UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549










FORM 10-Q












|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------



for the quarterly period ended March 31,
2023



OR



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------



for the transition period from                       to



Commission File Number: 001-35160










VOC ENERGY TRUST

(Exact name of registrant as specified in its charter)



|Delaware                                                       |  | 80-6183103                          
|-------------------------------------------------------------- |  | ------------------------------------
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)



|The Bank of New York Mellon Trust Company, N.A., Trustee |  |           
|-------------------------------------------------------- |  | ----------
|Global Corporate Trust                                   |  |           
|601 Travis Street, Floor 16                              |  |           
|Houston, Texas                                           |  | 77002     
|(Address of principal executive offices)                 |  | (Zip Code)



1-713-483-6020

(Registrant’s telephone number, including
area code)










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



|Title of each class          |  | Trading Symbol(s) |  | Name of each exchange on which registered
|---------------------------- |  | ----------------- |  | -----------------------------------------
|Units of Beneficial Interest |  | VOC               |  | The New York Stock Exchange              



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 x No ̈



Indicate by check
mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files).  Yes ̈
No  ̈



Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.
See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,”
and “emerging growth company” in Rule 12b-2 of the Exchange Act.



|Large accelerated filer ̈ |  | Accelerated filer ̈        
|------------------------ |  | --------------------------
|Non-accelerated filer x  |  | Smaller reporting companyx
|                         |  | Emerging growth company  ̈ 



If an emerging
growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any
new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ̈



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



As of May 11, 2023, 17,000,000 Units of Beneficial
Interest in VOC Energy Trust were outstanding.




















PART I—FINANCIAL INFORMATION



| | Item 1. | Financial Statements.
| | ------- | ---------------------



VOC ENERGY TRUST

CONDENSED STATEMENTS OF DISTRIBUTABLE INCOME

(Unaudited)



|                                                                                                        |  | Three months ended March 31, |          
|------------------------------------------------------------------------------------------------------- |  | ---------------------------- | ---------
|                                                                                                        |  | 2023                         |          
|Income from net profits interest                                                                        |  | $                            | 4,328,752
|Cash on hand withheld for Trust expenses                                                                |  |                              | (43,189  
|General and administrative expenses (1)                                                                 |  |                              | (375,563 
|Distributable income                                                                                    |  | $                            | 3,910,000
|Distributions per Trust unit (17,000,000 Trust units issued and outstanding at March 31, 2023 and 2022) |  | $                            | 0.23     










|(1) | Includes $28,860 and $27,750 paid to VOC Brazos Energy Partners, LP (“VOC Brazos”) during the three months ended March 31, 2023 and 2022, respectively, and $37,500 paid to The Bank of New York Mellon Trust Company, N.A. during each of the three-month periods ended March 31, 2023 and 2022.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



CONDENSED STATEMENTS OF ASSETS AND TRUST CORPUS



|                                                                                                    |  | March 31, 2023 |              |   | December 31, 2022 |  
|--------------------------------------------------------------------------------------------------- |  | -------------- | ------------ | - | ----------------- | -
|                                                                                                    |  | (Unaudited)    |              |   |                   |  
|ASSETS                                                                                              |  |                |              |   |                   |  
|Cash and cash equivalents                                                                           |  | $              | 1,292,066    |   |                   | $
|Investment in net profits interest                                                                  |  |                | 140,591,606  |   |                   |  
|Accumulated amortization and impairment                                                             |  |                | (127,264,398 | ) |                   |  
|Total assets                                                                                        |  | $              | 14,619,274   |   |                   | $
|                                                                                                    |  |                |              |   |                   |  
|TRUST CORPUS                                                                                        |  |                |              |   |                   |  
|Trust corpus, 17,000,000 Trust units issued and outstanding at March 31, 2023 and December 31, 2022 |  | $              | 14,619,274   |   |                   | $



CONDENSED STATEMENTS OF CHANGES IN TRUST CORPUS

(Unaudited)



|                                     |  | Three months ended March 31, |           
|------------------------------------ |  | ---------------------------- | ----------
|                                     |  | 2023                         |           
|Trust corpus, beginning of period    |  | $                            | 15,048,316
|Income from net profits interest     |  |                              | 4,328,752 
|Cash distribution                    |  |                              | (3,910,000
|Trust expenses                       |  |                              | (375,563  
|Amortization of net profits interest |  |                              | (472,231  
|Trust corpus, end of period          |  | $                            | 14,619,274



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





1







VOC ENERGY TRUST

NOTES TO CONDENSED FINANCIAL STATEMENTS

(Unaudited)



Note 1.	Organization of the Trust



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



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



The Trust was created to acquire and hold a term
net profits interest representing the right to receive 80% of the net proceeds (calculated as described below in Note 5) from production
from the underlying properties (as defined below). The net profits interest consists of working interests in substantially all of the
oil and natural gas properties held by VOC Brazos and VOC Kansas in the States of Kansas and Texas as of the date of the conveyance of
the net profits interest to the Trust. We refer to the properties in which the Trust holds the net profits interest as the “underlying
properties.”



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



As of March 31, 2023, cumulatively, since
inception, the Trust has received payment for 80% of the net proceeds attributable to VOC Brazos’ interest from the sale of 8.3 MMBoe
of production from the underlying properties (which is the equivalent of 6.6 MMBoe (unaudited) in respect of the net profits interest).



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



Note 2.	Basis of Presentation



The accompanying Condensed Statements of Assets
and Trust Corpus as of December 31, 2022, which has been derived from audited financial statements, and the unaudited interim condensed
financial statements as of March 31, 2023 and for the three-month periods ended March 31, 2023 and 2022, have been prepared
pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, certain information
and note disclosures normally included in annual financial statements have been condensed or omitted pursuant to those rules and
regulations.



The preparation of financial statements requires
the Trust to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates. The Trustee believes such information includes all the disclosures necessary to make
the information presented not misleading. The information furnished reflects all adjustments that are, in the opinion of the Trustee,
necessary for a fair presentation of the results of the interim period presented. The financial information should be read in conjunction
with the financial statements and notes thereto included in the Trust’s Annual Report on Form 10-K for the year ended December 31,
2022.





2







Note 3.	Trust Accounting Policies



The Trust uses the modified cash basis of accounting
to report receipts 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, lease maintenance, lease overhead, and
production and property taxes) and an adjustment for lease equipment costs and lease development expenses (which are capitalized in financial
statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”))
of the underlying properties, times 80%. Actual cash receipts may vary due to timing delays of actual cash receipts from the property
operators or purchasers and due to wellhead and pipeline volume balancing agreements or practices. The actual cash distributions of the
Trust will be made based on the terms of the conveyance creating the Trust’s net profits interest. Expenses of the Trust, which
include accounting, engineering, legal and other professional fees, Trustee fees, an administrative fee paid to VOC Brazos and out-of-pocket
expenses, are recognized when paid. Under U.S. GAAP, revenues and expenses would be recognized on an accrual basis. Amortization of the
investment in net profits interest is recorded on a unit-of-production method in the period in which the cash is received with respect
to such production. Such amortization does not reduce distributable income, rather it is charged directly to Trust corpus.



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.



Investment in the net profits interest was recorded
initially at the historical cost of VOC Brazos and is periodically assessed to determine whether its aggregate value has been impaired
below its total capitalized cost based on the underlying properties. The Trust will provide a write-down to its investment in the net
profits interest if and when total capitalized costs, less accumulated amortization, exceeds undiscounted future net revenues attributable
to the proved oil and gas reserves of the underlying properties. There was no impairment of the investment in the net profits interest
during the quarters ended March 31, 2023 or 2022.



No new accounting pronouncements were adopted or
issued during the quarter ended March 31, 2023 that would impact the financial statements of the Trust.



Note 4.	Investment in Net Profits Interest



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



|Oil and gas properties                  |  | $ | 197,270,173 |  
|--------------------------------------- |  | - | ----------- | -
|Accumulated depreciation and depletion  |  |   | (17,681,155 | )
|Hedge liability                         |  |   | (1,717,713  | )
|20-year asset retirement liability      |  |   | (2,131,797  | )
|Net property to be conveyed             |  |   | 175,739,508 |  
|Times 80% net profits interest to Trust |  | $ | 140,591,606 |  



Note 5.	Income from Net Profits Interest



|                                                                                                |  | Three months ended March 31, |          
|----------------------------------------------------------------------------------------------- |  | ---------------------------- | ---------
|                                                                                                |  | 2023                         |          
|Excess of revenues over direct operating expenses and lease equipment and development costs (1) |  | $                            | 5,410,940
|Times 80% net profits interest to Trust                                                         |  |                              | 80       
|Income from net profits interest before reserve adjustments                                     |  |                              | 4,328,752
|VOC Brazos reserve for future development, maintenance or operating expenditures (2)            |  |                              | –        
|Income from net profits interest (3)                                                            |  | $                            | 4,328,752





3














| | (1) | Excess of revenues over direct operating expenses and lease equipment and development costs reflect expenses and costs incurred by
VOC Brazos during the September through November production period. Pursuant to the terms of the conveyance of the net profits
interest, lease equipment and development costs are to be deducted when calculating the distributable income to the Trust.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | Pursuant to the terms of the conveyance of the net profits interest, VOC Brazos can reserve up to $1.0 million for future development,
maintenance or operating expenditures at any time. During the three months ended March 31, 2023 and 2022, VOC Brazos did not withhold
or release any dollar amounts due to the Trust from the reserve. The reserve balance was $1.0 million at March 31, 2023 and 2022.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (3) | The income from net profits interest is based upon the cash receipts from VOC Brazos for the oil and gas production. The revenues
from oil production are typically received by VOC Brazos one month after production; thus, the cash received by the Trust during the three
months ended March 31, 2023 substantially represents production by VOC Brazos from September 2022 through November 2022.
The cash received by the Trust during the three months ended March 31, 2022 substantially represents production by VOC Brazos from
September 2021 through November 2021.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



For the three months ended March 31, 2023
and 2022, MV Purchasing, LLC, an affiliate of VOC Brazos, purchased a significant portion of the production of the underlying properties.
Sales to MV Purchasing, LLC are under short-term arrangements, ranging from one to six months, using market sensitive pricing.



Note 6.	Income Taxes



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



Note 7.	Distributions to Unitholders



VOC Brazos makes quarterly payments of the net
profits interest to the Trust. The Trustee determines for each quarter the amount available for distribution to the Trust unitholders.
This distribution is expected to be made on or before the 45th day following the end of each quarter to the Trust unitholders of record
on the 30th day of the month following the end of each quarter (or the next succeeding business day). Such amounts will be equal to the
excess, if any, of the cash received by the Trust relating to the preceding quarter, over the expenses of the Trust paid for such quarter,
subject to adjustments for changes made by the Trustee during such quarter in any cash reserves established for future expenses of the
Trust. Beginning in the first quarter of 2022, the Trustee withheld a portion of the proceeds otherwise available for distribution each
quarter to build a reserve of approximately $1.175 million for the payment of future known, anticipated or contingent expenses or liabilities
of the Trust. The Trustee may increase or decrease the targeted amount at any time and may increase or decrease the rate at which it is
withholding funds to build the cash reserve at any time, without advance notice to the unitholders. Cash held in reserve will be invested
as required by the Trust Agreement. Any cash reserved in excess of the amount necessary to pay or provide for the payment of future known,
anticipated or contingent expenses or liabilities eventually will be distributed to unitholders, together with interest earned on the
funds. The targeted $1.175 million cash reserve was fully funded by February 2023 and is included in cash and cash equivalents on the
accompanying Condensed Statements of Assets and Trust Corpus.



The first quarterly distribution during 2023 was
$3,910,000, or $0.23 per Trust Unit, and was made on February 14, 2023 to Trust unitholders owning Trust Units as of January 30,
2023. Such distribution included the net proceeds of production collected by VOC Brazos from October 1, 2022 through December 31,
2022 and was net of $231,030 withheld by the Trustee towards the building of the cash reserve described above and with that amount, the
targeted reserve was fully funded.



The first quarterly distribution during 2022 was
$4,250,000, or $0.25 per Trust Unit, and was made on February 14, 2022 to Trust unitholders owning Trust Units as of February 1,
2022. Such distribution included the net proceeds of production collected by VOC Brazos from October 1, 2021 through December 31,
2021 and was net of $182,917 withheld by the Trustee towards the building of the cash reserve described above.





4







Note 8.	Advance for Trust Expenses



Under the terms of the Trust Agreement, the Trustee
is allowed to borrow money to pay Trust expenses. During the three months ended March 31, 2023 and 2022, there were no borrowings
or amounts owed for money borrowed in previous quarters. Under the terms of the Trust Agreement, VOC Brazos has provided a letter of credit
in the amount of $1,700,000 to the Trustee to protect the Trust against the risk that it does not have sufficient cash to pay future expenses.



Note 9.	Subsequent Events



On April 20, 2023, the Trust announced a Trust
distribution of net profits for the first quarterly payment period ended March 31, 2023. Unitholders of record on May 1, 2023
will receive a distribution amounting to $3,910,000, or $0.23 per Trust Unit, which will be paid on May 12, 2023.



Item 2. Trustee’s Discussion and Analysis of Financial Condition and Results of Operations.



The following discussion of the Trust’s financial
condition and results of operations should be read in conjunction with the financial statements and notes thereto. The Trust’s purpose
is, in general, to hold the net profits interest, to distribute to the Trust unitholders cash that the Trust receives in respect of the
net profits interest and to perform certain administrative functions in respect of the net profits interest and the Trust Units. The Trust
derives substantially all of its income and cash flows from the net profits interest. All information regarding operations has been provided
to the Trustee by VOC Brazos.



Results of Operations



Results of Operations for the Quarters Ended March 31, 2023
and 2022



The following is a summary of income from net profits
interest received by the Trust for the three months ended March 31, 2023 and 2022 consisting of the January distribution for
each respective year:



|                                                                                            |  | Three months ended March 31, |           
|------------------------------------------------------------------------------------------- |  | ---------------------------- | ----------
|                                                                                            |  | 2023                         |           
|Sales volumes:                                                                              |  |                              |           
|Oil (Bbl)                                                                                   |  |                              | 127,600   
|Natural gas (Mcf)                                                                           |  |                              | 83,501    
|Total (BOE)                                                                                 |  |                              | 141,517   
|Average sales prices:                                                                       |  |                              |           
|Oil (per Bbl)                                                                               |  | $                            | 82.73     
|Natural gas (per Mcf)                                                                       |  | $                            | 7.65      
|Gross proceeds:                                                                             |  |                              |           
|Oil sales                                                                                   |  | $                            | 10,556,507
|Natural gas sales                                                                           |  |                              | 639,071   
|Total gross proceeds                                                                        |  |                              | 11,195,578
|Costs:                                                                                      |  |                              |           
|Production and development costs:                                                           |  |                              |           
|Lease operating expenses                                                                    |  |                              | 4,022,303 
|Production and property taxes                                                               |  |                              | 893,958   
|Development expenses                                                                        |  |                              | 868,377   
|Total costs                                                                                 |  |                              | 5,784,638 
|                                                                                            |  |                              |           
|Excess of revenues over direct operating expenses and lease equipment and development costs |  |                              | 5,410,940 
|Times net profits interest over the term of the Trust                                       |  |                              | 80        
|Income from net profits interest before reserve adjustments                                 |  |                              | 4,328,752 
|VOC Brazos reserve for future development, maintenance or operating expenditures            |  |                              | –         
|Income from net profits interest                                                            |  | $                            | 4,328,752 





5







The cash received by the Trust from VOC Brazos
during the quarter ended March 31, 2023 substantially represents the production by VOC Brazos from September 2022 through November 2022.
The cash received by the Trust from VOC Brazos during the quarter ended March 31, 2022 substantially represents the production
by VOC Brazos from September 2021 through November 2021. The revenues from oil production are typically received by VOC Brazos
one month after production.



Gross proceeds. Oil and natural gas sales
were $11,195,578 for the three months ended March 31, 2023, an increase of $688,512 or 6.6% from $10,507,066 for the three months
ended March 31, 2022. Revenues are a function of oil and natural gas sales prices and volumes sold. The increase in gross proceeds
was due to increases in market prices for oil and natural gas, partially offset by decreases in oil and natural gas sales volumes during
the first quarter of 2023. During the three months ended March 31, 2023, the average price for oil increased 12.1% to $82.73 per
Bbl and the average price for natural gas increased 32.4% to $7.65 per Mcf. During the three months ended March 31, 2023, oil sales
volumes were 127,600 Bbls, a decrease of 8,162 Bbls or 6.0% from 135,762 Bbls for the three months ended March 31, 2022, while natural
gas sales volumes were 83,501 Mcf, a decrease of 1,131 Mcf or 1.3% from 84,632 Mcf for the same period in 2022.



Costs. Lease operating expenses were $4,022,303
for the three months ended March 31, 2023, an increase of $563,409 or 16.3% from $3,458,894 for the three months ended March 31,
2022. Production and property taxes were $893,958 for the three months ended March 31, 2023, an increase of $228,167 or 34.3% from
$665,791 for the same period in 2022. Such increase is primarily due to a $210,389 or 57.5% increase in property taxes along with a $17,778
or 5.9% increase in production taxes due to higher sales prices. Development expenses were $868,377 for the three months ended March 31,
2023, an increase of $376,229 or 76.4% from $492,148 for the same period in 2022. Of this increase, approximately $200,000 is associated
with the completion costs of two horizontal wells in Texas with the remainder being attributable to increased development expenses during
the three months ended March 31, 2023, compared to the three months ended March 31, 2022.



Excess of revenues over direct operating expenses
and lease equipment and development costs. The excess of revenues over direct operating expenses and lease equipment and development
costs from the underlying properties was $5,410,940 for the three months ended March 31, 2023, a decrease of $479,293 or 8.1% from
$5,890,233 for the three months ended March 31, 2022. The Trust’s 80% net profits interest of these totals were $4,328,752
and $4,712,186, respectively. During the three months ended March 31, 2023 and 2022, VOC Brazos did not withhold or release any dollar
amounts due to the Trust from the previously established cash reserve for future development, maintenance or operating expenditures, which
resulted in income from the net profits interest of $4,328,752 and $4,712,186 for such periods, respectively. These amounts were reduced
by a Trust holdback for current estimated expenses of $187,722 and $279,269 for the three months ended March 31, 2023 and 2022, respectively,
and a Trust holdback for future estimated expenses of $231,030 and $182,917 for the three months ended March 31, 2023 and 2022, respectively.
The Trustee paid general and administrative expenses of $375,563 for the three months ended March 31, 2023, an increase of $1,798
from $373,765 for the three months ended March 31, 2022. These factors resulted in distributable income for the three months ended
March 31, 2023 of $3,910,000, a decrease of $340,000 from $4,250,000 for the three months ended March 31, 2022.



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.
Administrative expenses include payments to the Trustee as well as a quarterly administrative fee to VOC Brazos pursuant to an administrative
services agreement.  Each quarter, the Trustee determines the amount of funds available for distribution. Available funds are the
excess cash, if any, received by the Trust from the net profits interest and other sources (such as interest earned on any amounts reserved
by the Trustee) in that quarter, over the Trust’s expenses paid for that quarter.  Available funds are reduced by any cash
that the Trustee decides to reserve for future development, maintenance or operating expenses. As of March 31, 2023, $1,292,066 was
held by the Trustee as such a reserve.



The Trustee may cause the Trust to borrow funds
required to pay expenses if the Trustee determines that the cash on hand and the cash to be received are insufficient to cover the Trust’s
expenses.  If the Trust borrows funds, the Trust unitholders will not receive distributions until the borrowed funds are repaid. 
During the three months ended March 31, 2023 and 2022, there were no such borrowings. VOC Brazos has provided a letter of credit
in the amount of $1.7 million to the Trustee to protect the Trust against the risk that it does not have sufficient cash to pay future
expenses.





6







Beginning in the first quarter of 2022, the Trustee
withheld a portion of the proceeds otherwise available for distribution each quarter to gradually build a $1.175 million cash reserve
for the payment of future known, anticipated, or contingent expenses or liabilities of the Trust. This amount is in addition to the $1.7
million letter of credit described above. The Trustee may increase or decrease the targeted amount at any time and may increase or decrease
the rate at which it is withholding funds to build the cash reserve at any time, without advance notice to the unitholders. Cash held
in reserve will be invested as required by the Trust Agreement. Any cash reserved in excess of the amount necessary to pay or provide
for the payment of future known, anticipated or contingent expenses or liabilities eventually will be distributed to unitholders, together
with interest earned on the funds. The targeted $1.175 million cash reserve was fully funded as of January 30, 2023.



Income to the Trust from the net profits interest
is based on the calculation and definitions of “gross proceeds” and “net proceeds” contained in the conveyance.



As substantially all of the underlying properties
are located in mature fields, VOC Brazos does not expect future costs for the underlying properties to change significantly compared to
recent historical costs other than changes due to fluctuations in the general cost of oilfield services.  VOC Brazos may establish
a cash reserve of up to $1,000,000 in the aggregate at any given time from the dollar amount otherwise distributable to the Trust to reduce
the impact on distributions of uneven capital expenditure timing. The cash reserve balance was $1,000,000 on March 31, 2023 and 2022,
respectively.



Note Regarding Forward-Looking Statements



This Form 10-Q includes “forward-looking
statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical fact included in
this Form 10-Q, including without limitation the statements under “Trustee’s Discussion and Analysis of Financial Condition
and Results of Operations” are forward-looking statements. Although VOC Brazos advised the Trust that it believes that the expectations
reflected in the forward-looking statements contained herein are reasonable, no assurance can be given that such expectations will prove
to have been correct. Important factors that could cause actual results to differ materially from expectations (“Cautionary Statements”)
are disclosed in the Trust’s Annual Report on Form 10-K for the year ended December 31, 2022 (the “Form 10-K”),
including under the section “Item 1A. Risk Factors”. All subsequent written and oral forward-looking statements attributable
to the Trust or persons acting on its behalf are expressly qualified in their entirety by the Cautionary Statements.



| | Item 3. | Quantitative and Qualitative Disclosures About Market Risk.
| | ------- | -----------------------------------------------------------



The Trust is a smaller reporting company as defined
by Rule 12b-2 of the Exchange Act and is not required to provide the information under this Item.



| | Item 4. | Controls and Procedures.
| | ------- | ------------------------



Evaluation of Disclosure Controls and Procedures.The Trustee maintains disclosure controls and procedures designed to ensure that information required 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 Trustee,
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. A 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
 “Risk Factors—Neither the trust nor the trust’s unitholders have the ability to influence VOC Brazos or control the
operations or development of the underlying properties” in the Form 10-K.





7







Changes in Internal Control over Financial Reporting.During the quarter ended March 31, 2023, there was no change in the Trust’s internal control over financial reporting that
has materially affected, or is reasonably likely to materially affect, the Trust’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.





8







PART II—OTHER INFORMATION



Item 1A. Risk Factors.



There have not been any material changes from the
risk factors previously disclosed in the Trust’s response to Item 1A to Part I of the Form 10-K.



| | Item 6. | Exhibits.
| | ------- | ---------



The exhibits listed below are filed or furnished
as part of this Quarterly Report on Form 10-Q.



|Exhibit
Number |  | Description                                                            
|-------------- |  | -----------------------------------------------------------------------
|               |  |                                                                        
|31             |  | Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|               |  |                                                                        
|32             |  | Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002





9







SIGNATURES



Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



| | VOC ENERGY TRUST
| | ----------------
| |                 
| | By:             
| |                 
| | By:             
| |                 
| |                 

Date: May 11, 2023



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.







10