16%-Yielding MV Oil Trust Hikes Quarterly Payout 14.5%
April 25, 2025
MV Oil Trust Units on the Rebound
It might not look like it, but things are looking up for MV Oil Trust (NYSE:MVO).
Global stocks tumbled after President Donald Trump unveiled his reciprocal tariffs in early April. For some countries, tariffs have been set at anywhere from 10% to 50%. For China, it’s much worse, at 145%.
Because of his punishing tariffs, President Trump has said that dozens of countries have called begging for deals. But, as of April 15, no tariff deals have been signed.
This uncertainty continues to weigh on stocks…and if there’s one thing investors like, it’s certainty.
The president has unexpectedly paused reciprocal tariffs for 90 days, but what happens after that? Can Trump really negotiate trade agreements with approximately 90 countries in less than 90 days?
The markets are not convinced. As of this writing, stocks have rebounded a little since tumbling when President Trump announced his reciprocal tariffs on April 2, affectionately known as “Liberation Day.”
But the S&P 500 is still approximately six percent lower than where it was before the November election. The index is also down more than eight percent year to date; on the plus side, it is up 6.5% over the last 12 months.
Some sectors are getting hit more than others. The energy sector has been the worst performer over the last year, falling 15.5%. It has also dropped more than seven percent in 2025. One big problem, of course, is that, should fears of a recession be realized, the demand for crude oil and gas would slump.
Economists don’t think the U.S. will enter a recession; it’ll be close though. Experts now think that the U.S. economy will stall in 2025, growing just 0.8%; that’s down from the 1.7% predicted growth in March. (Source: “Economy will likely slow to near-standstill or recession despite Trump tariff pause: Survey,” USA Today, April 14, 2025.)
Crude prices are expected to remain near $60.00 per barrel in the near future. On the plus side, demand for domestic crude remains solid. In fact, demand exceeds supply, which is why we rely on countries like Canada to make up the difference.
With that said, the outlook for domestic oil and gas producers remains solid. And that should benefit oil and gas exploration and production (E&P) companies like MV Oil Trust.
About MV Oil Trust
MV Oil Trust is an oil and gas E&P company that holds interests in the oil and natural gas properties of MV Partners LLC in Kansas and Colorado. (Source: “Form 10-K,” United States Securities and Exchange Commission, April 4, 2025.)
While most oil and gas E&P companies spend millions of dollars drilling new sites, MV Oil focuses on getting as much as it can out of its existing operations. Then the trust gives the vast majority of its profits to its unitholders.
On the plus side, because MV Oil Trust pays out all of its cash flow to investors, its dividend yield can be exceptionally high.
At the same time, MV Oil Trust’s oil and gas wells will eventually run dry. When I wrote about the partnership in February 2022, it had approximately 900 oil and gas wells. In November 2024, MVO had 850 wells. As of December 31, 2024, it had 840 wells, with a projected reserve life of over 35 years.
Q1 Distribution Increased to $0.275/Unit
As its name suggests, MV Oil is a trust, which means it pays out virtually all of its cash flow to investors. That’s great news when the economy is running on all cylinders, but it can result in lower distributions when the economy is weak or we’re in a recession or dealing with a global pandemic.
In the first quarter of 2025, MV Oil Trust generated 140,509 barrels of oil equivalent (BOE) at an average price of $67.77 per BOE. This resulted in gross proceeds of $9.5 million. (Source: “MV Oil Trust Announces First Quarter Distribution,” MV Oil Trust, April 4, 2025.)
This resulted in a quarterly distribution of $3.16 million, or $0.275 per unit. That works out to $1.50 per unit on an annual basis for a massive 15.92% yield.
Because the price of oil causes the company’s cash flow to fluctuate, its distribution payout will, too. In the third and fourth quarters of 2024, MV Oil Trust paid out $0.33 and $0.24 per unit, respectively.
MVO Units Up 8.5% Over the Last Month
MVO units took a big hit in January, but it’s tough to pinpoint exactly why. Some of the decline can be attributed to concerns over President Trump’s proposed (at the time) tariffs and the impact they would have on the economy.
Though, to be fair, in late January, the president also announced sweeping plans to increase domestic production. So, you’d think this would help boost MVO units, but that didn’t happen.
The moves in MVO stock could also be tied to the company’s quarterly payouts. MVO Oil Trust lowered its fourth-quarter dividend to $0.24 per unit then raised it to $0.275 per unit in the first quarter.
And MVO units have been inching higher since the beginning of March. Over that time, MVO has climbed almost 25%. The units are also up 14% over the last five trading days and 8.5% over the last month.
It’s tough, of course, to gauge what will happen with MVO stock in the best of times, let alone during a time of wavering tariff threats and concerns about the economy. One thing is certain, though: dividends can help smooth out the volatility.
Chart courtesy of StockCharts.com
The Lowdown on MV Oil Trust
MV Oil Trust is an oil and gas exploration and production company with an underlying reserve life of over 35 years. This certainly provides unitholders with an earnings window that stretches over decades.
But because of supply/demand metrics and the price of oil and gas, the partnership’s earnings and dividends fluctuate. That’s just something unitholders have to keep in mind. But, as long as MVO Oil is pulling oil and gas out of the ground, unitholders will be on the receiving end of a reliable, variable dividend.
