10-K: MV Oil Trust Nears Termination Amid Declining Results

MV Oil Trust reports significant declines in income and distributions as its net profits interest is set to terminate on June 30, 2026, leading to the Trust's dissolution.

Summary

• MV Oil Trust's net profits interest will terminate on June 30, 2026, as the minimum production threshold of 14.4 MMBoe (equivalent to 11.5 MMBoe for the Trust) has been met.
• The Trust will dissolve and wind up its affairs after this date, with no further distributions to unitholders.
• Income from net profits interest decreased to $11.3 million in 2025 from $18.6 million in 2024.
• Distributable income fell to $10.4 million ($0.905 per Trust Unit) in 2025 from $17.7 million ($1.535 per Trust Unit) in 2024.
• Proved reserves attributable to the Trust as of December 31, 2025, were 210 MBbls of oil, 5 MMcf of natural gas, and 0.1 MBbls of NGLs, totaling 211 MBoe.
• The average price received for crude oil sold decreased to $64.20 per Bbl in 2025 from $75.52 per Bbl in 2024.
• The average price received for natural gas sold increased to $2.48 per Mcf in 2025 from $2.19 per Mcf in 2024.
• Production volumes sold attributable to the 80% net profits interest decreased to 457,705 Boe in 2025 from 481,018 Boe in 2024.
• The projected reserve life of the underlying properties was over 28 years as of December 31, 2025, but the Trust's interest is limited by the termination date.
• MV Partners plans approximately $0.4 million in capital expenditures for recompletion and workovers of existing wells over the three years ending December 31, 2028.

Sentiment

Score: 2

Explanation: StockSavvy.ai views this as highly negative due to the imminent termination of the Trust, significant declines in income and distributions, and the depleting nature of its core assets with no replacement strategy.

Positives

• 100% of the Trust's proved reserves were classified as proved developed producing as of December 31, 2025.
• The underlying properties are in mature fields with long production histories and numerous additional development opportunities.
• MV Partners continues to pursue workover and development programs, such as polymer treatments and acid stimulations, to reduce natural decline.
• MV Partners believes existing burdens and obligations do not materially interfere with property use or adversely affect the net profits interest value.
• The Trust maintains effective internal control over financial reporting as of December 31, 2025.
• MV Partners has provided a $1.8 million letter of credit to the Trustee to protect the Trust against the risk of insufficient cash for future expenses.
• The Trustee built a $1.265 million cash reserve for future known, anticipated, or contingent expenses or liabilities from Q1 2022 to Q2 2023.

Negatives

• The Trust's net profits interest will terminate on June 30, 2026, leading to the dissolution of the Trust and cessation of distributions.
• Income from net profits interest decreased significantly from $18.6 million in 2024 to $11.3 million in 2025.
• Distributable income per Trust Unit decreased from $1.535 in 2024 to $0.905 in 2025.
• Average oil sales prices decreased from $75.52 per Bbl in 2024 to $64.20 per Bbl in 2025.
• Overall production volumes sold decreased from 481,018 Boe in 2024 to 457,705 Boe in 2025.
• Proved reserves declined significantly from 618,704 Boe at December 31, 2024, to 210,602 Boe at December 31, 2025.
• The standardized measure of discounted future net cash flows decreased by approximately 73.7% from $18,889,403 in 2024 to $4,967,984 in 2025.
• The market price of Trust Units is expected to decline to zero around or shortly after the termination date.
• The Trust is precluded from acquiring other oil and natural gas properties or net profits interests to replace depleting assets.
• The Trust is a smaller reporting company, which means it has reduced disclosure requirements and its auditor is not required to attest to internal control effectiveness, potentially making it less attractive to investors.
• MV Partners plugged and abandoned 27 wells in 2025, an increase from 7 in 2024 and 4 in 2023, indicating an increasing number of uneconomic wells.

Risks

• Prices of oil, natural gas, and natural gas liquids fluctuate, and lower prices could reduce proceeds to the Trust and cash distributions to Trust unitholders.
• Actual reserves and future production may be less than current estimates of proved reserves, which could reduce cash distributions by the Trust and the value of the Trust Units.
• Risks associated with the production, gathering, transportation, and sale of oil, natural gas, and natural gas liquids could adversely affect cash distributions by the Trust.
• The ability or willingness of OPEC and other oil exporting nations, such as Russia, to set and maintain production levels has a significant impact on oil and natural gas commodity prices, which could reduce the amount of cash available for distribution to Trust unitholders.
• Production of oil, natural gas, and natural gas liquids on the underlying properties could be materially and adversely affected by severe or unseasonable weather.
• Shortages or increases in costs of oil field equipment, services, and qualified personnel available to MV Partners could reduce the amount of cash available for distribution to Trust unitholders.
• The reserves attributable to the underlying properties are depleting assets, and production from those reserves will diminish over time; the Trust is precluded from acquiring other oil and natural gas properties or net profits interests to replace the depleting assets and production.
• The amount of cash available for distribution by the Trust will be reduced by the amount of any production and development costs, taxes, capital expenditures, and post-production costs.
• If development and production costs of the underlying properties exceed the proceeds of production, the Trust will not receive net proceeds until future proceeds from production exceed the total of the excess costs plus accrued interest during the deficit period.
• The Trust has established a cash reserve for contingent liabilities and to pay expenses in accordance with the Trust Agreement, which would reduce net profits payable to the Trust and distributions to Trust unitholders.
• A purchaser's failure to pay MV Partners for purchased production could have a significant adverse impact on MV Partners, which in turn could result in MV Partners not having sufficient net proceeds attributable to the net profits interest for MV Partners to distribute cash to the Trust.
• If the financial position of MV Partners degrades in the future, MV Partners may not be able to satisfy its obligations to the Trust.
• The Trust and the public Trust unitholders have no voting or managerial rights with respect to MV Partners, the operator of the underlying properties, and therefore no ability to influence the operation of the underlying properties.
• MV Partners may transfer all or a portion of the underlying properties at any time, subject to specified limitations, and MV Partners may abandon individual wells or properties that it reasonably believes to be uneconomic, which unitholders cannot prevent.
• The Trustee may, under certain circumstances, sell the net profits interest and dissolve the Trust prior to the expected termination of the Trust, potentially resulting in Trust unitholders not recovering their investment.
• Conflicts of interest could arise between MV Partners and the Trust unitholders regarding decisions on development, maintenance, operation, or abandonment of the underlying properties.
• The Trust is managed by a Trustee who cannot be replaced except by a majority vote of Trust unitholders holding a majority of the Trust Units at a special meeting, which may be difficult due to significant ownership by MV Energy and VAP-I.
• Financial information of the Trust is not prepared in accordance with GAAP, but on a modified cash basis, which may differ from GAAP financial statements.
• As a smaller reporting company, the Trust benefits from certain reduced governance and disclosure requirements, including that its independent registered public accounting firm is not required to attest to the effectiveness of its internal control over financial reporting, which may make the Trust Units less attractive to investors.
• Trust unitholders have limited ability to enforce provisions of the net profits interest directly against MV Partners.
• The market price for the Trust Units may not reflect the value of the net profits interest held by the Trust and, over time, will decline to zero around or shortly after the termination date of the net profits interest, June 30, 2026.
• If the Trust cannot meet the New York Stock Exchange continued listing requirements, the NYSE may delist the Trust Units.
• The disposal by the two members of MV Partners of their remaining Trust Units may reduce the market price of the Trust Units.
• Courts outside of Delaware may not recognize the limited liability of the Trust unitholders provided under Delaware law.
• The Trust's net profits interest may be characterized as an executory contract in bankruptcy, which could be rejected, thus relieving MV Partners from its obligations to make payments to the Trust.
• The operations of the underlying properties are subject to environmental laws and regulations and operational safety matters that may result in significant costs and liabilities, which could reduce the amount of cash available for distribution to Trust unitholders.
• Governmental authorities may enact climate change regulations that could increase MV Partners' costs to operate and, therefore, adversely affect distributions to the Trust unitholders.
• The Trust has not requested a ruling from the IRS regarding the tax treatment of ownership of the Trust Units or the net profits interest; if the IRS were to determine otherwise, Trust unitholders may receive different and less advantageous tax treatment.
• Cyber-attacks or other failures in telecommunications or information technology systems could result in information theft, data corruption, and significant disruption of MV Partners' business operations.
• Cyber-attacks or other failures in telecommunications or IT systems could result in information theft, data corruption, and significant disruption of the Trustee's operations.

Future Outlook

The Trust's net profits interest will terminate on June 30, 2026, leading to the Trust's dissolution and cessation of distributions. MV Partners expects to incur approximately $0.4 million in capital expenditures for recompletion and workovers over the three years ending December 31, 2028, aiming to partially offset natural production decline. However, the Trust will not benefit from production after its termination.

Management Comments

• MV Partners does not, as a matter of course, make public projections as to future sales, earnings or other results relating to the underlying properties.
• MV Partners believes that the burdens and obligations affecting the underlying properties are conventional in the industry for similar properties and do not, in the aggregate, materially interfere with the use of the underlying properties or adversely affect the value of the net profits interest.
• MV Partners believes that the delivery and recording of the Conveyance constituted fully conveyed and vested property interests in the Trust under Kansas law, and if MV Partners becomes a debtor in bankruptcy, the Conveyance cannot be avoided by a bankruptcy Trustee.
• MV Partners believes that it is possible the net profits interest for underlying properties in Colorado may not be treated as a real property interest under Colorado law, but should be treated as a fully conveyed personal property interest in bankruptcy, and does not believe it should be subject to rejection as an executory contract.
• MV Partners does not believe that loss of any major purchaser would have a material adverse impact on its business, as substitute purchasers are generally available.
• MV Partners believes it is in substantial compliance with all existing environmental laws and regulations applicable to the current operations of the underlying properties and that its continued compliance will not have a material adverse effect on cash distributions to Trust unitholders.
• MV Partners is not aware of any environmental issues or claims that will require material capital expenditures during 2026.
• Elaina C. Rodgers, Vice President of The Bank of New York Mellon Trust Company, N.A., as Trustee, concluded that the disclosure controls and procedures of the Trust are effective as of December 31, 2025.
• The Trustee determined that the Trust maintained effective internal control over financial reporting as of December 31, 2025.

Industry Context

StockSavvy.ai notes that MV Oil Trust operates as a passive royalty trust, a structure designed to provide unitholders with direct income from depleting oil and gas assets. The impending termination of the Trust on June 30, 2026, due to the exhaustion of its net profits interest, highlights the finite nature of such investment vehicles. The decline in oil prices in 2025, coupled with the natural decline of mature fields, directly impacted the Trust's distributable income, underscoring the commodity price sensitivity inherent in the upstream oil and gas sector. The ongoing regulatory shifts regarding climate change and environmental standards, while currently not materially impacting MV Partners, represent a broader industry trend that could increase operating costs for producers in the long term.

Comparison to Industry Standards

• The Trust's structure as a passive royalty trust with a finite life is a specific model, not directly comparable to integrated oil and gas companies or E&P firms focused on growth.
• The underlying properties are in mature fields in the Mid-Continent region (Kansas and Colorado), characterized by long production histories, which is typical for conventional plays in these areas.
• The decline rate of approximately 14.55% annually for proved reserves (assuming no additional development after 2026) is within the expected range for mature oil fields undergoing natural decline, though specific comparisons would require detailed field-level data from comparable assets.
• The reliance on workovers, recompletions, and polymer treatments by MV Partners is a common strategy for enhancing recovery and mitigating decline in mature fields, similar to practices by other operators in the Mid-Continent.
• The average oil price of $64.20/Bbl in 2025 and natural gas price of $2.48/Mcf in 2025 reflect market conditions, but without specific comparable company data, it is not possible to assess if these are better or worse than industry peers for similar quality and location.

Management Changes

Corporate Governance

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.

Related Party Transactions

• MV Partners conveyed the net profits interest to the Trust.
• MV Partners pays an overhead fee to Vess Oil and Murfin Drilling, affiliates of MV Energy (sole manager of MV Partners), to operate the underlying properties. This fee totaled $3.4 million in 2023, $3.6 million in 2024, and $3.8 million in 2025.
• MV Purchasing, LLC, majority-owned by indirect equity owners of MV Partners, purchased 73% of production in 2023, 74% in 2024, and 74% in 2025 from the underlying properties under short-term, market-sensitive arrangements.
• The Trust pays MV Partners an annual administrative services fee for accounting, bookkeeping, and informational services, totaling $116,874 in 2023, $121,549 in 2024, and $126,411 in 2025.
• The Trust pays The Bank of New York Mellon Trust Company, N.A. (Trustee) an annual fee of $150,000 for each of 2023, 2024, and 2025.
• The Trustee paid an annual fee to Wilmington Trust Company (Delaware Trustee) of $2,760 in each of 2023, 2024, and 2025.
• MV Partners provided a letter of credit in the amount of $1.8 million to the Trustee to protect against insufficient cash for future expenses.
• MV Energy, LLC and VAP-I, LLC, members of MV Partners, collectively own 25% and 12.5% respectively, totaling 37.5% of the outstanding Trust Units.

Stakeholder Impact

• Shareholders (Trust Unitholders): Will cease receiving distributions after June 30, 2026, and Trust Units are expected to be cancelled shortly thereafter. The market price of Trust Units is expected to decline to zero.
• MV Partners: Will retain 100% of net proceeds from the underlying properties after June 30, 2026, as the net profits interest terminates.
• Trustee (The Bank of New York Mellon Trust Company, N.A.): Will oversee the winding up and dissolution of the Trust after its termination.
• Employees: The Trust has no employees. MV Partners' employees involved in the operation of the underlying properties will continue their work, as MV Partners retains the properties.
• Customers (Purchasers of oil/gas): Will continue to receive supply from MV Partners' underlying properties, as the Trust's role is passive and its termination does not affect the underlying operations.
• Regulatory Bodies: The Trust will cease filing reports with the SEC and other regulatory bodies after its dissolution.

Next Steps

• The Trustee will make a final quarterly cash distribution, if any, on or about July 24, 2026, to Trust unitholders of record on the 15th day following June 30, 2026.
• The Trust Units are expected to be cancelled shortly after the final distribution.
• The Trust will dissolve and commence winding up its business and affairs after June 30, 2026.
• MV Partners intends to implement a development program over the three years ending December 31, 2028, for recompletion and workovers, though the Trust will not benefit from this after its termination.

Key Dates

Recommendation

The Trust has a finite life, with its net profits interest terminating on June 30, 2026. This means all distributions will cease shortly thereafter, and the Trust Units will be cancelled. The market price is explicitly stated to decline to zero around or shortly after the termination date. Investors holding these units face a complete loss of value post-termination. The significant decline in income, distributable cash, and proved reserves in 2025 further reinforces the negative outlook leading up to the termination.

Keywords

MV Oil Trust, MVO, SEC filing, 10-K, oil and gas, net profits interest, trust termination, oil production, natural gas production, Kansas, Colorado, commodity prices, depleting assets, distributions, proved reserves, financial performance, corporate governance, risk factors, environmental regulation, cybersecurity