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 June 30, 2025
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: 001-33219
MV OIL TRUST
(Exact name of registrant as specified in its
charter)
| Delaware |
|
06-6554331 |
| (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 |
|
MVO |
|
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 company
x |
| |
|
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 August 12, 2025, 11,500,000 Units
of Beneficial Interest in MV Oil Trust were outstanding.
PART I—FINANCIAL INFORMATION
Item 1. Financial Statements.
MV OIL TRUST
STATEMENTS OF DISTRIBUTABLE INCOME
(Unaudited)
| | |
Three months ended
June 30, | | |
Six months ended
June 30, | |
| | |
2025 | | |
2024 | | |
2025 | | |
2024 | |
| Income from net profits interest | |
$ | 3,380,004 | | |
$ | 4,019,362 | | |
$ | 6,372,746 | | |
$ | 9,578,418 | |
| Cash on hand used (withheld) for Trust expenses | |
| 7,562 | | |
| (98,159 | ) | |
| 165,448 | | |
| 4,997 | |
| General
and administrative expenses(1) | |
| (225,066 | ) | |
| (126,203 | ) | |
| (615,694 | ) | |
| (440,915 | ) |
| Distributable income | |
$ | 3,162,500 | | |
$ | 3,795,000 | | |
$ | 5,922,500 | | |
$ | 9,142,500 | |
| Distributions
per Trust unit (11,500,000 Trust units issued and outstanding at June 30, 2025 and 2024) | |
$ | 0.275 | | |
$ | 0.330 | | |
$ | 0.515 | | |
$ | 0.795 | |
| (1) | Includes $31,603 and $30,387 paid to MV Partners, LLC during the
three months ended June 30, 2025 and 2024, respectively, and $63,206 and $60,775 during
the six months ended June 30, 2025 and 2024, respectively. Also includes $37,500 paid
to The Bank of New York Mellon Trust Company, N.A. during each of the three months ended
June 30, 2025 and 2024 and $75,000 during each of the six months ended June 30,
2025 and 2024. |
STATEMENTS OF ASSETS AND TRUST CORPUS
| | |
June 30,
2025 | | |
December 31,
2024 | |
| | |
(Unaudited) | | |
| |
| ASSETS | |
| | | |
| | |
| Cash and cash equivalents | |
$ | 1,115,948 | | |
$ | 1,281,396 | |
| Investment in net profits interest | |
| 50,383,675 | | |
| 50,383,675 | |
| Accumulated amortization | |
| (48,561,089 | ) | |
| (47,799,222 | ) |
| Total assets | |
$ | 2,938,534 | | |
$ | 3,865,849 | |
| TRUST CORPUS | |
| | | |
| | |
| Trust
corpus, 11,500,000 Trust units issued and outstanding at June 30, 2025 and December 31, 2024 | |
$ | 2,938,534 | | |
$ | 3,865,849 | |
STATEMENTS OF CHANGES IN TRUST CORPUS
(Unaudited)
| | |
Three months ended
June 30, | | |
Six months ended
June 30, | |
| | |
2025 | | |
2024 | | |
2025 | | |
2024 | |
| Trust corpus, beginning of period | |
$ | 3,322,228 | | |
$ | 4,940,153 | | |
$ | 3,865,849 | | |
$ | 5,456,085 | |
| Income from net profits interest | |
| 3,380,004 | | |
| 4,019,362 | | |
| 6,372,746 | | |
| 9,578,418 | |
| Cash distributions | |
| (3,162,500 | ) | |
| (3,795,000 | ) | |
| (5,922,500 | ) | |
| (9,142,500 | ) |
| Trust expenses | |
| (225,066 | ) | |
| (126,203 | ) | |
| (615,694 | ) | |
| (440,915 | ) |
| Amortization of net profits interest | |
| (376,132 | ) | |
| (391,865 | ) | |
| (761,867 | ) | |
| (804,641 | ) |
| Trust corpus, end of period | |
$ | 2,938,534 | | |
$ | 4,646,447 | | |
$ | 2,938,534 | | |
$ | 4,646,447 | |
The accompanying notes are an integral part of
these financial statements.
MV OIL TRUST
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Note 1—Organization of the Trust
MV Oil Trust (the “Trust”) is a statutory
trust formed on August 3, 2006, under the Delaware Statutory Trust Act pursuant to a Trust Agreement (the “Trust Agreement”)
among MV Partners, LLC, a Kansas limited liability company (“MV Partners”), 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 pursuant to a conveyance from MV Partners to the Trust. The term net profits
interest represents 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”). The net profits interest consists of MV Partners’ net interests
in all of its oil and natural gas properties located in the Mid-Continent region in the states of Kansas and Colorado (the “underlying
properties”). The underlying properties include approximately 850 producing oil and gas wells.
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 MV Partners’ interest from the sale of production
from the underlying properties during the term of the Trust.
As
of June 30, 2025, cumulatively, since inception, the Trust has received payment for 80% of the net proceeds attributable to MV
Partners’ interest from the sale of 15.0 million barrels of oil equivalent (“MMBoe”) of production from the
underlying properties (which amount is the equivalent of 12.0 MMBoe with respect to the Trust’s net profits interest).
Consequently, the net profits interest will terminate on June 30, 2026 (the “Termination Date”) because the
minimum amount of production (14.4 MMBoe) applicable to the net profits interest has been produced and sold (which amount is
the equivalent of 11.5 MMBoe with respect to the Trust’s net profits interest). The Trustee will make a final quarterly
cash distribution, if any, on or about July 25, 2026 to the Trust unitholders of record on the 15th day following June 30,
2026, and the Trust Units are expected to be cancelled shortly thereafter. The Trust will not be entitled to any net proceeds that
MV Partners receives after the Termination Date from the sale of production from the underlying properties. The Trust will
dissolve and commence winding up its business and affairs after the Termination Date and, once the Trust winds up and terminates, it
will pay no further distributions.
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 Statement of Assets and Trust
Corpus as of December 31, 2024, which has been derived from audited financial statements, and the unaudited interim financial statements
as of June 30, 2025 and for the three and six months ended June 30, 2025 and June 30, 2024, 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 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 revenue 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,
2024.
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, gas and natural gas liquid 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 that created 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 MV Partners 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 MV Partners 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, exceed undiscounted future net revenues attributable
to the proved oil and gas reserves of the underlying properties.
The
Trust has one business activity as the owner of an investment in net profits interest, as reported in the accompanying Statements
of Assets and Trust Corpus, and operates in a single operating and reportable segment. Operating segments are defined as components of
an entity for which separate financial information is evaluated regularly by the chief operating decision maker (the “CODM”),
which is the Trustee. The segment participates in activities and derives its income from net profits interest as reported in the accompanying
Statements of Distributable Income, and the CODM uses this in making decisions about the allocation of cash reserves for current and
future Trust general and administrative expenses and the ultimate distribution to the Trust unitholders.
No new accounting pronouncements were adopted
or issued during the quarter ended June 30, 2025 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 MV Partners on January 24, 2007, the date of conveyance of the net profits interest to the Trust, and was calculated as
follows:
| Oil
and gas properties | |
$ | 96,210,819 | |
| Accumulated depreciation
and depletion | |
| (40,468,762 | ) |
| Hedge
asset | |
| 7,237,537 | |
| Net
property value to be conveyed | |
| 62,979,594 | |
| Times
80% net profits interest to Trust | |
$ | 50,383,675 | |
Note 5—Income from Net Profits Interest
| | |
Three months ended
June 30, | | |
Six months ended
June 30, | |
| | |
2025 | | |
2024 | | |
2025 | | |
2024 | |
| Excess
of revenues over direct operating expenses and lease equipment and development costs(1) | |
$ | 4,225,005 | | |
$ | 5,024,203 | | |
$ | 7,965,932 | | |
$ | 11,973,022 | |
| Times
net profits interest over the term of the Trust | |
| 80 | % | |
| 80 | % | |
| 80 | % | |
| 80 | % |
| Income from net profits
interest before reserve adjustments | |
| 3,380,004 | | |
| 4,019,362 | | |
| 6,372,746 | | |
| 9,578,418 | |
| MV
Partners reserve for future capital expenditures(2) | |
| — | | |
| — | | |
| — | | |
| — | |
| Income
from net profits interest(3) | |
$ | 3,380,004 | | |
$ | 4,019,362 | | |
$ | 6,372,746 | | |
$ | 9,578,418 | |
| (1) | Excess of revenues over direct operating expenses and lease equipment
and development costs reflect expenses and costs incurred by MV Partners during the December through
February production periods for the three months ended June 30, 2025 and 2024,
respectively, and during each of the September through February production periods
for the six months ended June 30, 2025 and 2024, respectively. 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,
MV Partners can reserve up to $1.0 million for future capital expenditures at any time.
During the three and six months ended June 30, 2025 and 2024, MV Partners did not
withhold or release any dollar amounts due to the Trust. The reserve balance was $1.0 million
at June 30, 2025 and 2024. |
| (3) | The income from net profits interest is based upon the cash receipts
from MV Partners for the oil and gas production. The revenues from oil production are typically
received by MV Partners one month after production; thus, the cash received by the Trust
during the three months ended June 30, 2025 substantially represents the production
by MV Partners from December 2024 through February 2025, and the cash received
by the Trust during the three months ended June 30, 2024 substantially represents the
production by MV Partners from December 2023 through February 2024. The cash
received by the Trust during the six months ended June 30, 2025 substantially represents
the production by MV Partners from September 2024 through February 2025, and the
cash received by the Trust during the six months ended June 30, 2024 substantially represents
the production by MV Partners from September 2023 through February 2024. |
For the three and six months ended June 30,
2025 and 2024, MV Purchasing, LLC, which is majority-owned by the indirect equity owners of MV Partners, purchased a majority of the
production from 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
MV
Partners 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 25th day of the month following
the end of each quarter to the Trust unitholders of record on the 15th 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 during 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. From the first quarter of 2022 to the second quarter
of 2023, the Trustee withheld a portion of the proceeds otherwise available for distribution each quarter and built a $1.265 million
cash reserve 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 withholds 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. This cash reserve is included
in cash and cash equivalents on the accompanying Statements of Assets and Trust Corpus.
The first quarterly distribution during 2025 was
$2,760,000, or $0.240 per Trust unit, and was made on January 24, 2025 to Trust unitholders owning Trust units as of January 16,
2025. Such distribution included the net proceeds attributable to the sale of production received by MV Partners from October 1,
2024 through December 31, 2024.
The second quarterly distribution during 2025
was $3,162,500, or $0.275 per Trust unit, and was made on April 25, 2025 to Trust unitholders owning Trust units as of April 15,
2025. Such distribution included the net proceeds attributable to the sale of production received by MV Partners from January 1,
2025 through March 31, 2025.
The first quarterly distribution during 2024 was
$5,347,500, or $0.465 per Trust unit, and was made on January 25, 2024 to Trust unitholders owning Trust units as of January 16, 2024.
Such distribution included the net proceeds attributable to the sale of production received by MV Partners from October 1, 2023 through
December 31, 2023.
The second quarterly distribution during 2024
was $3,795,000, or $0.330 per Trust unit, and was made on April 25, 2024 to Trust unitholders owning Trust units as of April 15,
2024. Such distribution included the net proceeds attributable to the sale of production received by MV Partners from January 1,
2024 through March 31, 2024.
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 June 30, 2025 and 2024, there were no borrowings
or amounts owed for money borrowed in previous quarters. MV Partners has provided a letter of credit in the amount of $1.8 million 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
The third quarterly distribution during 2025 was
$2,127,500, or $0.185 per Trust unit, and was made on July 25, 2025 to Trust unitholders owning Trust units as of July 15,
2025. Such distribution included the net proceeds attributable to the sale of production received by MV Partners from April 1, 2025
through June 30, 2025.
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 MV Partners.
Overview and Trust Termination
The Trust does not conduct any operations or activities.
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 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. The net profits interest entitles the Trust to receive 80% of the net proceeds attributable to MV Partners’ interest
from the sale of production from the underlying properties during the term of the Trust.
Trust
termination. As of June 30, 2025, cumulatively, since inception, the Trust has received payment for 80% of the net
proceeds attributable to MV Partners’ interest from the sale of 15.0 million barrels of oil equivalent (“MMBoe”)
of production from the underlying properties (which amount is the equivalent of 12.0 MMBoe with respect to the Trust’s net
profits interest). Consequently, the net profits interest will terminate on June 30, 2026 (the “Termination Date”)
because the minimum amount of production (14.4 MMBoe) applicable to the net profits interest has been produced and sold (which
amount is the equivalent of 11.5 MMBoe with respect to the Trust’s net profits interest). The Trustee will make a final
quarterly cash distribution, if any, on or about July 25, 2026 to the Trust unitholders of record on the 15th day following
June 30, 2026, and the Trust Units are expected to be cancelled shortly thereafter. The Trust will not be entitled to any net
proceeds that MV Partners receives after the Termination Date from the sale of production from the underlying properties. The
Trust will dissolve and commence winding up its business and affairs after the Termination Date and, once the Trust winds up and
terminates, it will pay no further distributions.
Results of Operations
Results of Operations for the Quarters Ended June 30, 2025
and 2024
The cash received by the Trust from MV Partners
during the quarter ended June 30, 2025 substantially represents the production by MV Partners from December 2024 through February 2025.
The cash received by the Trust from MV Partners during the quarter ended June 30, 2024 substantially represents the production
by MV Partners from December 2023 through February 2024. The revenues from oil production are typically received by MV Partners
one month after production. The Trust’s income from net profits interest decreased $639,358 to $3,380,004 for the quarter ended
June 30, 2025 from $4,019,362 for the quarter ended June 30, 2024. The decrease was primarily due to a $799,198 decrease in
excess of revenues over direct operating expenses and lease equipment and development costs for the underlying properties to $4,225,005
from $5,024,203 for the same period in the prior year. These amounts were reduced by a Trustee holdback for current Trust expenses of
$217,504 and $224,362 for the quarters ended June 30, 2025 and 2024, respectively. The Trustee paid general and administrative expenses
of $225,066 and $126,203 for the quarters ended June 30, 2025 and 2024, respectively. During the quarters ended June 30, 2025
and 2024, MV Partners did not withhold or release any dollar amounts due to the Trust from the previously established reserve for future
capital expenditures. These factors resulted in distributable income for the quarter ended June 30, 2025 of $3,162,500, a decrease
of $632,500 from $3,795,000 for the quarter ended June 30, 2024.
The average price received for crude oil sold
was $68.11 per Bbl and the average price received for natural gas sold was $3.07 per Mcf for the period from January 1, 2025 through
March 31, 2025. The average price received for crude oil sold was $70.25 per Bbl and the average price received for natural gas
sold was $2.66 per Mcf for the period from January 1, 2024 through March 31, 2024.
The overall production sales volumes attributable
to the net profits interest for the oil and gas production collected during the period from January 1, 2025 through March 31,
2025 were 111,619 Bbls of oil and 4,727 Mcf of natural gas, for a total of 112,407 barrels of oil equivalent. The overall production
sales volumes attributable to the net profits interest for the oil and gas production collected during the period from January 1,
2024 through March 31, 2024 were 116,363 Bbls of oil, 5,538 Mcf of natural gas and 5 Bbls of natural gas liquids, for a total
of 117,289 barrels of oil equivalent.
Results of Operations for the Six Months Ended June 30, 2025
and 2024
The cash received by the Trust from MV Partners
during the six months ended June 30, 2025 substantially represents the production by MV Partners from September 2024 through
February 2025. The cash received by the Trust from MV Partners during the six months ended June 30, 2024 substantially represents
the production by MV Partners from September 2023 through February 2024. The revenues from oil production are typically received
by MV Partners one month after production. The Trust’s income from net profits interest decreased $3,205,673 to $6,372,745 for
the six months ended June 30, 2025 from $9,578,418 for the six months ended June 30, 2024. The decrease was primarily due to
a $4,007,090 decrease in excess of revenues over direct operating expenses and lease equipment and development costs for the underlying
properties to $7,965,932 from $11,973,022 for the same period in the prior year. These amounts were reduced by a Trustee holdback for
current Trust expenses of $450,245 and $435,918 for the quarters ended June 30, 2025 and 2024, respectively. The Trustee paid general
and administrative expenses of $615,694 and $440,915 for the six months ended June 30, 2025 and 2024, respectively. During the six
months ended June 30, 2025 and 2024, MV Partners did not withhold or release any dollar amounts due to the Trust from the previously
established reserve for future capital expenditures. These factors resulted in distributable income for the six months ended June 30,
2025 of $5,922,500, a decrease of $3,220,000 from $9,142,500 for the six months ended June 30, 2024.
The average price received for crude oil sold
was $67.22 per Bbl and the average price received for natural gas sold was $2.37 per Mcf for the period from October 1, 2024 through
March 31, 2025. The average price received for crude oil sold was $75.29 per Bbl and the average price received for natural gas
sold was $2.43 per Mcf for the period from October 1, 2023 through March 31, 2024.
The overall production sales volumes attributable
to the net profits interest for the oil and gas production collected during the period from October 1, 2024 through March 31,
2025 were 225,948 Bbls of oil, 10,393 Mcf of natural gas and 5 Bbls of natural gas liquids, for a total of 227,683 barrels of oil
equivalent. The overall production sales volumes attributable to the net profits interest for the oil and gas production collected during
the period from October 1, 2023 through March 31, 2024 were 238,912 Bbls of oil, 11,515 Mcf of natural gas and 11 Bbls
of natural gas liquids, for a total of 240,838 barrels of oil equivalent.
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 an annual administrative fee to MV Partners 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 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.
From the first quarter of 2022 to the second quarter
of 2023, the Trustee withheld a portion of the proceeds otherwise available for distribution each quarter and built a $1.265 million
cash reserve for the payment of future known, anticipated or contingent expenses or liabilities. This amount is in addition to the $1.8
million letter of credit described below. The Trustee may increase or decrease the targeted amount at any time and may increase or decrease
the rate at which it withholds 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. As of June 30, 2025, $1,115,948 was held by the Trustee and is reported as cash and cash equivalents.
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 and six months ended June 30, 2025 and 2024, there were no such borrowings. MV Partners has provided a letter of credit
in the amount of $1.8 million to the Trustee to protect the Trust against the risk that it does not have sufficient cash to pay future
expenses.
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.
Substantially all of the underlying properties
are located in mature fields, and MV Partners 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 general cost of oilfield services. MV Partners 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. As of June 30, 2025, $1.0 million was held by MV Partners as a capital reserve.
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.
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 MV Partners
advised the Trust that it believes that the expectations reflected in the forward-looking statements contained herein are reasonable,
such expectations may not 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, 2024 (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 MV Partners 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. 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 MV Partners,
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—The Trust and the public Trust unitholders have no voting or managerial rights with respect to MV Partners,
the operator of the underlying properties. As a result, public Trust unitholders have no ability to influence the operation of the underlying
properties” and “Trustee’s Discussion and Analysis of Financial Condition and Results of Operations” in the Form 10-K
for a description of certain risks relating to these arrangements and reliance on information when reported by MV Partners to the Trustee
and recorded in the Trust’s results of operations.
Changes
in Internal Control over Financial Reporting. During the quarter ended June 30, 2025, 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 MV Partners.
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 5. Other Information.
Rule 10b5-1
Trading Plans. During the three months ended June 30, 2025, no officer or employee of the Trustee who
performs policy-making functions for the Trust adopted, modified, or terminated any Rule 10b5-1 trading arrangement or non-Rule 10b5-1
trading arrangement, as such terms are defined in Item 408(a) of Regulation S-K, with respect to the Trust units.
Item 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 |
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.
| |
MV OIL TRUST |
| |
|
| |
By: |
The Bank of New York Mellon Trust
Company, N.A., as Trustee |
| |
|
|
| |
By: |
/s/
ELAINA C. RODGERS |
| |
|
Elaina C. Rodgers |
| |
|
Vice President |
Date: August 12, 2025
The Registrant, MV Oil 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.
