San Juan Basin Royalty Trust(SJT) - 2022 Q1 - Quarterly Report

Financial Performance - Royalty income for Q1 2022 was $14,890,491, a 81.5% increase from $8,212,088 in Q1 2021[11] - Distributable income for Q1 2022 reached $14,369,227, compared to $7,751,242 in Q1 2021, reflecting an increase of 85.5%[11] - Distributable income per Unit increased to $0.308294 in Q1 2022 from $0.166304 in Q1 2021, marking an increase of 85.4%[11] - Royalty Income for Q1 2022 was $14,890,491, a 81.5% increase from $8,212,088 in Q1 2021, primarily due to higher natural gas prices[60] - Gross Proceeds from Subject Interests increased by approximately $15.6 million, or 100%, for Q1 2022 compared to Q1 2021, driven mainly by higher natural gas prices[54] - Distributable Income increased from $7.8 million ($0.166304 per Unit) in Q1 2021 to $14.4 million ($0.308294 per Unit) in Q1 2022[60] Production and Pricing - Natural gas production rose from 5,703,850 Mcf in Q1 2021 to 6,231,076 Mcf in Q1 2022, reflecting an increase of 9.2%[53] - The average natural gas price increased from $2.64 per Mcf in Q1 2021 to $4.79 per Mcf in Q1 2022[53] - Royalty Income for the three months ended March 31, 2022, was associated with oil and natural gas production of 6,231,076 Mcf and 6,040 Bbls, compared to 5,703,850 Mcf and 8,865 Bbls in the same period of 2021[68] - Average sales prices for oil and natural gas for the three months ended March 31, 2022, were $4.79 per Mcf and $65.97 per Bbl, compared to $2.64 per Mcf and $36.13 per Bbl in 2021[68] Expenses and Liabilities - General and administrative expenditures for Q1 2022 were $521,471, up from $461,258 in Q1 2021, an increase of 13.1%[11] - Severance taxes increased by approximately $3.1 million, or 374%, for Q1 2022 compared to Q1 2021, largely due to increased revenue and prior period corrections[57] - Lease operating expenses and property taxes rose by $3.7 million, or 103%, for Q1 2022 compared to Q1 2021, averaging approximately $2.5 million per month[58][59] - General and administrative expenses increased approximately 13% for the three months ended March 31, 2022, compared to the same period in 2021[63] Assets and Reserves - Total assets as of March 31, 2022, were $9,988,119, slightly up from $9,931,573 as of December 31, 2021[10] - Trust corpus decreased to $3,436,820 at the end of Q1 2022 from $3,690,847 at the end of Q4 2021, a decline of 6.9%[13] - The Trust's cash and short-term investments increased to $6,551,299 as of March 31, 2022, from $6,240,726 as of December 31, 2021[10] - Total cash reserves were $1.0 million as of March 31, 2022, with no anticipated increases in 2022[64] Operational Insights - Hilcorp does not anticipate materially reducing production or taking wells offline due to the current natural gas pricing environment[26] - There was no impairment of the Trust's assets as of March 31, 2022[18] - The fluctuations in natural gas production were influenced by non-operated true-ups and variances in capital spending[69] - The Trust believes it has sufficient capacity to draw upon cash reserves or borrow funds against the Royalty to cover operating expenses if Royalty Income is insufficient[66] - There were no changes to the contracts for the sale of production from the Subject Interests during the three months ended March 31, 2022[70] Governance and Controls - The Trustee has concluded that the Trust's internal disclosure controls and procedures are effective as of March 31, 2022[82]