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, June 20, 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 $294,238, 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 ("Hil ...

Core Points - 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 of $1,499,498 to excess production costs from Hilcorp's drilling activities in 2024 [1] - The cumulative balance of excess production costs is approximately $15,160,257 gross ($11,370,193 net to the Trust), reflecting a decrease of $1,999,331 gross ($1,499,498 net) from the previous month [1] - Hilcorp reported total revenue of $6,984,564 for March 2025, with gas revenues of $6,904,591 and oil revenues of $79,973, while production costs for the same month were $4,985,233 [2] - The average gas price for March 2025 was $2.82 per Mcf ($2.54 per MMBtu), a decrease of $0.54 per Mcf ($0.48 per MMBtu) compared to February 2025 [4] - Trust administrative expenses for the month totaled $85,694, with interest income of $856 applied to cover part of these expenses [3] - Cash reserves were utilized to cover administrative expenses, bringing the balance of cash reserves maintained by the Trustee to $32,959, with plans to increase reserves to $2.0 million before future distributions [5] Financial Overview - Hilcorp's production costs for March 2025 included $3,193,460 in lease operating expenses, $786,589 in severance taxes, and $1,005,184 in capital costs [2] - The Trust's ongoing audit process includes detailed analysis of Hilcorp's pricing and rates charged, ensuring compliance with operative Trust agreements [6]

Financial Performance - Total income for the three months ended March 31, 2025, was $8,238, a significant drop from $5,108,715 in the same period of 2024, indicating a decrease of over 99%[10] - Distributable income for the three months ended March 31, 2025, was $0, compared to $4,092,544 in the same period of 2024, reflecting a complete loss of distributable income year-over-year[10] - Royalty income for the three months ended March 31, 2025, was $0, compared to $5,091,060 in the same period of 2024, marking a decline of 100%[10] - Distributions declared per unit for the three months ended March 31, 2025, were $0, compared to $0.087806 in the same period of 2024[12] - Production Costs exceeded Gross Proceeds by $491,938 for the three months ended March 31, 2025, leading to no Royalty Income distribution[70] - Total Gross Proceeds increased by approximately $5.5 million, or 30.1%, for the three months ended March 31, 2025, compared to the same period in 2024, driven by increased production volumes from two new horizontal wells drilled in 2024[71] Cash and Reserves - As of March 31, 2025, cash and short-term investments decreased to $258,521 from $760,920 on December 31, 2024, representing a decline of approximately 66%[8] - The cash reserve balance was $258,521 as of March 31, 2025, down from $760,920 at the end of 2024, indicating a reduction of approximately 66%[24] - Total cash reserves were $258,521 as of March 31, 2025, down from $1,800,000 as of April 30, 2024, due to the lack of Royalty Income[81] - The Trust expects to continue drawing on cash reserves for all liabilities not covered by interest income until Royalty Income resumes[83] Trust Viability and Concerns - The trust's ability to continue as a going concern is in doubt due to anticipated deficits in income to cover liabilities, prompting evaluations of commercial lending options[25] - The anticipated deficit in income raises substantial doubt about the Trust's ability to continue as a going concern within one year after the issuance date of the financial statements[84] - The Trustee is negotiating a commercial line of credit to cover the Trust's liabilities once cash reserves are depleted[84] Production and Expenditures - Hilcorp's estimated capital expenditures for 2025 are approximately $9.0 million, with $4.0 million allocated to seven new vertical drill projects[39] - Hilcorp's capital expenditures rose significantly from $990,794 for the three months ended March 31, 2024, to $14,047,360 for the same period in 2025, an increase of approximately $13,056,566[72] - The cumulative balance of Excess Production Costs as of March 31, 2025, was $21,739,946 gross ($16,304,960 net to the Trust), which must be recovered from future Net Proceeds before Royalty Income can be paid[77] - Natural gas production from the Subject Interests increased from 5,595,016 Mcf for the three months ended March 31, 2024, to 7,620,893 Mcf for the same period in 2025[70] - Oil production volumes increased by 2,528 Bbls (41.5%) for the Subject Interests and by 41 Bbls (11.4%) for Royalty for the three months ended March 31, 2025[91] Tax and Compliance - The Trust's tax years 2021 and thereafter remain subject to examination, with material tax positions likely to be sustained[32] - Hilcorp's production and sale of natural gas from coal seam wells does not qualify for tax credit under Section 45K of the Code[30] - The Trust's auditing process includes detailed analyses of Hilcorp's pricing and rates charged, ensuring compliance with operative Trust agreements[34] - The trust operates under the regulations set forth by the Securities Exchange Act, ensuring transparency and accountability[118] - The trust's compliance with regulatory requirements highlights its commitment to investor protection[118] Governance and Structure - The San Juan Basin Royalty Trust has no directors or executive officers, indicating a streamlined governance structure[118] - Nancy Willis serves as the Director of Royalty Trust Services, responsible for overseeing trust operations[118] - The document does not provide insights into market expansion or new product developments[118] - The absence of executive officers may affect decision-making processes and strategic initiatives[118] - There are no specific financial performance metrics or forecasts provided in the document[118] - The trust's structure as a royalty trust suggests a focus on income generation from oil and gas royalties[118] - The trust's operational framework may influence investment strategies in the energy sector[118]

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 $3,435,269 that would otherwise be payable as royalty income, which will be applied to the balance of excess production costs [1] - The cumulative balance of excess production costs is approximately $17,159,588 gross ($12,869,691 net to the Trust), reflecting a decrease of $4,580,359 gross ($3,435,269 net) from the previous month [1] - Hilcorp's total revenue from the Subject Interests for February 2025 was $7,869,451, comprising $7,685,519 from gas revenues and $183,932 from oil revenues [2] - Production costs for February 2025 were reported at $3,289,092, which includes lease operating expenses, severance taxes, and capital costs [2] Production and Pricing - Gas volumes for February 2025 totaled 2,287,310 Mcf (2,541,456 MMBtu), down from 2,689,216 Mcf (2,988,018 MMBtu) in January 2025 [4] - The average gas price for February 2025 was $3.36 per Mcf ($3.02 per MMBtu), a decrease of $0.38 per Mcf ($0.35 per MMBtu) compared to January 2025 [4] Administrative Expenses and Cash Reserves - Trust administrative expenses for the month totaled $142,466, with a portion covered by interest income of $1,742 [3] - Cash reserves were utilized to cover the remaining administrative expenses, bringing the balance of cash reserves to $117,797 [5] - The Trustee plans to replenish cash reserves to $2.0 million before making future distributions to Unit Holders [5] Compliance and Auditing - The Trust continues to engage with Hilcorp regarding accounting and reporting, with ongoing audits of payments made to the Trust [6] - The auditing process includes a detailed analysis of Hilcorp's pricing and rates charged, ensuring compliance with operative Trust agreements [6]

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].