently affects profitability. VOC Brazos believes that it is in substantial compliance with all existing environmental laws and regulations applicable to its current operations and that its
continued compliance with existing requirements will not have a material adverse effect on the cash distributions to the trust unitholders. However, the clear trend in environmental regulation is to
place more restrictions and limitations on activities that may affect the environment, and thus, any changes in environmental laws and regulations or re-interpretation of enforcement policies that
result in more stringent and costly emission or discharge limits or waste handling, disposal or remediation obligations could have a material adverse effect on VOC Brazos' development expenditures,
results of operations and financial position. VOC Brazos may be unable to pass on those increases to its customers.

The
following is a summary of the more significant existing environmental, health and safety laws and regulations, each as amended from time to time, to which VOC Brazos' business
operations are subject:

Hazardous substance and wastes.The Comprehensive Environmental Response, Compensation and Liability Act, or "CERCLA," also
known as the Superfund
law, and comparable state laws impose liability without regard to fault or the legality of the original conduct on certain classes of persons who are considered to be responsible for the release of a
"hazardous substance" into the environment. Under CERCLA, these "responsible persons" may include the owner or operator of the site where the release occurred, and entities that transport or disposed
or arranged for the transport or disposal of hazardous substances released at the site. These responsible persons may be subject to joint and several, strict liability for the costs of cleaning up the
hazardous substances that have been released
into the environment, for damages to natural resources and for the costs of certain health studies. CERCLA also authorizes the U.S. Environmental Protection Agency, or "EPA," and, in some instances,
third parties to act in response to threats to the public health or the environment and to seek to recover from the responsible classes of persons the costs they incur. It is not uncommon for
neighboring landowners and other third-parties to file claims for personal injury and property damage

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allegedly
caused by the hazardous substances released into the environment. VOC Brazos generates materials in the course of its operations that may be regulated as hazardous substances.

The
Resource Conservation and Recovery Act, or "RCRA," and comparable state laws regulate the generation, transportation, treatment, storage, disposal and cleanup of hazardous and
non-hazardous wastes. Under the auspices of the EPA, the individual states administer some or all of the provisions of RCRA, sometimes in conjunction with their own, more stringent requirements.
Drilling fluids, produced waters and most of the other wastes associated with the exploration, production and development of crude oil or natural gas are currently exempt from regulations as hazardous
wastes under RCRA. However, it is possible that certain oil and natural gas exploration and production wastes now classified as non-hazardous could be classified as hazardous wastes in the future. In
December 2016, the EPA entered a consent decree with several groups, including the National Resources Defense Council, requiring the EPA to revisit the oil and gas waste exemption for hazardous waste.
Any change in the RCRA exemption for such wastes could result in an increase in the costs to manage and dispose of wastes, which could have a material adverse effect on the cash distributions to the
trust unitholders. In addition, VOC Brazos generates industrial wastes in the ordinary course of its operations that may be regulated as hazardous wastes.

The
real properties upon which VOC Brazos conducts its operations have been used for oil and natural gas exploration and production for many years. Although VOC Brazos may have utilized
operating and disposal practices that were standard in the industry at the time, petroleum hydrocarbons and wastes may have been disposed of or released on or under the real properties upon which VOC
Brazos conducts its operations, or on or under other, offsite locations, where these petroleum hydrocarbons and wastes have been taken for recycling or disposal. In addition, the real properties upon
which VOC Brazos conducts its operations may have been operated by third parties or by previous owners or operators whose treatment and disposal of hazardous substances, wastes or hydrocarbons was not
under VOC Brazos' control. These real properties and the petroleum hydrocarbons and wastes disposed or released thereon may be subject to CERCLA, RCRA and analogous state laws. Under such laws, VOC
Brazos could be required to remove or remediate previously disposed wastes, to clean up contaminated property, and to perform remedial operations such as restoration of pits and plugging of abandoned
wells to prevent future contamination.

Water discharges and hydraulic fracturing.The Federal Water Pollution Control Act, also known as the "Clean Water Act," and analogous
state laws
impose restrictions and strict controls with respect to the discharge of pollutants, including spills and leaks of oil, into federal and state waters. The discharge of pollutants into regulated waters
is prohibited, except in accordance with the terms of a permit issued by EPA or an analogous state agency. Any unpermitted discharge of pollutants could result in penalties and significant remedial
obligations. Spill prevention, control and countermeasure requirements under federal law require appropriate containment berms and similar structures to help prevent the contamination of navigable
waters in the event of a petroleum hydrocarbon tank spill, rupture or leak.

It
is customary to recover oil and natural gas from deep shale and tight sand formations through the use of hydraulic fracturing, combined with sophisticated horizontal drilling.
Hydraulic fracturing involves the injection of water, sand and chemical additives under pressure into rock formations to stimulate gas production. The federal Energy Policy Act of 2005 amended the
Underground Injection Control provisions of the federal Safe Drinking Water Act to exclude certain hydraulic fracturing activities from the definition of "underground injection." At present, hydraulic
fracturing is regulated at the state and local level. Due to public concerns raised regarding potential impacts of hydraulic fracturing on groundwater quality, legislative and regulatory efforts at
the federal, state and local level and in some states have been initiated to require or make more stringent the permitting and compliance requirements for hydraulic fracturing operations. Repeal of
the exemption would allow the EPA to promulgate new regulations. Many states have adopted rules that required operators to disclose chemicals and water volumes associated with hydraulic fracturing. In
addition, the EPA finalized a study

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of
the potential environmental impacts of hydraulic fracturing activities in 2016, finding that under certain circumstances the "water cycle" activities associated with hydraulic fracturing could
impact drinking water resources. If new laws or regulations that significantly restrict hydraulic fracturing are adopted, such legal requirements could make it more difficult or costly for VOC Brazos
to perform hydraulic fracturing activities. Moreover, required disclosure without protection for trade secret or proprietary products could discourage service companies from using such products and as
a result impact the degree to which some oil and gas wells may be efficiently and economically completed or brought into production. Finally, VOC Brazos believes that enactment of legislation
regulating hydraulic fracturing at the federal level may have a material adverse effect on its business.

Air emissions.The federal Clean Air Act and comparable state laws restrict the emission of air pollutants from many sources through
air emissions
permitting programs and also impose various monitoring and reporting requirements. The EPA finalized rules that define the terms used to determine whether a source is considered to be a major souce
under the Clean Air Act in May 2016. These laws and regulations may require VOC Brazos to obtain pre-approval for the construction or modification of certain projects or facilities expected to produce
or significant increase air emissions, obtain and strictly comply with stringent air permit requirements or incur development expenditures to install and utilize specific equipment or technologies to
control emissions. Obtaining permits has the
potential to delay the development of oil and natural gas projects. Federal and state regulatory agencies may impose administrative, civil and criminal penalties for non-compliance with air permits or
other requirements of the federal Clean Air Act and associated state laws and regulations.

Climate change.In response to certain scientific studies suggesting that emissions of certain gases, commonly referred to as greenhouse
gases, or
"GHGs," and including carbon dioxide and methane, are contributing to the warming of the Earth's atmosphere and other climatic conditions the EPA has begun to issue regulations restricting GHGs. These
restrictions include additional reductions of volatile organic compounds, hazardous air pollutants and methane emissions from the oil and gas sector. Such regulations limiting emissions of GHGs from
the equipment and operations of VOC Brazos could require VOC Brazos to incur costs to monitor and report on GHG emissions or reduce emissions of GHGs associated with its operations, and such
requirements also could adversely affect demand for the oil and natural gas that VOC Brazos produces. In addition, almost one-half of the states have already taken legal measures to reduce emissions
of GHGs, primarily through the planned development of GHG emission inventories and/or regional GHG cap and trade programs. Most of these cap and trade programs work by requiring either major sources
of emissions or major producers of fuels to acquire and surrender emission allowances, with the number of allowances available for purchase reduced each year until the overall GHG emission reduction
goal is achieved. These allowances would be expected to escalate significantly in cost over time. Although it is not possible at this time to predict if Congress may pass climate change legislation,
any future federal or state laws that may be adopted to address GHG emissions could require VOC Brazos to incur increased operating costs and could adversely affect demand for the oil and natural gas
VOC Brazos produces.

Finally,
it should be noted that some scientists have concluded that increasing concentrations of greenhouse gases in the Earth's atmosphere may produce climate changes that have
significant physical effects, such as increased frequency and severity of storms, floods, drought and other climatic events. If any such effects were to occur, they could adversely affect or delay
demand for the oil or natural gas produced by VOC Brazos or otherwise cause VOC Brazos to incur significant costs in preparing for or responding to those effects.

Endangered Species Act.The federal Endangered Species Act, or "ESA," restricts activities that may affect endangered and threatened
species or their
habitats. The designation of previously unidentified endangered or threatened species could cause VOC Brazos to incur additional costs or become subject to operating delays, restrictions or bans in
the affected areas. While some of VOC

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Brazos'
facilities or leased acreage may be located in areas that are designated as habitat for endangered or threatened species, VOC Brazos believes that it is in substantial compliance with the ESA.

Employee health and safety.The operations of VOC Brazos are subject to a number of federal and state laws and regulations, including
the federal
Occupational Safety and Health Act, or "OSHA," and comparable state statutes, whose purpose is to protect the health and safety of workers. In addition, the OSHA hazard communication standard, the EPA
community right-to-know regulations under Title III of the federal Superfund Amendment and Reauthorization Act and comparable state statutes require that information be maintained concerning hazardous
materials used or produced in operations and that this information be provided to employees, state and local government authorities and citizens. VOC Brazos believes that it is in substantial
compliance with all applicable laws and regulations relating to worker health and safety.

Item 1A.    Risk Factors.

Prices of oil and natural gas fluctuate, and lower prices could reduce proceeds to the trust and cash
distributions to unitholders.

The reserves attributable to the underlying properties and quarterly cash distributions of the trust are highly dependent upon the prices
realized from the sale of oil and natural gas. Prices of oil and natural gas can fluctuate widely on a quarter-to-quarter basis in response to a variety of factors that are beyond the control of the
trust and VOC Brazos. These factors include, among others:



Crude
oil prices have been volatile the last several years and in 2016, ranged from a high of $54.06 to a low of $26.21. The NYMEX crude oil spot prices per Bbl were $53.27, $37.04 and
$53.72 as of December 31, 2014, 2015 and 2016, respectively. Neither VOC Brazos nor the trust can predict the timing or the duration of any economic cycle and, depending on the prices realized,
the operating results of VOC Brazos and the financial condition of the trust could be materially and adversely affected.

Lower
prices of oil and natural gas will reduce the amount of the net proceeds to which the trust is entitled and may ultimately reduce the amount of oil and natural gas that is economic
to produce

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from
the underlying properties. As a result, the operator of any of the underlying properties could determine during periods of low commodity prices to shut in or curtail production from wells on the
underlying properties. In addition, the operator of the underlying properties could determine during periods of low commodity prices to plug and abandon marginal wells that otherwise may have been
allowed to continue to produce for a longer period under conditions of higher prices. Specifically, VOC
Brazos may abandon any well or property if it reasonably believes that the well or property can no longer produce oil or natural gas in commercially paying quantities. This could result in termination
of the net profits interest relating to the abandoned well or property. In making such decisions, VOC Brazos and any transferee will be required under the applicable conveyance to operate, or to use
commercially reasonable efforts to cause the operators of the underlying properties to operate, these properties as would a reasonably prudent operator, acting with respect to its own properties
(without regard to the existence of the net profits interest). Because substantially all the underlying properties are located in mature fields, decreases in commodity prices could have a more
significant effect on the economic viability of these properties compared to more recently discovered properties. The commodity price sensitivity of these mature wells is due to a variety of factors
that vary from well-to-well, including the additional costs associated with water handling and disposal, chemicals, surface equipment maintenance, downhole casing repairs and reservoir pressure
maintenance activities that are necessary to maintain production. As a result, the volatility of commodity prices may cause the amount of future cash distributions to trust unitholders to fluctuate,
and a substantial decline in the price of oil or natural gas will reduce the amount of cash available for distribution to the trust unitholders. The volatility of commodity prices also reduces the
accuracy of estimates of future cash distributions to trust unitholders.

Actual reserves and future production may be less than current estimates of proved reserves, which could
reduce cash distributions by the trust and the value of the trust units.

The value of the trust units and the amount of future cash distributions to the trust unitholders will depend upon, among other things, the
accuracy of the reserves and future production estimated to be attributable to the underlying properties and the net profits interest. It is not possible to measure underground accumulations of oil
and natural gas in an exact manner, and estimating reserves is inherently uncertain. Ultimately, actual production and revenues for the underlying properties could vary negatively and in material
amounts from estimates. Furthermore, development expenditures and production costs relating to the underlying properties could be higher than current estimates. Petroleum engineers are required to
make subjective estimates of underground accumulations of oil and natural gas based on factors and assumptions that include:



Changes
in these assumptions and amounts of actual production and development costs could materially decrease reserve estimates.

The processes of drilling and completing wells are high risk activities.

The processes of drilling and completing wells are subject to numerous risks beyond the trust's and VOC Brazos' control, including risks that
could delay VOC Brazos' current drilling schedule and the risk that drilling will not result in commercially viable oil production. VOC Brazos is not obligated to undertake any development activities,
so any drilling and completion activities will be subject to the reasonable discretion of VOC Brazos. Furthermore, VOC Brazos' future business, financial condition, results of operations, liquidity or
ability to finance its share of planned development expenditures could

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be
materially and adversely affected by any factor that may curtail, delay or cancel drilling, including the following:



In
the event that drilling of development wells is delayed or cancelled, or development wells have lower than anticipated production, due to one or more of the factors above or for any
other reason, estimated future distributions to trust unitholders may be reduced.

Risks associated with the production, gathering, transportation and sale of oil and natural gas could
adversely affect cash distributions by the trust.

The amount of cash to be received by the trust from VOC Brazos with respect to the net profits interest, the value of the trust units and the
amount of cash distributions to the trust unitholders will depend upon, among other things, oil and natural gas production and prices and the costs incurred by VOC Brazos to develop and produce oil
and natural gas reserves attributable to the underlying properties. Drilling, production or transportation accidents as well as adverse weather conditions that temporarily or permanently halt the
production and sale of oil or natural gas at any of the underlying properties will reduce trust distributions by reducing the amount of net proceeds
received by the trust and available for distribution. For example, accidents may occur that result in personal injuries, property damage, damage to productive formations or equipment and environmental
damages. To the extent VOC Brazos is not able to recover from insurance any costs incurred by VOC Brazos in connection with any such accidents, the net proceeds available for distribution to the trust
may be reduced or delayed. In addition, curtailments or damage to pipelines used by VOC Brazos to transport oil and natural gas production to markets for sale could reduce the amount of net proceeds
received by the trust and available for distribution. Any such curtailment or damage to the gathering systems used by VOC Brazos could also require VOC Brazos to find alternative means to transport
the oil and natural gas production from the underlying properties, which could require VOC Brazos to incur

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additional
costs that will have the effect of reducing net proceeds received by the trust and available for distribution.

Production of oil and natural gas on the underlying properties could be materially and adversely affected by
severe or unseasonable weather.

Production of oil and natural gas on the underlying properties could be materially and adversely affected by severe weather. Repercussions of
severe weather conditions may include:



VOC Brazos does not have any long term contracts related to the sale of production of oil and natural gas
from the underlying properties and may be unable to find purchasers.

VOC Brazos does not have any firm commitment contracts for the sale of any production nor has it received security or other guaranty of payment
for the production it sells. Therefore, there can be no assurance that VOC Brazos will be able to find buyers for its production, that buyers will pay the purchase price therefor or that the price at
which the production is sold will be the current market price for such hydrocarbons at the time of delivery. During the year ended December 31, 2016, VOC Brazos sold approximately 31% of the
oil produced from the underlying properties to MV Purchasing LLC, an affiliate of VOC Brazos. Any nonpayment by a purchaser of production, including MV Purchasing LLC, or inability by
VOC Brazos to sell any production, could reduce cash available for distribution to trust unitholders.

Neither the trust nor the trust's unitholders have the ability to influence VOC Brazos or control the
operations or development of the underlying properties.

The trust and the trust's unitholders have no voting rights with respect to VOC Brazos and therefore have no managerial, contractual or other
ability to influence VOC Brazos' activities or the operations of the underlying properties. Oil and natural gas properties are typically managed pursuant to an operating agreement among the working
interest owners of oil and natural gas properties. Vess Oil Corporation operates, or operates on a contract basis, substantially all of the underlying properties. The typical operating agreement
contains procedures whereby the owners of the working interests in the property designate one of the interest owners to be the operator of the property. Under these arrangements, the operator is
typically responsible for making all decisions relating to drilling activities, sale of production, compliance with regulatory requirements and other matters that affect the property.

Shortages or increases in costs of equipment, services and qualified personnel could result in a reduction in
the amount of cash available for distribution to the trust unitholders.

The demand for qualified and experienced personnel to conduct field operations, geologists, geophysicists, engineers and other professionals in
the oil and natural gas industry can fluctuate significantly, often in correlation with oil and natural gas prices, causing periodic shortages. Historically, there have been shortages of drilling rigs
and other equipment as demand for rigs and equipment has increased along with the number of wells being drilled. These factors also cause significant increases in costs for equipment, services and
personnel. Higher oil and natural gas prices generally stimulate demand and result in increased prices for drilling rigs, crews and associated supplies, equipment and services. Shortages of field
personnel and equipment or price increases could significantly decrease the amount of cash received by the trust and available for distribution to the trust unitholders or restrict the ability of VOC
Brazos to drill the development wells and conduct the operations which it currently has planned for the underlying properties.

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The trust units may lose value as a result of title deficiencies with respect to the underlying properties.

VOC Brazos acquired the underlying properties over the past 30 years. The existence of a material title deficiency with respect to the
underlying properties could reduce the value of a property or render it worthless, thus adversely affecting the net profits interest and distributions to trust unitholders. VOC Brazos does not obtain
title insurance covering mineral leaseholds, and VOC Brazos' failure to cure any title defects may cause VOC Brazos to lose its rights to production from the underlying properties. In the event of any
such material title problem, proceeds available for distribution to trust unitholders and the value of the trust units may be reduced.

VOC Brazos may transfer all or a portion of the underlying properties at any time without trust unitholder
consent, subject to specified limitations.

VOC Brazos may at any time transfer all or part of the underlying properties, subject to and burdened by the net profits interest, and may
abandon individual wells or properties that it reasonably believes would no longer produce oil or natural gas in commercially paying quantities. For the years ended December 31, 2014, 2015 and
2016, VOC Brazos plugged and abandoned 26, 14 and 13 wells, respectively, located on leases on the underlying properties. Trust unitholders will not be entitled to vote on any transfer of the
underlying properties, and the trust will not receive any proceeds from any such transfer, except in certain limited circumstances when the net profits interest is released in connection with such
transfer, in which case the trust will receive an amount equal to the fair market value (net of sales costs) of the net profits interest released. Following any sale or transfer of any of the
underlying properties, if the net profits interest is not released in connection with such sale or transfer, the net profits interest will continue to burden the transferred property and net proceeds
attributable to such property will be calculated as part of the computation of net proceeds described in this Form 10-K. VOC Brazos may delegate to the transferee responsibility for all of VOC
Brazos' obligations relating to the net profits interest on the portion of the underlying properties transferred.

In
addition, VOC Brazos may, without the consent of the trust unitholders, require the trust to release the net profits interest associated with any lease that accounts for less than or
equal to 0.25% of the total production from the underlying properties in the prior 12 months and provided that the net profits interest covered by such releases cannot exceed, during any
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 VOC Brazos of the relevant underlying properties and are
conditioned upon the trust's receiving an amount equal to the fair market value to the trust of such net profits interest. Any net sales proceeds paid to the trust will be distributable to trust
unitholders for the quarter in which they are received. Net sales proceeds of $229,344 and $0 were paid to the trust during 2015 and 2016 for its share of interest in certain underlying properties
that were sold in 2015 and 2016, respectively. VOC Brazos has not identified any of the underlying properties for sale as of December 31, 2016.

The reserves attributable to the underlying properties are depleting assets and production from those
properties will diminish over time. Furthermore, the trust is precluded from acquiring other oil and natural gas properties or net profits interests to replace the depleting assets and production.

The net proceeds payable to the trust attributable to the net profits interests are derived from the sale of production of oil and natural gas
from the underlying properties. The reserves attributable to the underlying properties are depleting assets, which means that the reserves and the quantity of oil and natural gas produced from the
underlying properties will decline over time. Furthermore, over approximately 90% of the estimated oil recovery attributable to the underlying properties has already been extracted from the producing
wells located on the underlying properties. Based on the estimated production volumes in the reserve report as of December 31, 2016, the oil and natural gas production from proved reserves
attributable to the underlying properties is projected to
decline at an average rate of approximately 6.5% per year over the next 20 years, assuming the level of development drilling and

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development
expenditures on the underlying properties disclosed elsewhere in this Form 10-K through 2020 and none thereafter. Actual decline rates may vary from this projected decline rate. In
the event expected future development is delayed, reduced or cancelled, the average rate of decline will likely exceed 6.5% per year.

The
trust agreement provides that the trust's activities are limited to owning the net profits interest and any activity reasonably related to such ownership, including activities
required or permitted by the terms of the conveyance. As a result, the trust is not permitted to acquire other oil and natural gas properties or net profits interests to replace the depleting assets
and production attributable to the net profits interest.

Because
the net proceeds payable to the trust are derived from the sale of depleting assets, the portion of the distributions to unitholders attributable to depletion may be considered
to have the effect of a return of capital as opposed to a return on investment. Eventually, the underlying properties burdened by the net profits interest may cease to produce in commercially paying
quantities and the trust may, therefore, cease to receive any distributions of net proceeds therefrom.

The amount of cash available for distribution by the trust will be reduced by the amount of any costs and
expenses related to the underlying properties and other costs and expenses incurred by the trust.

The net profits interest will bear its share of all costs and expenses related to the underlying properties, such as lease operating expenses,
production and property taxes and development expenses, which will reduce the amount of cash received by the trust and thereafter distributable to trust unitholders. Accordingly, higher costs and
expenses related to the underlying properties will directly decrease the amount of cash received by the trust in respect of its net profits interest. Historical costs may not be indicative of future
costs. In addition, cash available for distribution by the trust will be further reduced by the trust's general and administrative expenses.

If
production and development costs on the underlying properties together with the other costs exceed gross proceeds of production from the underlying properties, the trust will not
receive net proceeds from those properties until future gross proceeds from production exceed the total of the excess costs,
plus accrued interest. If the trust does not receive net proceeds pursuant to the net profits interest, or if such net proceeds are reduced, the trust will not be able to distribute cash to the trust
unitholders, or such cash distributions will be reduced, respectively. Development activities may not generate sufficient additional revenue to repay the costs.

A purchaser's failure to pay VOC Brazos for purchased production could have a significant adverse impact on
VOC Brazos, which in turn could result in VOC Brazos not having sufficient net proceeds attributable to the net profits interest for VOC Brazos to distribute cash to the trust.

A purchaser's failure to pay for purchased production could have a significant adverse impact on VOC Brazos' business, which could in turn
impact the trust. The recent tightening of credit in the financial markets may make it more difficult for purchasers to obtain financing and depending on the degree to which this occurs, there may be
a material increase in the nonpayment and nonperformance by such purchasers.

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

The trustee must sell the net profits interest if the holders of a majority of the trust units approve the sale or vote to dissolve the trust.
The trustee must also sell the net profits interest if the annual gross proceeds from the underlying properties attributable to the net profits interest 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 the trust. The net proceeds of any such sale will be distributed to the trust unitholders.

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The disposal by an affiliate of VOC Brazos of its remaining trust units may reduce the market price of the
trust units.

As of the date this Form 10-K, an affiliate of VOC Brazos, VOC Partners, LLC, owned 25% of the outstanding trust units. VOC
Partners, LLC may use some or all of the remaining trust units it owns for a number of business purposes, including:



If
it sells additional trust units or exchanges trust units in connection with acquisitions, then additional trust units will be available for sale in the market. The sale of additional
trust units may reduce the market price of the trust units. The trust has entered into a registration rights agreement with VOC Partners, LLC pursuant to which the trust has agreed to
file a registration statement or a shelf registration statement to register the resale of the remaining trust units held by VOC Partners, LLC and any transferee of the trust units upon
request by such holders. See "Item 13. Certain Relationships and Related Transactions, and Director IndependenceRegistration Rights."

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

The trading price for publicly traded securities similar to the trust units tends to be tied to recent and expected levels of cash
distributions. The amounts available for distribution by the trust will vary in response to numerous factors outside the control of the trust, including prevailing prices for sales of oil and natural
gas production from the underlying properties and the timing and amount of production and development costs. Consequently, the trading price for the trust units may not necessarily be indicative of
the value that the trust would realize if it sold the net profits interest to a third-party buyer. In addition, such market price may not necessarily reflect the fact that since the assets of the
trust are depleting assets, a portion of each cash distribution paid on the trust units should be considered by investors as a return of capital, with the remainder being considered as a return on
investment. As a result, distributions made to a trust unitholder over the life of these depleting assets may not equal or exceed the purchase price paid by the trust unitholder.

Conflicts of interest could arise between VOC Brazos and its affiliates, on the one hand, and the trust and
the trust unitholders, on the other hand.

As working interest owners in, and operators of substantially all the wells on, the underlying properties, VOC Brazos and its affiliates could
have interests that conflict with the interests of the trust and the trust unitholders. For example:



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The trust is managed by a trustee who cannot be replaced except by a majority vote of the trust unitholders
at a special meeting, which may make it difficult for trust unitholders to remove or replace the trustee.

The business and affairs of the trust are managed by the trustee. The voting rights of a trust unitholder are more limited than those of
stockholders of most public corporations. For example, there is no requirement for annual meetings of trust unitholders or for an annual or other periodic re-election of the trustee. The trust
agreement provides that the trustee may only be removed and replaced by the holders of a majority of the outstanding trust units, including trust units held by VOC Partners, LLC, at a special
meeting of trust unitholders called by either the trustee or the holders of not less than 10% of the outstanding trust units. As a result, it will be difficult for public unitholders to remove or
replace the trustee without the cooperation of VOC Partners, LLC as long as it holds a significant percentage of total trust units.

Trust unitholders have limited ability to enforce provisions of the net profits interest, and VOC Brazos'
liability to the trust is limited.

The trust agreement permits the trustee to sue VOC Brazos or any other future owner of the underlying properties to enforce the terms of the
conveyance creating the net profits interest. If the trustee does not take appropriate action to enforce provisions of the conveyance, trust unitholders' recourse would be limited to bringing a
lawsuit against the trustee to compel the trustee to take specified actions. The trust agreement expressly limits a trust unitholder's ability to directly sue VOC Brazos or any other third party other
than the trustee. As a result, trust unitholders will not be able to sue VOC Brazos or any future owner of the underlying properties to enforce these rights. Furthermore, the net profits interest
conveyance provides that, except as set forth in the conveyance,
VOC Brazos will not be liable to the trust for the manner in which it performs its duties in operating the underlying properties as long as it acts without gross negligence or willful misconduct.

Courts outside of Delaware may not recognize the limited liability of the trust unitholders provided under
Delaware law.

Under the Delaware Statutory Trust Act, trust unitholders are entitled to the same limitation of personal liability extended to stockholders of
corporations under the General Corporation Law of the State of Delaware. Courts in jurisdictions outside of Delaware, however, may not give effect to such limitation.

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The operations of the underlying properties are subject to environmental laws and regulations that may result
in significant costs and liabilities, which could reduce the amount of cash available for distribution to trust unitholders.

The oil and natural gas exploration and production operations of VOC Brazos are subject to stringent and comprehensive federal, state and local
laws and regulations governing the discharge of materials into the environment or otherwise relating to environmental protection. These laws and regulations may impose numerous obligations that apply
to VOC Brazos' operations, including the requirement to obtain a permit before conducting drilling, waste disposal or other regulated activities; the restriction of types, quantities and
concentrations of materials that can be released into the environment; the incurrence of significant development expenditures to install pollution or safety-related controls at the operated
facilities; the limitation or prohibition of drilling activities on certain lands lying within wilderness, wetlands and other protected areas; and the imposition of substantial liabilities for
pollution resulting from operations. Numerous governmental authorities, such as the EPA and analogous state environmental and oil and gas agencies, have the power to enforce compliance with these laws
and regulations and the permits issued under them, oftentimes requiring difficult and costly actions. Failure to comply with these laws and regulations may result in the assessment of administrative,
civil or criminal penalties; the imposition of investigatory or remedial obligations; and the issuance of injunctions limiting or preventing some or all of VOC Brazos' operations. Furthermore, the
inability to comply with environmental laws and regulations in a cost effective manner, such as removal and disposal of produced water and other generated oil and gas wastes, could impair VOC Brazos'
ability to produce oil and natural gas commercially from the underlying properties, which would reduce proceeds attributable to the net profits interest.

There
is inherent risk of incurring significant environmental costs and liabilities in the performance of VOC Brazos' operations as a result of its handling of petroleum hydrocarbons and
wastes, air emissions and wastewater discharges related to its operations, and historical industry operations and waste disposal practices. Under certain environmental laws and regulations, VOC Brazos
could be subject to joint and several strict liability for the removal or remediation of previously released materials or property contamination regardless of whether VOC Brazos was responsible for
the release or contamination or whether the operations were in compliance with all applicable laws at the time those actions were taken. Private parties, including the owners of properties upon which
VOC Brazos' wells are drilled and facilities where VOC Brazos' petroleum hydrocarbons or wastes are taken for reclamation or disposal, may also have the right to pursue legal actions to enforce
compliance as well as to seek damages for non-compliance with environmental laws and regulations or for personal injury or property damage. In addition, the risk of accidental spills or releases could
expose VOC Brazos to significant liabilities that could have a material adverse effect on its financial condition or results of operations. Changes in environmental laws and regulations occur
frequently, and any changes that result in more stringent or costly operational control requirements or waste handling, storage, transport, disposal or cleanup requirements could require VOC Brazos to
make significant expenditures to attain and maintain compliance and may otherwise have a material adverse effect on its results of operations, competitive position or financial condition. VOC Brazos
may be unable to recover some or any of these costs from insurance, in which case the amount of cash received by the trust may be decreased. The net profits interest held by the trust will bear 80% of
all costs and expenses incurred by VOC Brazos in regard to environmental costs and liabilities associated with the underlying properties, including costs and liabilities resulting from conditions that
existed prior to VOC Brazos' acquisition of the underlying properties unless such costs and expenses result from VOC Brazos' gross negligence or willful misconduct. In addition, as a result of the
increased cost of compliance, VOC Brazos may decide to discontinue drilling.

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The operations of the underlying properties are subject to complex federal, state, local and other laws and
regulations that could adversely affect the cost, manner or feasibility of conducting its operations or expose VOC Brazos to significant liabilities, which could reduce the amount of cash available
for distribution to trust unitholders.

The production and development operations on the underlying properties are subject to complex and stringent laws and regulations. In order to
conduct its operations in compliance with these laws and regulations, VOC Brazos must obtain and maintain numerous permits, drilling bonds, approvals and certificates from various federal, state and
local governmental authorities and engage in extensive reporting. VOC Brazos may incur substantial costs in order to maintain compliance with these existing laws and regulations, and the net profits
interest will bear its share of these costs. In addition, VOC Brazos' costs of compliance may increase if existing laws and regulations are revised or reinterpreted, or if new laws and regulations
become applicable to VOC Brazos' operations. Such costs could have a material adverse effect on VOC Brazos' business, financial condition and results of
operations and reduce the amount of cash received by the trust in respect of the net profits interest, VOC Brazos must also comply with laws and regulations prohibiting fraud and market manipulations
in energy markets. To the extent VOC Brazos is a shipper on interstate pipelines, it must comply with the tariffs of such pipelines and with federal policies related to the use of interstate capacity,
and such compliance costs will be borne indirectly in part by the trust.

Laws
and regulations governing exploration and production may also affect production levels. VOC Brazos is required to comply with federal and state laws and regulations governing
conservation matters, including: provisions related to the unitization or pooling of oil and natural gas properties; the establishment of maximum rates of production from wells; the spacing of wells;
the plugging and abandonment of wells; and the removal of related production equipment. These and other laws and regulations can limit the amount of oil and natural gas VOC Brazos can produce from its
wells, limit the number of wells it can drill, or limit the locations at which it can conduct drilling operations, which in turn could negatively impact trust distributions, estimated and actual
future net revenues to the trust and estimates of reserves attributable to the trust's interests.

New
laws or regulations, or changes to existing laws or regulations, may unfavorably impact VOC Brazos, could result in increased operating costs or have a material adverse effect on VOC
Brazos' financial condition and results of operations and reduce the amount of cash received by the trust. These and other potential regulations could increase the operating costs of the underlying
properties, reduce VOC Brazos' liquidity, delay VOC Brazos' operations or otherwise alter the way VOC Brazos conducts its business, any of which could have a material adverse effect on the net profits
interest and the trust's cash flows.

Climate change laws and regulations restricting emissions of "greenhouse gases" could result in increased
operating costs and reduced demand for the oil and natural gas that VOC Brazos produces while the physical effects of climate change could disrupt VOC Brazos' production and cause VOC Brazos to incur
significant costs in preparing for or responding to those effects.

The oil and gas industry is a direct source of certain greenhouse gases, or "GHG," emissions, namely carbon dioxide and methane, and future
restrictions on such emissions could impact our future operations. On December 15, 2009, the EPA published its findings that emissions of carbon dioxide, methane and other GHGs present an
endangerment to public health and the environment because emissions of such gases are, according to the EPA, contributing to the warming of the earth's atmosphere and other climate changes. Based on
these findings, the agency has begun adopting and implementing regulations that restrict emissions of GHGs under existing provisions of the federal Clean Air Act. These EPA rulemakings could affect
VOC Brazos' operations and its ability to obtain air permits for new or modified facilities.

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In
addition, almost half of the states have already taken legal measures to reduce emissions of GHGs, primarily through the planned development of GHG emission inventories and/or
regional GHG cap and trade programs. Most of these cap and trade programs work by requiring either major sources of emissions or major producers of fuels to acquire and surrender emission allowances,
with the number of allowances available for purchase reduced each year until the overall GHG emission reduction goal is achieved. These reductions would be expected to cause the cost of allowances to
escalate significantly over time. The adoption of any legislation or regulations that requires reporting of GHGs or otherwise limits emissions of GHGs from VOC Brazos' equipment and operations could
require VOC Brazos to incur costs to monitor and report on GHG emissions or reduce emissions of GHGs associated with its operations, and such requirements also could adversely affect demand for the
oil and natural gas produced, all of which could reduce proceeds attributable to the net profits interest and, as a result, the trust's cash available for distribution.

Finally,
it should be noted that some scientists have concluded that increasing concentrations of greenhouse gases in the Earth's atmosphere may produce climate changes that have
significant physical effects, such as increased frequency and severity of storms, droughts, and floods and other climatic events. If any such effects were to occur, they could have an adverse effect
on VOC Brazos' assets and operations and, consequently, may reduce the proceeds attributable to the net profits interest and, as a result, the trust's cash available for distribution.

Federal and state legislative and regulatory initiatives relating to hydraulic fracturing could result in
increased costs and additional operating restrictions or delays as well as adversely affect VOC Brazos' services.

Hydraulic fracturing is an important and common practice that is used to stimulate production of hydrocarbons, particularly natural gas, from
tight formations. The process involves the injection of water, sand and chemicals under pressure into formations to fracture the surrounding rock and stimulate production. The process is typically
regulated by state oil and gas commissions. The EPA finalized a study of the potential environmental impacts of hydraulic fracturing activities in December 2016, finding that under certain
circumstances the "water cycle" activities associated with hydraulic fracturing could impact drinking water resources. Some states have adopted, and other states are considering adopting, regulations
that could restrict or impose additional requirements relating to hydraulic fracturing in certain circumstances. If hydraulic fracturing is regulated at the federal level, VOC Brazos' fracturing
activities could become subject to additional permit requirements or operational restrictions and also to associated permitting delays and potential increases in costs. If new laws or regulations that
significantly restrict or otherwise impact hydraulic fracturing are passed by Congress or adopted in Texas or Kansas such legal requirements could make it more difficult or costly for VOC Brazos to
perform hydraulic fracturing activities and thereby affect the determination of whether a well is commercially viable. In addition, restrictions on hydraulic fracturing
could reduce the amount of oil and natural gas that VOC Brazos is ultimately able to produce in commercially paying quantities from the underlying properties.

The bankruptcy of VOC Brazos or any operator of the underlying properties could impede the operation of the
wells and the development of the proved undeveloped reserves.

VOC Brazos is a privately-held limited partnership engaged in the production and development of oil and natural gas from properties located in
Kansas and Texas. VOC Brazos intends to implement a development and workover program, including the expenditure through 2020 of approximately $38.0 million to drill additional wells and
recomplete and workover other wells. Without this development and workover program, the average decline rate over the life of the trust of the oil and natural gas production from the proved reserves
attributable to the underlying properties will likely exceed the 6.5% per year projected in the reserve report. The operator of substantially all of the underlying properties is a privately-held
corporation engaged in the operation of oil and natural gas

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wells
in Kansas and Texas. Therefore, the value of the net profits interest and the trust's ultimate cash available for distribution will be highly dependent on the financial condition of VOC Brazos
and the operator. None of VOC Brazos or the operator is a reporting company or files periodic reports with the SEC. Therefore, trust unitholders do not have access to financial information about VOC
Brazos or the operator. Furthermore, neither VOC Brazos nor the operator has agreed with the trust to maintain a certain net worth or to be restricted by other similar covenants.

The
ability of VOC Brazos to develop the underlying properties and the ability of the operator to operate the wells on the underlying properties depends on the future financial condition
and economic performance and access to capital of VOC Brazos and the operator, which in turn will depend upon the supply and demand for oil and natural gas, prevailing economic conditions and
financial, business and other factors, many of which are beyond the control of VOC Brazos and the operator.

In
the event of the bankruptcy of VOC Brazos or the operator, the trust would have to seek a new party to perform the development and workover program or the operations of the wells
operated by such operator. The trust may not be able to find a replacement driller or operator, and it may not be able to enter into a new agreement with such replacement party on favorable terms
within a reasonable period of time. As a result, such a bankruptcy may result in reduced production from the reserves and decreased distributions to trust unitholders.

The trust may be treated as an unsecured creditor with respect to the net profits interest attributable to
properties in Kansas in the event of the bankruptcy of VOC Brazos if a court were to hold that the conveyance and recording of the net profits interest was not a conveyance of a fully vested real
property interest or an interest in hydrocarbons in place or to be produced.

VOC Brazos and the trust believe that the recording in the appropriate real property records in Kansas of the net profits interest should
constitute the conveyance of a fully vested real property interest, interests in hydrocarbons in place or to be produced or a production payment as such is defined under the United States Bankruptcy
Code. In a bankruptcy of VOC Brazos, creditors of VOC Brazos would be able to claim the net profits interest as an asset of the bankruptcy estate to satisfy obligations to them if the conveyance of
the net profits interest did not constitute the conveyance of a real property interest or interests in hydrocarbons in place or to be produced under applicable state law or a production payment, in
which case the trust would be an unsecured creditor of VOC Brazos at risk of losing the entire value of the net profits interest to senior creditors.

Due to lack of geographic diversification of the underlying properties, adverse developments in Kansas or
Texas could adversely impact the results of operations and cash flows of the underlying properties and reduce the amount of cash available for distributions to trust unitholders.

The operations of the underlying properties are focused on the production and development of oil and natural gas within the states of Kansas and
Texas. As a result, the results of operations and cash flows of the underlying properties depend upon continuing operations in these areas. Due to the lack of diversification in geographic location,
adverse developments in exploration and production of oil and natural gas in either of these areas of operation could have a significantly greater impact on the results of operations and cash flows of
the underlying properties than if the operations were more diversified.

The tax treatment of an investment in trust units could be affected by recent and potential legislative
changes, possibly on a retroactive basis.

We are unable to predict changes in legislation that may be enacted, including as a result of fundamental tax reform. Any change could impact
the tax treatment of tax items in respect of an investment in trust units.

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Currently,
an individual having modified adjusted gross income in excess of $200,000 (or $250,000 for married taxpayers filing joint returns) is subject to a net investment income tax
equal generally to 3.8% of the lesser of such excess or the individual's net investment income, which appears to include interest income derived from investments such as the trust units as well as any
net gain from the disposition of trust units.

The trust has not requested a ruling from the IRS regarding the tax treatment of ownership of the trust
units. 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 that the net profits interest is not properly
treated as a production payment (and thus would fail to qualify as a debt instrument) for federal income tax purposes, the trust unitholders may receive different and potentially less advantageous tax
treatment than expected.

If the trust were not treated as a grantor trust for federal income tax purposes, the trust should be treated as a partnership for such
purposes. Although the trust would not become subject to federal income taxation at the entity level as a result of treatment as a partnership, and items of income, gain, loss and deduction would flow
through to the trust unitholders, the trust's tax reporting requirements would be more complex and costly to implement and maintain, and its distributions to trust unitholders could be reduced as a
result.

If
the net profits interest were not treated as a production payment (and thus would fail to qualify as a debt instrument for federal income tax purposes) the amount, timing and
character of income, gain, or loss in respect of an investment in the trust could be affected.

Neither
VOC Brazos nor the trustee has requested a ruling from the IRS regarding these tax questions, and neither VOC Brazos nor the trust can provide assurance that such a ruling would
be granted if requested or that the IRS will not challenge these positions on audit.

Item 1B.    Unresolved Staff Comments.

None.

Item 2.    Properties.

Reference is made to "Item 1Business" and "Item 7Trustee's Discussion and Analysis of Financial
Condition and Results of OperationsPlanned Development and Workover Program," which are incorporated herein by reference.

Item 3.    Legal Proceedings.

Currently, there are no legal proceedings pending to which the trust is a party or of which any of its property is the subject.

Item 4.    Mine Safety Disclosures.

None.

41

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Table of Contents

PART II

Item 5.    Market for the Registrant's Common Equity, Related Unitholder Matters and Issuer Purchases of Equity Securities.

The trust units commenced trading on the New York Stock Exchange on May 10, 2011 under the symbol "VOC." The following table sets forth,
for the periods indicated, the high and low sales prices per unit, as reported on the New York Stock Exchange, and the amount of cash distributions declared per unit.



High

Low

Cash
Distributions2015First Quarter (January 1, 2015 through March 31, 2015)

$
5.90

$
4.71

$
0.100Second Quarter (April 1, 2015 through June 30, 2015)


6.50


4.98


0.160Third Quarter (July 1, 2015 through September 30, 2015)


5.78


3.43


0.110Fourth Quarter (October 1, 2015 through December 31, 2015)


4.37


2.26


0.1002016First Quarter (January 1, 2016 through March 31, 2016)

$
3.50

$
1.73

$
0.045Second Quarter (April 1, 2016 through June 30, 2016)


3.65


2.48


0.050Third Quarter (July 1, 2016 through September 30, 2016)


3.60


2.67


0.090Fourth Quarter (October 1, 2016 through December 31, 2016)


3.44


2.75


0.100


As
of March 15, 2017, the 17,000,000 units outstanding were held by 11 unitholders of record.

Each
quarter, the trustee determines the amount of funds available for distribution to the trust unitholders. Available funds are the excess cash, if any, received by the trust from the
net profits interest and other sources (such as interest earned on any amounts reserved by the trustee) that quarter, over the trust's expenses for that quarter. Available funds will be reduced by any
cash that the trustee decides to hold as a reserve against future expenses. It is expected that quarterly cash distributions during the term of the trust will be made by the trustee on or before the
45th day following the end of each quarter to the trust unitholders of record on the 30th day following the end of each quarter (or the next succeeding business day).

Equity Compensation Plans

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

Recent Sales of Unregistered Securities

There were no equity securities sold by the trust during the year ended December 31, 2016 that were not registered under the Securities
Act of 1933, as amended, which we refer to as the "Securities Act."

Purchases of Equity Securities

There were no purchases of trust units by the trust or any affiliated purchaser during the fourth quarter of the year ended December 31,
2016.

Item 6.    Selected Financial Data.

The trust was formed on November 3, 2010. The following table sets forth selected data for the trust as of December 31, 2012,
2013, 2014, 2015 and 2016, and for the years ended December 31, 2012, 2013, 2014, 2015 and 2016, based on the audited statements of assets and trust corpus as of

42

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Table of Contents

December 31,
2012, 2013, 2014, 2015 and 2016 and the audited statements of distributable income for the years ended December 31, 2012, 2013, 2014, 2015 and 2016.



December 31,2012

2013

2014

2015

2016Net profits income

$
38,112,577

$
29,274,516

$
32,284,622

$
8,627,256

$
5,749,845Distributable income

$
37,230,000

$
28,560,000

$
31,450,000

$
7,990,000

$
4,845,000Distributions per trust unit

$
2.19

$
1.68

$
1.85

$
0.47

$
0.285Total assets at year end

$
122,349,786

$
111,439,640

$
101,602,829

$
93,455,545

$
85,466,531


Item 7.    Trustee's Discussion and Analysis of Financial Condition and Results of Operations.

The following review of the trust's financial condition and results of operations should be read in conjunction with the financial statements
and notes thereto. The trust's purpose is, in general, to hold the net profits interest to distribute to the trust unitholders cash that the trust receives in respect of the net profits interest and
to perform certain administrative functions in respect of the net profits interest and the trust units. The trust derives substantially all of its income and cash flows from the net profits interest.

Critical Accounting Policies

The trust uses the modified cash basis of accounting to report receipts by the trust of the net profits interest and payments of expenses
incurred. The net profits interest represents the right to receive revenues (oil and natural gas sales), less direct operating expenses (lease operating expenses and production and property taxes) and
development expenses (which are capitalized in financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") of the
underlying properties, times 80%. Cash distributions of the trust will be made based on the amount of cash received by the trust pursuant to terms of the conveyance creating the net profits interest.

The
financial statements of the trust, as prepared on a modified cash basis, reflect the trust's assets, trust corpus, earnings and distributions as follows:



43

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Table of Contents

While these statements differ from financial statements prepared in accordance with U.S. GAAP, the modified cash basis of reporting revenues and
distributions is considered most meaningful because quarterly distributions to the trust unitholders are based on net cash receipts received from VOC Brazos.

This
comprehensive basis of accounting other than U.S. GAAP corresponds to the accounting permitted for royalty trusts by the SEC as specified by Staff Accounting Bulletin Topic
12:E, Financial Statements of Royalty Trusts.

The
following is a summary of income from net profits interest received by the trust for the years ended December 31, 2014, 2015 and 2016, consisting of the February, May, August
and November distributions for each respective year.



Year Ended December 31,2014

2015

2016Sales volumes:Oil (Bbl)


744,451
(1)

642,966
(2)

582,075
(3)Natural gas (Mcf)


551,001
(1)

459,048
(2)

361,741
(3)Total (BOE)


836,285


719,474


642,365Average sales prices:Oil (per Bbl)

$
95.29

$
56.02

$
37.58Natural gas (per Mcf)

$
4.96

$
3.20

$
1.83Gross proceeds:Oil sales

$
70,939,003
(1)
$
36,016,562
(2)
$
21,874,690
(3)Natural gas sales


2,731,605
(1)

1,467,111
(2)

663,416
(3)Sale of leases


0


229,344


0​
​
​
​
​
​
​
​
​
​
​Total gross proceeds


73,670,608


37,713,017


22,538,106Costs:Production and development costs:Lease operating expenses


15,348,937


13,903,682


11,751,445Production and property taxes


5,156,032


4,008,982


2,045,240Development expenses


13,452,416


8,391,282


1,554,115​
​
​
​
​
​
​
​
​
​
​Total


33,957,385


26,303,946


15,350,800Settlement of hedge contractspayments received


(17,555
)

0


0​
​
​
​
​
​
​
​
​
​
​Total costs


33,939,830


26,303,946


15,350,800​
​
​
​
​
​
​
​
​
​
​Excess of revenues over direct operating expenses and lease equipment and development costs


39,730,778


11,409,071


7,187,306Times net profits interests over the term of the Trust


80
%

80
%

80
%​
​
​
​
​
​
​
​
​
​
​Income from net profits interest before reserve adjustments


31,784,622


9,127,256


5,749,845Cash reserve


500,000


(500,000
)

0​
​
​
​
​
​
​
​
​
​
​Income from net profits interest

$
32,284,622

$
8,627,256

$
5,749,845​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​


(1)Oil
and gas sales volumes and related revenues for the year ended December 31, 2014 (consisting of VOC Brazos' February, May, August and November 2014 net
profits interest distributions to the trust) generally represent the production by VOC Brazos from September 2013 through August 2014.(2)Oil
and gas sales volumes and related revenues for the year ended December 31, 2015 (consisting of VOC Brazos' February, May, August and November 2015 net
profits interest distributions to the trust) generally represent the production by VOC Brazos from September 2014 through August 2015.(3)Oil
and gas sales volumes and related revenues for the year ended December 31, 2016 (consisting of VOC Brazos' February, May, August and November 2016 net
profits interest distributions to the trust) generally represent the production by VOC Brazos from September 2015 through August 2016.


44

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Included
in the results of operations for the year ended December 31, 2016 is the following information representing a one-time event associated with the collection of suspended
funds from ten wells in Texas related to a working interest owner that elected to go non-consent.



Sales volumes:Oil (Bbl)


4,502Natural gas (Mcf)


3,389Total (BOE)


5,067Average sales prices:Oil (per Bbl)

$
93.03Natural gas (per Mcf)

$
5.72Gross proceeds:Oil sales

$
418,804Natural gas sales


19,375​
​
​
​
​Total gross proceeds


438,179Costs:Production and development costs:Lease operating expenses


(27,906
)Production and property taxes


19,068Development expenses


0​
​
​
​
​Total costs reimbursed by working interest owner


(8,838
)​
​
​
​
​Excess of revenues over direct operating expenses and lease equipment and development costs

$
447,017​
​
​
​
​​
​
​
​
​​
​
​
​
​


Comparison of Results of the Trust for the Years Ended December 31, 2016 and 2015

Income from Net Profits Interest.Income from net profits interest is recorded on a modified cash basis when net profits interest
proceeds are
received by the trust from VOC Brazos. Net profits interest proceeds that VOC Brazos remits to the trust are based on the oil and gas production VOC Brazos has received payment for within one month
following the end of the most recent fiscal quarter. VOC Brazos receives payment for its crude oil sales generally within 30 days following the month in which it is produced. Income from net
profits interest is generally a function of oil and gas gross proceeds, lease operating expenses, production and property taxes and development expenses as follows:

Gross proceeds.Oil and natural gas sales were $22,538,106 (including $438,179 as noted above for a one-time event) for the year ended
December 31, 2016, a decrease of $14,945,567 or 39.9% from $37,483,673 for the year ended December 31, 2015. Revenues are a function of oil and natural gas sales prices and volumes sold.
The decrease in gross proceeds was due to lower market prices for oil and natural gas during 2016 compared to 2015 and a decrease in oil sales volumes and gas sales volumes during 2016 compared to
2015. The decrease was also due to sales of leases as allowed under the terms of the Trust Agreement of $229,344 during the year ended December 31, 2015, with no sales of leases occurring
during the year ended December 31, 2016. During the year ended December 31, 2016, the average price for oil decreased 32.9% to $37.58 per Bbl and the average price for natural gas
decreased 42.8% to $1.83 per Mcf. Oil sales volumes were 582,075 Bbls (including 4,502 Bbls as noted above for a one-time event) for the year ended December 31, 2016, a decrease of 60,891 Bbls
or 9.5% from 642,966 Bbls, while natural gas sales volumes were 361,741 Mcf (including 3,389 Mcf as noted above for a one-time event), a decrease of 97,307 Mcf or 21.2% from 459,048 Mcf.

Costs.Lease operating expenses were $11,751,445 (offset by a $27,906 reimbursement as noted above for a one-time event) for the year
ended
December 31, 2016, a decrease of $2,152,237 or 15.5%

45

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from
$13,903,682 for the year ended December 31, 2015. The decrease was primarily due to decreases in the costs of oilfield goods and services. Production and property taxes were $2,045,240
(including $19,068 as noted above for a one-time event) for the year ended December 31, 2016, a decrease of $1,963,742 or 49.0% from $4,008,982 for 2015. Such decrease is primarily due to a
41.1% decrease in production taxes as a result of lower prices for oil and natural gas as well as a 51.6% decrease in property taxes. Development expenses were $1,554,115 for the year ended
December 31, 2016, a decrease of $6,837,167 or 81.5% from $8,391,282 for 2015. The decrease was primarily due to limited drilling activity and corresponding limited development expenses during
the year ended December 31, 2016 compared to development expenses covering certain completion costs for one horizontal well and certain drilling costs for one horizontal well in the lower
EagleBine interval that was abandoned during the year ended December 31, 2015.

Excess of revenues over direct operating expenses and lease equipment and development costs.The excess of revenues over direct
operating expenses
and lease equipment and development costs from the underlying properties was $7,187,306 (including $447,017 as noted above for a one-time event) for the year ended December 31, 2016, a decrease
of $4,221,765 or 37.0% from $11,409,071 for the year ended December 31, 2015. The trust's 80% net profits interest of these totals were $5,749,845 and $9,127,256, respectively. During the year
ended December 31, 2015, VOC Brazos increased its cash reserve for future development, maintenance or operating expenditures by a net amount of $500,000, which resulted in income from the net
profits interest of $5,749,845 and $8,627,256 for such years, respectively. These amounts were further reduced by a trust holdback for future expenses of $904,845 and $637,256 for the years ended
December 31, 2016 and 2015, respectively. The trustee paid general and administrative expenses of $918,448 for the year ended December 31, 2016, an increase of $117,630 from $800,818 for
the year ended December 31, 2015. These factors resulted in distributable income for the year ended December 31, 2016 of $4,845,000, a decrease of $3,145,000 from $7,990,000 for the year
ended December 31, 2015.

Comparison of Results of the Trust for the Years Ended December 31, 2015 and 2014

Income from Net Profits Interest.Income from net profits interest is recorded on a modified cash basis when net profits interest
proceeds are
received by the trust from VOC Brazos. Net profits interest proceeds that VOC Brazos remits to the trust are based on the oil and gas production VOC Brazos has received payment for within one month
following the end of the most recent fiscal quarter. VOC
Brazos receives payment for its crude oil sales generally within 30 days following the month in which it is produced. Income from net profits interest is generally a function of oil and gas
gross proceeds, lease operating expenses, production and property taxes, development expenses and cash settlements on hedge contracts as follows:

Gross proceeds.Oil and natural gas sales were $37,483,673 for the year ended December 31, 2015, a decrease of $36,186,935 or
49.1% from
$73,670,608 for the year ended December 31, 2014. Revenues are a function of oil and natural gas sales prices and volumes sold. The decrease in gross proceeds was due to lower market prices for
oil and natural gas during 2015 compared to 2014 and a decrease in oil sales volumes and gas sales volumes during 2015 compared to 2014. The decrease was partially offset by sales of leases as allowed
under the terms of the Trust Agreement of $229,344. During the year ended December 31, 2015, the average price for oil decreased 41.2% to $56.02 per Bbl and the average price for natural gas
decreased 35.5% to $3.20 per Mcf. Oil sales volumes were 642,966 Bbls for the year ended December 31, 2015, a decrease of 101,485 Bbls or 13.6% from 744,451 Bbls, while natural gas sales
volumes were 459,048 Mcf, a decrease of 91,953 Mcf or 16.7% from 551,001 Mcf.

Costs.Lease operating expenses were $13,903,682 for the year ended December 31, 2015, a decrease of $1,445,255 or 9.4% from
$15,348,937 for
the year ended December 31, 2014. The decrease was primarily due to decreases in the costs of oilfield goods and services. Production and property taxes

46

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were
$4,008,982 for the year ended December 31, 2015, a decrease of $1,147,050 or 22.2% from $5,156,032 for 2014. Such decrease is primarily due to a 54.0% decrease in production taxes as a
result of lower prices for oil and natural gas. Ad valorem taxes are paid and included in production and property taxes. Development expenses were $8,391,282 for the year ended December 31,
2015, a decrease of $5,061,134 or 37.6% from $13,452,416 for 2014. The decrease was primarily due to incurring a portion of drilling and completion costs of one horizontal well and a portion of the
drilling costs of one horizontal well that was abandoned in 2015 as compared to a portion of drilling costs of one horizontal well, a portion of the drilling and completion costs of two horizontal
wells and a portion of the completion costs of two horizontal wells in 2014.

Settlement of hedge contracts.There were no cash settlements during 2015, as the hedges expired on June 30, 2014. Cash
settlements relating
to hedge contracts resulted in gains of $17,555 for the year ended December 31, 2014. The gains were primarily due to lower market prices for oil and higher hedge strike prices.

Excess of revenues over direct operating expenses and lease equipment and development costs.The excess of revenues over direct
operating expenses
and lease equipment and development costs from the underlying properties was $11,409,071 for the year ended December 31, 2015, a decrease of $28,321,707 or 71.3% from $39,730,778 for the year
ended December 31, 2014. The trust's 80% net profits interest of these totals were $9,127,256 and $31,784,622, respectively. During the year ended December 31, 2015, VOC Brazos increased
its cash reserve for future development, maintenance or operating expenditures by a net amount of $500,000 and during the year ended December 31, 2014, VOC Brazos decreased its cash reserve for
future development, maintenance or operating expenditures by a net amount of $500,000, which resulted in income from the net profits interest of $8,627,256 and $32,284,622 for such years,
respectively. These amounts were further reduced by a trust holdback for future expenses of $637,256 and $834,622 for the years ended December 31, 2015 and 2014, respectively. The trustee paid
general and administrative expenses of $800,818 for the year ended December 31, 2015, a decrease of $69,975 from $870,793 for the year ended December 31, 2014. These factors resulted in
distributable income for the year ended December 31, 2015 of $7,990,000, a decrease of $23,460,000 from $31,450,000 for the year December 31, 2014.

Liquidity and Capital Resources

Other than trust administrative expenses, including any reserves established by the trustee for future liabilities, the trust's only use of cash
is for distributions to trust unitholders. Available funds are the excess cash, if any, received by the trust from the net profits interest and payments from other sources (such as interest earned on
any amounts reserved by the trustee) in that quarter, over the trust's expenses paid for that quarter. Available funds are reduced by any cash the trustee decides to hold as a reserve against future
expenses. The trust paid, out of the first cash payment received by the trust, the trustee's and Delaware trustee's legal expenses incurred in forming the trust, in connection with the initial public
offering (that were not otherwise paid by VOC Brazos) and related matters, as well as the Delaware trustee's acceptance fee in the amount of $5,000.

The
trustee can authorize the trust to borrow money to pay trust administrative or incidental expenses that exceed cash held by the trust. The trustee may authorize the trust to borrow
from the trustee as lender provided the terms of the loan are fair to the trust unitholders. The trustee may also deposit funds awaiting distribution in an account with itself, if the interest paid to
the trust at least equals amounts paid by the trustee on similar deposits, and make no other short-term investments with the funds distributed to the trust. The trustee has no current plans to
authorize the trust to borrow money. If the trust borrows funds, the trust unitholders will not receive distributions until the borrowed funds are repaid. During the year ended December 31,
2016, the trust made no borrowings.

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As
substantially all of the underlying properties are located in mature fields, VOC Brazos does not expect future costs for the underlying properties to change significantly as compared
to recent historical costs other than changes due to fluctuations in the cost of oilfield services generally. However, see "Trustee's Discussion and Analysis of Financial Condition and Results of
OperationsPlanned Development and Workover Program" below. VOC Brazos has agreed to post a letter of credit in the amount of $1 million in favor of the trustee to protect the
trustee against the risk that the trust does not have sufficient cash to pay its expenses.

The
trust pays the trustee an administrative fee of $150,000 per year. The trust pays the Delaware trustee a fee of $2,500 per year. The trust also incurs, either directly or as a
reimbursement to the trustee, legal, accounting, tax and engineering fees, printing costs and other expenses that are deducted by the trust before distributions are made to trust unitholders,
including the $18,750 administrative services fee payable quarterly to VOC Brazos pursuant to an administrative services agreement. The trust is also responsible for paying other expenses incurred as
a result of being a publicly traded entity, including costs associated with annual and quarterly reports to trust unitholders, tax return and Form 1099 preparation and distribution, NYSE
listing fees, independent auditor fees and registrar and transfer agent fees.

The
trust does not have any transactions, arrangements or other relationships with unconsolidated entities or persons that could materially affect the trust's liquidity or the
availability of capital resources.

Planned Development and Workover Program

The primary goals of VOC Brazos' development and workover program have been to develop proved undeveloped reserves, manage workovers and
minimize the natural decline in production in areas in which it operates. However, VOC Brazos is not obligated to undertake any development activities, so any drilling and completing activities will
be subject to the reasonable discretion of VOC Brazos. No assurance can be given, however, that any development well will produce in commercially paying quantities or that the characteristics of any
development well will match the characteristics of VOC Brazos' existing wells or VOC Brazos' historical drilling success rate. With respect to the underlying properties, VOC Brazos expects, but is not
obligated, to implement the following development strategies specific to each of its primary operating areas:



48

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The
trust is not directly obligated to pay any portion of the capital expenditures made with respect to the underlying properties; however, capital expenditures made by VOC Brazos with
respect to the underlying properties will be deducted from the gross proceeds in calculating the net proceeds from which cash will be paid to the trust. As a result, the trust will indirectly bear an
80% (subject to certain limitations during the final three years of the trust, as described above under "Item 1. BusinessComputation of Net ProceedsNet Profits
Interest") share of any capital expenditures made with respect to the underlying properties. Accordingly, higher or lower capital expenditures will, in general, directly decrease or increase,
respectively, the cash received by the trust in respect of its net profits interest. As the cash received by the trust in respect of the net profits interest will be reduced by the trust's pro rata
share of these capital expenditures, VOC Brazos expects that it will incur capital expenditures with respect to the underlying properties throughout the term of the trust on a basis that balances the
impact of the capital expenditures on current cash distributions to the trust unitholders with the longer term benefits of increased oil and natural gas production expected to result from the capital
expenditures. In addition, VOC Brazos may establish a capital reserve of up to $1.0 million in the aggregate at any given time to reduce the impact on distributions of uneven capital
expenditure timing.

VOC
Brazos, as the designated operator of the underlying properties, is entitled to make all determinations related to capital expenditures with respect to the underlying properties, and
there are no limitations on the amount of capital expenditures that VOC Brazos may incur with respect to the underlying properties. VOC Brazos is required under the conveyance to use commercially
reasonable efforts to cause the operators of the underlying properties to operate these properties as would a reasonably prudent operator acting with respect to its own properties (without regard to
the existence of the net profits interest). As the trust unitholders would not be expected to fully realize the benefits of capital expenditures made with respect to the underlying properties towards
the end of the term of the trust, during each twelve-month period beginning on the later to occur of (1) December 31, 2027 and (2) the time when 9.8 MMBoe have been produced from
the underlying properties and sold (which

49

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is
the equivalent of 7.8 MMBoe in respect of the net profits interest), capital expenditures that may be taken into account in calculating net proceeds attributable to the net profits interest will be
limited to the average annual capital expenditures during the preceding three years, as increased by 2.5% to account for expected increased costs due to inflation.

Off-Balance Sheet Arrangements

The trust has no off-balance sheet arrangements. The trust has not guaranteed the debt of any other party, nor does the trust have any other
arrangements or relationships with other entities that could potentially result in unconsolidated debt, losses or contingent obligations.

Contractual Obligations

As of December 31, 2016, the trust had no obligations or commitments to make future contractual payments other than the administrative
services fee and trustee fee payable to VOC Brazos and the trustee, respectively. See "Item 8. Financial Statements and Supplementary DataNotes to Financial
StatementsNote GRelated Party Transactions."

Item 7A.    Quantitative and Qualitative Disclosures About Market Risk.

Substantially all of the income to the trust is derived from the net profits interest, which generally entitles the trust to receive 80% of the
net proceeds from oil and gas production from the underlying properties. Consequently, the trust is exposed to market risk from fluctuations in oil and gas prices. Although the trust may borrow money
to pay expenses of the trust, the amount of any such borrowings is unlikely to be material to the trust. As a result, the trust is not subject to any material interest rate market risk.

50

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Item 8.    Financial Statements and Supplementary Data.



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To
the Trustee and Unitholders
VOC Energy Trust

We
have audited the accompanying statements of assets and trust corpus of VOC Energy Trust (the "Trust") as of December 31, 2015 and 2016, and the related statements of
distributable income and changes in trust corpus for each of the three years in the period ended December 31, 2016. These financial statements are the responsibility of the Trust's management.
Our responsibility is to express an opinion on these financial statements based on our audits.

We
conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our opinion.

As
described in Note B to the financial statements, these financial statements have been prepared on a modified cash basis of accounting, which is a comprehensive basis of
accounting other than accounting principles generally accepted in the United States of America.

In
our opinion, the financial statements referred to above present fairly, in all material respects, the assets and trust corpus of VOC Energy Trust as of December 31, 2015 and
2016, and its distributable income and its changes in trust corpus for each of the three years in the period ended December 31, 2016 on the basis of accounting described in Note B.

We
also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Trust's internal control over financial reporting as of
December 31, 2016, based on criteria established in the 2013Internal ControlIntegrated Frameworkissued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO), and our report dated March 15, 2017 expressed an unqualified opinion thereon.

/s/
Grant Thornton LLP
Wichita, Kansas
March 15, 2017

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VOC ENERGY TRUST        STATEMENTS OF ASSETS AND TRUST CORPUS



December 31,2015

2016ASSETSCash

$
251,537

$
238,640Investment in net profits interest


140,591,606


140,591,606Accumulated amortization


(47,387,598
)

(55,363,715
)​
​
​
​
​
​
​
​Total assets

$
93,455,545

$
85,466,531​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​TRUST CORPUSTrust corpus, 17,000,000 Trust units issued and outstanding at December 31, 2015 and 2016, respectively

$
93,455,545

$
85,466,531​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​




STATEMENTS OF DISTRIBUTABLE INCOME



Year Ended December 31,2014

2015

2016Income from net profits interest

$
32,284,622

$
8,627,256

$
5,749,845Cash on hand used for Trust expenses


36,171


163,562


12,898General and administrative expenses(1)


(870,793
)

(800,818
)

(917,743
)​
​
​
​
​
​
​
​
​
​
​Distributable income

$
31,450,000

$
7,990,000

$
4,845,000​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​Distributions per Trust unit (17,000,000 Trust units issued and outstanding at December 31, 2014, 2015 and 2016, respectively)

$
1.85

$
0.47

$
0.285​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​


(1)Includes
$83,550, $86,895 and $90,365 paid to VOC Brazos and $150,100, $150,100 and $150,100 paid to The Bank of New York Mellon Trust Company, N.A. for the years
ended December 31, 2014, 2015 and 2016, respectively.




STATEMENTS OF CHANGES IN TRUST CORPUS



Year Ended December 31,2014

2015

2016Trust corpus, beginning of year

$
111,439,640

$
101,602,829

$
93,455,545Income from net profits interest


32,284,622


8,627,256


5,749,845Cash distributions


(31,450,000
)

(7,990,000
)

(4,845,000
)Trust expenses


(870,793
)

(800,818
)

(917,743
)Amortization of net profits interest


(9,800,640
)

(7,983,722
)

(7,976,116
)​
​
​
​
​
​
​
​
​
​
​Trust corpus, end of year

$
101,602,829

$
93,455,545

$
85,466,531​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​




The accompanying notes are an integral part of these financial statements.

52

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Table of Contents



VOC Energy Trust        NOTES TO FINANCIAL STATEMENTS

NOTE AORGANIZATION OF THE TRUST

VOC Energy Trust (the "Trust") is a statutory trust formed on November 3, 2010 (capitalized on December 17, 2010) under the Delaware Statutory Trust Act pursuant to a trust
agreement dated November 3, 2010 (as amended and restated on May 10, 2011, the "Trust Agreement") among VOC Brazos Energy Partners, L.P., a Texas limited partnership ("VOC
Brazos"), as trustor, The Bank of New York Mellon Trust Company, N.A., as Trustee (the "Trustee"), and Wilmington Trust Company, as Delaware Trustee (the "Delaware Trustee"). The Trust was created to
acquire and hold a term net profits interest for the benefit of the Trust unitholders.

VOC
Brazos is a privately-held limited partnership engaged in the production and development of oil and natural gas from properties located in Texas. VOC Kansas Energy Partners, L.L.C.,
a Kansas limited liability company ("VOC Kansas"), is a privately-held limited liability company engaged in the production and development of oil and natural gas from properties primarily located in
Kansas along with a limited number of Texas properties. In connection with the closing of the initial public offering of units of beneficial interest in the Trust ("Trust Units") in May 2011, VOC
Brazos acquired all of the membership interests in VOC Kansas in exchange for newly issued limited partner interests in VOC Brazos pursuant to a Contribution and Exchange Agreement, dated
August 30, 2010, as amended, by and between VOC Brazos and VOC Kansas. This resulted in VOC Kansas becoming a wholly-owned subsidiary of VOC Brazos.

The
Trust was created to acquire and hold a term net profits interest representing the right to receive 80% of the net proceeds (calculated as described below in Note C) from
production from the Underlying Properties (as defined below). The net profits interest consists of working interests in substantially all of the oil and natural gas properties held by VOC Brazos and
VOC Kansas in the States of Kansas and Texas as of the date of the conveyance of the net profits interest to the Trust. We refer to the properties in which the Trust holds the net profits interest as
the "Underlying Properties."

The
net profits interest is passive in nature, and the Trustee has no management control over and no responsibility relating to the operation of the Underlying Properties. The net
profits interest entitles the Trust to receive 80% of the net proceeds attributable to VOC Brazos' interest from the sale of production from the underlying properties during the term of the Trust. The
net profits interest will terminate on the later to occur of (1) December 31, 2030 or (2) the time when 10.6 million barrels of oil equivalent ("MMBoe") (which is the
equivalent of 8.5 MMBoe in respect of the net profits interest) have been produced from the Underlying Properties and sold, and the Trust will soon thereafter wind up its affairs and terminate.

As
of December 31, 2016, cumulatively, since inception, the Trust has received payment for 3,604,731 net barrels of oil equivalent (unaudited).

The
trust will dissolve prior to its termination if:



53

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Table of Contents

VOC Energy Trust

NOTES TO FINANCIAL STATEMENTS (Continued)

NOTE AORGANIZATION OF THE TRUST (Continued)

Upon
dissolution, the trustee would sell all of the trust's assets, either by private sale or public auction, and distribute the net proceeds of the sale to the trust unitholders.

The
Trustee can authorize the Trust to borrow money to pay administrative or incidental expenses of the Trust that exceed cash held by the Trust. The Trustee may authorize the Trust to
borrow from the Trustee or the Delaware Trustee as a lender provided the terms of the loan are similar to the terms it would grant to a similarly situated commercial customer with whom it did not have
a fiduciary relationship. The Trustee may also deposit funds awaiting distribution in an account with itself and make other short term investments with the funds distributed to the Trust.

NOTE BTRUST ACCOUNTING POLICIES

A summary of the significant accounting policies of the Trust follows.

The
Trust uses the modified cash basis of accounting to report receipts by the Trust of the net profits interest and payments of expenses incurred. The net profits interest represents
the right to receive revenues (oil and natural gas sales), less direct operating expenses (lease operating expenses and
production and property taxes) and development expenses (which are capitalized in financial statements prepared in accordance with accounting principles generally accepted in the United States of
America ("U.S. GAAP")) of the Underlying Properties plus any payments made or net of payments received in connection with the settlement of certain hedge contracts, times 80%. Cash
distributions of the Trust will be made based on the amount of cash received by the Trust pursuant to terms of the conveyance creating the net profits interest.

The
financial statements of the Trust, as prepared on a modified cash basis, reflect the Trust's assets, Trust corpus, and distributable income as follows:



54

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Table of Contents

VOC Energy Trust

NOTES TO FINANCIAL STATEMENTS (Continued)

NOTE BTRUST ACCOUNTING POLICIES (Continued)

While
these statements differ from financial statements prepared in accordance with U.S. GAAP, the modified cash basis of reporting revenues and distributions is considered most meaningful
because quarterly distributions to the Trust unitholders are based on net cash receipts.

This
comprehensive basis of accounting other than U.S. GAAP corresponds to the accounting permitted for royalty trusts by the U.S. Securities and Exchange Commission (the "SEC")
as specified by Staff Accounting Bulletin Topic 12:E, Financial Statements of Royalty Trusts.

No
new accounting pronouncements have been adopted or issued during the year ended December 31, 2016 that would impact the financial statements of the Trust.

For
purposes of these statements, the Trust considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.

The
preparation of financial statements requires estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.

Significant
estimates affecting these financial statements include estimates of proved oil and gas reserves, which are used to compute the Trust's amortization of net profits interest.

NOTE CNET PROFITS INTEREST

Under the conveyance, 80% of the aggregate net proceeds attributable to the sale of oil and natural gas production from the Underlying Properties for each calendar quarter will be paid
to the Trust on or before the 30th day of the month following the end of each quarter. VOC Brazos will not pay to the Trust any interest on the net proceeds held by VOC Brazos prior to payment
to the Trust. The Trustee will make distributions to Trust unitholders quarterly.

"Gross proceeds" means the aggregate amount received by VOC Brazos from sales of oil and natural gas produced from the Underlying
Properties (other than amounts received for certain future non-consent operations). However, gross proceeds does not include consideration for the transfer or sale of any underlying property by VOC
Brazos or any subsequent owner to any new owner. Gross proceeds also does not include any amount for oil or natural gas lost in production or marketing or used by the owner of the Underlying
Properties in drilling, production and plant operations. Gross proceeds includes payments for future production if they are not subject to repayment in the event of insufficient subsequent production.

"Net proceeds" means gross proceeds less the following costs:



55

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Table of Contents

VOC Energy Trust

NOTES TO FINANCIAL STATEMENTS (Continued)

NOTE CNET PROFITS INTEREST (Continued)



All
of the hedge payments received by VOC Brazos from hedge contract counterparties upon settlements of hedge contracts and certain other non-production revenues, including salvage value
for equipment related to plugged and abandoned wells, as detailed in the conveyance, offset the costs outlined above in calculating the net proceeds. If any excess amounts have not been used to offset
costs

56

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Table of Contents

VOC Energy Trust

NOTES TO FINANCIAL STATEMENTS (Continued)

NOTE CNET PROFITS INTEREST (Continued)

at
the time when the later to occur of (1) December 31, 2030, or (2) the time when 10.6 MMBoe (which is the equivalent of 8.5 MMBoe in respect of the net profits interest) have
been produced from the Underlying Properties and sold, then Trust unitholders will not be entitled to receive the benefit of such excess amounts.

During
each twelve-month period beginning on the later to occur of (1) December 31, 2027 and (2) the time when 9.8 MMBoe have been produced from the Underlying
Properties and sold (which is the equivalent of 7.8 MMBoe in respect of the net profits interest) (in either case, the "Capital Expenditure Limitation Date"), the sum of the development expenditures
and amounts reserved for approved development expenditure projects for such twelve-month period may not exceed the Average Annual Capital Expenditure Amount. The "Average Annual Capital Expenditure
Amount" means the quotient of (x) the sum of the development expenditures and amounts reserved for approved development expenditure projects with respect to the three twelve-month periods
ending on the Capital Expenditure Limitation Date, divided by (y) three. Commencing on the Capital Expenditure Limitation Date, and each anniversary of the Capital Expenditure Limitation Date
thereafter, the Average Annual Capital Expenditure Amount will be increased by 2.5% to account for expected increased costs due to inflation.

In
the event that the net proceeds for any computation period 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 gross proceeds in the following computation period for purposes of determining the net proceeds for that following computation period.

Gross
proceeds and net proceeds are calculated on a cash basis, except that certain costs, primarily ad valorem taxes and expenditures of a material amount, may be determined on an
accrual basis.

The
net profits interest was recorded at the historical cost of VOC Brazos on May 10, 2011, the date of the conveyance, and was calculated as follows:



Oil and gas properties

$
197,270,173Accumulated depreciation and depletion


(17,681,155
)Hedge liability


(1,717,713
)20-year asset retirement liability


(2,131,797
)​
​
​
​
​Net property value to be conveyed


175,739,508​
​
​
​
​Times 80% net profits interest to Trust

$
140,591,606​
​
​
​
​​
​
​
​
​​
​
​
​
​


57

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Table of Contents

VOC Energy Trust

NOTES TO FINANCIAL STATEMENTS (Continued)

NOTE DINCOME FROM NET PROFITS INTEREST



Year Ended December 31,2014

2015

2016Excess of revenues over direct operating expenses and lease equipment and development costs(1)

$
39,730,778

$
11,409,071

$
7,187,306Times net profits interest over the term of the Trust


80
%

80
%

80
%​
​
​
​
​
​
​
​
​
​
​Income from net profits interest before reserve adjustments


31,784,622


9,127,256


5,749,845Cash reserve(2)


500,000


(500,000
)

0​
​
​
​
​
​
​
​
​
​
​Income from net profits interest

$
32,284,622
(3)
$
8,627,256
(4)
$
5,749,845
(5)​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​


(1)Pursuant
to the terms of the conveyance of the net profits interest, lease equipment and development costs are to be deducted when calculating the distributable
income to the Trust.(2)Pursuant
to the terms of the conveyance of the net profits interest, VOC Brazos can reserve up to $1.0 million for future development, maintenance or
operating expenditures at any time. The reserve balance was $500,000, $1,000,000 and $1,000,000 at December 31, 2014, 2015 and 2016, respectively(3)The
income from the net profits interest for the year ended December 31, 2014 (consisting of VOC Brazos' February, May, August and November 2014 net profits
interest distributions to the Trust) generally represent the production by VOC Brazos from September 2013 through August 2014.(4)The
income from the net profits interest for the year ended December 31, 2015 (consisting of VOC Brazos' February, May, August and November 2015 net profits
interest distributions to the Trust) generally represent the production by VOC Brazos from September 2014 through August 2015.(5)The
income from the net profits interest for the year ended December 31, 2016 (consisting of VOC Brazos' February, May, August and November 2016 net profits
interest distributions to the Trust) generally represent the production by VOC Brazos from September 2015 through August 2016.


For
the year ended December 31, 2014, 2015 and 2016, MV Purchasing, LLC purchased 35%, 37% and 31%, respectively, of the production sold from the Underlying Properties.
Sales to MV Purchasing are under short-term arrangements, ranging from one to six months, using market sensitive pricing.

NOTE EINCOME TAXES

Tax counsel to the Trust advised the Trust at the time of formation that, under then current tax laws, in its opinion the net profits interest should be treated as a debt instrument for
federal income tax purposes, and the Trust should be required to treat a portion of each payment it receives with respect to the net profits interest as interest income in accordance with the
"noncontingent bond method" under the original issue discount rules contained in the Internal Revenue Code of 1986, as amended, and the corresponding regulations. Tax counsel to the Trust also advised
the Trust at the time of formation that in its opinion the Trust will be treated as a grantor trust for federal income tax purposes. On the basis of this advice, Trust unitholders will be considered
to own and receive the

58

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Table of Contents

VOC Energy Trust

NOTES TO FINANCIAL STATEMENTS (Continued)

NOTE EINCOME TAXES (Continued)

Trust's
assets and income and will be directly taxable thereon as if no trust were in existence. No provision for federal or state income taxes has been made in the accompanying statements.

NOTE FDISTRIBUTIONS TO UNITHOLDERS

The Trustee determines for each quarter the amount available for distribution to the Trust unitholders. This distribution is expected to be made on or before the 45th day
following the end of each quarter to the Trust unitholders of record on the 30th day of the month following the end of each quarter (or the next succeeding business day). Such amounts will be
equal to the excess, if any, of the cash received by the Trust relating to the preceding quarter, over the expenses of the Trust paid for such quarter, subject to adjustments for changes made by the
Trustee during such quarter in any cash reserves established for future expenses of the Trust.



Date paid

Period covered

Distribution
per unit

Available
distribution
before reserve
change

Reserve
released
(established)
to (from)
distribution(1)

Total
distributionFebruary 14, 2014

October 1, 2013 through December 31, 2013

$
0.57

$9.69 million

$
0

$9.69 millionMay 15, 2014

January 1, 2014 through March 31, 2014


0.52

8.84 million


0

8.84 millionAugust 14, 2014

April 1, 2014 through June 30, 2014


0.39

6.63 million


0

6.63 millionNovember 14, 2014

July 1, 2014 through September 30, 2014


0.37

5.79 million


500,000

6.29 millionFebruary 14, 2015

October 1, 2014 through December 31, 2014

$
0.10

$1.20 million

$
500,000

$1.70 millionMay 15, 2015

January 1, 2015 through March 31, 2015


0.16

2.92 million


(200,000
)
2.72 millionAugust 14, 2015

April 1, 2015 through June 30, 2015


0.11

2.67 million


(800,000
)
1.87 millionNovember 14, 2015

July 1, 2015 through September 30, 2015


0.10

1.70 million


0

1.70 millionFebruary 12, 2016

October 1, 2015 through December 31, 2015

$
0.045

$0.765 million

$
0

$0.765 millionMay 13, 2016

January 1, 2016 through March 31, 2016


0.05

0.85 million


0

0.85 millionAugust 12, 2016

April 1, 2016 through June 30, 2016


0.09

1.53 million


0

1.53 millionNovember 14, 2016

July 1, 2016 through September 30, 2016


0.10

1.70 million


0

1.70 million


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


59

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Table of Contents

VOC Energy Trust

NOTES TO FINANCIAL STATEMENTS (Continued)

NOTE GRELATED PARTY TRANSACTIONS

Trustee Administrative Fee.Under the terms of the Trust Agreement, the Trust pays an annual administrative fee of $150,000 to the
Trustee and $2,500
to the Delaware Trustee.

Agreement with VOC Brazos.In May 2011, the Trustee, not in its individual capacity but solely as Trustee of the Trust, entered into an
administrative services agreement with VOC Brazos whereby, in connection with the conveyance of the net profits interest to the Trust, VOC Brazos agreed to provide the Trust with accounting,
bookkeeping and informational services relating to the net profits interest in exchange for an administrative services fee of $18,750 that will be paid to VOC Brazos on a quarterly basis, The
administrative services agreement will terminate on the earliest to occur of: (i) the date the Trust shall have dissolved and commenced winding up in accordance with the Trust agreement,
(ii) the date that all of the net profits interest has been terminated or is no longer held by the Trust and (iii) a date mutually agreed to by VOC Brazos and the Trustee. The quarterly
fee increases by 4% each year. For 2014, 2015 and 2016, $83,550, $86,895 and $90,365, respectively, was paid to VOC Brazos as administrative fees.

NOTE HADVANCE FOR TRUST EXPENSES

Under the terms of the Trust Agreement, the Trustee is allowed to borrow money to pay Trust expenses. During 2014, 2015 and 2016, the Trust did not borrow any money. Any advances will be
shown as additions to Trust Corpus when the borrowing is made and any repayments will be shown as reductions to Trust Corpus when the borrowing is repaid. Under the terms of the Trust Agreement, VOC
Brazos has provided a letter of credit in the amount of $1 million to the Trustee to protect the Trust against the risk that it does not have sufficient cash to pay future expenses.

NOTE IOTHER EVENTS



On January 19, 2017, the Trust announced a Trust distribution to unitholders of record on January 30, 2017 of $1,360,000, or $0.08
per unit, which was paid on February 14, 2017. Such distribution was comprised of the net proceeds of production collected by VOC Brazos from October 1, 2016 through December 31,
2016.

In
February 2017, VOC Brazos reported to the Trustee it had settled a lawsuit and related matters, resulting from an unaffiliated operator having drilled and completed a well across land
partly owned by VOC Brazos. As such, the Trust distribution of net profits for the first quarterly payment period ended March 31, 2017 will include the net settlement amount of approximately
$1.2 million (or approximately $0.9 million after giving effect of the 80% net proceeds to the Trust calculation).

NOTE JDISCLOSURES ABOUT OIL AND GAS ACTIVITIES (UNAUDITED)

The Trust is required to disclose proved reserves in accordance with the SEC's reporting rules, which require that the average, first-day-of-the-month price during the 12-month period
before the end of the year be used when estimating whether reserve quantities are economical to produce. This same 12-month average price is also used in calculating the aggregate amount of (and
changes in) future cash inflows related to the standardized measure of discounted future net cash flows. The rules also allow for the use of reliable technology to estimate proved oil and gas reserves
if those technologies have been demonstrated to result in reliable conclusions about reserve volumes. The unaudited supplemental information on oil and gas exploration and production activities for
2014, 2015 and 2016 has been presented in accordance with these rules.

60

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Table of Contents

VOC Energy Trust

NOTES TO FINANCIAL STATEMENTS (Continued)

NOTE JDISCLOSURES ABOUT OIL AND GAS ACTIVITIES (UNAUDITED) (Continued)

Estimates of the proved oil and gas reserves attributable to the Trust as of December 31, 2014, 2015 and 2016 are based on reports of Cawley, Gillespie &
Associates, Inc., independent petroleum and geological engineers, and the contract property management engineering staff of the manager of VOC Brazos who operates the Underlying Properties, in
accordance with the SEC's rules and definitions. Users of this information should be aware that the process of estimating quantities of "proved" and "proved developed" and "proved undeveloped" crude
oil and natural gas reserves is very complex, requiring significant subjective decisions in the evaluation of all available geological, engineering and economic
data for each reservoir. The data for a given reservoir may also change substantially over time as a result of numerous factors, including additional development activity, evolving production history
and continual reassessment of the viability of production under varying economic conditions. Consequently, material revisions to existing reserve estimates occur from time to time.

The
reserve data below represent estimates only and should not be construed as being exact. Moreover, the discounted values should not be construed as representative of the current
market value of the net profits interest. A market value determination would include many additional factors including: (i) anticipated future oil and gas prices; (ii) the effect of
federal income taxes, if any, on the Trust; (iii) an allowance for return on investment; (iv) the effect of governmental legislation; (v) the value of additional potential
reserves, not considered proved at present, which may be recovered as a result of further exploration and development activities; and (vi) other business risks.

The
following tables set forth (i) the estimated net quantities of proved, proved developed and proved undeveloped oil and natural gas reserves attributable to the Trust, and
(ii) the standardized measure of the discounted future net profits interest income attributable to the Trust and the nature of changes in such standardized measure between years. These tables
are prepared on the accrual basis, which is the basis on which VOC Brazos maintains its production records and is different from the basis on which the Trust is reporting.

61

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Table of Contents

VOC Energy Trust

NOTES TO FINANCIAL STATEMENTS (Continued)

NOTE JDISCLOSURES ABOUT OIL AND GAS ACTIVITIES (UNAUDITED) (Continued)

ESTIMATED QUANTITIES OF OIL AND GAS RESERVES



Oil (Bbls)

Gas (Mcf)

Oil
Equivalents
(Boe)Proved reservesBalance at December 31, 2013


6,511,391


3,684,077


7,125,403Revisions of previous estimates


732,766


707,378


850,662Production


(574,267
)

(420,998
)

(644,433
)​
​
​
​
​
​
​
​
​
​
​Balance at December 31, 2014


6,669,890


3,970,457


7,331,632Revisions of previous estimates


(728,618
)

(1,069,707
)

(906,903
)Production


(492,723
)

(328,828
)

(547,578
)​
​
​
​
​
​
​
​
​
​
​Balance at December 31, 2015


5,448,499


2,571,922


5,877,151Revisions of previous estimates


(159,594
)

(278,238
)

(205,967
)Production


(449,966
)

(271,843
)

(495,273
)​
​
​
​
​
​
​
​
​
​
​Balance at December 31, 2016


4,838,939


2,021,841


5,175,912​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​Proved developed reservesDecember 31, 2013


5,648,733


3,250,716


6,190,519​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​December 31, 2014


5,239,868


3,209,433


5,774,774​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​December 31, 2015


4,288,394


1,681,990


4,568,726​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​December 31, 2016


3,667,326


1,310,718


3,885,779​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​Proved undeveloped reservesDecember 31, 2013


862,658


433,361


934,885​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​December 31, 2014


1,430,022


761,024


1,556,859Proved undeveloped reserves converted to proved developed by drilling


0


0


0Additional proved undeveloped reserves added


97,868


163,979


125,198Revisions of previous estimates


(367,785
)

(35,071
)

(373,632
)​
​
​
​
​
​
​
​
​
​
​December 31, 2015


1,160,105


889,932


1,308,425Proved undeveloped reserves converted to proved developed by drilling


(35,072
)

0


(35,072
)Additional proved undeveloped reserves added


54,440


0


54,440Revisions of previous estimates


(7,860
)

(178,809
)

(37,659
)​
​
​
​
​
​
​
​
​
​
​December 31, 2016


1,171,613


711,123


1,290,134​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​


The
Trust recognized net increases in reserves for its share of VOC Brazos' total during 2014 associated with the production of properties of approximately 644,433 Boe. This increase was
supported by an increase in reserves of approximately 850,662 Boe as a result of positive revisions due to well performance during 2014 as additional information was obtained through the continued
development of existing wells during the period.

62

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Table of Contents

VOC Energy Trust

NOTES TO FINANCIAL STATEMENTS (Continued)

NOTE JDISCLOSURES ABOUT OIL AND GAS ACTIVITIES (UNAUDITED) (Continued)

The
Trust recognized net decreases in reserves for its share of VOC Brazos' total during 2015 associated with the production of properties of approximately 547,578 Boe. This decrease was
compounded by a decrease in reserves of approximately 906,903 Boe as a result of negative revisions due to significant decreases in realized prices during 2015.

The
Trust recognized net decreases in reserves for its share of VOC Brazos' total during 2016 associated with the production of properties of approximately 495,273 Boe. This decrease was
compounded by a decrease in reserves of approximately 205,967 Boe as a result of negative revisions due to significant decreases in realized prices during 2016.

STANDARDIZED MEASURE OF DISCOUNTED FUTURE NET CASH FLOWS  FROM PROVED OIL AND GAS RESERVES

Estimates of future net cash flows from proved reserves of crude oil and natural gas are computed using the average, first-day-of-the-month
price during the 12-month period for 2014, 2015 and 2016.



2014

2015

2016Future cash inflows

$
621,580,650

$
254,059,475

$
194,095,725Future costsProduction


(209,853,969
)

(133,238,131
)

(105,418,312
)Development


(51,405,006
)

(30,042,713
)

(30,377,275
)​
​
​
​
​
​
​
​
​
​
​Future net cash flows


360,321,675


90,778,631


58,300,138Less 10% discount factor


(151,051,700
)

(36,231,462
)

(23,977,444
)​
​
​
​
​
​
​
​
​
​
​Standardized measure of discounted future net cash flows

$
209,269,975

$
54,547,169

$
34,322,694​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​


63

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Table of Contents

VOC Energy Trust

NOTES TO FINANCIAL STATEMENTS (Continued)

NOTE JDISCLOSURES ABOUT OIL AND GAS ACTIVITIES (UNAUDITED) (Continued)

CHANGES IN STANDARDIZED MEASURE OF DISCOUNTED FUTURE NET CASH  FLOWS FROM PROVED OIL AND GAS RESERVES



2014

2015

2016Standardized measure at beginning of year

$
231,220,050

$
209,269,975

$
54,547,169Net proceeds to the Trust


(31,784,622
)

(9,127,256
)

(5,749,845
)Net payments received to settle hedge contracts


14,044


0


0​
​
​
​
​
​
​
​
​
​
​Net proceeds to the Trust, exclusive of net payments received to settle hedge contracts


(31,770,578
)

(9,127,256
)

(5,749,845
)Net changes in price and production costs


(6,428,639
)

(159,284,034
)

(12,542,407
)Changes in estimated future development costs


(28,319,178
)

15,361,824


(230,237
)Development costs incurred during the year


4,910,400


0


233,920Revisions of quantity estimates


26,294,642


(9,065,111
)

(1,576,842
)Accretion of discount


23,122,005


20,926,998


5,454,717Changes in production rates, timing and other(1)


(9,758,727
)

(13,535,227
)

(5,813,781
)​
​
​
​
​
​
​
​
​
​
​Standardized measure at end of year

$
209,269,975

$
54,547,169

$
34,322,694​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​


(1)The
Trust's changes in standardized measure of discounted future net cash flows attributable to the production rates, timing and other primarily represents changes
in the Trust's estimates of when proved reserve quantities will be realized. During the years ended December 31, 2014, 2015 and 2016, the Operator increased its development drilling capital
plans, which had the effect of accelerating the estimated timing of development and then the ultimate realization of undeveloped proved reserves.


The
average, first-day-of-the-month price during the 12-month period for 2014, 2015 and 2016 used in determining future net revenues related to the standardized measure calculation are
as follows:



2014

2015

2016Oil (per Bbl)

$
90.27

$
45.54

$
39.18Gas (per Mcf)

$
4.91

$
2.31

$
2.23


NOTE KSELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)



Summarized Quarterly Results Three months endedMarch 31

June 30

September 30

December 31(All numbers in thousands except per unit amounts)2015:Income from net profits interest

$
1,794

$
2,828

$
2,017

$
1,988Distributable income

$
1,700

$
2,720

$
1,870

$
1,700Distributions per unit

$
0.1000

$
0.1600

$
0.1100

$
0.10002016:Income from net profits interest

$
996

$
1,075

$
1,696

$
1,983Distributable income

$
765

$
850

$
1,530

$
1,700Distributions per unit

$
0.0450

$
0.0500

$
0.0900

$
0.1000


64

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Table of Contents

Item 9.    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None.

Item 9A.    Controls and Procedures.

Evaluation of disclosure controls and procedures.The trustee maintains disclosure controls and procedures designed to ensure that
information to be
disclosed by the trust in the reports that it files or submits under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the rules and regulations
promulgated by the SEC. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed by the trust is accumulated and communicated by
VOC Brazos to The Bank of New York Mellon Trust Company, N.A., as trustee of the trust, and its employees who participate in the preparation of the trust's periodic reports as appropriate to allow
timely decisions regarding required disclosure.

As
of the end of the period covered by this report, the trustee carried out an evaluation of the trust's disclosure controls and procedures. Mike Ulrich, as Trust Officer of the trustee,
has concluded that the disclosure controls and procedures of the trust are effective.

Due
to the contractual arrangements of (i) the trust agreement and (ii) the conveyance of the net profits interest, the trustee relies on (A) information provided by
VOC Brazos, including historical operating data, plans for future operating and capital expenditures, reserve information and information relating to projected production, and (B) conclusions
and reports regarding reserves by the trust's independent reserve engineers. See Item 1A. Risk Factors "The trust and the public trust unitholders have no voting or managerial
rights with respect to VOC Brazos, the operator of the underlying properties. As a result, public trust unitholders have no ability to influence the operation of the underlying properties" in this
Form 10-K, and "Item 7. Trustee's Discussion and Analysis of Financial Condition and Results of Operations" for a description of certain risks relating to these arrangements and reliance
on information when reported by VOC Brazos to the trustee and recorded in the trust's results of operations.

Changes in Internal Control Over Financial Reporting.During the fourth quarter ended December 31, 2016, there has been no change
in the
trustee's internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the trustee's internal control over financial reporting. The trustee
notes for purposes of clarification that it has no authority over, and makes no statement concerning, the internal control over financial reporting of VOC Brazos.

Trustee's Report on Internal Control Over Financial Reporting.The trustee is responsible for establishing and maintaining adequate
internal control
over financial reporting, as such term is defined in Exchange Act Rules 13a-15f, by the trust. The trust's internal control over financial reporting is a process designed under the supervision
of the trustee to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the trust's financial statements for external purposes in accordance with the
accounting permitted for royalty trusts by the SEC as specified by Staff Accounting
Bulletin Topic 12:E, Financial Statements of Royalty Trusts, which is a comprehensive basis of accounting other than generally accepted accounting principles.

As
of December 31, 2016, the trustee assessed the effectiveness of the trust's internal control over financial reporting based on the criteria for effective internal control over
financial reporting established in "Internal ControlIntegrated Framework," issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on that assessment, the
trustee determined that the trust maintained effective internal control over financial reporting as of December 31, 2016, based on those criteria.

Grant
Thornton LLP, the independent registered public accounting firm that audited the financial statements of the trust included in this annual report on Form 10-K, has
also audited the effectiveness of the trust's internal control over financial reporting as of December 31, 2016, as stated in their accompanying report.

65

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Table of Contents

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To
the Trustee and Unitholders
VOC Energy Trust

We
have audited the internal control over financial reporting of VOC Energy Trust (the "Trust") as of December 31, 2016, based on criteria established in the 2013 Internal ControlIntegrated Frameworkissued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Trustee is
responsible for maintaining effective internal control over financial reporting
and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Trustee's Report on Internal Control over Financial Reporting appearing under
Item 9A. Our responsibility is to express an opinion on the Trust's internal control over financial reporting based on our audit.

We
conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control
over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and
performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A
company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures
that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide
reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because
of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future
periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In
our opinion, the Trust maintained, in all material respects, effective internal control over financial reporting as of December 31, 2016, based on criteria established in the
2013InternalControlIntegrated Frameworkissued by COSO.

We
also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the statement of assets and trust corpus of the Trust as of
December 31, 2016, and the related statements of distributable income and changes in trust corpus for the year then ended, and our report dated March 15, 2017 expressed an unqualified
opinion on those financial statements.

/s/
Grant Thornton LLP

Wichita,
Kansas
March 15, 2017

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Table of Contents

Item 9B.    Other Information.

None.

PART III

Item 10.    Directors, Executive Officers and Corporate Governance.

The trust has no directors or executive officers. The trustee is a corporate trustee that may be removed by the affirmative vote of the holders
of not less than a majority of the outstanding trust units at a meeting at which a quorum is present.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act of 1934 requires the holders of more than 10 percent of the trust units to file with the SEC
reports regarding their ownership and changes in ownership of the trust units. The trustee believes that, during 2016, the trust's 10 percent unitholders complied with all Section 16(a)
filing requirements. In making these statements, the trustee has relied upon examination of the copies of Forms 3, 4 and 5, to the extent there were any, provided to the trust.

Audit Committee and Nominating Committee

Because the trust does not have a board of directors, it does not have an audit committee, an audit committee financial expert or a nominating
committee.

Code of Ethics

The trust does not have a principal executive officer, principal financial officer, principal accounting officer or controller and, therefore,
has not adopted a code of ethics applicable to such persons. However, employees of the trustee must comply with the bank's code of ethics.

Item 11.    Executive Compensation.

During the years ended December 31, 2014, 2015 and 2016, the trustee received compensation from the trust in the amount of $150,000 for
each year. The trust does not have any executive officers. Because the trust does not have a board of directors, it does not have a compensation committee.

Item 12.    Security Ownership of Certain Beneficial Owners and Management and Related Unitholder Matters.

The
following table sets forth certain information regarding the beneficial ownership of our trust units as of March 15, 2017 by each person who, to our knowledge, beneficially
owns more than 5% of the outstanding trust units.



Beneficial Owner

Trust Units
Beneficially
Owned

Percent of
Class(1)VOC Partners, LLC(2)


4,252,250


25.0
%


(1)Based
on 17,000,000 trust units outstanding as of March 15, 2017.(2)The
information is based on a Schedule 13D filing with the SEC on August 18, 2011. The address of the beneficial owner is 1700 Waterfront Parkway,
Building 500, Wichita, KS 67206.


67

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Table of Contents

Not
applicable.

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

Item 13.    Certain Relationships and Related Transactions, and Director Independence.

Under the terms of the conveyance governing the net profits interest, VOC Brazos is obligated to make certain payments to the trust on a
quarterly basis. Please see "Item 1. BusinessComputation of Net Proceeds" for more information about these agreements.

Administrative Services Agreement

The trust has entered into an administrative services agreement with VOC Brazos that obligates the trust, throughout the term of the trust, to
pay to VOC Brazos each quarter an administrative services fee for accounting, bookkeeping and informational services performed by VOC Brazos on behalf of the trust relating to the net profits
interest. The annual fee of $75,000 is payable in equal quarterly installments and increases by 4% each year. For 2014, 2015 and 2016, $83,550, $86,895 and $90,365, respectively, was paid to VOC
Brazos as administrative fees. The administrative services agreement will terminate upon the termination of the net profits interest unless earlier terminated by mutual agreement of the trustee and
VOC Brazos.

Registration Rights

The trust entered into a registration rights agreement with VOC Brazos in connection with VOC Brazos' conveyance to the trust of the net profits
interest. In the registration rights agreement, the trust agreed, for the benefit of VOC Brazos and any transferee of its trust units
(each, a "holder"), to register the trust units it holds. Specifically, the trust agreed:



68

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Table of Contents

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

In
connection with the preparation and filing of any registration statement, VOC Brazos will bear all costs and expenses incidental to any registration statement, excluding certain
internal expenses of the trust, which will be borne by the trustee, and any underwriting discounts and commissions, which will be borne by the seller of the trust units.

Item 14.    Principal Accountant Fees and Services.

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

The
following table presents fees for professional audit services rendered by Grant Thornton LLP for the audit of the trust's financial statements for 2015 and 2016 and fees
billed for other services rendered by Grant Thornton LLP.



2015

2016Audit fees

$
225,750

$
225,750Audit related fees





Tax fees





All other fees





​
​
​
​
​
​
​
​Total fees

$
225,750

$
225,750​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​


69

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Table of Contents

PART IV

Item 15.    Exhibits, Financial Statement Schedules



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





Page in this
Form 10-KVOC Energy TrustReport of Independent Registered Public Accounting Firm

51Statements of Assets and Trust Corpus

52Statements of Distributable Income

52Statements of Changes in Trust Corpus

52Notes to Financial Statements

53




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





Exhibit
Number



Description3.1



Certificate of Trust of VOC Energy Trust. (Incorporated herein by reference to Exhibit 3.4 to the Registration Statement on Form S-1, filed on December 30, 2010 (Registration No. 333-171474))3.2



Amended and Restated Trust Agreement of VOC Energy Trust, dated May 10, 2011, among VOC Brazos Energy Partners, L.P., The Bank of New York Mellon Trust Company, N.A., as Trustee of VOC Energy Trust, and
Wilmington Trust Company, as Delaware Trustee of VOC Energy Trust. (Incorporated herein by reference to Exhibit 3.1 to our Current Report on Form 8-K filed on May 10, 2011 (File No. 001-35160))4.1



Registration Rights Agreement, dated as of May 10, 2011, by and between VOC Partners, LLC and VOC Energy Trust. (Incorporated herein by reference to Exhibit 4.1 to our Current Report on Form 8-K
filed on May 10, 2011 (File No. 0001-35160))10.1



Conveyance of Term Net Profits Interest and Assignment of Pre-Effective Time Payment, dated May 10, 2011, from VOC Brazos Energy Partners, L.P. and VOC Kansas Energy Partners, LLC, to The Bank of New
York Mellon Trust Company, N.A. in its capacity as Trustee of VOC Energy Trust. (Incorporated herein by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on May 10, 2011 (File No. 001-35160))10.2



Administrative Services Agreement, dated May 10, 2011, by and between VOC Brazos Energy Partners, L.P. and The Bank of New York Mellon Trust Company, N.A., in its capacity as Trustee of VOC Energy Trust.
(Incorporated herein by reference to Exhibit 10.2 to our Current Report on Form 8-K filed on May 10, 2011 (File No. 001-35160))31.1
*


Certification filed pursuant to Section 302 of the Sarbanes Oxley Act of 200232.1
*


Certification furnished pursuant to Section 906 of the Sarbanes Oxley Act of 2002


70

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Table of Contents



Exhibit
Number



Description99.1
*


Report of Cawley, Gillespie & Associates, Inc., Petroleum Consultants


*Filed
herewith.


Item 16.    Form 10-K Summary

None.

71

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Table of Contents

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.



VOC ENERGY TRUSTBy:

THE BANK OF NEW YORK MELLON
TRUST COMPANY, N.A., AS TRUSTEEBy

/s/ MICHAEL J. ULRICH Michael J. Ulrich Vice President


March 15,
2017

The
Registrant, VOC Energy Trust, has no principal executive officer, principal financial officer, board of directors or persons performing similar functions. Accordingly, no additional
signatures are available and none have been provided. In signing the report above, the trustee does not imply that it has performed any such function or that such function exists pursuant to the terms
of the trust agreement under which it serves.

72

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Table of Contents

INDEX TO EXHIBITS



Exhibit
Number



Description3.1



Certificate of Trust of VOC Energy Trust. (Incorporated herein by reference to Exhibit 3.4 to the Registration Statement on Form S-1, filed on December 30, 2010 (Registration No. 333-171474))3.2



Amended and Restated Trust Agreement of VOC Energy Trust, dated May 10, 2011, among VOC Brazos Energy Partners, L.P., The Bank of New York Mellon Trust Company, N.A., as Trustee of VOC Energy Trust, and
Wilmington Trust Company, as Delaware Trustee of VOC Energy Trust. (Incorporated herein by reference to Exhibit 3.1 to our Current Report on Form 8-K filed on May 10, 2011 (File No. 001-35160))4.1



Registration Rights Agreement, dated as of May 10, 2011, by and between VOC Partners, LLC and VOC Energy Trust. (Incorporated herein by reference to Exhibit 4.1 to our Current Report on Form 8-K filed
on May 10, 2011 (File No. 0001-35160))10.1



Conveyance of Term Net Profits Interest and Assignment of Pre-Effective Time Payment, dated May 10, 2011, from VOC Brazos Energy Partners, L.P. and VOC Kansas Energy Partners, LLC, to The Bank of New York
Mellon Trust Company, N.A. in its capacity as Trustee of VOC Energy Trust. (Incorporated herein by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on May 10, 2011 (File No. 001-35160))10.2



Administrative Services Agreement, dated May 10, 2011, by and between VOC Brazos Energy Partners, L.P. and The Bank of New York Mellon Trust Company, N.A., in its capacity as Trustee of VOC Energy Trust.
(Incorporated herein by reference to Exhibit 10.2 to our Current Report on Form 8-K filed on May 10, 2011 (File No. 001-35160))31.1
*


Certification filed pursuant to Section 302 of the Sarbanes Oxley Act of 200232.1
*


Certification furnished pursuant to Section 906 of the Sarbanes Oxley Act of 200299.1
*


Report of Cawley, Gillespie & Associates, Inc., Petroleum Consultants


*Filed
herewith.


73

---