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VOC Energy Trust Is Ready To Perform Well

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Neftekachka, a tube of lipid connected nan background

Gerasimov174

VOC Energy Trust Should Benefit from nan Expected Increase successful Crude Oil and Natural Gas Prices

When marketplace prices for crude lipid and earthy state rise, nan VOC Energy Trust (NYSE:VOC) stock value typically benefits arsenic nan fund's net set to higher commodity prices.

As lipid and earthy state are expected to waste and acquisition higher complete nan adjacent fewer months, VOC Energy Trust net should rise, perchance giving nan banal value a beardown boost. This is because net are nan main driver of banal prices.

Therefore, investors should see expanding their position successful VOC Energy Trust.

About VOC Energy Trust successful The Oil & Gas Exploration and Production Industry

Headquartered successful Houston, Texas, VOC Energy Trust is simply a money engaged successful nan acquisition and consequent guidance of word nett profit interests calculated arsenic a percent of nan nett proceeds from nan production and waste of lipid and earthy state assets successful Texas and Kansas.

VOC Energy Trust's full proven reserves magnitude to astir 8.3 cardinal barrels of lipid balanced [MMBoe], pinch 35% connected nan underlying properties successful Kansas, pinch nan remaining 65% connected nan underlying properties successful Texas.

The VOC Energy Trust's word nett profits liking is quantifiable arsenic a percent of 80% of nan nett proceeds from nan underlying properties.

The underlying mineral properties dwell of interests successful astir 452 net-producing wells and astir 51,150 nett acres.

It's worthy noting that complete 95% of VOC Energy Trust's profits travel from nan waste of barrels of crude oil, truthful nan stock value should bespeak lipid value patterns rather closely.

Over nan past 5 years, arsenic crude lipid gained 55.14%, shares of VOC Energy Trust roseate astatine a somewhat faster pace, delivering a full return of 58.32%.

Chart, histogram Description automatically generated

Source: Seeking Alpha

In Seeking Alpha's chart, crude oil's capacity is represented by Crude Oil WTI Futures - March 23 (CLH2023), while earthy gas, whose finance mislaid 18.69% complete nan aforesaid 5-year period, is represented by Natural Gas Futures - March 23 (NGH2023).

For nan first 9 months of 2022, VOC Energy Trust reported an income from nett profits liking of $16.8 million, an summation of 195% year-over-year, arsenic a consequence of higher prices and income volumes of lipid equivalent.

In nan first 9 months of 2022, disposable rate retained for spot expenses was $550,291 and wide and administrative expenses were $772,288.

Thus, payable income accrued 195% to $15.47 cardinal aliases $0.91 per share.

As of September 30, 2022, full assets were weighted astatine $15.12 cardinal including rate of $837,495 and nan remaining $14.28 cardinal successful nett investments successful nett profit interests.

Fossil Fuels Price Outlook

In position of earthy gas, analysts are forecasting a value summation of 13% per metric cardinal British thermal units (MMBtu) this 4th and a 37.6% summation by nan extremity of 2023. The projected increases successful fossil fuels are from nan level astatine which nan commodity was trading astatine nan clip of writing, i.e., $2.44 per MMBtu

While nan tube of crude lipid is expected to emergence 5.2% this 4th and turn 18.2% by nan extremity of 2023. Gains are calculated from nan $78.9 per tube level, nan value astatine which nan commodity was trading astatine nan clip of writing.

Since nan trust's stock value is highly limited connected nan value activity of nan commodity crude oil, it is absorbing to statement nan pursuing main factors that are presently starring nan analysts to complaint a rising value per barrel.

Essentially, 2 things will thrust up nan value of crude oil.

The first is grounds request expected because of China's system afloat reopening aft nan authorities lifted restrictive measures to incorporate nan Covid-19 microorganism infection.

The 2nd concerns nan market's fears of a accumulation shortage that could look from awesome OPEC+ exporters aft Western countries imposed a caller package of sanctions connected nan Russian economy.

To adhd immoderate numbers to these expectations, according to nan International Energy Agency [IEA] February report, world lipid request should fortify by 2 cardinal barrels per time successful 2023 to a caller grounds of 101.9 cardinal barrels per day.

The IEA besides predicts astir half of that request is apt to travel from China arsenic nan system reopens aft drastic coronavirus restrictions and lockdowns.

The February IEA study besides said shipments from OPEC+ countries could statement later successful nan year. This intends much non-OPEC crude whitethorn request to beryllium brought to marketplace to meet rising world demand.

So, connected apical of nan catalyst of rising crude lipid prices, VOC Energy Trust's net will now besides use from an accrued measurement of nan fossil substance produced for nan world marketplace by US operations.

The banal value is truthful expected to waste and acquisition higher successful nan coming play and investors should adhd shares of VOC Energy Trust to their positions if they wish to use from nan imaginable upside.

The Stock Valuation

After falling importantly from a precocious of $13.09 per stock connected January 20, 2023, shares of VOC Energy Trust are down much than 35% to waste and acquisition astatine $8.07 astatine nan clip of writing.

Graphical personification interface, chart, exertion Description automatically generated

Source: Seeking Alpha

These stock value levels are not high, arsenic they are importantly beneath nan 75-day elemental moving mean statement of $9.44, while they are astir adjacent to nan 200-day elemental moving mean line.

The banal has a 52-week scope of $5.53 to $13.70 and its marketplace headdress is $140.76 million.

By taking advantage of these levels, investors whitethorn person a greater opportunity to use from nan expected summation successful VOC Energy Trust's word nett profit interests owed to higher barrel-oil balanced prices and income volumes.

Higher net connected nan expected amended outlook for commodities should beryllium reflected successful higher stock prices. Dividends could besides emergence and this will further thief nan stock value to scope higher levels.

On February 14, 2023, nan VOC Energy Trust paid a dividend of $0.23 per stock to shareholders for nan quarterly costs play that ended December 31, 2022. The costs results successful a guardant dividend output of 11.11% astatine nan clip of this writing.

It tin besides beryllium that crude lipid prices and output catalysts will not activity arsenic projected. But pinch an expected crisp summation successful power depletion from China and terrible unit connected fossil substance supplies owed to nan geopolitical fallout from nan warfare successful Ukraine, it is almost intolerable to ideate immoderate script different than nan 1 outlined.

Conclusion

With crude lipid prices and non-OPEC income volumes expected to waste and acquisition higher successful 2023, investors should see expanding their positions successful VOC Energy Trust arsenic this money stands to use from nan resulting tailwinds and perchance propel nan stock value to higher levels than existent levels.

This article was written by

Alberto Abaterusso floor plan picture

Alberto holds a Master's grade successful Business Economics. During his world profession he acquired an extended managerial and economical background, pinch a coagulated quantitative basis.  He covers each sectors and nan different types of stocks. Essentially describes a useful finance strategy that fits nan floor plan of immoderate investor, whether they are dividend investors aliases willing successful a worth proposition aliases maturation opportunity.

Disclosure: I/we person nary stock, action aliases akin derivative position successful immoderate of nan companies mentioned, and nary plans to initiate immoderate specified positions wrong nan adjacent 72 hours. I wrote this article myself, and it expresses my ain opinions. I americium not receiving compensation for it (other than from Seeking Alpha). I person nary business narration pinch immoderate institution whose banal is mentioned successful this article.

Editor: Naga



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