MV Oil Trust (NYSE: MVO) is an oil and gas royalty trust that holds an 80% net profits interest in oil, natural gas, and natural gas liquids production from properties operated by MV Partners, LLC in Kansas. The trust generates income by receiving 80% of the net profits from those underlying properties, calculated as gross revenues minus operating expenses, severance taxes, ad valorem taxes, workover expenses, and COPAS overhead, then distributing that income to trust unitholders. The trust is a passive vehicle organized under Delaware law, with The Bank of New York Mellon Trust Company, N.A. serving as trustee from its office in Austin, Texas. As of December 31, 2015, total proved reserves attributable to the trust were 6,310.5 MBbl of oil, 171.3 MMcf of gas, and 10.3 MBbl of NGLs. The trust does not operate the underlying properties and cannot direct development decisions. MV Partners retains the right to abandon wells it deems uneconomical, plugging 8 wells in FY2015, 22 in FY2014, and 17 in FY2013.

Revenue model

The trust receives an 80% net profits interest (NPI) from oil, gas, and NGL production on the underlying Kansas properties. Net profits are calculated as gross production revenues minus severance taxes, ad valorem taxes, operating expenses, workover expenses, and COPAS overhead. The total proved 80% NPI net operating income across all reserve categories was $85,871,200 as reported in the FY2015 10-K reserve disclosures. Cash received is distributed to trust unitholders.

Products and services

The trust's sole asset is an 80% net profits interest in oil, natural gas, and natural gas liquids production from Kansas fields operated by MV Partners. As of December 31, 2015, proved developed producing reserves were 5,257,400 Bbl of oil, 171.3 MMcf of gas, and 10,300 Bbl of NGLs. Proved undeveloped reserves were 741,108 Bbl of oil as of December 31, 2015.

Customers and end markets

The trust's income depends on oil, gas, and NGL commodity prices and production volumes from Kansas properties. No specific end customers are named in the filing. Demand is driven by commodity markets for crude oil, natural gas, and natural gas liquids.

Value-chain role

Passive royalty trust. The trust holds an 80% net profits interest conveyed by MV Partners and does not operate wells, employ staff, or make capital allocation decisions. MV Partners and its sub-operators Vess Oil and Murfin Drilling conduct all field operations, workovers, recompletions, and abandonment decisions on the underlying properties.

Geographic exposure

All underlying properties are located in Kansas. Key operating areas include the El Dorado Area (Sedgwick County), the Northwest Kansas Area (Ellis and Rooks Counties), and the Valley Center Field (Sedgwick County), as disclosed in the FY2015 10-K. Developed acreage totals 15,353 net acres in the El Dorado Area, 11,760 net acres in the Northwest Kansas Area, and 16,649 net acres in other areas as of the filing date.

Source: SEC 10-K, filed 2016-03-14

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