Use these links to rapidly review the documentTABLE OF CONTENTS PART IV

Table of Contents



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, 2012o

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 Mellon
Trust Company, N.A., Trustee
Global Corporate Trust
919 Congress
Austin, Texas(Address of principal executive offices)

78701(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 ý

Non-accelerated filer o (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 $18.20 on June 29, 2012, was approximately $232,009,050.

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 12, 2013, 17,000,000 Units of
Beneficial Interest in VOC Energy Trust were outstanding.

DOCUMENTS
INCORPORATED BY REFERENCE:None





---





Table of Contents



TABLE OF CONTENTS



PageFORWARD LOOKING STATEMENTS


1GLOSSARY OF CERTAIN OIL AND NATURAL GAS TERMS


1PART I


6Item 1.

Business


6Item 1A.

Risk Factors


30Item 1B.

Unresolved Staff Comments


43Item 2.

Properties


43Item 3.

Legal Proceedings


43Item 4.

Mine Safety Disclosures


43PART II


44Item 5.

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


44Item 6.

Selected Financial Data


44Item 7.

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


45Item 7A.

Quantitative and Qualitative Disclosures About Market Risk


54Item 8.

Financial Statements and Supplementary Data


55Item 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure


80Item 9A.

Controls and Procedures


80Item 9B.

Other Information


82PART III


82Item 10.

Directors, Executive Officers and Corporate Governance


82Item 11.

Executive Compensation


82Item 12.

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


82Item 13.

Certain Relationships and Related Transactions, and Director Independence


83Item 14.

Principal Accountant Fees and Services


84PART IV


85Item 15.

Exhibits, Financial Statement Schedules


85SIGNATURES


87


ii

---





Table of Contents

FORWARD LOOKING STATEMENTS

This Annual Report on Form 10-K, which we refer to as the "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.

---



Table of Contents

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.

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.

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.

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.

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.

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.

2

---



Table of Contents

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.



3

---



Table of Contents

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:



4

---



Table of Contents



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.

5

---





Table of Contents

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.

As
of December 31, 2010, the trust had no assets other than $1,000 cash and had conducted no operations other than in connection with the initial public offering of the units of
beneficial interest in the trust, which are referred to herein as the "trust units." On May 10, 2011, VOC Brazos and the trust completed an initial public offering of 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, 2012, the underlying properties included interests in 881 gross (548.2 net) producing wells and
included 99,350 gross (61,832.5 net) acres.

In
addition to the conveyance of the net profits interest, VOC Brazos also assigned to the trust the right to receive a payment equal to the amount the trust would have received had the
net profits interest been in effect during the period from January 1, 2011 through the day prior to the closing of the initial public offering. As a result, VOC Brazos made its first payment to
the trust pursuant to the net profits interest in August 2011, which payment covered the net proceeds attributable to the net profits interest for the first two quarters of 2011, consisting of the
period from January 1 to June 30. The
net proceeds attributable to the net profits interest will be impacted by the settlement of hedge contracts that VOC Brazos entered into for the years 2011, 2012, and 2013 and for the six months
ending June 30, 2014. The crude oil swap contracts will settle based on the average of the settlement price for each commodity business day in the contract month. VOC Brazos or the counterparty
is required to make a payment to the other party for the difference between the fixed price and the settlement price. Such settlements could either adversely or positively impact the proceeds
available to distribute to the trust, depending on the settlement price during the month or quarter of the distribution. See "Hedge Contracts" below. 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

6

---



Table of Contents

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, 2012, cumulatively, since inception, the trust has received payment for approximately 1.2 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. The trust's first distribution, which covered the first six months of 2011, less general
and administrative expenses including the Trustee's and the Delaware Trustee's fees and legal expenses incurred in forming the trust, in connection with the initial public offering of trust units
(that were not otherwise paid by VOC Brazos) and related matters and cash reserves of the trust, was made on August 15, 2011 to record unitholders as of August 1, 2011. 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, in effect, 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:



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 VOC Brazos and
its affiliates have no 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 12, 2013.

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

7

---



Table of Contents

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 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 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

8

---



Table of Contents

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:



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

9

---



Table of Contents

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:



10

---



Table of Contents



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, will offset the costs outlined above in calculating the net proceeds. If the hedge payments received
by VOC Brazos and certain other non-production revenues exceed the costs during a quarterly period, the ability to use such excess amounts to offset costs will be deferred and utilized as
offsets in
the next quarterly period to the extent such amounts, plus accrued interest thereon, together with other offsets to costs, for the applicable quarter, are less than the costs arising in such quarter.
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.

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 $1.4 million and
$1.5 million to the VOC Operators in 2011 and 2012, 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 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.

11

---





Table of Contents

Hedge Contracts

The revenues derived from the underlying properties depend substantially on prevailing crude oil prices and, to a lesser extent,
natural gas prices. As a result, commodity prices also affect the amount of cash flow available for distribution to the trust unitholders. Lower prices may also reduce the amount of oil and natural
gas that VOC Brazos can economically produce. VOC Brazos sells the oil and natural gas production from the underlying properties under floating market price contracts each month. VOC Brazos entered
into hedge contracts for 2011, 2012, 2013 and for the six months ending June 30, 2014 to reduce the exposure of the revenues from oil production from the underlying properties to fluctuations
in crude oil prices and to achieve more predictable cash flow. However, these contracts limit the amount of cash available for distribution if prices increase above the fixed hedge price. The hedge
contracts consist of fixed price swap contracts that have been placed with major trading counterparties in whom VOC Brazos believes represent minimal credit risk. Neither VOC Brazos nor the trust
cannot provide assurance, however, that these trading counterparties will not become credit risks in the future.

The
crude oil swap contracts will settle based on the average of the settlement price for each commodity business day in the contract month. In a swap transaction, the counterparty is
required to make a payment to VOC Brazos for the difference between the fixed price and the settlement price if
the settlement price is below the fixed price. VOC Brazos is required to make a payment to the counterparty for the difference between the fixed price and the settlement price if the settlement price
is above the fixed price. From January 1, 2013 through June 30, 2014, VOC Brazos' crude oil price risk management positions in swap contracts are as follows:

Fixed Price SwapsMonth

Volumes
(Barrels)

Weighted
Average Price
(Per Barrel)January 2013


34,975

$
99.01February 2013


34,686

$
99.01March 2013


34,406

$
99.01April 2013


34,166

$
99.01May 2013


33,959

$
99.01June 2013


33,727

$
99.01July 2013


33,526

$
99.01August 2013


33,317

$
99.01September 2013


33,122

$
99.01October 2013


32,929

$
99.01November 2013


32,741

$
99.01December 2013


32,554

$
99.01January 2014


13,220

$
102.15February 2014


13,149

$
102.15March 2014


13,078

$
102.15April 2014


13,008

$
102.15May 2014


12,939

$
102.15June 2014


12,870

$
102.15


The
amounts received by VOC Brazos from the hedge contract counterparty upon settlement of the hedge contracts will reduce the operating expenses related to the underlying properties in
calculating
the net proceeds. However, if the hedge payments received by VOC Brazos under the hedge contracts and other non-production revenue exceed operating expenses during a quarterly period, the
ability to use such excess amounts to offset operating expenses will be deferred, with interest accruing on such amounts at the prevailing prime rate, until the next quarterly period where the hedge
payments

12

---



Table of Contents

and
the other non-production revenue are less than such expenses. In addition, the aggregate amounts paid by VOC Brazos on settlement of the hedge contracts will reduce the amount of net
proceeds paid to the trust.

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.

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

13

---



Table of Contents

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 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

14

---



Table of Contents

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.

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

Widely Held Fixed Investment Trust Reporting Information

The trustee assumes that some trust units are held by a middleman, 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 2012 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 at http://voc.investorhq.businesswire.com.

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.

15

---



Table of Contents

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 6.8% over the next 20 years assuming no additional development drilling or other development
expenditures are made on the underlying properties after 2015. VOC Brazos expects total development expenditures for the underlying properties through December 31, 2015 will be approximately
$19.3 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, 2010, 2011 and 2012 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 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 21 years of experience in petroleum engineering. He is a licensed professional engineer in the State of Texas (License #83462).

16

---



Table of Contents

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 2010, 2011 and 2012 is presented consistent with these requirements.

Proved Reserves of VOC Energy Trust.The following table sets forth, as of December 31, 2012, 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


6,044


3,400


6,610Proved Undeveloped


723


462


800Total Proved


6,767


3,862


7,410


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 K 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.

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, 2010(1)


7,712


4,819


8,515Revisions, extensions, discoveries and additions


207


(159
)

180Production


(607
)

(460
)

(684
)Balance, December 31, 2011


7,312


4,200


8,011Revisions, extensions, discoveries and additions


86


116


105Production


(631
)

(454
)

(706
)Balance, December 31, 2012


6,767


3,862


7,410Proved Developed Reserves:Balance, December 31, 2010(1)


6,637


4,068


7,315Balance, December 31, 2011


6,530


3,728


7,151Balance, December 31, 2012


6,044


3,400


6,610Proved Undeveloped Reserves:Balance, December 31, 2010(1)


1,075


751


1,200Balance, December 31, 2011


782


472


860Balance, December 31, 2012


723


462


800


(1)The
conveyance of the net profits interest took place on May 10, 2011; however, the reserves are presented as of December 31, 2010. The trust
received revenue associated with the production for the months of January 1, 2011 through May 10, 2011


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

17

---



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, 2012 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, 2012 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)


7,276.3


277.9


904.2


8,458.4Gas (MMcf)


4,168.0


81.5


577.5


4,827.0RevenueOil

$
662,828.4

$
25,688.1

$
89,237.0

$
777,753.6Gas


17,161.0


496.3


3,517.3


21,174.6Severance Taxes


15,904.5


960.1


4,350.8


21,215.4Ad Valorem Taxes


21,145.8


707.2


2,895.2


24,748.2Operating Expenses


160,425.3


3,660.7


3,473.7


167,559.7Workover Expenses


9,321.6


347.8


0.0


9,669.4COPAS


23,990.2


234.6


107.2


24,332.0Investments


0.0


1,618.6


17,680.9


19,299.580% NPI Net Operating Income(1)

$
359,361.6

$
14,924.3

$
51,397.3

$
425,683.380% Net Profits Interest (NPI)(2)

$
208,581.6

$
9,545.0

$
28,321.4

$
246,448.0


(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 VOC Brazos' interest from the sale of production from 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, 2012, 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 $94.71 per Bbl and a Henry Hub natural gas price of $2.757 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 2012. The price adjustments were based on oil price differentials forecast at -$7.10 per Bbl for
the Kansas underlying properties, +$8.75 per Bbl decreasing to +$5.425 per Bbl on June 1, 2013 for the Kurten (Woodbine) Field wells in Texas and -$7.853 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

18

---



Table of Contents

accordance
with SEC rules and guidelines. For Kansas properties, severance taxes were applied at 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
3.0 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
2.0 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, 2012.

Gross

Net(acres)Developed Acreage:Kansas


75,657


44,991.2Texas


23,693


16,841.3Total


99,350


61,832.5Undeveloped Acreage:








The
following is a summary of the producing wells on the underlying properties as of December 31, 2012:

Operated
Wells

Non-Operated
Wells

TotalGross

Net

Gross

Net

Gross

NetOil


813


520.4


29


7.0


842


527.4Natural gas


25


16.2


14


4.6


39


20.8Total


838


536.6


43


11.6


881


548.2


19

---



Table of Contents

The
following is a summary of the number of developmental and exploratory wells drilled by VOC Brazos on the underlying properties during the last three years. VOC Brazos drilled two
exploratory wells during the periods presented.

Year Ended December 31,2010

2011

2012Gross

Net

Gross

Net

Gross

NetCompleted:Oil wells


7


5.3


6


4.4


5


3.6Natural gas wells

















Non-productive


2


1.3


1


0.9


3


1.7Total


9


6.6


7


5.3


8


5.3


As
of December 31, 2012, no wells were being drilled. Capital expenditures associated with proved undeveloped reserves for the year ended December 31, 2012, were
$11.49 million. 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 for the underlying
properties. Average prices do not include the effect of hedge and other derivative activity.

Year Ended December 31,2010

2011

2012Sales prices:Oil (per Bbl)

$
73.71

$
89.41

$
91.41Natural gas (per Mcf)

$
4.77

$
4.86

$
3.61Lease operating expense (per Boe)

$
14.76

$
15.95

$
16.25Production and property taxes (per Boe)

$
4.45

$
5.69

$
6.46


20

---



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, 2012.

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 (188 Fields)Fairport


868


0


868


6.8
%
$
21,167


6.6
%Marcotte


432


0


432


3.4


13,116


4.1Chase-Silica


413


0


413


3.3


9,468


2.9Bindley


352


0


352


2.8


8,436


2.6Moore-Johnson


262


219


299


2.4


7,096


2.2Mueller


176


0


176


1.4


4,714


1.5Wesley


149


0


149


1.2


4,186


1.3Griston SW


82


0


82


0.6


3,451


1.1Adell Northwest


118


0


118


0.9


3,130


1.0Codell


100


0


100


0.8


2,854


0.9Yaege


101


0


101


0.8


2,419


0.8Dopita


97


0


97


0.8


2,376


0.7Miner


90


0


90


0.7


2,267


0.7Other


2,725


2,314


3,111


24.5


64,859


20.2Kansas Total


5,965


2,533


6,387


50.4


149,539


46.5Texas (3 Fields)Kurten


3,865


2,966


4,360


34.4


120,676


37.6Hitts Lake North


994


0


994


7.8


30,326


9.4Sand Flat


934


0


934


7.4


20,724


6.5Texas Total


5,793


2,966


6,288


49.6

$
171,726


53.5Total


11,758


5,499


12,675


100.0
%
$
321,265


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, 2012 through December 1, 2012, without giving effect
to any hedge transactions, and were held constant for the life of the properties. This yielded a price for oil of $94.71 per barrel and a price for natural gas of $2.76 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.


21

---



Table of Contents

Kansas.As of December 31, 2012, proved reserves attributable to the portion of the Kansas underlying
properties were approximately 6.4 MMBoe and were located in three primary areas: the Central Kansas Uplift, Western Kansas and South Central Kansas. As of December 31, 2012, the VOC Operators
operated 97.4% 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, 2012, proved reserves attributable to the Texas underlying properties were approximately 6.3 MMBoe and
are located
in two areas: Central Texas and East Texas. As of December 31, 2012, the VOC Operators operated approximately 99.6% 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 Woodbine Interval and Buda 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.

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 534 million barrels for the State of Texas during 2012. There were 26 operating oil refineries located in Texas in 2012
with combined capacity to refine over 4.6 million barrels of oil per day. With oil production in the state of Texas
averaging approximately 1.5 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.

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 2,175 operators reported aggregate oil production of approximately 43 million barrels for the state of Kansas in 2012. 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
100,000 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

22

---



Table of Contents

"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, 2010, 2011 and 2012, MV Purchasing purchased 32%, 38% and 35%, 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, 2010, 2011 and 2012 were $5.82, $5.71 and $2.79 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., subject to certain
exceptions, until October 1, 2013, at which time the commitment will automatically convert to a year-to-year basis. 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 until August 31, 2015, at which time the commitment will
automatically convert to a month-to-month basis.

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 the lease, the portion of the net profits interest relating to the abandoned property will be extinguished. For the years ended
December 31, 2010, 2011 and 2012, VOC Brazos plugged and abandoned 27, 9 and 10 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

23

---



Table of Contents

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. VOC Brazos has not identified for sale any of the underlying properties.

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 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

24

---



Table of Contents

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General

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.

25

---





Table of Contents



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.

26

---



Table of Contents



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

27

---



Table of Contents

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 September 2010, the Natural Resources Defense Council filed a petition with the EPA asking them to reconsider the RCRA exemption for exploration, production, and
development wastes. To date, the EPA has not taken any action on the petition. 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 has commenced

28

---



Table of Contents

a
study of the potential environmental impacts of hydraulic fracturing activities, with final results expected in 2014. 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. 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, both houses of
Congress have actively considered legislation to reduce emissions of GHGs, and 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 when 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.

The
EPA has adopted various regulations under the federal Clean Air Act addressing emissions of GHGs. In November 2010, the EPA published its final regulations expanding the existing GHG
monitoring and reporting rule to include onshore and offshore oil and natural gas production facilities and onshore oil and natural gas processing, transmission, storage, and distribution facilities.
Reporting of GHG emissions from such facilities is required on an annual basis, with reporting beginning in 2012 for emissions occurring in 2011. In addition, EPA has taken the position that existing
Clean Air Act provisions require an assessment of GHGs for certain large new or modified stationary sources beginning in 2011. The adoption of any regulations that requires reporting of GHGs or
otherwise limits 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.

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.

29

---



Table of Contents

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 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 2012, ranged from a high of $109.77 to a low of $77.69. The NYMEX crude oil spot prices per Bbl were $91.38, $98.83 and
$91.82 as of December 31, 2010, 2011 and 2012, 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.

30

---



Table of Contents

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 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.

For
the year 2013 and the six months ending June 30, 2014, VOC Brazos has entered into swap contracts, which we refer to as the "hedge contracts," at weighted average prices
ranging from $99.01 to $102.15 per barrel of oil that hedge approximately 45% of expected oil production for such periods from the proved developed producing reserves attributable to the underlying
properties in the reserve report. The effect of these hedging transactions may limit the trust's ability to realize cash flow from crude oil price increases on the portion of the production
attributable to the net profits interest that is hedged during such period. The net profits interest will bear its share of the hedge payments regardless of whether the corresponding quantities of oil
are produced or sold. Furthermore, VOC Brazos has not entered into any hedge contracts relating to oil and natural gas volumes expected to be produced after June 30, 2014, and the terms of the
net profits interest conveyance prohibit VOC Brazos from entering into new hedging arrangements. As a result, the amounts of cash distributions may be subject to a greater fluctuation after
June 30, 2014 because of changes in crude oil prices. In the event that any of the counterparties to the hedge contracts default on its obligations to make payments to VOC Brazos under the
hedge contracts, the cash distributions to the trust unitholders would likely be materially reduced.

An increase in the differential between the price realized by VOC Brazos for oil or natural gas produced from the underlying properties and the NYMEX or other benchmark
price of oil or natural gas could reduce the proceeds to the trust and therefore the cash distributions by the trust and the value of trust units.

The prices received for VOC Brazos' oil and natural gas production usually fall below the relevant benchmark prices, such as NYMEX,
that are used for calculating hedge positions. The difference between the price received and the benchmark price is called a basis differential. The differential may vary significantly due to market
conditions, the quality and location of production and other factors. VOC Brazos cannot accurately predict natural gas or crude oil differentials. Increases in the differential between the realized
price of oil and natural gas and the benchmark price for oil and natural gas could reduce the proceeds to the trust and therefore the cash distributions by the trust and the value of the trust units.

31

---



Table of Contents

Actual reserves and future production may be less than current estimates of provided 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 be materially and adversely affected by any factor that may curtail, delay or cancel drilling, including the
following:



32

---



Table of Contents



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 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, 2012, VOC Brazos sold approximately 35% of the oil produced from the underlying properties to

33

---



Table of Contents

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.

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, 2010, 2011
and 2012, VOC Brazos plugged and abandoned 27, 9 and 10 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

34

---



Table of Contents

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. VOC Brazos has not identified for sale any of the underlying properties.

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 86% 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, 2012, the oil and natural gas production from proved
reserves attributable to the underlying properties is projected to decline at an average rate of approximately 6.8% per year over the next 20 years, assuming the level of development drilling
and development expenditures on the underlying properties disclosed elsewhere in this Form 10-K through 2015 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 6.8% 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, development expenses and hedge expenses, which will reduce the amount of cash received by the trust and thereafter distributable

35

---



Table of Contents

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.

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."

36

---



Table of Contents

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:



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

37

---



Table of Contents

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.

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.

38

---





Table of Contents

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.

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

39

---



Table of Contents

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. For example, members of Congress have considered and proposed legislation that, if adopted in
its proposed form, would subject companies involved in oil and natural gas exploration and production activities to, among other items, additional regulation of and restrictions on hydraulic
fracturing of
wells, the elimination of certain U.S. federal tax incentives and deductions available to oil and natural gas exploration and production activities, and the prohibition or additional regulation of
private energy commodity derivative and hedging activities. 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. The EPA has taken the position
that existing Clean Air Act provisions require an assessment of GHGs for certain large new or modified stationary sources beginning in 2011. The EPA's rules relating to emissions of GHGs from large
stationary sources of emissions are currently subject to a number of legal challenges, but the federal courts have thus far declined to issue any injunctions to prevent the EPA from implementing, or
requiring state environmental agencies to implement, the rules. These EPA rulemakings could affect VOC Brazos' operations and its ability to obtain air permits for new or modified facilities. In
addition, on November 30, 2010, the EPA published final regulations expanding the existing greenhouse gas monitoring and reporting rule to include onshore and offshore oil and natural gas
production and onshore oil and natural gas processing, transmission storage and distribution facilities. Reporting of GHG emissions from such facilities is required on an annual basis, with reporting
having begun in 2012 for emissions occurring in 2011.

In
addition, the U.S. Congress has from time to time considered legislation to reduce emissions of GHGs, and 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

40

---



Table of Contents

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. However, the EPA recently asserted federal regulatory authority over hydraulic fracturing involving diesel additives under the Safe Drinking Water
Act's Underground Injection Control Program. While the EPA has yet to take any action to enforce or implement this newly asserted regulatory authority, industry groups have filed suit challenging the
EPA's recent decision. At the same time, the EPA has commenced a study of the potential environmental impacts of hydraulic fracturing activities, with final results expected in 2014. 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. For example, in
December 2011, the State of Texas adopted regulations requiring public disclosure of certain information regarding the components used in the hydraulic fracturing process. Such federal or state
legislation could require the disclosure of chemical constituents used in the fracturing process to state or federal regulatory authorities who could then make such information publicly available.
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. Disclosure of chemicals used in the fracturing process could also make it easier for third parties opposing hydraulic
fracturing to initiate legal proceedings against producers and service providers based on allegations that specific chemicals used in the fracturing process could adversely affect groundwater. In
addition, 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. In addition to state and federal laws, local land use restrictions may impact development. For example, at least a couple of local
governments in Texas have imposed temporary moratoria on drilling activities within city limits so that local ordinances may be reviewed to assess their adequacy to address such activities. No
assurance can be given as to whether or not similar measures might be considered or implemented in the
jurisdictions in which VOC Brazos operates. 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.

41

---



Table of Contents

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 2015 of approximately $19.3 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 6.8% 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 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.

42

---



Table of Contents

The receipt of payments by VOC Brazos based on the hedge contracts depends upon the financial position of the hedge contract counterparties. A default by any of the hedge
contract counterparties could reduce the amount of cash available for distribution to the trust unitholders.

Payments from hedge contract counterparties to VOC Brazos are intended to offset costs and thus have the effect of providing additional
cash to the trust during periods of lower crude oil prices. In the event that any of the counterparties to the hedge contracts default on their obligations to make payments to VOC Brazos under the
hedge contracts, the cash distributions to the trust unitholders could be materially reduced. VOC Brazos does not have any security interest from its hedge counterparties against which it could
recover in the event of a default by any such counterparty.

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

In taxable years beginning after December 31, 2012, an individual having modified adjusted gross income in excess of $200,000
(or $250,000 for married taxpayers filing joint returns) to a "Medicare 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.

43

---





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." Prior to May 10,
2011, there was no established public trading market for the trust units. 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
Distributions2011Second Quarter (May 10, 2011 through June 30, 2011)

$
22.65

$
21.02

$
0.000Third Quarter (July 1, 2011 through September 30, 2011)

$
24.85

$
17.65

$
0.860Fourth Quarter (October 1, 2011 through December 31, 2011)

$
23.42

$
18.50

$
0.5602012First Quarter (January 1, 2012 through March 31, 2012)

$
24.47

$
20.50

$
0.440Second Quarter (April 1, 2012 through June 30, 2012)

$
23.49

$
16.55

$
0.690Third Quarter (July 1, 2012 through September 30, 2012)

$
20.68

$
17.76

$
0.600Fourth Quarter (October 1, 2012 through December 31, 2012)

$
19.38

$
11.97

$
0.460


As
of March 12, 2013, 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, payments from the hedge contracts 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, 2012 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, 2012.

Item 6.    Selected Financial Data.

The trust was formed on November 3, 2010. The conveyance of the net profits interest, however, did not occur until
May 10, 2011. As a result, the trust did not recognize any income or make any distributions during the year ended December 31, 2010. The following table sets forth selected data for the
trust as of December 31, 2010, 2011 and 2012, and for the period from November 3, 2010

44

---



Table of Contents

(inception)
through December 31, 2010 and for the years ended December 31, 2011 and 2012, based on the audited statements of assets and trust corpus as of December 31, 2010, 2011
and 2012 and the audited statements of distributable income for the period from November 3, 2010 (inception) through December 31, 2010 and for the years ended December 31, 2011
and 2012.

December 31,2010

2011

2012Net profits income

$


$
24,852,638

$
38,112,577Distributable income

$


$
24,140,000

$
37,230,000Distributions per trust unit

$


$
1.42

$
2.19Total assets at year-end

$
1,000

$
133,619,263

$
122,349,786


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 was formed on November 3, 2010. The conveyance of the net profits interest, however, did not occur until May 10, 2011. As a result, the trust did
not recognize any income or make any distributions during the year ended December 31, 2010. The trust's first quarterly distribution was paid on August 15, 2011. Such distribution was
comprised of the net proceeds of production collected by VOC Brazos from January 1, 2011 through June 30, 2011, less a $1.0 million cash reserve established by VOC Brazos for
future development, maintenance or operating expenditures, and less $0.5 million for future expenses of the trust. The trust's purpose is, in general, to hold the net profits interest and the
assigned interest in the hedge contracts, to distribute to the trust unitholders cash that the trust receives in respect of the net profits interest and the assigned interest in the hedge contracts
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 and the hedge contracts.

As
used in this Item 7 and in "Item 8. Financial Statements and Supplementary Data," references to "predecessor underlying properties" refers to those interests in oil and
gas properties of VOC Brazos and of VOC Kansas Energy Partners, LLC, or VOC KEP, under common control with VOC Brazos; and references to "acquired underlying properties" refers to those
interests in oil and gas properties held by VOC KEP that were not under common control with VOC Brazos prior to May 10, 2011 but became under common control with VOC Brazos when it acquired the
membership interests in VOC KEP on May 10, 2011.

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 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, earnings and distributions as follows:



45

---



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.

Comparison of Results of the Trust for the Years Ended December 31, 2012 and 2011

VOC Brazos computes net proceeds quarterly on a calendar basis and distributes to the trust 80% of the aggregate of such net proceeds
attributable to each calendar quarter on or before the 30th day of the month following the quarter. As a result, for the year ended December 31, 2012, the trust's net profits interest
represented the cash proceeds received by the trust, which was based upon the cash receipts for the oil and gas production collected by VOC Brazos from October 1, 2011 through
September 30, 2012. For the year ended December 31, 2011, the trust's net profits interest represented the cash proceeds received by the trust, which was based upon the cash receipts for
the oil and gas production collected by VOC Brazos from January 1, 2011 through September 30, 2011 as the conveyance of the net profits interest took take place on May 10, 2011.
VOC Brazos also assigned to the trust the right to receive a payment equal to the amount the trust would have received had the net profits interest been in effect during the period from
January 1, 2011 through the day of the conveyance.

The
revenues from oil production are typically received by VOC Brazos one month after production; thus, the cash received by the trust during the year ended December 31, 2012
substantially represented the production by VOC Brazos from September 2011 through August 2012 (twelve months), and the cash received by the trust during the year ended December 31, 2011
substantially represented the production by VOC Brazos from January 1, 2011 through August 2011 (eight months) for the reason noted in the preceding paragraph.

Income
from the net profits interest was $38.1 million for the year ended December 31, 2012 compared to $24.9 million for the year ended December 31, 2011.
General and administrative expense for the trust was $0.7 million for 2012 and $0.4 million for 2011. The trust paid administration fees of $0.1 million to VOC Brazos for each of
2012 and 2011. In addition, the trustee reserved $176,000 of cash on hand for future trust expenses for the year ended December 31, 2012 and $297,000 for future trust expenses for the year
ended December 31, 2011 which resulted in distributable income of $37.2 million or $2.19 per unit in 2012 compared to $24.1 million or $1.42 per unit in 2011.

46

---



Table of Contents

Excess
of revenues over direct operating expenses and lease equipment and development costs from the underlying properties was $46.7 million for the period from October 1,
2011 through September 30, 2012. Included in this amount were net payments received to settle hedges of $2.6 million. The Trust's net profits interest (80%) of this total was
$37.4 million for the year ended December 31, 2012. In addition, during 2012, VOC Brazos released and paid to the trust a net of $750,000 of the reserve for future capital or operating
expenditures, which resulted in income from net profits interest received by the trust of $38.1 million for the year ended December 31, 2012.

Excess
of revenues over direct operating expenses and lease equipment and development costs from the underlying properties was $32.3 million for the period from January 1,
2011 through September 30, 2011. The Trust's net profits interest (80%) of this total was $25.9 million for the year ended December 31, 2011. In addition, during 2011, VOC Brazos
withheld $1,000,000 for a reserve for future capital or operating expenditures, which resulted in income from net profits interest received by the trust of $24.9 million for the year ended
December 31, 2011.

The
average price received for crude oil sold during 2012 was $91.61 per Bbl, while the average price received for crude oil sold during 2011 was $90.35 per Bbl. The average price
received for natural gas sold during 2012 was $3.92 per Mcf, while the average price received for natural gas sold during 2011 was $4.96 per Mcf. The average prices for 2012 related to production by
VOC Brazos from September 2011 through August 2012, and the average prices for 2011 related to production by VOC Brazos from January 2011 through August 2011.

The
overall production volumes sold and delivered to purchasers attributable to the 80% net profits interest that was for the oil and gas production sold and delivered during the period
from October 1, 2011 to September 30, 2012 were 636,853 Bbls of oil and 443,619 Mcf of natural gas for a total equivalent barrels of oil of 710,790. The overall production volumes sold
and delivered to purchasers attributable to the 80% net profits interest that was for the oil and gas production sold and delivered during the period from January 1, 2011 to
September 30, 2011 were 397,562 Bbls of oil and 272,131 Mcf of natural gas for a total equivalent barrels of oil of 442,917.

As
noted above, the amounts reflected in the accompanying financial statements for the trust's year ended December 31, 2012 reflect cash received by the trust during the year.
Such cash is primarily derived from production by VOC Brazos from September 2011 through August 2012. The amounts reflected in the accompanying financial statements for the trust's year ended
December 31, 2011 reflect cash received by the trust during the year. Such cash is primarily derived from production by VOC Brazos from January 2011 through August 2011.

Historical Results of the Underlying Properties

The following tables set forth revenues, direct operating expenses and the excess of revenues over direct operating expenses relating
to the underlying properties for each of the three years in the period ended December 31, 2012 (the information for the year ended December 31, 2010 is derived from the combination of
the predecessor underlying properties' and acquired underlying properties' audited statements of historical revenues and direct operating expenses included in "Item 8. Financial Statements and
Supplementary Data" of this Form 10-K). Because the net profits interest had not been conveyed to the trust as of December 31, 2010 and because the trust had not engaged in
any activities other than organizational activities prior to December 31, 2010, the trust is providing financial information with respect to the underlying properties so that investors can
review the historical results of the underlying properties. The historical results of the underlying properties are not indicative of the

47

---



Table of Contents

future
distributions of the trust, and such historical results do not give effect to the conveyance of the net profits interest and related transactions that occurred on May 10, 2011.

(unaudited)(in thousands)
Year ended December 31,2010

2011

2012Revenues:Oil sales

$
60,187

$
67,932

$
72,052Natural gas sales


3,239


2,754


2,025Hedge and other derivative income (expense)


(707
)

1,380


3,178Total


62,719


72,066


77,255Direct operating expenses:Lease operating expenses


13,727


13,621


14,326Production and property tax


4,137


4,863


5,697Total


17,864


18,484


20,023Excess of revenues over direct operating expenses

$
44,855

$
53,582

$
57,232


The
above table sets forth information as it relates to the underlying properties on the accrual basis, which is the way the books and records are kept, These numbers do not relate to the trust as the
trust reports on a modified cash basis. For the year ended December 31, 2012, the trust's net profits interest represents the cash proceeds received by the trust, which is based upon the cash
receipts by VOC Brazos for the oil and gas production subsequent to January 1, 2012 and collected by September 30, 2012. For the year ended December 31, 2011, the trust's net
profits interest represents the cash proceeds received by the trust, which is based upon the cash receipts by VOC Brazos for the oil and gas production subsequent to January 1, 2011 and
collected by September 30, 2011.

The
following table provides oil and natural gas sales volumes, average sales prices and capital expenditures relating to the underlying properties for the three years in the period
ended December 31, 2012, combined for the predecessor underlying properties and the acquired underlying properties for 2010. Average prices do not include the effect of hedge and other
derivative activity.

(unaudited)
Year ended December 31,2010

2011

2012Operating data:Sales volumes:Oil (MBbls)


817


760


788Natural gas (MMcf)


679


567


561Total sales (MBoe)


930


855


882Average Prices:Oil (per Bbl)

$
73.71

$
89.41

$
91.41Natural gas (per Mcf)

$
4.77

$
4.86

$
3.61Capital expenditures (in thousands):Property acquisition

$
3,262

$
2,667

$
2,821Well development


7,230


6,732


11,624Total

$
10,492

$
9,399

$
14,445


48

---



Table of Contents

Discussion and Analysis of Historical Results of the Underlying Properties



Excess of revenues over direct operating expenses was $57.2 million for the year ended December 31, 2012, compared to
$53.6 million for the year ended December 31, 2011. The increase was primarily a result of a increase in oil production and an increase in the average price received for the oil sold.
This increase was partially offset by an increase in direct operating expenses.

Revenues.Revenues from oil and natural gas sales increased $3.4 million between the periods. This increase in revenues was
primarily the
result of an increase in the average price received for crude oil sold from $89.41 per Bbl for the year ended December 31, 2011 to $91.41 per Bbl for the year ended December 31, 2012 and
a 28 MBbl increase in oil volumes sold. The increase in revenues was offset by a decrease in the average price received for natural gas sold from $4.86 per Mcf for the year ended December 31,
2011 to $3.61 per Mcf for the year ended December 31, 2012, and a 6 MMcf decrease in natural gas volumes sold.

Hedge activity.Hedge activity income was $1.4 million for the year ended December 31, 2011 compared to hedge activity income
of
$3.2 million for the year ended December 31, 2012. This increase in income and decrease in expense was due to an increase in realized hedge income for the period and the recording of the
change in market value of some of the hedges to the income statement.

The
increase in hedge income in 2012 was primarily the result of having hedge contracts with higher weighted-average settlement prices of $100.85 in 2012 compared to $99.48 in 2011 along
with a lower average NYMEX price per Bbl of crude oil for the year ended December 31, 2012 of $94.20 compared to $95.12 for the year ended December 31, 2011.

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

Volumes.The increase in overall production sales volumes during the year ended December 31, 2012 compared to the year ended
December 31, 2011 was primarily attributable to the increased production from the drilling of horizontal wells in Texas which was partially offset by the natural decline of the underlying
properties' production sales volumes during the year ended December 31, 2012.

Lease operating expenses.Lease operating expenses increased from $13.6 million for the year ended December 31, 2011 to
$14.3 million for the year ended December 31, 2012. This increase was primarily a result of more workovers being performed in 2012, an increase in general operating expenses and
increased costs due to additional wells being added.

Production and property taxes.Production and property taxes increased $0.8 million as a result of the increases in the price of
crude oil and
in revenues from oil and natural gas sales, on which these taxes were based.



The information in the following discussion and analysis for 2010 is derived from the combination of the predecessor underlying
properties' and acquired underlying properties' audited statements of historical revenues and direct operating expenses included in "Item 8. Financial Statements and Supplementary Data" of this
Form 10-K. These combined numbers for 2010 are not audited but are provided to assist an investor in reviewing the historical results of operations of the underlying properties.

49

---





Table of Contents

Excess of revenues over direct operating expenses was $53.6 million for the year ended December 31, 2011, compared to $44.9 million for the
year ended December 31, 2010. The increase was primarily a result of a decrease in oil production offset by an increase in the average price received for the oil and natural gas sold. This
increase was partially offset by an increase in direct operating expenses and a decrease in hedge expense.

Revenues.Revenues from oil and natural gas sales increased $7.3 million between the periods. This increase in revenues was
primarily the
result of an increase in the average price received for crude oil sold from $73.71 per Bbl for the year ended December 31, 2010 to $89.41 per Bbl for the year ended December 31, 2011 and
a 57 MBbl decrease in oil volumes sold. The increase in revenues was also the result of an increase in the average price received for natural gas sold from $4.77 per Mcf for the year ended
December 31, 2010 to $4.86 per Mcf for the year ended December 31, 2011, offset by a 112 MMcf decrease in natural gas volumes sold.

Hedge activity.Hedge activity expense was $0.7 million for the year ended December 31, 2010 compared to hedge activity income
of
$1.4 million for the year ended December 31, 2011. This increase in income
and decrease in expense was due to an increase in realized hedge income for the period and the recording of the change in market value of some of the hedges to the income statement.

The
decrease in hedge expense from 2010 that became hedge income in 2011 was due to additional hedge contracts with higher settlement prices put into place prior to May 10, 2011
offset by the higher average NYMEX price per Bbl of crude oil for the year ended December 31, 2011 of $95.12 compared to $79.53 for the year ended December 31, 2010. The weighted average
settlement price of hedges for the year ended December 31, 2011 was $99.48 compared to $74.40 for the year ended December 31, 2010.

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

Volumes.The decrease in overall production sales volumes during the year ended December 31, 2011 compared to the year ended
December 31, 2010 was primarily attributable to the natural decline of the underlying properties' production sales volumes, which was partially offset by the drilling of three horizontal wells
in Texas during the year ended December 31, 2011.

Lease operating expenses.Lease operating expenses decreased from $13.7 million for the year ended December 31, 2010 to
$13.6 million for the year ended December 31, 2011. This decrease was primarily a result of fewer workovers being performed in 2011, offset by an increase in general operating expenses
and increased costs due to additional wells being added.

Production and property taxes.Production and property taxes increased $0.7 million as a result of the increases in the price of
crude oil and
in revenues from oil and natural gas sales, on which these taxes were based.

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

50

---



Table of Contents

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, 2012, the trust made no borrowings.

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
amounts received by VOC Brazos from the hedge contract counterparty upon settlement of the hedge contracts reduce the operating expenses related to the underlying properties in
calculating the net proceeds. However, if the hedge payments received by VOC Brazos under the hedge contracts and other non-production revenue exceed operating expenses during a quarterly
period, the
ability to use such excess amounts to offset operating expenses are deferred, with interest accruing on such amounts at the prevailing prime rate, until the next quarterly period in which the hedge
payments and the other non-production revenue are less than such expenses. In addition, the aggregate amounts paid by VOC Brazos on settlement of the hedge contracts reduce the amount of
net proceeds paid to the trust.

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.

Other Events

As reported previously on October 18, 2012 and then updated on January 17, 2013, an operational update was made regarding the
underlying oil and gas properties subject to the trust's net profits interest including properties located in Brazos County, Texas. VOC Brazos is continuing to develop the Woodbine C Sand underlying
the Kurten Woodbine Unit in the area, utilizing horizontal wells completed with multiple fracture stimulations together with recompletions of existing vertical wellbores into additional pay intervals.
In September 2012, VOC Brazos began producing from the first of three horizontal wells planned for 2012. The second horizontal well was abandoned due to mechanical issues with the wellbore. As a
result of the abandoned horizontal well, future production volumes for the

51

---



Table of Contents

underlying
properties associated with the one well in the Kurten Woodbine Unit, which has 105 producing wells, will be delayed. VOC Brazos informed the trust that the total cost of the abandoned well
with respect to the trust's net profits interest was approximately $2.6 million, which was incorporated into the quarterly distributions for the third and fourth quarter of 2012. While the
distributions for the third and fourth quarter of 2012 were impacted by this event, it does not impair the reserves in the Kurten Field, and the Trust will not lose any barrels for purposes of the
term of the net profits interest. In addition VOC Brazos may elect to drill the abandoned well from a new location in 2013. The third horizontal well planned for 2012 was spudded in October 2012 and
put on production in December 2012.

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:



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

52

---



Table of Contents

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 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, 2012, 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."

Hedge Contracts

The revenues derived from the underlying properties depend substantially on prevailing crude oil prices and, to a lesser extent,
natural gas prices. As a result, commodity prices also affect the amount of cash flow available for distribution to the trust unitholders. Lower prices may also reduce the amount of oil and natural
gas that VOC Brazos can economically produce. VOC Brazos sells the oil and natural gas production from the underlying properties under floating market price contracts each month. VOC Brazos has
entered into hedge contracts for 2013 and for the six months ending June 30, 2014, to reduce the exposure of the revenues from oil production from the underlying properties to fluctuations in
crude oil prices and to achieve more predictable cash flow. However, these contracts limit the amount of cash available for distribution if prices increase above the
fixed hedge price. The hedge contracts consist of fixed price swap contracts that have been placed with major trading

53

---



Table of Contents

counterparties
in whom VOC Brazos believes represent minimal credit risk. The trust cannot provide assurance, however, that these trading counterparties will not become credit risks in the future.

The
crude oil swap contracts will settle based on the average of the settlement price for each commodity business day in the contract month. In a swap transaction, the counterparty is
required to make a payment to VOC Brazos for the difference between the fixed price and the settlement price if the settlement price is below the fixed price. VOC Brazos is required to make a payment
to the counterparty for the difference between the fixed price and the settlement price if the settlement price is above the fixed price. From January 1, 2013 through June 30, 2014, VOC
Brazos' crude oil price risk management positions in swap contracts are as follows:

Fixed Price SwapsMonth

Volumes
(Barrels)

Weighted
Average Price
(Per Barrel)January 2013


34,975

$
99.01February 2013


34,686

$
99.01March 2013


34,406

$
99.01April 2013


34,166

$
99.01May 2013


33,959

$
99.01June 2013


33,727

$
99.01July 2013


33,526

$
99.01August 2013


33,317

$
99.01September 2013


33,122

$
99.01October 2013


32,929

$
99.01November 2013


32,741

$
99.01December 2013


32,554

$
99.01January 2014


13,220

$
102.15February 2014


13,149

$
102.15March 2014


13,078

$
102.15April 2014


13,008

$
102.15May 2014


12,939

$
102.15June 2014


12,870

$
102.15


The
amounts received by VOC Brazos from the hedge contract counterparty upon settlement of the hedge contracts will reduce the operating expenses related to the underlying properties in
calculating
the net proceeds. However, if the hedge payments received by VOC Brazos under the hedge contracts and other non-production revenue exceed operating expenses during a quarterly period, the
ability to use such excess amounts to offset operating expenses will be deferred, with interest accruing on such amounts at the prevailing prime rate, until the next quarterly period where the hedge
payments and the other non-production revenue are less than such expenses. In addition, the aggregate amounts paid by VOC Brazos on settlement of the hedge contracts will reduce the amount
of net proceeds paid to the trust.

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, and the trust's interest in the hedge contracts, which generally entitles the trust to receive 80% of any proceeds
received by VOC Brazos from the settlement of certain hedges in existence on May 10, 2011. Consequently, the trust is exposed to market risk from fluctuations in oil and gas prices. For more
information regarding the hedge contracts, please see "Item 7. Trustee's Discussion and Analysis of Financial Condition and Results of OperationsHedge Contracts." 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.

54

---





Table of Contents

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, 2011 and 2012, and the related statements of
distributable income and changes in trust corpus for the period from November 3, 2010 (inception) through December 31, 2010 and for the years ended December 31, 2011 and 2012.
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 also 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 the Trust as of December 31, 2011 and 2012, and
its distributable income and its changes in trust corpus for the period from November 3, 2010 (inception) through December 31, 2010 and for the years ended December 31, 2011 and
2012 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, 2012, based on criteria established inInternal ControlIntegrated Frameworkissued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO), and our report dated March 15, 2013 expressed an unqualified opinion thereon.

/s/
Grant Thornton LLP

Wichita,
Kansas
March 15, 2013

55

---





Table of Contents

VOC ENERGY TRUST        STATEMENTS OF ASSETS AND TRUST CORPUS

December 31,2011

2012ASSETSCash

$
298,147

$
474,600Investment in net profits interest


140,591,606


140,591,606Accumulated amortization


(7,270,490
)

(18,716,420
)Total assets

$
133,619,263

$
122,349,786TRUST CORPUSTrust corpus, 17,000,000 Trust units issued and outstanding at December 31, 2011 and 2012, respectively

$
133,619,263

$
122,349,786


STATEMENTS OF DISTRIBUTABLE INCOME

Period from
November 3, 2010
(inception) through
December 31, 2010

Year ended
December 31,
2011

Year ended
December 31,
2012Income from net profits interest

$


$
24,852,638

$
38,112,577Advance from VOC Brazos Energy Partners, L.P.


1,000





Cash on hand withheld for future Trust expenses


(1,000
)

(297,147
)

(176,453
)General and administrative expenses(1)





(415,491
)

(706,124
)Distributable income

$
0

$
24,140,000

$
37,230,000Distributions per Trust unit (0, 17,000,000 and 17,000,000 Trust units issued and outstanding at December 31, 2010, 2011 and 2012, respectively)

$
0

$
1.42

$
2.19


(1)Includes
$56,250 and $77,250 paid to VOC Brazos and $90,000 and $145,100 paid to The Bank of New York Mellon Trust Company, N.A. for the years ended
December 31, 2011 and 2012, respectively.


STATEMENTS OF CHANGES IN TRUST CORPUS

Period from
November 3, 2010
(inception) through
December 31, 2010

Year ended
December 31,
2011

Year ended
December 31,
2012Trust corpus, beginning of period

$


$
1,000

$
133,619,263Investment in net profits interestMay 10, 2011





140,591,606


Income from net profits interest





24,852,638


38,112,577Advance from VOC Brazos Energy Partners, L.P.


1,000





Cash distributions





(24,140,000
)

(37,230,000
)Trust expenses





(415,491
)

(706,124
)Amortization of net profits interest





(7,270,490
)

(11,445,930
)Trust corpus, end of period

$
1,000

$
133,619,263

$
122,349,786




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

56

---





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.

In
connection with the May 2011 closing of the initial public offering and in exchange for 17,000,000 Trust Units, VOC Brazos and VOC Kansas conveyed 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"). 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.

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.

57

---



Table of Contents

VOC Energy Trust

NOTES TO FINANCIAL STATEMENTS (Continued)

NOTE BTRUST ACCOUNTING POLICIES (Continued)

1.Basis of accounting

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 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:



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, 2012 that would impact the financial statements of the Trust.

2.Cash equivalents

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.

3.Use of estimates

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

58

---



Table of Contents

VOC Energy Trust

NOTES TO FINANCIAL STATEMENTS (Continued)

NOTE BTRUST ACCOUNTING POLICIES (Continued)

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 (as defined in Note I), 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:



59

---



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, will offset the costs outlined above in calculating the net proceeds. If the hedge payments received
by VOC Brazos and certain other non-production revenues exceed the costs during a quarterly period, the ability to use such excess amounts to offset costs will be deferred and utilized as
offsets in the next quarterly period to the extent such amounts, plus accrued interest thereon, together with other offsets to costs, for the applicable quarter, are less than the costs arising in
such quarter. 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) (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

60

---



Table of Contents

VOC Energy Trust

NOTES TO FINANCIAL STATEMENTS (Continued)

NOTE CNET PROFITS INTEREST (Continued)

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


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

$
140,591,606


NOTE DINCOME FROM NET PROFITS INTEREST

Year ended December 31,2011

2012Excess of revenues over direct operating expenses and lease equipment and development costs(1)

$
32,315,797

$
46,703,222Times net profits interest over the term of the Trust


80
%

80
%Income from net profits interest before reserve adjustments


25,852,638


37,362,577Cash reserve(2)


(1,000,000
)

750,000Income from net profits interest(3)

$
24,852,638

$
38,112,577


(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 and did so during the year ended December 31, 2011. The reserve balance was $1,000,000 and $250,000 at December 31, 2011 and 2012, respectively.(3)The
income from net profits interest is based upon the cash receipts from VOC Brazos for the oil and gas production. The revenues from oil production are
typically received by VOC Brazos one month after production. Because of the terms of the Net Profits Interest and because the first payment thereon to the Trust occurred in August 2011, the cash
received by the Trust during the year ended December 31, 2011 substantially represents the cash received by VOC Brazos from January 2011 through August 2011. The cash received by the Trust
during the year ended December 31, 2012 substantially represents production by VOC Brazos from September 2011 through August 2012.


61

---



Table of Contents

VOC Energy Trust

NOTES TO FINANCIAL STATEMENTS (Continued)

NOTE DINCOME FROM NET PROFITS INTEREST (Continued)

For
the year ended December 31, 2011 and 2012, MV Purchasing, LLC purchased 38% and 35%, 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 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.

On
July 20, 2011, the Trust announced a Trust distribution to unitholders of record on August 1, 2011 of $14.6 million, or $0.86 per unit, which was paid on
August 15, 2011. Such distribution was comprised of the net proceeds of production collected by VOC Brazos from January 1, 2011 through June 30, 2011, less a $1.0 million
cash reserve established by VOC Brazos for future development, maintenance or operating expenditures.

On
October 18, 2011, the Trust announced a Trust distribution to unitholders of record on October 31, 2011 of $9.5 million, or $0.56 per unit, which was paid on
November 15, 2011. Such distribution is comprised of the net proceeds of production collected by VOC Brazos from July 1, 2011 through September 30, 2011.

On
January 19, 2012, the Trust announced a Trust distribution to unitholders of record on January 30, 2012 of $7.5 million, or $0.44 per unit, which was paid on
February 14, 2012. Such distribution was comprised of the net proceeds of production collected by VOC Brazos from October 1, 2011 through December 31, 2011, and reflects a release
of the $1,000,000 reserve previously established by VOC Brazos for future development, maintenance or operating expenditures.

On
April 19, 2012, the Trust announced a Trust distribution to unitholders of record on April 30, 2012 of $11.7 million, or $0.69 per unit, which was paid on
May 15, 2012. Such distribution was comprised of the net proceeds of production collected by VOC Brazos from January 1, 2012 through March 31, 2012, and reflects a $600,000
reserve established by VOC Brazos for future development, maintenance or operating expenditures.

62

---



Table of Contents

VOC Energy Trust

NOTES TO FINANCIAL STATEMENTS (Continued)

NOTE FDISTRIBUTIONS TO UNITHOLDERS (Continued)

On
July 19, 2012, the Trust announced a Trust distribution to unitholders of record on July 30, 2012 of $10.2 million, or $0.60 per unit, which was paid on
August 14, 2012. Such distribution was comprised of the net proceeds of production collected by VOC Brazos from April 1, 2012 through June 30, 2012, and reflects a $400,000
reserve established by VOC Brazos for future development, maintenance or operating expenditures.

On
October 18, 2012, the Trust announced a Trust distribution to unitholders of record on October 30, 2012 of $7.8 million, or $0.46 per unit, which was paid on
November 14, 2012. Such distribution is comprised of the net proceeds of production collected by VOC Brazos from July 1, 2012 through September 30, 2012, and reflects a release of
$750,000 of the reserve previously established by VOC Brazos for future development, maintenance or operating expenditures.

As
of December 31, 2012, cumulatively, since inception, the Trust has received payment for 1,153,707 net barrels of oil equivalent (unaudited).

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.The Trustee, not in its individual capacity but solely as trustee of the Trust, entered into an
administrative services
agreement with VOC Brazos in May 2011. See Note I.

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 2011 and 2012, 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PUBLIC OFFERING

Public Offering of Units of Beneficial Interest.Through an initial public offering, which closed on May 10, 2011, and subsequent
over-allotment offering, which closed on May 12, 2011, VOC Brazos sold 12,747,750 Trust Units to the public, including 1,662,750 Trust Units sold pursuant to the
over-allotment option exercised by the underwriters. The proceeds (net of underwriting discounts of approximately $17.4 million) received by VOC Brazos (before expenses) from the
sale of 12,747,750 Trust Units were approximately $250.3 million. The Trust received no proceeds from the sale of the Trust Units. Upon completion of these transactions, there were 17,000,000
Trust Units issued and outstanding.

Registration Rights Agreement.On May 10, 2011, VOC Partners and the Trust entered into a Registration Rights Agreement (the
"Registration
Rights Agreement") whereby VOC Partners, its affiliates and certain permitted transferees holding registrable securities are entitled, 180 days after the effectiveness of the Registration
Rights Agreement and upon receipt by the Trustee of written notice from holders of a majority of the registrable securities, to demand that the Trust effect the registration of the registrable
securities under the Securities Act of 1933, as amended. The holders of the registrable securities are entitled to demand a maximum of three such registrations.

63

---



Table of Contents

VOC Energy Trust

NOTES TO FINANCIAL STATEMENTS (Continued)

NOTE IPUBLIC OFFERING (Continued)

Conveyance of Term Net Profits Interest and Assignment of Pre-Effective Time Payment.On May 10, 2011, VOC Brazos, VOC Kansas, and
the Trustee, entered into a Conveyance of Term Net Profits Interest and Assignment of Pre-Effective Time Payment (the "conveyance") whereby, for good and valuable consideration, including
the issuance by the Trust to VOC Brazos of 17,000,000 Trust Units, VOC Brazos and VOC Kansas transferred to the Trust the Net Profits Interest. Under the conveyance, VOC Brazos and VOC Kansas paid the
Trust an additional amount representing 80% of the net profits from all of VOC Brazos' and VOC Kansas' interests in such oil and natural gas properties for the production period from January 1,
2011 to May 10, 2011, such payment being referred to as the "Pre-Effective Time Payment".

Administrative Services Agreement.On May 10, 2011, VOC Brazos and the Trustee, not in its individual capacity but solely as
trustee of the
Trust, entered into an administrative services agreement (the "Administrative Services Agreement") 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.

NOTE JOTHER EVENTS



On January 17, 2013, the Trust announced a Trust distribution to unitholders of record on January 30, 2013 of
$4.42 million, or $0.26 per unit, which was paid on February 14, 2013. Such distribution was comprised of the net proceeds of production collected by VOC Brazos from October 1,
2012 through December 31, 2012.

64

---





Table of Contents

VOC Energy Trust

NOTES TO FINANCIAL STATEMENTS (Continued)

NOTE K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 2010, 2011 and 2012 has been presented in accordance with
these rules.

Estimates
of the proved oil and gas reserves attributable to the Trust as of December 31, 2010, 2011 and 2012 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.

65

---



Table of Contents

VOC Energy Trust

NOTES TO FINANCIAL STATEMENTS (Continued)

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

ESTIMATED QUANTITIES OF OIL AND GAS RESERVES

Oil (Bbls)

Gas (Mcf)Proved reservesBalance at December 31, 2010


7,711,666


4,819,193Revisions of previous estimates


207,348


(159,215
)Production


(607,492
)

(460,228
)Balance at December 31, 2011


7,311,522


4,199,750Revisions of previous estimates


85,903


116,363Production


(630,678
)

(454,487
)Balance at December 31, 2012


6,766,747


3,861,626Proved developed reservesDecember 31, 2010


6,636,824


4,068,247December 31, 2011


6,529,856


3,727,737December 31, 2012


6,043,374


3,399,610Proved undeveloped reservesDecember 31, 2010


1,074,842


750,946December 31, 2011


781,666


472,013December 31, 2012


723,374


462,016


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 2010, 2011 and 2012.

2010

2011

2012Future cash inflows

$
596,970,450

$
680,134,350

$
639,142,500Future costsProduction


(195,967,133
)

(206,138,211
)

(198,019,653
)Development


(21,706,717
)

(15,975,389
)

(15,439,597
)Future net cash flows


379,296,600


458,020,750


425,683,250Less 10% discount factor


(170,744,150
)

(199,746,625
)

(179,235,250
)Standardized measure of discounted future net cash flows

$
208,552,450

$
258,274,125

$
246,448,000


66

---



Table of Contents

VOC Energy Trust

NOTES TO FINANCIAL STATEMENTS (Continued)

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

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

2011

2012Standardized measure at beginning of year(1)

$
208,552,450

$
258,274,125Net proceeds to the Trust


(25,852,638
)

(37,362,577
)Net payments received to settle hedge contracts


281,303


2,077,773Net proceeds to the Trust, exclusive of net payments received to settle hedge contracts


(25,571,335
)

(35,284,804
)Net changes in price and production costs


51,643,152


1,446,202Changes in estimated future development costs


(1,773,092
)

(4,988,014
)Development costs incurred during the year


6,023,840


5,526,880Revisions of quantity estimates


7,428,660


3,239,596Accretion of discount


20,855,245


25,827,413Changes in production rates, timing and other


(8,884,795
)

(7,593,398
)Standardized measure at end of year

$
258,274,125

$
246,448,000


(1)The
conveyance of the Net Profits Interest took place on May 10, 2011; however, the reserves are presented as of December 31, 2010.


The
average, first-day-of-the-month price during the 12-month period for 2010, 2011 and 2012 used in determining future net
revenues related to the standardized measure calculation are as follows:

2010

2011

2012Oil (per Bbl)

$
74.00

$
90.00

$
91.95Gas (per Mcf)

$
5.46

$
5.25

$
4.39


NOTE L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)2011:Income from net profits interest


N/A


N/A

$
15,132

$
9,721Distributable income


N/A


N/A

$
14,620

$
9,520Distributions per unit


N/A


N/A

$
0.8600

$
0.56002012:Income from net profits interest

$
7,616

$
11,883

$
10,609

$
8,005Distributable income

$
7,480

$
11,730

$
10,200

$
7,820Distributions per unit

$
0.4400

$
0.6900

$
0.6000

$
0.4600


67

---



Table of Contents

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To
the Partners of VOC Brazos Energy Partners, L.P.:

We
have audited the accompanying combined statement of historical revenues and direct operating expenses of the Predecessor Underlying Properties, consisting of the Underlying Properties
of VOC Brazos Energy Partners, L.P. ("VOC Brazos") and the Underlying Properties of VOC Kansas Energy Partners, L.L.C. under common control with VOC Brazos, for the year ended
December 31, 2010. This statement is the responsibility of the management of VOC Brazos. Our responsibility is to express an opinion on this statement 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 the financial statements are free of material misstatement. Predecessor Underlying Properties is not required to have, nor were we engaged to perform, an
audit of Predecessor Underlying Properties' internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Predecessor Underlying Properties' internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the statements. We believe that our audit provides a reasonable basis for our
opinion.

The
accompanying combined statement was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission as described in Note B to
the statement and is not intended to be a complete presentation of VOC Brazos' interests in the Predecessor Underlying Properties.

In
our opinion, the combined statement referred to above present fairly, in all material respects, the historical revenues and direct operating expenses, described in Note B, of
the Predecessor Underlying Properties for the year ended December 31, 2010, in conformity with accounting principles generally accepted in the United States of America.

/s/
Grant Thornton LLP
Grant Thornton LLP

Wichita,
Kansas
March 22, 2011

68

---



Table of Contents



Predecessor Underlying Properties

COMBINED STATEMENT OF HISTORICAL REVENUES
AND DIRECT OPERATING EXPENSES

Year ended December 31, 2010

Revenues:Oil sales

$
36,914,333Natural gas sales


2,396,637Hedge and other derivative expense


(707,371
)Total


38,603,599Direct operating expenses:Lease operating expenses


7,325,042Production and property taxes


2,720,313Total


10,045,355Excess of revenues over direct operating expenses

$
28,558,244




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

69

---





Table of Contents



Predecessor Underlying Properties

NOTES TO COMBINED STATEMENT OF HISTORICAL REVENUES
AND DIRECT OPERATING EXPENSES

For the year ended December 31, 2010

NOTE APROPERTIES

The Predecessor Underlying Properties consist of working interests in substantially all of the oil and natural gas properties located in Kansas and Texas owned by VOC Brazos Energy
Partners, L.P. ("VOC Brazos") and working interests in substantially all of the oil and natural gas properties owned by VOC Kansas Energy Partners, LLC ("KEP") under common control with
VOC Brazos Energy Partners, L.P. (the "Common Control Properties"). In connection with the closing of the initial public offering of trust units of VOC Energy Trust, pursuant to that certain
Contribution and Exchange Agreement dated August 30, 2010, VOC Brazos will acquire all of the membership interests in KEP in exchange for newly issued limited partner interests in VOC Brazos,
resulting in KEP becoming a wholly-owned subsidiary of VOC Brazos. As the Common Control Properties are deemed to be under common control with VOC Brazos, accounting rules specify VOC Brazos and the
Common Control Properties be combined from the earliest date they came under common control. The financial data and operations of such assets are referred to herein as "Predecessor."

NOTE BBASIS OF PRESENTATION

The accompanying Combined Statement of Historical Revenues and Direct Operating Expenses was
derived from the historical accounting records of Predecessor and reflect the historical revenues and direct operating expenses directly attributable to the Predecessor Underlying Properties for the
period described herein. Such amounts may not be representative of future operations. The statement does not include depreciation, depletion and amortization, general and administrative expenses,
interest expense or other expenses of an indirect nature. The amounts represent Predecessor's net interest in the wells related to the Predecessor Underlying Properties.

Historical
financial statements representing financial position, results of operations and cash flows required by generally accepted accounting principles are not presented as such
information is not readily available on an individual property basis and not meaningful to the underlying properties. Accordingly, the statement of historical revenues and direct operating expenses is
presented in lieu of full financial statements prepared under Regulation S-X.

The
accompanying Combined Statement of Historical Revenues and Direct Operating Expenses included herein was prepared on an accrual basis. Revenue from oil and natural gas is recognized
when sold. Direct operating expenses include lease operating expenses and production and property taxes.

This
combined statement of historical revenues and direct operating expenses does not reflect the impact of any administrative overhead costs. VOC Brazos incurred administrative overhead
costs of $204,575 for the year ended December 31, 2010. KEP is an amalgamation of properties held by 24 owners. Prior to their consolidation in November 2009, each owner conducted its own
accounting for its respective properties, and in most cases the owners did not allocate overhead to the properties. One of the reasons the owners decided to consolidate holdings into KEP was the
efficiency in sharing these overhead expenses. In the future, Vess Oil Corporation will provide these overhead services to KEP.

VOC
Brazos has entered into certain swap agreements to mitigate the effects of fluctuations in the prices of crude oil. These agreements involve the exchange of amounts based on a
fluctuating oil price for amounts based on a fixed oil price over the life of the agreement, without an exchange of the notional amount upon which the payments are based. VOC Brazos accounts for
substantially all of the

70

---



Table of Contents

Predecessor Underlying Properties

NOTES TO COMBINED STATEMENT OF HISTORICAL REVENUES
AND DIRECT OPERATING EXPENSES (Continued)

For the year ended December 31, 2010

NOTE BBASIS OF PRESENTATION (Continued)

swap
agreements as cash flow hedges. The effective portion of the unrealized gain or loss on the swap agreement is recorded as a component of the accumulated other comprehensive income (loss) and
reclassified into earnings as the underlying hedged item affects earnings. The unrealized gain or loss on the derivative instrument as well as the swap agreements not qualifying as cash flow hedges
are reflected as hedge and other derivative activity in the accompanying Combined Statements of Historical Revenues and Direct Operating Expenses.

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

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

Estimates of the proved oil and gas reserves attributable to the Predecessor Underlying Properties as of December 31, 2009 and 2010 are based on reports of Cawley,
Gillespie & Associates, Inc., independent petroleum and geological engineers, and the contract property management engineering staff of Predecessor who operate the underlying properties,
in accordance with SEC rules and regulations. Such estimates give effect to the combination of (i) the estimates of proved oil and gas reserves attributable to VOC Brazos, based on the report
of Cawley, Gillespie & Associates, Inc., and (ii) the estimates of proved oil and gas reserves attributable to the Common Control Properties, calculated by adjusting the estimated
reserves attributable to specified working interest percentages held by KEP outlined in the Cawley, Gillespie & Associates, Inc. reserve report to reflect the working interest
percentages held in the Common Control Properties. 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 oil and gas properties. 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 Predecessor Underlying Properties; (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 oil and natural
gas properties, and (ii) the standardized measure of the discounted future net profits interest income attributable to the oil and gas properties and the nature of changes in such standardized
measure between years. These tables

71

---



Table of Contents

Predecessor Underlying Properties

NOTES TO COMBINED STATEMENT OF HISTORICAL REVENUES
AND DIRECT OPERATING EXPENSES (Continued)

For the year ended December 31, 2010

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

are
prepared on the accrual basis, which is the basis on which Predecessor maintains its production records. The data presents the proved reserves attributable to the Predecessor Underlying Properties
for the economic life of such properties and is not limited to the term of the trust.

ESTIMATED QUANTITIES OF OIL AND GAS RESERVES

Oil (Bbls)

Gas (Mcf)Proved reserves:Balance at December 31, 2009


8,092,582


4,503,091Revisions of previous estimates


659,977


1,041,826Production


(494,876
)

(446,979
)Balance at December 31, 2010


8,257,683


5,097,938Proved developed reserves:December 31, 2009


6,729,632


3,854,008December 31, 2010


6,799,873


3,992,358Proved undeveloped reserves:December 31, 2009


1,362,950


649,083December 31, 2010


1,457,810


1,105,580


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

Future oil and natural gas sales and production and development costs have been estimated in accordance with the SEC reporting rules.

The
standardized measure of discounted future net cash flows (the "Standardized Measure") represents the present value of estimated future cash inflows from proved oil and natural gas
reserves, less future development, production and plugging and abandonment costs, discounted at 10% per annum, or PV-10 value, to reflect timing of future cash flows. Production costs do
not include depreciation, depletion and amortization of capitalized acquisition, exploration and development costs. Because Predecessor bears no federal income tax expense and taxable income is passed
through to the partners of Predecessor, no provision for federal or state income taxes is included in the reserve report or in the calculation of the Standardized Measure.

Estimated
proved reserves and related future net revenues and Standardized Measure were determined using index prices for oil and natural gas, without giving effect to transactions, and
were held constant throughout the life of the properties. The index prices were the unweighted arithmetic average first-day of-the-month prices for the prior
12 months of $79.43 per barrel for oil and $4.37 per MMBtu for natural gas at December 31, 2010. For purposes of comparing natural gas prices per MMBtu and per Mcf, adjustments have been
made to reflect Btu content, shrink and compression and handling charges as realized on an individual lease basis. The relevant average realized prices, adjusting

72

---



Table of Contents

Predecessor Underlying Properties

NOTES TO COMBINED STATEMENT OF HISTORICAL REVENUES
AND DIRECT OPERATING EXPENSES (Continued)

For the year ended December 31, 2010

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

in
the case of crude oil for forecasted gravity, quality, transportation and marketing as well as other factors affecting the price received at the wellhead, were $74.22 per barrel for oil and $5.02
per Mcf for natural gas at December 31, 2010.

Changes
in the demand for oil and natural gas, inflation, and other factors made such estimates inherently imprecise and subject to substantial revision. This table should not be
construed to be an estimate of current market value of the proved reserves attributable to Predecessor's reserves.

The
Standardized Measure relating to Predecessor's proved reserves at December 31, 2010 is shown below:

2010Future cash inflows

$
648,185,108Future costsProduction


(223,916,334
)Development


(25,384,253
)Future net cash flows


398,884,521Less 10% discount factor


(218,408,117
)Standardized measure of discounted future net cash flows

$
180,476,404


The
following table sets forth the changes in the Standardized Measure applicable to Predecessor's proved oil and natural gas reserves for the year ended December 31, 2010:

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

2010Standardized measure at beginning of year

$
120,381,905Sales of oil and gas produced, net of production costs


(29,265,616
)Net changes in price and production costs


52,703,598Changes in estimated future development costs


(14,568,030
)Development costs incurred during the period which reduce future development costs


7,599,939Revisions of quantity estimates


15,664,245Accretion of discount


12,038,190Change in production rates, timing and other


15,922,173Standardized measure at end of year

$
180,476,404


73

---



Table of Contents

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To
the Members of VOC Kansas Energy Partners, LLC:

We
have audited the accompanying statement of historical revenues and direct operating expenses of the Acquired Underlying Properties, consisting of the Underlying Properties of VOC
Kansas Energy Partners, LLC ("KEP") not under common control with VOC Brazos Energy Partners, L.P., for the year ended December 31, 2010. This statement is the responsibility of
management of KEP. Our responsibility is to express an opinion on this statement 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 the financial statements are free of material misstatement. Acquired Underlying Properties is not required to have, nor were we engaged to perform, an audit
of Acquired Underlying Properties' internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Acquired Underlying Properties' internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, as well as evaluating the overall presentation of the statements. We believe that our audit provides a reasonable basis for our opinion.

The
accompanying statement was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission as described in Note B to the
statement and is not intended to be a complete presentation of KEP's interests in the Acquired Underlying Properties.

In
our opinion, the statement referred to above present fairly, in all material respects, the historical revenues and direct operating expenses, described in Note B, of the
Acquired Underlying Properties for the year ended December 31, 2010, in conformity with accounting principles generally accepted in the United States of America.

/s/
Grant Thornton LLP
Grant Thornton LLP

Wichita,
Kansas
March 22, 2011

74

---



Table of Contents



Acquired Underlying Properties

STATEMENT OF HISTORICAL REVENUES
AND DIRECT OPERATING EXPENSES

Year ended December 31, 2010

Revenues:Oil sales

$
23,272,803Natural gas sales


842,035Total


24,114,838Direct operating expenses:Lease operating expenses


6,401,987Production and property taxes


1,416,534Total


7,818,521Excess of revenues over direct operating expenses

$
16,296,317




The accompanying notes are an integral part of this statement.

75

---





Table of Contents



Acquired Underlying Properties

NOTES TO STATEMENT OF HISTORICAL REVENUES
AND DIRECT OPERATING EXPENSES

For the year ended December 31, 2010

NOTE APROPERTIES

The Acquired Underlying Properties consist of working interests in substantially all oil and natural gas properties located in Kansas owned by VOC Kansas Energy Partners, LLC
("KEP") which are not under common control with VOC Brazos Energy Partners, L.P. ("VOC Brazos"). In connection with the closing of the initial public offering of trust units of VOC Energy
Trust, pursuant to that certain Contribution and Exchange Agreement dated August 30, 2010, VOC Brazos will acquire all of the membership interests in KEP in exchange for newly-issued limited
partner interests in VOC Brazos.

NOTE BBASIS OF PRESENTATION

The accompanying Statement of Historical Revenues and Direct Operating Expenses was derived from the historical accounting records of KEP and reflect the historical revenues and direct
operating expenses directly attributable to the Acquired Underlying Properties for the period described herein. Such amounts may not be representative of future operations. The statement does not
include depreciation, depletion and amortization, general and administrative expenses, interest expense or other expenses of an indirect nature. The amounts represent KEP's net interest in the wells
relating to the Acquired Underlying Properties.

Historical
financial statements representing financial position, results of operations and cash flows required by generally accepted accounting principles are not presented as such
information is not readily available on an individual property basis and not meaningful to the underlying properties. Accordingly, the statement of historical revenues and direct operating expenses is
presented in lieu of financial statements prepared under Rule 3-05 of Regulation S-X.

The
accompanying Statement of Historical Revenues and Direct Operating Expenses included herein was prepared on an accrual basis. Revenue from oil and natural gas sales is recognized
when sold. Direct operating expenses include lease operating expenses and production and property taxes.

This
Statement of Historical Revenues and Direct Operating Expenses does not reflect the impact of any administrative overhead costs. KEP is an amalgamation of properties held by 24
owners. Prior to their consolidation in November 2009, each owner conducted its own accounting for its respective properties, and in most cases the owners did not allocate overhead to the properties.
One of the reasons the owners decided to consolidate holdings into KEP was the efficiency in sharing these overhead expenses. In the future, Vess Oil Corporation will provide these overhead services
to KEP.

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

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

Estimates of the proved oil and gas reserves attributable to the Acquired Underlying Properties as of December 31, 2009 and 2010 are based on the report of Cawley,
Gillespie & Associates, Inc.,
independent petroleum and geological engineers, and the contract property management engineering staff of KEP who operate the underlying properties, in accordance with SEC rules and regulations. Such
estimates are calculated by adjusting the estimated reserves attributable to specified working

76

---



Table of Contents

Acquired Underlying Properties

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

For the year ended December 31, 2010

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

interest
percentages held by KEP outlined in the Cawley, Gillespie & Associates, Inc. reserve report to reflect the working interest percentages held in the Acquired Underlying
Properties. 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 oil and gas properties. A market value determination would include many additional factors including: (i) anticipated future oil and natural gas prices; (ii) the
effect of federal income taxes, if any, on the Acquired Underlying Properties; (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 oil and gas
properties, and (ii) the standardized measure of the discounted future net profits interest income attributable to the oil and gas properties 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 KEP maintains its production records. The data presents the proved reserves attributable to the
Acquired Underlying Properties for the economic life of such properties and is not limited to the term of the trust.

ESTIMATED QUANTITIES OF OIL AND GAS RESERVES

Oil (Bbls)

Gas (Mcf)Proved reserves:Balance at December 31, 2009


3,837,671


1,959,474Revisions of previous estimates


767,948


124,153Production


(321,661
)

(232,254
)Balance at December 31, 2010


4,283,958


1,851,373Proved developed reserves:December 31, 2009


3,837,671


1,959,474December 31, 2010


4,171,465


1,851,373Proved undeveloped reserves:December 31, 2009





December 31, 2010


112,493





77

---



Table of Contents

Acquired Underlying Properties

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

For the year ended December 31, 2010

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

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

Future oil and natural gas sales and production and development costs for 2010 have been estimated in accordance with the SEC reporting
rules.

The
standardized measure of discounted future net cash flows (the "Standardized Measure") represents the present value of estimated future cash inflows from proved oil and natural gas
reserves, less future development, production and plugging and abandonment costs, discounted at 10% per annum, or PV-10 value, to reflect timing of future cash flows. production costs do
not include depreciation, depletion and amortization of capitalized acquisition, exploration and development costs. Because KEP bears no federal income tax expense and taxable income is passed through
to the members of KEP, no provision for federal or state income taxes is included in the reserve report or in the calculation of the Standardized Measure.

Estimated
proved reserves and related future net revenues and Standardized Measure were determined using index prices for oil and natural gas, without giving effect to derivative
transactions, and were held constant throughout the life of the properties. The index prices were the unweighted arithmetic average first-day of-the-month prices
for the prior 12 months of $79.43 per barrel for oil and $4.37 per MMBtu for natural gas at December 31, 2010. The relevant average realized prices, adjusting in the case of crude oil
for forecasted gravity, quality, transportation and marketing as well as other factors affecting the price received at the wellhead, were $74.22 per barrel for oil and $5.02 per Mcf for natural gas at
December 31, 2010.

Changes
in the demand for oil and natural gas, inflation, and other factors make such estimates inherently imprecise and subject to substantial revision. This table should not be
construed to be an
estimate of current market value of the proved reserves attributable to the reserves of the Acquired Underlying Properties.

The
Standardized Measure relating to the proved reserves of the Acquired Underlying Properties at December 31, 2010 is shown below:

2010Future cash inflows

$
319,037,861Future costsProduction


(146,343,958
)Development


(1,749,143
)Future net cash flows


170,944,760Less 10% discount factor


(83,138,265
)Standardized measure of discounted future net cash flows

$
87,806,495


78

---



Table of Contents

Acquired Underlying Properties

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

For the year ended December 31, 2010

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

The
following table sets forth the changes in the Standardized Measure applicable to the proved oil and natural gas reserves of the Acquired Underlying Properties for the year ended
December 31, 2010:

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

2010Standardized measure at beginning of year

$
58,307,954Sales of oil and gas produced, net of production costs


(16,296,317
)Net changes in price and production costs


21,385,452Changes in estimated future development costs


(1,545,676
)Development costs incurred during the period which reduce future development costs


133,055Revisions of quantity estimates


16,130,251Accretion of discount


5,830,796Change in production rates, timing and other


3,860,980Standardized measure at end of year

$
87,806,495


79

---





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, 2012, 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, 2012, 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, 2012, 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, 2012, as stated in their accompanying report.

80

---





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, 2012, based on criteria established in 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 the 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, 2012, based on criteria established in Internal ControlIntegrated
Frameworkissued by COSO.

We
have also 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, 2012, and the related statements of distributable income and changes in trust corpus for the year then ended, and our report dated March 15, 2013 expressed an unqualified
opinion on those financial statements.

/s/
Grant Thornton LLP

Wichita,
Kansas
March 15, 2013

81

---





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 2012, 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, 2012 and 2011, the trustee received compensation from the trust in the amount of $145,000
and $90,000, respectively. 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 12, 2013 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
%Kayne Anderson Capital Advisors, L.P.(3)


1,581,488


9.3
%Richard A. Kayne(3)


1,581,488


9.3
%


(1)Based
on 17,000,000 trust units outstanding as of March 12, 2013.


82

---



Table of Contents

(2)The
information is based on a Schedule 13D filing with the SEC on August 18, 2011. The address of the beneficial owner is 1700 Waterfront
Parkway, Building 500, Wichita, KS 67206.(3)The
information is based on a Schedule 13G/A filing with the SEC on January 10, 2013. The reported units are owned by investment accounts
(investment limited partnerships, a registered investment company and institutional accounts) managed, with discretion to purchase or sell securities, by Kayne Anderson Capital Advisors, L.P.,
as a registered investment adviser. Kayne Anderson Capital Advisors, L.P. is the general partner (or general partner of the general partner) of the limited partnerships and investment adviser
to the other accounts. Richard A. Kayne is the controlling shareholder of the corporate owner of Kayne Anderson Investment Management, Inc., the general partner of Kayne Anderson Capital
Advisors, L.P. Mr. Kayne is also a limited partner of each of the limited partnerships and a shareholder of the registered investment company. Kayne Anderson Capital
Advisors, L.P. disclaims beneficial ownership of the units reported, except those units attributable to it by virtue of its general partner interests in the limited partnerships.
Mr. Kayne disclaims beneficial ownership of the units reported, except those units held by him or attributable to him by virtue of his limited partnership interests in the limited partnerships,
his indirect interest in the interest of Kayne Anderson Capital Advisors, L.P. in the limited partnerships, and his ownership of common stock of the registered investment company. The address
of the beneficial owner is 1800 Avenue of the Stars, Third Floor, Los Angeles, CA 90067.


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 and the assignment of the interest in the hedge contracts, 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 2012 and 2011, $77,250 and $56,250, 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

83

---



Table of Contents

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:



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 2011 and 2012 and fees
billed for other services rendered by Grant Thornton LLP.

2011

2012Audit fees

$
101,946

$
215,000Audit related fees





Tax fees





All other fees





Total fees

$
101,946

$
215,000


84

---





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


55Statements of Assets and Trust Corpus


56Statements of Distributable Income


56Statements of Changes in Trust Corpus


56Notes to Financial Statements


57Predecessor Underlying PropertiesReport of Independent Registered Public Accounting Firm


68Combined Statements of Historical Revenues and Direct Operating Expenses


69Notes to Combined Statements of Historical Revenues and Direct Operating Expenses


70Predecessor Acquired PropertiesReport of Independent Registered Public Accounting Firm


74Combined Statements of Historical Revenues and Direct Operating Expenses


75Notes to Combined Statements of Historical Revenues and Direct Operating Expenses


76




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))


85

---



Table of Contents

Exhibit
Number



Description10.2



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.


86

---





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 PresidentMarch 15, 2013


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.

87

---





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.


88

---