Distribution Information - The San Juan Basin Royalty Trust will not declare a monthly cash distribution for April due to the application of net proceeds of $3,435,269 to excess production costs[6] Production Costs - The excess production costs are a result of Hilcorp San Juan L.P.'s drilling of two new horizontal wells in 2024[6]

DALLAS , April 17, 2025 /PRNewswire/ -- Argent Trust Company, as the trustee (the "Trustee") of the San Juan Basin Royalty Trust (the "Trust") (NYSE: SJT), today reported that it will not declare a monthly cash distribution to the holders of its Units of beneficial interest (the "Unit Holders") due to the application of net proceeds of $3,435,269, which amount would otherwise be payable to the Trust as royalty income, to the balance of excess production costs accrued as a result of Hilcorp San Juan L.P.'s ( ...

Financial Performance - The Trust received approximately $6.9 million in Royalty Income for the fiscal year ended December 31, 2024, a decrease from $53.2 million in 2023[40]. - The Trust distributed approximately $5.2 million to Unit Holders in 2024, down from $51.6 million in 2023[40]. - The Trust's gross revenue in 2024 was $6.9 million, but it may not meet the $1.0 million revenue threshold in 2025, which could trigger termination provisions[49]. - Total Income for 2024 was $7,032,254, down from $53,387,439 in 2023, indicating a significant decline in revenue[215]. - Royalty Income for Q4 2024 was $6,945,974, a significant drop from $53,240,068 in Q4 2023, reflecting lower gas and oil production[215]. - Distributable Income for Q4 2024 was $0, a decrease from $3.6 million ($0.077927 per Unit) in Q4 2023, primarily due to increased capital project spending[200]. - Distributable Income per Unit for Q4 2024 was $0.110671, a decrease from $1.107901 in Q4 2023[216]. Production and Reserves - As of December 31, 2024, 99.8% of the Trust's estimated proved reserves consisted of natural gas reserves, with 95.1% of Gross Proceeds in 2024 attributable to natural gas production[39]. - Proved developed natural gas reserves as of December 31, 2024, were 62,095 MMcf, an increase from 57,488 MMcf in 2023[119]. - The Trust reported no proved undeveloped reserves as of December 31, 2024, down from 9,135 MMcf in 2023[120]. - The production of natural gas from the Subject Interests for 2024 was 22,415,695 Mcf, with an average price of $2.07 per Mcf[110]. - Total production costs for natural gas and oil attributable to the Subject Interests in 2024 were $82,130,843, with average production costs per unit of $3.6324[110]. Costs and Expenses - Excess Production Costs incurred from May through December 2024 amounted to $21,248,008 gross ($15,936,006 net to the Trust)[40]. - The balance of Excess Production Costs as of March 21, 2025, was $21,739,947 gross ($16,304,960 net to the Trust)[44]. - Lease operating expenses and property taxes increased by $3.5 million, or 12.7%, to $30.8 million for the year ended December 31, 2024, compared to $27.3 million in 2023[184]. - Capital costs for Q4 2024 totaled approximately $11.5 million, up from $1.6 million in Q4 2023, driven by costs associated with two horizontal wells[202]. - Monthly lease operating expenses averaged $7.5 million in Q4 2024, compared to $2.3 million in Q4 2023, due to repairs and maintenance[203]. Cash Reserves and Distributions - The Trust's cash reserves were $760,919 as of December 31, 2024, down from $1,800,000 in April 2024[42]. - The Trust has not made any distributions since April 2024 due to increased Production Costs and a decline in natural gas pricing[41]. - The Trustee plans to replenish cash reserves to $2,000,000 before making any distributions to Unit Holders[42]. - The Trust did not receive any Royalty Income from May 2024 through December 2024, relying on cash reserves to cover liabilities during this period[190]. - The cash reserve balance was $760,919 on December 31, 2024, and decreased to $258,521 by March 21, 2025[229]. Regulatory and Market Risks - Extensive governmental regulations impact oil and gas operations, with potential future climate change laws affecting production and costs[76]. - Government actions aimed at reducing oil and gas production could directly impact prices and demand for the Trust's products[77]. - The Biden administration's policies may lead to restrictions on future oil and gas leases, although current leases remain unaffected[80]. - The Trust's ability to generate revenue is subject to the performance of Hilcorp and other operators, and any bankruptcy could interrupt distributions to Unit Holders[63]. - The Trust's revenue is influenced by potential regulatory changes in the natural gas industry, which historically has been heavily regulated[131]. Tax Implications - The Trust is classified as a non-mortgage widely held fixed investment trust (NMWHFIT) for federal income tax purposes[55]. - The Trust's income is subject to U.S. federal income taxes, even if no cash distributions are received, which could create tax liabilities for Unit Holders[87]. - Legislative changes, such as the Tax Cuts and Jobs Act, could retroactively affect the tax treatment of Trust Units, impacting Unit Holders' benefits[89]. - Unit Holders must report their share of the production revenues as ordinary income from oil and natural gas royalties[234]. Operational Challenges - Hilcorp reserves the right to abandon wells that cease to produce economically, potentially leading to lower cash distributions for the Trust in the future[51]. - Hilcorp's operations may be limited by regulations under the Endangered Species Act and the Migratory Birds Treaty Act, potentially incurring additional costs[152][153]. - Cybersecurity risks pose a potential threat to the Trust's operations, with the Trustee implementing robust protocols to mitigate these risks[86]. - The Trust's ability to transport and sell petroleum products is subject to FERC regulations, impacting market prices and operational costs[132]. Market Conditions - The Trust's market price for natural gas is seasonal, impacting income available for distribution to Unit Holders[39]. - The market price for the Trust Units may not reflect the actual value of the Royalty held by the Trust due to various external factors affecting cash distributions and operating expenses[74]. - Average price of natural gas Gross Proceeds decreased from $4.69 per Mcf in 2023 to $2.07 per Mcf in 2024, while oil Gross Proceeds increased from $66.34 per Bbl in 2023 to $68.07 per Bbl in 2024[165].

Distribution Decisions - San Juan Basin Royalty Trust will not declare a monthly cash distribution for January 2024 due to lower natural gas prices and increased production and capital costs[6] - The production month of November 2024 saw costs exceed proceeds, impacting the Trust's ability to distribute cash[6]

Core Viewpoint - Argent Trust Company, as the trustee of the San Juan Basin Royalty Trust, will not declare a monthly cash distribution to Unit Holders due to the application of net proceeds to cover excess production costs incurred from Hilcorp's drilling activities in 2024 [1] Financial Summary - The Trust reported net proceeds of $4,153,693 that would have been payable as royalty income, which will instead be applied to the balance of excess production costs [1] - The cumulative excess production costs currently stand at approximately $21,739,947 gross ($16,304,960 net to the Trust), reflecting a decrease of $5,538,257 gross ($4,153,693 net) from the previous month [1] - Hilcorp's total revenue from the Subject Interests for January 2025 was $10,152,016, comprising $10,063,934 from gas revenues and $88,082 from oil revenues [2] - Production costs for January 2025 were reported at $4,613,759, which includes lease operating expenses, severance taxes, and capital costs [2] Production and Pricing - Gas volumes for January 2025 totaled 2,689,216 Mcf (2,988,018 MMBtu), showing a slight increase from December 2024's volume of 2,669,858 Mcf (2,966,509 MMBtu) [4] - The average gas price for January 2025 was $3.74 per Mcf ($3.37 per MMBtu), an increase of $0.60 per Mcf ($0.54 per MMBtu) compared to December 2024 [4] Administrative Expenses - Trust administrative expenses for the month totaled $255,657, with an increase attributed to timing differences in expense payments [3] - Interest income of $2,038 will partially cover these administrative expenses, with cash reserves used for the remainder [3] Cash Reserves and Future Plans - The Trustee plans to replenish cash reserves to $2.0 million before making future distributions to Unit Holders [5] - As of April 30, 2024, total cash reserves were $1.8 million, and cash reserves will be utilized to cover administrative expenses until excess production costs are repaid [5] - Hilcorp's 2025 capital project plan estimates capital expenditures of approximately $9.0 million, with allocations for new vertical drill projects, recompletions, and facilities projects [7][8]

Core Viewpoint - Argent Trust Company, as the trustee of the San Juan Basin Royalty Trust, will not declare a monthly cash distribution to Unit Holders due to excess production costs and low natural gas pricing during December 2024 [1] Financial Performance - Hilcorp reported total revenue of $8,687,779 for December 2024, with gas revenues of $8,390,577 and oil revenues of $297,202 [2] - Production costs for December 2024 were $6,459,217, which included lease operating expenses of $2,751,758, severance taxes of $825,059, and capital costs of $2,882,401 [2] - Cumulative excess production costs amounted to approximately $27,278,204 gross ($20,458,653 net to the Trust), reflecting a decrease in the deficit of $2,228,562 gross ($1,671,422 net) from the previous month [3] Cash Reserves and Administrative Expenses - Trust administrative expenses for the month totaled $141,887, with interest income of $2,703.69 applied to cover part of these expenses [3] - Cash reserves were utilized to cover remaining administrative expenses, bringing the balance of cash reserves to $512,140, with plans to increase reserves to $2.0 million before future distributions [5] Production and Pricing - Gas volumes for December 2024 were 2,669,858 Mcf (2,966,509 MMBtu), an increase from 2,261,819 Mcf (2,513,132 MMBtu) in November 2024 [4] - The average gas price for December 2024 was $3.14 per Mcf ($2.83 per MMBtu), up from $2.10 per Mcf ($1.89 per MMBtu) in November 2024 [4] Future Capital Expenditures - Hilcorp's 2025 capital project plan estimates capital expenditures of approximately $9.0 million, with allocations for new vertical drill projects, recompletions, and facilities projects [7][8]

Core Viewpoint - Hilcorp Energy Company has provided its 2025 capital project plan for the San Juan Basin Royalty Trust, estimating capital expenditures of approximately $9.0 million for the year [1][2]. Group 1: 2025 Capital Expenditure Plan - The 2025 Plan includes 29 projects, with $4.0 million allocated to seven new vertical drill projects in the Dakota/Mesaverde formations [2]. - Approximately $4.5 million is designated for 22 projects focused on recompletions and workovers in the Fruitland Coal formation [2]. - The remaining $0.5 million will be used for facilities projects related to natural gas compression and other facility improvements [2]. - Hilcorp noted that the project status for 2025 may change if underlying assumptions are revised, and actual costs may differ from estimates [2]. Group 2: 2024 Capital Expenditure Overview - For 2024, Hilcorp projected capital expenditures of approximately $34.0 million, with actual expenditures from January to November totaling around $33.6 million [3]. - Of the 2024 expenditures, approximately $24.6 million was spent on two new horizontal drilling projects in the Mancos formation [3]. - An estimated $8.0 million was allocated for recompletions and workovers, while about $1.0 million was spent on facilities projects related to natural gas compression [3].

Group 1 - San Juan Basin Royalty Trust (NYSE: SJT) has benefited from unexpectedly cold weather, which is expected to drive natural gas prices higher [2] - The oil and gas industry is characterized as a boom-bust, cyclical sector, requiring patience and experience for successful investment [2] Group 2 - The analysis of oil and gas companies includes a focus on balance sheets, competitive positions, and development prospects to identify undervalued opportunities [1]

Core Viewpoint - Argent Trust Company, as the trustee of the San Juan Basin Royalty Trust, will not declare a monthly cash distribution to Unit Holders due to excess production costs and low natural gas pricing during November 2024 [1][3] Financial Performance - Hilcorp reported total revenue of $4,880,618 from the Subject Interests for November 2024, with gas revenues of $4,752,207 and oil revenues of $128,411 [2] - Production costs for the Subject Interests were $13,139,376, which included lease operating expenses of $2,634,510, severance taxes of $597,211, and capital costs of $9,907,655 [2] Excess Production Costs - Hilcorp will charge excess production costs of approximately $29,506,766 gross ($22,130,075 net to the Trust) to the next month's distribution [3] - No cash distributions will be made until future net proceeds are sufficient to cover Trust liabilities and replenish cash reserves [3] Gas Production and Pricing - Gas volumes for November 2024 totaled 2,261,819 Mcf (2,513,132 MMBtu), an increase from 1,880,071 Mcf (2,088,968 MMBtu) in October 2024 [4] - The average gas price for November 2024 was $2.10 per Mcf ($1.89 per MMBtu), compared to $1.92 per Mcf ($1.72 per MMBtu) in October 2024 [4] Cash Reserves and Administrative Expenses - The Trustee plans to increase cash reserves to $2.0 million before any future distributions to Unit Holders [5] - Trust administrative expenses for the month totaled $113,093, with interest income of $3,497 applied to cover part of these expenses [3][5] Compliance and Auditing - The Trustee continues to engage with Hilcorp regarding accounting and reporting, with ongoing audits of payments made to the Trust [6] - The Trust's auditing process includes a detailed analysis of Hilcorp's pricing and rates charged [6]

Core Insights - Hilcorp reported total revenue of $3,674,540 for October 2024, with gas revenues at $3,602,210 and oil revenues at $72,330 [1] - The Trust will not declare a monthly cash distribution due to excess production costs and low natural gas pricing for October 2024 [5] - Excess production costs for the reporting period amounted to approximately $21,248,008 gross, with $15,936,006 net to the Trust [6] Financial Performance - Gas volumes for October 2024 were 1,880,071 Mcf, an increase from 1,869,291 Mcf in September 2024 [2] - Average gas price for October 2024 was $1.92 per Mcf, up from $1.42 per Mcf in September 2024 [2] - Total production costs for October 2024 were reported at $7,059,218, including lease operating expenses of $2,468,962, severance taxes of $327,389, and capital costs of $4,262,867 [1] Operational Insights - The Trust's auditing process includes a detailed analysis of Hilcorp's pricing and rates charged, ensuring compliance with operative Trust agreements [3] - The Trustee has increased cash reserves to cover Trust expenses during revenue shortfalls, with total cash reserves at $760,919 after utilizing $200,647 for administrative expenses [7] - The Trust's administrative expenses for the month totaled $204,336, with interest income of $3,689 applied to cover part of these expenses [6]